Decisions of the Appellate Body of the World Trade Organization Canadian Periodicals: Canada - Certain Measures Concerning Periodicals Introduction Complete Text of this Survey (RTF Format) Full Text of the WTO Appellate Body Report (PDF Format) * Chinedu R. Ezetah** WTO Appellate Body Report: Canadian Periodicals: Canada - Certain Measures Concerning Periodicals, AB-1997-2, WT/DS31/AB/R, Adopted by Dispute Settlement Body, July 30 1997, Canada, United States, Appellant; Canada, United States, Apellee; Devision: Matsushita, Ehlermann and Lacarte-Muró. Introduction This case involved a dispute between the United States and Canada over measures taken by the Canadian Government to protect Canadian magazine industry as a medium of Canadian ideas and interests, and a tool for the promotion of Canadian culture. A long-standing policy of the Canadian Government had been to protect its magazine industry by boosting its advertisement revenues and distribution capacity. For example income tax deductions were granted for advertisements directed at the Canadian market, and schemes that achieved lower postal rates for magazine distribution were adopted. In 1965, Imported "split run" editions of foreign magazines (i.e. special editions that contain advertisements primarily directed at the Canadian market as the material difference with all other editions of the same issue distributed in the magazines country of origin) were identified by Canada as undermining these policies and consequently banned. Again, in 1995, an anticipated publication of Sports Illustrated Canada as a split run of US Sports Illustrated, was identified by the Canadian Government as an evasion of the ban on imported split runs. In response, the Government imposed a new tax on the advertisements of all domestically published split-run magazines. The US objected to the measures as being trade restrictive and protectionist, and its initiation of the WTO dispute settlement process led to an unfavorable ruling for Canada. Besides the successful resolution of the dispute within the framework of the WTO dispute resolution system, the case raises issues of vital importance to the new international trade dispute resolution system, the jurisprudence of international trade law and the substantive trade agreements. For example, the case signals a possible pattern of legalism that the WTO Appellate Body may have adopted: one that keeps faith with the time hallowed concept of judicial precedence1 and, not only resurrects the Vienna Convention on the Law of Treaties, but broadens its ambits with remedial principles and strategies of interpretation such as those of "structure and design" analysis and "judicial economy". The case also portrays the Panel and Appellate Body as being ready to assume a wide discretion in the application of supplementary rules of interpretation to justify textual conclusions, and therefore suggests a readiness to review the preparatory histories and policy objectives of the measures under consideration. Questions of substance that come to light in the case include: the articulation of the minimum procedural content of the DSU requirement of "objective assessments of facts"; the articulation of a possible criteria for distinguishing obligations under the GATT from the GATS; and the appropriate standard of "substitutability" under Article III of the GATT. In addition, the case underlines probable areas of future legal conflict such as: the appropriate balance between Article III national treatment principle and the fiscal sovereignty of states; the exact limits that Article 17 of the DSU places on the appellate jurisdiction of the WTO Appellate Body; the meaning of indirect taxation under Article III; and the significance of culture under the WTO system. The issues above are important, not only to International trade lawyers and practitioners, but also for political scientists and other trade experts. The reason is that the increasing judicialisation implicit in the patterns above is likely to facilitate other factors and forces of linear vertical integration in the international trade order, possibly in the same manner that institutional theorists explain the role of the European Court of Justice in the integration of the EU.2 That notwithstanding, the level of legalism manifest in the case, if it continues, is likely to exert pressures on the international trade order towards increasing harmonization of domestic laws, trade policies and rules. In examining the issues above, Part 1 of the paper summarizes the facts of the case as presented before the WTO Panel and the Appellate Body and the decisions taken on contested issues. Part 2 commences the review of the case with a discussion on the value placed on precedents and the implications for the jurisprudence of international trade. This is followed by analysis of emerging principles of treaty interpretation implicit in the decisions, emerging principles of international trade law and it concludes with a discussion of legal problems created or left unresolved by the Appellate Body. Part 3 concludes the review with a comment on the nature of legalism that emerges from the case, and the role of the Appellate Body in the development of the jurisprudence of international trade law. * provided by worldtradelaw.net ** LLM candidate, Harvard Law School. 1 This concept is widely regarded by jurists in common law systems as the "life blood of legal systems". See Lloyd & M.D.A. Freeman, INTRODUCTION TO JURISPRUDENCE (Great Britain: The Garden City Press Ltd., 1986) at page1101. The concept emphasis the primacy of decisions of courts, tribunals and adjudicatory panels over other sources of judicial authority such as legal writings and commentaries, treats such decisions as binding in a hierarchical order of jurisprudential superiority and emphasis the need for the gathering and publication of such decisions. 2 Pierson, P., "the Path to European Integration: A Historical Institutionalist Approach" (1996) COMPARATIVE POLITICAL STUDIES, Vol.29, No.2, pp.123-163.
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