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Note: This webpage is prepared by the Secretariat under its own
responsibility and is intended only to provide a general explanation of
the subject matter it addresses. It is in no way intended to provide
legal guidance with respect to, or an authoritative legal interpretation
of, the provisions of any WTO agreement. Moreover, nothing in this note
affects, nor is intended to affect, WTO members' rights and obligations
in any way.
> For a more in-depth discussion of environment-related disputes, see
Environment-Related
Disputes.
>
Secretariat background note on how GATT Article XX is applied in WTO
dispute settlement rulings.
>
WTO Analytical Index on GATT Article XX
>
WTO Analytical Index on GATS Article XIV
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GATT Article XX on General Exceptions lays out a number of specific
instances in which WTO members may be exempted from GATT rules. Two
exceptions are of particular relevance to the protection of the
environment: paragraphs (b) and (g) of Article XX. Pursuant to these two
paragraphs, WTO members may adopt policy measures that are inconsistent
with GATT disciplines, but necessary to protect human, animal or plant
life or health (paragraph (b)), or relating to the conservation of
exhaustible natural resources (paragraph (g)).
GATT Article XX on General Exceptions consists of two cumulative
requirements. For a GATT-inconsistent environmental measure to be
justified under Article XX, a member must perform a two-tier analysis
proving:
first, that its measure falls under at least one of the exceptions (e.g.
paragraphs (b) to (g), two of the ten exceptions under Article XX) and,
then,
that the measure satisfies the requirements of the introductory
paragraph (the “chapeau” of Article XX), i.e. that it is not applied in
a manner which would constitute “a means of arbitrary or unjustifiable
discrimination between countries where the same conditions prevail”, and
is not “a disguised restriction on international trade”.
Environmental policies covered by Article XX
WTO members' autonomy
to determine their own environmental objectives has been
reaffirmed on a number of occasions (e.g. in
US —
Gasoline,
Brazil — Retreaded
Tyres). The Appellate Body also noted, in the
US — Shrimp
case, that conditioning market access on whether exporting
members comply with a policy unilaterally prescribed by the
importing member was a common aspect of measures falling
within the scope of one or other of the exceptions of Article
XX.
In past cases, a number of policies have been found to fall
within the realm of these two exceptions:
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policies aimed at
reducing the consumption of cigarettes, protecting dolphins,
reducing risks to human health posed by asbestos, reducing
risks to human, animal and plant life and health arising from
the accumulation of waste tyres (under Article XX(b)); and
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policies aimed at the
conservation of tuna, salmon, herring, dolphins, turtles,
clean air (under Article XX(g)).
Interestingly, the
phrase “exhaustible natural resources” under Article XX(g) has
been interpreted broadly to include not only “mineral” or
“non-living” resources but also living species which may be
susceptible to depletion, such as sea turtles. To support this
interpretation, the Appellate Body noted, in the
US — Shrimp
case, that modern international conventions and declarations
made frequent references to natural resources as embracing
both living and non-living resources. Moreover, in order to
demonstrate the exhaustible character of sea turtles, the
Appellate Body noted that sea turtles were included in
Appendix 1 on species threatened with extinction of the
Convention on International Trade in Endangered Species of
Wild Fauna and Flora (“CITES”).
Also in the US — Shrimp
case, the Appellate Body accepted as a policy covered by
Article XX(g) one that applied not only to turtles within the
United States waters but also to those living beyond its
national boundaries. The Appellate Body found that there was a
sufficient nexus between the migratory and endangered marine
populations involved and the United States for purposes of
Article XX(g).
Degree of connection between the means and the environmental
policy objective
In order for a
trade-related environmental measure to be eligible for an
exception under Article XX, paragraphs (b) and (g), a member
has to establish a connection between its stated environmental
policy goal and the measure at issue. The measure needs to be
either:
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necessary for the protection of
human, animal or plant life or health (paragraph (b)) or
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relating to the conservation of
exhaustible natural resources (paragraph (g)).
To determine whether a measure is
“necessary” to protect human,
animal or plant life or health under Article XX(b), a process of
weighing and balancing a series of factors has been used by the
Appellate Body, including the contribution made by the environmental
measure to the policy objective, the importance of the common interests
or values protected by the measure and the impact of the measure on
international trade. If this analysis yields a preliminary conclusion
that the measure is necessary, this result must be confirmed by
comparing the measure with its possible alternatives, which may be less
trade restrictive while providing an equivalent contribution to the
achievement of the objective pursued.
In the
Brazil — Retreaded Tyres case, for instance, the Appellate Body
found that the import ban on retreaded tyres was “apt to produce a
material contribution to the achievement of its objective”, i.e. the
reduction in waste tyre volumes. The Appellate Body also found that the
proposed alternatives, which were mostly remedial in nature (i.e. waste
management and disposal), were not real alternatives to the import ban,
which could prevent the accumulation of tyres.
The Appellate Body also recognized in Brazil — Retreaded Tyres that certain complex environmental problems
may be tackled only with a comprehensive policy comprising a
multiplicity of interacting measures. The Appellate Body pointed out
that the results obtained from certain actions — for instance, measures
adopted in order to address global warming and climate change — can only
be evaluated with the benefit of time.
In EC — Asbestos,
the Appellate Body also found, as a result of a process of weighing and
balancing a series of factors, that there was no reasonably available
alternative to a trade prohibition. This was clearly designed to achieve
the level of health protection chosen by France and the value pursued by
the measure was found to be “both vital and important in the highest
degree”. The Appellate Body made the point that the more vital or
important the common interests or values pursued, the easier it was to
accept as necessary measures designed to achieve those ends.
For a measure to be “relating”
to the conservation of natural resources, a substantial relationship
between the measure and the conservation of exhaustible natural
resources needs to be established. In the words of the Appellate Body, a
member has to establish that the means (i.e. the chosen measure) are
“reasonably related” to the ends (i.e. the stated policy goal of
conservation of exhaustible natural resources). Moreover, in order to be
justified under Article XX(g), a measure affecting imports must be
applied “in conjunction with restrictions on domestic production or
consumption” (the even-handedness requirement).
In the
US —
Gasoline case, the United States had adopted a measure regulating
the composition and emission effects of gasoline in order to reduce air
pollution in the United States. The Appellate Body found that the chosen
measure was “primarily aimed at” the policy goal of conservation of
clean air in the United States and thus fell within the scope of
paragraph (g) of Article XX. As far as the second requirement of
paragraph (g) is concerned, the Appellate Body ruled that the measure
met the “even-handedness” requirement, as it affected both imported and
domestic products.
In the US — Shrimp
case, the Appellate Body considered that the general structure and
design of the measure in question were “fairly narrowly focused” and
that it was not a blanket prohibition of the importation of shrimp
imposed without regard to the consequences to sea turtles; thus, the
Appellate Body concluded that the regulation in question was a measure
“relating to” the conservation of an exhaustible natural resource within
the meaning of Article XX(g). The Appellate Body also found that the
measure in question had been made effective in conjunction with the
restrictions on domestic harvesting of shrimp, as required by Article
XX(g).
The importance of the manner in
which trade-related environmental measures are applied
The introductory clause
of Article XX (its
chapeau) emphasizes the manner in which the measure in
question is applied. Specifically, the application of the
measure must not constitute a “means of arbitrary or
unjustifiable discrimination” or a “disguised restriction on
international trade”.
The chapeau requires that the measure does not constitute an
abuse or misuse of the provisional justification made
available under one of the paragraphs of Article XX, that is
to say, is applied in good faith. In
Brazil — Retreaded Tyres, the Appellate Body recalled that
the chapeau serves to ensure that members' right to avail
themselves of exceptions is exercised in good faith in order
to protect legitimate interests, not as a means to circumvent
one member's obligations towards other WTO members. In other
words, Article XX embodies the recognition by WTO members of
the need to maintain a balance between the right of a member
to invoke an exception and the rights of the other members
under the GATT.
WTO jurisprudence has highlighted some of the circumstances
which may help to demonstrate that the measure is applied in
accordance with the chapeau. These include relevant
coordination and cooperation activities undertaken by the
defendant at the international level in the trade and
environment area, the design of the measure, its flexibility
to take into account different situations in different
countries as well as an analysis of the rationale put forward
to explain the existence of a discrimination (the rationale
for the discrimination needs to have some connection to the
stated objective of the measure at issue).
The role of
international coordination and cooperation
In the
US —
Gasoline decision, the Appellate Body considered that the
United States had not sufficiently explored the possibility of
entering into cooperative arrangements with affected countries
in order to mitigate the administrative problems raised by the
United States in their justification of the discriminatory
treatment.
Moreover, in the US — Shrimp
case, the fact that the United States had “treated WTO members
differently” by adopting a cooperative approach regarding the
protection of sea turtles with some members but not with
others also showed that the measure was applied in a manner
that discriminated among WTO members in an unjustifiable
manner.
At the compliance stage, in US — Shrimp
(Article 21.5), the Appellate Body found that, in view of
the serious, good faith efforts made by the United States to
negotiate an international agreement on the protection of sea
turtles, including with the complainant, the measure was now
applied in a manner that no longer constitutes a means of
unjustifiable or arbitrary discrimination.
The Appellate Body also acknowledged that, “'as far as
possible', a multilateral approach is strongly preferred” over
a unilateral approach. But, it added that, although the
conclusion of multilateral agreements was preferable, it was
not a prerequisite to benefit from the justifications in
Article XX to enforce a national environmental measure.
The flexibility of
the measure to take into account different situations in
different countries
In the US — Shrimp
case, the Appellate Body was of the view that rigidity and
inflexibility in the application of the measure (e.g. by
overlooking the conditions in other countries) constituted
unjustifiable discrimination. It was deemed not acceptable
that a member would require another member to adopt
essentially the same regulatory programme without taking into
consideration that conditions in other members could be
different and that the policy solutions might be ill-adapted
to their particular conditions.
In order to implement the panel and Appellate Body
recommendations, the United States revised its measure and
conditioned market access on the adoption of a programme
comparable in effectiveness (and not essentially the same) to
that of the United States. For the Appellate Body, in US — Shrimp
(Article 21.5), this allowed for sufficient flexibility in
the application of the measure so as to avoid “arbitrary or
unjustifiable discrimination”.
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The text of GATT Article XX
“Subject to the requirement that such measures
are not applied in a manner which would constitute a means of arbitrary
or unjustifiable discrimination between countries where the same
conditions prevail, or a disguised restriction on international trade,
nothing in this Agreement [the GATT] shall be construed to prevent the
adoption or enforcement by any contracting party of measures: ...
(b) necessary to protect human, animal or
plant life or health;...
(g) relating to the conservation of
exhaustible natural resources if such measures are made effective in
conjunction with restrictions on domestic production or consumption.
...”
(Article XIV of the GATS contains the
same introductory clause and the same paragraph (b) — but it does not
contain an equivalent to paragraph (g))
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