Joanne Scott** Introduction: EU lawyers are long used to reflecting on the fundamental ways in which the legal systems and governance of its component States have been affected by their membership of the European Union. In more recent times, however, and in particular since the conclusion of the Uruguay round and the signing of the World Trade Organisation Agreements in 1994, lawyers are confronting an ever more complex set of questions concerning the relationship between the norms of the different systems, and the impact of the strengthened system of international trade law not only on the states individually but also on the EU and its institutions. There are numerous aspects to the question of how, in substantive and procedural terms, the process of political and legal decision-making in the European Union is affected by the EC’s membership of the WTO. Most obviously, there are a number of hotly debated legal issues, which are addressed elsewhere in this book,1 dealing with the exact legal status and effect of WTO norms within the European legal order. Secondly, there are sector-specific questions concerning how particular EC policies are affected by provisions the provisions of the relevant agreements. Thirdly, there is a need to examine the extent to which and the way in which the EU institutions and organs seek to integrate the substantive obligations contained in the various agreements into their political and legislative processes. A fourth and significant dimension which is not often explored concerns the likely impact not of the actual provisions of the WTO Agreements, but of the general principles and due process norms being developed by the dispute settlement bodies, not only on the adjudicative methods of the Court of Justice, but also more generally in the interpretation of provisions of the EC Treaties and EC law in particular when the scrutiny of trade restrictions arises.
This chapter concentrates primarily on the third and fourth categories outlined above, and it is divided into three parts. The first part considers briefly some of the points of comparison and contrast between the EU and the WTO, and the relevance of these similarities and differences for the interpretation and effect of the respective norms of each system. The second part takes two case studies in order to examine in more concrete detail some of the ways in which WTO norms and provisions are likely to influence and be integrated into the EC decision-making processes. The first of these examines the recently proposed amendment to the EC Cosmetics Directive and the second the ramifications of a pending legal challenge to a recent Regulation on aircraft noise. The final part of the paper considers the general principles and procedural norms evolving and being developed at WTO level, and at how these are likely to be relevant for the ECJ and EC decision-making bodies more generally.
Part One The EU and the WTO share a number of obvious features: both are organisations established primarily to promote trade between states. They are also distinctively different in many respects: the WTO is a very broad multilateral organisation while the EU is a geographically limited regional entity. Further, even in the early stages when it was primarily a common market, the EEC has always been a more closely integrated collection of states than the GATT or the WTO. Nonetheless, the EEC’s common market was modelled partly on the GATT, and many of the EC Treaty provisions clearly reflect this. Interesting comparisons can be drawn between the similar EC and GATT rules on matters such as internal taxation, discriminatory and non-discriminatory trade restrictions.2 It might be expected that given the EC’s experience in dealing internally with many of these same issues, such as the removal of discriminatory barriers to trade, and of disproportionate regulatory restrictions between states, it would be well equipped to respond to such issues arising in the context of a multilateral trade organisation of which it is a member.
However, the situation is rather different where it is not a case of the EC enforcing the rules of the internal market against one of its own member states, but instead the EC confronting a WTO-based challenge to one of its own regulatory measures. This is not only because of the tighter supranational legal and constitutional framework of the EC as compared with the looser international legal nature of the WTO and its agreements, but also because of the development of the EU into an entity which, in the scope of its aims and its policies, is much more than a trade organisation. Whatever the significance of the developments which emerged from the Uruguay round, with the move from GATT 1947 to GATT 1994 and the establishment of the WTO, it remains a fundamentally different entity from the European Union. Its aims and objectives, its political institutions, its dispute resolution bodies, its instruments, although sharing common features, are profoundly different in key respects from those of the EU. Two fundamental differences between the EC/EU and the WTO – in the legal-institutional dimension and the policy-substantive dimension – lie at the heart of many of the tensions created by the application of the rules and norms of the latter to the former. These are the dimensions which need to be borne in mind when examining the impact of the WTO on EC decision-making. Yet at the same time, a degree of convergence can be seen, and at the very least some degree of mutual influence between the two systems, in particular as the WTO Appellate Body, with its rather more juridical nature than the previous GATT panels, begins to develop its jurisprudence through the disputes coming before it.
The EEC began life, along with the other two Communities, primarily as a common market; an area which, although going beyond a free trade zone having established fairly strong legal and political institutions to achieve its goals, was not at the time the kind of ambitious political and constitutional entity which it undoubtedly is today. It has since that time expanded not the scope of its policies from those such as trade, agriculture and competition to a whole range of others including environmental, consumer and social policy. Secondly, its institutions have also evolved, with an increasingly evident desire for greater constitutional legitimacy to underpin the extent and nature of its powers and functions. Despite the argument that its key or core priorities remain those of the promotion of trade, the multiple aspirations and tasks of the EU as a closely integrated regional organisation are unquestionable. Its role and functions are wide and general and the balance sought between the imperative of free trade and its many other policy goals is complex. Even if the EU’s identity as a “polity” continues to be contested, the WTO, despite the institutional and substantive changes brought about by the Marrakesh agreements, falls well short of being described as such. It is an international organization which shares many of the core aims and tasks set for itself by the EEC – primarily those of promoting trade and raising the standard of living – albeit not a regional but on a worldwide basis, and it currently lacks both the aims and the instruments to become a more general organ of world governance. To use the terminology familiar in the EC context, its methods and instruments are those of negative rather than positive economic integration (if integration is not too loaded or too strong a word for the establishment between states of a high level of open trade and market access).
At the same time, it is true to say that the very success of the WTO in establishing a rule-of-law-based system for promoting multilateral trade/commerce has led to arguments for its development of more democratic institutions and more positive instruments, partly to build on the success of a cooperative international organisation which has allowed for the peaceful resolution of disputes between states, but more particularly in order to build respect for other values and policies more strongly into its framework. The centrality and strength of the MFN, non-discrimination and other rules on trade effectively consign all other important policies – not only those such as environmental, health, social and cultural policies, but even the position of developing countries - to the status of exceptions which must be argued for within relatively strict constraints, rather than important competing or even co-equal policies in their own right.3 Nevertheless, while there may be no parallel at WTO level to the mixture of negative rules and positive policies seen in the EC’s combination of Treaty-based trade-restriction prohibitions on the one hand and legislative harmonisation/co-ordination measures on the other, there is nonetheless a strong emphasis on the need to agree and to develop positive international standards through acceptable and legitimate processes as one crucial way of addressing the tension between the goals of trade liberalisation and legitimate regulation. The WTO does not have its own standard-setting processes and its own political institutions for developing such norms, but other international bodies such as the WHO, ISO, the Codex Alimentarius and the OECD are indicated as a source of guidelines and norms for Member States.4 It is interesting to observe how the EC, long used to grappling within its own borders with the problem of how to reconcile free trade provisions with national regulatory interests,5 has responded when it has found itself in the position of the member whose regulatory policies - such as those on beef hormones, eco-labelling or aircraft noise - are open to challenge for compatibility with the rules of the trade organisation. This may be an analogy which has its limits, but it is not inapt to compare the response of the ECJ, in confronting the rules of this international organisation which are potentially in conflict with the rules and policies of the EC, with that of various national constitutional courts to the conflicts which have arisen between fundamental national norms and EC law. In denying the direct effect of the GATT and insisting on the effectiveness of its provisions within the EC legal order only insofar as the institutions of that order have expressed or implied that it should have such effect, the ECJ’s response is not dissimilar in certain ways from the assertion of various national courts that EC law does not take effect unconditionally and supremely within the national legal order, but must always be channeled through national constitutional provisions, which will themselves limit its applicability where it comes into potential conflict with basic norms of the national order. In each case there is an apparent desire on the part of the judicial authority on the one hand to respect the legal obligations of membership of the organisation – in the case of national courts by acknowledging the prima facie requirement to give primacy to EC law, albeit in their own way, and in the case of the ECJ by acknowledging the binding nature of WTO law – but equally an intention to impose limits on the way in which those obligations take effect, so as to protect the integrity of aspects of their own legal order and the perceived distinctiveness of the values and norms constituting their political order.
This judicial response is not of course open to the political institutions, to whom the direct effectiveness or otherwise of the WTO agreements has less immediate relevance. A fundamental, if rather obvious point to emphasise is that whatever controversy there may be over the exact legal status of WTO law within the EC legal order, there is no question about the binding nature of the former. The EC, as a signatory and party along with its Member States, to the WTO, clearly accepts that the obligations contained in the WTO agreements are legally binding upon it. How those obligations are to be given effect may be a matter of dispute, but their binding nature is not, and it is primarily the political institutions which must give effect to WTO law. If an EC action or measure is found to conflict with the provisions of the GATT, for example, it is up to the Commission and the other institutions to find a solution which is compliant.
The European Commission found itself in relation to the beef hormones dispute, for example, in the position vis-à-vis the WTO bodies which various EC Member States have found themselves vis-à-vis the EC, being sanctioned for introducing a public health and consumer protection policy which was apparently not sufficiently supported by scientific evidence. Whereas the ECJ had rejected a challenge to the ban on hormones in beef in the earlier FEDESA case,6 the Appellate Body of the WTO reached a different conclusion in response to the complaints brought by Canada and the US in finding that the measure was not based upon an assessment of risk.7 This dispute, and the difference between the balance struck, the method for striking the balance, and indeed the result reached in the respective adjudicative tribunals of the EU and the WTO, raises obvious questions about the likelihood of the Appellate Body’s approach influencing the ECJ’s methods of interpretation and approach to judicial review. It does not necessarily raise the question whether the ECJ would or should treat WTO provisions as being directly or indirectly effective within the EC legal order. Rather the question is whether, when confronting a similar set of questions about the justifiability of a ban on hormone-treated beef in the context of the EC Treaty’s prohibition on trade restrictions with its exception for legitimate public health measures, the ECJ might adapt its approach so as to make more likely a congruence between the two. However, as suggested above, this is not a one-dimensional legal question of whether the ECJ as an adjudicative body should be influenced by or should adopt the reasoning of the Appellate Body in relation to a similarly structured set of legal provisions governing trade. It is a more complex question precisely because the values which underpin the assessment made by the Appellate Body and the ECJ respectively are likely to reflect both the institutional differences (for example in terms of the possible reasons for judicial deference to the lawmaking bodies) and the substantive normative differences (e.g. in terms of the particular balance struck at EU level between trade liberalisation and public health/consumer concerns) between those two organisations.
Part Two: Two Case Studies We will now look briefly at two topical case studies, each of which exemplifies different aspects of the way in which WTO norms and provisions may affect EC decision-making, and at different stages of the decision-making process.
Case Study One: The Cosmetics Directive Our first case study examines the attempt by the Commission, in drafting the latest proposed amendment to Council Directive 76/768,8 to ensure that the measure is WTO-compliant, indeed arguably over-compliant.
Council Directive 76/768 set out to approximate Member States laws relating to the marketing and sale of cosmetics. Amongst other things it requires Member States to prohibit the marketing of cosmetics which contain any of the substances listed in the various annexes to the Directive.9 Article 4(1) of the Directive also provided for a ban on the marketing of cosmetics containing ingredients or combinations of ingredients tested on animals.10 The original date for the coming into force of the ban was after 1 January 1998, but this was postponed until after 30 June 2000 by the Commission.11 The basis for this postponement was the insufficiency of progress in developing satisfactory methods to replace animal testing which are scientifically validated as offering an equivalent level of protection for the consumer. By March 2000, at the time of the Commission’s proposals for an amendment to the basic Directive, only three alternative methods had been validated, of which two are available.12 For this reason the Commission proposed a further postponement pending adoption and transposition of its additional far-reaching proposals for amendment of the Directive, amounting to a substantial modification of the original Directive.
The Commission explains in the explanatory memorandum to its proposal that the two overriding objectives of the proposed amendment are consumer safety and the reduction and the eventual elimination of animal suffering.13 It also highlights the WTO as a restrictive context within which these aims have to be pursued: “However, for any measures to be effective and enforceable it is also necessary to take account of the constraints arising from compliance with international trade rules, in particular those of the WTO.”14 Four more precise objectives are then set out in the memorandum. The first is to introduce a definitive prohibition on the performance of experiments on animals for finished cosmetic products in territory of the Member States of the EU. The second is to replace the previously envisaged ban on the marketing of substances containing ingredients tested on animals by a combination of the proposed prohibition on the performance of such experiments, and a requirement making mandatory the use of validated alternative methods, when they become available, for testing chemicals used in cosmetics. The third aim is to revise the Directive so as to make it WTO-compliant. One stage in this process seems to be to again postpone the entry into force of the ban on the marketing of cosmetics containing ingredients tested on animals, and which would have applied to all products including those from third countries, and not just those originating within the EU. At the same time the Commission has declared its intention to seek the mutual recognition, in cooperation with third countries, of test data from in vitro/in vivo studies. The fourth and final aim is said to be the improvement of information provided to the consumer, to allow the use, subject to EC guidelines, of claims indicating that animal testing has not been performed. The bottom line of the proposed amendment is expressed by the Commission in the following terms:
To take account of the need to comply with international law, the proposed amendment prohibits the performance of tests on animals on the territory of the Member States for the purpose of complying with Directive 76/768/EEC, but not the marketing of products which have been tested on animals. This represents an advancement for animal protection in the European Union. Moreover, the prohibition in its revised form cannot be challenged under WTO rules.15 This sentiment has been reflected in answers which the Commission has given to Members of the European Parliament on this subject.16 The main concern expressed by the Commission in its current proposal in relation to the compatibility of the ban envisaged in the earlier Article 4(1)(i) of the Directive with WTO rules is that it is likely to contravene Article III.4 of the GATT, as constituting discriminatory treatment between like products originating within the EU and those originating outside. According to the Commission, since “the test method does not have any physical effect on the product, discrimination on this basis could be considered to be contrary to WTO rules”.17 The assumption here is that products physically constituted in the same way remain ‘alike’ regardless of differences in their method of production or harvesting. Consequently differences in treatment predicated upon differences in production or harvesting techniques, will represent discriminatory treatment under the GATT. Thus, to prohibit the importation of cosmetics from third countries which have been tested on animals while permitting the marketing and sale of EC-originating cosmetics which are alike, other than for the fact they were not tested on animals, would be unlawful under Article III.4. It was this kind of reasoning which underpinned the panel reports in the (in)famous Tuna/Dolphin ‘cases’.18 The Commission goes on to say that it is “doubtful whether Article XX of the GATT could provide sufficient justification of this measure”,19 the implication being that it is unlikely that the measures in question could be justified as being necessary to protect animal life or health pursuant to Article XX(b).
This seems a cautious analysis on the Commission’s part. Had it been committed to introducing a general ban on products which have been tested on animals, it could have pursued this more convincingly. It is, after all, far from settled that such a ban would contravene GATT (or other WTO agreements such as the Agreement on Technical Barriers to Trade). As regards the conclusion that non-animal tested and animal-tested products are necessarily ‘like products’ within the meaning of Article III.4, it should be pointed out that the panel reports in the tuna/dolphin ‘cases’ were never adopted, and that this issue has not been addressed by the more recently established Appellate Body. The case for treating certain process-based product bans of this kind as capable of being compliant with GATT, Article III has recently been made – both on doctrinal/jurisprudential grounds and on policy grounds – by Howse and Regan.20 In the subsequent Shrimps/Turtles ‘case’ brought against the US in relation to a process ban on ‘turtle-unfriendly shrimp’, no attempt was made to argue the ‘like’ product point under GATT, Article III, and the case instead focussed upon the scope of the Article XX exceptions and the ‘chapeau’ thereof.21 Equally, in the case of an EU cosmetics ban, there seems to be no clear reason to conclude at the outset that, even if Article III did catch the ban in the first instance, that it is “very doubtful” that it could be saved under the GATT, Article XX(b) exception, concerning the protection of the life and health of humans, animals and plants. The requirements of Article XX(b) and of the ‘chapeau’ of Article XX do not seem insurmountable in a case such as this, and the EU’s behaviour would not seem comparable to the impugned behaviour of the United States in tuna/dolphin or shrimp/turtle. Two points in particular point in the EU’s favour. First, the ban would be on a ‘batch by batch’ basis and not a country-wide basis. That is to say that only such cosmetic products tested on animals would be prohibited, regardless of the overall regulatory policy of the exporting state. Market access to the EU would not be contingent upon a change of policy on the part of the government/legislature of the state of export, but merely upon the practices of the manufacturer in question. Second, the EC’s position could be strengthened by the fact that it has been working on the development of alternative methods of scientific testing, in particular through the European Centre for the Validation of Alternative Methods and the application of those methods by the Scientific Committee on Cosmetic Products and non-Food Products, and apparently ‘stepping up negotiations within the OECD’ to have these accepted at on a more global scale.22 The circumstances are not necessarily comparable to those condemned in shrimp/turtle, where the US was held to have failed to negotiate adequately with the various countries involved, or to pursue more actively the attempt to agree international standards – behaviour which resulted ultimately in the non-fulfilment of the requirements of the ‘chapeau’ to Article XX.23 The EU’s apparent efforts to develop internationally acceptable alternatives to testing on animals, in addition to the fact that the coming into force of the ban was postponed pending the development of such methods, provides further evidence of caution before resorting to what the Appellate Body has called a ‘heavy weapon’ of international trade.
There are a number of possible explanations for the Commission’s retreat from a general ban in the EU on cosmetic products tested on animals. It is certainly possible that the Commission genuinely considers that such a ban could not be WTO compliant, and has been influenced to take a cautious view of the possibility for legally maintaining a process based restriction on trade under those agreements. In this case the fear of the WTO may loom larger than the WTO itself. In view of the context to the EU’s proposed ban, and the more nuanced approach of the Appellate Body in shrimp/turtle, where it focuses upon the circumstances of application of specific measures rather than drawing crude distinctions between entire categories of measures which may or may not be allowed, it is not improbable that the EU could apply such a ban in a manner which is WTO-compliant. At the very least the EU has a strongly arguable case. In this respect it is interesting to note that the EU has on its books other examples of import bans which would be less readily justifiable before the WTO dispute settlement bodies. To take just one example, Council Directive 91/62924 provides that animals coming from outside of the EU must be accompanied by a certificate issued by the competent authority of that country, certifying that they have received treatment at least equivalent to that granted to animals of Community origin as provided for by the Directive.25 Thus, veal calves which have been raised in conditions which are not certified to be equivalent to those of the EU may not be imported into the EU; this regardless of whether the standard which has been breached could be said to be such to impinge upon the quality of the product itself, or merely upon the ‘quality’ of the circumstances in which it is produced or reared. It is, however, perhaps significant from the point of view of the GATT/WTO that this equivalence is demanded only in the case of live calves being imported into the EU, and not in the case of dead calves (i.e. veal) being imported into the EU. In view of this and other examples, and their dubious but uncertain legality, and in view of the fact that the Community finds itself on both sides of the process/product distinction debate,26 it could be that ambiguity serves the Community well. It may be reluctant to seek clarification of the parameters of Articles III and XX in this respect for fear of the repercussions that might ensue beyond the sphere of animal testing in the cosmetics industry. On the other hand, attesting perhaps more to the fragmented or at least imperfectly coordinated institutional nature of the Commission rather than to a deliberate strategy of ambiguity or contradictoriness on the issue, the Commission’s communication to the Council and Parliament on “Integrating environment and sustainable development into economic and development co-operation policy” indicates a bolder approach to the product/process distinction and, by implication, to the possible WTO-compatibility of a measure such as the cosmetics ban or related labelling requirements.27
One thing that is clear is that whatever the final outcome in terms of the construction of the relevant GATT norms, in the case of the cosmetics ban, this further (indefinite) delay, accompanied by a statement of intention to initiate bilateral talks with third countries on the mutual recognition of tests establishing alternative measures, would represent an additional important element in terms of likely WTO compatibility. Only time will tell, but it is not impossible that the Commission is preparing the ground for an eventual ban more carefully, in the light of the lessons of the shrimp/turtle dispute.
On the other hand, since there is room for argument on the legal point, it may be that the Commission’s latest proposal reflects its own policy preferences (or at least the policy preferences of some of its directorates general), and that just as Member States often point to the constraints imposed by EC membership to justify an unpopular measure adopted at home, the Commission may choose to do so vis-à-vis the WTO. This is particularly relevant in view of the European Parliament’s strong and vocal preference – most recently voiced during the committee debates on the Commission’s proposal - for the adoption of a ban on cosmetics tested on animals.
Perhaps most interesting, however, is the possibility suggested by this case study that the effect of the WTO on EC decision-making will not always be obvious or clear-cut. The question of the direct applicability or effectiveness of GATT norms within EC law on the one hand, or the nature of the response of the EC to a ruling of a panel or the Appellate Body against it on the other, are very clear instances of the impact of the WTO on EC decision-making. But the more indirect forms of impact, whereby some of the general and ambiguous norms in the WTO agreements, and the complex or inconclusive decisions of the Dispute Resolution Bodies, are interpreted and applied by the EC political institutions in their formulation of legislative measures, are equally significant. It is very likely that those institutions will, as is arguably true of the Commission in its proposal to amend the cosmetics Directive, add their own gloss or dimension to the rules within that interpretative process, which may lead, if not necessarily to over-compliance, at least to results which do not seem to flow inexorably from the text or jurisprudence of the WTO
Case Study Two: The Regulation on civil subsonic jet aeroplanes. The second case study focuses upon a different stage of the decision-making process; not a pre-legislative attempt to “WTO-proof” the legislative measure, nor an ex post facto response to a finding of violation by the WTO dispute settlement bodies, but a challenge to an EC Regulation brought by a private party before a national court in the UK.28 The challenge was brought by Omega Air Ltd., a company trading in aircraft, to Council Regulation 925/1999 on re-certified civil subsonic jet aeroplanes,29 and the English High Court has referred a number of questions to the European Court under Article 234 TEC.30 In simplified terms, the Regulation provides that re-certified civil subsonic jet aeroplanes could no longer be registered or operated within the EU after a certain date.31 Effectively, planes of this kind which meet the noise standards of Chapter 2 of the Chicago Convention on International Civil Aviation, but not the higher standards of Chapter 3 of that Convention, would no longer be permitted to be registered or operated in the EU. However, certain planes of this kind which, although not initially compliant with Chapter 3 standards, but subsequently modified to meet those standards, would not be covered by the prohibition. According to Article 2 of the Regulation, “civil subsonic jet aeroplanes which have been modified to meet Chapter 3 standards by being completely re-engined with engines having a bypass ratio of three or more” would not be covered by the prohibition. Much of Omega’s fleet of aeroplanes had been re-engined with a bypass ratio of less than three, and therefore would be caught by the Regulation. However, Omega’s claim was that despite the lower bypass ratio, the re-engined aircraft nonetheless met the noise standards established by Chapter 3 of the Chicago Convention.32 The English High Court identified three grounds of invalidity of the Regulation, these being reflected in the question referred:
Is Article 2(2) of Council Regulation (EC) No 925/1999 invalid insofar as it defines “recertificated civil subsonic jet aeroplanes” so that re-engined aeroplanes “with engines having a by-pass ratio of three or more” are not subject to prohibitions imposed by the Regulation but aeroplanes wholly re-engined with engines having a by-pass ratio of less than three are subject to prohibitions, having regard in particular to:
the duty to give reasons under Article 253 of the EC Treaty;
the general principle of proportionality;
such rights as private parties may derive from the General Agreement on Tariffs and Trade and/or the Agreement on Technical Barriers to Trade?
The third ground for invalidity concerned Article 2 of the Agreement on Technical Barriers to Trade (TBT) which provides, amongst other things, that WTO members must ensure that technical regulations are not adopted or applied with the aim or effect of creating unnecessary obstacles to international trade. The Article provides also that such regulations should not be maintained if the objectives can be addressed in a less trade-restrictive manner, and further that where relevant international standards exist, members must use them as a basis for technical regulations, and that such regulations are where appropriate to be based on product requirements based on performance rather than design. The use of bypass ratio (BPR) as a criterion of noise is a design feature rather than a performance standard, as indicated in Article 2 TBT, and the accepted “international standards”, as included in the Chicago Convention, were expressed in terms of decibel levels rather than BPR.
Significantly, Omega did not pursue this third head of invalidity in its submissions to the European Court. This is stated to be due to the judgment of the European Court in Portugal v. Council,33 albeit that Omega observes that were the European Court to take a different position in the future regarding to the status of the WTO Agreement (or specifically the TBT Agreement) in Community law, then Omega will rely on such a ground. Crucially, however, Omega contends that the TBT Agreement remains highly relevant to the first two grounds of invalidity.34 On the issue of reasoning Omega points to the failure in the Regulation to give reasons as to why a by-pass ratio criterion is used, and why this by-pass ratio was set at three. They argue that recourse to such criteria is arbitrary and unjustifiable, and incapable of rational justification, and that the criteria are not on any reasonable view relevant to achieving the declared objectives of the Regulation. In submitting that it was incumbent on the Community institutions to put forward reasons in respect of these criteria, Omega point to a number of factors. These include the fact that the Regulation departs from internationally agreed noise certification criteria under the Chicago Convention, and that they impose design (not performance) standards, allegedly in contravention of the TBT Agreement. Omega asserts that in the case of a departure from the accepted norm, it is necessary to have “a particularly thorough and convincing statement of reasons”.35 This reflects their further contention that, “at least in the normal case”, EC law requires the Community to adopt internationally recognized standards where they are available, and that it similarly imposes a requirement that technical standards be set by reference to performance and not design criteria, and hence that the TBT Agreement merely reflects Community law in this latter respect. On the issue of reasoning, Omega’s arguments were resoundingly accepted by the High Court, which held that the Regulation “appears to be wholly defective in its reasons”.36 The High Court’s own provisional conclusion on the adequacy of the reasons was clearly directly influenced by the provisions of the TBT Agreement, in the sense that the need for the EC legislature to give more satisfactory reasons to explain the use of BPR as a criterion for determining acceptable noise levels seems to have been based precisely on the failure to follow the indications in Art 2 of the TBT. The move from the use of decibel level, which had been used in international agreements and established in the Chicago Convention on International Civil Aviation, to the use of BPR therefore needed explanation, and in the English court’s view, had not adequately been explained. The implication of this part of the judgment is that whether or not the provisions of the TBT are directly effective, their existence imposes a procedural obligation on the EC institutions to provide an adequate explanation for the departure from the norms or guidelines laid down therein. This is evident from the judgment where the national judge began by accepting the respondent’s presentation of the jurisprudence of the ECJ concerning the degree of specificity required when reasons are being given for the adoption of a Regulation – i.e. that where a Regulation is concerned, the reasons may be confined to indicating the general objectives and the general situation which led to its adoption, and that it is not necessary to require a specific statement of reasons for each of the technical choices made by the institution, and yet he goes on later to conclude that the Regulation is defective in its reasoning for not explaining why a BPR standard was used.
Another interesting feature of the case is the fact that whereas the judge rejected the attempt to make the standards in the Chicago Convention relevant by means of an argument based on Article 307 EC,37 he clearly treated them as being of indirect relevance via the combination of the provisions of the TBT Agreement on the one hand, and the Community requirement of giving reasons on the other hand:
It is the Chicago Convention and the International Civil Aviation Organisation ICAO which have set international standards based on decibel measurement….
The judgment then set out the relevant provisions of Article 2 of the TBT, including the stipulation that members shall use relevant international standards as a basis for technical regulations, and continued:
I am quite satisfied that the relevant international standards are the Chicago Convention. It seems to me that if it is decided to move from the decibel related method to a BPR method, some sort of explanation is required… the Regulation seems to be wholly inadequate in its reasons.38 While this clearly falls short of giving effect either to the aircraft noise standards contained in the Chicago Convention, or to the provisions of the TBT on technical regulations, the imposition, through the reasoning requirement, of an obligation on the EC institutions to explain why the standards established in the main international agreement on aircraft noise have not been used, when the TBT agreement by which the Community is bound actually specifies that appropriate international standards of this kind should be used, clearly makes the provisions of both agreements highly relevant for the Community’s decision-making process, in particular if the English court’s approach is followed by the ECJ.39 Omega’s arguments in respect of breach of the general principle of proportionality are not entirely dissimilar from those outlined above in respect of the reasoning requirement. Their fundamental contention is that there is no rational relationship between the means deployed by the Regulation and the main aim which it pursues; namely the control of noise emissions at Community airports. They argue moreover in favour of a stricter standard of proportionality review in a case such as this where the Community has departed from internationally agreed standards and from the terms of the TBT Agreement. Thus, the TBT Agreement, although acknowledged not to be of direct effect nor to constitute a standard against which the European Court will assess the legality of Community acts, is invoked as a means of increasing the rigour with which established grounds of review will be applied, and of constraining the degree of discretion which these permit the Community institutions. In the event that the European Court accepts Omega’s arguments, and indeed the conclusions of the English High Court, it will be apparent that an absence of direct effect on the part of the WTO Agreement should not necessarily be equated with an absence of relevance or effect within the European and national courts. Particularly important in this respect, as noted above, is the manner in which substantive obligations which inhere in the WTO package may be translated by courts and transformed into procedural requirements; notably but perhaps not only a duty to give reasons. It is with this issue of procedural requirements and the WTO Agreements that this next section is concerned.