In three comments on the last post, the Appellate Body's new approach to what aspect of a measure should be considered under the GATT Article XX sub-paragraphs is getting heavily criticized. In this post, I'm going to support some of that criticism, but then come to the Appellate Body's defense a bit.
First, the criticisms. In the comments, Bryan Mercurio and Chris Wold are both very surprised that the Appellate Body reversed itself without engaging with its contrary precedents. Bryan says:
I cannot understand how ... the AB can make such a decision without directly engaging with US-Gasoline, Korea-Beef, etc.
And Chris says:
How the Appellate Body can completely ignore its previous analysis, especially when Korea-Beef and US-Gasoline are cited in the two footnotes preceding the Section 337 footnote, is striking, to say the least.
While I have no problem with high courts overturning their precedents, it seems to me that when they do so, they should be explicit about it and they should give reasons for the change. So on this point, I agree with the commenters.
In addition, Bryan and Chris complain about the uncertainty that now exists regarding the Article XX chapeau. Bryan says:
I cannot understand how ... to reconcile this decision with the well understood use of the chapeau - is the chapeau now redundant?
Along the same lines, Chris says:
the first part of the chapeau already carves out a space for discussing discriminatory/ differential treatment by asking whether the measure constitutes arbitrary or unjustifiable discrimination. It is difficult to see why the GATT would first ask whether the discrimination is necessary and then ask whether the discrimination is arbitrary or unjustifiable. It is difficult to imagine discrimination being “necessary” but then being found to be “arbitrary” or “unjustifiable,” unless the Appellate Body restricts arbitrary and unjustifiable discrimination to procedural/due process concerns. This is particularly true considering the way the Appellate Body characterized the necessity test: it stated that what must be shown to be “necessary” is “the treatment giving rise to the finding of less favourable treatment.” (para. 177). Thus, the same discrimination will be assessed for necessity as will be assessed to determine whether it is arbitrary or unjustifiable.
I confess that I'm not sure exactly how the Appellate Body's new approach fits with the chapeau, at least in the context of Article III. Going back to the first criticism, I wish this significant change had been discussed in more detail, including the issue of how the new approach would affect the application of the chapeau.
But despite these criticisms, I think the Appellate Body's new approach makes some sense. I explained my views a bit in the first post I did on this, as well as in a comment to that post, but let me clarify a bit more with a hypothetical.
Let's say Country A adopts Statute X to clean up the environment in some way. Statute X has lots of different provisions in it, covering a variety of issues. One of these provisions is Section Y. Section Y sets up rules for how certain domestic and foreign companies are to comply with a particular part of Statute X.
Country B is concerned that Section Y treats imports less favorably than like domestic products, and challenges Section Y under GATT Article III:4. A panel finds a violation of GATT Article III:4. Country A has invoked Article XX(g) as a defense, so now the question is, what aspect of the measure should be considered under Article XX(g)? If I'm reading all this correctly, the Gasoline view is that Statute X, the underlying measure, must be considered under Article XX(g), whereas the Thailand - Cigarettes (Philippines)/Section 337 view is that it is the regulatory differences under Section Y that must be considered.
Which is the better approach? My problem with the Gasoline approach is that I'm not sure what the relevance is of considering Statute X under Article XX(g). Statute X as a whole is not being challenged. It may very well be that when examined as a whole, Statute X satisfies the terms of Article XX(g). But that was never in question, as Statute X itself was not challenged. Rather, it was the regulatory differences in Section Y that are being challenged. Thus, I'm not sure that looking at Statute X tells us anything relevant about the legal claim.
This takes me to anon's criticism that "Article XX is a general exceptions or a defence provision that applies to 'measures' not 'treatment'." But what is the "measure" being challenged here? I would argue that it is Section Y, not Statute X.
So I guess my question for those who support the Gasoline approach is, what is the rationale for considering Statute X (i.e., the underlying measure) under the Article XX sub-paragraphs when only a particular section of the measure was challenged? Shouldn't we focus on the aspect/part of the measure where the violation was alleged?
