The Application of WTO Law in China
(Jiangyu Wang)

Part II Application of GATT/WTO in U.S. Law - No strict Self-Executing

B. Application of GATT/WTO Agreements in U.S. Law

Although the United States was biggest driving force behind the multilateral trading negotiations, and was the one leading the effort "to reinvigorate the negotiations and to break the gridlock that has stalled the negotiations despite several years of preparation and another seven years of negotiation" during the Uruguay Round, the legal status of GATT/WTO agreements as domestic law in the United States is not entirely clear. First of all, according to relevant U.S. statues, trade treaties are not self-executing. Secondly, they could even not apply the later-in-time rule.

In the first place, status of trade agreements in U.S. law is governed by the Trade Agreements Act of 1979 (hereinafter the 1979 Act). In the Act, Congress made clear that any provision of the Tokyo Round agreements negotiated under the GATT framework would not prevail over a U.S. statute, regardless of when the statue was enacted. Clearly, this was not consistent with the later-in-time-prevail rule. In addition, the same Act precluded any private right of action or remedy based on the agreements, unless otherwise provided by U.S. law.

Subsequent international trade treaties the U.S. concluded continued the opposition to trade treaty priority. The United States-Canada Free-Trade Agreement Implementation Act provided that "[n]o provision of the Agreement, nor the application of any such provisions to any person or circumstance, which is in conflict with any law of the United States shall have effect." Similar expression was contained in the North American Free Trade Agreement Implementation Act of 1993. Moreover, the Act further removed any legal actions by private parties challenging the validity of any U.S. law or government action under the North American Free Trade Agreement (NAFTA).

For implementing the GATT/WTO embodied in the Uruguay Round Agreements, the U.S. Congress adopted the Uruguay Round Agreement Act of 1994 (URAA) to define the limits of legal effects of the GATT/WTO agreements in U.S. legal order. A brief of the URAA is that it prevents terms of the GATT/WTO that conflict with existing federal law from having domestic effects, and allows for continued ability of the United States to take unilateral actions pose for the WTO. This aim can be well evidenced by the legislative history of the URAA. During the debate on approving the WTO Agreement, the prevailing view was that the multinational pact was not in conflict with U.S. sovereignty generally for two reasons: first, Congress is ultimately responsible for changing the laws of the United States; and second, the U.S. is entitled to withdraw from the WTO if it feels that the DSB abused its power. These arguments were vehemently endorsed by Clinton Administration officials who were eager to get the agreement passed Congress. Mickey Kantor, U.S. Trade Representatives, stated emphatically that "[n]o ruling by any dispute panel … can force us to change any federal, state or local law or regulation. Not the city council of Los Angeles, nor the Senate of the United States can be bound by these dispute settlement rulings." His assistant, Deputy USTR Rufus Yerxa reiterated that "a WTO dispute settlement panel recommendation does not automatically change U.S. law. It has not self-executing effect …. Only Congress can change that law to implement a panel recommendation."
But the language of the URAA is even clearer. The features of the URAA are described as follows:
United States Law to Prevail in Conflict The URAA puts U.S. sovereignty and U.S. law under perfect protection. According to the Act, if there is a conflict between U.S. and any of the Uruguay Round agreements, U.S. law will take precedence regardless when U.S. law is enacted. § 3512 (a) states: "No provision of any of the Uruguay Round Agreements, nor the application of any such provision to any person or circumstance, that is inconsistent with any law of the United States shall have effect." Specifically, implementing the WTO agreements shall not be construed to "amend or modify any law of the United States, including any law relating to (i) the protection of human, animal, or plant life or health, (ii) the protection of the environment, or (iii) worker safety", or to "limit any authority conferred under any law of the United States, including section 301 of the Trade Act of 1974."

Relationship of WTO Agreements to States Law The URAA contains a detailed provision outlining how the U.S. federal government will work to secure the objectives of the WTO agreements without impinging on state rights. In a nutshell, with regard to inconsistence with WTO at state level, there is no guarantee of compliance but only "consultation". It is the U.S. understanding that "each WTO member will be free to determine how it will conform with those agreements at national and sub-national level", and as such, the WTO agreements "do not automatically 'preempt' or invalidate state laws that do not conform to the rules set out in those agreements". The URAA establishes Federal-State consultation process, under which the U.S. shall take efforts to help the states bring laws into conformity with WTO obligations, and the states have the right to be informed and involved in any challenges to the WTO consistency of state actions, as well as the right to be consulted before the federal government challenges subcentral government actions of other countries. In addition, the URAA sets up a sharp limitation on who may attempt to have state law declared invalid as violative of WTO agreements. Generally, "No State law, or the application of such a State law, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with any of the Uruguay Round Agreements, except in an action brought by the United States for the purpose of declaring such law or application invalid." In the latter case, a set of complex procedures should be followed.

WTO Decision-making & Dispute-settlement and U.S. Law To make sure that the WTO decision making process will not be applied in a manner detrimental to U.S. interest, the URAA requires the U.S. government "ensure that Ministerial Confference and the General Council continue the practice of decisionmaking by consensus followed under the GATT 1947." Though the WTO Agreement allows for voting for a few matters, it is understood that voting procedures in the WTO will ensure that "there can be no change in U.S. substantive rights and obligations without the agreement of the United States." With regard to dispute resolution, the U.S. declared that, whatever the decision made by the WTO dispute settlement panels is, it will not "have any power to change U.S. law or order such a change." The USTR described the WTO dispute settlement's relationship to and consequence on U.S. domestic legal system as follows:

"[our] government was careful to structure the WTO dispute rules to preserve our rights. The findings of a WTO dispute settlement panel cannot force us to change our laws. Only the United States determines exactly how it will respond to the recommendations of a WTO panel, if at all. If a U.S. measure is ever found to be in violation of a WTO provision, the United States may on its own decide to change the law; compensate a foreign country by lowering trade barriers of equivalent amount in another sector; or do nothing and possibly undergo retaliation by the affected county in the form of increased barriers to U.S. exports of an equivalent amount. But America retains full sovereignty in its decision of whether or not to implement a panel recommendation."

(* Footnote Omitted)