‘Exhaustible Natural Resource’ in WTO Law: GATT Article XX (g) Disputes and Their Implications

Abstract

Trade in natural resources is an important part of international trade and can be governed by World Trade Organization (WTO).Article XX (g) of the GATT 1994 is the only WTO rule that expressly employs the term 'exhaustible natural resources', but it is silent as to the meaning and scope of this term. There are in total nine General Agreement on Tariffs and Trade (GATT) and WTO disputes in which Article XX (g) has been invoked. In various disputes, the term 'exhaustible natural resources' has been interpreted within the framework of the Vienna Convention on the Law of Treaty. An exhaustive study of Article XX (g) disputes shows that there are several different scenarios in which this term has been interpreted, and that the Dispute Settlement Body (DSB) panels and the Appellate Body (AB) often held flexible and friendly attitudes when interpreting the term. Although WTO case law suggests that this term has been interpreted to cover a wide range of subjects, no consensus on the meaning and scope of this term in WTO law has been reached. Consequently, the threshold for invoking Article XX (g) exception remains high. This also helps explain how the DSB panels and the AB tried to balance the two seemingly conflicting policy aims of Article XX (g), i.e., ensuring free trade and protecting the environment. Given the world's increasing reliance on natural resources, persisting need for free trade and mounting concerns over environmental protection, Article XX (g) is highly likely to be invoked in more WTO disputes in the future. It remains to be seen how the term 'exhaustible natural resources' will be interpreted and what role Article XX (g) can play in international trade governance.