The WTO's Reading of the Gatt Article XX Chapeau: A Disguised Restriction on Environmental Measures

Abstract

This article presents a detailed critique of the WTO Appellate Body's Shrimp-Turtle interpretation of the Article XX chapeau. It asserts as a premise that Article XX is itself an integral part of the GATT meant to preserve national prerogatives with respect to certain policy realms, and is thus not subordinate to other GATT objectives. Shrimp-Turtle's interpretations of Article XX(g) have clearly erased certain mistaken interpretations that blocked use of Article XX in the past, but the Appellate Body has reinstated equivalent obstacles through its erroneous interpretation of the "arbitrary or unjustifiable discrimination" test of the chapeau. Conceding that the U.S. embargo was applied in certain minor ways (since corrected) that were discriminatory, the article notes that these aspects were the least important to the Appellate Body's analysis. On the major points of the report, the article first questions whether there was "discrimination" at all in the U.S. embargo. But even if there was discrimination, it was neither arbitrary nor unjustifiable. The Appellate Body analysis was overly broad, lacked textual basis, and departed from the interpretation of the same test in the SPS context. The keys to the Appellate Body's conclusion of unjustifiable discrimination - the intended and actual coercive effect of the embargo and the failure of the U.S. to pursue multilateral negotiations - have nothing to do with "discrimination." Moreover, they touch on national environmental policy choices of the precise type Article XX was meant to shield from trade-based discipline. As a matter of its own legitimacy and as a means toward its own goal of supporting sustainable development, it is vital for the WTO to loosen the constraints on Article XX.