“THE PRINCIPLE OF GOOD FAITH IN THE LAW OF

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“The Principle of Good Faith in the Law of the World Trade Organization”

“The Principle of Good Faith in the Law of the World Trade Organization”



Dr. Roberto Rios-Herran


To Professor Phaedon John Kozyris, with admiration and respect



“The law of justice declares that each one participates in the perfection of the universe and in a happiness of his own in proportion to his own virtue and to the good will he entertains toward the common good.”


Leibniz (On the Ultimate Origin of Things)



  1. Introduction


The process of globalization, i.e. the integration and expansion of various domestic markets into a global market place, creates a need for the development of a uniformed regulatory framework to establish the foundations for this integration and provide for a common set of rules and principles to facilitate this process. This is the environment in which international trade1 exists.


The World Trade Organization (WTO) provides “the common institutional framework for the conduct of trade relations among its members in matters related to [the WTO] agreements and associated legal instruments included in the Annexes to this agreement.”2 The WTO follows a “positive harmonization”3 approach in trying to achieve the uniformed regulatory framework mentioned above (including dispute settlement), which will provide for a level playing field for its members and establish a global marketplace. These are, in broad terms, the aims of the WTO.


The WTO agreements represent legally binding obligations for its members, and are regulated by the general principles of public international law. The WTO rules therefore, cannot be considered as a “self-contained” regime nor be read, “in clinical isolation from Public International Law.” 4 Hence, general principles of public international law regulate the WTO agreements, and these agreements shall be interpreted, “in accordance with customary rules of interpretation of public international law.”5 This is the nature of WTO law.


In this perspective of things the principle of good faith plays an important role in providing for a standard of conduct to be followed by WTO members in the organization and implementation of their trade activities. The aim of this article is to analyze how this principle is integrated into the law of the WTO, and how it has been interpreted by the Dispute Settlement Body (DSB) of the organization in various cases. It is structured in three parts. The first one provides for a definition of the principle of good faith; the second one analysis the methodology of interpretation of the WTO agreements followed by the DSB; and the third one analyses relevant case law. Concluding remarks are provided at the end of the article.


  1. The Principle of Good faith


Present in virtually all legal systems of the world, good faith is one of the most widely accepted “general principles” of law. Good faith can be defined as:


“the mental and moral state of honest, even if objectively unfounded, conviction as to the truth or falsehood of a proposition or body of opinion, or as to the rectitude or depravity of a line of conduct. One who acts in good faith, so far as the violation of positive law, or even, in certain junctures, of natural law, is concerned, is said to labor under an invincible error, and hence to be guiltless. This consideration is not infrequently applied to determine the degree of right or obligation prevailing in the various forms of human engagements, such as contracts and the law of obligations. In the mater of prescription it is held to be an indispensable requirements whether there be question of acquiring dominion or freeing oneself from a burden.”6


In international relations, this universal acceptance of the principle of good faith, along with that of free consent and the Pacta Sunt Servanda rule7 has been specifically recognized in the Vienna Convention on the Law of Treaties (VCLT)8, and other international conventions.9

Good faith is an element of behavior with a subjective nature, which in turn makes it difficult to prove whether or not this element is present in the behavior of a party to a convention.10 Honesty and fairness therefore, are two important elements shaping the conduct of States acting in good faith, and their policies shall reflect a level of coherency towards this international law requirement. In this juncture, States acting in good faith are under the obligation, “to refrain from acts calculated to frustrate the objects of the treaty.”11 Thus, when contracting with each other, it is presumed that States will honor their obligations in good faith and will refrain from imposing unreasonable burdens on one another. Good faith is one generally accepted principle of law in public international law permeating both the standard of conduct of States in their dealings with each other, and the settlement of disputes among them.


The principle of good faith, along with other principles of customary international law, is incorporated in the VCLT, which provides for its use in the following provisions:





Based on these articles we see that good faith is an obligatory standard of performance for parties to an international convention (article 26), and a guiding principle in interpreting their obligations (articles 31 and 32). In this respect, the only possibility for justifying non performance of obligations under an international convention is when the application of a given treaty is contrary to jus cogens, as per the terms of article 53 of the VCLT.12 Thus, good faith performance and interpretation of States’ obligations highlights the need for a faithful behavior in the achievement and enforcement of an agreed common purpose. This in turn influences the perception of States of the “rightness” or the “justice” of the resulting international order.13 Therefore, the principle of good faith regulates the application and implementation of international treaties.


  1. Interpretation of WTO Agreements


The WTO agreements are interpreted by the Dispute Settlement Body (DSB) of the organization fallowing the prescriptions contained in the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). In this respect article 1 of the DSU indicates that:


“the rules and procedures of this Understanding shall apply to disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this understanding (referred to in this understanding as the “covered agreements”). The rules and procedures of this Understanding shall also apply to consultations and the settlement of disputes between Members [of the WTO] concerning their rights and obligations under the provision of the Agreement Establishing the World Trade Organization (referred to in this Understanding as the “WTO Agreement”) and of this understanding taken in isolation or in combination with any other covered agreement.”


The DSB has the authority to establish panels and a standing Appellate Body (AB) to implement these tasks14 with respect to the provisions contained in the covered agreements.15 The dispute settlement system plays a central role in ensuring the stability of the multilateral trading system, and clarifies the extent of obligations of the members of the WTO, preserving their rights and obligations under the covered agreements, and using customary rules of interpretation of public international law for their interpretation. In this respect, article 3 (2) of the DSU indicates that:


“The dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. The Members recognize that it serves to preserve the rights and obligations of Members under the covered agreements and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law. Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.”


The concept of “security and predictability” has already been the object of definition in some cases. In this respect the AB in Japan – Alcoholic Beverages II indicated that the rules of the WTO are, “reliable, comprehensible and enforceable…. [and that they] are not so rigid or so inflexible as not to leave room from reasoned judgments in confronting the endless and ever changing ebb and flow of real facts in real cases in the real world. They will served the multilateral trading system best if they are interpreted with that in mind.”16 In this juncture, WTO members acting in good faith should refrain from taking actions that will jeopardize the “security and predictability” of the multilateral trading system, and promptly comply with the recommendations of the DSB.17


The DSB follows a “textual” interpretation18 of the WTO agreements in which the text is presumed to represent the final and most reliable expression of the intent of the parties, leaving the possibility to have recourse to other supplementary means of interpretation only when the text leaves a question unanswered. This is consistent with the provisions included in the VCLT articles 31 and 32, which represent the “customary rules of interpretation of public international law” mentioned in article 3 (2) of the DSU. In this perspective, the expressed intent of the parties included in the text prevails over other “subjective” interpretations. These articles read as follows:


Article 31
General rule of interpretation

1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:

(a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;

(b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.

3. There shall be taken into account, together with the context:

(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;

(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;

(c) any relevant rules of international law applicable in the relations between the parties.

4. A special meaning shall be given to a term if it is established that the parties so intended.


Article 32
Supplementary means of interpretation

Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:

(a) leaves the meaning ambiguous or obscure; or

(b) leads to a result which is manifestly absurd or unreasonable.


The AB has reaffirmed the applicability of these provisions when interpreting the WTO agreements, indicating that the general rule referred to in article 31 constitute part of the “customary rules of interpretation of public international law”, which the DSB has to apply as per the indications in this respect contained in article 3 (2) of the DSU.19 Regarding the textual interpretation of the WTO agreements, the AB has indicated that:


“article 31 of the Vienna Convention provides that the words of the treaty form the foundation for the interpretative process; interpretation must be based above all on the text of the treaty.”20


This approach to interpreting the WTO has been further develop by the DSB in subsequent cases, providing as a general rule that:


“a treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted. It is in the words constituting that provision, read in their context, that the object and purpose of the states parties to the treaty must first be sought. Where the meaning imparted by the text itself is equivocal or inconclusive, or where confirmation of the correctness of the reading of the text itself is desired, light from the object and purpose of the treaty as a whole may usually be sought.”21


Additionally, the various elements contained in article 31, e.g. context, object and purpose, instruments made in connection with the agreement, must be applied as a whole, In US – Section 301, the Panel concluded that the elements of article 31 of the VCLT, “are to be viewed as one holistic rule of interpretation rather than a sequence of separate tests to be applied in a hierarchical order.”22 A similar conclusion was reached by the Panel in EC – Asbestos, “to the extent that Article 31 of the Vienna Convention contains a single rule of interpretation and not a number of alternative rules, the various criteria in the article should be considered as forming part of a whole.”23


An important corollary of article 31, which also reflects the good faith element conditioning the DSB interpretation of the WTO agreements is the principle of effective treaty interpretation24, according to which a treaty should not be interpreted in such a way as to lead to a result which is manifestly absurd or unreasonable. In US - Gasoline, the AB indicated in this respect that:


“One of the corollaries of the “general rule of interpretation” in the Vienna Convention is that interpretation must give meaning and effect to all the terms of a treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.”25


The general methodology for interpreting the WTO agreements by the DSB has been the object of substantive jurisprudence over the last 10 years. The systematic application of the VCLT rule has brought a standardized approach of interpretation which has contributed to the legitimacy and strengthening of the DSU and its objectives of providing stability and predictability to the multilateral trading system.


  1. Case Law on Good Faith


The principle of good faith has been the object of analysis in various cases decided by the DSB. WTO members are expected to comply with their obligations in good faith, and this element is assumed to be present in the conduct of WTO members. In this respect in a landmark case (EC – Sardines) the AB concluded that:


“… We must assume that Members of the WTO will abide by their treaty obligations in good faith, as required by the principle of Pacta Sunt Servanda articulated in Article 26 of the Vienna Convention. And always in dispute settlement, every Member of the WTO must assume the good faith of every other Member.” 26


It is therefore necessary when analyzing the performance of a Member to assume that the good faith element is present in its actions. But how is this principle structured? It has been suggested that good faith is formed by two important elements: the doctrine of the abuse of rights and the protection of legitimate expectations, which together, “heighten a legal system’s legitimacy by placing each participant on equal ground.” 27 While the use of the doctrine of abuse of rights (“abus de droit) has been accepted in WTO jurisprudence and interpretation methodology, the principle of protection of legitimate expectations has not.

In the Shrimp – Turtle Case, the AB, referring to the principle of good faith, indicated that:


“as once a general principle of law and a general principle of international law, controls the exercise of rights by states. One application of this general principle, the application widely known as the doctrine of abus de droit, prohibits the abusive exercise of state’s rights and enjoins that whatever the assertion of a right impinge on the field covered by a treaty obligation, it must be exercised bona fide, that is to say, reasonably.”28


Regarding the application of the principle of protection of legitimate expectations, the available case law against its use is extensive, mainly because its use runs contrary to the textual approach methodology when interpreting the WTO agreements fallowed by the AB, as indicated in the provisions of Article 31 of the VCLT. The use of this principle in dispute settlement will in fact inevitably incorporate concepts not included in the WTO agreements by panelists, fact that will go contrary to the specific provision of article 3(2) of the DSU, which provides that, “Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.” In this respect, in Chile – alcoholic beverages the AB indicated that :


“In this dispute, while we have rejected certain of the factors relied upon by the Panel, we have found that the Panel’s legal conclusions are not tainted by any reversible error of law. In these circumstances, we do not consider that the Panel has added to the rights or obligations of any Member of the WTO. Moreover, we have difficulty in envisaging circumstances in which a panel could add to the rights and obligations of a Member of the WTO if its conclusions reflected a correct interpretation and application of provisions of the covered agreements.”29


One can clearly see then that a textual interpretation of the WTO agreements is required to ensure that the main elements incorporated in these agreements are protected (including good faith), and that the intentions of the parties, when entering into these agreements, is respected. Regarding this issue of interpretation, in India – Patents the AB indicated that:


“The duty of a treaty interpreter is to examine the words of the treaty to determine the intentions of the parties. This should be done in accordance with the principles treaty interpretation set out in article 31 of the Vienna convention. But these principles of interpretation neither require nor condone the imputation into a treaty of words that are not there, or the importation into a treaty of concepts that were not intended.”30


Furthermore in the same case, with respect to the use of the principle of protection of legitimate expectations when interpreting Members’ obligations under the WTO agreements, the AB clearly indicated that:


“the Panel’s invocation of the ‘legitimate expectations’ of Members relating to conditions of competition melds the legally-distinct bases for ‘violation’ and ‘non-violation’ complaints under Article XXIII of the GATT 1994 into one uniform cause of action. This is not consistent with either Article XXIII of the GATT 1994 or Article 64 of the TRIPS Agreement. Whether or not ‘non-violation’ complaints should be available for disputes under the TRIPS Agreement is a matter that remains to be determined by the Council for Trade-Related Aspects of Intellectual Property (the ‘Council for TRIPS’) pursuant to Article 64.3 of the TRIPS Agreement. It is not a matter to be resolved through interpretation by panels or by the Appellate Body.”31


In EC – Computer Equipment the AB further discuss the inapplicability of the principle of protection of legitimate expectation, and instead introduced the concept of common intention of the parties. In this respect the AB indicated that:


“We do not agree with the Panel that interpreting the meaning of a concession in a Member’s Schedule in the light of the ‘legitimate expectations’ of exporting Members is consistent with the principle of good faith interpretation under Article 31 of the Vienna Convention. Recently, in India - Patents, the panel stated that good faith interpretation under Article 31 required ‘the protection of legitimate expectations’. We found that the panel had misapplied Article 31 of the Vienna Convention….

The purpose of treaty interpretation under Article 31 of the Vienna Convention is to ascertain the common intentions of the parties. These common intentions cannot be ascertained on the basis of the subjective and unilaterally determined ‘expectations’ of one of the parties to a treaty. Tariff concessions provided for in a Member’s Schedule -- the interpretation of which is at issue here -- are reciprocal and result from a mutually-advantageous negotiation between importing and exporting Members. A Schedule is made an integral part of the GATT 1994 by Article II:7 of the GATT 1994. Therefore, the concessions provided for in that Schedule are part of the terms of the treaty. As such, the only rules which may be applied in interpreting the meaning of a concession are the general rules of treaty interpretation set out in the Vienna Convention.”32

The principle of good faith was also invoked by the AB in another important case in the context of interpreting the provisions of Article 3.1., and paragraph 2 of Annex II of the anti-Dumping agreement (dealing respectively with the determination of injury, and best information available) in which the AB indicated that the provisions at stake were “another expression of the principle of good faith, which is, at once, a general principle of law and a principle of general international law, that informs the provisions of the anti Dumping Agreement, as well as the other covered agreements.”33 In the same report the AB also considered the concept of fundamental fairness of the objective examination referred to in the Anti-Dumping agreement as being another expression of the general principle of good faith34, and that good faith, “informs the provisions of the covered agreements.”35

Finally, in a very interesting decision in United States – Continued Dumping and Subsidy Offset Act of 2000 (the “Byrd Amendment”) the AB when reviewing the panel conclusion that by enacting this piece of legislation “the United States may be regarded as not having acted in good faith” (specifically against the indications contained in article 5.4. the anti dumping agreement and Article 11.4 of the Subsidies and Countervailing Measures Agreement) used the principles of pacta sunt servanda and good faith as the basis of its analysis by indicating that, according to Article 31 of the VCLT, the principle of good faith inform the interpreter in completing its task, and that performance of treaties is governed by good faith; that, “clearly, therefore there is a basis for a dispute settlement panel to determine, in an appropriate case, whether a Member has not acted in good faith”36; and that nothing in the WTO agreements supports the assumption that a WTO member has not acted in good faith when that member is found to have violated a treaty provision.37

  1. Conclusion

The principle of good faith is well entrenched in the legal structure of the WTO, and its juridical value has been clearly established, as indicated by the different cases discussed above. This is a most welcome development introduced by the WTO legal framework over the last 10 years since the importance of the principle was quite limited in the practice of GATT 1947. The systematic application of the principle of good faith, when interpreting the WTO agreements and analyzing the actions of the Members, helps to add to the legitimacy of the WTO system and increases the perception of the fairness of its actions.

“The main idea is that when a number of persons engage in a mutually advantageous cooperative venture according to rules, and thus restrict their liberty in ways necessary to yield advantages for all, those who have submitted to these restrictions have a right to a similar acquiescence on the part of those who have benefited from their submission.”38

In this perspective of things, it is necessary therefore that everybody does its part, so that all members can get a fair share under just arrangements. The principle of good faith provides a very important standard of behavior in this respect, and is a guiding principle when interpreting the scope of obligations of the parties to an agreement. It shapes the good will that parties should entertain towards the common good.

Partner. Richardson Rios Olechowski Law Firm. Warsaw, Poland. Comments to the author can be sent to: [email protected]

1 “International Trade is a multi-disciplinary subject. That kind of subject calls for an appropriate response, i.e., one that is not narrow, but at the same time not so broad as to be unfocused, and one that is not dry, but at the same time not so forceful as to be polemical.” In Bhala, Raj. “Trade, Development and Social Justice.” Carolina Academic Press. 2003. p. xix.

2 Article II of the Marrakesh Agreement Establishing the World Trade Organization. “The Legal Texts. The Results of the Uruguay Round of Multilateral Trade Negotiations.” Cambridge University Press. P. 4.

3 Negative harmonization was the main regulatory philosophy of the old GATT system, in which the objective pursued was the elimination of discrimination from international trade based on the National Treatment and Most Favored Nation principles. Positive harmonization has as its main objective (in addition to eliminating non discrimination) the creation of a uniform global regulatory framework.

4 See in this respect: WTO Appellate Body, United States – Standards for Reformulated and Conventional Gasoline, WTO Doc. WT/DS2/AB, at 17. 1996.

5 Article 3 of the Understanding on rules and Procedures Governing the Settlement of Disputes. “The legal Texts…” Op. Cit. p.355.

6 Retrieved from: http://en.wikipedia.org/wiki/Good_faith See also the definitions of this principle contained in the Catholic Encyclopedia: http://www.newadvent.org and Black’s Law Dictionary. Sixth ed. West Publishing Company. 1990.

7 “Agreements (and stipulations) of the parties (to a contract) must be observed.” In Black’s Law Dictionary.

8 See Preamble paragraph 3 of the VCLT

9 See for example in this respect a resolution of the International Whaling Commission indicating that “good faith requires fairness, reasonableness, integrity and honesty in international behavior” and article 300 of the UN Convention on the Law of the Sea, which indicates that an abuse of right is contrary to the principle of good faith.

10 In this respect, “the parties have a capacity for justice in the sense that they can be assured that their undertaking is not in vain. Assuming that they have taken everything into account, including the general facts of moral psychology, they can rely on one another to adhere to the principles adopted. Thus they consider the strains of commitment. They cannot enter into agreements that may have consequences they cannot accept.” In Rawls. John, “A Theory of Justice.” Harvard University Press. 1971. p. 176

11 Y.B.I.L.C. Vol. II 7-8 (1964)

12 Article 53 of the VCLT indicates that, “a treaty is void if, at the time of its conclusion, it conflicts with a peremptory norm of general international law. For the purposes of the present Convention, a peremptory norm of general international law is a norm accepted and recognized by the international community of States as a whole as a norm from which no derogation is permitted and which can be modified only by a subsequent norm of general international law having the same character.”

13 For further discussion of these principles see the excellent article of Garcia J. Frank. “Trade and Justice: Linking the Trade Linkages Debate. University of Pennsylvania Journal of International Economic Law. 391. 1998.

14 Article 2 of the DSU

15 This term has been defined by the AB as including, “the WTO agreement, the Agreements in Annexes 1 and 2, as well as any Plurilateral Trade agreement in Annex 4 where its Committee of signatories has taken a decision to apply the DSU. In a dispute brought to the DSB, a panel may deal with all the relevant provisions of the covered agreements cited by the parties to the dispute in one proceeding.” Appellate Body. Brazil – Measures affecting desiccated coconut. WT/DS22/AB/R of 21 February, 1997.

16 Appellate Body. Japan – Alcoholic Beverages. WT/DS10/AB/R of 4 October, 2004. See also in this respect the Panel report on US – Section 301 Trade Act in which the Panel indicated that “providing security and predictability to the multilateral trading system is another central object and purpose of the system which could be instrumental to achieving the broad objectives of the preamble.” WT/DS152/R of 22 December, 1999.

17 In this respect delays in implementing DSB decisions and the time frame during which a WTO inconsistent measure can be kept in place have been pointed out as some structural deficiencies of the DSU that weakens this “security and predictability” objective. For a more elaborated discussion of this problem see: Mateo Diego Fernandez and Roberto Rios Herran. “The Reform of the WTO Dispute Settlement Understanding: A Closer Look at the Mexican Proposal” Manchester Journal of International Economic Law. Vol. 1 Issue 1. 2004 and Yenkong H. Nganjoh.and Roberto Rios Herran “The WTO Dispute Settlement System and the Issue of Compliance: Multilateralizing the enforcement mechanism” Manchester Journal of International Economic Law. Vol. 1. Issue 3. 2004.

18 For a very comprehensive analysis in this respect please refer to the excellent article of Lennard, Michael. “Navigating by the Stars: Interpreting the WTO Agreements. Oxford University Press. Journal of International Economic Law. 2002.

19 See US – Gasoline, supra 4.

20 See Japan – Alcoholic beverages. Supra 16.

21 Appellate Body report on United States – Import Prohibition of Certain Shrimp and Shrimp Products. WT/DS58/AB/R 6 November, 1998.

22 Panel report on United States – Sections 301-310 of the trade Act of 1974. WT/DS152/R 27 January 2000. par.7.22

23 Panel Report on European Communities – Measures Affecting asbestos and Asbestos Containing Products. WT/DS135/R 5 April 2001. par.8.46.

24 Also referred to as “Ut res magis valeat quam pereat” meaning that the thing may rather have effect than be destroyed. In Black’s Law Dictionary. Op. Cit.

25 US Gasoline. P. 23.

26 Appellate Body Report on European Communities – Trade Description of Sardines. WT/DS231/AB/R 26 September, 2002. In this respect, in Chile – Taxes on Alcoholic Beverages the AB concluded that, “Members of the WTO should not be assumed, in any way, to have continued previous protection or discrimination through the adoption of a new measure. This would come close to a presumption of bad faith.” WT/DS/87/AB/R 13 December, 1999.

27 Thomas Cottier and Krista N. Schefer. “Good Faith and the protection of legitimate expectations in the WTO.” In New Directions in International conomic Law 49. Marco Bronckers & Reinhard Quick eds. 2000. p.50.

28 Shrimp – Turtle. Supra 21 p.158. The AB also indicated that, “The chapeau of Article XX is, in fact, but one expression of the principle of good faith. This principle, at once a general principle of law and a general principle of international law controls the exercise of rights by States…an abusive exercise by a Member of its own right thus result in a breach of the other Member and, as well, a violation of the treaty obligation of the Member so acting.” Para. 158.

29 Chile – Alcoholic Beverages. Supra 26 at para.79

30 Appellate Body report on India – Patent Protection for Pharmaceutical and Agricultural Chemical Products. WT/DS50/AB/R adopted 16 January 1998. para. 45.

31 Ibid. para. 41-42.

32 Appellate Body report on European Communities – Customs Classification of Certain Computer Equipment. WT/DS68/AB/R 5 June 1998 para 83-84

33 Appellate Body report on United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan. WT/DS184/AB/R July 24,2002. para. 101.

34 Ibid. para.193.

35 Ibid. para.101.Additionally, the principle of good faith requires members engaged in dispute settlement procedures to comply with the requirements of the DSU in good faith. See appellate Body report on United States – Treatment of Foreign Sales Corporation s. WT/DS108/AB/R March 20,2000. para. 166 Furthermore, the “meaningful exchange” indicated in Article 12(3) of the Safeguards Agreement during the consultation process before initiating panel proceedings must be fully guided by good faith. See Appellate Body report on United Sates – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea. WT/DS202/AB/R March 8,2002. para 110.

36 See WT/DS217/AB/R January 16,2003 para 297.

37 Ibid. para.298.

38 Rawls, John. Op. Cit. p.112.

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