US - Clove Cigarettes and US - Tuna II (Mexico): Implications for the Role of Regulatory Purpose under Article III:4 of the GATT

Abstract

The resolution of the issue of what role regulatory purpose might play in adjudicating the consistency of origin-neutral measures under the GATT National Treatment rule is essential to the resolution of the tension between trade liberalization and domestic autonomy with respect to the use of domestic policy instruments. As far as internal non-fiscal measures are concerned, the Appellate Body has yet to clarify its position on whether purpose should be considered in the step of determining ‘less favourable treatment’ under Article III:4. The Appellate Body’s recent decisions in US – Clove Cigarettes and US – Tuna II (Mexico) indicate that it continues to be reluctant to assign purpose a role under Article III:4, despite its explicit consideration of purpose in assessing ‘less favourable treatment’ under the National Treatment provision of the Agreement on Technical Barriers to Trade. These decisions also suggest that, in examining the policy claims raised in these two cases, the Appellate Body has employed its approach to ‘arbitrary or unjustifiable discrimination’ in the context of the Chapeau of GATT Article XX.