On December 3, the Appellate Body is scheduled to issue the Brazil - Tyres report. There will be a lot of things said about GATT Article XX, all of which should be interesting and informative. In addition, though, there is a slight posssiblity that the AB will clarify GATT Article XXIV a bit as it applies to free trade areas and customs unions. Before the Panel, the EC had claimed that an exemption for Mercosur imports violated GATT Articles XIII:1 and I:1. As a defense, Brazil argued that the exemption was justified under GATT Article XXIV. The Panel exercised judicial economy, though, and did not address the issue.
In its appeal, the EC argues that the Panel's decision in this regard was in error, arguing that "[g]iven the
very limited basis of the Panel's finding of violation regarding the ban, a finding concerning the EC's claims under Article XIII:1 and I:1 GATT would have been necessary to ensure a complete resolution of the dispute." However, this appeal is a "conditional" one, as the EC only asks the AB to address it if the AB does not find, as requested by the EC, that the Mercosur exemption leads to a finding that the ban is inconsistent with the chapeau of GATT Article XX. (See paras. 370-371 of the EC appellant submission)
