TRADE

AND ENVIRONMENT, HEALTH:

GENERAL EXCEPTIONS IN
ARTICLE XX OF GATT
IN THE WORLD TRADE ORGANIZATION

- Dr. Dao Gia Phuc -

Japan China

Viet Nam
Steel imports:
- Only eco-friendly production is allowed.
- Environment-harmful production is banned!

Violate WTO law??? Dr. Dao Gia Phuc

 Viet Nam Korea China

Veggie & Non Deep-fried Non Deep-fried Deep-fried

Vietnames Noodle law:

1. Deep-fried noodles à Banned
2. V.A.T:
• Veggie: 5%
• Other: 20%

Violate WTO rules???Dr. Dao Gia Phuc

What is the relationship between trade and
environment, health ?

Sustainable development

past present
Dr. Dao Gia Phuc
 Overall, import weighted tariff on industrial products
40
Average Tariff %
35

30

25

20

15

10

0
1947 1962 1972 1987 1995

Dr. Dao Gia Phuc

%
tar
iff NON TARIFF MEASURES

1947 2019
Dr. Dao Gia Phuc
 WTO rules ?
Avoiding Allowing for
unnecessary regulatory autonomy
obstacles to int’l to protect legitimate
trade interests

Promotion of int’l
standards

Dr. Dao Gia Phuc

Legal basis

- Article XX of the GATT 1994

- Technical Barriers to Trade Agreement

(TBT Agreement)

- Sanitary and Phyto-sanitary Measures

Agreement (SPS Agreement)

Dr. Dao Gia Phuc

Article XX of GATT 1994

Dr. Dao Gia Phuc

Article XX of the GATT 1994
“Subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions prevail,
or a disguised restriction on international trade, nothing in this
Agreement shall be 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 health;
…
(j) imposed for the protection of national treasures of artistic,
historic or archaeological value;
(g) relating to the conservation of exhaustible natural resources
…”
Dr. Dao Gia Phuc
Article XX of the GATT 1994

Chapeau

sub-paragraphs

Dr. Dao Gia Phuc

Nature and Function of Art. XX

US – Section 337 Tariff Act (1989):

- Allow Members to adopt measures promoting or protecting

important societal values;

- Be invoked by Member only when a measure has been found to

be inconsistent with another GATT 1994 provisions;

- The list of exceptions in Art. XX is exhaustive.

Dr. Dao Gia Phuc

Scope of application

- Allow deviation from all GATT obligations;

- Whether Art. XX may also justify inconsistency with

obligations set out in other WTO agreements ?

§ Art. 3 of TRIMs Agreement: “all exceptions under the

GATT 1994 shall apply, as appropriate, to the provisions of
this Agreement”;

§ China – Publications and Audiovisual Products (2010) and

China – Raw Materials (2012): depend on particular cases
to decide whether Art. XX is available to justify if there is
no clear statement. Dr. Dao Gia Phuc
Two-tier Test under Article XX of the GATT 1994

Chapeau

sub-paragraphs

Dr. Dao Gia Phuc

Article XX of the GATT 1994

“Subject to the requirement that such measures are not applied in a

manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions prevail,
or a disguised restriction on international trade, nothing in this
Agreement shall be 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 health;
…
(j) imposed for the protection of national treasures of artistic,
historic or archaeological value;
(g) relating to the conservation of exhaustible natural resources
…” Dr. Dao Gia Phuc
AB report, US – Gasoline (1996) (para. 22):
“In order that the justifying protection of Article XX …
the measure at issue must not only come under one or
another of the particular exceptions – paragraphs (a) to
(j) – listed under Article XX; it must also satisfy the
requirements imposed by the opening clauses of the
Article XX. The analysis is, in the other words, two-
tiered: first, provisional justification by reason of
characterization of the measure under Article XX(g);
second, further appraisal of the same measure under
the introductory clauses of Article XX.” Dr. Dao Gia Phuc
US - Shrimp

Dr. Dao Gia Phuc

US - Shrimp

Dr. Dao Gia Phuc

Article XX of the GATT 1994
US - Shrimp

Panel

Dr. Dao Gia Phuc

AB report, US – Shrimp (para. 118):
“In United States – Gasoline, we enunciated the
appropriate method for applying Art. XX:
…first, … provisional justification by reason
… under XX(g); second, further … under the
introductory clauses of Art. XX”

(para. 120):
“The standard of “arbitrary discrimination”, for
example, under the chapeau may be different for a
measure that purports to be necessary to protect
public morals than for one relating to the products
of prison labour.”
Dr. Dao Gia Phuc
Article XX of the GATT 1994
US - Shrimp
Appellate Body

Dr. Dao Gia Phuc

 Article XX of the GATT 1994
“Subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or
unjustifiable discrimination between countries where the same
conditions prevail, or a disguised restriction on international trade,
nothing in this Agreement shall be 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 health;
…
(j) imposed for the protection of national treasures of artistic,
historic or archaeological value;
(g) relating to the conservation of exhaustible natural resources
…”
Dr. Dao Gia Phuc
 Specific exceptions under Article XX:
Article XX(b)

“(b) necessary to protect human, animal or plant life or health”

1. The policy objective pursued by the measure is the

protection of the life or health of humans, animals
or plants;

2. The measure is necessary to fulfill that policy

objective.

Dr. Dao Gia Phuc

Specific exceptions under Article XX:
Article XX(b)

1. The policy objective:

§ Examine the design and structure of the measure.
Ex: measure to reduce the smoking of cigarettes, reduce air
pollution, reduce risk arising for accumulation of waste tyres,
etc.
§ Cover public health policy as well as environmental
policy measures: not just only the existence of risks to
environment but also specifically of risks to health.
(Brazil – Retreaded Tyres (2007)).

Dr. Dao Gia Phuc

Panel report, China – Raw Materials, para. 7.498:
“China claims that its export restrictions … are justified
as they will reduce pollution caused by the production of
the restricted exports and lead to better health for the
Chinese population … those export restrictions are part
of a comprehensive environmental protection
framework whose objectives are pollution reduction for
the protection of health of the Chinese population …”

Panel:
“…… only those export restrictions that bring about a material
contribution to the environmental policy goal are accepted as
WTO-consistent.” (para. 7.515)
“… China was unable to substantiate its claim that its export
restrictions … are part of a comprehensive programme
maintained in order to reduce pollution …” (para. 7.516).
Dr. Dao Gia Phuc
Panel report, Brazil – Retreaded tyres, paras. 7.53, 7.84:
“the accumulation of waste tyres creates a risk of
mosquito-borne diseases such as dengue and yellow
fever … because waste tyres create perfect breeding
grounds for disease carrying mosquitos and that
diseases are also spread through interstate
transportation of waste tyres for disposal operations
…
… Mosquitos-borne diseases also pose health risks to
animals …”
Panel:
“Brazil’s policy of reducing exposure to the risks to
human, animal or plant life or health arising from the
accumulation of waste tyres falls within the range of
policies covered by Article XX(b). Dr. Dao Gia Phuc
Specific exceptions under Article XX:
Article XX(b)

2. ‘Necessity’:

(Brazil – Retreaded Tyres (2007)).

Measure à Necessity?

Dr. Dao Gia Phuc

AB report, Brazil – Retreaded tyres, para. 178:

“in order to determine whether a measure is ‘necessary’

… a panel must consider ... particularly the importance
of the interests or value at stake, the extent of the
contribution to the achievement of the trade measure’s
objective, and its trade restrictiveness. If this analysis
yields a preliminary conclusion that the measure is
necessary, this result must be confirmed by comparing
the measure with possible alternatives, which may be
less trade restrictive while providing an equivalent
contribition to the achivement of the objective. This
comparison whould be carried out in the light of the
importance of the interests or values at stake ...
Dr. Dao Gia Phuc
Specific exceptions under Article XX:
Article XX(b)

2. ‘Necessity’:

(Brazil – Retreaded Tyres (2007)).

Measure à Necessity?

Dr. Dao Gia Phuc

 Specific exceptions under Article XX:
Article XX(b)
2. ‘Necessity’:

§ Must consider the extent of contribution to the

achievement o the measure’s objective, and its trade
restrictiveness;
§ The result of ‘Necessity’ must be confirmed by
comparing the measure with possible alternatives,
which may be less restrictive while providing the
equivalent contribution to the achievement of the
objective.
(Brazil – Retreaded Tyres (2007)).

Dr. Dao Gia Phuc

EC – Asbestos (2001):
- A French ban on asbestos and asbestos products;
- Appellate Body provided four findings:
§ The more important the societal value pursued by the
measure at issue, the more easily may be considered to be
‘necessary’;
§ Whether or not the existence of less trade-restrictive
alternative measures;
§ It is for WTO Members to determine the level of protection
of health or the environment they consider appropriate;
§ Member may also rely, in good faith, on divergent scientific
source, but qualified and respected.
Dr. Dao Gia Phuc
Specific exceptions under Article XX:
Article XX(g)
“(g) relating to the conservation of exhaustible natural resources if
such measures are made effective in conjunction with restrictions
on domestic production or consumption”

1. Conservation of exhaustible natural resources;

2. ‘Relate to’;

3. Be ‘made effective in conjunction with’ restrictions on

domestic production or consumption.

Dr. Dao Gia Phuc

Specific exceptions under Article XX:
Article XX(g)

1. The measure must relate to the ‘conservation of

exhaustible natural resources’:

• ‘Exhaustible’ natural resources and ‘renewable’

natural resources are not mutual exclusive.
(US – Shrimp (1998))

Dr. Dao Gia Phuc

Specific exceptions under Article XX:
Article XX(g)

2. ‘Relate to the conservation…’:

• Distinguish ‘relate to’ in Art. XX(g) and ‘necessary’ in Art.

XX(b) ?
• Require a close and real relationship between the measure
and the policy’s objective.
(US – Shrimp (1998))

Dr. Dao Gia Phuc

Specific exceptions under Article XX:
Article XX(g)

3. ‘Made effective in conjunction with’:

• Does not require imported and domestic products to

be treated identically – ‘even-handedness’;
• Even-handedness: only require the regulation
imposing restriction also on domestic production.
(US – Gasoline (1996))

Dr. Dao Gia Phuc

Article XX of GATT 1994

Chapeau

sub-paragraphs

Dr. Dao Gia Phuc

Chapeau of Article XX of the GATT 1994:

“… requirement that such measures are not applied in a manner

which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions
prevail, or a disguised restriction on international trade …”

Object and Purpose:

• Avoid that justified measures are applied would constitute a

misuse or an abuse of the exceptions of Art. XX;
• An expression of the principle of good faith in international law.
(US – Shrimp (1998))

Dr. Dao Gia Phuc

Chapeau of Article XX of the GATT 1994:
‘arbitrary or unjustifiable discrimination’

• Be different from the discrimination addressed in other

provisions of the GATT;
• Three elements:
(i) the application of measure must result in discrimination;
(ii) this discrimination must be arbitrary or unjustifiable in
character;
(iii) his discrimination must occur between countries where
the same conditions prevail.
(US – Gasoline (1996), US – Shrimp (1998))
Dr. Dao Gia Phuc
US - Shrimp

Dr. Dao Gia Phuc

US – Shrimp (1998)
- US government regulated an import ban on shrimp
harvested without TEDs method issued by US authorities.
India, Pakistan, Thailand and Malaysia complained the
measure;
- Appellate Body made three observations:
§ Require other Members adopt the same regulatory
program without taking into consideration different
conditions in the territories of other Member à
‘arbitrary discrimination’;
§ US negotiated and concluded the Inter-American
Convention for the Protection and Conservation of Sea
Turtles but there is no serious efforts made by US to
negotiate similar agreements with any other countries
à ‘unjustifiable discrimination’. Dr. Dao Gia Phuc
Chapeau of Article XX of the GATT 1994:
‘disguised restriction on international trade’

• ‘Arbitrary discrimination’, ‘unjustifiable discrimination’

and ‘disguised restriction’ may be read side-by-side à ‘an
arbitrary or unjustifiable discrimination’ may also lead to a
‘disguised restriction’;
• The application of the measure constitutes a ‘disguised
restriction on international trade’ if it is in fact only a
disguise to conceal the pursuit of trade restrictive objective.
(US – Gasoline (1996), EC – Asbestos (2001))

Dr. Dao Gia Phuc