WTO Law Class 7 GATT General Exceptions Ferrara

WTO Law Class 7: GATT General Exceptions Ferrara 2018 Dr. Holger Hestermeyer Shell Reader in International Dispute Resolution, King‘s College London

Introduction to General Exceptions n Purpose n Applicability (GATT v non GATT? ) n Public policy interests (closed v open list? ) n Extraterritoriality? n GATT Panel Tuna/Dolphin v AB Shrimp/Turtle (§ 121) n Structure (two-step analysis) n Proportionality principle (suitability, necessity, proportionality stricto sensu) n Burden of proof

General exceptions § Relevant WTO legal provisions: § Article XX of GATT 1994 / Article XIV of GATS § WTO case law on Article XX generally: § Two-tier test – Appellate Body Reports, US – Gasoline, Brazil – Retreaded Tyres: o Does the measure fall under an exception listed in a subparagraph of Article XX? o Does the measure in question satisfy the chapeau of Article XX? § “necessary” or “related to” – Appellate Body Reports, Korea – Beef, US – Gasoline : o Is the measure necessary to achieve the intended objective? o Is the measure related to the achievement of the objective? § Chapeau – Appellate Body Report, Brazil – Retreaded Tyres: o Does the measure in question constitute an “arbitrary or unjustifiable discrimination between countries where the same conditions prevail”? o Does the measure in question constitute a “disguised restriction on international trade”? § Burden of proof : o Which participant is responsible for proving which elements of the legal test?

US – Shrimp, WT/DS 58/AB/R

Article XX(g) exhaustible natural resources • ‘relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restriction on domestic production or consumption’ • Jurisdictional limit? “sufficient nexus” between the sea turtles and the US (AB Shrimp/Turtle, § 133) • ‘exhaustible natural resources’: – stocks of salmon (Canada-Salmon GATT) – clean air (US-Gasoline) – sea turtles (Shrimp/Turtle) (sustainable development) • ‘relating to’ – means/end relationship (in light of design and structure of the measure) (‘primarily aimed at’) GATT Panel Canada. Salmon – ‘reasonably related + ‘close and genuine relationship of ends and means’ + rational connection (AB Shrimp/Turtle § 141)

Article XX(b) Human, Animal or Plant Life or Health • ‘necessary to protect human, animal or plant life or health’ • Two aspects: – Is the measure designed to pursue a policy of protecting life or health? – Is the measure necessary to achieve this objective? • “the measure is apt to make a material contribution to the achievement of its objective” AB Brazil-Retreaded Tyres § 150 • EC—Asbestos – Evidence about health risk – France’s chosen level of protection – ‘Controlled use’ as a reasonable alternative? No

‘necessary’ • ‘making a contribution’ <> ‘indispensable’ • Proportionality? Available measures (early GATT)? 1) ‘weighing and balancing’ the following factors – contribution made by the compliance measure to the enforecement of the law – importance of the common interests or values protected – accompanying impact of the law on imports • Members enjoy right to set the appropriate level of protection 2) Is a less trade-restrictive alternative reasonably available? – Does it impose an undue burden on the regulating state? (China-Audiovisual, § 327) – Who names possible measures?

Article XX(a) Public morals • ‘necessary to protect public morals’ • Public morals: – standards of right and wrong conduct maintained by or on behalf of a community or nation – Members enjoy “some scope to define and apply for themselves the concepts of ‘public morals’” – scope/concept of public morals “are influenced by each Members’ prevailing social, cultural, ethical and religious values” • Panel and AB China—Audiovisual Products: there are reasonable alternatives available

Article XX(d) Compliance Measures • “necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to [. . . ] the prevention of deceptive practices” • Three aspects: – ‘designed to secure compliance’ – ‘with laws that are not inconsistent with GATT – ‘necessary’ to secure such compliance

Chapeau • ‘Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between contries where the same conditions prevail, or a disguised restriction on international trade. . . ’ • ‘arbitrary’ & ‘unjustifiable’ discrimination & ‘disguised restriction on trade: – ‘avoiding abuse or illegitimate use of exception’ – ‘more than one alternative action available’ (Gasoline) – is there a reasonable justification for the discrimination? (Gas. ) – no attempt to find/negotiate an international solution with the claimants (Shrimp) – limited flexibility, lack of transparency/predictability (Shrimp) – no rational connection to the Art XX objective (Brazil tyres)