In an earlier post, Simon referred to the recent ASIL Unbound discussion on the Seal case. Indeed, I found the discussion very helpful and suggest everyone visit the site. There are so many issues there, but let me focus on one particular issue, that is whether the Appellate Body (AB) had to (explicitly) address multiple purposes (protecting seal and protecting the indigenous communities) enshrined in the EU Seal Regime.
Prof. Regan argues that:
“Responsible regulation often involves taking account of different, and conflicting, purposes. That means making trade-offs, often by a regulation in the form of a ban with exceptions. And discrimination introduced by an exception is not rendered “arbitrary,” or “unjustifiable,” or a “disguised restriction” just because the purpose of the exception is different from the purpose of the ban. The only shadow of a reason for saying an exception cannot be justified by a different purpose from the ban is the suggestion that multiple purposes are evidence of disguised discrimination.”
Likewise, Prof. Qin views that:
“The apparent incoherence in the AB’s findings under the chapeau stems directly from its failure to declare that the IC exception has a justifiable purpose independent of the policy objective of seal welfare. Moreover, its decision not to recognize explicitly the legitimacy of the purpose of the IC exception may have led the AB to omit any reference to the UN Declaration and ILO Convention, which had been invoked by the European Union and cited by the Panel as evidence for the rationale of the IC exception.”
Incidentally, the AB seems to have recognized the legitimacy of second purpose (the IC exception), at least implicitly. The AB ruled that:
5.41 (…) [U]nder the EU Seal Regime, in particular, Article 3 of the Basic Regulation, the prohibition on the products containing seal seems to be derivative of the three (IC/MRM/Travellers) market access conditions, that is, the permissive component of the measure.
Suppose that the AB does consider the second purpose, explicitly or implicitly, the next, perhaps more critical, issue would be the “standard of review,” that is how much deference should be given to regulators. Here, Prof. Regan submits that:
“[W]hat is required in principle is not that the alternative should achieve at least as much of every goal as the actual measure. What is required in principle is that the alternative should leave the regulator at least as well off as the actual measure, by the regulator’s own lights, in view of the trade-offs it would make.” (emphasis original)
Likewise, Prof. Qin concludes that:
“[S]hould the WTO be involved in judging the proper balance between two nontrade values, here animal welfare and the welfare of indigenous peoples, under the laws of its Members? Thus far, no one seems to have posted this highly relevant question. In the view of this author, the AB should have refrained from making such a judgment as a matter of policy. And the AB could have done so by making a legally sound finding that the EU Seal Regime is not discriminatory within the meaning of GATT Article XX chapeau, because the prevailing conditions relevant to the policy objective of the IC exception are not the same between Greenland and Canada.”
One might say that such a deferential hermeneutic would have the EU’s trading partner (such as Canada and Norway) tolerate any negative externalities flowing from the EU Seal Regime, which might be considered merely incidental or fortuitous effects.
Yet, the current AB’s position seems to have taken these negative externalities more seriously in its own interpretation of the chapeau test. Based on the Gasoline and Shrimp-Turtle case law, the AB criticized the ambiguous structure of the EU measure (which the AB viewed would invite abuses of the IC exception) as well as the lack of the EU’s due process-type efforts toward the Canadian Inuit communities.
Interestingly, this very issue is reminiscent of the “aim and effect” test under GATT Article III. This test also concerns whether to tolerate any (incidental) negative externalities in the face of legitimate public policies. Perhaps this interpretive dilemma is inevitable in any type of adjudication (in the absence of harmonization).
