There are a number of past GATT/WTO disputes where the issue of the "coercive" nature of the measure was raised. The old tuna/dolphin cases and the shrimp/turtle cases come to mind immediately, and I'm sure there are others. (I haven't done any research for this post!) In the recent Tuna Appellate Body report, the issue came up in the context of TBT Agreement Article 2.2. Here's what Mexico argued:
335. With respect to its first claim, Mexico submits that the Panel erred in finding the United States' dolphin protection objective to be a legitimate objective. Mexico maintains that the list of examples of legitimate objectives in Article 2.2 of the TBT Agreement informs the interpretation of the term "legitimate objective" in that provision and points out that none of the listed objectives include language similar to "by ensuring that the US market is not used to encourage" or other language reflecting a "coercive and trade-restrictive objective".671 However, for Mexico, the United States' dolphin protection objective is a "coercive objective" because its purpose is to "coerce" another WTO Member to change its practices to comply with a unilateral policy of the United States. Moreover, Mexico alleges that the dolphin protection objective is unnecessary, and constitutes a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade. Mexico asserts that the situation in US – Gasoline is "closely analogous" to the situation in the present case, where the United States has disregarded a multilateral agreement that addresses the same subject matter as the measure at issue.672
The Appellate Body's response to the "coercion" part of this argument was interesting because it is somewhat of a non-response. As far as I can tell, the Appellate Body ignores the coercion point entirely:
337. At the outset, we recall that the United States' dolphin protection objective is phrased as follows: "contributing to the protection of dolphins, by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins".673 Mexico does not claim that "contributing to the protection of dolphins" is an illegitimate objective; instead, Mexico argues that it is illegitimate to pursue this objective "by ensuring that the US market is not used to encourage" certain fishing practices. It thus appears to us that Mexico does not take issue with the United States' dolphin protection objective per se, but with the means used in pursuance of this objective.
338. Article 2.2 of the TBT Agreement recognizes that a technical regulation shall not create "unnecessary obstacles" to international trade. The provision thus envisages that some trade-restrictiveness may arise from a technical regulation. However, the technical regulation would not be inconsistent with Article 2.2 unless it is found to constitute an "unnecessary obstacle[] to international trade". Hence, the mere fact that a WTO Member adopts a measure that entails a burden on trade in order to pursue a particular objective cannot per se provide a sufficient basis to conclude that the objective that is being pursued is not a "legitimate objective" within the meaning of Article 2.2.
So what should we take from this non-response, if that's what it is? Has the Appellate Body rejected this argument completely? That's what I thought at first, but then I saw the following in the less favorable treatment analysis under Article 2.1:
226. Mexico also faults the Panel for failing to find that the US measure is "discriminatory" in that it uses a market access restriction to "pressure" Mexico and the Mexican fleet to adopt essentially the same "dolphin-safe" regime as in force in the United States, thereby per se targeting the origin of the tuna products.484 As noted, technical regulations inherently establish distinctions between products according to their characteristics or their related processes and production methods. Thus, Article 2.1 should not be read to mean that any distinction would per se accord "less favourable treatment" within the meaning of that provision. At the same time, we have noted that any adverse impact on competitive opportunities for imported products vis-à-vis like domestic products that is caused by a technical regulation may potentially be relevant for an assessment of "less favourable treatment". It may thus have been pertinent for the Panel to consider, along with other factors, the question of whether the US measure had the effect of exerting pressure on Mexico to modify its practices. This alone, however, would not be sufficient to establish a breach of Article 2.1.
Here, then, the idea of "pressure" imposed on a foreign country or its companies was deemed relevant (although not sufficient to find a violation on its own).
I'm not sure what all this means for the future of anti-coercion arguments. The issue doesn't seem to have been explored in great detail, so we may need to wait until there is a case where it is more of the focus.
I did have one thought about the discussion of "pressure" in the context of non-discrimination. Couldn't exerting pressure on a trading partner's companies to change their practices, as part of an overall plan to encourage certain practices, be seen as evidence of a non-protectionist purpose? That is, if your goal is to pressure all companies to act a certain way, doesn't that suggest that your goal is not to favor your own companies? Here, the Appellate Body seemed to blur the distinction between "pressure" on the Mexican government and "pressure" on the Mexican fleet. Aren't these very different things? And here, who was the pressure on? Certainly the Mexican fleet could have adapted on its own. But yes, the US may have been hoping that the Mexican government took certain actions in response. Again, we may need to wait for future cases to develop this issue.
