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Exploring the Meaning of Trade-Restrictiveness in the WTO

Published online by Cambridge University Press:  14 January 2015

TANIA VOON
TANIA VOON*
Affiliation:
Melbourne Law School, The University of Melbourne
*
*Email: [email protected].
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Abstract

Trade-restrictiveness is a familiar concept across various provisions and agreements of the World Trade Organization (WTO), but its precise meaning remains vague. In many WTO disputes, the existence or degree of trade-restrictiveness of a challenged measure is simply assumed or addressed in a few brief sentences. Yet whether a measure is more trade-restrictive than necessary, or more trade-restrictive than a proposed alternative measure, is crucial to the legality of a range of measures currently in place around the world, some under challenge in the WTO. A careful analysis of the existing case law and treaty text – focusing on Article 2.2 of the Agreement on Technical Barriers to Trade and the general exceptions in the General Agreement on Tariffs and Trade 1994 and the General Agreement on Trade in Services – demonstrates that while the existence of discrimination is likely to restrict trade, discrimination is not necessary to establish trade-restrictiveness, which also necessarily arises from direct barriers to market access such as import bans. In the absence of an explicit barrier to imports, a WTO panel is likely to focus on the extent to which a challenged measure negatively affects the competitive opportunities of imported products vis-à-vis domestic products.

Type
Review Article
Information
World Trade Review , Volume 14 , Issue 3 , July 2015 , pp. 451 - 477
Copyright
Copyright © TANIA VOON 2015 

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References

1 See, e.g., Sykes, Alan O. (2003), ‘The Least Restrictive Means’, 71 University of Chicago Law Review, 403CrossRefGoogle Scholar, 406. See also Trachtman, Joel (1998), ‘Trade and … Problems: Cost–Benefit Analysis and Subsidiarity’, 9 European Journal of International Law, 32Google Scholar; Regan, Donald H. (2007), ‘The Meaning of “Necessary” in GATT Article XX and GATS Article XIV: The Myth of Cost–Benefit Balancing’, 6 World Trade Review, 347CrossRefGoogle Scholar; Ming Du, Michael (2010), ‘Autonomy in Setting Appropriate Level of Protection under the WTO Law: Rhetoric or Reality?’, 13 Journal of International Economic Law, 1077CrossRefGoogle Scholar.

2 See, e.g., Appellate Body Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R, WT/DS401/AB/R, adopted 18 June 2014, paras. 5.205–5.206 (EC–Seal Products).

3 Australia – Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging: Request for the Establishment of a Panel by Ukraine, WT/DS434/11, 17 August 2012; Australia – Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging: Request for the Establishment of a Panel by Honduras, WT/DS435/16, 17 October 2012; Australia – Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging: Request for the Establishment of a Panel by the Dominican Republic, WT/DS441/15, 13 November 2012; Australia – Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging: Request for the Establishment of a Panel by Indonesia, WT/DS467/15, 6 March 2014; Australia – Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging: Request for the Establishment of a Panel by Cuba, WT/DS458/14, 14 April 2014.

4 Panel Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/R and Add.1, adopted 5 April 2001, para. 2.4 (EC–Asbestos).

5 Based on the general search function at worldtradelaw.net, conducted 23 September 2014.

6 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995), annex 1A (General Agreement on Tariffs and Trade) (GATT).

7 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995), annex 1B (General Agreement on Trade in Services) (GATS).

8 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995), annex 1A (Agreement on Technical Barriers to Trade) (TBT Agreement).

9 Appellate Body Report, EC–Seal Products, para. [5.121.

10 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995), annex 1A (Agreement on the Application of Sanitary and Phytosanitary Measures) (SPS Agreement).

11 Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995), annex 1A (Agreement on Rules of Origin).

12 Emphasis added.

13 Emphasis added.

14 See, e.g., Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007, para. 210, (Brazil–Retreaded Tyres); Appellate Body Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/AB/R, adopted 19 January 2010, para. 240 (China–Publications and Audiovisual Products); Appellate Body Reports, EC–Seal Products, para. 5.169.

15 See Panel Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/R, WT/DS401/R and Add.1, adopted 18 June 2014, para. 7.635 (EC–Seal Products); Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, para. 163 (Korea–Beef). But see Appellate Body Reports, EC–Seal Products, para. 5.213.

16 Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001, para. 172 (EC–Asbestos).

17 See, e.g., Appellate Body Report, Korea–Beef, para. 163; Appellate Body Reports, EC–Seal Products, para. 5.215.

18 See, e.g., Appellate Body Reports, EC–Seal Products, para. 5.261.

19 See, e.g., Appellate Body Report, Korea–Beef, para. 182; Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, para. 308 (US–Gambling).

20 Panel Report, EC–Asbestos, para. 8.236.

21 Ibid.

22 Ibid para. 8.238.

23 Ibid para. 8.239.

24 See, e.g., Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, p. 25 (US–Gasoline). See also Panel Report, EC–Asbestos, para. 8.237.

25 Emphasis added.

26 Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, adopted 13 June 2012, para. 323 (US–Tuna II (Mexico)); Appellate Body Reports, United States–Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R, WT/DS386/AB/R, adopted 23 July 2012, para. 379 (US–COOL).

27 See, e.g., Appellate Body Reports, EC–Seal Products, para. 5.169; Appellate Body Report, Korea–Beef, para. 157; Appellate Body Report, US–Gambling, para. 282.

28 Appellate Body Report, US–Tuna II (Mexico), para. 313; Appellate Body Reports, US–COOL, para. 370. See also Appellate Body Reports, EC–Seal Products, para. 5.128.

29 See Roessler, Frieder, ‘Diverging Domestic Policies and Multilateral Trade Integration’, in Bhagwati, Jagdish and Hudec, Robert (eds.), Fair Trade and Harmonization: Prerequisites for Free Trade? (vol II, 1996) 21Google Scholar, 30.

30 Appellate Body Report, US–Tuna II (Mexico), para. 318. See also Appellate Body Reports, US–COOL, para. 374.

31 Appellate Body Report, US–Tuna II (Mexico), para320. See also Appellate Body Reports, US–COOL, para. 376.

32 Appellate Body Report, US–Tuna II (Mexico), para. 322. See also Appellate Body Reports, US–COOL, para. 377.

33 Appellate Body Report, US–Tuna II (Mexico), para. 321.

34 Appellate Body Report, United States–Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012, para. 96 (US–Clove Cigarettes).

35 Appellate Body Report, Korea–Beef, para. 163 (original emphasis). See also Appellate Body Report, China–Publications and Audiovisual Products, para. 306.

36 Appellate Body Report, Korea–Beef, n. 105 (original emphasis).

37 Appellate Body Report, Brazil–Retreaded Tyres, para. 150 (quoting Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/R, adopted 17 December 2007, para. 7.211 (Brazil–Retreaded Tyres)). The Panel also stated that ‘an import prohibition is, ordinarily, the heaviest “weapon” in a Member's armoury of trade measures’: Panel Report, Brazil–Retreaded Tyres, para. 7.114.

38 Appellate Body Report, US–Tuna II (Mexico), para. 319 (quoted in Appellate Body Reports, US–COOL, para. 375).

39 Panel Reports, EC–Seal Products, para. 7.426. See also Panel Report, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/R, WT/DS386/R, adopted 23 July 2012, para. 7.569 (US–COOL).

40 Panel Reports, EC–Seal Products, para. 7.426 (quoting Appellate Body Report, US–Tuna II (Mexico), para. 319).

41 Panel Reports, EC–Seal Products, para. 7.468.

42 Panel Reports, EC–Seal Products, para. 7.472.

43 Appellate Body Reports, EC–Seal Products, paras. 5.205, 5.262.

44 Appellate Body Reports, EC–Seal Products, para. 5.70.

45 Appellate Body Reports, EC–Seal Products, n. 1269.

46 Appellate Body Report, China–Publications and Audiovisual Products, para. 306 (emphasis added).

47 Protocol on the Accession of the People's Republic of China, WTO Doc WT/L/432, annex (23 November 2001), part I, para. 5.1.

48 Appellate Body Report, China–Publications and Audiovisual Products, paras. 230, 233. See generally Voon, Tania, ‘China and Cultural Products at the WTO’ (2010) 37(3) Legal Issues of Economic Integration 253Google Scholar.

49 Appellate Body Report, China–Publications and Audiovisual Products, paras. 307, 311.

50 Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/R and Corr.1, adopted 19 January 2010, para. 7.788 (China–Publications and Audiovisual Products) (emphasis added).

51 Panel Report, China–Publications and Audiovisual Products, paras. 2.3(a), 7.725, 7.727.

52 Appellate Body Report, China–Publications and Audiovisual Products, paras. 317, 321; Panel Report, China–Publications and Audiovisual Products, para. 7.897.

53 Appellate Body Report, China–Publications and Audiovisual Products, paras. 336–337.

54 Appellate Body Reports, EC–Seal Products, para. 5.185. See also Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011, para. 177 (Thailand–Cigarettes from the Philippines).

55 GATT Panel Report, Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes, DS10/R, adopted 7 November 1990, BISD 37S/200, para. 75 (Thailand–Cigarettes) (emphasis added).

56 Panel Report, Brazil–Retreaded Tyres, para. 7.157 (emphasis added).

57 Panel Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/R, adopted 20 May 1996, para. 6.16 (US–Gasoline).

58 Appellate Body Report, US–Gasoline, p. 29.

59 Appellate Body Report, US–Gasoline, p. 25.

60 Appellate Body Reports, US–COOL, para. 490 (emphasis added).

61 Appellate Body Reports, US–COOL, para. 496(a)(iv).

62 See, e.g., Appellate Body Report, Brazil–Retreaded Tyres, para. 156; Appellate Body Report, US–Tuna II (Mexico), para. 320.

63 See, e.g., Appellate Body Report, Brazil–Retreaded Tyres, para. 174; Appellate Body Report, US–Tuna II (Mexico), para. 330.

64 Appellate Body Report, China–Publications and Audiovisual Products, para. 332.

65 Appellate Body Report, China–Publications and Audiovisual Products, paras. 311, 321.

66 Appellate Body Report, Brazil–Retreaded Tyres, para. 150.

67 Appellate Body Report, US–Tuna II (Mexico), para. 319; see also Appellate Body Reports, US–COOL, para. 375.

68 Appellate Body Report, US–Tuna II (Mexico), n. 647; see also Appellate Body Reports, US–COOL, n. 929. Similarly, an analysis of alternative measures is not necessary if the challenged measure ‘does not fulfil the identified objective within the meaning of Article 2.2’: Panel Reports, US–COOL, para. 7.719 (referring to Appellate Body Report, Brazil–Retreaded Tyres, paras. 156, 178; Appellate Body Report, China–Publications and Audiovisual Products, para. 237–249).

69 Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005, para. 7.215 (Dominican Republic–Import and Sale of Cigarettes) (emphasis added).

70 Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, para. 71 (Dominican Republic–Import and Sale of Cigarettes).

71 Appellate Body Report, Dominican Republic–Import and Sale of Cigarettes, para. 73.

72 Appellate Body Report, Dominican Republic–Import and Sale of Cigarettes, para. 71.

73 Appellate Body Report, China–Publications and Audiovisual Products, para. 300 (emphasis added). Cf Panel Report, United States – Rules of Origin for Textiles and Apparel Products, WT/DS243/R and Corr.1, adopted 23 July 2003, para. 6.148 (US–Textiles Rules of Origin).

74 Panel Reports, US–COOL, para. 7.572 (emphasis added). See also Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, adopted 13 June 2012, para. 7.568 (US–Tuna II (Mexico)).

75 Panel Reports, US–COOL, para. 7.574.

76 Panel Reports, US–COOL, para. 7.575.

77 Panel Reports, US–COOL, n. 759.

78 Appellate Body Reports, US–COOL, para. 381.

79 See, e.g., Appellate Body Report, Thailand–Cigarettes from the Philippines, para. 133.

80 See, e.g., Appellate Body Reports, EC–Seal Products, para. 5.82.

81 See, e.g., Appellate Body Report, US–Tuna II (Mexico), para. 225; Appellate Body Report, US–Clove Cigarettes, para. 182.

82 Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, p. 16 (Japan–Alcoholic Beverages (II)).

83 Appellate Body Reports, EC–Seal Products, para. 5.82 (original emphasis).

84 Appellate Body Reports, US–COOL, para. 193.

85 Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16 February 2001, para. 11.20 (Argentina–Hides and Leather).

86 Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May 2009, para. 7.256 (see also para. 7.240) (Colombia–Ports of Entry).

87 GATT, note ad art III.

88 See Panel Report, EC–Asbestos, para. 8.100; Panel Reports, EC–Seal Products, nn. 1007, 1014.

89 Panel Report, Brazil–Retreaded Tyres, para. 7.15.

90 Panel Report, Brazil–Retreaded Tyres, paras. 7.107, 7.114, 7.237–7.238.

91 Appellate Body Report, Brazil–Retreaded Tyres, paras. 125, 127.

92 Appellate Body Report, Brazil–Retreaded Tyres, para. 153.

93 Appellate Body Report, Brazil–Retreaded Tyres, para. 126 (original emphasis).

94 Appellate Body Report, Brazil–Retreaded Tyres, paras. 228–229.

95 See, e.g., Panel Report, US–Textiles Rules of Origin, para. 6.148.

96 See, e.g., Panel Report, EC–Seal Products, para. 7.472 cf 7.482.

97 Panel Report, Brazil–Retreaded Tyres, para. 7.114.

98 Appellate Body Report, Brazil–Retreaded Tyres, para. 228.

99 United States’ first written submission to the Panel, US–COOL (Article 21.5–Canada) (Article 21.5–Mexico) (26 November 2013), para. 153.

100 United States’ first written submission to the Panel, US–COOL (Article 21.5–Canada) (Article 21.5–Mexico) (26 November 2013), para. 155. See also United States’ second written submission to the Panel, US–COOL (Article 21.5–Canada) (Article 21.5–Mexico) (15 January 2014), paras. 106–107. See also, in the context of SPS Article 5.6, Panel Report, Japan – Measures Affecting Agricultural Products, WT/DS76/R, adopted 19 March 1999, para. 8.96 (Japan–Agricultural Products II).

101 Panel Reports, United States – Certain Country of Origin Labelling (COOL) Requirements: Recourse to Article 21.5 of the DSU by Canada and Mexico, WT/DS384/RW, WT/DS386/RW (circulated 20 October 2014). This Panel Report is currently under appeal in relation to other matters.

102 See above n. 65 and corresponding text.

103 Appellate Body Report, US–Tuna II (Mexico), para. 212, citing Appellate Body Report, US–Clove Cigarettes, para. 171; Appellate Body Report, US–COOL, para. 268.

104 Appellate Body Report, US–Clove Cigarettes, para. 171 (original emphasis).

105 Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, para. 271 (US–Offset Act (Byrd Amendment)).

106 Panel Report, US–Clove Cigarettes, paras. 7.332, 8.1(c); Appellate Body Report, US–Clove Cigarettes, paras. 9, 298(a)(v); Appellate Body Report, US–COOL, paras. 496(a)(iv), 496(b)(vi)–(vii); Appellate Body Report, US–Tuna II (Mexico), paras. 407(b)–407(e). See also Voon, Tania, Mitchell, Andrew and Gascoigne, Catherine, ‘Consumer information, consumer preferences and product labels under the TBT Agreement’ in Trebilcock, Michael J. and Epps, Tracey (eds.), Research Handbook on the WTO and Technical Barriers to Trade (Edward Elgar, UK, 2013)Google Scholar 454, 473 (Table 13.1).

107 Appellate Body Reports, EC–Seal Products, paras. 5.125, 5.130.

108 See, e.g., Appellate Body Report, US–Clove Cigarettes, para. 181.