Introduction
2. Case reports
2.1. EU Law - Commission v Germany
2.2. US Law - Murray v. Charming Betsy
2.3. US Law – Chevron USA, Inc v Natural Res Def Council
3. EU Law and US Law Comparison
3.1. Application and Analysis
3.2. Conclusion
1. Introduction
In order to get a grasp of the legal status of international law in national legal affairs, a more
nuanced analysis is required of the interaction between multiple international legal orders and
legal instruments that are all interlinked in order to understand the ‘traditional’ concepts of
dualism and monism. Direct or indirect effect elucidates the effect of international law and the
interpretation of it in domestic courts, but the exact definition of the two notions remains
somewhat vague. However, it can be stated that direct and indirect effect share a similar
notion in the sense that they allow provisions of international agreements to be adjudicated by
domestic judiciary and hence become relevant in domestic legal orders. The US and EU legal
orders apply elements of direct and indirect effect differently as evidenced by the analysis of
the three primary cases outlined below, specifically for the EU perspective C-61-94
Commission v. Germany and the US perspective – Charming Betsy/Chevron. Quasi-(in)direct
effect of an international agreement is prompted where domestic courts render a domestic act
illegal or inapplicable because of its inconsistency with an international agreement, as in the
EU case of C-61-94 Commission v. Germany. Indirect effect of an international agreement
occurs where domestic courts uphold domestic law due to the ambiguity of the provisions of
international law and take the international agreement into account in order to ascertain the
meaning (as opposed to the status) of a domestic act. In other words, the international
agreement does not determine/alter the status of the domestic agreement but it is used to
guide/direct domestic courts in ascertaining the meaning of the domestic agreement where it
in no way obliges the court to adhere to the international agreement and thus invalidates the
provisions of the international agreement, as in the US case of Chevron and Betsy. One can
state the indirect effect of international agreements is less intrusive on the domestic law
whereas the direct effect will amend the domestic law. But in all of these situations,
international law reaches directly into the domestic legal order and potentially affects the legal
status of the domestic act This paper discusses how WTO law is interpreted in the EU and the
US jurisdictions and compares these two approaches to discuss if there are any differences
between the two by way of case law and scholarly opinions.
1 Jean Peter Hix.,’Indirect effect of International agreements: Consistent Interpretation and other Forms of
Judicial Accommodation of WTO Law by the EU courts and the US Courts’, Jean Monnet Working paper
series,2013, ISSN 2161-0320
2. Case reports
2.1. EU Law - Commission v Germany
An example of –quasi direct effect of WTO law is stated below.
FACTS: The Commission of the European Communities (applicant) brought an action
against the Federal Republic of Germany (defendant) for breach of its obligations under the
EC Treaty. This was due to the fact that Germany had authorized the importation of dairy
products under the inward processing procedure even though the customs value of the goods
was below the minimum price of the International Dairy Products Agreement (IDA) approved
by the European Community and Commission.
This was a decision that the European Community had concluded under GATT with the aim to liberalize the world trade in dairy products and promote the social and economic development of developing countries.3
ISSUE: Germany refused to withdraw the authorizations granted claiming that the goods
under inward processing did not enter into free circulation.
Commission argued that imported goods within the “suspension system” which are not subject to import duties fall within the customs territory of the Community.5
HELD: The European Court of Justice ruled that the Commission was justified to claim that
Germany had acted incompatible with the agreement when they granted the authorization to
import dairy products below the minimum prices of the IDA agreement, even if this was
under the inward processing procedure.6 It is the responsibility of the countries that have
entered into the IDA agreement to ensure that the exporters who have not acceded to the
agreement comply with the minimum prices of the agreement. This makes the IDA agreement
generally applicable.7 The European Court of Justice stated that “the primacy of international
agreements concluded by the Community over provisions of secondary Community legislation
means that such provisions must, so far as is possible, be interpreted in a manner that is
consistent with those agreements”.8 To conclude, the court ruled in accordance with article
155 of the EC Treaty. The article stipulates that the Commission is responsible for ensuring
the application of the Treaty, consequently, for compliance with international agreements
concluded by the Community which (according to Article 228) are binding for both the
Community institutions and the member states.9
2.2. US Law - Murray v. Charming Betsy
One of the earliest US Supreme Court cases to consider the scope of customary international
law in interpreting domestic legislation was Murray v. The Charming Betsy, 6 U.S. (2 Cranch)
64 (1804). The Charming Betsy doctrine is grounded in the separation of power concerns and
is more of a statutory construction than a legal doctrine. In essence the doctrine supposes that
Courts should presume that Congress intends to act in conformity with international law to
avoid foreign relations problems. Hence, that US courts should abide by its international
obligations.10
2.3. US Law – Chevron USA, Inc v Natural Res Def Council
FACTS: The dispute arose from the application of the Clean Air Act Amendments of 1977
and Environmental Protection Agency’s (EPA) regulations specifying the application of the
Clean Air Act Amendments of 1977. The Clean Air Act Amendments of 1977 imposed
certain requirements on states that have not achieved the national air quality standards
established by the EPA pursuant to earlier legislation, including the requirement that such
“non-attainment” states establish a permit program regulating “new or modified major
stationary sources” of air pollution.
ISSUE: The issue at question is whether the EPA’s regulations are based on the reasonable
construction of the statutory term of the Clean Air Act Amendments.
HELD: The Supreme Court of the US established the following two-fold test to assess an
agency's construction of the statute which it administers:11
1. Whether Congress has directly spoken to the precise question at issue; and (if the statute is
silent or ambiguous with respect to the specific issue), international obligations [...]When read with Chevron, the Charming Betsy argument would
come into play only where a domestic statute is unclear as to the matter at hand; where the
statute is unambiguous, the statutory language prevails and the question of international
obligation would no longer be pertinent.”26 In the United States international agreements are
given indirect effect based on the Charming Betsy canon of interpretation of federal statutes
whereas in the EU courts interpret community law in favour of international law as was the
case in Commission v. Germany.
Reference list
• LII / Legal Information Institute. 2020. ALEXANDER MURRAY V. The Schooner
CHARMING BETSY. [online] Available at:
<https://www.law.cornell.edu/supremecourt/text/6/64> [Accessed 10 September
2020].
• Chevron USA, Inc v Natural Res Def Council, Inc, 467 US 837, 104 S Ct 2778, 842–4
• http://www.judicialmonitor.org/archive_winter2011/generalprinciples.html.
• C-61/94 Commission v. Germany. EU:C:1996:313.
• C-53/96 Hermès International v. FHT Marketing Choice BV. EU:C:1998:292.
• Corus Staal BV and Corus Staal USA Inc v United States Department of Commerce,
27 CIT 388, 259 F Supp 2d 1253 (2003).
• Lester, Simon Nicholas, Mercurio, Bryan & Davies, Arwel, World trade law: text,
materials and commentary, Third edition, Hart, Oxford, 2018.
• Eckhardt, Elsig ‘Support for international trade law: The US and the EU compared’
Int J Const Law. 2015 Oct; 13(4): 966–986.
• George E. Warren Corp. v. U.S. Environmental Protection Agency, 159 F.3d 616
(D.C. Cir. 1998)
• Jeanne J. Grimmett.,“The Status of WTO Rules in U.S. Law” Federal Publications,
2006.
• Jean Peter Hix.,’Indirect effect of International agreements: Consistent Interpretation
and other Forms of Judicial Accommodation of WTO Law by the EU courts and the
US Courts’, Jean Monnet Working paper series,2013, ISSN 2161-0320.
9 C-61/94 Commission v. Germany. EU:C:1996:313, para. 15. 10 http://www.judicialmonitor.org/archive_winter2011/generalprinciples.html. 11 Chevron USA, Inc v Natural Res Def Council, Inc, 467 US 837, 104 S Ct 2778, 842–4, para. 5.
26 Jeanne J. Grimmett.,“The Status of WTO Rules in U.S. Law” Federal Publications, 2006, p. 2.
2 C-61/94 Commission v. Germany. EU:C:1996:313, para. 1. 3 Ibid., paras. 2-3. 4 Ibid., paras. 9-12. 5 Ibid., paras. 26-27. 6 Ibid., para. 39. 7 Ibid., para. 33. 8 Ibid., para. 52.
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