The Final Act and the Single Undertaking

A worked illustration

Suppose a State accedes to the WTO in order to obtain textile market access. It cannot accept GATT 1994, the Agreement on Textiles and Clothing and the DSU while declining TRIPS. Article II:2 makes all of Annexes 1, 2 and 3 integral parts of the one Agreement, and Article XIV permits acceptance of that Agreement only as a whole.

It may, however, decline the Agreement on Government Procurement, which sits in Annex 4, and by Article II:3 that agreement then creates neither rights nor obligations for it. India has done exactly this: it is not a party to the Government Procurement Agreement, which is why its public procurement preference policies are lawful under WTO law.

And the transitional periods are not exceptions to the single undertaking. TRIPS Article 65 gave developing members until 1 January 2000 and, for product patents in fields not previously patentable, until 1 January 2005. The obligation bound from the beginning; only its implementation was deferred, which is precisely why India lost India: Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, on the mailbox and exclusive marketing rights provisions of Article 70, which applied at once.

Distinctions

What this does NOT mean

It does not mean every member owes identical obligations. The single undertaking makes the agreements binding on all; it does not make the commitments identical. Tariff Schedules under GATT and Schedules of specific commitments under GATS are negotiated member by member, so the level of obligation differs enormously while the rules are the same for everybody.

It does not mean the package can never change. Article X provides for amendment, and the Trade Facilitation Agreement was added to Annex 1A by protocol in 2017 and the Agreement on Fisheries Subsidies in 2025.

And it does not mean a member may not be given time. Transition periods, special and differential treatment and the Article IX:3 waiver are all ways of varying when and how an obligation bites, without varying whether it applies.

Quick revision

• Final Act Embodying the Results of the Uruguay Round, signed Marrakesh, 15 April 1994; in force 1 January 1995.
• The umbrella is the Marrakesh Agreement, sixteen articles. Annex 1A goods, 1B services, 1C TRIPS, 2 dispute settlement, 3 trade policy review, 4 plurilaterals.
• Article II:2: Annexes 1, 2 and 3 are integral parts, binding on all Members. That is the single undertaking.
• Article II:3: Annex 4 binds only those that accept, and creates neither obligations nor rights for others.
• Cure for the Tokyo Round codes problem; protects the Round's bargain by making it indivisible.
• Not the same as identical obligations: Schedules are negotiated member by member.
• India is not a party to the Government Procurement Agreement, lawfully, because it is in Annex 4.

Test yourself

1. What is the single undertaking and where is it in the text? It is the rule that the Uruguay Round package is accepted as a whole, and it is in Article II:2 of the Marrakesh Agreement, which provides that the agreements and associated legal instruments included in Annexes 1, 2 and 3, the Multilateral Trade Agreements, are integral parts of that Agreement and binding on all members. Article XIV supports it by opening the Agreement to acceptance as a whole, and Article XII requires an acceding State to negotiate terms of accession to the Agreement and the Multilateral Trade Agreements together. The counterpart is Article II:3, under which the Annex 4 Plurilateral Trade Agreements bind only members that have accepted them and create neither obligations nor rights for the rest. The rule exists to cure the Tokyo Round arrangement, under which nine codes could be accepted separately so that no two contracting parties necessarily owed each other the same duties, and to protect the Round's central bargain by making it indivisible.

2. Does the single undertaking mean every member has the same obligations? Explain. No, and the distinction is between rules and commitments. The single undertaking makes the same agreements binding on every member, so every member owes most favoured nation treatment under Article I of GATT, national treatment under Article III, the TRIPS minimum standards and the DSU procedure. What differs, and differs enormously, is the schedule of concessions each member has negotiated: bound tariff rates under GATT vary line by line and member by member, and under the GATS market access and national treatment apply only in the sectors and modes a member has scheduled and only subject to the limitations it has recorded. Time also differs: TRIPS Article 65 gave developing members until 1 January 2000, and until 1 January 2005 for product patents in fields not previously patentable, and least developed members have had repeated extensions. So the rules are uniform, the commitments and the timetables are not, and both statements have to be in a full answer.

3. Set out the annex structure of the WTO agreements. The Marrakesh Agreement Establishing the World Trade Organization is a short instrument of sixteen articles which serves as an umbrella, and the substance sits in four annexes. Annex 1 is divided into three parts: Annex 1A holds the Multilateral Agreements on Trade in Goods, that is GATT 1994 together with the agreements on agriculture, sanitary and phytosanitary measures, textiles and clothing, technical barriers, trade related investment measures, anti-dumping, customs valuation, preshipment inspection, rules of origin, import licensing, subsidies and countervailing measures, safeguards, and now trade facilitation and fisheries subsidies; Annex 1B holds the General Agreement on Trade in Services; Annex 1C holds the Agreement on Trade-Related Aspects of Intellectual Property Rights. Annex 2 is the Understanding on Rules and Procedures Governing the Settlement of Disputes, Annex 3 is the Trade Policy Review Mechanism, and Annex 4 holds the Plurilateral Trade Agreements. Annexes 1, 2 and 3 bind every member; Annex 4 binds only its own parties.