I've been thinking about the mandatory/discretionary distinction because it came up in the panel report in the recent U.S. - Olives from Spain case (which was adopted by the DSB today, i.e., not appealed into the void by the U.S., which is kind of a big deal). You can see what we had to say in our DSC for the case here. This all brought back memories of a JIEL article I wrote on the subject many years ago. Here's part of how I tried to explain my framework for thinking about the role of "discretion" when considering "as such" challenges to a measure:
... First, there is discretion as to whether to take any action or to take a particular action. The measure may involve varying degrees of direction to the implementing entity, that is, it may prescribe to varying degrees that action be taken. It could be that no action at all need be taken, with the agency having a choice as to whether to act or not. Or, the measure could offer a choice of several actions to take, and thus it need not take the particular action of concern. The issue for this kind of discretion is: To what extent does the measure prescribe whether the entity must take the action in question? I refer to this element as the prescriptiveness of the measure. The use of this term is based on the following definitions of ‘prescribe’ and ‘prescriptive’. Prescribe: ‘To lay down authoritatively as a guide, direction, or rule; to impose as a peremptory order; to dictate; to point, to direct; to give as a guide, direction, or rule of action; to give law. To direct; define; mark out’.15 Prescriptive: ‘Making or giving injunctions, directions, laws, or rules’.16 Thus, the prescriptiveness element can be thought of as measuring the degree of the ‘direction’ that is given under the measure to the implementing entity in regard to what actions this entity must take.
Second, there is discretion as to what precise action is to be taken. The measure may involve varying degrees of specifics as to the actions to be taken in implementing the measure. It may identify a very specific action or set of actions that are to be taken or it may leave aspects of these actions open. I refer to this element as the specificity of the measure.
This is a complex issue and I wish I could take another crack at this article to explain it all a bit more precisely, but nevertheless, after reading the Olives panel report, I'm more convinced than ever of my view, and I think what the Olives panel said was consistent with it (although I don't want to go so far as to say they agree with me -- it may just be that the measure at issue in the case fit well with my way of thinking). Basically, as I see it, there is often some discretion under a law or regulation, but it's only where the discretion is substantial enough after examining both of the categories noted above that a defense based on the existence of discretion under the measure should succeed. If there is discretion as to whether to act or not (e.g., the law says the government "may" take action but does not require it) and discretion as to what action to take (e.g. the law doesn't specify the particular action in much detail), the defense has a good chance. In these circumstances, we shouldn't presume a government will apply the law inconsistently with WTO rules, because they have the discretion not to do so.
By contrast, if the discretion in these areas is limited, the defense would fail and the measure could be found in violation "as such." If the measure spells out the action to be taken in specific terms (and that action violates WTO obligations), and it doesn't give the government much leeway on whether to take the action, then it is safer to presume that it will be applied inconsistently with WTO rules.
All of this brings me to the EU's new Anti-Coercion Instrument. I've seen discussion on Twitter about whether this measure, when it takes effect, would violate WTO obligations "as such," even before it is applied. Based on the framework set out above, I am skeptical that it does. Applying the framework to the ACI, I see it this way:
- The ACI authorizes the EU to take action, but the EU is not required to do anything under the measure. It can decide to take action in any given case, or it can decide not to. Thus, the measure is not very prescriptive, and there is a great deal of discretion in this sense.
- If the EU chooses to take action, it can do a wide range of things, with only very general guidance on what measures to take. The measure does not explicitly identify actions that would violate WTO obligations (e.g. imposing tariffs above the bound rate), and in fact does not identify any particular actions at all. Thus, the measure does not have much specificity, so there is discretion in this sense as well.
As a result, in my view, the ACI should not be found to violate WTO obligations "as such." (Of course, the EU could still apply it in a particular case in such a way that its implementation violates WTO obligations. But we are not there yet.)
To think about how a measure of this sort could violate WTO obligations "as such," imagine a version of the ACI that was much more prescriptive and specific. For example, if the measure had stated that in response to coercive actions by another government, the EU "must" act, and that action "must" take the form of tariffs on that government. In that situation, there would be a good case that the measure violates the MFN obligation "as such" by applying different tariffs to different WTO Members.
