If a measure is maintained on the exportation of a ‘product’ in terms of Article XI:1, it is possible that the measures are in the coverage of the Article. In this case if oil cannot be termed as a ‘product’ OPEC’s measures will not fall within the purview of Article XI:1.
There is no definition of a product in the text of the GATT. There is also no case law with-in the WTO, where a panel would have had to determwith-ine whether a natural resource with-in its natural, unprocessed state constitutes a product. There are also very few cases which have contemplated on the definition of a product in general. It should also be noted that a ‘prod-uct’ is a legal term in the field of WTO and GATT and has a special meaning where the object and purpose of the GATT and the practice of Members needs to be taken into con-sideration.227 Therefore even though dictionary definitions will be consulted they may not define the term accurately.
When it comes to dictionary definitions of the term product, the Shorter Oxford English Dictionary does not define product as an object; it defines ‘product’ as a ‘thing produced by an action, operation’228 Merriam Webster’s Collegiate Dictionary indicates that a prod-uct may be a ‘good’ or a ‘service’ that is marketed or sold as a commodity.229 The Panel in China – Audiovisual Products referred to the Oxford English Dictionary, which defines product as ‘[a]n article or substance that is manufactured or refined for sale’.230 The term
226 Broome, supra note 14, at 413, 414-416; Desta 2010, supra note 14, at 450-451.
227 Weksman, Jacob, ‘Greenhouse Gas Emissions Trading and the WTO’ (1999) 8:3 Review of European community & International Environmental Law, 251-264, at 255.
228 Shorter Oxford English Dictionary (Oxford: Oxford University Press, 2007), at 2359 and 3239.
229 Merriam Webster’s Collegiate Dictionary (New York: Merriam-Webster, 2003), at 991.
230 China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audio-visual Entertainment Products, panel report circulated 12 August 2009, adopted 19 January 2010,
WT/DS363/R (China – Publications and Audiovisual Products), para. 7.1188; Oxford English Dictionary (Oxford: Oxford University Press, 2004), available at http://www.oed.com.
46
‘product’ generally refers to a thing produced in dictionaries.231 The dictionaries also seem to be referring to a definition of a product where a thing is a product if it is tradable.
Since the terms ‘good’ and ‘product’ are used at times interchangeably, definitions of the term ‘good’ may be useful in defining a ‘product’. In US – Softwood Lumber IV one of the issues the Panel faced was the definition of the term ‘good’. The question was, whether standing timber232 could be a ‘good’ in the context of Article 1.1(a)(1)(iii) of the Agree-ment on Subsidies and Countervailing Measures (SCM AgreeAgree-ment). The Panel concluded that the SCM Agreement does not place limitations on the broad ordinary meaning of the term in its context and in light of the object and purpose of the Agreement. Canada had suggested that goods were tradable products with a potential or actual tariff line. The Panel pointed to the fact that although the term ‘good’ is often used as an equivalent to the term
’product’ that may not always be the case. The Panel noted also that the Agreement does not address whether the goods have to be able to be imported or traded. The Panel thus concluded that standing timber was a good even though it could not be traded as such.233 The Panel in US – Softwood Lumber III case also came to the conclusion that there is no reason to limit the term ‘goods’ to tradable goods and that standing timber are goods in in the sense of Article 1.1(a)(1)(iii) SCM Agreement.234
It should be however noted that the Panel in US – Softwood Lumber IV specifically made a distinction between the terms ‘good and a ‘product’ and seemed to imply that the term product entails the ability to trade or import/export a product and that standing timber would not have filled the definition of a product. This means that the case cannot be used as a precedent for including a natural resource in its natural state within the coverage of the term ‘product’. Most researchers also argue that oil, since it cannot be traded as such, does not constitute a product. Broome has argued that oil is not a product in the sense of Article XI:1 since it has not gone through a production process.235 Worika has similarly stated that GATT does not regulate oil in its natural state since it does not qualify as a product or a good. Therefore OPEC’s measures cannot, according to Worika, be inconsistent with Arti-cle XI:1 since oil still on the ground is not covered by GATT.236
231 China –Publications and Audiovisual Products, supra note 230, para. 7.1340.
232 Standing timber is an input for logs which are processed into softwood lumber by sawmills.
233 US – Softwood Lumber IV, supra note 4, para. 7.28.
234 US – Softwood Lumber III, supra note 4, para. 7.29.
235 Broome, supra note 14, at 416.
236 Worika, supra note 14, at 91.
47 Considering the object and purpose of the treaty may provide some basis for the inclusion of oil in its natural state as a product. The object and purpose of GATT is to liberalize markets in trade in goods and reduce tariff levels and other barriers to trade. As noted ear-lier, OPEC’s production quotas can be seen as restrictions on the exportation in terms of Article XI:1. By placing restrictions on the production levels of oil, OPEC is creating the same effect that an export restriction would have: influencing the amount exported from one WTO Member country to another. It could be argued that since the measure has an equivalent effect to an export restriction it should be in the coverage of Article XI:1, de-spite the literal interpretation of the term ‘product’.
Another fact that might support the inclusion of OPEC’s measures into the coverage of Article XI:1 is the practice in WTO jurisprudence to interpret Article XI:1 broadly. The researchers who have argued that oil production quotas are covered in Article XI:1 rely mostly on this argument. They have not analyzed the term ‘product’ and justified why oil in its natural state should be considered a product. The broad interpretation argument is based on two cases Japan – Semi-Conductors237 and Japan – Alcoholic Beverages II238. In Japan – Semi-Conductors the broad interpretation concerned the measure itself, not the object of the measure at hand. This is why the case cannot be used to argue for a broad interpretation of the term ‘product’. In Japan – Alcoholic Beverages II the interpretation problem concerned the definition of a like product in terms of Article III of the GATT, and cannot be used either to justify a broad application of the term product.
As stated in the general section of textual interpretation, the interpretation of the text of the treaty takes prevalence over other forms of interpretation and the interpreters cannot make a decision based on what the interpretation of an article should include but what it actually does include. The object and purpose of a treaty cannot be used to broaden the coverage of a treaty, if there is no textual basis for it, because it is not what the parties of the agreement are committed to. Therefore the term ‘product’ cannot cover natural resources in their natu-ral state unless states wish to agree to it.
It can be concluded that there is no basis in the text of GATT or a precedent from WTO/GATT practice that oil in its natural state may be termed a ‘product’. The previous practice of the Members of excluding, i.e. not challenging OPEC practices, oil in its natural
237 Japan – Semi-Conductors, supra note 57.
238 Japan – Alcoholic Beverages II, supra note 50.
48 state from the rules of WTO also serves as an indication that the Members do not consider oil in its natural state to be a product. Natural resources are definitely not outside the scope of WTO and GATT but purely textual approach will not offer indication that oil in its natu-ral state could be termed as a product.