WTO Jurisprudence Research Articles

GATT Article XX and Proximity of Interest: Determining the Subject Matter of Paragraphs b and g

The interpretation of GATT Article XX has begun to play a critical role in defining the relationship among international trade law, international environmental law, and general international law. Different thresholds for provisional justification of trade measures under paragraphs XX(b) and (g) suggest that each paragraph should address different types of policies and measures. However, jurisprudence on paragraph XX(g) appears to make paragraph XX(b) somewhat redundant and raises the issue of whether paragraphs XX(b) and XX(g) have been interpreted in accordance with the rule of effective treaty interpretation. This article develops an analytical approach to take in deciding whether to address a trade measure under GATT paragraph XX(b) or (g), based on the proximity of interest between the country that applies trade restrictions and the environmental or health problem that is addressed. I propose that the subject matter be assigned based on the location of the environmental concern, with domestic concerns addressed in XX(b) and transnational or global concerns under XX(g). An analysis of Article XX, applying the rules of treaty interpretation of the Vienna Convention, supports this interpretation. The adopted body of GATT and WTO jurisprudence also supports this interpretation, with the exception of one case.

Recent Books on Trade and Environment: GATT Phantoms Still Haunt the WTO

WTO jurisprudence, in particular in the area of trade and environment, continues to evolve. Books on the same topic roll off the academic presses as never before. Yet, not all of these publications have fully appreciated the dramatic change that took place with the shift from GATT to the WTO, especially the more nuanced decisions by the Appellate Body. This essay reviews four recent books on trade and environment. It sets the debate in a wider framework and then focuses on the extent to which trade rules genuinely prohibit ecological state intervention. Its main objective is to dispel some of the GATT-inspired myths that keep haunting the WTO, in particular to point at the narrowed scope of prohibited discrimination, the accepted extra-territorial effect of certain regulations (including the possibility to justify regulations based on process or production methods) and the increased relevance, including before WTO panels, of environmental agreements negotiated outside the WTO.

Privately Subsidized Recycling Schemes and their Potential Harm to the Environment of Developing Countries: Does International Trade Law Have a Solution?

The article discusses the problem of privately subsidized recycling schemes, that are common in the developed countries and that may in certain circumstances harm the environment of developing countries, as a result of the asymmetry in economic development and environmental protection between them and the developed countries where the products originate. This may happen, for instance, when such products are exported to developing countries and have a negative impact on the economic viability of collection and recycling of their own waste. Newly established and still struggling recycling plants, unsupported by private or governmental subsidies or other protective measures prevailing in the rich and more environmentally conscious countries, may be forced to close down. Alternatively, they may decide to abandon expensive collection of local waste, in favor of free or subsidized waste imported from developed countries. In both cases, collection and recycling activities in the importing countries are reduced, and sometimes eliminated. The objective of this article is to document and draw attention to this problem, that has not yet been discussed in the rich literature on trade & environment, and to examine the question of what remedies, if any, may be offered under international trade law (in particular GATT/WTO rules) to affected countries. Would countries in situations as those described above be permitted to take measures against imports harming their recycling activities? Of particular interest in this regard, is how to relate to privately paid, but governmentally induced, subsidies under the WTO Subsidies Agreement? Such subsidies, while fulfilling most economic definitions of subsidies, appear to have escaped the attention of the Agreement's drafters and may therefore be outside its scope. Importing member countries would therefore be precluded from taking countervailing measures against products enjoying such subsidies. These and other potential protective measures will be discussed in the article, in light of recent case law of the WTO, in particular in the matter of United States - Measures Treating Export Restraints as Subsidies. This discussion will demonstrate the formalistic nature of the existing WTO jurisprudence and show how a more purposive, teleological approach to interpretation of international trade rules could lead to a better solution to the problem at hand.

THE PUZZLE OF WTO SAFEGUARDS AND REGIONAL TRADE AGREEMENTS

So far WTO jurisprudence has not resolved the puzzle of how WTO Members that are part also of a regional trade agreement (such as NAFTA or MERCOSUR) should conduct safeguard investigations and apply eventual safeguards in line with WTO rules. Can or must they exclude regional imports from the injury determination? Can or must they apply the eventual safeguard only to third parties, or are they under an obligation rather to apply all safeguards on a non-discriminatory basis? Those are the questions examined in this paper. The paper refocuses some of the attention to GATT Article XIX and criticizes the Appellate Body’s requirement of parallelism as well as its jurisprudence under GATT Article XXIV. It also offers an alternative way forward and ends with a list of options for WTO safeguards by members of customs unions or free trade areas.

The safeguards mess: a critique of WTO jurisprudence

The creation of the WTO revived the use of ‘safeguard’ measures to protect troubled industries against surges in import competition. Many of these measures have now been challenged in the WTO dispute resolution process, and in each case the process has found the challenged measure to be a violation of WTO law. This paper examines the WTO rules on safeguards from an economic perspective. Among other things, it argues that the textual preconditions for the use of safeguards in the treaty text are incoherent, and that the Appellate Body has compounded the problem through a series of dubious and unhelpful rulings. The result is a situation in which nations cannot use safeguards without facing a near certainty that they will be found invalid. Those who believe that safeguard measures are wasteful protectionism may welcome these developments, but it is by no means clear that the trading system will benefit in the long run.

The Salmon Case: Evolution of Balancing Mechanisms for Non-Trade Values in WTO

The Salmon case represents an important step in the evolution of the doctrinal tools available for managing WTO disputes involving non-trade values. Although the Salmon case concerns the specialized WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), it has implications for the broader development of WTO jurisprudence with respect to the place of non-trade values in the WTO regime. The SPS Agreement strikes a particular negotiated balance between trade liberalization and the protection of human, animal or plant life or health: trade-restrictive SPS measures will be permitted if they are scientifically justified, non-discriminatory and not more trade-restrictive than necessary in view of the member's chosen level of protection. Disputes concerning SPS measures can be seen as attempts by complaining parties to enforce that balance. One particular provision in the SPS Agreement, Article 5.6, introduces into SPS jurisprudence the "necessity test," long a part of GATT jurisprudence in, among other provisions, Article XX(b). Overall, the SPS agreement can be understood as an elaboration of Article XX(b) with respect to the specialized subject of SPS measures. However, in contrast to Article XX(b) as interpreted by prior panels, the SPS necessity test as written requires consideration of the effective achievement of a member's non-trade regulatory goals, prior to invalidating the member's chosen measure on trade-restrictive grounds. For this reason, the SPS-version necessity test has the potential to operate in a manner that is friendlier to non-trade values than the standard necessity test. The Salmon Panel is the first WTO dispute settlement body to rule on an Article 5.6 claim, and its decision and the Appellate Body report afford the first opportunity to examine the extent to which the promise contained in the language of Article 5.6 is indeed borne out in its judicial application. I conclude that the Appellate Body's finding on the limits of a Panel's review of a member's discretion to choose its appropriate level of protection, stakes out a strong position of respect for non-trade values in WTO, albeit in a somewhat problematic manner. Since the necessity test is employed widely throughout GATT jurisprudence, the Salmon case has the potential to influence necessity test interpretation beyond the strict SPS context. I also conclude that the Appellate Body's interpretation of the SPS necessity test in Salmon has increased the likelihood that non-trade values will be respectfully considered outside the SPS Agreement in Article XX cases. When one examines the Appellate Body's interpretation of the traditional necessity test in the Asbestos and Korean Beef cases, one catches a "whiff" of Salmon, confirming that the Salmon case is indeed contributing to the larger task of successfully incorporating respect for non-trade values into the WTO.

The Legacy of the Byrd Amendment Controversies—Rethinking the Principle of Good Faith

On January 16, 2003, the WTO Appellate Body (“AB”) released its ruling on a hotly debated, highly controversial piece of legislation, the so-called “Byrd Amendment,’ officially called the U.S. Continued Dumping and Subsidy Offset Act of 2000. Unlike the panel ruling issued three months earlier, the Appellate Body ruling is not likely to draw much attention because it basically shadows the panel ruling that the Byrd Amendment is inconsistent with WTO agreements. The Appellate Body agreed that the Byrd Amendment did constitute a specific action against dumping and subsidies that violated WTO obligations. However, a closer look into the ruling reveals that the Appellate Body reversed an important holding of the panel. The panel had held that the US did not act in good faith such that it violated certain provisions in the AD/SCM Agreements. The Appellate Body rejected this good faith argument, reasoning that the panel had overreached in reaching this conclusion. Reinforcing the role of the principle of good faith in the WTO jurisprudence will have significant impacts on the WTO system, especially the WTO dispute settlement system. At first

Environmentally Motivated Tax Distinctions and WTO Law: The European Commission's Green Paper on Integrated Product Policy in Light of the 'Like Product-' and 'PPM-' Debates

The article discusses the WTO-compatibility of a reduced VAT rate for 'environmentally friendly' products as proposed in the European Commission's Green Paper on Integrated Product Policy. It analyses certain hypothetical cases in the light of GATT Articles III and XX and the corresponding WTO jurisprudence. Furthermore, the article elaborates on the issues of 'like products', 'PPMs' and the question whether identical products can, nevertheless, be considered 'unlike'. Concerning the GATT Article XX justifications the article develops the distinction of discriminatory effect, for example a GATT Article III violation, and discriminatory intent which precludes justifications under GATT Article XX. Finally, it discusses the criticism raised in the literature of the Appellate Body's approach to GATT Article III and XX as improperly limiting the regulatory autonomy of WTO Members. The article concludes that the careful approach chosen by the Appellate Body leaves sufficient scope for WTO Members to address public policy concerns and does not expose this young legal institution to severe institutional criticism. Alternative approaches proposed in the literature lack a textual basis in GATT 1994, add to or diminish the rights and obligations of WTO Members under GATT Article XX, and would expose the Appellate Body to criticism of making instead of interpreting the law. Copyright Oxford University Press 2003, Oxford University Press.

Rethinking the mandatory/discretionary legislation distinction in WTO jurisprudence

A WTO member state whose legislation is alleged to have infringed WTO rules often invokes the mandatory/discretionary distinction, which states that only legislation mandating actions inconsistent with WTO rules can be challenged; legislation merely granting the discretion to do so cannot be challenged. This article highlights the treatment of this distinction by the Panel and the Appellate Body in recent decisions, in particular, United States–Section 211 Omnibus Appropriation Act of 1998 (‘US–Section 211’), and United States – Countervailing Measures Concerning Certain Products from the European Communities (‘US–Countervailing Measures’). The reasoning and analysis in these cases extended beyond the characterization of the form of the legislation to an examination of the effect of the legislation, and may portend a reconsideration of the mandatory/discretionary distinction and a reformulation of the test for reviewing a state's legislation for WTO-compliance.

Enhanced Third Party Rights in the WTO Dispute Settlement Understanding

This article examines the issue of enhanced third party rights in the WTO DSU. The origin of broader participatory rights in the GATT practice is explored. Further, in the early WTO jurisprudence and in particular, in EC – Hormones, the Appellate Body determined the conditions under which those rights should be granted and the content thereof. Their foundation on the discretionary authority of the Panels and on considerations of due process was thereby established. This contribution focuses on United States – 1916 Anti-Dumping Act, where the Appellate Body was offered the opportunity to elaborate on the issue in a case where claims of procedural prejudice were raised. In light of the unsatisfactory response of the Appellate Body, an analysis of the DSU provisions is undertaken and the argument that enhanced third party rights have a strong basis in the DSU is advocated. At the same time, the procedural and systemic importance of the issue is highlighted.

Non‐Trade Concerns and the Wto Jurisprudence in the Asbestos Case

Non‐Trade Concerns and the W<scp>to</scp> Jurisprudence in the <i>Asbestos</i> Case

Recent WTO Jurisprudence in the Field of Anti-dumping

Recent WTO Jurisprudence in the Field of Anti-dumping

Preliminary assessment of the effects of the WTO agreement on sanitary and phytosanitary trade regulations

Sanitary and phytosanitary (SPS) measures that regulate movement of products across international borders are necessary to protect public health or the environment, but may also be used to protect domestic producers from international competition. The recent WTO Agreement on the Application of SPS Measures aims to create a set of multilateral trade rules which allows the legitimate use of trade regulations for health and environmental protection, while disallowing their use for mercantilist regulatory protectionism. This paper examines WTO jurisprudence, negotiated settlements of formal complaints, and unilateral implementation of Agreement's provisions since its entry into force to evaluate whether and how the Agreement has served the interests of the world trading system. Copyright 1998 by Oxford University Press.

The Precedential Effect of WTO Panel and Appellate Body Reports

The Dispute Settlement Understanding in the WTO Agreement represents a significant shift from a diplomatic model of dispute settlement to a rule-based model. The substitution of legal legitimacy for political legitimacy in the dispute settlement process makes the success or failure of the system largely dependent on the credibility of the jurisprudence produced by the panels and Appellate Body. One way which international tribunals have established credible jurisprudence, is by following their previous decisions unless there is good reason for deciding otherwise. This paper examines the precedential effect of previously adopted panel and Appellate Body reports, and policy reasons for and against a stronger form of precedent in WTO jurisprudence.