In addition to the AB's findings on interpretation in this case, discussed by Adarsh Ramanujan, it seems to me that para 5.112 of the AB decision (quoted below) is also very important, stating that the amendment and waiver provisions of the WTO are lex specialis, prevailing over Art. 41 of the VCLT. Therefore, an RTA cannot modify Peru's WTO obligations inter se, except as specifically permitted by Article XXIV of GATT or other WTO law. This seems to reject an important argument that Joost Pauwelyn and others have made. I might have approached it another way—arguing that the FTA modification does not comply with Art. 41 because it is not provided for by the multilateral treaty and is inconsistent with the amendment provisions of the multilateral treaty, which implicitly prohibit other forms of amendment. This would be an appropriate understanding of both the amendment provisions of the WTO agreement and Art.41, and would avoid finding conflict between the VCLT and the WTO. Here is para. 5.112:
5.112. Nevertheless, we note that the WTO agreements contain specific provisions addressing amendments, waivers, or exceptions for regional trade agreements300, which prevail over the general provisions of the Vienna Convention, such as Article 41. This is particularly true in the case of FTAs considering that Article XXIV of the GATT 1994 specifically permits departures from certain WTO rules in FTAs. However, Article XXIV conditions such departures on the fulfilment of the rule that the level of duties and other regulations of commerce, applicable in each of the FTA members to the trade of non-FTA members, shall not be higher or more restrictive than those applicable prior to the formation of the FTA.
