Proportionality in WTO law

Journal of International Economic Law

Volumn 4, Issue 3, 2001, Pages 441-480

  Desmedt, Axel ^a  

^a UNIVERSITY OF MICHIGAN   (United States)

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EID: 0347769507     PISSN: 13693034     EISSN: None     Source Type: Journal    
DOI: 10.1093/jiel/4.3.441     Document Type: Article

References (180)

1. See Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline (US - Gasoline), WT/DS2/9, adopted on 20 May 1996, Section III.B.
2. Article 3.2 and Article 19.2 of the Dispute Settlement Understanding.
3. See Marco C. E. J. Bronckers, 'Better Rules for a New Millennium: A Warning against Undemocratic Developments in the WTO', JIEL 2(4) (1999), at 554.
4. See Meinhard Hilf, 'Power, Rules and Principles - Which Orientation for WTO/GATT Law?', JIEL 4(1) (2001) 111.
5. Ibid, at 120.
6. See, e.g., Article 46 of TRIPS where reference is made to 'the need for proportionality' in the context of enforcement provisions, and footnote 9 of Article 4.10 SCM Agreement where the word 'disproportionate' is used in connection to countermeasures (see below).
7. In EC law, an explicit reference to the proportionality principle can be found in Article 5 EC Treaty ('Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty'). See also Article 52.1 of the Charter of Fundamental Rights of the European Union, where the proportionality principle was explicitly recognized (OJ [2000] C 364/1). The European Court of Justice ('EC Court') also commonly refers to the proportionality principle as a substantive and independent general principle of law that has notably developed through its case law on the 'four freedoms' (free movement of goods, persons, services, and capital). For an overview of the proportionality principle in EC law, see Jürgen Schwarze, European Administrative Law (Sweet & Maxwell 1992), at 677; and also Evelyn Ellis (ed), The Principle of Proportionality in the Laws of Europe (Oxford 1999).
8. In EC law, an explicit reference to the proportionality principle can be found in Article 5 EC Treaty ('Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty'). See also Article 52.1 of the Charter of Fundamental Rights of the European Union, where the proportionality principle was explicitly recognized (OJ [2000] C 364/1). The European Court of Justice ('EC Court') also commonly refers to the proportionality principle as a substantive and independent general principle of law that has notably developed through its case law on the 'four freedoms' (free movement of goods, persons, services, and capital). For an overview of the proportionality principle in EC law, see Jürgen Schwarze, European Administrative Law (Sweet & Maxwell 1992), at 677; and also Evelyn Ellis (ed), The Principle of Proportionality in the Laws of Europe (Oxford 1999).
9. For example, in the context of the interpretation of the ECHR Convention, see Francis G. Jacobs and Robin C. A. White, The European Convention on Human Rights (2nd edn, Oxford, Clarendon Press 1996) 306-9. In EC law, see J. H. Jans, 'Proportionality Revisited', 27 Legal Issues of European Integration 239 (2000), at 246.
10. For example, in the context of the interpretation of the ECHR Convention, see Francis G. Jacobs and Robin C. A. White, The European Convention on Human Rights (2nd edn, Oxford, Clarendon Press 1996) 306-9. In EC law, see J. H. Jans, 'Proportionality Revisited', 27 Legal Issues of European Integration 239 (2000), at 246.
11. For a comprehensive comparative study, see Joel P. Trachtman, 'Trade and . . . Problems, Cost-Benefit Analysis and Subsidiarity', Harvard Jean Monnet Working Paper No. 1/97, http:// www.law.harvard.edu/Programs/Jean Monnet/papers/97-97-01.html. In this paper, a variety of legal devices - such as the proportionality principle - are used to address conflicts between trade values and other values as analysed in a comparative perspective.
12. See ILC Draft on State Responsibility in Third Report on State Responsibility by James Crawford, Special Rapporteur, UN GA Doc A/CN4/507 of 15 March 2000 (hereafter 'ILC Draft'), ILC Draft, at para 306; ICJ, 'Legality of the Threat or Use of Nuclear Weapons' ('Nuclear Weapons'), Advisory Opinion, ICJ Reports (1996), at para 41; and ICJ, Judgment of 25 September 1997, Case concerning the Gabcicovo-Nagymaros Project (Hungary/Slovakia), General List No 92 (1997), at para 85.
13. See ILC Draft on State Responsibility in Third Report on State Responsibility by James Crawford, Special Rapporteur, UN GA Doc A/CN4/507 of 15 March 2000 (hereafter 'ILC Draft'), ILC Draft, at para 306; ICJ, 'Legality of the Threat or Use of Nuclear Weapons' ('Nuclear Weapons'), Advisory Opinion, ICJ Reports (1996), at para 41; and ICJ, Judgment of 25 September 1997, Case concerning the Gabcicovo-Nagymaros Project (Hungary/Slovakia), General List No 92 (1997), at para 85.
14. See ILC Draft on State Responsibility in Third Report on State Responsibility by James Crawford, Special Rapporteur, UN GA Doc A/CN4/507 of 15 March 2000 (hereafter 'ILC Draft'), ILC Draft, at para 306; ICJ, 'Legality of the Threat or Use of Nuclear Weapons' ('Nuclear Weapons'), Advisory Opinion, ICJ Reports (1996), at para 41; and ICJ, Judgment of 25 September 1997, Case concerning the Gabcicovo-Nagymaros Project (Hungary/Slovakia), General List No 92 (1997), at para 85.
15. The word 'quantitative' does not necessarily exclude an analysis of the type of countermeasure adopted. However, the purpose of the proportionality principle in this context remains: 'matching' the reaction with the measure against which it is directed.
16. Opinion of Advocate General Van Gerven of 20 March 1990, Case C-169/89, Gourmetterie Van den Burg, ECR [1990] I-2143, at para 8.
17. See, e.g., Opinion of Advocate General Fennelly of 15 June 2000, Case C-376/98, Tobacco Advertising Directive, at para 175. The Advocate General rejects the validity of the Directive's prohibition of the advertising of diversified products on grounds of proportionality as no evidence was presented demonstrating the link between the advertising of non-tobacco goods and services and the effect on consumption.
18. See, e.g., Advocate General Van Gerven, Gourmetterie, at para 9.
19. See Jans, above n 8, at 245.
20. See Appellate Body Report, Korea - Measures Affecting Imports of Fresh, Chilled and Frozen Beef (Korea - Beef), WT/DS161/AB/R and WT/DS169/AB.R, adopted on 10 January 2001.
21. See, e.g., ECJ judgment of 20 September 1988, Case 302/86, Commission v Denmark, ECR [1988] 4607; and ECJ, judgment of 16 December 1992, Case C-169/91, Council of the City of Stoke-on-Trent and Norwich City Council v B & Q Plc., ECR [1992] I-6635.
22. See, e.g., ECJ judgment of 20 September 1988, Case 302/86, Commission v Denmark, ECR [1988] 4607; and ECJ, judgment of 16 December 1992, Case C-169/91, Council of the City of Stoke-on-Trent and Norwich City Council v B & Q Plc., ECR [1992] I-6635.
23. ECJ, Council of the City of Stoke-on-Trent and Norwich City Council v B & Q Plc., para 15.
24. See, e.g., Pike v Bruce, 397 U.S. 137 (1970). However, it has been argued - notably on the basis of recent case law - that the Supreme Court in fact does not balance but rather only strikes down discriminatory measures. See Donald H. Regan, 'Movement of Goods Under the Dormant Commerce Clause and the European Community Treaty' in R. Goebel (ed.), The European Union and the United States: Constitutional Systems in Evolution (Kluwer, forthcoming 2000).
25. See, e.g., Pike v Bruce, 397 U.S. 137 (1970). However, it has been argued - notably on the basis of recent case law - that the Supreme Court in fact does not balance but rather only strikes down discriminatory measures. See Donald H. Regan, 'Movement of Goods Under the Dormant Commerce Clause and the European Community Treaty' in R. Goebel (ed.), The European Union and the United States: Constitutional Systems in Evolution (Kluwer, forthcoming 2000).
26. More subdivisions could be made (see, e.g., Trachtmann, above n 9). However, for the purpose of an analysis under WTO law, we will limit ourselves to the four types of obligations mentioned above.
27. See ECJ, judgment of 5 May 1998, Case C-180/96, United Kingdom v Commission (BSE), ECR [1998] I-2265, at para 96.
28. In the services area, it is for example noteworthy that a discussion on the application of the necessity test was launched by the Working Party on Domestic Regulation with the WTO Secretariat. See Informal Note by the WTO Secretariat of 8 October 1999, Job No 5929.
29. See Article 47 of the ILC Draft; and Decision by the Arbitrators, Brazil - Export Financing Programme for Aircraft - Recourse to Arbitration by Brazil under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement (Brazil - Aircraft), WT/DS46/ARB, circulated on 28 August 2000, para 3.44.
30. Article 49, ILC Draft para 306. See also ICJ, Gabcikovo-Nagymaros, at para 85.
31. ILC Draft, para 309.
32. See Petros C. Mavroidis, 'Remedies in the WTO Legal System: Between a Rock and a Hard Place', 11 EJIL 763 (2000), at 773.
33. See Restatement (Third) on Foreign Relations Law of the United States §905 (Unilateral remedies) cmt. (d).
34. Article 22.4 DSU.
35. See Mavroidis, above n 26, at 773.
36. See Decision by the Arbitrators, European Communities - Regime for the Importation, Sale and Distribution of Bananas - Recourse to Arbitration by the European Communities under Article 22.6 of the DSU (EC - Bananas), WT/DS27/ARB, circulated on 9 April 1999, at para 6.3.
37. Article 22.6 DSU.
38. See Arbitrators, EC - Bananas, para 7.1; Decision by the Arbitrators, European Communities - Measures Concerning Meat and Meat Products (Hormones) - Original Complaint by the United States - Recourse by the European Communities to Article 22.6 of the DSU (EC - Hormones), circulated on 12 July 1999, at paras. 36-44.
39. See Arbitrators, EC - Bananas, para 7.1; Decision by the Arbitrators, European Communities - Measures Concerning Meat and Meat Products (Hormones) - Original Complaint by the United States - Recourse by the European Communities to Article 22.6 of the DSU (EC - Hormones), circulated on 12 July 1999, at paras. 36-44.
40. See paras 76-77.
41. See, e.g., Restatement, §905 cmt. (d).
42. See Article 22.3 DSU.
43. See Joost Pauwelyn, 'Enforcement and Countermeasures in the WTO: Rules are Rules', 94 AJIL 335 (2000), 344. This author argues that the requirement of equivalence of countermeasures that follows from DSU rules cannot achieve the purpose of inducing compliance. See also the recent proposals in this regard, formulated by Allan Rosas, Principal Legal Adviser of the European Communities, in 'WTO Dispute Settlement Findings: An EU Perspective', 4 J Int'l Econ L 131 (2001).
44. See Joost Pauwelyn, 'Enforcement and Countermeasures in the WTO: Rules are Rules', 94 AJIL 335 (2000), 344. This author argues that the requirement of equivalence of countermeasures that follows from DSU rules cannot achieve the purpose of inducing compliance. See also the recent proposals in this regard, formulated by Allan Rosas, Principal Legal Adviser of the European Communities, in 'WTO Dispute Settlement Findings: An EU Perspective', 4 J Int'l Econ L 131 (2001).
45. See Article 37 ILC Draft.
46. See Joost Pauwelyn, above n 36, at 341; and Allan Rosas, above n 36, at 142.
47. See Arbitrators, EC - Bananas, paras 6.12-6.16. This concern was also raised by the arbitrators in the Aircraft case at para 3.59.
48. Article 4.10 and 4.11 SCM Agreement.
49. Article 7.10 and 7.11 SCM Agreement.
50. See footnote 9 and 10 to Articles 4.10 and 4.11 SCM Agreement.
51. See GATT Doc. C/M/220 at 36. This issue is further discussed in Mavroidis, above n 26, at 801.
52. Arbitrators, Brazil - Aircraft, para 3.51 and footnote 51.
53. Ibid at para 3.60.
54. Ibid at para 3.59. The Panel's proposed solution does not solve the problem of subsequent complainants. For example, if Brazil still refuses to comply after countermeasures have been taken for the full amount of the subsidy, can the European Union in a subsequent complaint still apply countermeasures against Brazil if it wins the case? Probably that too would violate the proportionality principle vis-a-vis Brazil's infringement.
55. A reference to this draft is mentioned in a note from the GATT Secretariat, Group on Environmental Measures and International Trade, Trade provisions contained in existing Multilateral Environmentl Agreements vis-a-vis GATT principles and provisions, 14 October 1993, TRE/W/16/rev. 1, para 8.
56. In the Asbestos case parties submitted arguments on the substantial provisions of the TBT Agreement. However, the Panel concluded that the measure at issue (a French ban on asbestos) did not fall within the ambit of the TBT Agreement. See Panel Report, European Communities - Measures affecting Asbestos and Asbestos-containing Products (EC - Asbestos), WT/DS135/R, 18 September 2000. The Appellate Body overturned the Panel's findings in this respect, stating that the French ban did fall in the scope of the TBT Agreement. However, it did not pursue its analysis on the substantive TBT provisions invoked by Canada as it considered not having the 'adequate basis' to do so properly. See Appellate Body Report, EC - Asbestos, at para 83.
57. In the Asbestos case parties submitted arguments on the substantial provisions of the TBT Agreement. However, the Panel concluded that the measure at issue (a French ban on asbestos) did not fall within the ambit of the TBT Agreement. See Panel Report, European Communities - Measures affecting Asbestos and Asbestos-containing Products (EC - Asbestos), WT/DS135/R, 18 September 2000. The Appellate Body overturned the Panel's findings in this respect, stating that the French ban did fall in the scope of the TBT Agreement. However, it did not pursue its analysis on the substantive TBT provisions invoked by Canada as it considered not having the 'adequate basis' to do so properly. See Appellate Body Report, EC - Asbestos, at para 83.
58. Panel Report and Appellate Body Report, Australia - Measures Affecting the Importation of Salmon (Australia - Salmon), WT/DS18, adopted on 6 November 1998.
59. Panel Report and Appellate Body Report, Japan - Measures Affecting Agricultural Products (Japan -Agricultural Products), WT/DS76, adopted on 19 March 1999.
60. Panel Report, Australia - Salmon - Recourse to Article 21.5, WT/DS18/RW, adopted on 20 March 2000.
61. Article 2.1 SPS Agreement.
62. Article 5.1 SPS Agreement provides: 'Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organisations.'
63. Annex A, paragraph 4, SPS Agreement.
64. Article 5.2 SPS Agreement.
65. See Appellate Body Report, EC - Hormones, at para 193.
66. See below section III on Article XX.
67. See ECJ, BSE, above at n 21.
68. See ECJ, Case 178/84, Commission v Germany, ECR [1987] 1227, at para 44.
69. See, e.g., Opinion of Advocate General Fennelly, Tobacco, above n 13, at para 176.
70. Consider, for example, the case of a product suited both for animal feed and human consumption. Suppose a risk assessment study show that there are adverse effects exclusively with regard to human consumption. As a result thereof, a government simply bans the product from its market. Such a measure would be based on risk assessment and probably satisfy the 'rational connection' requirement. However, it would not necessarily meet the 'necessity' test of Article 2.1. After all, the ban will apply also on the product's use as animal feed while there is no causal connection between the measure and the protection of animal health. Thus, the measure will be disproportionate in its scope. Such a measure could of course also be challenged under the 'least trade-restrictive' test. However, the complainant's burden of proof is different (and arguably heavier) in the latter line of attack.
71. Present WTO case law does not indicate whether an SPS measure must be 'indispensable' or only 'useful' to the aim pursued. Arguably, however, the same standard should be applied as in Article XX, which also uses the word 'necessary'. In that regard, the Appellate Body recently stated that 'necessary'-leaned rather towards 'indispensable'. See Appellate Body Report, Korea - Beef, para 161; as discussed below Part III.B.1 (b).
72. See Joost Pauwelyn, 'The WTO Agreement on SPS Measures as Applied in the First Three SPS Disputes', 2 J Int'l Econ L 641 (1999), 643. In this article the situation is envisaged of a measure that would only partly be aimed at the protection of human, animal or plant life or health. The question then is whether this would still be an SPS measure in the sense of the SPS Agreement.
73. See Panel Report, Australia - Salmon, para 8.167; and Appellate Body Report, para 180.
74. See Panel Report, Australia - Salmon, para 8.167; and Appellate Body Report, para 180.
75. Ibid.
76. Appellate Body Report, Japan - Measures Affecting Agricultural Proudcts (Japan - Agricultural Products), WT/DS76/AB/R, adopted on 19 March 1999, paras. 118-31.
77. Appellate Body Report, Australia - Salmon, para 199.
78. The question is whether such an option is always tenable, as the Member in question will have to show that its measures are consistent with a level of protection amounting 'zero risk'. In Korea - Beef the Appellate Body rejected Korea's stated level of protection based on its 'unlikelihood' considering the measures adopted.
79. Ibid, para 197.
80. See Panel Report, Australia - Salmon - Recourse to Article 21.5, WT/DS18/RW, adopted on 20 March 2000, para 7.129.
81. When assessing the risks on animal or plant life or health (not human life or health) and determining the measure to be applied, Article 5.3 SPS Agreement mentions that additional economic factors should be considered in a kind of cost-benefit analysis. However, this cost-benefit analysis does not allow the questioning of the level of protection chosen by the WTO Member.
82. Appellate Body Report, Australia - Salmon, para 206.
83. Ibid.
84. See Appellate Body, Korea - Beef, para 178; see below Part III.B.1 (d).
85. Ibid. However, in the Salmon case, the Appellate Body relied on Australia's level of protection as stated in its submissions during the Panel proceedings.
86. See 6th paragraph of the preamble of the TBT Agreement.
87. In fact, Members seem to refer to a variety of 'legitimate objectives' when notifying TBT measures to the WTO. Examples of other stated objectives in this regard are: cost savings, increasing productivity, and harmonization (see Fourth Annual Review of the Implementation and Operation of the [TBT] Agreement, G/TBT/7, 3 March 1999, p 9). Other objectives for consideration could be: consumer protection, promoting competition or administrative efficiency.
88. The United States maintained such an argument in the Asbestos case. See Panel Report, EC - Asbestos, at para 4.71.
89. Ibid, at para 3.298. Canada's response to the argument of the United States.
90. Panel Report, EC - Asbestos, at paras 3.279 and 3.290.
91. Ibid, at para 4.31. Further support for this position could be inferred from Venezuela's statement in the Gasoline case. See Panel Report, US - Gasoline, para 3.81.
92. Ibid, at para 4.31. Further support for this position could be inferred from Venezuela's statement in the Gasoline case. See Panel Report, US - Gasoline, para 3.81.
93. In this sense, see Appellate Body Report, EC - Hormones, at para 189.
94. See below Part III.B.1 (a).
95. In this sense, see Informal Note of the WTO Secretariat of 8 October 1999, Working Party on Domestic Regulation, 'Application of the necessity test: issues for consideration', Job No. 5229.
96. See GATT Panel Report, United States - Section 337 of the Tariff Act of 1930 (US - Section 337), adopted on 7 November 1989, BISD 36S/345; GATT Panel Report, Thailand - Restrictions of Importation of and Internal Taxes on Cigarettes (Thailand - Cigarettes), adopted on 7 November 1990, DS10/R, BISD 37S/200, para 75; GATT Panel Report, United States - Measures Affecting Alcoholic and Malt Beverage (US - Malt Beverages), adopted on 19 June 1992, BISD 39S/206 paras 5.40-5.43 and 5.52.
97. See GATT Panel Report, United States - Section 337 of the Tariff Act of 1930 (US - Section 337), adopted on 7 November 1989, BISD 36S/345; GATT Panel Report, Thailand - Restrictions of Importation of and Internal Taxes on Cigarettes (Thailand - Cigarettes), adopted on 7 November 1990, DS10/R, BISD 37S/200, para 75; GATT Panel Report, United States - Measures Affecting Alcoholic and Malt Beverage (US - Malt Beverages), adopted on 19 June 1992, BISD 39S/206 paras 5.40-5.43 and 5.52.
98. See GATT Panel Report, United States - Section 337 of the Tariff Act of 1930 (US - Section 337), adopted on 7 November 1989, BISD 36S/345; GATT Panel Report, Thailand - Restrictions of Importation of and Internal Taxes on Cigarettes (Thailand - Cigarettes), adopted on 7 November 1990, DS10/R, BISD 37S/200, para 75; GATT Panel Report, United States - Measures Affecting Alcoholic and Malt Beverage (US - Malt Beverages), adopted on 19 June 1992, BISD 39S/206 paras 5.40-5.43 and 5.52.
99. Panel Report, EC - Hormones, WT/DS26/R/USA, adopted on 13 February 1998, at paras 8.38-8.42; The Panel's findings on this point have been supported in the doctrine. See Reinhard Quick and Andreas Blühner, 'Has the Appellate Body Erred? An appraisal and criticism of the ruling in the WTO Hormones case', JIEL 2(3) 603 (1999), 626-28; Joost Pauwelyn, 'The WTO Agreement on SPS Measures as applied in the First Three SPS Disputes', above n 63 at 644. See also, Appellate Body, EC - Asbestos, para 80, where it is stated that obligations of the TBT Agreement are different and additional to the obligations of the GATT.
100. Panel Report, EC - Hormones, WT/DS26/R/USA, adopted on 13 February 1998, at paras 8.38- 8.42; The Panel's findings on this point have been supported in the doctrine. See Reinhard Quick and Andreas Blühner, 'Has the Appellate Body Erred? An appraisal and criticism of the ruling in the WTO Hormones case', JIEL 2(3) 603 (1999), 626-28; Joost Pauwelyn, 'The WTO Agreement on SPS Measures as applied in the First Three SPS Disputes', above n 63 at 644. See also, Appellate Body, EC - Asbestos, para 80, where it is stated that obligations of the TBT Agreement are different and additional to the obligations of the GATT.
101. Panel Report, EC - Hormones, WT/DS26/R/USA, adopted on 13 February 1998, at paras 8.38- 8.42; The Panel's findings on this point have been supported in the doctrine. See Reinhard Quick and Andreas Blühner, 'Has the Appellate Body Erred? An appraisal and criticism of the ruling in the WTO Hormones case', JIEL 2(3) 603 (1999), 626-28; Joost Pauwelyn, 'The WTO Agreement on SPS Measures as applied in the First Three SPS Disputes', above n 63 at 644. See also, Appellate Body, EC - Asbestos, para 80, where it is stated that obligations of the TBT Agreement are different and additional to the obligations of the GATT.
102. Panel Report, EC - Hormones, WT/DS26/R/USA, adopted on 13 February 1998, at paras 8.38- 8.42; The Panel's findings on this point have been supported in the doctrine. See Reinhard Quick and Andreas Blühner, 'Has the Appellate Body Erred? An appraisal and criticism of the ruling in the WTO Hormones case', JIEL 2(3) 603 (1999), 626-28; Joost Pauwelyn, 'The WTO Agreement on SPS Measures as applied in the First Three SPS Disputes', above n 63 at 644. See also, Appellate Body, EC - Asbestos, para 80, where it is stated that obligations of the TBT Agreement are different and additional to the obligations of the GATT.
103. See Informal Note, above n 84.
104. ECJ, German Beer above n 59, at 44.
105. However, several authors have argued that a type of 'necessity' requirement was implied in the headnote of Article XX in view of the Appellate Body's decision in Gasoline. See Edmond McGovern, International Trade Regulation (Exeter Globefield Press, updated 2000) at §13.131; Reinhard Quick, 'The Community's Regulation on LegHold Traps: Creative Unilateralism Made Compatible with WTO Law through Bilateral Negotiations?' in Marco Bronckers and Reinhard Quick (eds), New Directions in International Economic Law (Kluwer 2000), 239-57, at 250; Rambod Behboodi, 'Legal Reasoning and the International Law of Trade - The First Steps of the Appellate Body', 4 Journal of World Trade 55 (1998), at 75; Hilf, above n 5, at 121. Contra, Arthur E. Appleton, 'GATT Article XX's Chapeau: A Disguised "Necessary Test"?: The WTO Appellate Body's Ruling in United States - Standards for Reformulated and Conventional Gasoline', 6 RECIEL 131, 134-35.
106. However, several authors have argued that a type of 'necessity' requirement was implied in the headnote of Article XX in view of the Appellate Body's decision in Gasoline. See Edmond McGovern, International Trade Regulation (Exeter Globefield Press, updated 2000) at §13.131; Reinhard Quick, 'The Community's Regulation on LegHold Traps: Creative Unilateralism Made Compatible with WTO Law through Bilateral Negotiations?' in Marco Bronckers and Reinhard Quick (eds), New Directions in International Economic Law (Kluwer 2000), 239-57, at 250; Rambod Behboodi, 'Legal Reasoning and the International Law of Trade - The First Steps of the Appellate Body', 4 Journal of World Trade 55 (1998), at 75; Hilf, above n 5, at 121. Contra, Arthur E. Appleton, 'GATT Article XX's Chapeau: A Disguised "Necessary Test"?: The WTO Appellate Body's Ruling in United States - Standards for Reformulated and Conventional Gasoline', 6 RECIEL 131, 134-35.
107. However, several authors have argued that a type of 'necessity' requirement was implied in the headnote of Article XX in view of the Appellate Body's decision in Gasoline. See Edmond McGovern, International Trade Regulation (Exeter Globefield Press, updated 2000) at §13.131; Reinhard Quick, 'The Community's Regulation on LegHold Traps: Creative Unilateralism Made Compatible with WTO Law through Bilateral Negotiations?' in Marco Bronckers and Reinhard Quick (eds), New Directions in International Economic Law (Kluwer 2000), 239-57, at 250; Rambod Behboodi, 'Legal Reasoning and the International Law of Trade - The First Steps of the Appellate Body', 4 Journal of World Trade 55 (1998), at 75; Hilf, above n 5, at 121. Contra, Arthur E. Appleton, 'GATT Article XX's Chapeau: A Disguised "Necessary Test"?: The WTO Appellate Body's Ruling in United States - Standards for Reformulated and Conventional Gasoline', 6 RECIEL 131, 134-35.
108. However, several authors have argued that a type of 'necessity' requirement was implied in the headnote of Article XX in view of the Appellate Body's decision in Gasoline. See Edmond McGovern, International Trade Regulation (Exeter Globefield Press, updated 2000) at §13.131; Reinhard Quick, 'The Community's Regulation on LegHold Traps: Creative Unilateralism Made Compatible with WTO Law through Bilateral Negotiations?' in Marco Bronckers and Reinhard Quick (eds), New Directions in International Economic Law (Kluwer 2000), 239-57, at 250; Rambod Behboodi, 'Legal Reasoning and the International Law of Trade - The First Steps of the Appellate Body', 4 Journal of World Trade 55 (1998), at 75; Hilf, above n 5, at 121. Contra, Arthur E. Appleton, 'GATT Article XX's Chapeau: A Disguised "Necessary Test"?: The WTO Appellate Body's Ruling in United States - Standards for Reformulated and Conventional Gasoline', 6 RECIEL 131, 134-35.
109. Appellate Body Report, US - Gasoline, section IV; and Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products (US - Shrimp), WT/D58/AB/R, adopted on 6 November 1998, paras 115-16.
110. Appellate Body Report, US - Gasoline, section IV; and Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products (US - Shrimp), WT/D58/AB/R, adopted on 6 November 1998, paras 115-16.
111. See Appellate Body, US - Gasoline, Part III.B.
112. Other terms are 'in pursuance of (paragraph (h)), 'essential' (paragraph (j)), 'for the protection of' (paragraph (f)), and 'involving' (paragraph (i)).
113. Appellate Body Report, US - Gasoline, section III.B.
114. In fact, the Panel in Korea - Beef explicitly referred to the fact that Korea's dual retail system was 'a disproportionate measure not necessary to secure compliance with Korean law against deceptive practices' (emphasis added). See Panel Report, para 675.
115. Panel Report, Thailand - Cigarettes, para 74.
116. Appellate Body Report, Korea - Beef, paras 161-62.
117. In addition to the earlier mentioned provisions of the TBT and SPS Agreements, see for example also Article X:3(c) of GATT, Articles VI:4, XII:2 (c) and (d), XIV of GATS, Articles 3.2, 8.1, 27.2, 39.3 and 41.2 of TRIPS, Articles 18.1(b), 21.1, 29.1 of the SCM Agreement, Articles 5.1 and 7.1 of the Agreement on Safeguards.
118. Appellate Body Report, Korea - Beef, para 164; and also Appellate Body Report, EC - Asbestos, at para 172. The Appellate Body applied a similar reasoning to the words 'arbitrary discrimination' of the chapeau of Article XX. See Appellate Body, US - Shrimp, para 120.
119. Appellate Body Report, Korea - Beef, para 164; and also Appellate Body Report, EC - Asbestos, at para 172. The Appellate Body applied a similar reasoning to the words 'arbitrary discrimination' of the chapeau of Article XX. See Appellate Body, US - Shrimp, para 120.
120. Appellate Body Report, Korea - Beef, para 164; and also Appellate Body Report, EC - Asbestos, at para 172. The Appellate Body applied a similar reasoning to the words 'arbitrary discrimination' of the chapeau of Article XX. See Appellate Body, US - Shrimp, para 120.
121. Such differentiated approach was also advocated by the Appellate Body for the interpretation of the concept of 'like product': 'The concept of "likeness" is a relative one that evokes the image of an accordion. The accordion of "likeness" stretches and squeezes in different places as different provisions of the WTO Agreement are applied'. See Appellate Body Report, Japan - Taxes on Alcoholic Beverages, WT/DS8/AB, WT/DS10/AB and WT/DS11/AB, adopted on 1 November 1996, p 21. More recently, the 'like product' issue was extensively debated by the Appellate Body in Asbestos (see paras 84-103).
122. See above n 8.
123. Appellate Body Report, Korea - Beef, para 176.
124. Appellate Body Report, Australia - Salmon, para 197 . Nevertheless, more recently a Panel was rather lenient in considering certain tax measures of Argentina to be 'necessary' for combating tax evasion. See Panel Report, Argentina - Measures Affecting the Export of Bovine Hides and the Import of Finished Leather (Argentina - Bovine Hides), WT/DS155/R, adopted on 16 February 2001, paras 11.299-11.303. The Panel in effect applied the 'necessity' test when reviewing compliance with the chapeau of Article XX (see below).
125. Appellate Body Report, Australia - Salmon, para 197 . Nevertheless, more recently a Panel was rather lenient in considering certain tax measures of Argentina to be 'necessary' for combating tax evasion. See Panel Report, Argentina - Measures Affecting the Export of Bovine Hides and the Import of Finished Leather (Argentina - Bovine Hides), WT/DS155/R, adopted on 16 February 2001, paras 11.299-11.303. The Panel in effect applied the 'necessity' test when reviewing compliance with the chapeau of Article XX (see below).
126. Panel Report, Thailand - Cigarettes, para 78.
127. See Panel Report, EC - Asbestos, para 8.188.
128. Appellate Body Report, EC -Asbestos, paras 156-63.
129. See above at n 61.
130. Para 163.
131. Appellate Body Report, Korea - Beef, para 161. Whether a measure is indispensable or not may depend on the next step of the necessity test which relates to the 'least trade-restrictive' character of the measure at stake. Note that it is interesting to compare these findings of the Appellate Body with the comments referred to earlier on EC law where the causal link requirement apparently varies between 'useful' and 'indispensable'. See Jans, above at n 15.
132. Panel Report, Korea - Beef, paras 655-58.
133. Paras 11.305-11.306.
134. Panel Report, EC - Asbestos, para 8.180.
135. GATT Panel Report, United States - Section 337 of the Tariff Act of 1930 (US - Section 337), adopted on 7 November 1989, L/6439, BISD 36/402 (1990), para 5.26.
136. Panel Report, Thailand - Cigarettes, para 81.
137. GATT Panel Report, United States - Measures Affecting Alcoholic and Malt Beverage, adopted on 19 June 1992, DS23/R, para 5.52.
138. Aaditya Mattoo and Petros Mavroidis, 'Trade, Environment and the WTO: The Dispute Settlement Practice Relating to Article XX of GATT' in Ulrich Petersmann, International Trade Law and the GATT/WTO Dispute Settlement System (Kluwer 1997), 327-43, at 337.
139. Appellate Body Report, Korea - Beef, para 163. When export restrictions are at stake, the quantifying criterion will presumably be exported products.
140. See above, section II.
141. See Panel Report, Argentina - Bovine Hides, footnote 560.
142. See above.
143. The Appellate Body does examine that aspect as a part of the 'necessity' test in Korea - Beef (see paras 178-81).
144. Panel Report, Argentina - Bovine Hides, paras 11.324-11.329.
145. See below. The European Commission apparently formulated similar concerns regarding the Panel's analysis of Article XX(d). Some of its comments in this regard can be found in the 'interim review' of the Panel Report. See Argentina - Bovine Hides, para 10.23.
146. Panel Report, Thailand - Cigarettes, para 73.
147. Panel Report, US - Section 337, para 5.26.
148. Appellate Body Report, Korea - Beef, para 176.
149. See above, section II.
150. See, by analogy, Appellate Body Report, Australia - Salmon, para 206.
151. Appellate Body, Korea - Beef, para 178.
152. Ibid, paras 197-99. The different factual circumstances of both cases are interesting: in the Salmon case, the Appellate Body chose to use the level of protection as stated by Australia ('high or very conservative level of protection') which was lower than the level of protection that should have been inferred from the import ban ('zero risk'). In the Korea - Beef case, it chose to reject the more conservative level of enforcement chosen by Korea (elimination of fraud) in favour of a lower level of enforcement deduced from the measure at stake (considerable reduction of fraud). Thus, in both cases the Appellate Body chose the lower of both protection or enforcement levels.
153. Panel Report, Canada Measures Affecting Exports of Unprocessed Herring and Salmon, L/6268, adopted on 22 March 1988, BISD 35S/98, para 4.6.
154. Ibid.
155. Appellate Body Report, US - Gasoline, section III.B.
156. Appellate Body Report, US - Shrimp, para 136.
157. Appellate Body Report, US - Gasoline, section III.B.
158. Appellate Body Report, US - Shrimp, para 141.
159. Appellate Body Report, US - Gasoline, section III.C. Interestingly, the Appellate Body's point in this respect, which is more relevant to the interpretation of 'relating to', is a part of its analysis of the words 'if such measures are made effective in conjunction with restrictions on domestic production or consumption' of Article XX(g).
160. Appellate Body Report, US - Gasoline, section III.B.
161. Ibid. In its analysis of Article XX(b) in the Gasoline case, the Panel found that it was its role to examine whether the 'inconsistent measures were necessary to achieve the policy goal under Article XX(b)' (our emphasis). The Panel added that it did not have to examine whether other (consistent) parts of the measure at stake were necessary for achieving the environmental objective. See Panel Report, US - Gasoline, para 6.22. This reasoning was overruled by the above-mentioned Appellate Body findings in Gasoline. In Bovine Hides, the Panel followed this Appellate Body holding by analysing whether or not a contested measure rather than the inconsistency of that measure was 'necessary' to secure compliance with laws not inconsistent with GATT (Article XX(d) GATT). However, as discussed, the Panel then failed to review under paragraph (d) of Article XX whether Argentina chose the least trade-restrictive measure available.
162. Appellate Body Report, US - Gasoline, section III.B.
163. See Arthur E. Appleton, 'Shrimp/Turtle: Untangling the Nets', JIEL 2(3) 477 (1999), at 483.
164. Even though it relates to the chapeau of Article XX and not Article XX(g), this position is further supported by the authoritative findings of the Appellate Body in Shrimp castigating the Panel for having maintained that measures undermining the WTO multilateral system are to be considered inconsistent with the chapeau of Article XX. Appellate Body, US - Shrimp, at para 116.
165. See above n 90.
166. See above, section III.A.
167. See above n 89. Note that Appleton has argued in 1997 that the necessary test should not be read in the chapeau (see 'GATT Article XX's Chapeau: A Disguised "Necessary" Test' above n 89). However, in his latest article on the Shrimp case Appleton states that 'the Appellate Body appears to be moving ever closer to adopting some type of proportionality inquiry'. See Appleton, above n 140, at 492
168. Appellate Body Report, United States - Gasoline, section IV.
169. Appellate Body Report, United States - Shrimp, above n 142, para 159.
170. Ibid, at para 171.
171. Appellate Body Report, US - Gasoline, section IV.
172. See Edmond McGovern, see above n 89,/13.1131.
173. 'We note, primarily, that the application of the measure may be characterized as amounting to an abuse or misuse of the an exception of Article XX (. . .) also where a measure (. . .), is actually applied in an arbitrary or unjustifiable manner' (our emphasis). Appellate Body Report, US - Shrimp, para 160. Here the Appellate Body totally disconnects the discrimination standard - included in the text of the chapeau of Article XX - from the words 'arbitrary and unjustifiable'.
174. See Appellate Body Report, US - Shrimp, para 116. The Appellate Body rejects the Panel's broad formulations on the object and purpose of the WTO Agreements and mentions that '[m]aintaining, rather than undermining, the multilateral trading system is necessarily a fundamental and pervasive premise underlying the WTO Agreement; but it is not a right or an obligation which can be employed in the appraisal of a given measure under the chapeau of Article XX.'
175. It was observed that the Appellate Body (incorrectly) expressed a preference for negotiated solutions to unilateral measures on the basis of the words 'unjustifiable discrimination'. See Donald M. McRae, 'GATT Article XX and the WTO Appellate Body' in Bronckers and Quick (eds), above n 89, 219-36, at 231.
176. The problem created by this distinction is illustrated in the Panel report, Argentina - Bovine Hides, footnote 566. The Panel seemed to feel uncomfortable when trying to distinguish the measure itself from the measure applied.
177. See Appellate Body Report, US - Shrimp, para 116.
178. Contra, Meinhard Hilf, see above n 4, 121, stating that 'the different formulations used in the WTO agreements and by the Appellate Body just lead to gradual differences, whereas the basic thrust of the approaches is similar in the sense of proportionality'.
179. Joost Pauwelyn, 'Does the WTO Stand for "Deference to" or "Interference with" National Health Authorities When Applying the (SPS) Agreement on Sanitary and Phytosanitary Measures' paper presented at the World Trade Forum 2000, Geneva 21-22 August 2000.
180. The Panel's interpretation in Bovine Hides, amounting to an inclusion of a necessity test in the word 'justifiable' of the chapeau of Article XX, can also be mentioned as a step towards the integration of the proportionality principle into the chapeau. Whether that approach will be followed remains to be seen.