Every time the question of challenging OPEC at the WTO comes up, and even assuming for the sake of argument that OPEC supply management practices fall under GATT Art. XI and therefore a violation of this provision, one possible ground of defence that is often raised but easily dismissed has been GATT Art. XX(h) on commodity agreements.
The reason it is dismissed so easily is that, to be justified under XX(h), OPEC has to qualify as an intergovernmental commodity agreement and the supply management measures must be “undertaken in pursuance of obligations under” it.
The problem is that the definition of an intergovernmental commodity agreement has been limited to agreements involving both producers and consumers of the commodity concerned, and OPEC by definition fails on that requirement. As such, the argument goes, OPEC does not qualify as an ICA and therefore the GATT Art. XX(h) defence does not apply.
I am sensing however that this approach is changing fast, and the latest and clearest manifestation comes from the recent Doha Draft Modalities for Agriculture (TN/AG/W/4/Rev.2, 19 May 2008) at http://www.wto.org/english/tratop_e/agric_e/chair_texts08_e.htm
Without going into too much detail, I found the following provisions particularly interesting:
Para 90: “Provision shall be made to ensure the possibility that Members may take joint action through adoption of suitable measures, including through adoption of intergovernmental commodity agreements, for stabilization of prices for exports of agricultural commodities at levels that are stable, equitable and remunerative. …”
Para 91: “Action for negotiations and adoption of intergovernmental commodity agreements in pursuance of the provisions of the paragraph above may be taken either jointly by producing and consuming countries or by commodity-dependent producing countries only.”
Para 94: “Such agreements may provide for participation of association of producers.”
Most importantly of all, Para 95 provides: “The general exceptions provisions of Article XX:h of GATT 1994 shall also apply to intergovernmental commodity agreements of which only producing countries of the concerned commodities are Members.”
This is a radical shift from the long-established approach to international commodity regulation, and if this is indicative of an emerging consensus on the role of ICAs, even though it still is confined to agricultural commodities, it will have implications for all primary products, including oil and other minerals.
I wonder whether we are about to enter a new chapter in international law relating to commodities trade, one that will not just further strengthen OPEC in international law terms but even make it look like a role model other sectors should try to replicate.
