The Transformation of the World Trading System through the 1994 Agreement Establishing the World Trade Organization

Ernst-Ulrich Petersmann ¹

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How can governments be induced to use their foreign policy powers in a peaceful and welfare-increasing manner? Mankind has so far failed to find a convincing answer to this question and has paid dearly for this failure with centuries of war, welfare-reducing abuses of government powers and unnecessary poverty. There is also a long history of abuses of trade policy powers in a mutually impoverishing manner generating international conflicts and `trade wars'. Due to inadequate constitutional safeguards, governments cannot pursue national economic welfare as their dominant trade policy objective. Since import restrictions operate by taxing domestic traders and consumers for the benefit of `rent-seeking' producer interests, and often limit the freedoms and property rights of domestic citizens without effective parliamentary and judicial control, the lack of an effective `foreign policy constitution' can undermine also the `domestic policy constitution' and its general constitutional restraints on the taxing, regulatory and spending powers of governments. The regional EC integration law was uniquely successful in securing peace, economic welfare and individual liberty among the EC Member States through `supranational' legal and institutional guarantees of rule of law, `market freedoms', non-discriminatory competition and judicial protection of individual rights. But most governments seem to believe that the `constitutional approach' of EC law cannot be extended to the foreign policy powers of the EC nor beyond the regional context of European integration.

The 1994 Agreement Establishing the World Trade Organization (WTO) is the most ambitious attempt in history at promoting welfare-increasing policies through international guarantees of freedom, non-discrimination and rule of law in the ever more important field of worldwide economic relations. In many respects, such as the protection of individual rights (e.g., of access to courts and intellectual property rights) and the establishment of a mandatory global dispute settlement system, it goes beyond the postwar `UN Constitution' for the conduct of foreign policies. Its `integration' of international rules on trade in goods, services, trade-related investment measures, environmental measures and intellectual property rights, reinforced by the WTO's `Trade Policy Review Mechanism' and integrated dispute settlement system, is also more ambitious than the stillborn 1948 Havana Charter for an International Trade Organization (save for the Havana Charter rules on restrictive business practices and intergovernmental commodity agreements). It introduces a new kind of worldwide integration law with far-reaching implications for other existing international organizations, such as the UN Conference on Trade and Development and the World Intellectual Property Organization.

This contribution begins with a brief review of the difficulties of `constitutionalizing' foreign policies in national and international law (Chapter I) and of the `constitutional' problems of the world trading system (Chapter II), which make its reform such a hard task. Chapters III and IV analise the contents of the 1994 Uruguay Round Agreements, their `constitutional functions' and their underlying `public choice strategies', which made it possible to conclude the Uruguay Round successfully. The paper ends with a brief outlook at the WTO agenda for future negotiations. The methods and value premises of this paper - i.e. liberal constitutional theory, `public choice' theory and economic analysis of law - are explained in Chapter II.C in the hope of stimulating a broader discussion on the need for a more realistic theory of international relations, of international law and of international organizations.

I. The Long and Winding Road towards `International Constitutionalism': From Florence to Geneva via Bretton Woods, San Francisco and Luxembourg

A. National Constitutionalism

Constitutionalism was preceded by a long history of political ethics, whose evolution can be subdivided into personal ethics, focusing on the virtues of the rulers (e.g., Plato's philosopher kings), and institutional ethics, searching for rules and institutions in order to limit abuses of government powers and protect the liberty of citizens through the rule of law. Greek, Roman, medieval and other philosophers since the Age of Enlightenment, proceeding from the Aristotelian belief that the `rule of law' can better enable man to realize his natural aspiration for social life than Plato's preference for the `rule of man', developed comprehensive theories on the supremacy of law for both the `rulers' and the `ruled'. The more sceptical they were about man's egoistic nature and the assumption of `benevolent governments', the more they emphasized the need for a `mixed political order' with monocratic, oligocratic and/or democratic elements and `checks and balances' (e.g., between the King, the Upper House of Lords and Lower House of Commons in England after the Bill of Rights of 1689). Donato Gianotti's book on the `Florentine Republic',² written after the fall of the last Florentine Republic (1530), seems to have been the first complete draft for a comprehensive constitutional reform of a concrete political order after Plato's incomplete Nomoi (347 B.C.) for the foundation of a new city and T. Morus' Utopia (1516).

Gianotti was also the first author who emphasized the need for `separation of powers', based on the distinction of four state functions (elections, foreign and security policy, legislation, judicial review) and three decision-making phases (initiation of proposals, deliberation and decision, execution) in the `mixed state'.³ In contrast to John Milton's distinction between two government functions (law making, law executing), John Locke's distinction between three functions (legislation, execution, foreign policy) and the prevailing theory (notably by Montesquieu, Madison and Kant) on the separation of legislative, executive and judicial government powers, Gianotti's classification was more differentiated and more realistic. Sharing the pessimism about man's nature of Machiavelli (who was his predecessor in the position of secretary to the Florentine Republic's `Council of Ten'), Gianotti's proposals for a stable `mixed government' recognized the need for separating also the right of initiative for government decisions from the decision-making power and for regulating specifically foreign policy and defence powers. He avoided thereby the inadequacies of the `three-functions-theory' on the separation of legislative, executive and judicial state functions, such as Montesquieu's unrealistic perception of `foreign policy' as the `execution of international law' by the `Executive', which led to an unclear distribution of foreign policy powers in the US Constitution of 1787 and in many subsequent national constitutions. The right of initiative of the EC Commission and the mandate of the `European Council (to) provide the Union with the necessary impetus for its development and ... define the general political guidelines thereof' (Article D of the 1992 Maastricht Treaty) reflect this insight that government has always been more than a mere `Executive', just as parliament has always been more than a mere `Legislature'.

Written constitutions as a contractual means by which citizens secured their freedom through long-term basic rules of a higher legal rank, and constitutionally limited democracies based on recognition of inalienable fundamental rights and representative government, emerged only in the 18th century in North America and Europe. But the constitutional ideals of `a government of laws, not of men', and of `horizontal' and `vertical' separation of powers (e.g., through judicial protection of individual rights), were never effectively applied to the conduct of foreign policies and international relations. Up to World War II, most national constitutions remained characterized by an introverted focus on domestic policy issues and included only few references to foreign policy issues, such as declarations of war, treaty-making powers and treaty-making procedures. The task of `nation-building' and the admissibility of war under classical international law contributed to a `defensive' constitutional attitude vis-à-vis third countries and to the long-standing doctrine of the alleged incompatibility between the requirements of foreign policy and the ideals of rule of law and democratic decision-making.

The constitutional protection of fundamental rights was primarily concerned with the moral and political freedom of the individual and, notably within federal states, with the liberalization of trade protectionism within states, for instance among the Member States of the American, German and Swiss (Con)Federations. It was only in the 20th century that the ever more active use by (federal) governments of their power `to regulate commerce with foreign Nations, and among the several States',<sup>4</sup> and the increasing awareness of the importance of economic liberty as a condition for the exercise of many other liberties, led to concerns over constitutional safeguards against abuses of the economic regulatory powers of governments. But these concerns focused again on the `domestic policy constitution'. Notably in Anglo-American constitutional thinking, the prevailing view continued to be that the citizens do not enjoy constitutional rights to trade with foreign nations because

When the people granted Congress the power to `regulate Commerce with foreign Nations' ... they thereupon relinquished at least whatever rights they, as individuals, may have had to insist upon the importation of any product.⁵

Only a few constitutions of small trading nations like Switzerland, and a few postwar constitutions like the German Basic Law, seem to include constitutional guarantees of freedom of trade which, at least in principle, apply symmetrically to both domestic and foreign trade. But, for a number of reasons, even these national constitutional guarantees never provided an effective `foreign policy constitution'. For instance, the constitutional guarantees of freedom of trade and industry (Article 31) and of low import and export duties (Article 29) in the Swiss Constitution of 1874 were progressively undermined by interpreting Article 29 as not prohibiting non-tariff trade barriers, by constitutional amendments providing for comprehensive discretionary regulatory powers, and by the lack of judicial review over federal legislation and over most foreign trade restrictions. To date, most national constitutions appear not to have dealt effectively with their task to protect the `domestic policy constitution' from being undermined by abuses of `foreign policy' powers, for instance by import restrictions which tax and restrict domestic citizens and redistribute income (`protection rents') among domestic groups in a welfare-reducing manner. In globally integrated economies, `domestic' and `foreign' policies are often no longer separable, and citizens value the `transnational' exercise of their liberties no less than purely domestic activities. National constitutions remain therefore incomplete without effective constitutional constraints on foreign policy powers.

B. International Constitutionalism

It was early recognized, for instance in Immanuel Kant's proposals of 1795 for an international treaty on `perpetual peace' among republican states with representative constitutional government, that peace and rule of law at the international level depend on respect for the `rights and duties of their citizens' in domestic laws.⁶ The parallels between the international law doctrine of `fundamental rights and duties of states' and the constitutional law doctrine of fundamental rights and duties of citizens were also noted early (e.g., in the writings of international lawyers like Pufendorf and de Vattel). Thus, following the adoption of the `Déclaration des droits de l'homme et du citoyen' by the French National Convention in 1789, a supplementary `Déclaration du droit des gens' was considered, though not approved, by the French National Convention in 1793 and 1795; proceeding from the inalienability of the sovereignty of each nation and from the need to subordinate the interest of the individual nation to the general interest of the human race, it laid down basic rights and duties of states in 20 articles. But neither the theory of the `fundamental rights and duties of states' nor Kant's plan for an international `federation of free states' were aimed at a supranational `international constitutional law' and hardly influenced the power-oriented state practice up to World War I.⁷

The `constitutional functions' of international guarantees of freedom and non-discrimination for limiting abuses of national regulatory powers, and the importance of international organizations for the effectiveness of international rules and for a `vertical separation of powers', were only recognized in the light of the traumatic experience of World War II and of the preceding `law of the jungle' in international economic affairs. That `the federal principle of organisation may indeed prove the best solution of some of the world's most difficult problems', provided its application does not replicate at the international level the `constitutional failures' of nation states, was emphasized in F.A. Hayek's 1944 best-seller The Road to Serfdom:

When we want to prevent people from killing each other we are not content to issue a declaration that killing is undesirable, but we give an authority power to prevent it. In the same way there can be no international law without the power to enforce it. The obstacle to the creation of such an international power was very largely the idea that it need command all the practically unlimited powers which the modern state possesses. But with the division of power under the federal system this is by no means necessary. This division of power would inevitably act at the same time also as a limitation of the power of the whole as well as of the individual state.⁸

More specifically, regarding the problem of economic regulation,

We cannot hope for order or lasting peace after this war if states, large or small, regain unfettered sovereignty in the economic sphere. But this does not mean that a new super-state must be given powers which we have not learnt to use intelligently even on a national scale... What we need and can hope to achieve is not more power in the hands of irresponsible international economic authorities, but, on the contrary, a superior political power which can hold the economic interests in check... The need is for an international political authority which, without power to direct the different people what they must do, must be able to restrain them from action which will damage others ... even more than in the national sphere, it is essential that these powers of the international authority should be strictly circumscribed by the Rule of Law... An international authority which effectively limits the powers of the state over the individual will be one of the best safeguards of peace. The international Rule of Law must become a safeguard as much against the tyranny of the state over the individual as against the tyranny of the new super-state over the national communities.⁹

This `constitutional insight' - that governments risk to become prisoners of the `sirene-like' pressures of organized interest groups unless they follow the wisdom of Ulysses (when his boat approached the island of the Sirenes) and tie their hands to the mast of international guarantees of freedom and non-discrimination - underlied many international postwar agreements such as: the legal and institutional guarantees in the `United Nations Law'<sup>10</sup> for the respect of the `sovereign equality of states' and of the human rights of their citizens; the legal requirements in the 1944 Agreement establishing the International Monetary Fund (IMF) for freedom of payments, stable and non-discriminatory exchange rates and convertible currencies; and the legal guarantees in the 1947 General Agreement on Tariffs and Trade (GATT) for non-discriminatory competition and the use of transparent, welfare-increasing trade policy instruments. The `constitutional functions' of these and other guarantees of freedom, non-discrimination and rule of law for limiting abuses of national foreign policy powers, and for extending the national guarantees of freedom, non-discrimination and rule of law to transnational relations,<sup>11</sup> are particularly visible in Western Europe. Here, the requirement in Article 3 of the 1949 Statute of the Council of Europe - that `every Member of the Council of Europe must accept the principles of the rule of law and of the enjoyment by all persons within its jurisdiction of human rights and fundamental freedoms' - has become a common `constitutional minimum standard' and a condition of membership in the European Union and in its `Europe Agreements' with Eastern European countries. While, in the worldwide UN law and `Bretton Woods law', the scope for judicial review of the validity of acts by UN bodies remains very limited¹² and less than a third of the UN member states have accepted the mandatory jurisdiction of the International Court of Justice, EC law and the European Convention on Human Rights provide for obligatory judicial review by international courts and for direct access of European citizens to the EC Court of Justice and the European Court of Human Rights.

Yet, it remains noteworthy that this judicial protection of individual rights in European relations was often introduced by the courts, for instance in response to complaints by EC citizens, and often against protectionist resistance by the EC Council and national governments.¹³ Thus, it was thanks to the EC Court of Justice and to the judicial protection of individual rights by national courts, that the EC Treaty's prohibitions of tariffs and non-tariff trade barriers were construed as directly enforceable `market freedoms' and individual rights of EC citizens. And it was largely in response to the `basic rights jurisprudence' of the German Constitutional Court in the 1970s, that fundamental rights of the EC citizens were recognized and judicially protected as unwritten guarantees of EC law. In both EC law and the European Convention on Human Rights, it was a common experience that the effectiveness of the international guarantees of freedom and non-discrimination was greatly enhanced by enabling the citizens to directly invoke and enforce these guarantees through independent courts. The 1993 `Maastricht judgment' by the German Constitutional Court, in which the Court emphasized the `limits ... imposed, by the principle of democracy, on an extension of the functions and powers of the European Communities' as long as the parliamentary and democratic foundations of the European Union are not further extended concurrently with integration, may prompt the EC to strengthen also the collective democratic rights of EC citizens in EC law. As a result of this judicial interpretation of EC law as a constitution, the century-old tradition of power-oriented foreign policies among European states was progressively transformed, pursuant to the Kantian ideal, into rule-oriented domestic issues to be decided by the courts on the basis of the equal `market freedoms' and other basic rights of EC citizens.

The 1947 General Agreement on Tariffs and Trade (GATT) was the first historical attempt at limiting welfare-reducing `beggar-thy-neighbour policies', which had triggered a worldwide recession during the 1930s leading to World War II, through worldwide multilateral guarantees of freedom of trade, non-discrimination, use of welfare-increasing policy instruments, rule of law and peaceful settlement of disputes without unilateral reprisals. GATT law includes many precise, unconditional and justiciable rules and explicitly requires the availability of domestic judicial review. Yet, most governments and domestic courts continue to view trade policy as part of foreign policy and insist, in their domestic legislation and in its judicial interpetation, on the need for discretionary powers to restrict trade regardless of the self-imposed international GATT obligations. The EC Council Decision of 22 December 1994 on the conclusion of the Uruguay Round Agreements establishing the World Trade Organization (WTO) illustrates this attitude in the following paragraph:

Whereas, by its nature, the Agreement establishing the World Trade Organization, including the Annexes thereto, is not susceptible to being directly invoked in Community or Member State courts.¹⁴

C. The Need for Strengthening the `Foreign Policy Constitution'

WTO law - like GATT law - includes many precise, unconditional and justiciable guarantees of freedom, non-discrimination, rule of law, private intellectual property rights and judicial review. Yet, the attempt by governments, even in constitutional democracies like those of the EC states and the USA, to limit the `domestic law effects' of their self-imposed international guarantees of freedom and non-discrimination illustrates that the foreign policy concern over lack of reciprocity and over inequality of domestic enforcement procedures is considered more important than the `general interest' of their citizens in making their `WTO market freedoms' more effective through the `direct applicability' and judicial protection of WTO law. This `primacy of foreign policy' over the individual rights of the citizens reflects a power-oriented perception of government. The 1993 and 1994 GATT dispute settlement reports on the inconsistency of the EC's import restrictions on bananas with GATT Articles I to III, and the continuing disregard by the EC of these dispute settlement findings, show that also the EC institutions assert a Community power to tax and restrict EC citizens in manifest violation of their international GATT obligations.

The EC's `banana protectionism' - which, according to a recent estimate by the World Bank, costs EC consumers $2.3 billion a year and distorts EC competition (leading to numerous bankruptcies e.g., in Germany) for the benefit of a handful of multinational banana firms<sup>15</sup> - reflects a political weakness of the EC's `foreign policy constitution': governments are not effectively constrained to pursuing their legitimate task of protecting the general interests of the citizens. Neither `separation of powers', for instance through parliamentary legislation and judicial review, nor the principle of `primacy of international law over secondary EC law', which underlies Articles 228 to 234 of the EC Treaty¹⁶ and requires both the EC and its Member States to act in conformity with self-imposed international treaty obligations, are effectively guaranteed in the EC's external relations. Even though the GATT obligations are `binding on the institutions of the Community and on Member States' (Articles 228:7, 234 EC Treaty) and were ratified also by national parliaments in EC member countries, the `GATT case-law' of the EC Court of Justice remains characterized by a long tradition of ignoring even precise and unconditional GATT rules and GATT dispute settlement findings against the EC.¹⁷

The most recent example of this `judicial protectionism' is the Court's judgment of 5 October 1994 on Germany's complaint that the EC Council's `banana regulation' No. 404/93 was inconsistent with GATT Articles I to III, as previously determined in two independent GATT dispute settlement reports. The Court concluded from the existence of GATT's safeguard clause (Article XIX) and GATT's dispute settlement system (Article XXIII) `that the GATT rules are not unconditional' and `preclude the Court from taking provisions of GATT into consideration to assess the lawfulness of a regulation in an action by a Member State under the first paragraph of Article 173 of the Treaty'.¹⁸ No GATT contracting party, and no learned publication on GATT law, have ever advanced such an interpretation, which is also contradicted by the fact that GATT rules have been recognized as justiciable during 45 years of GATT dispute settlement practice as well as in the domestic laws of several countries. The `banana judgment' leaves it essentially to the EC Council whether it wants to comply with, or disregard, the GATT and WTO guarantees of freedom and non-discrimination, and whether it wants to respect international treaty obligations of EC Member States ratified by their national parliaments, or disregard the parliamentary decisions and engage the international state responsibility of EC Member States for the violation of GATT rules by the EC. Paradoxically, only third GATT contracting parties may invoke the GATT/WTO dispute settlement procedures to enforce the EC's GATT and WTO obligations through legally binding third party adjudication, whereas the EC Member States have no equivalent right to sue in the GATT/WTO or before the EC Court of Justice. The strange result is that EC consumers may no longer rely on their own governments in order to benefit from the `GATT/WTO market freedoms', but may depend on the invocation of the WTO dispute settlement mechanism by third countries.

How can the inadequate `foreign policy constitutions' of states be strengthened? Will the national constitutional courts in EC Member States challenge protectionist EC restrictions if they manifestly violate the EC's GATT and WTO obligations ratified also by national parliaments?<sup>19</sup> For a number of reasons, autonomous unilateral reforms of the `foreign policy constitutions' of states and of the EC are unlikely to find the necessary domestic political support.²⁰ Only reciprocal multilateral agreements on worldwide reforms tend to attract the necessary political support by export industries for `constitutionalizing' discretionary foreign policy powers.²¹ This is confirmed by the experience in national and international law that liberal trade could be secured - both within federal states (such as the USA, Switzerland and Germany) as well as at the international level within the EC and among GATT member countries - only by means of constitutional or reciprocal international legal restraints on discretionary trade policy powers.²² The 1994 WTO Agreement is a landmark achievement in this respect.

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1 Professor of law at the University of St. Gallen, visiting professor at the Graduate Institute of International Studies at Geneva, and legal advisor in the GATT/WTO 1981-1995.

2 D. Gianotti, Republica Fiorentina, A critical edition and introduction by G. Silvano (1990).

3 See Riklin, `Donato Gianotti - ein verkannter Vordenker der Gewaltenteilung aus der Zeit der Florentiner Renaissance', Zeitschrift für Neuere Rechtsgeschichte (1992) 129 seq.

4 Article I, Section 8, clause 3 of the US Constitution.

5 US Court of Appeals for the Federal Circuit, Arjay Associates Inc. v. Bush, 891 F2d 891, 898 (Fed.Cir. 1989). For a criticism of this case-law see Petersmann, `National Constitutions and International Economic Law', in M. Hilf, E.-U. Petersmann (eds), National Constitutions and International Economic Law (1993) 3-52, at 14 seq.

6 Kant's booklet on `Perpetual Peace', presented in 1795 as a draft treaty consisting of 9 articles with a supplement and an annex, differed from earlier projects (e.g., by Abbé de Saint Pierre in 1713) by linking the reforms of international law proposed in Kant's 6 `preliminary articles' to reforms of domestic constitutional laws proposed in Kant's 3 `definitive articles' (Article I: `The civil constitution of each state shall be republican'; Article II: `The law of nations shall be founded on a federation of free states'; Article III: `The rights of men, as citizens of the world, shall be limited to the conditions of universal hospitality'). As shown by Kant's detailed commentary on the draft treaty, the underlying assumption was that representative constitutional government, separation of powers, protection of individual rights and a `covenant of peace' among independent republican states would promote a gradual convergence of national interests and the `primacy of domestic policy' also in international relations. See M.C. Jacob (ed.), Peace Projects of the Eighteenth Century (1974).

7 See Petersmann, `Rights and Duties of States and Rights and Duties of their Citizens', in U. Beierlin, M. Bothe, E.-U. Petersmann (eds), Festschrift für Professor R. Bernhardt (1995) 1087-1128.

8 F.A. Hayek, The Road to Serfdom (1944) (reprint 1979), at 173.

9 Hayek, supra note 7, at 172, 175.

10 See Schachter, `United Nations Law', AJIL (1994) 1-23.

11 See E.-U. Petersmann, Constitutional Functions and Constitutional Problems of International Economic Law (1991), at 221 seq.

12 See Watson, `Constitutionalism, Judicial Review and the World Court', 34 Harv. Int'l L.J. (1993) 1-44.

13 See Burley, Mattli, `Europe before the Court: A Political Theory of Legal Integration', 47 International Organizations (1993) 41-76.

14 Official Journal of the EC L 336/2 of 23 December 1994. The Uruguay Round Schedule of Specific Services Commitments by the `European Communities and their Member States' likewise specifies that `the rights and obligations arising from the GATS, including the schedule of commitments, shall have no self-executing effect and thus confer no rights directly to individual natural persons or juridical persons' (cf. Legal Instruments Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Vol. 28, GATT 1994, at 23557).

15 See Borell, `Bananarama', Policy Research Working Paper 1386, World Bank (1994). The study says that, out of the $2.3bn annual protection costs in artifically inflated prices, only $300 million benefit ACP producers, while most of the extra cost is in monopoly profits for European companies marketing bananas. According to the study, the EC's banana system severely distorts competition, encourages black marketeering, restricts the growth of the EU banana market, discriminates against efficient producers and robs inefficient ones of incentives to raise productivity and cut costs.

16 See Petersmann, `Commentary on Article 234 of the EEC Treaty', in H. Groeben, J. Thiesing, C. Ehlermann (eds), Kommentar zum EWG-Vertrag (1991) 5726 seq.

17 For a critical survey of the Court's `GATT case-law' see Petersmann, `Application of GATT by the Court of Justice of the European Communities', 20 CML Rev. (1983) 397-437. The Court's rare references to GATT rules in the interpretation of EC Regulations explicitly referring to GATT law, such as Regulation No. 2641/84 on the strengthening on the common commercial policy (see Case 70/87, Fediol v. Commission, [1989] ECR 1781) and Regulation No. 2423/88 on protection against dumped imports (see Case C-69/89, Nakajima v. Council, [1991] ECR 2069), continue to be exceptional in view of the many cases (like the `banana judgment' of 5 October 1994) where the Court construes EC foreign trade law without taking into account the EC's GATT obligations. Moreover, the EC Court's review of e.g., anti-dumping and other foreign trade measures tends to focus on the observance of procedural requirements (such as: accurate statement of the facts and of the reasoning? manifest error of factual appraisal?) and to avoid the intricacies of substantive international and European foreign trade law (e.g., in the Court's examination of dumping findings and whether there was a `misuse of powers').

18 Case C-280/93, Germany v. Council of the European Union, judgment of 5 October 1994, at paras. 109, 110. The case has not yet been reported in the EC Court Reports but was published in ILM (1995), at 154 seq., together with the preceding GATT Panel Report on the EEC's Import Regime for Bananas, at 180 seq.

19 See the decision by the German Constitutional Court of 25 January 1995 (reported in Europäische Zeitschrift für Wirtschaftsrecht (1995) 126f), according to which German courts may grant interim relief in the application of the EC's contested banana market regulation if it risks to cause the bankruptcy of German importers and if, without interim relief, the right of German citizens to the protection of their private property (Article 14 of the German Basic Law) and to effective judicial protection (Article 19:4 Basic Law) could be impaired by unacceptable, disproportionate damage which could not be repaired by a later court decision. Following this Constitutional Court decision, the competent administrative court decided on 9 February 1995 to grant interim relief by ordering an increase in the import quota of the plaintiff by 2,500 tonnes (Verwaltungsgerichtshof Hessen, 8 TG 292/95).

20 Cf. Petersmann, `How Can the European Union be Constitutionalized? The European Parliament's 1994 Proposal for a "Constitution for the European Union"', Aussenwirtschaft (Swiss Review of International Economic Relations) (1995) 170-219.

21 For an explanation of this conclusion see also Petersmann, supra note 4, at 46 seq.

22 For a comprehensive comparative legal analysis see E.-U. Petersmann, supra note 10.

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