There are many problematic things that the AB says in its ruling concerning the relationship of different international legal regimes and fora. Some of those things have been discussed in the various posts on this case. And I may address them as well in a future post. But it seems to me the critical bottom line of the decision is as follows (para. 79): "laws and regulations" in XX(d) includes any laws and regulations in the domestic legal system that have been incorporated from international agreements or have "direct effect" in the domestic legal system. So it is all a matter of form: the proper incorporation into domestic law will allow a WTO Member to use a XX(d) defense when it wants to resort to trade restrictions as an enforcement device. Now what if the trigger that determines the sanctions is (according to the domestic statute or regulation), a violation of an international norm? In other words, the WTO Member is enforcing a domestic law that makes it a domestic offense to violate an international norm. Clearly, assuming that there is in form a valid domestic law being enforced, there is no problem here invoking Article XX(d). In adjudicating such a defense, would, however, the Appellate Body have to determine whether, in fact, there has been a violation of some other, non-WTO international obligation? Of course they would "en passsant" because how could the trade measure be "necessary" to enforce the domestic law if, in fact, what triggers the violation of the domestic law, namely the violation of an international norm, has not occured? So all this business about the problem of having to determine certain rights and obligations under non-WTO law to decide a WTO dispute can't be so important; and, after all, under TRIPs for instance, the AB is having to essentially decide the rights and obligations under other non-WTO treaties to decide WTO disputes, because the terms of the relevant WTO treaty require it to do so. This is why the AB's advancing of the consideration that one might have to decide rights and obligations under non-WTO treaties to interpret Art. XX(d) is question-begging or tautological. IF the correct reading of XX(d) is that the AB has to resolve whether some other non-WTO obligations have been violated, THEN it is perfectly appropriate and legitimate that the AB do so. the non-WTO law becomes a "fact" that must be resolved to apply the WTO norm--as the AB had quite properly suggested for example in discussing Lome Convention in Bananas, and in discussing even Indian municipal law in India-Patents. Not to mention TRIPs in general. I simply then do not think the AB advancing as a consideration of what XX(d) means that it must avoid deciding on whether non-WTO oblgations have been violated is consistent with the previous jurisdprudence of the AB. And in the end, as I suggest, it matters only formally, since a prospective defendent country can always go through the formalities of creating domestic legal rules that embody the international obligations they want to enforce, so as to be seen by the AB as enforcing domestic laws and regulations, not international ones.
So we see what Mexico should do now, right?
