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G.3.1 Article XX — Two-tier analysis
back to top
G.3.1.1 US — Gasoline, p. 22, DSR 1996:I, p. 3 at 20
(WT/DS2/AB/R)
… In order that the justifying protection
of Article XX may be extended to it, the measure at issue must not
only come under one or another of the particular exceptions — paragraphs (a) to (j)
— listed under Article XX; it must also satisfy
the requirements imposed by the opening clauses of Article XX. The
analysis is, in other words, two-tiered: first, provisional
justification by reason of characterization of the measure under XX(g);
second, further appraisal of the same measure under the introductory
clauses of Article XX.
G.3.1.2 US — Shrimp, paras. 119-120
(WT/DS58/AB/R)
The sequence of steps indicated above in the
analysis of a claim of justification under Article XX reflects, not
inadvertence or random choice, but rather the fundamental structure
and logic of Article XX. …
The task of interpreting the chapeau so as
to prevent the abuse or misuse of the specific exemptions provided for
in Article XX is rendered very difficult, if indeed it remains
possible at all, where the interpreter (like the Panel in this case)
has not first identified and examined the specific exception
threatened with abuse. …
G.3.2 Article XX(b)
— Relationship with Article III back to top
G.3.2.1 EC — Asbestos, para. 115
(WT/DS135/AB/R)
We do not agree with the Panel that
considering evidence relating to the health risks associated with a
product, under Article III:4, nullifies the effect of Article XX(b) of
the GATT 1994. Article XX(b) allows a Member to “adopt and enforce”
a measure, inter alia, necessary to protect human life or
health, even though that measure is inconsistent with another
provision of the GATT 1994. Article III:4 and Article XX(b) are
distinct and independent provisions of the GATT 1994 each to be
interpreted on its own. The scope and meaning of Article III:4 should
not be broadened or restricted beyond what is required by the normal
customary international law rules of treaty interpretation, simply
because Article XX(b) exists and may be available to justify measures
inconsistent with Article III:4. The fact that an interpretation of
Article III:4, under those rules, implies a less frequent recourse to
Article XX(b) does not deprive the exception in Article XX(b) of effet
utile. Article XX(b) would only be deprived of effet utile
if that provision could not serve to allow a Member to “adopt
and enforce” measures “necessary to protect human … life or
health”. Evaluating evidence relating to the health risks arising
from the physical properties of a product does not prevent a measure
which is inconsistent with Article III:4 from being justified under
Article XX(b). We note, in this regard, that, different inquiries
occur under these two very different Articles . Under Article III:4,
evidence relating to health risks may be relevant in assessing the competitive
relationship in the marketplace between allegedly “like”
products. The same, or similar, evidence serves a different purpose
under Article XX(b), namely, that of assessing whether a Member
has a sufficient basis for “adopting or enforcing” a WTO-inconsistent
measure on the grounds of human health.
G.3.3 Article XX(b) — Evidence. See
also General Exceptions: Article XX of the GATT 1994, Article XX(d) — Necessity test (G.3.6) back to top
G.3.3.1 EC — Asbestos,
para. 178
(WT/DS135/AB/R)
… In justifying a measure under Article XX(b)
of the GATT 1994, a Member may also rely, in good faith, on scientific
sources which, at that time, may represent a divergent, but qualified
and respected, opinion. A Member is not obliged, in setting health
policy, automatically to follow what, at a given time, may constitute a
majority scientific opinion. Therefore, a panel need not, necessarily,
reach a decision under Article XX(b) of the GATT 1994 on the basis of
the “preponderant” weight of the evidence.
G.3.4 Article XX(b) — Objective pursued — alternative measure back to top
G.3.4.1 EC — Asbestos, para. 172
(WT/DS135/AB/R)
… In this case, the objective pursued by the
measure is the preservation of human life and health through the
elimination, or reduction, of the well-known, and life-threatening,
health risks posed by asbestos fibres. The value pursued is both vital
and important in the highest degree. The remaining question, then, is
whether there is an alternative measure that would achieve the same end
and that is less restrictive of trade than a prohibition.
G.3.5 Article XX(d) — Level of enforcement — alternative measure back to top
G.3.5.1 Korea — Various Measures on Beef,
para. 176
(WT/DS161/AB/R, WT/DS169/AB/R)
It is not open to doubt that Members of the
WTO have the right to determine for themselves the level of enforcement
of their WTO-consistent laws and regulations. We note that this has also
been recognized by the panel in United States — Section 337,
where it said: “The Panel wished to make it clear that this [the
obligation to choose a reasonably available GATT-consistent or less
inconsistent measure] does not mean that a contracting party could be
asked to change its substantive patent law or its desired level of
enforcement of that law. …”. (emphasis added) …
G.3.6 Article XX(d) — Necessity test
back to top
G.3.6.1 Korea — Various Measures on Beef,
para. 161
(WT/DS161/AB/R, WT/DS169/AB/R)
We believe that, as used in the context of
Article XX(d), the reach of the word “necessary” is not limited to
that which is “indispensable” or “of absolute necessity” or “inevitable”.
Measures which are indispensable or of absolute necessity or inevitable
to secure compliance certainly fulfil the requirements of Article XX(d).
But other measures, too, may fall within the ambit of this exception. As
used in Article XX(d), the term “necessary” refers, in our view, to
a range of degrees of necessity. At one end of this continuum lies “necessary”
understood as “indispensable”; at the other end, is “necessary”
taken to mean as “making a contribution to.” We consider that a “necessary”
measure is, in this continuum, located significantly closer to the pole
of “indispensable” than to the opposite pole of simply “making a
contribution to”.
G.3.6.2 Korea — Various Measures on Beef,
para. 162
(WT/DS161/AB/R, WT/DS169/AB/R)
… It seems to us that a treaty interpreter
assessing a measure claimed to be necessary to secure compliance of a
WTO-consistent law or regulation may, in appropriate cases, take into
account the relative importance of the common interests or values that
the law or regulation to be enforced is intended to protect. The more
vital or important those common interests or values are, the easier it
would be to accept as “necessary” a measure designed as an
enforcement instrument.
G.3.6.3 Korea — Various Measures on Beef,
para. 163
(WT/DS161/AB/R, WT/DS169/AB/R)
There are other aspects of the enforcement
measure to be considered in evaluating that measure as “necessary”.
One is the extent to which the measure contributes to the realization of
the end pursued, the securing of compliance with the law or regulation
at issue. The greater the contribution, the more easily a measure might
be considered to be “necessary”. Another aspect is the extent to
which the compliance measure produces restrictive effects on
international commerce, that is, in respect of a measure inconsistent
with Article III:4, restrictive effects on imported goods. A
measure with a relatively slight impact upon imported products might
more easily be considered as “necessary” than a measure with intense
or broader restrictive effects.
G.3.6.4 Korea — Various Measures on Beef,
para. 164
(WT/DS161/AB/R, WT/DS169/AB/R)
In sum, determination of whether a measure,
which is not “indispensable”, may nevertheless be “necessary”
within the contemplation of Article XX(d), involves in every case a
process of weighing and balancing a series of factors which prominently
include the contribution made by the compliance measure to the
enforcement of the law or regulation at issue, the importance of the
common interests or values protected by that law or regulation, and the
accompanying impact of the law or regulation on imports or exports.
G.3.6.5 Dominican Republic
— Import and Sale
of Cigarettes, para. 70
(WT/DS302/AB/R)
The Appellate Body Reports in Korea — Various Measures on Beef, EC
— Asbestos and US — Gambling
indicate that, in the assessment of whether a proposed alternative to
the impugned measure is reasonably available, factors such as the trade
impact of the measure, the importance of the interests protected by the
measure, or the contribution of the measure to the realization of the
end pursued, should be taken into account in the analysis. The weighing
and balancing process of these three factors also informs the
determination whether a WTO-consistent alternative measure which the
Member concerned could reasonably be expected to employ is available, or
whether a less WTO-inconsistent measure is reasonably available. …
G.3.6.6 Dominican Republic
— Import and Sale
of Cigarettes, para. 72
(WT/DS302/AB/R)
Having assessed the importance of the
interests protected by the tax stamp requirement, its trade impact, and
its contribution to the realization of the end pursued, the Panel also
considered whether a WTO-consistent alternative measure is reasonably
available to secure compliance with the Dominican Republic’s tax laws
and regulations appropriate to the level of enforcement pursued by the
Dominican Republic. In the light of its analysis of the relevant
factors, especially the measure’s contribution to the realization of
the end pursued, the Panel opined that the alternative of providing
secure tax stamps to foreign exporters, so that those tax stamps could
be affixed on cigarette packets in the course of their own production
process, prior to importation, would be equivalent to the tax stamp
requirement in terms of allowing the Dominican Republic to secure the
high level of enforcement it pursues with regard to tax collection and
the prevention of cigarette smuggling. The Panel gave substantial weight
to its finding that the tax stamp requirement is of limited
effectiveness in preventing tax evasion and cigarette smuggling; in
particular, it found “no evidence to conclude that the tax stamp
requirement secures a zero tolerance level of enforcement with regard to
tax collection and the prevention of cigarette smuggling.” We consider
that the Panel conducted an appropriate analysis, following the approach
set out in Korea — Various Measures on Beef and in EC — Asbestos, and affirmed in US
— Gambling. We see no reason to
disturb the Panel’s conclusions in respect of the existence of a
reasonably available alternative measure to the tax stamp requirement.
G.3.7 Article XX(g) — “conservation of
exhaustible natural resources” back to top
G.3.7.1 US — Shrimp, para. 128
(WT/DS58/AB/R)
… Textually, Article XX(g) is not
limited to the conservation of “mineral” or “non-living” natural
resources. The complainants’ principal argument is rooted in the
notion that “living” natural resources are “renewable” and
therefore cannot be “exhaustible” natural resources. We do not
believe that “exhaustible” natural resources and “renewable”
natural resources are mutually exclusive. One lesson that modern
biological sciences teach us is that living species, though in
principle, capable of reproduction and, in that sense, “renewable”,
are in certain circumstances indeed susceptible of depletion, exhaustion
and extinction, frequently because of human activities. Living resources
are just as “finite” as petroleum, iron ore and other non-living
resources.
G.3.7.2 US — Shrimp, para. 130
(WT/DS58/AB/R)
From the perspective embodied in the preamble
of the WTO Agreement, we note that the generic term “natural
resources” in Article XX(g) is not “static” in its content or
reference but is rather “by definition, evolutionary”. It is,
therefore, pertinent to note that modern international conventions and
declarations make frequent references to natural resources as embracing
both living and non-living resources. …
G.3.7.3 US — Shrimp, para. 153
(WT/DS58/AB/R)
[The language of the Preamble of the WTO
Agreement] demonstrates a recognition by WTO negotiators that
optimal use of the world’s resources should be made in accordance with
the objective of sustainable development. As this preambular language
reflects the intentions of negotiators of the WTO Agreement,
we believe it must add colour, texture and shading to our interpretation
of the agreements annexed to the WTO Agreement, in this
case, the GATT 1994. We have already observed that Article XX(g) of the
GATT 1994 is appropriately read with the perspective embodied in the
above preamble.
G.3.8 Article XX(g) — “measures made
effective in conjunction with” back to top
G.3.8.1 US — Gasoline, pp. 20-21, DSR
1996:I, p. 3 at 19-20
(WT/DS2/AB/R)
… the clause “if such measures are made
effective in conjunction with restrictions on domestic product or
consumption” is appropriately read as a requirement that the measures
concerned impose restrictions, not just in respect of imported gasoline
but also with respect to domestic gasoline. The clause is a requirement
of even-handedness in the imposition of restrictions, in the name
of conservation, upon the production or consumption of exhaustible
natural resources.
… if no restrictions on
domestically-produced like products are imposed at all, and all
limitations are placed upon imported products alone, the measure
cannot be accepted as primarily or even substantially designed for
implementing conservationist goals. The measure would simply be naked
discrimination for protecting locally-produced goods.
We do not believe … that the clause “if
made effective in conjunction with restrictions on domestic production
or consumption” was intended to establish an empirical “effects test”
for the availability of the Article XX(g) exception. …
G.3.8.2 US — Shrimp, paras. 144-145
(WT/DS58/AB/R)
… We believe that, in principle, Section 609
is an even-handed measure.
Accordingly, we hold that Section 609 is a
measure made effective in conjunction with the restrictions on domestic
harvesting of shrimp, as required by Article XX(g).
G.3.9 Article XX(g) — “relating to”
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G.3.9.1 US — Gasoline, pp. 17-18, DSR
1996:I, p. 3 at 16
(WT/DS2/AB/R)
… In enumerating the various categories of
governmental acts, laws or regulations which WTO Members may carry out
or promulgate in pursuit of differing legitimate state policies or
interests outside the realm of trade liberalization, Article XX uses
different terms in respect of different categories:
“necessary” — in paragraphs (a), (b) and
(d); “essential” — in paragraph (j); “relating to” — in
paragraphs (c), (e) and (g); “for the protection of” — in paragraph
(f); “in pursuance of” — in paragraph (h); and “involving” —
in
paragraph (i).
It does not seem reasonable to suppose that
the WTO Members intended to require, in respect of each and every
category, the same kind or degree of connection or relationship between
the measure under appraisal and the state interest or policy sought to
be promoted or realized.
G.3.9.2 US — Gasoline, p. 18, DSR 1996:I,
p. 3 at 16-17
(WT/DS2/AB/R)
… Article XX(g) and its phrase, “relating
to the conservation of exhaustible natural resources,” need to be read
in context and in such a manner as to give effect to the purposes and
objects of the General Agreement. The context of Article XX(g)
includes the provisions of the rest of the General Agreement,
including in particular Articles I, III and XI; conversely, the context
of Articles I and III and XI includes Article XX. Accordingly, the
phrase “relating to the conservation of exhaustible natural resources”
may not be read so expansively as seriously to subvert the purpose and
object of Article III:4. Nor may Article III:4 be given so broad a reach
as effectively to emasculate Article XX(g) and the policies and
interests it embodies. …
G.3.9.3 US — Gasoline, pp. 18-19, DSR
1996:I, p. 3 at 17
(WT/DS2/AB/R)
All the participants and the third
participants in this appeal accept … that a measure must be “primarily
aimed at” the conservation of exhaustible natural resources in order
to fall within the scope of Article XX(g). Accordingly, we see no need
to examine this point further, save, perhaps, to note that the phrase
“primarily aimed at” is not itself treaty language and was not
designed as a simple litmus test for inclusion or exclusion from Article XX(g).
G.3.9.4 US — Gasoline, p. 19, DSR 1996:I,
p. 3 at 18
(WT/DS2/AB/R)
… We consider that, given that substantial
relationship, the baseline establishment rules cannot be regarded as
merely incidentally or inadvertently aimed at the conservation of clean
air in the United States for the purposes of Article XX(g).
G.3.9.5 US — Shrimp, paras. 141-142
(WT/DS58/AB/R)
In its general design and structure,
therefore, Section 609 is not a simple, blanket prohibition of the
importation of shrimp imposed without regard to the consequences (or
lack thereof) of the mode of harvesting employed upon the incidental
capture and mortality of sea turtles. Focusing on the design of the
measure here at stake, it appears to us that Section 609, cum
implementing guidelines, is not disproportionately wide in its scope and
reach in relation to the policy objective of protection and conservation
of sea turtle species. The means are, in principle, reasonably related
to the ends. The means and ends relationship between Section 609 and the
legitimate policy of conserving an exhaustible, and, in fact, endangered
species, is observably a close and real one. …
In our view, therefore, Section 609 is a
measure “relating to” the conservation of an exhaustible natural
resource within the meaning of Article XX(g) of the GATT 1994.
G.3.10 Article XX(g) — Jurisdictional
limitation. See also National Treatment, Relationship
between Article III and Article XX (N.1.12) back to top
G.3.10.1 US — Shrimp, para. 121
(WT/DS58/AB/R)
… conditioning access to a Member’s
domestic market on whether exporting Members comply with, or adopt, a
policy or policies unilaterally prescribed by the importing Member may,
to some degree, be a common aspect of measures falling within the scope
of one or another of the exceptions (a) to (j) of Article XX. Paragraphs
(a) to (j) comprise measures that are recognized as exceptions to
substantive obligations established in the GATT 1994, because the
domestic policies embodied in such measures have been recognized as
important and legitimate in character. It is not necessary to assume
that requiring from exporting countries compliance with, or adoption of,
certain policies (although covered in principle by one or another of the
exceptions) prescribed by the importing country, renders a measure a
priori incapable of justification under Article XX. Such an
interpretation renders most, if not all, of the specific exceptions of
Article XX inutile, a result abhorrent to the principles of
interpretation we are bound to apply.
G.3.10.2 US — Shrimp (Article 21.5
— Malaysia),
para. 138
(WT/DS58/AB/RW)
In our view, Malaysia overlooks the
significance of this statement [in paragraph 121 of US — Shrimp]. Contrary to what Malaysia suggests, this statement is not
“dicta”. As we said before, it appears to us “that
conditioning access to a Member’s domestic market on whether exporting
Members comply with, or adopt, a policy or policies unilaterally
prescribed by the importing Member may, to some degree, be a common
aspect of measures falling within the scope of one or another of the
exceptions (a) to (j) of Article XX.” This statement expresses a
principle that was central to our ruling in United States — Shrimp.
G.3.10.3 US — Shrimp, para. 133
(WT/DS58/AB/R)
… We do not pass upon the question of
whether there is an implied jurisdictional limitation in Article XX(g),
and if so, the nature or extent of that limitation. We note only that in
the specific circumstances of the case before us, there is a sufficient
nexus between the migratory and endangered marine populations involved
and the United States for purposes of Article XX(g).
G.3.11 Chapeau of Article XX — general
back to top
G.3.11.1 US — Gasoline, p. 22, DSR 1996:I,
p. 3 at 20
(WT/DS2/AB/R)
The chapeau by its express terms addresses,
not so much the questioned measure or its specific contents as such, but
rather the manner in which that measure is applied. It is, accordingly,
important to underscore that the purpose and object of the introductory
clauses of Article XX is generally the prevention of “abuse of the
exceptions. …” …
G.3.11.2 US — Gasoline, p. 22, DSR 1996:I,
p. 3 at 21
(WT/DS2/AB/R)
… If those exceptions are not to be abused
or misused, in other words, the measures falling within the particular
exceptions must be applied reasonably, with due regard both to the legal
duties of the party claiming the exception and the legal rights of the
other parties concerned.
G.3.11.3 US — Gasoline, p. 23, DSR 1996:I,
p. 3 at 21
(WT/DS2/AB/R)
… The provisions of the chapeau cannot
logically refer to the same standard(s) by which a violation of a
substantive rule has been determined to have occurred. …
G.3.11.4 US — Gasoline, p. 25, DSR 1996:I,
p. 3 at 23
(WT/DS2/AB/R)
“Arbitrary discrimination”, “unjustifiable
discrimination” and “disguised restriction” on international trade
may, accordingly, be read side-by-side; they impart meaning to one
another. It is clear to us that “disguised restriction” includes
disguised discrimination in international trade. It is equally
clear that concealed or unannounced restriction or
discrimination in international trade does not exhaust the
meaning of “disguised restriction.” …
G.3.11.5 US — Shrimp, para. 159
(WT/DS58/AB/R)
The task of interpreting and applying the
chapeau is, hence, essentially the delicate one of locating and marking
out a line of equilibrium between the right of a Member to invoke an
exception under Article XX and the rights of the other Members under
varying substantive provisions (e.g., Article XI) of the GATT 1994, so
that neither of the competing rights will cancel out the other and
thereby distort and nullify or impair the balance of rights and
obligations constructed by the Members themselves in that Agreement. The
location of the line of equilibrium, as expressed in the chapeau, is not
fixed and unchanging; the line moves as the kind and the shape of the
measures at stake vary and as the facts making up specific cases differ.
G.3.11.6 US — Shrimp, paras. 156-157
(WT/DS58/AB/R)
… we consider that [the chapeau of Article XX] embodies the recognition on the part of WTO Members of the need to
maintain a balance of rights and obligations between the right of a
Member to invoke one or another of the exceptions of Article XX,
specified in paragraphs (a) to (j), on the one hand, and the substantive
rights of the other Members under the GATT 1994, on the other hand.
Exercise by one Member of its right to invoke an exception, such as
Article XX(g), if abused or misused, will, to that extent, erode or
render naught the substantive treaty rights in, for example, Article XI:1, of other Members. Similarly, because the GATT 1994 itself makes
available the exceptions of Article XX, in recognition of the legitimate
nature of the policies and interests there embodied, the right to invoke
one of those exceptions is not to be rendered illusory. The same concept
may be expressed from a slightly different angle of vision, thus, a
balance must be struck between the right of a Member to invoke an
exception under Article XX and the duty of that same Member to
respect the treaty rights of the other Members. …
In our view, the language of the chapeau makes
clear that each of the exceptions in paragraphs (a) to (j) of Article XX
is a limited and conditional exception from the substantive
obligations contained in the other provisions of the GATT 1994, that is
to say, the ultimate availability of the exception is subject to the
compliance by the invoking Member with the requirements of the chapeau.
…
G.3.11.7 US — Shrimp, para. 160
(WT/DS58/AB/R)
… We note, preliminarily, that the
application of a measure may be characterized as amounting to an abuse
or misuse of an exception of Article XX not only when the detailed
operating provisions of the measure prescribe the arbitrary or
unjustifiable activity, but also where a measure, otherwise fair and
just on its face, is actually applied in an arbitrary or unjustifiable
manner. The standards of the chapeau, in our view, project both
substantive and procedural requirements.
G.3.11.8 US — Shrimp (Article 21.5
— Malaysia),
para. 118
(WT/DS58/AB/RW)
The chapeau of Article XX establishes three
standards regarding the application of measures for which
justification under Article XX may be sought: first, there must be no
“arbitrary” discrimination between countries where the same
conditions prevail; second, there must be no “unjustifiable”
discrimination between countries where the same conditions prevail; and,
third, there must be no “disguised restriction on international trade”.
The Panel’s findings appealed by Malaysia concern the first and second
of these three standards.
G.3.12 Chapeau of Article XX — “arbitrary or
unjustifiable discrimination between countries where the same conditions
prevail” back to top
G.3.12.1 US — Gasoline, pp. 23-24, DSR
1996:I, p. 3 at 22
(WT/DS2/AB/R)
… It was asked whether the words
incorporated into the first two standards “between countries where the
same conditions prevail” refer to conditions in importing and
exporting countries, or only to conditions in exporting countries. The
reply of the United States was to the effect that it interpreted that
phrase as referring to both the exporting countries and importing
countries and as between exporting countries. … At no point in the
appeal was that assumption challenged by Venezuela or Brazil. …
… we see no need to decide the matter of the
field of application of the standards set forth in the chapeau nor to
make a ruling at variance with the common understanding of the
participants.
G.3.12.2 US — Shrimp, para. 150
(WT/DS58/AB/R)
… In order for a measure to be applied in a
manner which would constitute “arbitrary or unjustifiable
discrimination between countries where the same conditions prevail”,
three elements must exist. First, the application of the measure must
result in discrimination. As we stated in United States — Gasoline, the nature and quality of this discrimination is different
from the discrimination in the treatment of products which was already
found to be inconsistent with one of the substantive obligations of the
GATT 1994, such as Articles I, III or XI. Second, the discrimination
must be arbitrary or unjustifiable in character. We will
examine this element of arbitrariness or unjustifiability
in detail below. Third, this discrimination must occur between
countries where the same conditions prevail. In United States —
Gasoline, we accepted the assumption of the participants in that
appeal that such discrimination could occur not only between different
exporting Members, but also between exporting Members and the importing
Member concerned. Thus, the standards embodied in the language of the
chapeau are not only different from the requirements of Article XX(g);
they are also different from the standard used in determining that
Section 609 is violative of the substantive rules of Article XI:1 of the
GATT 1994.
G.3.12.3 US — Shrimp, paras. 164-165
(WT/DS58/AB/R)
… It may be quite acceptable for a
government, in adopting and implementing a domestic policy, to adopt a
single standard applicable to all its citizens throughout that country.
However, it is not acceptable, in international trade relations, for one
WTO Member to use an economic embargo to “require other Members
to adopt essentially the same comprehensive regulatory program, to
achieve a certain policy goal, as that in force within that Member’s
territory, “without taking into consideration different
conditions which may occur in the territories of those other Members.
… We believe that discrimination results not
only when countries in which the same conditions prevail are differently
treated, but also when the application of the measure at issue does not
allow for any inquiry into the appropriateness of the regulatory program
for the conditions prevailing in those exporting countries.
G.3.12.4 US — Shrimp, para. 177
(WT/DS58/AB/R)
… Section 609, in its application, imposes a
single, rigid and unbending requirement that countries applying for
certification … adopt a comprehensive regulatory program that is
essentially the same as the United States’ program, without inquiring
into the appropriateness of that program for the conditions prevailing
in the exporting countries. Furthermore, there is little or no
flexibility in how officials make the determination for certification
pursuant to these provisions. In our view, this rigidity and
inflexibility also constitute “arbitrary discrimination” within the
meaning of the chapeau.
G.3.12.5 US — Shrimp (Article 21.5
— Malaysia),
paras. 122-123
(WT/DS58/AB/RW)
We concluded in United States — Shrimp
that, to avoid “arbitrary or unjustifiable discrimination”, the
United States had to provide all exporting countries “similar
opportunities to negotiate” an international agreement. Given the
specific mandate contained in Section 609, and given the decided
preference for multilateral approaches voiced by WTO Members and others
in the international community in various international agreements for
the protection and conservation of endangered sea turtles that were
cited in our previous Report, the United States, in our view, would be
expected to make good faith efforts to reach international agreements
that are comparable from one forum of negotiation to the other. The
negotiations need not be identical. Indeed, no two negotiations can ever
be identical, or lead to identical results. Yet the negotiations must be
comparable in the sense that comparable efforts are made,
comparable resources are invested, and comparable energies are devoted
to securing an international agreement. So long as such comparable
efforts are made, it is more likely that “arbitrary or unjustifiable
discrimination” will be avoided between countries where an importing
Member concludes an agreement with one group of countries, but fails to
do so with another group of countries.
Under the chapeau of Article XX, an importing
Member may not treat its trading partners in a manner that would
constitute “arbitrary or unjustifiable discrimination”. With respect
to this measure, the United States could conceivably respect this
obligation, and the conclusion of an international agreement might
nevertheless not be possible despite the serious, good faith efforts of
the United States. Requiring that a multilateral agreement be concluded
by the United States in order to avoid “arbitrary or unjustifiable
discrimination” in applying its measure would mean that any country
party to the negotiations with the United States, whether a WTO Member
or not, would have, in effect, a veto over whether the United States
could fulfill its WTO obligations. Such a requirement would not be
reasonable. For a variety of reasons, it may be possible to conclude an
agreement with one group of countries but not another. The conclusion of
a multilateral agreement requires the cooperation and commitment of many
countries. In our view, the United States cannot be held to have engaged
in “arbitrary or unjustifiable discrimination” under Article XX
solely because one international negotiation resulted in an agreement
while another did not.
G.3.12.6 US — Shrimp (Article 21.5
— Malaysia),
para. 124
(WT/DS58/AB/RW)
As we stated in United States — Shrimp
[Appellate Body Report, para. 168], “the protection and conservation
of highly migratory species of sea turtles … demands concerted and
cooperative efforts on the part of the many countries whose waters are
traversed in the course of recurrent sea turtle migrations”. Further,
the “need for, and the appropriateness of, such efforts have been
recognized in the WTO itself as well as in a significant number of other
international instruments and declarations”. For example, Principle 12
of the Rio Declaration on Environment and Development states, in part,
that “[e]nvironmental measures addressing transboundary or global
environmental problems should, as far as possible, be based on
international consensus”. Clearly, and “as far as possible”, a
multilateral approach is strongly preferred. Yet it is one thing to prefer
a multilateral approach in the application of a measure that is
provisionally justified under one of the subparagraphs of Article XX of
the GATT 1994; it is another to require the conclusion of a
multilateral agreement as a condition of avoiding “arbitrary or
unjustifiable discrimination” under the chapeau of Article XX. We see,
in this case, no such requirement.
G.3.12.7 US — Shrimp (Article 21.5
— Malaysia),
para. 130
(WT/DS58/AB/RW)
… The Panel compared the efforts of the
United States to negotiate the Inter-American Convention with one group
of exporting WTO Members with the efforts made by the United States to
negotiate a similar agreement with another group of exporting WTO
Members. The Panel rightly used the Inter-American Convention as a
factual reference in this exercise of comparison. It was all the more
relevant to do so given that the Inter-American Convention was the only
international agreement that the Panel could have used in such a
comparison. As we read the Panel Report, it is clear to us that the
Panel attached a relative value to the Inter-American Convention in
making this comparison, but did not view the Inter-American Convention
in any way as an absolute standard. Thus, we disagree with Malaysia’s
submission that the Panel raised the Inter-American Convention to the
rank of a “legal standard”. The mere use by the Panel of the
Inter-American Convention as a basis for a comparison did not
transform the Inter-American Convention into a “legal standard”.
Furthermore, although the Panel could have chosen a more appropriate
word than “benchmark” to express its views, Malaysia is mistaken in
equating the mere use of the word “benchmark”, as it was used by the
Panel, with the establishment of a legal standard.
G.3.12.8 US — Shrimp (Article 21.5
— Malaysia),
para. 144
(WT/DS58/AB/RW)
In our view, there is an important difference
between conditioning market access on the adoption of essentially the
same programme, and conditioning market access on the adoption of a
programme comparable in effectiveness. Authorizing an importing
Member to condition market access on exporting Members putting in place
regulatory programmes comparable in effectiveness to that of the
importing Member gives sufficient latitude to the exporting Member with
respect to the programme it may adopt to achieve the level of
effectiveness required. It allows the exporting Member to adopt a
regulatory programme that is suitable to the specific conditions
prevailing in its territory. As we see it, the Panel correctly reasoned
and concluded that conditioning market access on the adoption of a
programme comparable in effectiveness, allows for sufficient
flexibility in the application of the measure so as to avoid “arbitrary
or unjustifiable discrimination”. We, therefore, agree with the
conclusion of the Panel on “comparable effectiveness”.`
G.3.12.9 US — Shrimp (Article 21.5
— Malaysia),
paras. 149-150
(WT/DS58/AB/RW)
We need only say here that, in our view, a
measure should be designed in such a manner that there is sufficient
flexibility to take into account the specific conditions prevailing in any
exporting Member, including, of course, Malaysia. Yet this is not the
same as saying that there must be specific provisions in the measure
aimed at addressing specifically the particular conditions prevailing in
every individual exporting Member. Article XX of the GATT 1994
does not require a Member to anticipate and provide explicitly for the
specific conditions prevailing and evolving in every individual
Member.
We are, therefore, not persuaded by Malaysia’s
argument that the measure at issue is not flexible enough because the
Revised Guidelines do not explicitly address the specific conditions
prevailing in Malaysia.
G.3.13 Chapeau of Article XX — “disguised
restriction on international trade” back to top
G.3.13.1 US — Gasoline, p. 25, DSR 1996:I,
p. 3 at 23
(WT/DS2/AB/R)
… It is equally clear that concealed
or unannounced restriction or discrimination in international
trade does not exhaust the meaning of “disguised restriction.”
We consider that “disguised restriction”, whatever else it covers,
may properly be read as embracing restrictions amounting to arbitrary or
unjustifiable discrimination in international trade taken under the
guise of a measure formally within the terms of an exception listed in
Article XX. Put in a somewhat different manner, the kinds of
considerations pertinent in deciding whether the application of a
particular measure amounts to “arbitrary or unjustifiable
discrimination”, may also be taken into account in determining the
presence of a “disguised restriction” on international trade. The
fundamental theme is to be found in the purpose and object of avoiding
abuse or illegitimate use of the exceptions to substantive rules
available in Article XX.
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