Thesis
Reference
Fragmentation of international law: the application of WTO law by Brazilian courts
AMARAL CORREA MUNCH, Luciane
Abstract
International legal scholars debate fragmentation of international law as a possible effect of domestic courts' engagement with it. Among proposals to avoid fragmentation, scholars believe that using the VCLT is necessary for domestic courts to interpret international law
“correctly”. This thesis contends that fragmentation depends on one's perspective on the nature of international law, proposing a linguistic approach to analyse it which distinguishes problems of coherence and consistency, a distinction that impacts on accountability for fragmentation. Analysing over 400 cases on GATT-related matters before Brazilian courts in the period between 2014-2018, and comparing national and international interpretations of the same legal rules, this thesis has not found a statistic relevant level of inconsistency. Although Brazilian courts never used the VCLT to interpret GATT, nor referred to WTO case law or WTO adjudicating bodies' interpretation, their interpretation of the same legal rules did not differ from that of WTO adjudicating bodies.
AMARAL CORREA MUNCH, Luciane. Fragmentation of international law: the
application of WTO law by Brazilian courts. Thèse de doctorat : Univ. Genève, 2019, no. D.
982
URN : urn:nbn:ch:unige-1321590
DOI : 10.13097/archive-ouverte/unige:132159
Available at:
http://archive-ouverte.unige.ch/unige:132159
Disclaimer: layout of this document may differ from the published version.
PhD Thesis
FRAGMENTATION OF INTERNATIONAL LAW:
THE APPLICATION OF WTO LAW BY BRAZILIAN COURTS
Luciane Amaral Corrêa Münch
Supervisor: Professor Gabrielle Marceau Thesis number 982
Genève, December 2019
To Michael and Arthur, for the time I have stolen from them to write this thesis.
ACKNOWLEDGEMENTS
Writing a PhD thesis is, in itself, a challenging experience. When other testing situations add up – a family living and moving between two continents, a serious disease, the death of a parent -, it is only with a lot of support that one can get through it.
I am deeply grateful to many who shared this journey with me.
Initially, I thank my supervisor, Professor Gabrielle Marceau, for the wholehearted way in which she embraces her supervisees. I cannot thank her enough for her generosity in opening her house for her students to expose their work to professors and practitioners who are references in their fields of expertise. Her constant support and feedbacks were fundamental to keep me on track.
In addition to her role as my supervisor, Professor Marceau had another fundamental role in my life - before we actually met. Eighteen years ago, with a growing interest in International Economic Law, I was admitted as an LLM student in various universities in Europe and the United States. One of them was the London School of Economics. At that time, I was deeply impressed by the work of someone called Gabrielle Marceau, a former LSE student, which inspired me to apply to and choose the LSE to do my LLM. I never regretted it, not only because of the excellent study opportunities that I had at the LSE, but also because, thanks to this choice, I met the love of my life, my husband Michael Münch, who was also an LSE student at that time. I could not imagine then that, fourteen years later, Professor Marceau would accept me as a PhD student, and meet the family that serendipity united.
I am grateful to Professor Laurence Boisson de Chazournes, for her invaluable advice on the occasion of my preliminary exam. Moreover, I am indebted to all professors, practitioners and PhD students who participated in Professor Marceau’s PhD meetings, contributing enormously to my development. I thank them in the persons of Professors Joost Pauwelyn and Peter van den Bossche, and Thiago Couto Carneiro, Pamela Ugaz, Leonila Guglya, Michelle Ayu Chinta Kristy, Clément Marquet, Hassan Fartousi and Brook Bekele.
I could not have done this PhD without the support of the Federal Court of Appeals of the Fourth Region in Brazil. The Court has a strong continuing education policy, which includes granting paid leaves of absence for judges to pursue graduate studies abroad. I thank all my fellow judges of that Court for giving me such splendid opportunity.
I am particularly grateful to my friend, mentor, fellow judge and former President of the Federal Court of Appeals, Judge Carlos Eduardo Thompson Flores Lenz. As the Director of our Court’s Judicial School in 2013, he gave me full support to apply to the Secondment Program in International Trade at the Brazilian Mission to the WTO in Geneva, and one year later to the PhD at UNIGE. From 2017, his invaluable support as the Court’s President was fundamental for me to be able to reconcile my work with PhD commitments. Judge Thompson Flores shares with me a great enthusiasm for International Law and diplomacy, and never ceases to impress me with his formidable knowledge and culture.
Many thanks to Judges Tadaaqui Hirose and Luiz Fernando Wowk Penteado, who, as former Presidents of the Federal Court of Appeals of the Fourth Region, supported my application to the Secondment Program and the PhD, and helped me reconcile work with PhD commitments.
I am forever grateful to my dear friends Angelo Aguiar Martins and Maria Teresa Santafé Aguiar Pizzolatti, my Advisor and Chief of Staff for almost 27 years, in whose persons I also recognize all my staff at the Federal Court of Appeals of the Fourth Region. Their assistance and friendship were invaluable from the time I was on leave until later on, when I had to work full-time while still committed to the PhD. Without them, I would have never been able to do it, nor to keep any work-life balance in that period.
Moreover, I cannot thank enough Judges Carla Evelise Justino Hendges, Claudia Maria Dadico and Andrei Pitten Velloso, for taking over my place while I was away. I was very lucky to have such competent judges replacing me, they did a wonderful job there!
To my dear fellow judges Rômulo Pizzolatti, Sebastião Ogê Muniz, Maria de Fátima Freitas Labarrère, Roger Raupp Rios, Marcelo de Nardi and Alexandre Rossato da Silva Ávila, many thanks for the courage and patience to conduct judgment sessions using
international videoconferences, so that I could participate from abroad – and what an amazing experience, they all went faultlessly! Of course, this would not have been possible without all the support from the Court’s IT and video services, for which I thank all the officers involved in the persons of Cristian Ramos Prange, Germano Preichardt, José Fernando de Abreu Pinto Ribeiro, Julio Cezar Camarotto and Alexandre Kenzi Antonini. In the person of my dear Maria Cecília Dresch da Silveira, from whom I got continuous support and technical help during those sessions, I thank all officers of the Judgment Sessions’ Office who made this possible.
I would like to give a special thank you to my dear fellow judge and friend Otávio Roberto Pamplona, whom I miss so much. We passed our examinations to become federal judges at the same time, when I was 23 and he, 26. We had known each other and our families since then, and had worked in same chambers for almost ten years before I took a leave of absence in 2014. When I left for Geneva after a happy farewell lunch with many of my fellow judges, I could never imagine that I would never see him again in this life. My dear friend passed away just before I went back to Brazil, at the age of 51, and I never had a chance to hug him and thank him once more for his friendship and support when I considered doing a PhD abroad. I hope he can feel my gratitude and friendship from where he is now.
I am grateful to Professor Martha Lucía Olivar Jimenez. My supervisor during my graduate studies in Brazil, she became a close friend, sharing the most significant moments of my life for over twenty years. It meant a lot to me to discuss some of my ideas with her around great cups of coffee.
In the person of Minister Celso de Tarso Pereira, I thank the whole team of the Brazilian Mission to the WTO and Other Economic Organizations in Geneva with whom I worked in 2014. Working with them all was amazing! I learned a lot from this experience, which had a significant impact on my PhD. From the participants in the Secondment Program, my special gratitude goes to Anderson Fonseca, Ana Flávia Pigozzo Fedato, Pedro Brandão e Souza and Luis Gustavo Rolim Rosa Lima, and also to my dear ‘sister’ Ada Bogliolo Piancastelli de Siqueira, who was then an intern at the WTO Appellate Body Secretariat: thank you for your priceless support, and for still being part of my life.
I am particularly indebted to Rita Antunes, for her precious help during all these years, which included spending several months abroad, and making me countless cups of tea and coffee. Thank you, my dear, with all my heart. I could not have made it without you.
Many thanks to my friend Viviane Ribas Ardeola for the countless air tickets – and changes! – she had to manage over these years. Nothing is a problem to her, and she solves everything – Vivi, you rock! Moreover, many thanks to my dear friend Luciano Teston, who eased our transitions between two continents by making us feel at home in Brazil and abroad.
I am forever grateful to Fernando Luis Massa Lokschin - and his wife, May-, my precious friends, Antonio Luiz Frasson, Paulo Roberto Becker do Amaral, Daniela Vargas Barletta, and Renata Hubner Frainer for being much more than doctors. As I told them, a miracle does not lie in avoiding sickness, but in how we live through it: going through a disease with people like them, who make us feel loved at all times, this is the real miracle. In their persons, I express my deepest gratitude to all doctors and staff who participated in my surgeries and treatment, and especially to the caring team that assisted me during five weeks of radiotherapy at Hospital Moinhos de Vento in Porto Alegre. In addition, I am grateful to those who helped me in my physical recovery:
Angela Spiazzi, Josiane Angelina Dutra Shishito, Renata Schwartz and Márcio Fernando da Silveira Rocha. To my oncologist brother-in-law, Rodrigo Ughini Villarroel, many thanks for the patience to answer so many endless questions, talk to my doctors, and go through my exams just to calm my anxieties. To my friend Olga Aline Orlandini Cavalcante, thanks for the best gift she could have ever given me! I will never forget the blessings from Adriana Finkelstein and Guershon Kwasniewski. Finally, my gratitude to Nestor Formolo Pellini has no bounds: it is for everything, and he alone knows how much this means.
Moving abroad can be testing, especially when we have small children and leave a close family behind. Thanks to my mother-in-law, Ruth Münch, for her support. To my friends Barbara Knobel and Patrick Horber, Julia Grinberg, Elena Dimitriou-Pfaffl and Celestyn Pfaffl, Jane Hoareau and Alejandro Prado, Monica Sozio and Andrea Cetrone, many thanks for the lovely times that Arthur spent with his friends during our years abroad. It was lovely meeting you, and time has shown that our kids’ friendship knows no geographical barriers.
To my dear Petrus - Petrônio Duarte Schuler, my stepfather – thanks for being such a sweet, caring and understanding person. It was lovely every time you visited when we were abroad, watching the beautiful relationship you had with my son, who loved his grandpa deeply. We still feel that you left us too soon, and we all miss you a lot.
Finally, I express my endless gratitude to my family: my Mum, Silésia; my sister, Márcia, and my goddaughter, Manuela; my brother, Renato, his wife, Ligia, and my niece, Maria Antônia; my Grandma, Aldemira; my husband, Michael, and my son Arthur. I love you to the moon and back!
Mum, you have no idea how much I cherished the times you visited when we lived abroad, the trips we made together, and the way your relationship with Arthur never ceased to grow, even with the Atlantic Ocean between you both. Thank you enormously for all the support you gave me, even when you were dealing with your partner’s disease and had little time to take a breath from it – and, even though you never mentioned it, it must not have been easy having your partner and your daughter sick at the same time and keep your spirits high for our sake.
My dear Marcinha, sister and best girlfriend, thank you so much for all your support: having us as guests for many times, visiting and letting our dear Manu spend time with us abroad, giving me endless encouragement, being by my side cheering me up when I got sick, sharing your life with me. Manu, you know how deeply I have loved you, much before you were born. You fill my heart with laughter, my dear daughter.
My dear Renato, no one could dream of a better and gentler brother. Thank you for all the light moments when you make us laugh even in the face of hardship, and for being so caring and full of love. Many thanks to my dear Ligia for all her support, sharing her experience as a PhD student and later supervisor, and encouraging me through my treatment. Toninha, I deeply love your strength and happiness!
Vó (Grandma), you are the best! I missed you every day when I was abroad. Thank you so much for cherishing all our achievements, big or small, and celebrating every moment with us!
Michael, you are my love and my best friend. I cannot thank you enough for all the support you have given me all these years, and sharing your life with me. Arthur, you are the best part of me. When I was young, my father, Alcione, dedicated one of his books to my mum and us – their children- for the time he had stolen from us to write it. I never fully understood the meaning of that dedication, until one day, after dinner, Arthur said that I had spent almost half of his life working on my PhD. Then, I took its full meaning in. This is why, in an open act of plagiarism and from deep inside my heart, I dedicate this thesis to you, for the time stolen from you to write it.
Table of Contents
ACKNOWLEDGEMENTS ... iii
Introduction ... 1
I Theoretical Framework ... 8
Chapter 1: Fragmentation of International Law: Setting the Scene ... 8
Section I Conceptualizing Fragmentation ...10
Section II Fragmentation as a Matter of Perspective ...14
§I. The common anxieties in the contemporary debate on fragmentation: specialised regimes and judicial fragmentation ...15
A)International regimes ...15
B)Judicial Fragmentation ...16
§II.The contemporary debate on fragmentation: different perspectives...20
A)The ILC Report ...21
B) Other perspectives: toward unity ...24
C) Other perspectives: toward diversity ...27
D) Other perspectives – between unity and diversity ...28
E)A critical perspective ...33
1) Indeterminacy of the legal argument...34
2)A critical analysis of fragmentation ...35
Section III Fragmentation as Problems of Language ...38
§I. Fragmentation as a problem of coherence ...39
§II. Fragmentation as a problem of consistency ...44
A) Inconsistency in international law and the ILC Report ...45
A) Inconsistency and the problem of meaning ...47
1)Judicial interpretation and meaning generation in international law ...47
2)Semantic authority and semantic struggles in meaning generation and change in international law ...50
§III. Coherence and Consistency ...52
Chapter 2: Fragmentation of International Law Resulting from Domestic Court Interpretation ... 54
Section I. When Hydra Gets a New Head ...55
Section II. Problems of Coherence and Consistency in Domestic Courts’ Engagement with International Law ...57
§I. Domestic courts: legal function and authority to interpret international law ...58
§II. Problems of coherence and consistency related to domestic courts’ interpretation of international law ...59
A) Coherence ...59
B) Consistency ...60
§III. Coherence and consistency applied to domestic courts’ interpretation of international law ...61
A) Coherence ...62
B) Consistency ...64
Section III Brazilian Courts and WTO-Related Matters ...67
§I. WTO adjudicating bodies – semantic authority and the shaping of WTO Law ...67
A) The relevance of predictability and security in the multilateral trading system ...68
B) The semantic authority of the WTO dispute settlement system ...70
§II. Brazil and the WTO ...74
A) Brazil as a Member of the WTO ...75
B) Incorporation and Legal Status of International and WTO Law in Brazil ...75
1)Incorporation and legal status of treaties in Brazil: an introduction ...75
a)Incorporation and direct effect of international and WTO treaties in Brazil ...76
b) Legal status of treaties in Brazil ...77
i) Human-rights treaties ...77
ii) Other treaties ...77
iii) Tax-Related Treaties and Interpreting Article 98 of the Brazilian Tax Code ...78
2)The Effects of WTO DSB Rulings in Brazil: Lessons from the Tyres Case ...78
C)The Brazilian Judiciary Power and Jurisdiction over WTO-Related Matters ...82
1) Overview of the Brazilian Judiciary Power and WTO-related matters ...82
2) Jurisdiction Over WTO-Related Matters: The Problem of State Courts...83
3)A general overview on repercussão geral, recursos repetitivos, súmulas
vinculantes, and súmulas ...85
4) Setting the Scene ...85
Section IV The Research Method: Coherence and Consistency Applied ...87
§I. Research material ...87
§II. Criteria for fragmentation analysis ...89
A) Object of analysis ...89
A) Tests ...89
1) Coherence...89
2) Consistency ...89
a) Use of treaty interpretation methods ...90
b)Identification of treaty provisions in light of WTO interpretation ...91
c)Textualist approach to interpretation ...91
d)Reference to WTO case law and interpretation ...91
e) Interpretation analysis ...91
3) Outcomes ...92
II The Application of WTO Law by Brazilian Courts ... 93
Chapter 1: Article III GATT ... 93
Section I. Case Law in Brazil ...96
§I. The appeal court level ...96
A) State and Federal District Courts of Appeal: case law ...96
1)ICMS – a general overview ...96
2)Case analysis ...97
a)State of Alagoas ...97
i) The case: ICMS on imported cumin from India ...97
ii) Fragmentation analysis ...98
α)Coherence ...98
β) Consistency ...98
β.i)Identification of treaty provisions in light of WTO interpretation 98 β.ii)Textualist approach to interpretation ...98
β.iii)Interpretation analysis ...99
iii) Outcome analysis ... 100
b) Bahia ... 100
i) ICMS: Tax rate reduction on wheat flour ... 100
α) Case ... 100
β) Fragmentation analysis ... 101
β.i) Coherence ... 101
β.ii)Consistency... 101
β.ii.i)Identification of treaty provisions ... 102
β.ii.ii) Textualist approach to interpretation ... 102
β.ii.iii) Interpretation analysis ... 102
γ) Outcome analysis ... 104
ii)ICMS: Engines for ferry boats ... 104
α) The case ... 104
β)Fragmentation analysis ... 104
β.i)Coherence ... 104
β.ii) Consistency ... 104
β.ii.i)Identification of treaty provisions ... 105
β.ii.ii) Textualist approach to interpretation ... 105
β.ii.iii) Interpretation analysis ... 105
γ)Outcome analysis ... 106
iv)Bahia – overall analysis of fragmentation ... 106
α)Overall fragmentation: problems of coherence ... 106
α.i)External fragmentation ... 106
α.ii) Internal fragmentation ... 106
β)Overall fragmentation: problems of consistency ... 106
β.i)External fragmentation ... 106
β.i.i)Identification of the treaty provisions applicable to the facts .... 106
β.i.ii)Textualist approach to interpretation ... 106
β.i.iii)Interpretation analysis ... 106
β.ii)Internal fragmentation ... 107
v)Bahia: overall analysis of outcomes ... 107
c) Minas Gerais ... 107
i) ICMS: Equipment for disabled persons imported from Italy ... 107
α) Cases ... 107
β)Fragmentation analysis ... 108
β.i) Coherence ... 108
β.i.i)External fragmentation ... 108
β.i.ii) Internal fragmentation ... 108
β.ii)Consistency... 108
β.ii.i)External fragmentation ... 108
β.ii.i.i) Identification of treaty provisions... 108
β.ii.i.ii)Textualist approach to interpretation ... 108
β.ii.i.iii) Interpretation analysis ... 109
β.ii.ii) Internal fragmentation ... 109
γ)Outcome analysis ... 109
ii) ICMS: Tax base reduction on the importation of used aircraft ... 109
α) Cases ... 110
β)Fragmentation analysis ... 112
β.i) Coherence ... 112
β.i.i)External fragmentation ... 112
β.i.ii) Internal fragmentation ... 112
β.ii)Consistency... 113
β.ii.i)External fragmentation ... 113
β.ii.i.i)Identification of treaty provisions ... 113
β.ii.i.ii)Textualist approach to interpretation ... 113
β.ii.i.iii) Interpretation analysis ... 113
β.ii.ii) Internal fragmentation ... 114
γ)Outcome analysis ... 114
iii) ICMS: Tax base reduction on the importation of used machinery.... 114
α) Cases ... 115
β)Fragmentation analysis ... 115
β.i) Coherence ... 115
β.i.i)External fragmentation ... 116
β.i.ii) Internal fragmentation ... 116
β.ii)Consistency... 116
β.ii.i)External fragmentation ... 116
β.ii.i.i) Identification of the treaty provisions ... 116
β.ii.i.ii) Textualist approach to interpretation ... 116
β.ii.i.iii) Interpretation analysis ... 116
β.ii.ii) Internal fragmentation ... 116
γ)Outcome analysis ... 116
iv) ICMS: Tax credits on medical equipment, data processing machines and computers ... 116
α) Cases ... 117
β)Fragmentation analysis ... 117
β.i) Coherence ... 117
β.i.i)External fragmentation ... 117
β.i.ii) Internal fragmentation ... 117
β.ii)Consistency... 118
β.ii.i)External fragmentation ... 118
β.ii.i.i) Identification of treaty provisions... 118
β.ii.i.ii)Textual approach to interpretation ... 118
β.ii.i.iii) Interpretation analysis ... 118
β.ii.ii) Internal fragmentation ... 119
γ) Outcome analysis ... 119
v) ICMS – Tax credit and tax base reduction on imported fish ... 119
α) Case... 119
β)Fragmentation analysis ... 120
β.i) Coherence ... 120
β.ii)Consistency... 120
β.ii.i)Identification of treaty provisions ... 120
β.ii.ii)Textualist approach to interpretation ... 120
β.ii.iii)Interpretation analysis ... 120
γ)Outcome analysis ... 120
vi) ICMS on imported seeds ... 120
α) Case... 121
β)Fragmentation analysis ... 121
β.i) Coherence ... 121
β.ii)Consistency... 121
β.ii.i) Identification of treaty provisions ... 121
β.ii.ii)Textualist approach to interpretation ... 121
β.ii.iii)Interpretation analysis ... 121
γ) Outcome analysis ... 122
vii) Minas Gerais – overall analysis of fragmentation ... 122
α) Overall fragmentation: problems of coherence ... 122
α.i) External fragmentation ... 122
α.ii) Internal fragmentation ... 122
β) Overall fragmentation: problems of consistency ... 122
β.i)External fragmentation ... 122
β.ii.i) Identification of treaty provisions ... 122
β.ii.ii)Textual approach to interpretation ... 122
β.ii.iii)Interpretation analysis ... 122
β.ii)Internal fragmentation ... 123
viii)Minas Gerais: overall analysis of outcomes ... 123
d)Pernambuco ... 123
i) ICMS: Base reduction and lower tax rates on low-income family ‘basic basket’ food products ... 123
α) The cases ... 124
β)Fragmentation analysis ... 125
β.i) Coherence ... 125
β.i.i) External fragmentation ... 125
β.i.ii) Internal fragmentation ... 125
β.ii)Consistency... 125
β.ii.i)External fragmentation ... 125
β.ii.i.i) Identification of treaty provisions... 125
β.ii.i.ii)Textualist approach to interpretation ... 125
β.ii.i.iii) Interpretation analysis ... 125
β.ii.ii) Internal fragmentation ... 126
γ)Outcome analysis ... 126
ii) ICMS: Tax exemption on imports of canary seeds and millet ... 126
α) The cases ... 126
β)Fragmentation analysis ... 127
β.i) Coherence ... 127
β.i.i)External fragmentation ... 127
β.i.ii) Internal fragmentation ... 127
β.ii)Consistency... 127
β.ii.i)External fragmentation ... 127
β.ii.i.i)Identification of treaty provisions ... 127
β.ii.i.ii) Textualist approach to interpretation ... 128
β.ii.i.iii) Interpretation analysis ... 128
β.ii.ii)Internal fragmentation ... 129
γ)Outcome analysis ... 129
iii) ICMS: Tax exemption on imports of boldo leaves from Chile ... 129
α) The case ... 129
β)Fragmentation analysis ... 129
β.i) Coherence ... 130
β.ii)Consistency... 130
β.ii.i) Identification of treaty provisions ... 130
β.ii.ii)Textualist approach to interpretation ... 130
β.ii.iii)Interpretation analysis ... 130
γ) Outcome analysis ... 130
iv) ICMS: value added margin on imported autos ... 130
α) The case ... 131
β) Fragmentation analysis ... 132
β.i) Coherence ... 132
β.ii) Consistency ... 132
β.ii.i) Identification of treaty provisions ... 132
β.ii.ii)Textualist approach to interpretation ... 132
β.ii.iii) Interpretation analysis ... 132
γ) Outcome analysis ... 133
v) ICMS: tax exemption on codfish... 133
α) The case ... 133
β) Fragmentation analysis ... 134
β.i) Coherence ... 135
β.ii) Consistency ... 135
β.ii.i) Identification of treaty provisions ... 135
β.ii.ii) Textualist approach to interpretation ... 135
β.ii.iii) Interpretation analysis ... 135
γ) Outcome analysis ... 135
vi) ICMS: Tax exemption on imports of cumin ... 135
α) The case ... 135
β) Fragmentation analysis ... 136
β.i) Coherence ... 136
β.ii) Consistency ... 136
β.ii.i) Identification of treaty provisions ... 136
β.ii.ii) Textualist approach to interpretation ... 136
β.ii.iii) Interpretation analysis ... 136
γ) Outcome analysis ... 136
vii) Pernambuco – overall analysis of fragmentation ... 136
α) Overall fragmentation: problems of coherence ... 136
α.i) External fragmentation ... 136
α.ii) Internal fragmentation ... 136
β) Overall fragmentation: problems of consistency ... 136
β.i) External fragmentation ... 136
β.i.ii) Identification of treaty provisions ... 137
β.ii.ii) Textualist approach to interpretation ... 137
β.i.iii) Interpretation analysis ... 137
β.ii) Internal fragmentation ... 137
viii) Pernambuco: overall analysis of outcomes ... 137
e) Rio de Janeiro ... 137
i) ICMS: tax exemption on codfish and hake ... 137
α) Cases ... 138
β) Fragmentation analysis ... 138
β.i) Coherence... 138
β.i.i) External fragmentation ... 138
β.i.ii) Internal fragmentation ... 138
β.ii) Consistency ... 138
β.ii.i) External fragmentation ... 138
β.ii.i.i) Identification of the treaty provisions ... 139
β.ii.i.ii) Textualist approach to interpretation ... 139
β.ii.iii) Interpretation analysis ... 139
β.ii.ii) Internal fragmentation ... 139
γ) Outcome analysis ... 139
ii) ICMS: tax deferral on house appliances ... 139
α) The case ... 139
β) Fragmentation analysis ... 140
β.i) Coherence ... 140
β.ii) Consistency ... 140
β.ii.i) Identification of treaty provisions ... 140
β.ii.ii) Textualist approach to interpretation ... 140
β.ii.iii) Interpretation analysis ... 140
γ) Outcome analysis ... 140
vii) Rio de Janeiro – overall analysis of fragmentation ... 140
α) Overall fragmentation: problems of coherence ... 140
α.i) External fragmentation ... 140
α.ii) Internal fragmentation ... 140
β) Overall fragmentation: problems of consistency ... 141
β.i) External fragmentation ... 141
β.i.ii) Identification of treaty provisions in light of GATT/WTO interpretation ... 141
β.i.ii) Textual approach to interpretation ... 141
β.i.iii) Interpretation analysis ... 141
β.ii) Internal fragmentation ... 141
viii) Rio de Janeiro: overall analysis of outcomes ... 141
f) Rio Grande do Sul ... 141
i) ICMS: base reduction on low-income family ‘basic basket’ food products ... 141
ii) Fragmentation analysis ... 144
α) Coherence ... 144
α.i) External fragmentation ... 144
α.ii) Internal fragmentation ... 144
β) Consistency ... 144
β.i) External fragmentation ... 144
β.i.i) Identification of treaty provisions ... 144
β.i.ii) Textualist approach to interpretation ... 144
β.i.iii) Interpretation analysis ... 144
β.ii) Internal fragmentation ... 146
iii) Outcome analysis ... 146
g) Santa Catarina ... 146
i) ICMS on onions from Argentina ... 146
ii) Fragmentation analysis ... 146
α) Coherence ... 146
β) Consistency ... 146
β.i) Identification of the treaty provisions ... 146
β.ii) Textualist approach to interpretation ... 147
β.iii) Interpretation analysis ... 147
iii) Outcome analysis ... 147
g) Sao Paulo ... 147
i) ICMS: tax benefits on packaged frozen, bleached, dried and/or shelled food products ... 147
α) Cases: ... 147
β) Fragmentation analysis ... 148
β.i) Coherence... 148
β.i.i) External fragmentation ... 148
β.i.ii) Internal fragmentation ... 148
β.ii) Consistency ... 149
β.ii.i) External fragmentation ... 149
β.ii.i.i) Identification of the treaty provisions ... 149
β.ii.i.ii) Textualist approach to interpretation ... 149
β.ii.iii) Interpretation analysis ... 149
β.ii.ii) Internal fragmentation ... 149
γ) Outcome analysis ... 149
ii) ICMS exemption on agricultural pesticides and fertilisers ... 149
α) Cases ... 149
β) Fragmentation analysis ... 150
β.i) Coherence ... 150
β.i.i) External fragmentation ... 150
β.i.ii) Internal fragmentation ... 150
β.ii) Consistency ... 150
β.ii.i) External fragmentation ... 150
β.ii.i.i) Identification of the treaty provisions ... 151
β.ii.i.ii) Textualist approach to interpretation ... 151
β.ii.iii) Interpretation analysis ... 151
β.ii.ii) Internal fragmentation ... 151
γ) Outcome analysis ... 151
iii) ICMS: base reduction on industrial machinery ... 151
α) Case ... 151
β) Fragmentation analysis ... 151
β.i) Coherence... 151
β.ii) Consistency ... 151
β.ii.i) Identification of the treaty provisions ... 152
β.ii.i.ii) Textualist approach to interpretation ... 152
β.ii.iii) Interpretation analysis ... 152
γ) Outcome analysis ... 152
iv) ICMS: tax deferral on aluminium scrap and wheat grains ... 152
α) Cases ... 152
β) Fragmentation analysis ... 153
β.i) Coherence... 153
β.i.i) External fragmentation ... 153
β.i.ii) Internal fragmentation ... 153
β.ii) Consistency ... 153
β.ii.i) External fragmentation ... 153
β.ii.i.i) Identification of the treaty provisions ... 153
β.ii.i.ii) Textualist approach to interpretation ... 153
β.ii.i.iii) Interpretation analysis ... 153
β.ii.ii) Internal fragmentation ... 153
γ) Outcome analysis ... 153
v) ICMS: base reduction on dry yeast ... 154
α) Case ... 154
β) Fragmentation analysis ... 154
β.i) Coherence... 154
β.ii) Consistency ... 154
β.ii.i) Identification of the treaty provisions ... 154
β.ii.ii) Textualist approach to interpretation ... 154
β.ii.iii) Interpretation analysis ... 154
γ) Outcome analysis ... 154
vi) ICMS: tax rate on imports of sleep systems ... 154
α) Case ... 155
β) Fragmentation analysis ... 155
β.i) Coherence... 155
β.ii) Consistency ... 155
β.ii.i) Identification of the treaty provisions ... 155
β.ii.ii) Textualist approach to interpretation ... 155
β.ii.iii) Interpretation analysis ... 155
γ) Outcome analysis ... 155
vii) ICMS: tax exemption on autos for disabled people ... 155
α) Case ... 156
β) Fragmentation analysis ... 156
β.i) Coherence... 156
β.ii) Consistency ... 156
β.ii.i) Identification of the treaty provisions ... 156
β.ii.ii) Textualist approach to interpretation ... 156
β.ii.iii) Interpretation analysis ... 156
γ) Outcome analysis ... 156
viii) ICMS: base reduction on imports of used printers... 156
α) Case ... 157
β) Fragmentation analysis ... 157
β.i) Coherence... 157
β.ii) Consistency ... 157
β.ii.i) Identification of the treaty provisions ... 157
β.ii.ii) Textualist approach to interpretation ... 157
β.ii.iii) Interpretation analysis ... 157
γ) Outcome analysis ... 157
ix) ICMS: tax exemption on x-ray equipment for luggage inspection .... 157
α) Case ... 158
β) Fragmentation analysis ... 158
β.i) Coherence... 158
β.ii) Consistency ... 158
β.ii.i) Identification of the treaty provisions ... 158
β.ii.ii) Textualist approach to interpretation ... 158
β.ii.iii) Interpretation analysis ... 158
γ) Outcome analysis ... 158
x) ICMS: tax exemption and base reduction on inputs for agricultural industry... 158
α) Cases ... 159
β) Fragmentation analysis ... 159
β.i) Coherence... 159
β.i.i) External fragmentation ... 159
β.i.ii) Internal fragmentation ... 159
β.ii) Consistency ... 159
β.ii.i) External fragmentation ... 159
β.ii.i.i) Identification of the treaty provisions ... 159
β.ii.i.ii) Textualist approach to interpretation ... 159
β.ii.i.iii) Interpretation analysis ... 160
β.ii.ii) Internal fragmentation ... 160
γ) Outcome analysis ... 160
xi) ICMS: tax exemption on dried and salted fish ... 160
α) Cases ... 160
β) Fragmentation analysis ... 160
β.i) Coherence... 160
β.i.i) External fragmentation ... 161
β.i.ii) Internal fragmentation ... 161
β.ii) Consistency ... 161
β.ii.i) External fragmentation ... 161
β.ii.i.i) Identification of the treaty provisions ... 161
β.ii.i.ii) Textualist approach to interpretation ... 161
β.ii.i.iii) Interpretation analysis ... 161
β.ii.ii) Internal fragmentation ... 161
γ) Outcome analysis ... 161
xii) Sao Paulo: overall analysis of fragmentation ... 161
α) Coherence ... 161
α.i) External fragmentation ... 161
α.ii) Internal fragmentation ... 161
β) Consistency ... 161
β.i) External fragmentation ... 161
β.i.i) Identification of the treaty provisions ... 161
β.i.ii) Textualist approach to interpretation ... 162
β.i.iii) Interpretation analysis ... 162
β.ii) Internal fragmentation ... 162
γ) Outcome analysis ... 162
i) State courts’ overall analysis ... 162
i) State courts – overall analysis of fragmentation ... 162
α) Coherence ... 162
α.i) External fragmentation ... 162
α.ii) Internal fragmentation ... 162
β) Consistency ... 162
β.i) External fragmentation ... 162
β.i.i) Identification of the treaty provisions ... 162
β.i.ii) Textualist approach to interpretation ... 162
β.i.iii) Use of treaty interpretation methods ... 163
β.i.iv) Reference to WTO case law ... 163
β.i.v) Interpretation analysis ... 163
β.ii) Internal fragmentation ... 163
ii) State courts – overall analysis of outcomes ... 163
B) Federal Courts of Appeal – case law ... 163
1) An overview on PIS/COFINS and IPI ... 164
2) Case analysis ... 165
a) Federal Court of Appeals of the First Region ... 165
i) The case: IPI reduction on imported autos ... 165
ii) Fragmentation analysis ... 166
α) Coherence ... 166
β) Consistency ... 166
β.i) Identification of the treaty provisions in light of GATT/WTO interpretation ... 166
β.ii) Textualist approach to interpretation ... 166
β.iii) Reference to WTO case law and interpretation ... 166
β.iv) Interpretation analysis ... 167
iii) Outcome analysis ... 168
b) Federal Court of Appeals of the Second Region ... 168
i) IPI: customs procedure for temporary admission on leased goods .. 168
α) Cases ... 169
β) Fragmentation analysis ... 172
β.i) Coherence... 172
β.i.i) External fragmentation... 172
β.i.ii) Internal fragmentation ... 172
β.ii) Consistency ... 172
β.ii.i) External fragmentation ... 172
β.ii.i.i) Identification of treaty provisions in light of WTO interpretation ... 172
β.ii.i.ii) Textualist approach to interpretation ... 172
β.ii.i.iii) Reference to WTO case law or interpretation ... 172
β.ii.i.iv) Interpretation analysis ... 172
β.ii.ii) Internal fragmentation ... 172
γ) Outcome analysis ... 172
ii) IPI: higher tax rate on imported autos ... 172
α) The case ... 173
β) Fragmentation analysis ... 173
β.i) Coherence... 173
β.ii) Consistency ... 173
β.ii.i) Identification of treaty provisions in light of WTO interpretation
... 173
β.ii.ii) Textualist approach to interpretation ... 173
β.ii.ii) Reference to WTO case law and interpretation ... 173
β.ii.iv) Interpretation analysis ... 173
γ) Outcome analysis ... 173
iii) Federal Court of Appeals of the Second Region – overall analysis of fragmentation ... 174
α) Coherence ... 174
α.i) External fragmentation ... 174
α.ii) Internal fragmentation ... 174
β) Consistency ... 174
β.i) External fragmentation ... 174
β.i.i) Identification of treaty provisions in light of WTO interpretation ... 174
β.i.ii) Textualist approach to interpretation ... 174
β.i.iii) Reference to WTO case law and interpretation ... 174
β.i.iv) Interpretation analysis ... 174
β.ii) Internal fragmentation ... 174
iv) Federal Court of Appeals of the Second Region – overall analysis of outcomes ... 175
c) Federal Court of Appeals of the Third Region ... 175
i) IPI: customs procedure for temporary admission on leased goods .. 175
α) Cases ... 175
β) Fragmentation analysis ... 175
β.i) Coherence ... 176
β.i.i) External fragmentation... 176
β.i.ii) Internal fragmentation ... 176
β.ii) Consistency ... 176
β.ii.i) External fragmentation ... 176
β.ii.i.i) Identification of treaty provisions in light of WTO interpretation ... 176
β.ii.i.ii) Textualist approach to interpretation ... 176
β.ii.i.iii) Reference to WTO case law and interpretation... 176
β.ii.i.iv) Interpretation analysis ... 176
β.ii.ii) Internal fragmentation ... 176
γ) Outcome analysis ... 176
d) Federal Court of Appeals of the Fourth Region ... 176
i) IPI: customs procedure for temporary admission on leased goods .. 177
α) Case ... 177
β) Fragmentation analysis ... 177
β.i) Coherence ... 177
β.ii) Consistency ... 177
β.ii.i) Identification of treaty provisions in light of WTO interpretation ... 177
β.ii.ii) Textualist approach to interpretation ... 177
β.ii.iii) Reference to WTO case law and interpretation ... 178
β.ii.iv) Interpretation analysis ... 178
γ) Outcome analysis ... 178
ii) IPI: higher tax rate on imported autos ... 178
α) The case ... 178
β) Fragmentation analysis ... 179
β.i) Coherence... 179
β.ii) Consistency ... 179
β.ii.i) Identification of treaty provisions in light of WTO interpretation ... 179
β.ii.ii) Textualist approach to interpretation ... 179
β.ii.iii) Reference to WTO case law and interpretation ... 179
β.ii.iii) Interpretation analysis ... 179
γ) Outcome analysis ... 179
iii) Federal Court of Appeals of the Fourth Region – overall analysis of fragmentation ... 179
α) Coherence ... 179
α.i) External fragmentation ... 180
α.ii) Internal fragmentation ... 180
β) Consistency ... 180
β.i) External fragmentation ... 180
β.i.i) Identification of treaty provisions in light of WTO interpretation ... 180
β.i.ii) Textualist approach to interpretation ... 180
β.i.iii) Reference to WTO case law and interpretation ... 180
β.i.iii) Interpretation analysis ... 180
β.ii) Internal fragmentation ... 180
iv) Federal Court of Appeals of the Fourth Region – overall analysis of outcomes ... 180
e) Federal Court of Appeals of the Fifth Region ... 180
i) PIS/COFINS on corn imports from Paraguay ... 180
α) Case... 181
β) Fragmentation analysis ... 181
β.i) Coherence ... 181
β.ii) Consistency ... 181
γ) Outcome analysis ... 181
ii) IPI on imported autos from China ... 182
α) Case ... 182
β) Fragmentation analysis ... 182
β.i) Coherence ... 183
β.ii) Consistency ... 183
β.ii.i) Identification of treaty provisions in light of WTO interpretation ... 183
β.ii.ii) Textualist approach to interpretation ... 183
β.ii.iii) Reference to WTO case law and interpretation ... 183
β.ii.iii) Interpretation analysis ... 183
γ) Outcome analysis ... 183
iii) PIS/COFINS on wheat ... 183
α) Cases ... 183
β) Fragmentation analysis ... 184
β.i) Coherence... 184
α.i) External fragmentation ... 184
α.ii) Internal fragmentation ... 184
β.ii) Consistency ... 184
β.i) External fragmentation ... 184
β.ii) Internal fragmentation ... 184
γ) Outcome analysis ... 184
iv) Federal Court of Appeals of the Fifth Region – overall fragmentation analysis ... 185
α) Coherence ... 185
α.i) External fragmentation ... 185
α.ii) Internal fragmentation ... 185
β) Consistency ... 185
β.i) External fragmentation ... 185
β.i.i) Identification of treaty provisions in light of WTO interpretation ... 185
β.i.ii) Textualist approach to interpretation ... 185
β.i.iii) Reference to WTO case law and interpretation ... 185
β.i.iii) Interpretation analysis ... 185
β.ii) Internal fragmentation ... 185
iv) Federal Court of Appeals of the Fifth Region – overall analysis of outcomes ... 185
3) Overall analysis of fragmentation and outcomes at the federal appeal courts ... 186
a) Federal courts: overall fragmentation analysis ... 186
i) Coherence ... 186
α) External fragmentation ... 186
β) Internal fragmentation ... 186
ii) Consistency ... 186
α) External fragmentation ... 186
α.i) Identification of treaty provisions in light of WTO interpretation ... 186
α.ii) Textualist approach to interpretation ... 186
α.iii) Use of treaty interpretation methods ... 186
α.iv) Reference to WTO case law and interpretation ... 186
α.v) Interpretation analysis ... 186
β) Internal fragmentation ... 187
b) Federal Courts: overall outcome analysis ... 187
C) Analysis on fragmentation and outcomes at the appeal court level ... 187
1) Fragmentation analysis – appeal court level ... 187
a) Coherence ... 187
i) External fragmentation... 187
β) Internal fragmentation ... 188
ii) Consistency ... 188
α) External fragmentation ... 188
α.i) Identification of treaty provisions in light of WTO interpretation ... 188
α.ii) Textualist approach to interpretation ... 188
α.iii) Use of treaty interpretation methods ... 188
α.iv) Reference to WTO case law and interpretation ... 188
α.v) Interpretation analysis ... 188
β) Internal fragmentation ... 189
2) Outcome analysis – appeal court level ... 189
§II. The superior court level ... 189
A) Superior Court of Justice ... 189
B) Supreme Court ... 189
1) Case ... 189
a) Fragmentation analysis ... 190
i) Coherence ... 190
ii) Consistency ... 191
γ) Outcome analysis ... 191
Chapter 2. The Way Forward ... 192
Section I Fragmentation in Brazilian Courts: conclusions ... 192
§I. The practice of Brazilian Courts: problems of coherence ... 192
§II. The practice of Brazilian Courts: problems of consistency ... 194
A) Semantic authority: a brief word on WTO Appellate Body ... 194
B) Jurisdiction ... 198
B) Treaty interpretation methods and textualist approach ... 200
C) Lack of specialised knowledge of WTO Law ... 201
D) Language barriers and translation: wording and meaning ... 203
Section II Outcomes in Brazilian Courts: conclusions ... 204
Conclusions ... 206
Annex ... 208
COURT OF APPEALS OF THE STATE OF SAO PAULO – FOOTNOTE 454 ... 208
References ... 220
Introduction
National courts’ engagement1 with international law has been a major object of research among international legal scholars2. Fragmentation of international law through the interpretation of domestic courts has been a recurring concern within this strand of literature.3 An empiric analysis of the case of Brazil can shed some light on the relevance of fragmentation as international treaties have a direct effect4 in this country, and are interpreted by domestic courts directly. The law of the World Trade Organization (WTO Law) provides a rich sample for this analysis as Brazilian domestic courts ruled over 400 cases relating to this area of international law between 2014 and 2018.
Domestic courts play an important role in the enforcement and development of international law. They are often better equipped to secure compliance with their rulings than international adjudicating bodies are. Not only has national courts’ engagement with international
1 This thesis prefers the use of ‘engagement’ as opposed to ‘enforcement/application’, in line with the International Law Association Study Group on Principles on the Engagement of Domestic Courts With International Law. According to the Study Group’s final report, ‘the driving principle for the choice of the term was to avoid a binary approach (enforcement/application versus non- enforcement/breach) in favour of a functional approach: the term ‘engagement’ captures, in the Study Group’s view, the richness of approaches of domestic courts to international law’. Antonios Tzanakopoulos (co-rapporteur), ‘ Final Report: Mapping the Engagement of Domestic Courts with International Law’, (International Law Association, August 2016), 2. <www.ila-hq.org> accessed 03 August 2019.
2 Georges Scelle, ‘Règles Générales du Droit de la Paix’, Collected Courses of the Hague Academy of International Law (Brill|Nijhoff 1933), vol. 46; Dinah Shelton.(ed), International Law and Domestic Legal Systems: Incorporation, Transformation and Persuasion (OUP 2011); Yilmaz, Müslüm, Domestic Judicial Review of Trade Remedies, Experiences of the Most Active WTO Members (CUP 2013); André Nollkaemper, ‘Conversations Among Courts, Domestic and International Adjudicators’
in Cesare PR Romano, Karen J Alter and Yuval Shany, The Oxford Handbook of International Adjudication (OUP 2014).
3 André Nollkaemper, National Courts and the International Rule of Law, (Kindle Edition, OUP 2011);
Ole Kristian Fauchald & André Nollkaemper, The Practice of International and National Courts and the (De-)Fragmentation of International Law (Kindle Edition, Hart Publishing 2012); Eyal Benvenisti and George W. Downs, Between Fragmentation and Democracy: The Role of National and International Courts (Kindle Edition, CUP 2017); Antonios Tzanakopoulos, ‘Domestic Judicial Lawmaking’, in Catherine Brölmann and Yannick Radi (eds), Research Handbook on the Theory and Practice of International Lawmaking (Edward Elgar 2016).
4 For the purpose of this thesis, ‘direct effect’ corresponds to ‘private invocability’, that is, the possibility that private individuals bring treaty-based claims to domestic courts, resorting to them to protect their treaty-based rights. Maria Angela Jardim de Santa Cruz Oliveira, International Trade Agreements Before Domestic Courts (Springer 2015) 21.
law increased,5 but also their rulings have outnumbered those of international courts and tribunals in several areas.6
In countries with direct effect, private actors turn to domestic courts in order to force their governments to comply with international treaties.
Domestic courts’ relevance to international judicial practice has prompted recent research seeking to map their engagement with, and interpretation of, international law.7
Fragmentation of international law as a result of domestic court interpretation has been a frequent concern among commentators. A paramount example is the International Law Association’s Study Group on ‘Principles on the Engagement of Domestic Courts with International Law’ that delivered its final report (ILA Report) in 2016, culminating five years of work on the subject. In this report, the Study Group sought to map domestic courts’ different practices in engaging with international law, taking into account thirteen different country reports and four thematic ones. It noted that, despite their potential in developing international law, national courts’ engagement with it can also have a negative impact on the field:
Given the paucity of international judicial settlement of disputes, judicial law-making by domestic courts that impacts on international law, while subject to informal and diffuse international monitoring, requires much more vigilance in order to be kept within acceptable limits, and in order to have a developing rather than a merely corrosive effect on international regulation (which could be cast as a form of fragmentation).8
Along these lines, many scholars perceive that the engagement of domestic courts with international law entails a permanent challenge to define the boundaries of domestic court decisions that international law can accept and those that it cannot. 9
The term ‘fragmentation’ has been used in different contexts and with different connotations over time. In the past twenty years, the debate on fragmentation of international law was centred around rule and institutional specialization, and the formation of specialised international regimes in different areas of international law. The contemporary connotation of fragmentation relates more to an overdevelopment of international law, which is perceived as a threat to its effectiveness in tackling global problems. The lack of a hierarchical relationship among
5 Antonios Tzanakopoulos (co-rapporteur), ‘ Final Report: Mapping the Engagement of Domestic Courts with International Law’, (International Law Association, August 2016) 6-7. <www.ila- hq.org> accessed 03 August 2019.
6 André Nollkaemper, National Courts and the International Rule of Law, (Kindle Edition, OUP 2011) loc. 1505.
7 For example, Yuval Shany, Regulating Jurisdictional Relations between National and International Courts, (OUP, first published 2007, paperback 2009); David Sloss (ed), The Role of Domestic Courts in Treaty Enforcement: A Comparative Study (Kindle Edition, CUP 2009); André Nollkaemper, National Courts and the International Rule of Law, (Kindle Edition, OUP 2011); Ole Kristian Fauchald & André Nollkaemper, The Practice of International and National Courts and the (De-)Fragmentation of International Law (Kindle Edition, Hart Publishing 2012); David Haljan, Separating Powers: International Law Before National Courts (Kindle Edition, Springer 2013);
Helmut Philip Aust and Georg Nolte (eds), The Interpretation of International Law by Domestic Courts (Kindle Edition, OUP 2016); Eyal Benvenisti and George W. Downs, Between Fragmentation and Democracy: The Role of National and International Courts (Kindle Edition, CUP 2017);
Antonios Tzanakopoulos, ‘Domestic Judicial Lawmaking’, in Catherine Brölmann and Yannick Radi (eds), Research Handbook on the Theory and Practice of International Lawmaking (Edward Elgar 2016).
8 Antonios Tzanakopoulos (co-rapporteur), ‘ Final Report: Mapping the Engagement of Domestic Courts with International Law’, (International Law Association, August 2016) 27-28. <www.ila- hq.org> accessed 03 August 2019.
9 André Nollkaemper, National Courts and the International Rule of Law, (Kindle Edition, OUP 2011) location 1626;
