(1)

“traditional imports from ACP States” means imports into the Community of bananas originating in the States listed in the Annex hereto  (11) up to a limit of 857 700 tonnes (net weight) per year; these are termed “traditional ACP bananas”;

(2)

“non-traditional imports from ACP States” means imports into the Community of bananas originating in ACP States but not covered by definition (1); these are termed “non-traditional ACP bananas”;

(3)

“imports from non-ACP third States” means bananas imported into the Community originating in third States other than ACP States; these are termed “third State bananas”’.

‘1.

Do Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organisation of the market in bananas, as amended by Council Regulation (EC) No 1637/98 of 20 July 1998, Commission Regulation (EC) No 2362/98 of 28 October 1998 laying down detailed rules for the implementation of Council Regulation (EEC) No 404/93 regarding imports of bananas into the Community, Commission Regulation (EC) No 2806/98 of 23 December 1998 on the issuing of import licences for bananas under the tariff quotas and for traditional ACP bananas for the first quarter of 1999 and on the submission of new applications, Commission Regulation (EC) No 102/99 of 15 January 1999 on the issuing of import licences for bananas under the tariff quotas and for traditional ACP bananas for the first quarter of 1999 (second period) and Regulation (EC) No 608/1999 of 19 March 1999 on the issuing of import licences for bananas under the tariff quotas and for traditional ACP bananas for the second quarter of 1999 and on the submission of new applications infringe Article I, Article XIII:1 and Article XIII:2(d) of GATT 1994, taken separately or together, inasmuch as they:

–

introduce to the benefit of twelve countries named in the annex to Regulation No 1637/98 a joint quota of a maximum of 857 700 kg [sic] of bananas (“traditional ACP bananas”) and, moreover, in that that quota does not accord with a distribution of trade that approaches trade without restrictions in so far as it is included in the system introduced by Regulation No 1637/98, the import of bananas being regulated solely on the basis of a tariff quota;

–

introduce a tariff quota for a total quantity of 2 535 000 tonnes for third countries and for non-traditional ACP bananas and then allocate that tariff quota in percentage terms on the basis of a non-representative period, since the import of bananas in the period from 1994 to 1996 was already subject to restrictive conditions?

2.

Do the regulations referred to in paragraph 1 infringe Article 4 of the Framework Agreement of 23 April 1993 between the European Economic Community and the Cartagena Group and its member countries inasmuch as by that agreement, the European Community undertook to have its relations with Ecuador governed by the provisions of GATT and to grant that country most-favoured-nation treatment?

3.

Do the Commission regulations referred to in paragraph 1 infringe the principle of the protection of legitimate expectations and the principle of good faith in international public law and international customary law, inasmuch as the Commission has not fulfilled the obligations arising for the Community from GATT 1994, has misused legal procedures and has not taken account of judicial proceedings and of the outcome of an international dispute settlement procedure inasmuch as, despite declarations made at the time of the adoption of Regulation No 1637/98, it has not established a system under which import licences for bananas are issued to “genuine importers”?

4.

Has the Commission exceeded the authority given to it by Council Regulation No 404/93, as amended by Regulation No 1637/98, by adopting the tariff quota for the import of bananas while disregarding the obligations which arise for the Community from GATT 1994 and GATS or which must, where appropriate, be taken into account, because of its avowed intention to adapt the regime for the import of bananas into the Community to the applicable WTO agreements, as a positive rule of law to be integrated into Community law?’

–

‘in conformity with the principles of public international law’, it is for the courts of the contracting parties, ‘and in particular … the Court of Justice within the framework of its jurisdiction under the [EC] Treaty’, to decide what effect the provisions of an agreement are to have in the internal legal order of the contracting parties if that question has not been settled by the agreement;  (20)

–

according to international law there must be ‘bona fide performance of every agreement’ and each contracting party must ‘determine the legal means appropriate for attaining that end in its legal system, unless the agreement, interpreted in the light of its subject-matter and purpose, itself specifies those means’;  (21)

–

the WTO agreements do not determine those means  (22) inasmuch as, while the mechanism for resolving disputes is stronger than the mechanism provided under the previous system, GATT 1947, the system resulting from those agreements nevertheless accords ‘considerable importance to negotiation between the parties’.  (23) In fact, according to the [DSU (see point 7 above)], although the main purpose of the mechanism for resolving disputes is to secure the withdrawal of measures that are inconsistent with the WTO rules (Article 3(7) of the DSU), compensation may be granted on an interim basis pending the withdrawal of the inconsistent measure;  (24)

–

‘to require the judicial organs to refrain from applying rules of domestic law which are inconsistent with the WTO agreements would have the consequence of depriving the legislative or executive organs of the contracting parties of the possibility afforded by Article 22 of the [DSU] of finding negotiated solutions, even on a temporary basis’;  (25)

–

the WTO agreements are still founded, like GATT 1947, ‘on the principle of negotiations with a view to entering into reciprocal and mutually advantageous arrangements and [are] thus distinguished, from the viewpoint of the Community, from the agreements concluded between the Community and non-member countries which introduce a certain imbalance of obligations’;  (26)

–

moreover, the most important commercial partners of the Community have concluded that the WTO agreements are not among the rules applicable when reviewing the legality of their rules of domestic law.  (27) The Community legal order must follow the same course because ‘the lack of reciprocity in that regard …, in relation to the WTO agreements … may lead to disuniform application of the WTO rules’. It would in fact deprive ‘the legislative or executive organs of the Community of the scope for manoeuvre enjoyed by their counterparts in the Community’s trading partners’;  (28)

–

it follows that, ‘having regard to their nature and structure, the WTO agreements are not in principle among the rules in the light of which the Court is to review the legality of measures adopted by the Community institutions’;  (29)

–

moreover, certain particular situations, already identified in relation to GATT 1947, constitute exceptions to the rule just stated. These are cases where ‘the Community intended to implement a particular obligation assumed in the context of the WTO, or where the Community measure refers expressly to the precise provisions of the WTO agreements’.  (30)

(1)

The Community regime for the import of bananas based on Regulation No 404/93 of 13 February 1993 on the common organisation of the market in bananas as amended by Regulation (EC) No 1637/98 of 20 July 1998 and on the regulations adopted to implement that regulation is invalid inasmuch as it is inconsistent with the WTO rules as established by the DSB on 25 September 1997 and confirmed by the same body on 6 May 1999.

In the alternative:

The Community regime for the import of bananas based on Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organisation of the market in bananas as amended by Regulation (EC) No 1637/98 of 20 July 1998 and on the regulations adopted to implement that regulation was intended to implement a particular obligation assumed by the Community in the context of the WTO. However, as the DSB decision of 6 May 1999 found, it did not remove the inconsistency with the WTO rules established by the DSB decision of 25 September 1997 and it is therefore invalid in respect of that part which is inconsistent with those rules.

(2)

The same answers apply with respect to the compatibility of the aforesaid regime with Article 4 of the EEC-Andean Pact Agreement.

1 –

Original language: Italian.

2 –

OJ 1994 L 366, p.1.

3 –

[NOT APPLICABLE IN THE ENGLISH TEXT]

4 –

[NOT APPLICABLE IN THE ENGLISH TEXT]

5 –

Namely the Republic of Bolivia, the Republic of Colombia, the Republic of Ecuador, the Republic of Peru and the Republic of Venezuela.

6 –

OJ 1998 L 127, p.10. The text of the Agreement is reproduced on p. 11 et seq.

7 –

Annex 2 to the Agreement establishing the World Trade Organisation (OJ 1994 L 336, p. 234).

8 –

OJ 1993 L 47, p. 1.

9 –

Report WT/DS27/AB/R – European Communities – Regime for the Importation, Sale and Distribution of Bananas, of 9 September 1997, available on the WTO website, www.wto.org.

10 –

OJ 1998 L 210, p. 28.

11 –

The annex in question lists twelve ACP States which traditionally supply bananas and for which an annual quota of 857 700 tonnes is reserved without allocating individual maximum quotas for each State.

12 –

OJ 1998 L 293, p. 32.

13 –

OJ 1998 L 349, p. 32.

14 –

OJ 1999 L 11, p. 16.

15 –

OJ 1999 L 75, p. 18.

16 –

Report WT/DS27/RW/ECU, European Communities – Regime for the Importation, Sale and Distribution of Bananas, of 12 April 1999, available on the WTO website, www.wto.org.

17 –

OJ 2001 L 31, p. 2.

18 –

Judgment in Case C-149/96 Portugal v Council [1999] ECR I-8395.

19 –

Council Decision 96/386/EC of 26 February 1996 concerning the conclusion of Memoranda of Understanding between the European Community and the Islamic Republic of Pakistan and between the European Community and the Republic of India on arrangements in the area of market access for textile products (OJ 1996 L 153, p. 47).

20 –

Judgment in Case C-149/96 Portugal v Council, cited above, point 34. See also the judgment in Case 104/81 Kupferberg [1982] ECR 3641, paragraph 17.

21 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 35.

22 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 41.

23 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 36.

24 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 37. My emphasis.

25 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 40. My emphasis.

26 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 42.

27 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 43.

28 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraphs 45 and 46.

29 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 47.

30 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 49. The two ‘exceptions’ were mentioned by the Court for the first time in the judgments in Case C-69/89 Nakajima v Council [1991] ECR I-2069, paragraph 31, and Case 70/87 Fediol v Commission [1989] ECR 1781, paragraphs 19-22, respectively.

31 –

I note that Advocate General Saggio, after a full analysis, expressed the same view in his Opinion in that case. He held that the WTO agreements, by virtue of ‘their status as international agreements, are binding on all the institutions [under Article 300(7) EC] and therefore constitute a source of Community law. The Court of Justice therefore has an obligation to ensure that the agreements are respected … by the Community institutions’ (point 20) especially as ‘many provisions of the [WTO] agreements give rise to obligations and prohibitions that are unconditional and include specific undertakings for commitments by the contracting parties in the context of their reciprocal relations’ (point 19). In order to avoid the fears that conclusion might cause with respect to the interests of the Community, the Advocate General is concerned to ‘separate’ the question of the effect of the WTO rules in the Community legal order from the question of the direct applicability of those rules and whether they may confer ‘on individuals rights on which they may rely in actions before the court’. In his view, indeed, recognition that the WTO rules may have such an effect does not necessarily mean that they may be invoked before the courts. ‘For this result to be achieved … it must be implicit in the general context of the agreement that its provisions may be invoked before the courts’. Consequently, ‘a provision of an agreement may be held not to have direct effect but that does not justify failing to recognise it as binding on the Community institutions and thence excluding it as a criterion of legality (for the Community)’ (point 18).

32 –

Judgment in Case C-377/98 Netherlands v Parliament and Council [2001] ECR I-7079.

33 –

OJ 1998 L 213, p. 13.

34 –

Convention on Biological Diversity signed on 5 June 1992 in Rio de Janeiro, approved by the European Community by Council Decision 93/626/EEC of 25 October 1993 (OJ 1993 L 309, p. 1).

35 –

Paragraphs 52-54. My emphasis.

36 –

I note that the same line was followed in the order of the Court in Case C-307/99 OGT Fruchthandelsgesellschaft [2001] ECR I-3159. I shall have more to say about this later.

37 –

Under Article 3(5) DSU: ‘All solutions to matters formally raised under the consultation and dispute settlement provisions of the [WTO] agreements … shall be consistent with those agreements and shall not nullify or impair benefits accruing to any Member under those agreements, nor impede the attainment of any objective of those agreements’ (my emphasis).

38 –

Opinion delivered on 15 May 2003 in Case C-93/02 P Biret International v Council [2003] ECR I‑0000, point 81.

39 –

Judgment in Case C-93/02 P Biret International v Council, cited above. The same situation was also the subject of Case C-94/02 P Biret et Cie v Council on which the Court ruled on the same day. My observations will refer only to the judgment in Case C-93/02 P Biret International v Council.

40 –

OJ 1994 L 336, p. 40.

41 –

Council Directive 81/602/EEC of 31 July 1981 concerning the prohibition of certain substances having a hormonal action and of any substances having a thyrostatic action (OJ 1981 L 222, p. 32) and Council Directive 88/146/EEC of 7 March 1988 prohibiting the use in livestock farming of certain substances having a hormonal action (OJ 1988 L 70, p. 16).

42 –

Council Directive 96/22/EC of 29 April 1996 concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of ß-agonists, and repealing Directives 81/602/EEC, 88/146/EEC and 88/299/EEC (OJ 1996 L 125, p. 3).

43 –

See Appellate Body report WT/DS26/AB/R, WT/DS48/AB/R, European Communities – Measures Concerning Meat and Meat Products, of 16 January 1998, adopted by the DSB on 13 February 1998, available on the WTO website www.wto.org.

44 –

Judgment of the Court of First Instance in Case T-174/00 Biret International v Council [2002] ECR II-17, paragraph 67.

45 –

Ibid., paragraph 61.

46 –

Opinion in Case C-93/02 P Biret, cited above, point 86.

47 –

Opinion in Case C-93/02 P Biret, cited above, points 85-88.

48 –

Judgment in Case 104/81 Kupferberg, cited above, paragraph 18.

49 –

Opinion in Case C-93/02 P Biret, cited above, points 97-102 (the passage quoted occurs in point 102).

50 –

Point 103. In that case, the conclusion led the Advocate General to propose that Biret’s action for damages against the Community be declared admissible on the ground that the Community’s conduct was unlawful in that it was in breach of WTO law.

51 –

As indeed had, in a sense, the judgment in Case C-104/97 P Atlanta v Commissionand Council [1999] ECR I-6983, particularly paragraphs 19-22. However, completely different indications are given in the Order in OGT on which I shall have more to say later (see point 93 et seq. below).

52 –

The Court in fact found that, since the Community had stated that it intended to comply with its WTO obligations but that it needed a reasonable time to do so, under Article 21(3) of the DSU it was granted a period of 15 months for that purpose, which expired on 13 May 1999. The Court therefore concluded that ‘for the period prior to 13 May 1999 the Community Courts [could] not, in any event, carry out a review of the Community measures in question … without rendering ineffective the grant of [that period]’ (paragraph 62, my emphasis).

53 –

Paragraph 57, my emphasis.

54 –

See Arbitration Decision WT/DS27/15, European Communities – Regime for the Importation, Sale and Distribution of Bananas of 23 December 1997, adopted by the DSB on 7 January 1998, available on the WTO website, www.wto.org, paragraph 12.

55 –

Judgment in Case C-149/96 Portugal v Council, cited above, paragraph 49. See also the judgment in Case C-69/89 Nakajima, cited above, paragraph 31.

56 –

OJ 1988 L 209, p. 1.

57 –

Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade, approved on behalf of the Community by Council Decision 80/271/EEC of 10 December 1979 concerning the conclusion of the Multilateral Agreements resulting from the 1973 to 1979 trade negotiations (OJ 1980 L 71, p. 1). I note that, according to the second recital in the preamble to Regulation No 2423/88, the Community anti-dumping rules ‘were adopted in accordance with existing international obligations, in particular those arising from Article VI of the … GATT, from the … Anti-Dumping Code … and from the Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the GATT (Code on Subsidies and Countervailing Duties)’. The third recital adds that ‘in applying these rules it is essential, in order to maintain the balance of rights and obligations which these Agreements sought to establish, that the Community take account of their interpretation by the Community’s major trading partners, as reflected in legislation or established practice’.

58 –

Judgment in Case C-69/89 Nakajima, cited above, paragraphs 29-31.

59 –

Case C-352/96 Italy v Council [1998] ECR I-6937.

60 –

Council Regulation (EC) No 1522/96 of 24 July 1996 on the introduction and administration of certain tariff quotas for imports of rice and broken rice (OJ 1996 L 190, p. 1).

61 –

Judgment in Case C-352/96 Italy v Council, paragraphs 19-21.

62 –

Order in Case C-307/99 OGT Fruchthandelsgesellschaft [2001] ECR I-3159.

63 –

Ibid., paragraph 28.

64 –

Most legal writers are also critical of the answer in question. See inter alia S. Peers, ‘WTO dispute settlement and Community law’ in the European Law Review, 2001, p. 605 et seq. (‘If the 1998 Regulations are not an example of the Community’s intention to implement a WTO obligation, it is hard to see what is’) (p. 615); P. Eeckhout, ‘Judicial Enforcement of WTO Law in the European Union’, in the Journal of International Economic Law, 2001, p. 91 et seq. (‘That statement, with respect, is difficult to understand and accept’) (p. 107).

65 –

See Award of the Arbitrator WT/DS27/15, European Communities – Regime for the Importation, Sale and Distribution of Bananas, of 23 December 1997, adopted by the DSB on 7 January 1998, available on the WTO website, www.wto.org, paragraph 12.

66 –

Ibid., paragraph 12. My emphasis.

67 –

Written question P-4069/98 by Yvonne Sandberg-Fries to the Commission. ‘Consequences of trade dispute between the USA and the European Union’ (OJ 1999 C 182, p.137).

68 –

Judgment in Case C-317/99 Kloosterboer Rotterdam [2001] ECR I-9863, paragraph 28; see also judgments in Joined Cases C-9/95, C-23/95 and C-156/95 Belgium and Germany v Commission [1997] ECR I-645, paragraph 37, and Case C-48/98 Söhl & Söhlke [1999] ECR I-7877, paragraph 36.

69 –

Article 20(e) of Regulation No 404/93 as amended.