LLM Group 2 Business Law Global Trade Under World Trade Organisation 2024-25 Question Paper with Solutions

For full marks, cover: the four structural defects of GATT that made an organisation necessary, each with its evidence; then the second half of the stem as a legal question, because "GATT is the predecessor of WTO" is only partly true and the interesting part of the answer is where it is false; and finish with the table of differences, which is what the examiner will look for.

The question has two halves and they pull in opposite directions, which is why it is a good question. The first half asks why an organisation was needed when an agreement already existed. The second asks whether the agreement was the organisation's predecessor. The honest answer is that the WTO succeeded GATT institutionally and did not replace it textually, because GATT 1947 as amended survives inside the WTO as GATT 1994, which is one of the covered agreements. A candidate who says simply that the WTO replaced GATT has got the law wrong.

Third, the coverage was too narrow for the economy of the 1980s. GATT covered trade in goods. It did not cover services, which by then were a growing share of world output and of cross border transactions; it did not cover intellectual property, except a passing reference in Article XX(d); it did not cover investment measures; and its disciplines on agriculture and on textiles had been suspended in practice, agriculture by waiver and grandfathering, textiles by the Multi Fibre Arrangement of 1974, a licensed derogation from Article XI permitting bilateral quotas on exactly the products in which developing countries were competitive.

Fourth, and decisively, dispute settlement was blockable. A panel could be established only by consensus of the Contracting Parties and its report adopted only by consensus, so a respondent could veto either step. The two Tuna Dolphin panel reports, DS21/R of 3 September 1991 and DS29/R of 1994, both found against the United States and neither was ever adopted. A system in which the losing party decides whether the judgment exists is not a legal system.

Textually the statement is false, and that is the point most candidates miss. GATT 1947 as a legal instrument was terminated: members of the WTO withdrew from it, and the last contracting parties completed the process by the end of 1995. What binds WTO members is GATT 1994, defined in paragraph 1 of the incorporating text in Annex 1A as GATT 1947 as amended, plus the protocols and certifications on tariff concessions, the protocols of accession, the Article XXV waivers still in force, and six Understandings, together with the Marrakesh Protocol.

The Appellate Body confirmed in Brazil: Measures Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, that GATT 1994 is a legally distinct instrument from GATT 1947, so a measure taken before 1 January 1995 could not be judged under the new agreements. The predecessor is therefore an ancestor and not the same person.

Two further senses of the statement are worth a sentence each. In terms of substance the continuity is very strong: Articles I, II, III, VI, XI, XVI, XIX, XX, XXI, XXIII and XXIV of GATT 1947 are the operative provisions of GATT 1994 word for word, so the core rules of world trade law were drafted in 1947 and have never been rewritten. In terms of membership the continuity is near total: the one hundred and twenty eight contracting parties became the founding members, and the WTO had one hundred and sixty six members by 2026.

India: Certain Measures Relating to Solar Cells and Solar Modules, WT/DS456/AB/R, adopted 14 October 2016. The Jawaharlal Nehru National Solar Mission required developers selling power to the government to use cells and modules of Indian origin. The United States complained. The panel and the Appellate Body held the requirement inconsistent with Article III:4 of GATT 1994 and Article 2.1 of the TRIMs Agreement, and rejected India's defences under Article III:8(a) on government procurement, because the product discriminated against was not the product procured, and under Article XX(j) and XX(d). India lost. The case shows the WTO reaching an instrument of domestic industrial policy in a way GATT never did, both because the TRIMs Agreement did not exist and because the report could not be blocked.

Three concrete consequences follow. The Ad Note to Article III, adopted in 1947, still supplies the distinction between the two sentences of Article III:2 that decided Japan: Taxes on Alcoholic Beverages, adopted 1 November 1996. The GATT practice on balance of payments consultations under Articles XII and XVIII:B, and the role Article XV:2 gives the International Monetary Fund's findings, is what defeated India in India: Quantitative Restrictions, WT/DS90/AB/R, adopted 22 September 1999. And the two Tuna Dolphin panel reports of 1991 and 1994, never adopted and therefore of no formal legal effect, were nevertheless the starting point from which the Appellate Body reasoned in United States: Shrimp, WT/DS58/AB/R, adopted 6 November 1998, reaching the opposite conclusion on extraterritorial conservation.

So the accurate formulation of the statement in the stem has three parts. Institutionally the WTO succeeded GATT, and Article XVI:1 says so. Textually GATT 1947 was terminated and GATT 1994 is a legally distinct instrument, as Brazil: Desiccated Coconut holds. And interpretively the two are continuous, so that the meaning of the modern agreement is very largely the meaning the old one had acquired by 1994. A candidate who gives all three has answered the question completely; one who gives only the first has restated the textbook, and one who gives only the second has produced a technicality.