T RAINING P ROGRAMME F OR T HE G OVERNMENT O F I NDONESIA S ESSION 4: The GATT 1994: General and Security Exceptions Jogjakarta, Indonesia 26-29 March 2019
A GENDA I. General Exceptions 1. Function of Article XX 2. Structure of Article XX 3. Order of Analysis 4. Burden of Proof 5. Specific Subparagraphs 6. Chapeau of Article XX II. Security exceptions 1. Do WTO panels and the Appellate Body have jurisdiction to examine national security measures? 2. Are national security measures self-judging? 3. Can national security measures be taken at any time? 4. Article XXI in the GATT 1947 5. Article XXI in the WTO
F UNCTION OF A RTICLE XX • Article XX allows a WTO Member to adopt or enforce a measure that is inconsistent with its obligations under the GATT 1994 in order to pursue certain public policy goals provided that the measure is applied in a manner consistent with the requirements set out in Article XX . • Article XX balances the right of WTO Members to invoke public policy exceptions and the rights of other WTO Members to ensure that the substantive obligations of the GATT 1994 are respected.
S TRUCTURE OF A RTICLE XX Article XX: General Exceptions Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or Chapeau unjustifiable discrimination between countries where the Application same conditions prevail, or a disguised restriction on of the international trade, nothing in this Agreement shall be measure 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 Sub- health; paragraphs … Public policy (d) necessary to secure compliance with laws or objectives regulations which are not inconsistent with the provisions of this Agreement (e) - (j)
O RDER OF A NALYSIS • Panel finds that a measure is inconsistent with Member A's GATT 1994 obligations. • Member A argues the measure is justified under Article XX. • Panel assesses whether the measure is justified under Article XX in a two-tiered analysis: 1. Does the measure fall within the scope of one or more of the sub-paragraphs in order to enjoy provisional justification ? 1. If yes, does the measure fully meet the requirements of the chapeau of Article XX?
B URDEN OF P ROOF • Article XX is an affirmative defence: o defence because it arises only when a measure has been found to be inconsistent with a provision of the GATT 1994. o affirmative because the burden of proof rests with the Member invoking it.
B URDEN OF P ROOF 1. Respondent invoking Article XX must demonstrate that its measure meets the requirements of the relevant sub- paragraphs and the chapeau. 2. The burden then shifts to the Complainant to rebut the Respondent's arguments by, inter alia , demonstrating that there are less restrictive alternatives to achieve the objective pursued. 3. Burden then shifts back to Respondent to, inter alia , claim that the alternative measures are not reasonably available.
S PECIFIC S UBPARAGRAPHS Article GENERAL PRODUCT-SPECIFIC POLICY RELATION TO MEASURE XX POLICY OBJECTIVES REQUIRING JUSTIFICATION OBJECTIVES (a) Public morals* Necessary to... (b) Life and health* Necessary to... (c) Importation or exportation of Relating to... gold and silver* (d) Law enforcement* Necessary to... (e) Products of prison labour Relating to... (f) National treasures* Imposed for the protection of... (g) Natural resources* Relating to the conservation of... (h) Commodity agreements* Undertaken in pursuance of... (i) Domestic materials* Involving restrictions on export of... (j) Products in short supply* Essential to... Provisions interpreted by the Appellate Body in bold. Provisions applied mainly or exclusively to export restrictions in italics*
A RTICLES XX( A ), ( B ) AND ( D ) • Measures "necessary to" the protection of public morals (Article XX(a)), public health (Article XX(b)), and the enforcement of laws and regulations (Article XX(d)). Design Necessity: • • Is there a relationship between the Weighing and balancing exercise • measure and the public policy Importance of the value , • objective pursued? Trade restrictiveness of the • Is the measure capable of measure, and • protecting the public policy Contribution of the measure objective? to the public policy objective pursued. • Consideration of LRAs.
P UBLIC MORALS • What are public morals? Are they the same for every country? • Panel in US – Gambling : "standards of right and wrong conduct maintained by or on behalf of a community or nation" (para. 6.465). • Public morals exceptions were invoked in several disputes: US – Gambling, EC – Seal Products, Colombia – Textiles, and Indonesia – Import Licensing Regimes .
P UBLIC MORALS
P UBLIC H EALTH • Article XX(b) allows Members to adopt measures: "necessary to protect human, animal or plant life and health." • As with public morals, there has been some deference to Members in determining whether the challenged measure was designed to protect public health. • Brazil – Retreaded Tyres : ▪ Ban on retreaded tyres. ▪ Risks for human and animal health arising from the accumulation of waste tyres. ▪ Measure was also "necessary" because it was apt to produce a material contribution to the achievement of its objective.
S ECURE COMPLIANCE WITH L AWS & R EGULATIONS • Article XX(d) of the GATT 1994 allows Members to adopt measures "necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement … ". 1. The measure must be designed to secure compliance with national laws or regulations, such as customs laws or intellectual property laws. • In Mexico – Taxes on Soft Drinks , Mexico invoked Article XX(d) to defend its discriminatory taxes as a measure necessary for Mexico to get the United States to comply with its NAFTA obligations. • Panel and AB: domestic laws or regulations only. 2. Those laws and regulations must not be inconsistent with provisions of the GATT 1994 . 3. The measure must be necessary to secure compliance with those laws or regulations (Appellate Body Report, Thailand – Cigarettes, para. 163).
O THER S UBPARAGRAPHS • Article XX(g) of the GATT 1994 allows Members to adopt measures "relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption." • Article XX(j) of the GATT 1994 allows Members to adopt measure that are " essential to the acquisition or distribution of products in general or local short supply".
C HAPEAU OF A RTICLE XX ▪ The chapeau addresses, not so much the challenged measure or its specific contents as such, but the manner in which that measure is applied (Appellate Body Report, US-Gasoline , p. 22). ▪ To meet the requirements of the chapeau, the measure must not be: Applied in a manner that arbitrarily discriminates between 1. countries where the same conditions prevail; Applied in a manner that unjustifiably discriminates 2. between countries where the same conditions prevail; A disguised restriction on international trade. 3.
E XTRATERRITORIAL A PPLICATION OF A RTICLE XX • Article XX permits WTO Members to restrict imports of products whose characteristics jeopardise public morals in their own territory, the life and health of their own population, the enforcement of their own laws in their jurisdiction and to protect their own natural resources. • But does Article XX allow WTO Members to take measures designed to change policies that affect public morals in another territory, the life and health of people abroad, the enforcement of the laws of other countries and natural resources located in other countries or in common areas?
E XTRATERRITORIAL A PPLICATION OF A RTICLE XX • Public morals: Can a Member justify a ban on imports of fur from countries that do not ban the use of leghold traps? • Life and health: Can a Member justify a ban on imports of lead acid batteries from countries without legislation protecting workers against lead poisoning? • Law enforcement : Can a Member justifiably limit its trade relations to countries that effectively secure compliance with their laws against corruption in customs matters? • Natural resources: Can a Member impose a surcharge on imports of energy intensive products from countries with levels of air pollution higher than its own?
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