Tied Aid and Development Aid Procurement in the Framework of EU and WTO Law: The Imperative for Change 9781474200226, 9781849461153

Citation preview

Acknowledgements This book concludes a journey I began years ago at the University of Nottingham where I studied for an LLM and a PhD. It was during those years that I first became interested in the role that public procurement can play in enhancing development and eradicating poverty in developing countries (indeed I still remember the option talk given by Martin Trybus on the opening day of the LLM). Many friends, colleagues and family have helped in the preparation of this book. A heartfelt thank you goes to all those colleagues who have read and commented on some of the chapters in draft: Tawhida Ahmed, Maurizio Carbone, Daria Davitti, David Fraser, John Linarelli, Jeff Kenner, Ping Wang, and Alessandra Valaguzza. I would like to acknowledge previous and current colleagues in the School of Law University of Nottingham who have offered help and advice in different ways, especially Emilie Cloatre, Sarah Dromgoole, Niahm Meloni, Vanessa Munro, Theresa Murphy, Tom Poole, Sope Williams-Elegbe, Konstantina Kalogeropoulou, Craig Rotherham, Sangeeta Shah, Paul Torremans, Peter Trepte. I would also like to thank the following people for sharing with me their experience and knowledge on development aid and food aid: Harold Alderman, Asha Ayoung, Andrea Baticci, Pamela Bigart, Edward Clay, Denise Carpenter, Hakan Falkell, Rowena Gorospe, John Hoddinott, Bernard Hoeckman, Robert Hunja, Frans Lammersen, Patrice Lennormanne, Jack Keulemans, Jeanmarie Meyer, Nicole Menage, Joop Menkveld, Oliver Morrissey, Kevin Naik, Keith Otterside, Stefano Signore, Alaleh Motamedi, Maria Perrotti, Terri Toyota. Special thanks to Belen Vazquez—I miss the lively conversations we had about tied aid all those years ago in London. Many of the ideas explored in this book were formed during my time as a postgraduate student at the University of Nottingham and I owe a huge debt to the wisdom and knowledge of Sue Arrowsmith—a mentor, friend and colleague whose work remains an important inspiration for me. I would also like to express my gratitude to Peter Kunzlik and Steen Treumer whose positive comments and advice when examining my PhD have been important as I have continued my research into tied aid. Throughout these years I have also been fortunate to benefit from the support of a number of institutions. In particular a grant awarded by the British Academy allowed me to travel and carry out the research necessary to complete the key case studies featured in this book. It was a pleasure to conduct some of the research in Rome at the University Luiss Guido Carli,

vi

Acknowledgements

where I took up a Visiting Professor Fellowship in 2010. I am grateful to the entire faculty for their hospitality and their generous fellowship scheme. I would also like to thank the Universita’ di Roma Tre, Faculty of Economics, for inviting me to take part as a visiting lecturer in their Masters on Human Development and Food Security. I am grateful to all the students and staff on the course and, in particular, the course director, George-Andre Simon, for the stimulating exchange of ideas which never failed to inspire me. Some of the interview research was conducted in Washington and Cape Town, where I was welcomed by the prestigious Universities of Georgetown and Stellenbosch. In particular I thank all the colleagues I met at the International Law Institute at Georgetown University, and especially Don Wallace Jr, the Institute’s Chairman; and in South Africa I am indebted to Geo Quinot for his kind hospitality. I would also like to thank my research assistants Laura Graham, Paolo Vargiu, Alexandra Guarashi and especially Mehmet Bedi Kaya whose invaluable help has been of the essence at the final stage of this project. In addition I would like to thank everybody who helped me at Hart Publishing especially Richard Hart, Rachel Turner, Mel Hamill and Tom Adams. I would like to express my everlasting thanks to my parents for their wholehearted love, to my brothers, Angelo and Stefano, my sisters, Silvia and Patrizia, and to my beloved Antonio and Emanuele. I am thankful to my mum, my sister Silvia and my brother Stefano for generously dedicating their time to my boys. Thanks also to Alessandra Marchi and Adriana Milillo for always being there for me. My thoughts are also for my late father-in-law, Eddie, who is greatly missed by all of us. Love and gratitude above all to my husband, Jon, for his love and support, his precious help, his witty irony, his constant encouragement and his unlimited patience especially during the months that preceded the completion of this book, le parole non sono in grado di esprimere quanto ti sono grata e quanto tu sia importante per me. And to my sons Daniel and James, sono loro ora che danno un senso alla mia vita. This book is dedicated to my boys: Jon, James and Daniel. Un grazie sincero a tutti voi Elton on the Hill, 2013

List of Acronyms AoA BOP CCP CIPE CRS DAC DFID DDR DGCS Sviuppo ECD EEA EFTA EU FAC FAO FSTC GATT GATS GDP GPA GNI HQ HLM HIPCs IRTC LDC LMIC LRPs MAE MCC MDG MFN NGO NT ODA OECD

WTO Agreement on Agriculture Balance of Payments Common Commercial Policy Comitato Interministeriale per la Programmazione Economica Creditor Reporting System (OECD) Development Assistance Committee Department for International Development (UK) Doha Development Round Direzione Generale Cooperazione allo (General Directorate for Development Cooperation) European Consensus on Development European Economic Area European Free Trade Association European Union Food Aid Convention Food and Agriculture Organization Free Standing Technical Cooperation General Agreement on Tariffs and Trade General Agreement on Trade in Services Gross Domestic Product Government Procurement Agreement Gross National Income Headquarter High Level Meeting Heavily Indebted Poor Countries Investment Related Technical Cooperation Least Developed Country Low and Medium Income Country Local and Regional Purchases Ministero Affari Esteri (also referred to as MFA Minister Foreign Affairs) Millennium Challenge Corporation Millennium Development Goals Most Favoured Nation Non-Governmental Organization National Treatment Official Development Assistance Organisation for Economic Cooperation and Development

xvi

List of Acronyms

RTE SCM SDR TC TFEU USAID USDA USGAO WFP UN WTO

Resource Transfer Efficiency Subsidies and Countervailing Measures Agreement Special Drawing Rights Technical Cooperation Treaty on the Functioning of the European Union United States Agency for International Development United States Department of Agriculture United States Government Accountability Office World Food Programme World Trade Organization

Tables of Cases Appellate Body Canada—Certain Measures Affecting the Automotive Industry WT/DS139/AB/R, WT/DS142/AB/R (2000) ..................................... 390 Appellate Body Canada—Measures Affecting the Export of Civilian Aircraft WT/DS70/AB/R; Panel report WT/DS70/R; (1999) ................... 378, 384 Appellate Body Canada—Certain Measures Concerning Periodicals, WT/DS31/AB/R (1997)................................................................................... 374 Appellate Body EC—Measures Affecting Asbestos, WT/DS135/AB/R (2001) .... 372 Appellate Body Japan—Taxes on Alcoholic Beverages AB WT/DS1/AB/R, WT/DS8/AB/R, WT/DS11/AB/R (1996)......................... 308, 371 Appellate Body United States—Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WT/DS138/AB/R (2000) Panel Report WT/DS138/R (1999) ...................................................................................... 384 Brazilian International Taxes, GATT BISD II (1952).......................................... 371 Case C-7/61 Commission v Italy [1961] ECR 693 ............................................. 316 Case C-32/65 Italy v Council and Commission [1966] ECR 389 ....................... 289 Case C-22/70 Commission v Council (AETR) [1971] ECR 263 ................. 262, 263 Case C-8/74 Procure du Roi v Dassonville (1974) ECR 837 .............. 291, 292, 299 Case C-33/74 Johannes Henricus Maria van Binsbergen v Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid [1974] ECR 1299............................................................................................... 292, 315 Case C-4/75 Rewe-Zentralfinanz v Landwirtshaftskammer [1975] ECR 843......................................................................................................... 316 Case C-104/75 Officier van Justitie v de Peijper [1976] ECR 613 ...................... 316 Case C-71/76 Trieffry v Conseil De L’Ordre des Advocats a la Cout de Paris [1977] ECR 765 ................................................................................ 301 Case C-30/77 Regina v Bouchereau [1977] ECR 1999....................................... 353 Case C-120/78 Rewe-Zentral v Bundesmonopolverwaltung fur Branntwein (Cassis de Dijon case) [1979] ECR 649 ....................... 291, 292, 315 Case C-251/78 Firma Denkavit Fürtemmittel GmbH v Minister Fur Ernährung [1979] ECR 3369 ................................................................... 293 Case C-15/81 Gaton Schul v Inspecteur der Invoerrechten [1982] ECR 1409....................................................................................................... 289 Case C-95/81Commission v Italy [1982] ECR 2187 .......................................... 316 Case C-249/81 Commission v Ireland (buy Irish) [1982] ECR 4005............................................................................... 292, 299, 304, 308 Case C-42/82 Commission v France [1983] ECR 1013 ...................................... 316 Case C-72/83 Campus Oil Limited and others v Minister for Industry and Energy and others (Campus Oil) [1984] ECR 2727 ................................ 317 Case C-207/83 Commission v United Kingdom [1985] ECR 1201 ............ 289, 299 Case C-21/84 Commission v France (postal franking machines) [1985] ECR 1356............................................................................................... 292, 305

xviii

Tables of Cases

Case C-103/84 Commission v Italy (subsidies for the purchase of national vehicles) [1986] ECR 1759 ................................................... 299, 300 Case C-192/84, Commission v Hellenic Republic [1985] ECR-3967 ........................................................................................... 299 Cases C 199/85 Commission v Italy [1987] ECR 1039 ............................. 353, 359 Case C-314/85 foto-frost v Hauptzollamt Lubeck-Ost [1987] ECR 4199....................................................................................................... 353 Case C-45/86 Commission v Council [1987] ECR 1493 ...................... 68, 268, 270 Case C-45/87 Commission v Ireland (Dundalk Water) [1988] ECR 4929......................................................................................... 68, 293, 294 Case C-31/87 Gebroeders Beentjes BV v Netherlands [1988] ECR 4635....................................................................................... 308, 339, 340 Case C-142/87 Belgium v Commission [1990] ECR I-959 ......................... 295, 321 Case C-266-267/87 BR v Royal Pharmaceutical Society of GB [1989] ECR 1295....................................................................................................... 292 Case C-3/88 Commission v Italy (Re Data Processing) [1989] ECR 4035 .............................................................................................. 294, 295 Case C-31/88 Du Pont de Nemours Italiana v Unità Sanitalia Locale No 2 di Carrara (1990) ECR I-889 ..................................... 294, 295, 321 Case C-62/88 Greece v Council [1990] ECR I-1527 .......................................... 275 Case C-351/88 Laboratori Bruneau Srl v Unita Sanitaria Locale RM/24 de Monterondo [1991] ECR I-3641 ................................................... 294 Case C-243/89 Commission v Denmark (Storebaelt) [1993] ECR I-3353 .................................................................................................... 294 Case C-300/89 Commission v Council (Titanium Dioxide) [1991] ECR I-2867 .................................................................................... 270, 282, 284 Case C-360/89 Commission v Italy [1992] ECR I-3401 ..................................... 294 Case C-76/90 Sager [1991] ECR I-4221 ............................................................. 292 Case C-267 and C-268/91 Keck & Methouard [1993] ECR I-6097 ................... 293 Case C-155/91 Commission v Council [1993] ECR I-939 .................. 270, 276, 283 Case C-316/91 Parliament v Council [1994] ECR I-625 .................................... 278 Case C-324/91 Parliament v Council ECR [1994] I-625 .................................... 284 Case C-19/92 Kraus v Land Baden-Wuttemberg [1993] ECR I-1663 ................. 317 Case C-71/92 Commission v Spain [1993] ECR I-5923 ............................. 353, 359 Case C-391/92 Commission v Greece [1995] ECR I-1621 ................................. 293 Case C-187/93 Parliament v Council ECR [1994] 2857..................................... 270 Case C-384/93 Alpine Investment [1995] ECR I-1141 ....................................... 292 Case C-324/93 R v Secretary of State for the Home Department Ex p Evans Medical [1995] ECR I-563................................................... 353, 356 Case C-359/93 Commission v The Netherlands (UNIX) [1995] ECR I-157 ...................................................................................................... 294 Case C-39/94 Syndicat Francaise de l’Express International (SFEI) v La Poste [1996] ECR I-3547 .......................................................................... 319 Case C-55/94 Reinhard Gebhard v Consiglio degli avvocati e procuratori di Milano [1995] ECR I-4165......................................................................... 317 Case C-70/94 Werner v Germany [1995] ECR I-3189 ............................... 269, 273 Case C-83/94 Leifer and Others [1995] ECR I-3231 ................................. 269, 274 Case C-268/94 Portugal v Council [1996] ECR I-6177 ................ 263, 270, 282–84

Tables of Cases

xix

Case T-106/95 FFSA v Commission [1997] ECR II-229 ..................................... 321 Case C-265/95 Commission v France [1997] ECR I-06959........................ 290, 292 Case C-124/95 The Queen ex parte Centro-com v HM Treasury and Bank of England [1997] ECR I-81 ................................................................. 273 Case T-14/96 Bretagne Angleterre Irlande (BAI) v Commission (1999) ECR II-139.......................................................................... 318, 321, 386 Case C-44/96 Mannesmann Anlagenbau Austria AG v Strohal Rotationsdruck GesmbH [1998] ECR I-73 ............................................ 338, 342 Case C-184/96 Commission v France (foie gras) [1998] ECR I-6197 .................................................................................................... 291 Case C-323/96 Commission v Belgium [1998] ECR I-5063 ............................... 338 Case C-353/96 Commission v Ireland [1998] ECR I-8565 ................................. 340 Case C-360/96 Gemeente Arnhem v BFI Holding BV [1998] ECR I-682 ........... 341 Case C-67/97 Bluhme [1998] ECR I-8033 ......................................................... 291 Case T-46/97 SIC v Commission [2000] ECR II-02125...................................... 321 Case C-306/97 Connemara Machine Turf v Coillte Teoranta [1998] ECR I-8761; [1999] 2 CMLR 457 .................................................................. 340 C-307/97 Saint-Gobain v Finanzamt Aachen-Innenstadt ................................... 302 Case C-107/98 Teckal Srl v Comune di Viano, Azienda Gas-Acqua Consorziale (AGAC) die Reggio Emilia [1999] ECR I-8121........................... 356 Case C-108/98 RI.SAN v Comune di Ischia [1999] ECR I-5219........................ 288 Case C-254/98 Schutzverband gegen unlauteren Wettbewerb v TK-Heimdienst Sass GmbH C- [2000] ECR I-15............................................ 293 Case C-275/98 Unitron Scandinavia AS v Ministeriet for Fodevarer, Landbrug og Fiskeri [1999] ECR I-8291 ........................................................ 311 Case C-324/98 Telaustria Verlags GmbH and Telefonadress GmbH v Telekom Austria AG [2000] ECR I-10745 ............... 294, 311, 313, 353 C-376/98 Germany v Parliament and Council (Tobacco Advertising case) [2000] ECR I-08419 ........................................................... 269 Case C-380/98 The Queen v HM Treasury Ex p The University of Cambridge [2000] ECR I-8035 .......................................................... 343, 347 Case C-379/98 PreussenElektra AG v Schleswag AG [2001] ECR I-2099 ............................................................................ 316, 320, 324, 325 Case C-443/98 Unilever Italiana v Central Food [2000] ECR I-7535................. 290 Case C-405/98 Konsumentombudsmannen (KO) v Gourmet International Products AB (GIP) [2001] ECR I-1795 Case C-476/98 Commission v Federal Republic of Germany (Open skies) [2002] ECR I-09855............... 265, 302, 303, 327, 437 Case C-334/99 Germany v Commission—Gröditzer Stahlwerke [2003] ECR I-1139....................................................................... 321 Case C-482/99 French Republic v Commission of the European Communities (Stardust Marine) [2002] ECR I-04397............................. 308, 324 Case C-470/99 Universale-Bau AG, Bietergemeinschaft: 1) Hinteregger & Söhne Bauges.m.b.H. Salzburg, 2) ÖSTÜ-STETTIN Hoch- und Tiefbau GmbH v Entsorgungsbetriebe Simmering GmbH [2002] ECR I-11617 ........................ 349 Case C-53/00 Ferrig v ACOSS [2001] ECR I-09067 .......................................... 322 Case C-55/00 Gottardo v INPS [2002] ECR I-413 ............................................ 302

xx

Tables of Cases

Case C-59/00 Bent Mousten Vestergaard v Spøttrup Boligselskab [2001] ECR I-09505 .................................................................. 294 Case C-283/00 Commission v Spain (SIEPSA), ECJ judgment of 16 October 2003 ................................................................................ 338, 341 Case C-373/00 Adolf Truley v Bestattung Wien [2003] ECR I-1931 .................. 340 Case C-252/01 Commission v Belgium [2003] ECR I-11859 ............................. 353 Case C-234/02 Contse v Isnsulad [2005] I-9315 ........................................ 292, 294 Case C-178/03 Commission v European Parliament and Council [2006] ECR I-107.............................................................................. 276 Case C-231/03 Consorzio Aziende Metano (Coname) v Comune di Cingia de’Botti [2005] ECR I-7287 .............................................. 311 Case C-94/03 Commission v Council [2006] ECR I-00001 ................................ 278 Case C-458/03 Parking Brixen GmbH v Gemeinde Brixen, Stadtwerke Brixen AG [2005] ECR I-08612 .................................................. 313 Case C-507/03 Commission v Ireland [2004] ECR I-09777 OJ C35/4 ......................................................................... 313, 315 Case C-532/03 Commission v Ireland [2004] ECR I-11353 OJ C85/3 .................................................................................. 314 Case C-195/04 Commission v Finland [2004] ECR I-03351 .............................. 313 Case C-412/04 Commission v Italy [2008] ECR I-00619 ................................... 312 Case C-119/06 Commission v Italy [2007] ECR I-00168 ........................... 314, 445 Case C-212/06 Waloon Government [2008] ECR I-1683 .................................. 289 Case C-220/06 Asociación Profesional de Empresas de Reparto y Manipulado de Correspondencia v Administración General del Estado [2007] ECR I-12175 ........................................................ 312 Case T-258/06 Germany v Commission [2006] OJ C294/52 ..................... 313, 314 Case C-376/08 Serrantoni Srl and Consorzio stabile edili Scrl v Comune di Milano [2010] OJ C 51/9 ..................................................... 312, 314 EC Commission’s decision State aid No N264/2002 London Underground public private partnership [2002] OJ C/309/2002 .................... 322 Hartford Fire Insurance v California 113 SCt 2891 (1993) ................................ 306 Joined Cases 286/82 and 26/83 Luisi and Carbone v Ministero del Tesoro [1984] ECR 377 ............................................................................ 292 Joined cases 29/83 and 30/83 Compagnie Royale Asturienne des Mines v EEC Commission [1984] I-1679 ....................................................... 306 Joined cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85, A Ahlström OY and Others v Commission of the European Communities [1988] ECR 5193 ........................................... 306 Joined cases C-181/91 and C-248/91 Parliament v Council and Commission [1993] ECR I-3685 .................................................................... 378 Joined cases C-34-36/95 Konsumentombudsmannen (KO) v De Agostini (Svenska) Förlag AB and TV-Shop i Sverige AB [1997] ECR I-3843 .................................................................................................... 293 Joined Cases C-147/06 and C-148/06 SECAP SpA and Santorso Soc coop arl v Comune di Torino [2008] ECR I-03565 ........................................ 312 Mannington Mills v Congoleum Corporation 595 F 2d 1287 (3rd Cir 1979) ................................................................................................ 306

Tables of Cases

xxi

Opinion 2/00 Re Cartagena Protocol on Biosafety [2001] ECR I-9713 ............................................................................ 270, 275, 276, 284 Panel Report Canada—Administration of Foreign Investment Review Act, BISD 30S/140 (1984) ..................................................................................... 374 Panel Report Italian Discrimination against Imported Agricultural Machinery, GATT BISD (7th Supp) (1958) ..................................................... 373 Panel Report Norway—Procurement of Toll Collection Equipment for the City of Trondheim BISD 40S/319 (1992) ............................................ 428 Panel Report Korea—Measures Affecting Trade in Commercial Vessels,

WT/DS273/R (2005) ............................................................................... 380 Re Procurement of a Sonar Mapping System: EC v USA [1992] 3 CMLR 573 .......................................................................... 308, 309, 310, 347 Also cited as United States—Procurement of a Sonar Mapping System (Sonar Mapping case) GPR.DS1/R, 23 April 1992 ...................................... 424 Timberlane v Bank of America 549 F 2d 597 (9th Cir 1976) ............................. 306 United States v Aluminium Corp of America 148 F 2d 416 (2nd Cir 1945) ............................................................................................... 306

DAC list of ODA recipients Effective for reporting on 2011, 2012 and 2013 flows Least Developed Countries

Other Low Income Countries (per capita GNI