Back in 2000, the Appellate Body said this in Korea - Beef about the "necessary" standard in GATT Article XX(d):
164. In sum, determination of whether a measure, which is not "indispensable", may nevertheless be "necessary" within the contemplation of Article XX(d), involves in every case a process of weighing and balancing a series of factors which prominently include the contribution made by the compliance measure to the enforcement of the law or regulation at issue, the importance of the common interests or values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports.
165. The panel in United States – Section 337 described the applicable standard for evaluating whether a measure is "necessary" under Article XX(d) in the following terms:
It was clear to the Panel that a contracting party cannot justify a measure inconsistent with another GATT provision as "necessary" in terms of Article XX(d) if an alternative measure which it could reasonably be expected to employ and which is not inconsistent with other GATT provisions is available to it. By the same token, in cases where a measure consistent with other GATT provisions is not reasonably available, a contracting party is bound to use, among the measures reasonably available to it, that which entails the least degree of inconsistency with other GATT provisions.
166. The standard described by the panel in United States – Section 337 encapsulates the general considerations we have adverted to above. In our view, the weighing and balancing process we have outlined is comprehended in the determination of whether a WTO-consistent alternative measure which the Member concerned could "reasonably be expected to employ" is available, or whether a less WTO-inconsistent measure is "reasonably available".
This kind of analysis has been brought over to Article 2.2 of the TBT Agreement. In Tuna II, the Appellate Body said:
322. In sum, we consider that an assessment of whether a technical regulation is "more trade-restrictive than necessary" within the meaning of Article 2.2 of the TBT Agreement involves an evaluation of a number of factors. A panel should begin by considering factors that include: (i) the degree of contribution made by the measure to the legitimate objective at issue; (ii) the trade-restrictiveness of the measure; and (iii) the nature of the risks at issue and the gravity of consequences that would arise from non-fulfilment of the objective(s) pursued by the Member through the measure. In most cases, a comparison of the challenged measure and possible alternative measures should be undertaken. In particular, it may be relevant for the purpose of this comparison to consider whether the proposed alternative is less trade restrictive, whether it would make an equivalent contribution to the relevant legitimate objective, taking account of the risks non-fulfilment would create, and whether it is reasonably available.
The Australia - Plain Packaging panel applied this same approach (see paras. 7.31-32). In doing so, it explained the meaning of the "trade-restrictiveness" element as follows:
7.1072. The Appellate Body has understood the word "restriction" as referring to "something that restricts someone or something, a limitation on action, a limiting condition or regulation". Accordingly, it found, in the context of Article XI:2(a) of the GATT 1994, that the word "restriction" refers generally to something that has a limiting effect. It further determined that as used in Article 2.2 in conjunction with the word "trade", the term means "something having a limiting effect on trade". Specifically, what is at stake in this context is the limiting effect of the measure on international trade, as is made clear by the reference to "international trade" in the first sentence of Article 2.2. We therefore understand that a technical regulation is "trade-restrictive" within the meaning of Article 2.2 when it has a limiting effect on international trade.
With all this in mind, it seems to me that if you want to weigh and balance factors such as the degree of contribution a measure makes to its objective, on the one hand, with the measure's trade-restrictiveness (limiting effect on international trade), on the other hand, you need to have some sense of how trade-restrictive the measure is.
But when I read pp. 419-473 of the Plain Packaging panel report, I'm not sure exactly what the limiting effect was in this case. Just how trade-restrictive is it? The Plain Packaging panel concludes with this:
7.1255. On the basis of the foregoing, we conclude that the TPP measures are trade-restrictive, insofar as, by reducing the use of tobacco products, they reduce the volume of imported tobacco products on the Australian market, and thereby have a 'limiting effect' on trade.
There are a lot of pages in this report, and I don't claim to have read every one of them at this point, but I didn't get a good sense of the degree of limiting effect on trade in this case. I can see how there would be some limiting effect, but precisely how much of an effect is there?
I don't mean to blame the panel here. I'm really not sure what panels are supposed to do with this legal standard. I have a sense of how you would characterize trade-restrictiveness in the more obvious cases. A total import ban would be extremely trade-restrictive; an internal measure that discriminates on the basis of nationality would be significantly trade-restrictive. But if the measure does not do either of these things, on what basis do we determine the level of trade-restrictiveness? Is it about (potential) volume of trade affected, which is what the panel's statement in para. 7.1255 seems to imply? Is it more of a design, structure, architecture analysis? I think we need something more concrete to go on here, or else I'm not sure how the weighing and balancing, and comparing to alternatives, is supposed to work.
