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Week 3: Regulatory Exceptions - Coggle Diagram
Week 3: Regulatory Exceptions
Article XX: Context
GATT provisions represent members states' agreement to discipline and their use of regulations that restrict international trade but...
The GATT also recognizes that there are circumstances where measures that have trade restricting effects may nevertheless be desirable or necessary. These circumstances are found in GATT article XX and XXI
Article XX exceptions have remained controversial since the ealry 1990 and throughout the WTO. They are the centerpiece in contests over regulartory authority and the appropriate balance between trade and non trade objectives
eg. US Tuna Dolphin Dispute 1992 (pre WTO)
Australia had abandoned several restrictions over fear that WTO rules would be breached
A Two Tiered Test
Article xx is a defense, therefore the burden of proof is laid on the defending nation.
Particular Exceptions (a) - (j)
The Chapeau (introductory paragraph)
The Particular Exceptions
The purpose of the measure must fit into and satisfy the elements of one of the pararaphs
a) necessary to protect public morals
b) Necessary to protect human, animal or plant life or health
c) relating to the importations or exportations of gold or silver
d) necessary to secure compliance with laws (relating to enforcement of customs, monopolies, patents, trade marks, copyrights, and against deceptive practices)
e) Relating to the products of prison labour
f) imposed for the protection of national treasures (artistic, historic or archaeological)
g) Relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption
j) Essential to the acquisition or distribution of products in general or local short supply (provided that measures do not deprive others of their equitable share and is provisional in application)
Its easy to see how the policy areas reflect the priorities of 1947
Note the use of different criteria or threshhold. (compare relating to with necessary to
Paragraph G
To satisfy this exception measures must
1) Relate to the conservation of exhaustible resources (ENR)
ENR takes a "broad evolutionary approach to NER: Cases have found living resources as NER (dolphins, turtles and even air quality)
Conservation of resources beyond national borders? requires close relationship
2) "Relate to" conservation of ENR
Measure must have a close & real connection to the conservation objective. It should be primarily aimed at the conservation objectice
US Shrimp. Allowing imports only from states using turtle escape devices was related to protecting turtles
3) be made effective in conjenction with restrictions on domestic production and consumption
Requires evenhandedness. eg. a state can't require TEDs for imported shrimp and not place the same restrictions domestically.
Paragraph A
What constitues public morals?
Animal Welfare (EC Seals: import ban on seal products due to "cruel" hunt
Gambling (US gambling: restrictions on gambling services)
Likely covers restrictions on alcohol and pornography
What about slavery, human and labour rights, political censorship?
Whose morals? Who decides?
A community's "standeds of right and wrong conduct...can vary in time and space, depending upon a range of factors, including prevailing social, cultural, ethical and religious values" (US gambling)
States have "some scope to define" public morals "in accordance with their own systems and scales of values"
Morals "as defined by regulating member (EC seals), but members "discretion is not unlimited
Paragraph B)
Protection of human, animal and plant health
Human health from asbestos related disease (EC Asbestos), toxins in water / soil and risk of mosquito borne diseases (Brasil tyres)
Animals have included dolphins (US tuna)
Though b) doesnt mention the environment, biodiversity, etc, they are essential to protection of uman /animal / plant life (brazil tyres)
Can states protect life/health beyond their own borders?
Both A and B will permit only measures "necessary" for the protection of public morals or human, animal or plant life and health
Test of necessity
1.What is the measures objective? And, does it make a material contribution to achieving that objective?
States have authority to determine the appropriate level of protection: Eg. to reduce, or elimate or educate the public on the risks posed by a product
States can rely, in good faith, on scientific material even if there is divergent opinion
Ec Asbestos (french ban on imports of chrysotile asbestos)
Frances objective was to reduce the risk of asbestos exposure to zero or close to, in order to eliminate asbestos related disease. Canada argued that chrysotile asbestos could be used safely, so ban was innapropriate.
Appellate body confirmed that France got to decide what its health objectives were, what risks were appropriate in its community
Is the measure the least trade restrictive (LTR) means of achieving that objective? are there any available alternatives?
Complaint can raise possible LTR alternatives, respondent state can rebut
EC Asbestos: Canada argued that controlled use, safety regs where an LRT alternative. However, AB accepted France's argument that these LTR measures would not be as effective in achiving its objective (reducing risk to 0)
EC Seals: Canada argued that regulation and monitoring of the hunt were LTR alternatives. However AB accepted EC argument that monitoring was impractical and likely ineffective due to location of the hunt and the speed and methods my which it is carried out
"Weighing and balancing" of all relevant factors: the importance of the interest / values protected, contribution the measure makes and trade restrictiveness of the measure and LTR alternatives
This criterion is harder to pin down: two pointers
The more important the value is and the more the measure contributes to protecting that value, the more necessary it is likely to be. Hierarchy of values to be protected: human health and like is most vital and important in the highest degree (AB in EC Asbestos)
The more restrictive the impact of a measure, the more compelling a case needs to be to demonstrate it. Ban on import / sales is most restrictive compared to labelling or restrictions on consumption
The Chapeau
States seeking to reply on Article XX must also satisfy the Chapeau
The Chapeau requirements question the measure's design, implementation and effects
Does it amount to an arbitrary or unjustifiable discrimination where same conditions prevail?
Is it disguised restriction on trade?
In practice the chapeau hasproven to be a significant hurdle. Many measures satisfying paras (a), (b) or (g) have ultimately failed the Chapeau
US Tuna (GATT): import certificate only granted if incidental take rate of dolphins was not more than 1.25 of the rate by US fishers at the same time
The permitted rate us only knowable after foreign fishers have made their haul
Why use Us fishers rate as a baseline? if the measures objective is to protect dolphins, the take rate should reference rates for healthy dolphin stocks
US Shrimp: Import ceritifica only granted where TED use (turtle excluder device) is mandated in the shrimp's country of origin
There are other ways to protect turtles and TEDs may not be appropriate or necessary for fishing methods in some countries
US assisted neighbouring developing states, not the complainants