GENERAL EXCEPTIONS
TECHNICAL AND
SANITARY BARRIERS
LEGAL BASIS
- Article XX GATT 1994;
- Technical Barriers to Trade Agreement (TBT Agreement);
- Agreement on the Application of Sanitary and
Phytosanitary Measures (SPS Agreement).
NECESSITY OF EXCEPTIONS
- Develop in collateral with preserving good values;
- Create a sustainable balance between countries as well
as between human and the environment/nature.
GENERAL EXCEPTIONS
Article XX GATT 1994:
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 shall be construed to prevent the
adoption or enforcement by any contracting party of measures :
a) necessary to protect public morals;
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;
…
GENERAL EXCEPTIONS
According to AB in case US – Gasoline:
"[T]he chapeau says that 'nothing in this Agreement shall be
construed to prevent the adoption or enforcement by any
contracting party of measures ...' The exceptions listed in Article
XX thus relate to all of the obligations under the General
Agreement: the national treatment obligation and the most-
favoured-nation obligation, of course, but others as well.”
According to AB in case US – Shrimp:
"[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. …”
GENERAL EXCEPTIONS
Not prohibit (permitting) the establishment or
implementation of measures to protect community
benefits, however:
- Do not create discrimination and restrictions in
international trade;
- Compliance with the obligations of the Agreements:
➢ MFN, NT;
➢ Balance between rights and obligations among
Members.
Promote the formation of international standards (SBS, TBT, …)
SCOPE OF REGULATION
Article XX GATT 1994:
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 shall be construed to prevent the
adoption or enforcement by any contracting party of measures:
a) necessary to protect public morals;
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;
…
SCOPE OF REGULATION
According to AB in case US – Shrimp:
“… 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 …”
- General exceptions needed to protect important social
benefits;
- Measures are listed on a list of a) to j) in Article XX
GATT 1994.
MEASURES WITHIN ARTICLE XX
According to AB in case EC – Seal Products:
“We begin by noting that the general exceptions of Article XX
apply to 'measures' that are to be analyzed under the
subparagraphs and chapeau, not to any inconsistency with the
GATT 1994 that might arise from such measures.”
Applies to measures that violate any of the GATT 1994
Provisions.
ARTICLE XX STRUCTURE
Article XX GATT 1994:
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 The Preamble
restriction on international trade, nothing in this (The Chapeau)
Agreement shall be construed to prevent the adoption or
enforcement by any contracting party of measures:
a) necessary to protect public morals;
b) necessary to protect human, animal or plant life or
health;
…
g) relating to the conservation of exhaustible natural (sub – paragraphs)
resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption;
…
TWO TIERS TEST
According to AB in case US – Gasoline:
“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 ...;
- second, further appraisal of the same measure under
the introductory clauses of Article XX.”
TWO TIERS TEST
According to AB in case US – Shrimp:
“… 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, …. The standards established in the chapeau
are, moreover, necessarily broad in scope and reach: the prohibition
of the application of a measure '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. …”
- Arbitrary or unjustifiable discrimination;
- Disguised restriction on international trade.
TWO TIERS TEST
PANEL, APPEALATE BODY
TWO TIERS TEST
Panel
Whether the measure falls under the Exceptions in the list
from a) to j)
Whether the questioning measure satisfy the requirements of
the Chapeau of Article XX
(US – Shrimp paragraph 120, Brazin – Retreaded
Tyres)
A measure that satisfies Article XX GATT 1994 must be
demonstrated through two tiers test.
SPIRIT OF SUB – PARAGRAPH (A)
TO (J)
According to AB in case US – Gasoline:
“… 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)
…”
- Necessary;
- Essential;
- Relating to; Not easily fully interpreted by
- For the protection of; the competent authority.
- In pursuance of;
- Involving.
BURDEN OF PROOF
According to AB in case US – Gasoline:
“The burden of demonstrating that a measure provisionally
justified as being within one of the exceptions set out in the
individual paragraphs of Article XX does not, in its application,
constitute abuse of such exception under the chapeau, rests on the
party invoking the exception.”
- Need to distinguish between proving the measure on the
lists a) to j) and the measure satisfying the Chapeau;
- It is the responsibility of the Member establishing the
measure.
(EC – Asbestos, Indonesia – Import Licensing Regimes)
Then the responsibility of the Members complaining?
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
" necessary to protect human, animal or plant life or health;”
- Whether the policies of measure designed to protect
human, animal or plant health;
- Issuing measure is necessary to accomplish the objectives
of the proposed policies.
- Implementing measure appropriate with the Chapeau of
Article XX GATT 1994.
(US – Gasoline, EC – Asbestos,
EC – Tariff Preferences)
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
Policy objectives of issuing measure
According to AB in case EC – Tariff Preferences:
“Examining the design and structure of Council Regulation …”
- Analysis of the structure and purpose of the measure (form,
content,…);
- The policy objectives must be cited in relation to the
protection of human, plant and animal health (specific
provisions to restraint risks to humans, animals and plants,…
not other goals).
(EC – Tariff Preferences, Brazil – Retreaded Tyres)
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
The measure’s “necessary”
According to Panel in case Brazil – Retreaded Tyres:
“… the accumulation of waste tyres creates a risk of mosquito-
borne diseases such as dengue and yellow fever … because waste
tyres create perfect breeding grounds for disease carrying
mosquitos and that diseases are also spread through
interstate transportation of waste tyres for disposal operaion …
Mosquitos-borne diseases also pose heath risks to animals …”
“Brazil’s policy of reducing exposure to the risks to human,
animal or plant life or health arising from the accumulation of
waste tyres falls within the range of policies covered by Article
XX(b)”
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
The measure’s “necessary”
According to AB in case Brazil – Retreaded Tyres:
"In order to determine whether a measure is 'necessary' within the
meaning of Article XX(b) of the GATT 1994, a panel must assess
all the relevant factors, particularly the extent of the contribution
to the achievement of a measure's objective and its trade
restrictiveness. …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 …”
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
The measure’s “necessary”
- Need to analyze all the relevant factors, particularly the extent
of the contribution to the achievement of a measure's
objective and its trade restrictiveness.
- Once the conclusion is “necessary”, the respondent Member
should ensure that no alternative actionable measure has
yielded less trade restriction.
(Brazil – Retreaded Tyres)
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
The measure’s “necessary”
Some criteria to determine the necessary:
- The aspect of the measure is proven to be necessary (US –
Gasoline);
- Proof based on scientific literature and risk assessment (EC –
Asbestos);
- Balancing the importance of related factors (Brazil –
Retreaded Tyres, Indonesia – Chicken, Brazil – Taxation).
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (b) Article XX GATT 1994
The “protection”
According to AB in case EC – Seal Products:
“… We note that Article XX(b) focuses on the protection of
'human, animal or plant life or health'. It may be that the
protection of human, animal, or plant life or health implies a
particular focus on the protection from or against certain
dangers or risks …”
- Certain dangers or risks;
- Members have the right to determine the level of
protection they deem appropriate (EC – Seal Products).
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (g) Article XX GATT 1994
“relating to the conservation of exhaustible natural resources if
such measures are made effective in conjunction with restrictions
on domestic production or consumption;”
- Whether the measure policies are designed to
conservation of exhaustible natural resources;
- Measure is “relating to” the setted objectives;
- Whether the measures are made effective in conjunction
with restrictions on domestic production.
(EC – Tariff Preferences, US – Shrimp)
There is no common investigate framework, case law
proposes “a comprehensive evaluation of the component
elements”
(China – Rare Earths)
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (g) Article XX GATT 1994
Exhaustible natural resources
According to AB in case US – Shrimp:
“Textually, Article XX(g) is not limited to the conservation of
'mineral' or 'non-living' natural resources …
… We hold that, in line with the principle of effectiveness in treaty
interpretation, measures to conserve exhaustible natural
resources, whether living or non-living, may fall within Article
XX(g).”
Not only mineral resources but also “living resources”
(endangered animals, plants/in the verge of extinction).
(China – Rare Earths, US – Tuna II (Mexico))
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (g) Article XX GATT 1994
Relating to
According to AB in case US – Gasoline:
“In interpreting the term "relating to" under Article XX(g), the
Appellate Body in US – Gasoline noted that all the parties and
participants to the appeal agreed that this term was equivalent to
"primarily aimed at””
- Interpreted equivalent with “primarily aimed at”;
- A requirement for a “close and genuine
relationship” between measure and objectives that
policies desired to achieve.
(China – Rare Earths, US – Shrimp)
The difference between “necessary” and “relating to”?
MOST IMPORTANT EXCEPTIONS
Sub – paragraph (g) Article XX GATT 1994
made effective in conjunction with restrictions
According to AB in case US – Gasoline:
“In US – Gasoline, the Appellate Body described the term
"measures made effective in conjunction with" as a "requirement
of even-handedness in the imposition of restrictions"
The requirement for uniformity in imposing restrictions:
- Applies to both domestic and export products;
- Not an identical treatment;
- No actual effectives investigation required.
MOST IMPORTANT EXCEPTIONS
Relationship between paragraphs and the Chapeau
According to Panel in case China – Rare Earths:
“"It is well settled that discrimination can also be arbitrary or
unjustifiable … the Appellate Body has examined whether a WTO-
consistent or less trade-restrictive alternative would be available
and would enable the regulating Member to achieve its legitimate
policy goals
- with the same degree of efficiency and efficacy.”
Examine whether a WTO-consistent or less trade-
restrictive alternative available.
THE CHAPEAU (PREAMBLE)
“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 shall be construed to prevent the
adoption or enforcement by any contracting party of measures :”
Objectives:
- Prevent the misuse of exceptions under Article XX;
- Balancing rights and obligations of Members issuing policies to
other Members;
- Convey the general principles of honest and goodwill in
international trade.
(US – Gasoline, US – Shrimp)
THE CHAPEAU (PREAMBLE)
Discrimination
- Need to distinguish between the “discrimination” in other
provisions of GATT; Accordingly, the Chapeau “prohibits measures
that are applied in a manner which would constitute”:
➢ Arbitrary discrimination;
➢ Unjustifiable discrimination;
➢ Disguised restriction on international trade.
The Chapeau governs how a measure of
paragraph (a) to (j) Article XX shall be applied.
- The discrimination is not only between exporting countries but
also between exporting countries and importing countries.
(US – Shrimp, US – Gasoline, EC – Seal Products)
THE CHAPEAU (PREAMBLE)
arbitrary or unjustifiable discrimination between countries
where the same conditions prevail
- According to AB in case US – Shrimp, the concept mentioned
above is made up of 3 factors:
➢ “First, the application of the measure must result in
discrimination”;
➢ “Second, the discrimination must be arbitrary or
unjustifiable in character”;
➢ “Third, this discrimination must occur between countries
where the same conditions prevail”.
THE CHAPEAU (PREAMBLE)
arbitrary or unjustifiable discrimination
According to AB in case US – Tuna II (Mexico) Art. 21.5:
“The Appellate Body has stated that the analysis of whether
discrimination is arbitrary or unjustifiable 'should focus on the
cause of the discrimination, or the rationale put forward to explain
its existence'.”
Investigate arbitrary or unjustifiable discrimination needs
focus on the cause of the discrimination, or the rationale put
forward to explain its existence.
EXAMPLE: CASE US - SHRIMP
- The United States issued an import ban for shrimp imported
without using TEDs fishing methods and tools which established
by the US authorities; The complaints were filled by India,
Pakistan, Thailand, Malaysia;
- The AB argued that the discrimination was ‘arbitrary and
unjustifiable’:
➢ There is no consideration of the difference in condition
between countries: the measure is rigid and inflexible =>
‘arbitrary discrimination’;
➢ The conservation of sea turtles requires synergies and
cooperation from many countries but the US only signed
plurilateral agreement on this issue with the American nations,
not yet with the complaint countries => ‘unjustifiable
discrimination’.
THE CHAPEAU (PREAMBLE)
Disguised restriction
According to AB in case US – Gasoline:
“'Arbitrary discrimination', 'unjustifiable discrimination' and
'disguised restriction' on international trade may, accordingly, be
read side-by-side; they impart meaning to one another”
- Arbitrary or unjustifiable discrimination and disguised
restriction are two concepts which same interpretation;
- The measure in fact revealed that it was not aimed at setting
objectives but to restricted trade.
(US – Gasoline, Brazil – Retreaded Tyres)
Could use the same interpreting conditions with
arbitrary or unjustifiable discrimination
RELATIONSHIP BETWEEN ARTICLE XX
AND WTO AGREEMENTS
- Article III TRIMS Agreement: “All exceptions under GATT 1994
shall apply, as appropriate, to the provisions of this Agreement” ,
…
- China – Publications and Audiovisual Products (2010) and China
– Raw Materials (2012): Depending on each specific case, the
agreements are not mentions properly.
