EEC - Exports of Canadian Grains
EEC - Exports of Canadian Grains
|Products at issue
|Type of product
Key legal aspects
|Legal basis at issue
|Claims at issue
|Defences at issue
|No of Pages (total / legal reasoning)
|Request for consultations
|Request for establishment
|Adoption of report
|Outcome of the proceedings
|DS12/1 (12/01/1990) EEC - Export of Canadian Grains - Request for Consultations under Article XXIII:1 by Canada (10/01/1990)DS12/2 (23/03/1990) EEC - Export of Canadian Grains - Recourse to Article XXIII:2 by Canada (22/03/1990)
DS12/3 (08/08/1990) Canada/European Communities - Article XXVIII Rights - Recourse to Arbitration "Canada and the European Communities hereby request that the following question be examined by an expert (arbitrator) to be nominated by common agreement of the parties: Does Canada maintain, through the bilateral agreement of 29 March 1962 with respect to quality wheat (hereby annexed), all the negotiating rights provided for in Article XXVIII? What kind of rights under the General Agreement does Canada maintain through the bilateral agreement of 29 March 1962 on ordinary wheat (hereby annexed)?"
DS12/R (16/10/1990) Canada/European Communities - Article XXVIII Rights - Award by the Arbitrator: The parties agreed that the Arbitrator examine the following questions: (i) whether Canada maintained through the Bilateral Agreement of 29 March 1962 with respect to quality wheat all the negotiating rights provided for in GATT Article XXVIII; and (ii) the kind of rights under the General Agreement that Canada maintained through the Bilateral Agreement on ordinary wheat. The Arbitrator found that, given the fact that wheat exports to the EEC were of great importance to Canada; that it had not been known in 1962 what the import restrictions on wheat would have been under the EEC Common Agricultural Policy (CAP); and that the parties had been under considerable pressure to conclude the XXIV:6 negotiations, the purpose of these two agreements was to place Canada in a legal position equivalent to the one it would have been in if the time-limits of Article XXVIII had not applied.
The Arbitrator found that the Quality Wheat Agreement had been negotiated and concluded in the context of the XXIV:6 negotiations. While in principle a claim based on a bilateral agreement could not be brought under the multilateral dispute settlement procedures of the GATT, an exception was warranted in that case, given the close connection of the bilateral agreement with the GATT, the fact that the Agreement was consistent with the objectives of the GATT, and that both parties had joined in requesting recourse to the GATT Arbitration procedures.
The Arbitrator turned to the question of the substantive rights conferred by paragraph B(iv) of the Quality Wheat Agreement, which stated that "[t]he negotiations shall be in accordance with the procedures of Article XXVIII of the GATT" and that in those negotiations Canada "shall have all the contractual rights held by her on quality wheat on September 1, 1960". The Arbitrator considered that the wording of paragraph B(iv) was clear and unequivocal in retaining the equivalent of all of Canada's contractual GATT rights held as of 1 September 1960, which were the equivalent of all Article XXVIII rights, including the right to withdraw concessions. Regarding the question of whether, by formally acknowledging the conclusion in 1962 of the XXIV:6 Negotiations (which followed the procedures of Article XXVIII), Canada had lost its right to invoke the provisions of Article XXVIII:3, the Arbitrator found that the very purpose of the bilateral agreement was to put Canada in a legal position equivalent to the one it would have been in, if the time-limits of Article XXVIII had not applied.
With respect to the Agreement on Ordinary Wheat, the Arbitrator noted that its text was less precise and comprehensive; it spoke only about negotiations and did not specifically mention Article XXVIII rights; in the nearly three decades between 1962 and 1990 had Canada never requested that the negotiations provided for in the agreement be pursued, although they had actively negotiated under the terms of the Quality Wheat Agreement; and, finally, no time-limits were set in that agreement for starting or concluding the negotiations. The Arbitrator concluded that, by its silence, Canada had relinquished any rights under the General Agreement it might have possessed under it in 1962.
Note: First arbitration carried out under the improved GATT dispute settlement rules and procedures approved by the Contracting Parties on 12/04/1989 (BISD 36S/61).