general exceptions under the gatt 1994 · •balance between the rights of state 1 under gatt and...
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General Exceptions
Under the GATT 1994
Dr. Szilárd Gáspár-Szilágyi16 October 2017
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OVERVIEW
I. GENERAL CONTEXT
II. SCOPE AND NATURE OF Art. XX
III. THE ‘TWO-TIER’ TEST
IV. SPECIFIC EXCEPTIONS
V. THE CHAPEAU
VI. STUDENT PRESENTATION
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I. GENERAL CONTEXT
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II. SCOPE AND NATURE OF ART. XX
How to ask the questions properly?
1) Is there an inconsistency between the State measure and a
GATT provision (NT, MFN, QR, etc.)?
IF YES!!
2) Can it be justified under art. XX GATT?
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II. SCOPE AND NATURE OF ART. XX
• Limited – exhaustive list of exceptions
• Conditional – the conditions of art. XX must be met
• Allows deviations from all GATT obligations
• Balance between the rights of State 1 under GATT and the
legitimate policy objectives of State 2
• Covers also unilateral measures – US Shrimp 1998
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Does art. XX apply to other WTO Agreements?
• Ammmm… mostly NOT ‘[…] nothing in this Agreement […]’
BUT
• China Publ. Audiovisual Products – art. 5.1. AP – YES – reference to
regulation of trade
• China Raw Materials – art.11.3 AP – NO
• If GATT XX incorporated into other WTO agreement – art. 3 TRIMS - YES
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II. TWO-TIER TEST
US-Gasoline (1996) – para. 139
• Step 1 – Does the measure fall under a specific exception?
IF YES
• Step 2 – Are the requirements of the chapeau met?
US Shrimp (1998) – para. 119 - analysis must be conducted in
this order!!25.10.2017 8
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III. THE SPECIFIC EXCEPTIONS
• Art. XX (b),(d) and (g) more widely used
• EC-Seal Products (2014) para. 5.169 – method
(a) Is the measure designed to address the specific interest?
AND
(b) Is there a nexus between the measure and the interest?
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Art. XX(b) protection of humans/plants/animals
(a) Designed to protect …
(b) ‘Necessary to’
(a) Designed to protect …
- Covers public health + environment
- Design, structure, purpose of the measure
- Brazil Retreaded Tyres (2007)– part of comprehensive program
- Deference to state
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Art. XX(d) Secure Compliance with Domestic Laws
NOT inconsistent with WTO Law
(a) Designed to secure compliance…
(b)‘Necessary to’
(a) Designed to secure compliance…
• Korea Beef 2001
• secure compliance – measure is a means to ‘enforce’
domestic rule; incapable of securing compliance?
• domestic laws/regulations – case-by-case analysis
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Art. XX(d) Secure Compliance with Domestic Laws
NOT inconsistent with WTO Law
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Challenged
measure
Domestic
law/regulationSecure
compliance
WTO LAW
NOT inconsistent
Burden of proof
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‘Necessary to’!!
• Applies to art. XX (a), (b), (d) + art. XIV GATS
• Complex and fairly controversial
• Current approach first applied in Korea Beef (2001) then
reconfirmed in Brazil Retreaded Tyres (2007), paras. 143-183, 210
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‘Necessary to’!!
Step 1 – What is the relative importance of the protected value?
Step 2 – Factors: contribution to objective, trade restrictiveness
Step 3 – Are there possible alternatives to the measure?
Weighing and balancing of relevant factors
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Art. XX(g) Conservation of Exhaustible Natural
Resources
(a) Conservation of exhaustible natural resources
(b) ‘relating to’
(c) Made effective in conjunction with restrictions on domestic
production/consumption
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(a) Conservation of exhaustible natural resources
• Conservation: preservation + regulation – China Rare Earths
• Balance: trade lib. + sovereignty + sustainable development
• Exhaustible: both living and non-living! – US Shrimp, para. 128
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(b) ‘relating to’
- relationship between measure and objective, US Shrimp para. 135
- reasonable to achieve objective?
- design, structure of the measure
(c) Made effective in conjunction with restrictions on
domestic production/consumption
- even-handedness – US Gasoline, p 20
- measure applies to local + imported products
- Identical treatment not required
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IV. THE ‘CHAPEAU’
• Second step in the overall test
• Concerns the actual application of the measure
• Meant to prevent abusive use of exceptions
• Emanation of principle of good faith – Brazil RT, para. 224
• Line of equilibrium between competing rights of Members
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IV. THE ‘CHAPEAU’
3 separate but interrelated parts:
- arbitrary discrimination
OR
- unjustifiable discrimination
OR
- disguised restriction on international trade
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between countries where
the same conditions
prevail
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Arbitrary/unjustifiable discrimination
Step 1 – Is there discrimination?
Does the same measure apply to countries where different
conditions prevail?
Step 2 – Was it applied in an arbitrary/unjustifiable way?
Case-by-case analysis US Shrimp, Brazil R Tyres
Did it have a legitimate cause or rationale?
Was it avoidable? Was a multilateral solution sought?
Step 3 – Did the same conditions prevail in the countries?
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