The excellent and interesting Villars Framework 2.0, which was recently released, expresses concern that "[j]udicial balancing tests may leave states uncertain as to which sustainability standards are permitted and which are not," and offers the following reform proposal related to PPM-based standards:
This problem of uncertainty, and possible regulatory chill, can be resolved by a clarifying amendment to the WTO treaty, or by an authoritative interpretation under Article IX(2) of the WTO Agreement, reversing the existing jurisprudence by stating that products are not like (and therefore cannot be comparable for purposes of finding discrimination) if they are distinguished according to a proportionate national regulatory rule implemented for a legitimate purpose, and that legitimate purposes under both the prohibitions of discrimination and the requirement of proportionality includes addressing externalities that significantly adversely affect the importing state. One important benefit of such a change would be to shift the burden of proof so that regulating states would not have to justify their measures. Another would be to provide a broader range of legitimate purposes.
I have similar concerns about judicial scrutiny of these measures, but I would resolve them with a different substantive reform. Rather than focus on whether the products at issue are "like," I would emphasize the "so as to afford protection to domestic production" language in Article III:1, and its expression in Articles III:2 and III:4. The existing jurisprudence has at times looked at the purpose -- mostly the objective one, but sometimes even the subjective one -- when considering whether tax or regulatory measures are consistent with these provisions, but other times it has not. What I think would be useful here is a a clarifying amendment to the WTO treaty or an authoritative interpretation under Article IX(2) of the WTO Agreement making clear that the design, structure, etc. of a measure must be considered in any Article III:2 or Article III:4 analysis as part of an inquiry into the objectively determined purpose of the measure.
For an illustration of what I have in mind, look at the Appellate Body's Article III:2, second sentence analysis in Chile - Alcohol. I would do something similar under both Article III:2, first sentence and Article III:4. I think such an approach could be taken under the existing language, but if panels and the AB/MPIA are not doing it, an amendment or interpretation could make sure they do.