WORLD TRADE
ORGANIZATIONWT/CTE/W/53/Rev.1
26 October 1998
(98-4148)
Committee on Trade and Environment
GATT/WTO DISPUTE SETTLEMENT PRACTICE RELATING TO ARTICLE XX,
PARAGRAPHS (b), (d) AND (g) OF GATT
Note by the Secretariat
Revision
I. INTRODUCTION
1. This Note has been prepared in response to a request from the Committee on Trade and
Environment for factual background information on GATT/WTO dispute settlement practice relating
to the application of Article XX to environmental measures.  The Note focuses on paragraphs (b), (d)
and (g) of Article XX of the General Agreement, which are the three exceptions usually referred to inso-called "environmental" disputes, the latter term being understood in a broad sense, so as to cover
disputes relating to the protection of the environment as such, but also to the protection of human
health.  It highlights the most important aspects of relevant panel reports, but is not meant to interpret
them.
2. Under the GATT, six panel proceedings involving an examination of environmental measures
or human health-related measures under Article XX were completed;  out of the six reports, three
have remained unadopted.
1  So far, two such proceedings have been completed under the
WTO Dispute Settlement Understanding.2  A brief description of the relevant facts of each case is
provided in Annex 1.
3. The pertinent text of Article XX of GATT 1994 reads as follows:
"Subject to the requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between countries where the
same conditions prevail, or a disguised restriction on international trade, nothing in this
Agreement shall be construed to prevent the adoption or enforcement by any contracting party
of measures:
"(b) necessary to protect human, animal or plant life or health;  ...
                                                     
1"United States - Prohibition of Imports of Tuna and Tuna Products from Canada", adopted on
22 February 1982, BISD 29S/108 (hereinafter Tuna 1982 );  "Canada - Measures Aff ecting Exports of Unprocessed
Herring and Salmon", adopted on 22 March 1988, BISD 35S/98 (hereinafter Salmon/Herring );  "Thailand -
Restrictions on Importation of and Internal Taxes on Cigarettes", adopted on 7 November 1990, BISD 36S/200(hereinafter Cigarettes ),  "United States - Restrictions on Imports of Tuna", circulated on 3 September 1991, not
adopted, BISD 39S/155 (hereinafter  Tuna I );  "United States - Restrictions on Imports of Tuna", circulated on
16 June 1994, not adopted, DS29/R, (hereinafter Tuna II  ); "United States - Taxes on Automobiles", circulated on
11 October 1994, not adopted, DS31/R (hereinafter Auto Taxes ).
2"United States - Standards for Reformulated and Conventional Gasoline", Appellate Body Report and Panel
Report, adopted on 20 May 1996, WT/DS2/9 (hereinafter Gasoline );  "United States - Import Prohibition of Certain
Shrimp and Shrimp Products", Panel Report, WT/DS58/R, circulated on 15 May 1998 and Appellate Body Report,WT/DS58/AB/R, circulated on 12 October 1998 (hereinafter Shrimp ).WT/CTE/W/53/Rev.1
Page 2
"(d) necessary to secure compliance with laws or regulations which are not inconsistent
with the provisions of this Agreement, including ...;  ...
"(g) relating to the conservation of exhaustible natural resources if such measures are
made effective in conjunction with restrictions on domestic production ofconsumption;  ..."
4. It is important to underline at the outset that none of these panels questioned the
environmental policy choices underlying the measures at issue.  In the Gasoline  case, for instance, the
Panel underlined that:
"it was not its task to examine generally the desirability or necessity of the environmental
objectives of the Clean Air Act or the Gasoline Rule.  Its examination was confined to those
aspects of the Gasoline Rule that had been raised by the complainants under specific
provisions of the General Agreement.  Under the General Agreement, WTO Members were
free to set their own environmental objectiv es, but they were bound to implement these
objectives through measures consistent with its provisions, notably those on the relative
treatment of domestic and imported products".
3
II. APPLICATION OF ARTICLE XX
A. R ELATION BETWEEN ARTICLE XX AND OTHER PROVISIONS OF GATT
5. Dispute settlement practice has determined that Article XX is a limited and conditional
exception from obligations under other provisions of the General Agreement, and, as opposed to the
positive provisions of the General Agreement, does not establish obligations in itself.4  It follows that
(i) Panels examine Article XX only if it has expressly been invoked by a party to the dispute5,
(ii) Panels have interpreted Article XX narrowly6, and (iii) the party invoking Article XX bears the
burden of proof (for this last point, see following section).
6. Panels generally proceed to examine Article XX once they have found a violation under the
substantive obligations of the General Agreement.  This principle was established in the Section 337
case, where the Panel concluded:
"Article XX(d) applies only to measures inconsistent with another provision of the General
Agreement, and that, consequently, the application of Section 337 has to be examined first in
the light of Article III:4.  If any inconsistencies with Article III:4 were found, the Panel wouldthen examine whether they could be justified under Article XX(d)".
7
                                                     
3Gasoline , Panel Report, paragraph 7.1.  See also Tuna I , paragraphs 6.1-4, Tuna II , paragraphs 5.42-43, and
Shrimp , Appellate Body Report, paragraphs 185-186.
4"United States - Section 337 of the Tariff Act of 1930", adopted on 7 November 1989, BISD 36S/345,
paragraph 5.9, and Tuna I , paragraph 5.22.
5The Panel report on "United States - Imports of Sugar from Nicaragua" (adopted on 13 March 1984,
BISD 31S/67, paragraph 4.4) noted that "the United States had not invoked any of the exceptions provided for in theGeneral Agreement permitting discriminatory quantitative rest rictions contrary to Article XIII.  The Panel therefore
did not examine whether the reduction in Nicaragua's quota could be justified under any such provision".  See also"EEC - Regulation on Imports of Parts and Components", adopted on 16 May 1990, BISD 37S/132, paragraph 5.11.
6The Tuna II  Panel Report recorded that "the  long-standing practice of panels  has ... been to interpret this
provision [Article XX] narrowly, in a manner that preserves the basic objectives and principles of the GeneralAgreement [reference is made to the Panel Reports on "Canada - Administration of the Foreign Investment Review
Act", adopted on 7 February 1984, BISD 30S/140, paragraph 5.20, and "United States - Section 337 of the Tariff Act
of 1930", adopted on 7 November 1989, BISD 36S/345, paragraph 5.27], DS29/R, paragraphs 5.26 and 5.38.  See alsothe Appellate Body's discussion on the scope of Article XX (paragraph 13 below).
7"United States - Section 337 of the Tariff Act of 1930", adopted on 7 November 1989, BISD 36S/345,
paragraph 5.9.  In an isolated case, the Panel started by examining the application of Article XX, considering that "ifWT/CTE/W/53/Rev.1
Page 3
7. In practice, a party to a dispute can argue that the contested measure is compatible with the
substantive obligations of the GATT, and, in the alternative, that it is covered under Article XX.
Hence, the fact that a party invokes Article XX does not constitute " ipso facto  an admission that the
measures in question would otherwise be inconsistent with the General Agreement.  Indeed, the
efficient operation of the dispute settlement process required that such arguments in the alternative be
possible".8
B. BURDEN OF PROOF
8. Panels have traditionally considered that, since Article XX is an exception, it is up to the
party invoking it to demonstrate that the measure at issue meets the requirements laid down in that
provision.  Practically, the party must demonstrate that the measure (i) falls under at least one of the
ten exceptions - paragraphs (a) to (j) - listed under Article XX, and (ii) satisfies the requirements ofthe preamble, i.e. is not applied in a manner wh ich would constitute "a means of arbitrary or
unjustifiable discrimination between countries where the same conditions prevail", and is not "a
disguised restriction on international trade".
9. In the Gasoline  case, the Panel confirmed this principle by stating that "as the party invoking
an exception the United States bore the burden of proof in demonstrating that the inconsistent
measures came within its scope".
9  In the same case, the Appellate Body stated that "[t]he burden of
demonstrating that a measure provisionally justified as being within one of the exceptions set out in
the individual paragraphs of Articl e XX does not, in its application, constitute abuse of such exception
under the chapeau, rests on the party invoking the exception.  That is, of necessity, a heavier task than
that involved in showing that an exception, ... , encompasses the measure at issue".10
C. S EQUENCE OF STEPS IN THE ANALYSIS OF ARTICLE XX
10. In the Gasoline  case, the Appellate Body noted that:
"In order that the justifying protection of Article XX may be extended to it, the measure at
issue must not only come under one or another of the particular exceptions -paragraphs (a) to
(j) - listed under Article XX;  it must also satisfy the requirements imposed by the opening
clauses of Article XX.  The analysis is, in other words, two-tiered:  first, provisional
                                                                                                                                                                    
Article XX(d) applied, then an examination of the question of the consistency of the [measure] with the other
GATT provisions cited above would not be required" ("United States - Imports of Certain Automotive SpringAssemblies", BISD 30S/107, paragraph 50, adopted on 26 May 1983, on the understanding that it would not"foreclose future examination of the use of Section 337 to deal with patent infringement cases from the point of viewof consistency with Articles III and XX of the General Agreement"  (C/M/ 168, p. 10);  this examination was carried
out by the Section 337 Panel).
8Tuna I , paragraph 5.22.  See also the Gasoline  case, where the United States argued that "the Gasoline Rule
fell within the scope of Article XX whether or not it was inconsistent with other provisions of the General Agreement.Not all measures described by Article XX were inconsistent with the General Agreement.  However, if the Panelaccepted that the Gasoline Rule was consistent with other provisions of the General Agreement, in particularArticle III, it did not need to decide whether the measures  at issue also fell under Article XX.  Article XX guaranteed
in any event that these measures were not inconsistent with the General Agreement" (WT/DS2/9, Panel Reportparagraph 3.37).  This argument was not contested by the complaining parties, and the Panel did not address it in itsfindings.
9Gasoline , Panel Report paragraphs 6.20, 6.31 and 6.35.  See also "Canada - Administration of the Foreign
Investment Review Act", adopted on 7 February 1984, BISD 30S/140, paragraph 5.20, and "United States -
Section 337 of the Tariff Act of 1930", adopted on 7 November 1989, BISD 36S/345, paragraph 5.9.
10Gasoline , Appellate Body Report, p. 22-23.  Note also the Appellate Body's findings on the burden of
proof in the case "United States - Measures Affecting Imports of Woven Wool Shirts and Blouses From India",WT/DS33/AB/R, adopted on 23 May 1997.WT/CTE/W/53/Rev.1
Page 4
justification by reason of characterization of the measure under [one of the exceptions];
second, further appraisal of the same measure under the introductory clauses of Article XX."11
11. In the Shrimp  case, the Appellate Body criticized the Panel for having started its analysis with
the chapeau of Article XX.  The Appellate Body said:
"The sequence of steps indicated above [reference to the Gasoline  case, see paragraph 10] in
the analysis of a claim of justification under Article XX reflects, not inadvertence or random
choice, but rather the fundamental structure and logic of Article XX.  The Panel appears to
suggest, albeit indirectly, that following the indicated sequence of steps, or the inverse
thereof, does not make any difference.  To the Panel, reversing the sequence set out in theUnited States - Gasoline  seems equally appropriate.  We do not agree."
"The task of interpreting the chapeau so as to  prevent the abuse of misuse of the specific
exemptions provided for in Article XX is rendered very difficult, if indeed it remains possible
at all, where the interpreter (like the Panel in this case) has not first identified and examined
the specific exception threatened with abuse.  The standards established in the chapeau are,
moreover, necessarily broad in scope and reach ... When applied in a particular case, the
actual contours and contents of these standards will vary as the kind of measure under
examination varies."
12
12. In the same case, the Appellate Body noted that "it does not follow from the fact that a
measure falls within the terms of Article XX(g) that that measure also will necessarily comply with
the requirements of the chapeau".13
III. THE PREAMBLE OF ARTICLE XX
A. F UNCTION AND SCOPE OF THE PREAMBLE14
13. Under the GATT, only the first two panels addressing Article XX made findings under the
preamble (see below paragraphs 20-21).  This is explained by the fact that, afterwards, panels
developed the practice to examine first whether the measure at issue fell under one of the
ten exceptions listed in Article XX.  However, until the Appellate Body report in the Gasoline  case,
no measure passed this first step, and as a result panels considered that there was no need to proceed
to the chapeau.
14. As to what required justification under the chapeau, the Panel Report on "United States -
Imports of Certain Automotive Spring Assemblies" noted that "the Preamble of Article XX made it
clear that it was the application of the measure and not the measure itself that needed to be
examined".15  This finding was confirmed by the Appellate Body in the Gasoline case: "[t]he chapeau
by its express terms addresses, not so much the questioned measure or its specific contents as such,
but rather the manner in which that measure is applied".16  (See also below paragraph 30).
15. In the same case, the Appellate Body considered the purpose and object of the preamble of
Article XX.  Referring to the negotiating history of  that provision, which indicates that the preamble
was meant "to prevent abuse of the exceptions of Article [XX]"17, the Appellate Body noted:
                                                     
11Gasoline , Appellate Body Report p. 22.
12Shrimp , Appellate Body Report, paragraphs 119-120.
13Shrimp , Appellate Body Report, paragraph 149.
14Also referred to as "chapeau" or "introductory paragraph".
15Adopted on 26 May 1983, BISD 30S/107, paragraph 56.
16Gasoline , Appellate Body Report, p. 22.
17Quoted in Analytical Index:  Guide to GATT Law and Practice, Vol. I, p. 564 (1995).WT/CTE/W/53/Rev.1
Page 5
"[t]he chapeau is animated by the principle that while the exceptions of Article XX may be
invoked as a matter of legal right, they should no t be so applied as to frustrate or defeat the
legal obligations of the holder of the right under the substantive rules of the
Genera Agreement .  If those exceptions are not to be abused or misused, in other words, the
measures falling within the particular exceptions must be applied reasonably, with due regardboth to the legal duties of the party claiming the exception and the legal rights of the other
parties concerned".
18
16. The Appellate Body confirmed this stance in the Shrimp  report.  It recalled that, as confirmed
by the negotiating history of that provision,
"the language of the chapeau makes clear that each of the exceptions in paragraphs (a) to (j)
of Article XX is a limited and conditional  exception from the substantive obligations
contained in the other provisions of the GATT 1994, that is to say, the ultimate availability of
the exception is subject to the compliance by the invoking Member with the requirements of
the chapeau".19
17. In fact, according to the Appellate Body, the chapeau is "but one expression of the principle
of good faith".20  Hence,
"[t]he task of interpreting and applying the chapeau is ... essentially the delicate one of
locating and marking out a line of equilibrium between the right of a Member to invoke anexception under Article XX and the rights of the other Members under varying substantive
provisions (e.g. Article XI) of the GATT 1994, so that neither of the competing rights will
cancel out the other and thereby distort and nullify or impair the balance of rights and
obligations constructed by the Members themselv es in that Agreement.  The location of the
line of equilibrium, as expressed in the chapeau, is not fixed and unchanging;  the line movesas the kind and the shape of the measures at stake vary and as the facts making up specific
cases differ."
21
18. In the Gasoline  case, the Appellate Body also examined the scope of Article XX, i.e. whether
Article XX can be invoked as an exception to all substantive obligations under the GATT, or only to
some of them.  It ruled in favour of the former approach, noting that:
"[t]he exceptions listed in Article XX ... relate to all of the obligations under the General
Agreement :  the national treatment obligation and the most-favoured-nation obligation, of
course, but others as well.  Effect is more easily given to the words "nothing in this
Agreement", and Article XX as a whole including its chapeau more easily integrated into the
remainder of the General Agreement , if the chapeau is taken to mean that the standards it sets
forth are applicable to all of the situations in which an allegation of a violation of asubstantive obligation has been made and one of the exceptions contained in Article XX has
in turn been claimed".
22
19. In the Shrimp  case, the Appellate Body examined the relation between the first preambular
paragraph of the WTO Agreement and the chapeau of Article XX.  It noted that language contained inthe former "demonstrates a recognition by WTO negotiators that optimal use of the world's resources
should be made in accordance with the objective of sustainable development" and that,
                                                     
18Gasoline , Appellate Body Report, p. 22.
19Shrimp , Appellate Body Report, paragraph 157.
20Ibidem,  paragraph 158
21Ibidem , paragraph 159.
22Gasoline , Appellate Body Report, p. 24.WT/CTE/W/53/Rev.1
Page 6
"[p]ending any specific recommendations by the CTE to WTO Members on the issues raised
in its terms of reference, and in the absence up to now of any agreed amendments or
modifications to the substantive provisions of the GATT 1994 and the WTO Agreement
generally, we must fulfill our responsibility in this specific case, which is to interpret the
existing language of the chapeau of Article XX by examining its ordinary meaning, in light ofits context and object and purpose in order to determine whether the United States measure at
issue qualifies for justification under Article XX.  It is proper for us to take into account, as
part of the context of the chapeau, the specific language of the preamble to the WTO
Agreement , which ... gives colour, texture and shading to the rights and obligations of
Members under the WTO Agreement , generally, and under the GATT 1994, in particular."
23
B. "A N ARBITRARY OR UNJUSTIFIABLE DISCRIMINATION BETWEEN COUNTRIES WHERE THE
SAME CONDITIONS PREVAIL , OR A DISGUISED RESTRICTION ON INTERNATIONAL TRADE "
1. GATT 1947 Dispute Settlement Practice
20. Under the GATT, the concept of "arbitrary or unjustifiable discrimination between countries
where the same conditions prevail" was examined in two disputes.  The 1982 Panel on
"United States -Prohibition of Imports of Tuna and Tuna Products from Canada" examined whether a
US prohibition on imports of tuna and tuna products from Canada fell under Article XX(d) and noted
that:
"[t]he United States action ... had been taken exclusively against imports of tuna and tuna
products from Canada, but similar actions had been taken against imports from Costa Rica,
Ecuador, Mexico and Peru and then for similar reasons.  The Panel felt that the discrimination
of Canada in this case might not necessarily have been arbitrary or unjustifiable".24
In the report on "United States - Imports of Certain Automotive Spring Assemblies", the Panel foundthat the measure under examination was "not applied in a manner which would constitute a means of
arbitrary or unjustifiable discrimination against countries where the same conditions prevail" because
it "was directed against imports of certain automotive spring assemblies produced in violation of a
valid United States patent from all foreign sources, and not just from Canada".
25
21. In the two aforementioned cases, the concept of "disguised restriction on international trade"
was given a very literal interpretation, the two panels putting emphasis on the publicity of themeasure.  In Tuna 1982 , the Panel felt that "the United States's action should not be considered to be a
disguised restriction on international trade, noting that the United States's prohibition of imports of
tuna and tuna products from Canada had been taken as a trade measure and publicly announced as
such".
26  In the second case, the Panel considered that:
"[n]otice of the exclusion order [i.e. the measure at issue] was published in the Federal
Register and the order was enforced by the United States Customs at the border.  The Panel
also noted that the ITC proceedings in this particular case were directed against the
importation of automotive spring assemblies produced in violation of a valid United States
patent and that, before an exclusion order could be issued under Section 337, both the validity
of a patent and its infringement by a foreign manufacturer had to be clearly established.
                                                     
23Shrimp , Appellate Body Report, paragraphs 152 to 155.
24Adopted on 22 February 1982, BISD 29S/91, paragraph 4.8.
25Adopted on 26 May 1983, BISD 30S/107, paragraph 55.
26Tuna 1982 , paragraph 4.8.  At the Council meeting where the report was adopted, the representative of
Canada said that "Canada did not consider it sufficient for a trade measure to be publicly announced as such for it tobe considered not to be a disguised restriction on international trade within the meaning of Article XX of the GeneralAgreement" (quoted in Analytical Index:  Guide to GATT Law and Practice, Vol. I, p. 565 (1995)).WT/CTE/W/53/Rev.1
Page 7
Furthermore, the exclusion order would not prohibit the importation of automotive spring
assemblies produced by any producer outside the United States who had a license ... to
produce these goods.  Consequently, the Panel found that the exclusion order had not been
applied in a manner which constituted a disguised restriction on international trade".27
This interpretation was not confirmed by the Appellate Body.
2. WTO Dispute Settlement Practice
(a) The Gasoline  case
22. In the Gasoline  case, the Appellate Body did not attempt to define the concepts of "arbitrary
discrimination", "unjustifiable discrimination" or "disguised restriction", but decided to look at them
in the light of their object and purpose:
""[a]rbitrary discrimination", "unjustifiable discrimination" and "disguised restriction" on
international trade may, accordingly, be read side-by-side;  they impart meaning to one
another.  It is clear to us that "disguised restriction" includes disguised discrimination  in
international trade.  It is equally clear that  concealed or unannounced  restriction or
discrimination in international trade does not exhaust the meaning of "disguised restriction".
We consider that "disguised restriction", whatever else it covers, may properly be read as
embracing restrictions amounting to arbitrary or unjustifiable discrimination in international
trade taken under the guise of a measure formally within the terms of an exception listed inArticle XX.  Put in a somewhat different manner, the kinds of considerations pertinent in
deciding whether the application of a particular measure amounts to "arbitrary or unjustifiable
discrimination", may also be taken into account in determining the presence of a "disguised
restriction" on international trade.  The fundamental theme is to be found in the purpose and
object of avoiding abuse or illegitimate use of the exceptions to substantive rules available in
Article XX ".28 [emphasis added]
In that case, the Appellate Body rejected the arguments presented by the United States to justify lessfavourable treatment of foreign producers.  The United States was reproached for two omissions:
(i) not having adequately explored means to allow foreign producers to benefit from the same
treatment as domestic producers;  (ii)  ignoring the costs resulting for foreign producers from the
imposition of a more stringent standard, while these costs had been purposely avoided for domesticproducers.  According to  the Appellate Body:
"these two omissions go well beyond what was necessary for the Panel to determine that a
violation of Article III:4 had occurred in the first place.  The resulting discrimination must
have been foreseen, and was not merely inadvertent or unavoidable.  In the light of theforegoing, our conclusion is that the baseline establishment rules in the Gasoline Rule, in their
application, constitute "unjustifiable discrimination" and a "disguised restriction on
international trade".
29
23. An important question is whether the requirement to avoid "arbitrary or unjustifiable
discrimination between countries where the same c onditions prevail, or a disguised restriction on
international trade" contained in the chapeau of Article XX overlaps with the most-favoured-nation
treatment and the national treatment, as contained in Article I and Article III respectively, or whether
                                                     
27"United States - Imports of Certain Automotive Spring Assemblies", adopted on 26 May 1983,
BISD 30S/107, paragraph 56.
28Gasoline , Appellate Body Report, p. 25.
29Ibidem , p. 28-29.WT/CTE/W/53/Rev.1
Page 8
it has to be understood as a different, sui generis , type of non-discrimination.  The Appellate Body
favoured the second approach in the Gasoline  case:
"[t]he enterprise of applying Article XX would clearly be an unprofitable one if it involved no
more than applying the standard used in finding that the baseline establishment rules [the
measures at issue] were inconsistent with Article III:4.  That would also be true if the findingwere one of inconsistency with some other substantive rule of the General Agreement .  The
provisions of the chapeau cannot logically refer to the same standard(s) by which a violation
of a substantive rule has been determined to have occurred.  To proceed down that path would
be both to empty the chapeau of its contents and to deprive the exceptions in paragraphs (a) to
(j) of meaning.  Such recourse would also confuse the question of whether inconsistency witha substantive rules existed, with the further and separate question arising under the chapeau of
Article XX as to whether that inconsistency was nevertheless justified.  One of the corollaries
of the "general rule of interpretation" in the Vienna Convention  is that interpretation must give
meaning and effect to all the terms of a treaty.  An interpreter is not free to adopt a reading
that would result in reducing whole clauses or paragraphs of a treaty to redundancy orinutility".
30
(b) The Shrimp  case:  Panel Report
24. In the Shrimp  case, the Panel considered it important "to determine first whether the scope  of
Article XX encompasses measures whereby a Member conditions access to its market for a givenproduct on the adoption of certain conservation policies by the exporting Member(s)".  The Panel
decided to start by examining whether the measures at issue satisfied the conditions contained in the
chapeau, because "the chapeau determines to a larg e extent the context of the specific exceptions
contained in the paragraphs of Article XX".
31
25. The Panel then considered whether the US measure could be considered as "unjustifiable"
discrimination between countries where the same conditions prevail.  It noted that the term
"unjustifiable" had never been subject to any precise interpretation and was susceptible to both narrow
and broad interpretations.  It decided, therefore, to in terpret this term within its context and in the light
of the object and purpose of the agreements to which it belonged.  The Panel noted:
"... as the WTO Agreement is an integrated system including GATT 1994 [footnote omitted],
we shall consider as the context of the chapeau and of Article XX as a whole not only the
other relevant provisions of GATT 1994 together with its preamble and annexes, but also theWTO Agreement, including its preamble and its other annexes.  For the same reasons, the
object and purpose to be considered is not only that of GATT 1994, but that of the WTO
Agreement as a whole."
32
26. The Panel recalled that in the Gasoline  case, the Appellate Body had noted that Article XX
"needs to be read in its context and in such a manner as to give effect to the purposes and objects of
the General Agreement" and "the purpose and object of the introductory clause of Article XX is
generally the prevention of 'abuse of the exceptions of ... [Article XX]'".  The Panel considered this
finding of the Appellate Body to be an application of the pacta sunt servanda  principle of
international law, pursuant to which international agreements must be applied in good faith.Consequently,
"... when invoking Article XX, a Member invokes the right to derogate to certain specific
substantive provisions of GATT 1994 but .... in doing so, it must not frustrate or defeat the
                                                     
30Ibidem , p. 23.
31Shrimp , Panel Report, paragraphs 7.26, 7.29 and 7.33.
32Ibidem , paragraph 7.34 - 7.35.WT/CTE/W/53/Rev.1
Page 9
purposes and objects of the General Agreement and the WTO Agreement or its legal
obligations under the substantive rules of GATT by abusing the exception contained in
Article XX."33
27. The Panel then turned to the examination of the preamble of the WTO Agreement in order to
determine the object and purpose of that Agreement.   Looking more specifically at the first paragraph
of the preamble, the Panel concluded:
"While the WTO Preamble confirms that environmental considerations are important for the
interpretation of the WTO Agreement, the cen tral focus of that agreement remains the
promotion of economic development through tr ade;  and the provisions of GATT are
essentially turned towards liberalization of access to markets on a nondiscriminatory basis."34
28. The Panel also noted that "by its very nature, the WTO Agreement favours a multilateral
approach to trade issues", as shown in the Preamble to the WTO Agreement and in Article 23.1 of the
Dispute Settlement Understanding (DSU).35
29. On this basis, the Panel concluded:
"... we are of the opinion that the chapeau of Article XX, interpreted within its context and in
the light of the object and purpose of GATT and of the WTO Agreement, only allows
Members to derogate from GATT provisions so long as, in doing so, they do not undermine
the WTO multilateral trading system, thus also abusing the exceptions contained inArticle XX. ... We are of the view that a type of measure adopted by a Member which, on its
own, may appear to have a relatively minor impact on the multilateral trading system, may
nonetheless raise a serious threat to that system if similar measures are adopted by the same
or other Members.  Thus, by allowing such type of measures even though their individual
impact may not appear to be such as to threaten the multilateral trading system, one wouldaffect the security and predictability of the multilateral trading system.  We consequently find
that when considering a measure under Article XX, we must determine not only whether the
measure on its own  undermines the WTO multilateral trading system, but also whether such
type of measure, if it were to be adopted by other Members, would threaten the security and
predictability of the multilateral trading system."
"In our view, if an interpretation of the chapeau of Article XX were to be followed which
would allow a Member to adopt measures conditioning access to its market for a given
product upon the adoption by the exporting Members of certain policies, including
conservation policies, GATT 1994 and the WTO Agreement could no longer serve as a
multilateral framework for trade among Members as security and predictability of trade
relations under those agreements would be threatened.  This follows because, if oneWTO Member were allowed to adopt such measures, then other Members would also have
the right to adopt similar measures on the same subject but with differing, or even conflicting,
requirements.  If that happened, it would be impossible for exporting Members to comply at
the same time with multiple conflicting policy requirements.  Indeed, as each of these
requirements would necessitate the adoption of a policy applicable not only to exportproduction (such as specific standards applicable only to goods exported to the country
requiring them) but also to domestic production, it would be impossible for a country to adopt
one of those policies without running the risk of breaching  other Members' conflicting policy
requirements for the same product and being refused access to these other markets.  We note
that, in the present case, there would not even be the possibility of adapting one's export
                                                     
33Ibidem , paragraphs 7.39 - 7.41.
34Ibidem , paragraph 7.42.
35Ibidem , paragraph 7.43.WT/CTE/W/53/Rev.1
Page 10
production to the respective requirements of the different Members.  Market access for goods
could become subject to an increasing number of conflicting policy requirements for the same
product and this would rapidly lead to the end of the WTO multilateral trading system."36
(c) The Shrimp  case:  Appellate Body Report
30. The Appellate Body disagreed with the approach chosen by the Panel in its analysis of
Article XX. It criticized the Panel for not expressly examining the ordinary meaning of the words of
Article XX and for focusing on the design of the measure rather than on the manner in which the
measure was applied.  The Appellate Body considered that "the general design of a measure, as
distinguished from its application is ... to be ex amined in the course of determining whether that
measure falls within one or another of the paragraphs of Article XX following the chapeau", but not in
examining the chapeau itself.
"The Panel failed to scrutinize the immediate  context of the chapeau:  i.e. paragraphs (a) to (j)
of Article XX.  Moreover, the Panel did not look into the object and purpose of the chapeau
of Article XX .  Rather, the Panel looked into the object and purpose of the whole of the
GATT 1994 and the WTO Agreement , which object and purpose it described in an overly
broad manner.  Thus, the Panel arrived at the very broad formulation that measures which
'undermine the WTO multilateral trading system' [footnote omitted] must be regarded as 'not
within the scope of measures permitted under the chapeau of Article XX' [footnote omitted].
Maintaining, rather than undermining, the mu ltilateral trading system is necessarily a
fundamental and pervasive premise underlying the WTO Agreement ;  but it is not a right or an
obligation, nor is it an interpretative rule which can be employed in the appraisal of a given
measure under the chapeau of Article XX."37
31. Thus, according to the Appellate Body, the approach chosen by the Panel -i.e. examining the
chapeau first- led it to formulate an inappropriately broad test (that of a measure which "undermines
the WTO multilateral trading system") (see also above paragraph 11).  The Appellate Body further
noted that "conditioning access to a Member's domestic market on whether exporting Members
comply with, or adopt, a policy or policies unilaterally prescribed by the importing Member may, to
some degree, be a common aspect of measures fall ing within the scope of one or another of the
exceptions (a) to (j) of Article XX".38
32. Consequently, the Appellate Body "reverses the Panel's finding that the United States
measure at issue is not within the scope of measures permitted under the chapeau of Article XX of the
GATT 1994 ...".39
33. The Appellate Body then carried out its own an alysis of the case.  After finding that the
US measure qualified for "provisional justification under Article XX(g)" (see below, Section V), the
Appellate Body examined whether that measure me t the requirements of the chapeau.  It found that
various cumulative factors in the application of Section 609 constituted "unjustifiable discrimination".
The Appellate Body noted that "[p]erhaps the most  conspicuous flaw in this measure's application
related to its intended and actual coercive effect on the specific policy decisions made by foreign
governments, Members of the WTO."40  It considered inter alia  that:
"it is not acceptable, in international trade relations, for one WTO Member to use an
economic embargo to require  other Members to adopt essentially the same comprehensive
regulatory program, to achieve a certain policy goal, as that in force within that Member's
                                                     
36Ibidem , paragraphs 7.44 and 7.45.
37Shrimp , Appellate Body Report, paragraph 116.
38Ibidem , paragraph 115-122.
39Ibidem , paragraph 187.
40Ibidem , paragraph 161.WT/CTE/W/53/Rev.1
Page 11
territory, without  taking into consideration different conditions which may occur in the
territories of those other Members."41
34. Other elements relating to the application of the measure showed, in the view of the Appellate
Body, an "unjustifiable discrimination".  Firs t, the Appellate Body noted the importance of
international cooperation to protect migratory species such as sea turtles and reproached the United
States for not having engaged the complaining countries "in serious, across-the-board negotiations
with the objective of concluding bilateral or multilateral agreements for the protection and
conservation of sea turtles, before enforcing the import prohibition ...".  As a result, the application of
Section 609 is unilateral, which "heightens the disruptive and discriminatory influence of the importprohibition and underscores its unjustifiability".
42  Second, the fact that countries had different periods
of time for phasing in the requirements of Section 609 also constituted different treatment among
various countries desiring certification.43  Third, "[d]iffering treatment of different countries desiring
certification is also observable in the differences in the levels of effort made by the United States in
transferring the required TED technology to specific countries".44
35. The Appellate Body then went on to consider whether the measure at issue had been applied
in a manner constituting "arbitrary discrimination between countries where the same conditions
prevail".  It first noted that the rigidity and inflexibility in the application of the measure, already
noted above (see paragraph 33), "also constitutes 'arb itrary discrimination' within the meaning of the
chapeau".45  Second, other characteristics of the certification process (such as, lack of transparency
and predictability, no formal opportunity for an applicant country to be heard, no procedure for review
of, or appeal from, a denial of an application) tend to show that "exporting Members applying for
certification whose applications are rejected are denied basic fairness and due process, and are
discriminated against, vis-à-vis  those Members which are granted certification";  this is contrary "to
the spirit, if not to the letter, of Article X:3 of the GATT 1994".46
36. On this basis, the Appellate Body concluded that the measure at issue was applied "in a
manner which amounts to a means not just of "unjustifiable discrimination", but also of "arbitrary
discrimination" between countries where the same c onditions prevail, contrary to the requirements of
the chapeau of Article XX.  The measure, therefore, is not entitled to the justifying protection of
Article XX of the GATT 1994.  Having made this finding, it is not necessary for us to examine also
whether the United States measure is applied in a manner that constitutes a "disguised restriction on
international trade" under the chapeau of Article XX."47
IV. PARAGRAPH (B) OF ARTICLE XX
A. B URDEN OF PROOF
37. As noted above (see paragraphs 8-9), the party invoking Article XX bears the burden of
proving that the contested measure meets the requirements contained in that provision.  Under
paragraph (b), Panel practice has determined that this demonstration includes the following elements:
"(1) that the policy  in respect of the measures for which the provision was invoked fell
within the range of policies designed to protect human, animal or plant life or health;
                                                     
41Ibidem , paragraph 164.
42Ibidem , paragraph 166 to 172.
43Ibidem , paragraph 174.
44Ibidem , paragraph 175.
45Ibidem , paragraph 177.
46Ibidem , paragraphs 178 to 183.
47Ibidem , paragraph 184.WT/CTE/W/53/Rev.1
Page 12
"(2) that the inconsistent measures for which the exception was being invoked were
necessary  to fulfil the policy objective;  and
"(3) that the measures were applied in conformity with the requirements of the
introductory clause  of Article XX".48
B. T HE POLICY GOAL OF PROTECTING HUMAN , ANIMAL AND PLANT LIFE OR HEALTH
38. In the case "Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes", the
Panel found that measures by Thailand prohibiting imports of cigarettes were inconsistent with
Article XI.  Thailand argued that the import ban fell under Article XX(b) because the government hadadopted measures to control smoking which would only be effective if cigarettes imports were
prohibited and because US cigarettes contained additives which made them more harmful than Thai
cigarettes.  An expert from the World Heal th Organization (WHO) was heard by the Panel.
Regarding the scope of paragraph (b), the Panel accep ted, in agreement with the parties to the dispute
and the expert from the WHO, that:
"smoking constituted a serious risk to human health and that consequently measures designed
to reduce the consumption of cigarettes fell within the scope of Article XX(b).  The Panel
noted that this provision clearly allowed contracting parties to give priority to human health
over trade liberalization;  however, for a measure to be covered by Article XX(b) it had to be
"necessary"".
49
39. In the two Tuna  disputes, the Panel and the parties accepted - implicitly in the first case,
explicitly in the second one - that the protection of dolphin life or health was a policy that could fall
under Article XX(b).50  In the Gasoline  case, the Panel and the parties agreed that:
"the policy to reduce air pollution resulting from the consumption of gasoline was a policy
within the range of those concerning the protection of human, animal and plant life or health
mentioned in Article XX(b)".51
C. MEASURE REQUIRING JUSTIFICATION UNDER ARTICLE XX( B)
40. According to panel practice, the measure requir ing justification under Ar ticle XX(b) is not the
policy goal (the protection of the environment or of public health, for instance), but the inconsistency
with the General Agreement which has been previously determined by the Panel.  In Tuna I , the Panel
found that:
"[t]he conditions set out in Article XX(b) which limit resort to this exception, namely that the
measure taken must be "necessary" and not "constitute a means of arbitrary or unjustifiable
discrimination or a disguised restriction on inte rnational trade" refer to the trade measure
requiring justification under Article XX(b), not however to the life or health standard chosenby the contracting party".
52
41. After finding that the imported gasoline was treated less favourably than domestic gasoline,
the Gasoline  Panel examined whether the aspect of the Gasoline Rule found inconsistent with the
General Agreement was necessary to achieve the stated policy objectives under Article XX(b).
                                                     
48Gasoline , Panel Report, paragraph 6.20.  See also  Tuna II , paragraph 5.29.
49Adopted on 7 November 1990, BISD 37S/200, paragraph 73.
50Tuna I , and Tuna II , paragraph 5.30.
51Gasoline , Panel Report, paragraph 6.21.
52Tuna I , paragraph 5.27.WT/CTE/W/53/Rev.1
Page 13
"The Panel noted that it was not the necessity of the policy goal that was to be examined, but
whether or not it was necessary that imported gasoline be effectively prevented from
benefitting from as favourable sales conditions as were afforded by an individual baseline tied
to the producer of a product.  It was the task of the Panel to address whether these inconsistent
measures were necessary to achieve the policy goal under Article XX(b).  It was therefore notthe task of the Panel to examine the necessity of the environmental objectives of the Gasoline
Rule, or of parts of the Rule that the Panel did not specifically find to be inconsistent with the
General Agreement."
53
Note, however, the findings made in this regard by the Appellate Body under paragraph (g) ofArticle XX (see below, paragraph 59).
D. T
HE CONCEPT OF NECESSITY
42. The examination of whether or not a measure is "necessary" under paragraph (b), commonly
referred to as the "necessity test", has proved to be a crucial step in panel practice.  So far, no Panelcalled to apply that paragraph accepted the necessity of a measure otherwise inconsistent with other
provisions of the GATT.  The Cigarettes  report provided the first application of Article XX(b), and
set the benchmark for subsequent cases.  In that case, the Panel concluded that:
"the import restrictions imposed by Thailand could be considered to be "necessary" in terms
of Article XX(b) only if there were no alternative measure consistent with the GeneralAgreement, or less inconsistent with it, which Thailand could reasonably be expected to
employ to achieve its health policy objectives".
54
The Panel borrowed the "least-trade restrictive" requirement from a previous panel report55, which
had applied it in relation with Article XX(d), with the following justification:
"[t]he Panel could see no reason why under Article XX the meaning of the term "necessary"
under paragraph (d) should not be the same as in paragraph (b).  In both paragraphs the same
term was used and the same objective intended:  to allow contracting parties to impose trade
restrictive measures inconsistent with the General Agreement to pursue overriding public
policy goals to the extent that such inconsistencies were unavoidable.  The fact that paragraph
(d) applies to inconsistencies resulting from the enforcement of GATT-consistent laws andregulations while paragraph (b) applies to those resulting from health-related policies
therefore did not justify a different interpretation of the term "necessary".
56
43. In the Cigarettes  case, the Panel concluded that the import restrictions were not "necessary"
within the meaning of paragraph (b) because Thailand could implement other policy measuresconsistent with the General Agreement to reach the same public health objective.  For instance,
Thailand could regulate the quality  of cigarettes through strict, non-discriminatory labelling and
ingredient disclosure regulations, coupled with a ban on unhealthy substances;  similarly, Thailand
could control the quantity  of cigarettes consumed in the country by banning advertisements of
cigarettes.  These measures, applied on both imported and domestic cigarettes, would be consistent
                                                     
53Gasoline , Panel Report, paragraph 6.22.
54Cigarettes , paragraph 75.
55The Panel Report on "United States - Section 337 of the Tariff Act of 1930" stated that "a contracting party
cannot justify a measure inconsistent with other GATT provisions as "n ecessary" in terms of Article XX(d) if an
alternative measure which 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, thatwhich entails the least degree of inconsistency with other GATT provisions" (adopted on 7 November 1989,BISD 36S/345, paragraph 5.26).
56Cigarettes , paragraph 74.WT/CTE/W/53/Rev.1
Page 14
with the General Agreement, in particular with Article III (National Treatment).  Considering the
WHO resolutions on smoking that had been made available to it, the Panel also noted that the health
measures they recommended were non-discriminatory and concerned all, not just imported
cigarettes.57
44. In Tuna I , the Panel considered that, even if an extrajurisdictional application of
Article XX(b) were permitted, the United States would not have met, in casu , the necessity
requirement for two reasons.  First, the United States had not demonstrated to the Panel that "it had
exhausted all options reasonably available to it to pursue dolphin protection objectives through
measures consistent with the General Agreement, in particular through the negotiation of international
cooperative arrangements, which would seem to be desirable in view of the fact that dolphins roamthe waters of many states and the high sea".  Second, by linking the maximum incidental dolphin
taking rate which Mexico had to meet during a particular period to the taking rate actually recorded
for United States fishermen during the same period, the United States limited trade on the basis of
unpredictable conditions that could not be regarded as necessary to protect the health and life of
dolphins.
58
45. In the Gasoline  case, the Panel examined whether there were consistent or less inconsistent
measures reasonably available to the United States to pursue its policy objectives, whereby imported
gasoline would be afforded as favourable sales conditions as domestic gasoline:
"[t]he Panel did not consider that the manner in which imported gasoline was effectively
prevented from benefitting from as favourable sales conditions as were afforded to domesticgasoline by an individual baseline tied to the producer of a product was necessary to achieve
the stated goals of the Gasoline Rule.  In the view of the Panel, baseline establishment
methods could be applied to entities dealing in imported gasoline in a way that granted
treatment to imported gasoline that was consistent or less inconsistent with the General
Agreement".
59
The Panel reviewed various options which it considered to be reasonably available to theUnited States while being consistent or less inconsis tent with the General Agreement.  Therefore, the
Panel concluded that the United States "had failed to demonstrate the necessity of the Gasoline Rule's
inconsistency with Article III:4" in this case.
60
E. JURISDICTIONAL APPLICATION OF ARTICLE XX( B)
46. The question to know whether Article XX(b) can be invoked to protect the life or health of
animals outside the jurisdiction of the country invoking it was examined in the two Tuna  panel
reports, both of them remaining unadopted.  The reasoning followed by the two Panels differs on
several points.
1. Negotiating history
47. In Tuna I , the Panel, considering that the text of Article XX(b) does not clearly answer the
question of the location of the living things to be protected, resorted to the drafting history of that
provision and noted the following:
"[t]he proposal for Article XX(b) dated from the Draft Charter of the International Trade
Organization (ITO) proposed by the United States, which stated in Article 32, "Nothing inChapter IV [on commercial policy] of this Charter shall be construed to prevent the adoption
                                                     
57Ibidem , paragraphs 77-81.
58Tuna I , paragraph 5.28.
59Gasoline , Panel Report, paragraph 6.25.
60Ibidem , paragraphs 6.25 to 6.28.WT/CTE/W/53/Rev.1
Page 15
or enforcement by any Member of measures: ... (b) necessary to protect human, animal or
plant life or health".  In the New York Draft of the ITO Charter, the preamble had been
revised to read as it does at present, and exception (b) read:  "For the purpose of protecting
human, animal or plant life or health, if corresponding domestic safeguards under similar
conditions exist in the importing country".  This added proviso reflected concerns regardingthe abuse of sanitary regulations by importing countries.  Later, Commission A of the Second
Session of the Preparatory Committee in Geneva agreed to drop this proviso as unnecessary
[footnote referring to EPCT/A/PV/30/7-15].  Thus, the record indicates that the concerns of
the drafters of Article XX(b) focused on the use of sanitary measures to safeguard life or
health of humans, animals or plants within the jurisdiction of the importing country".
61
48. In Tuna II , the Panel observed that "the text of Article XX(b) does not spell out any limitation
on the location of the living things to be protected".  Referring to various observations made in
relation to the jurisdictional application of Article XX(g) (see below paragraphs 76-83), the Panel
considered them to be equally valid for the applic ation of Article XX(b).  Regarding the negotiating
history of the provision, it reached a different conclusion than Tuna I  by noting that:
"the statements and drafting changes made during the negotiation of the Havana Charter and
the General Agreement did not clearly support any particular contention of the parties with
respect to the location of the living thing to be protected under Article XX(b).  The Panel did
not see the need to settle the issue argued by the parties as to whether the intent of the drafterswas to restrict measures justifiable under Article XX to sanitary measures.  The Panel
therefore found that the policy to protect the life and health of dolphins in the eastern tropical
Pacific Ocean, which the United States pursued within its jurisdiction over its nationals and
vessels, fell within the range of policies covered by Article XX(b)".
62
2. The concept of necessity and the extrajurisdictional application of Article XX(b)
49. In Tuna I , the Panel, referring to the Cigarettes  case, recalled that Article XX(b) was intended
to allow countries to impose trade restrictive measures inconsistent with the General Agreement to
pursue overriding public policy goals to the extent that such inconsistencies were unavoidable.  On
this basis, the Panel considered that:
"if the broad interpretation of Article XX(b) suggested by the United States were accepted,
each contracting party could unilaterally determine the life or health protection policies fromwhich other contracting parties could not deviate without jeopardizing their rights under the
General Agreement.  The General Agreement would then no longer constitute a multilateral
framework for trade among all contracting parties but would provide legal security only in
respect of trade between a limited number of contracting parties with identical internal
regulations".
63
50. In Tuna II , the Panel considered that neither the intermediary  nor the primary  nation embargo
could possibly, by themselves, further the United States objectives of protecting the life and health of
dolphins.  Their desired effect was contingent upon exporting countries changing their polices and
practices.  This led the Panel to examine whether measures "necessary to protect the life and health ofanimals could include measures taken so as to force other countries to change their policies within
their own jurisdiction, and requiring such changes in order to be effective".  The Panel concluded that
measures taken so as to force other countries to change their policies, and that are effective only if
such changes occurred, could not be considered "necessary" within the meaning of Article XX(b).
This conclusion was justified as follows:
                                                     
61Tuna I , paragraphs 5.25-26.
62Tuna II , paragraphs 5.31 to 5.33.
63Tuna I , paragraph 5.27.WT/CTE/W/53/Rev.1
Page 16
"If Article XX(b) were interpreted to permit contracting parties to deviate from the basic
obligations of the General Agreement by taking trade measures to implement policies within
their own jurisdiction, including policies to pr otect living things, the objectives of the
General Agreement would be maintained.  If however Article XX(b) were interpreted to
permit contracting parties to impose trade embarg oes so as to force other countries to change
their policies within their jurisdiction, including policies to protect living things, and which
required such changes to be effective, the objectives of the General Agreement would be
seriously impaired".64
V. PARAGRAPH (G) OF ARTICLE XX
A. B URDEN OF PROOF
51. Under Article XX(g), panel practice has determined that the party bearing the burden of proof
must demonstrate the following elements:
"(1) that the policy  in respect of the measures for which the provision was invoked fell
within the range of policies related to the conservation of exhaustible naturalresources;
"(2) that the measures for which the exception was being invoked - that is the particular
trade measures inconsistent with the General Agreement - were related to  the
conservation of exhaustible natural resources;
"(3) that the measures for which the exception was being invoked were made effective in
conjunction  with restrictions on domestic production or consumption;  and
"(4) that the measures were applied in conformity with the requirements of the
introductory clause  of Article XX".
65
B. P OLICY GOAL OF CONSERVING EXHAUSTIBLE NATURAL RESOURCES
52. In the 1982 Tuna  Panel Report, the Panel "noted that both parties considered tuna stocks,
including albacore tuna, to be an exhaustible natural resource in need of conservation management".66
In the Salmon/Herring  case, the Panel agreed with the parties that salmon and herring stocks are
"exhaustible natural resources".67  In Tuna I , the parties and the Panel seem to have implicitly agreed
that dolphins are an exhaustible natural resource, whereas in Tuna II  the parties disagreed as to
whether dolphins should be considered as an "exhaustible natural resource".  In the latter case, the
Panel, "noting that dolphin stocks could potentially be exhausted, and that the basis of a policy to
conserve them did not depend on whether at present their stocks were depleted, accepted that a policy
to conserve dolphins was a policy to conserve an exhaustible natural resource".68
53. In Auto Taxes , the Panel considered whether the CAFE regulation was a policy to conserve an
exhaustible natural resource.  The Panel, "noting that gasoline was produced from petroleum, an
exhaustible natural resource, found that a policy to conserve gasoline was within the range of policies
mentioned in Article XX(g)".69
                                                     
64Tuna II , paragraphs 5.37 to 5.39.
65Gasoline , Panel Report, paragraph 6.35.  See also Tuna II , paragraph 5.12.
66Tuna 1982 , BISD 29S/91, paragraph 4.9.
67Salmon/Herring , paragraph 4.4.
68Tuna II , paragraph 5.13.
69Auto Taxes , paragraph 5.57.WT/CTE/W/53/Rev.1
Page 17
54. In the Gasoline  case, the United States argued that clean air was an exhaustible natural
resource since it could be exhausted by pollutants such as those emitted through the consumption of
gasoline.  Venezuela disagreed, considering that clean air was a "condition" of air that was renewable
rather than a resource that was exhaustible.  The Panel agreed with the former:
"In the view of the Panel, clean air was a resource (it had value) and it was natural.  It could
be depleted.  The fact that the depleted resource was defined with respect to its qualities was
not, for the Panel, decisive.  Likewise, the fact that a resource was renewable could not be an
objection.  A past panel had accepted that renewable stocks of salmon could constitute an
exhaustible natural resource [footnote referring to "Canada - Measures Affecting Exports of
Unprocessed Herring and Salmon", adopted on 22 March 1988, BISD 35S/98].  Accordingly,
the Panel found that a policy to reduce the depletion of clean air was a policy to conserve a
natural resource within the meaning of Article XX(g)".70
55. In the Shrimp  case, the parties disagreed as to whether sea turtles could be considered
"exhaustible nature resources" within the meaning of paragraph (g).  The Appellate Body noted that,
contrary to what argued the complainants, the text of Article XX (g) was not limited to the
conservation of "mineral" or "non-living" natural resources and that living species, which are in
principle "renewable", "are in certain circumstan ces indeed susceptible of depletion, exhaustion and
extinction, frequently because of human activities".  The Appellate Body further noted that:
"The words of Article XX(g), "exhaustible natural resources", were actually crafted more than
50 years ago.  They must be read by a treaty interpreter in the light of contemporary concerns
of the community of nations about the protection and conservation of the environment.  While
Article XX was not modified in the Uruguay Round, the preamble attached to the
WTO Agreement  shows that the signatories to that Agreement were, in 1994, fully aware of
the importance and legitimacy of environmental protection as a goal of national andinternational policy.  The preamble of the WTO Agreement  -- which informs not only the
GATT 1994, but also the other covered agreements -- explicitly acknowledges "the objective
of sustainable development " [footnote omitted]....
"From the perspective embodied in the preamble of the WTO Agreement , we note that the
generic term "natural resources" in Article XX(g) is not "static" in its content or reference but
is rather "by definition, evolutionary" [footnoted omitted].  It is, therefore, pertinent to notethat modern international conventions and declarations make frequent references to natural
resources as embracing both living and non-living resources....
"Given the recent acknowledgement by the international community of the importance of
concerted bilateral or multilateral action to protect living natural resources, and recalling theexplicit recognition by WTO Members of the objective of sustainable development in the
preamble of the WTO Agreement , we believe it is too late in the day to suppose that
Article XX(g) of the GATT 1994 may be read as referring only to the conservation of
exhaustible mineral or other non-living natural resources. [footnote omitted]  Moreover,
two adopted GATT 1947 panel reports previously found fish to be an "exhaustible naturalresource" within the meaning of Article XX(g) [reference to Tuna 1982  and Salmon/Herring ].
We hold that, in line with the principle of effectiveness in treaty interpretation [footnote
omitted], measures to conserve exhaustible natural resources, whether living  or non-living ,
may fall within Article XX(g)."
56. Considering further that all of the seven recognized species of sea turtles are listed in
Appendix 1 of the Convention on International Trade in Endangered Species of Wild Fauna and Flora
                                                     
70Gasoline , Panel Report, paragraph 6.37.WT/CTE/W/53/Rev.1
Page 18
("CITES"), the Appellate Body concluded that the five species of sea turtles involved in the dispute
constitute "exhaustible natural resources" within the meaning of Article XX(g) of the GATT 1994.71
C. M EASURE REQUIRING JUSTIFICATION UNDER ARTICLE XX(G)
57. In Tuna I , the Panel noted that "the conditions set out in Article XX(g) which limit resort to
this exception, namely that the measures taken must be related to the conservation of exhaustiblenatural resources, and that they do not "constitute a means of arbitrary or unjustifiable discrimination
... or a disguised restriction on international trade" refer to the trade measure requiring justification
under Article XX(g), not however to the conservation policies adopted by the contracting party".
72
58. In Auto Taxes , the Panel "recalled that the measure requiring justification under Article XX(g)
was not the Motor Vehicle Information and Cost Saving Act in general, nor the establishment of theCAFE fuel consumption standard as such.  The measure at issue was the discrimination against
foreign cars and parts resulting from the CAFE regulations providing for the calculation of the fleet
average fuel consumption".
73
59. The practice to examine under Article XX the inconsistencies found under other GATT
provision(s) was, however, modified by the Appellate Body in the Gasoline  case.  In that dispute, the
Panel, following past practice, had considered "whether the precise aspects of the Gasoline Rule that
it had found to violate Article III - the less favourable baseline establishments methods that adversely
affected the conditions of competition for imported gasoline - were primarily aimed at the
conservation of natural resources".74  The Appellate Body disagreed and found that:
"[o]ne problem ... is that the Panel asked itself whether the "less favourable treatment" of
imported gasoline was "primarily aimed at" the conservation of natural resources, rather than
whether the "measure", i.e. the baseline establishment rules, were "primarily aimed at"
conservation of clean air.  In our view, the Panel here was in error in referring to its legal
conclusion on Article III:4 instead of the measure in issue.  The result of this analysis is to
turn Article XX on its head.  Obviously, there had to be a finding that the measure provided"less favourable treatment" under Article III:4 before the Panel examined the "General
Exception" contained in Article XX.  That, however, is a conclusion of law.  The chapeau of
Article XX makes it clear that it is the "measures" which are to be examined under
Article XX(g), and not the legal finding of "less favourable treatment".
75
D" R ELATING TO ..."
1. GATT 1947 dispute settlement practice
60. The first application of the "relating to" concept was made in the Salmon/Herring  case.  After
agreeing that salmon and herring were exhaustible natural resources and that harvest limitations
imposed by Canada were restrictions on domestic production, the Panel examined whether the export
prohibitions maintained by Canada on certain unprocessed salmon and herring were "relating to" the
conservation of salmon and herring stocks:
"Article XX(g) does not state how the trade measures are to be related to the conservation and
how they have to be conjoined with the production restrictions.  This raises the question of
                                                     
71Shrimp , Appellate Body Report, paragraphs  127 to 134.  The Panel did not make findings under
Article XX(g).
72Tuna I , paragraph 5.32.
73Auto Taxes , paragraph 5.59.
74Gasoline , Panel Report, paragraph 6.40.
75Gasoline , Appellate Body Report, p. 16.  In this dispute, the United States limited its appeal to the Panel's
findings under Article XX(g).WT/CTE/W/53/Rev.1
Page 19
whether any relationship with conservation and any conjunction with production restrictions
are sufficient for a trade measure to fall under Article XX(g) or whether a particular
relationship and conjunction are required".76
The Panel decided to examine the meaning of "rel ating to" in the light of the context in which
Article XX(g) appears in the General Agreement and of  the purpose of that provision.  It noted that:
"some of the subparagraphs of Article XX state that the measure must be "necessary" or
"essential" to the achievement of the policy purpose set out in the provision
(cf. subparagraphs (a), (b), (d) and (j)) while subparagraph (g) refers only to measures"relating to" the conservation of exhaustible natural resources.  This suggests that
Article XX(g) does not only cover measures that are necessary or essential for the
conservation of exhaustible natural resources but a wider range of measures.  However, as the
preamble of Article XX indicates, the purpose of including Article XX(g) in the General
Agreement was not to widen the scope  for measures serving trade policy purposes but merelyto ensure that the commitments under the General Agreement do not hinder the pursuit of
policies aimed at the conservation of exhaustible natural resources.  The Panel concluded for
these reasons that, while a trade measure did not have to be necessary or essential to the
conservation of an exhaustible natural resource, it had to be primarily aimed at the
conservation of an exhaustible natural resource to be considered as "relating to" conservation
within the meaning of Article XX(g)".77  [emphasis added]
The Panel then proceeded to examine whether the export prohibitions on unprocessed salmon and
herring were primarily aimed at the conservation of salmon and herring stocks and rendering effective
the restrictions on the harvesting of salmon and herring.  The Panel considered the variouscharacteristics of the measures maintained by Canada, and noted in particular that unlike foreign
processors and consumers, domestic processors and consumers can purchase these unprocessed fish
without limit.  It then concluded that "these prohib itions could not be deemed to be primarily aimed at
the conservation of salmon and herring stocks and at rendering effective the restrictions on the
harvesting of these fish." The export prohibitions were therefore not justified under Article XX(g).
78
61. The "primarily aimed at" test was subsequently applied in Tuna I, Tuna II  (for this case, see
below paragraph 85),  Auto Taxes , and Gasoline.   I n Tuna I , the Panel made the following finding
regarding the terms "relating to":
[t]he Panel did not consider that the United States measures, even if Article XX(g) could be
applied extrajurisdictionally, would meet the conditions set out in that provision. ... [T]he
United States linked the maximum incidental dolphin-taking rate which Mexico had to meetduring a particular period in order to be able to export tuna to the United States to the taking
rate actually recorded for United States fishermen during the same period.  Consequently, the
Mexican authorities could not know whether, at a given point of time, their conservation
policies conformed to the United States conservation standards.  The Panel considered that a
limitation on trade based on such unpredictable conditions could not be regarded as beingprimarily aimed at the conservation of dolphins".
79
62. In Auto Taxes , the Panel examined successively the separate foreign fleet accounting and the
fleet averaging.  It found, based on the evidence submitted, that:
                                                     
76Salmon/Herring , paragraph 4.5.
77Ibidem , paragraph 4.6.
78Ibidem , paragraph 4.7.
79Tuna I , paragraph 5.33.WT/CTE/W/53/Rev.1
Page 20
"separate foreign fleet accounting primarily served to inhibit imports of small cars.  This did
not contribute directly to fuel conservation in the United States.  Indeed, it was likely to make
it more costly, and therefore more difficult, for domestic manufacturers to meet the CAFE
standard and the overall goal of conserving fuel.  The Panel was of the view that a measure
that did not further the objectives of conservation of an exhaustible resource could not bedeemed to be primarily aimed at such conservation and therefore found that the measure
found to be inconsistent with Article III:4 was not justified by Article XX(g)".
80
In examining the fleet averaging system, the Panel recalled that:
"the requirement under Article XX(g), unlike those related to the protection of public morals
or human, animal or plant life and health (Articles XX(a) and (b)), or those relating to
compliance with laws or regulations not inconsistent with the General Agreement
(Article XX(d)), did not require that the measure be necessary.  Subject to the requirements of
the introductory clause of Article XX, the fact that other less trade restrictive measures, suchas fuel tax, could be used equally and more effectively to encourage fuel efficiency did not
imply that the measure could not be justified under Article XX(g)".
81
The Panel did not make a finding on the consistency of a fleet averaging system with Article XX(g).
It noted, however, the following:
"the inconsistency of the CAFE regulation with Article III:4 arose from the fact that the
treatment of imported products was dependent on factors not directly relating to the products
as products:  averaging was applied to a particular mix of products determined by the
ownership and control relationships of producer/importers.  The issue before the Panel wastherefore whether the application of this form of averaging to imported cars was primarily
aimed at rendering effective conservation requirements imposed on domestic production.  The
Panel observed that if there were no requirement placed on imported cars, the objectives of
the CAFE programme would be prejudiced, as imported large cars would not be subject to
any restriction on fuel consumption.  Thus the application of fleet averaging to imported cars
in a similar manner to its application to domestic cars clearly served the purpose of fuel
conservation, and served to render effective the conservation measure.  In these respects, fleetaveraging met two of the key requirements of Article XX(g)".
82
2. WTO Dispute Settlement Practice
63. In the Gasoline  case, the Panel had concluded that "the less favourable baseline
establishments methods at issue ... were not primarily aimed at the conservation of natural resources",in particular because the Panel had seen "no direct connection between less favourable treatment of
imported gasoline that was chemically identical to domestic gasoline, and the US objective of
improving air quality in the United States".
83
64. Referring to the "General rule of interpretation" contained in Article 31 of the
Vienna Convention on the Law of Treaties84, which, according to the Appellate Body, applies
pursuant to Article 3.2 of the DSU, the Appellate B ody noted that Article XX uses different terms in
"enumerating the various categories of governmental acts, laws or regulations which WTO Members
may carry out or promulgate in pursuit of differing legitimate state policies or interests outside the
realm of trade liberalization".  It deduced therefrom that "[i]t does not seem reasonable to suppose that
the WTO Members intended to require, in respect of each and every category, the same kind or degree
                                                     
80Auto Taxes , paragraph 5.60.
81Ibidem , paragraph 5.63.
82Ibidem , paragraphs 5.63-66.
83Gasoline , Panel Report, paragraph 6.40.
84See Annex 2.WT/CTE/W/53/Rev.1
Page 21
of connection or relationship between the measure under appraisal and the state interest or policy
sought to be promoted or realized".85
65. Following Article 31 of the Vienna Convention, the Appellate Body considered that
Article XX(g) had to be read in context and in  the light of the object and purpose of the General
Agreement :
"[t]he context of Article XX(g) includes the provisions of the rest of the General Agreement ,
including in particular Articles I, III and XI;  conversely, the context of Articles I and III and
XI includes Article XX.  Accordingly, the phrase "relating to the conservation of exhaustible
natural resources" may not be read so expansively as seriously to subvert the purpose and
object of Article III:4.  Nor may Article III:4 be given so broad a reach as effectively toemasculate Article XX(g) and the policies and interests it embodies.  The relationship
between the affirmative commitments set out in, e.g., Articles I, III and XI, and the policies
and interests embodied in the "General Exceptions" listed in Article XX, can be given
meaning within the framework of the General Agreement  and its object and purpose by a
treaty interpreter only on a case-to-case basis, by careful scrutiny of the factual and legalcontext in a given dispute, without disregarding the words actually used by the
WTO Members themselves to express their intent and purpose".
86
66. The Appellate Body noted that "the phrase "primarily aimed at" is not itself treaty language
and was not designed as a simple litmus test for inclusion or exclusion from Article XX(g)", but didnot consider it was necessary to examine that point further since, in the appeal proceeding, the parties
and third parties to the dispute had accepted the "primarily aimed at" test as developed by previous
panel report.  In this particular case, the Appellate Body found, contrary to the Panel, that the baseline
establishment rules were "primarily aimed at" the conservation of natural resources;  according to the
Appellate Body, the baseline establishment rules could not be divorced from other parts of theGasoline Rule, but had to be considered in the global context of the Gasoline Rule to which they were
related.  This relationship was "not negated by the inconsistency, found by the Panel, of the baseline
establishment rules with the terms of Article III:4" (see above paragraph 59).
87
67. In the Shrimp  case, the Appellate Body recallin g the findings it had reached in Gasoline ,
noted:
"[i]n the present case, we must examine the relationship between the general structure and
design of the measure here at stake, Section 609, and the policy goal it purports to serve, thatis, the conservation of sea turtles".
88
68. In doing so, the Appellate Body found in particular that the requirement that a country adopt a
regulatory programme requiring the use of TEDs by commercial shrimp trawling vessels in areas
where there is a likelihood of intercepting sea turtles was "directly connected with the policy ofconservation of sea turtles".  As to the "design" of the measure, the Appellate Body considered that:
"Section 609, cum implementing guidelines, is not disproportionately wide in its scope and
reach in relation to the policy objective of protection and conservation of sea turtle species.
The means are, in principle, reasonably related to the ends.  The means and ends relationship
between Section 609 and the legitimate policy of conserving an exhaustible, and, in fact,endangered species, is observably a close and real one, a relationship that is every bit as
substantial as that which we found in United States - Gasoline  between the EPA baseline
establishment rules and the conservation of clean air in the United States."
                                                     
85Appellate Body Report, p. 17-18.
86Gasoline , Appellate Body Report, p. 18.
87Ibidem , p. 16-19.
88Shrimp , Appellate Body Report, paragraph 137.  The Panel did not make findings under Article XX(g).WT/CTE/W/53/Rev.1
Page 22
69. Consequently, the Appellate Body concluded that  Section 609 was a measure "relating to" the
conservation of an exhaustible natural resource within the meaning of Article XX(g) of GATT 1994.89
E. "I N CONJUNCTION WITH RESTRICTIONS ON DOMESTIC PRODUCTION OR CONSUMPTION "
1. GATT 1947 Dispute Settlement Practice
70. In the 1982 Report on "United States - Prohibi tion of Imports of Tuna and Tuna Products
from Canada", the Panel concluded that it was not necessary to interpret the terms "relating to" and
"in conjunction with" since it had found that the party invoking Article XX(g) did not maintain
restrictions on the domestic production or consumption of tuna.90
71. In the Salmon/Herring  case, the Panel decided to examine the "relating to" concept in the
light of the context and purpose of Article XX(g).  It found that a measure had to be primarily aimed
at the conservation of an exhaustible natural resour ce to be considered as "relating to" conservation
(see above paragraph 60).  The Panel then went on to examine the terms "in conjunction with" and
considered that these terms
"had to be interpreted in a way that ensures that the scope of possible actions under that
provision corresponds to the purpose for which it was included in the General Agreement.  A
trade measure could therefore ... only be considered to be made effective "in conjunction
with" production restrictions if it was primarily aimed at rendering effective these
restrictions".91
72. In Tuna I , the Panel recalled the findings of the Salmon/Herring  Panel and noted:
"[a] country can effectively control the production or consumption of an exhaustible natural
resource only to the extent the production or consumption is under its jurisdiction.  This
suggests that Article XX(g) was intended to permit contracting parties to take trade measures
primarily aimed at rendering effective restrictions on production or consumption within theirjurisdiction".
"The Panel further noted that Article XX(g) allows each contracting party to adopt its own
conservation policies.  The conditions set out in Article XX(g) which limit resort to this
exception, namely that the measures taken must be related to the conservation of exhaustible
natural resources, and that they not "constitute a means of arbitrary or unjustifiable
discrimination ... or a disguised restriction on international trade" refer to the trade measurerequiring justification under Article XX(g), not however to the conservation policies adopted
by the contracting party.  The Panel considered that if the extrajurisdictional interpretation of
Article XX(g) ... were accepted, each contracting party could unilaterally determine the
conservation policies from which other contracting parties could not deviate without
jeopardizing their rights under the General Agreem ent.  The considerations that led the Panel
to reject an extrajurisdictional application of Article XX(b) therefore apply also to
Article XX(g)".
92
73. For Tuna II , see below paragraph 85, and for Auto Taxes  see above paragraph 62.
                                                     
89Shrimp , Appellate Body Report, paragraphs 135 to 142.
90Adopted on 22 February 1982, BISD 29S/91.
91Salmon/Herring , paragraph 4.6.
92Tuna I , paragraphs 5.31-5.32.WT/CTE/W/53/Rev.1
Page 23
2. WTO Dispute Settlement Practice
74. In the Gasoline  case, the Panel found that the less favourable baseline establishment methods
at issue were not "relating to" the conservation of clean air, and thus did not feel it necessary to
examine whether the baseline establishment rules were "made effective in conjunction with
restrictions on domestic production or consumption".  The Appellate Body, having reversed thefindings of the Panel on the former point (see above paragraphs 63-66), examined the latter.  Its
findings modified the practice established so far by Panels.  The Appellate Body considered that:
"the clause "if such measures are made effective in conjunction with restrictions on domestic
production or consumption" is appropriately read as a requirement that the measures
concerned impose restrictions, not just in respect of imported gasoline but also with respect todomestic gasoline.  The clause is a requirement of even-handedness  in the imposition of
restrictions, in the name of conservation, upon the production or consumption of exhaustible
natural resources.
"There is, of course, no textual basis for requiring identical treatment of domestic and
imported products.  Indeed, where there is identity of treatment - constituting real, not merely
formal, equality of treatment - it is difficult to see how inconsistency with Article III:4 would
have arisen in the first place.  On the other hand, if no restrictions on domestically-produced
like products are imposed at all, and all limitations are placed upon imported products alone ,
the measure cannot be accepted as primarily or even substantially designed for implementingconservationist goals [footnote omitted].  The measure would simply be naked discrimination
for protecting locally-produced goods.
"In the present appeal, the baseline establishment rules affect both domestic gasoline and
imported gasoline, providing for - generally speaking - individual baselines for domesticrefiners and blenders and statutory baselines for importers.  Thus, restrictions on the
consumption or depletion of clean air by regulating the domestic production of "dirty"
gasoline are established jointly with correspond ing restrictions with respect to imported
gasoline.  That imported gasoline has been determined to have been accorded "less favourable
treatment" than the domestic gasoline in terms of Article III:4, is not material for purposes of
analysis under Article XX(g).  It might also be noted that the second clause of Article XX(g)
speaks disjunctively of "domestic production or consumption.
"We do not believe, finally, that the clause "if made effective in conjunction with restrictions
on domestic production or consumption" was intended to establish an empirical "effects test"
for the availability of the Article XX(g) exception.  In the first place, the problem of
determining causation, well-known in both domestic and international law, is always adifficult one.  In the second place, in the field of conservation of exhaustible natural
resources, a substantial period of time, perhaps years, may have to elapse before the effects
attributable to implementation of a given measure may be observable.  The legal
characterization of such a measure is not reasonably made contingent upon occurrence of
subsequent events.  We are not, however, suggesting that consideration of the predictableeffects of a measure is never relevant.  In a particular case, should it become clear that
realistically, a specific measure cannot in any possible situation have any positive effect on
conservation goals, it would very probably be because that measure was not designed as a
conservation regulation to begin with.  In other words, it would not have been "primarily
aimed at" conservation of natural resources at all".
93
75. In the Shrimp  case, the Appellate Body said it need ed "to examine whether the restrictions
imposed by Section 609 with respect to imported shri mp are also imposed in respect of shrimp caught
                                                     
93Gasoline , Appellate Body Report, p. 20-22.WT/CTE/W/53/Rev.1
Page 24
by United States shrimp trawl vessels".  Considering in particular that US shrimp trawlers were
required, but for a few exceptions, to use approved TEDs in areas and at times where there was a
likelihood of intercepting sea turtles, the Appellate Body concluded that Section 609 was "an even-
handed measure", and, accordingly, was "made effective in conjunction with the restrictions on
domestic harvesting of shrimp".94
F. JURISDICTIONAL APPLICATION OF ARTICLE XX( G)
76. The jurisdictional application of Article XX(g) was examined in the two Tuna  panel reports,
both of them remaining unadopted.  The reasoning followed by the two panels differs.
1. The distinction between territory and jurisdiction
77. In Tuna II , the Panel examined in detail the territorial application of Article XX(g) and made
a distinction between territory and jurisdiction which does not appear in Tuna I .  The analysis focused
on the following points.
78. Considering the text of Article XX(g), the Panel observed that:
"it does not spell out any limitation on the location of the exhaustible natural resources to be
conserved. ... The nature and precise scope of the policy area  in the Article, the conservation
of exhaustible natural resources, is not spelled out or specifically conditioned by the text of
the Article, in particular with respect to the location of the exhaustible natural resource to be
conserved.  The Panel noted that two previous panels have considered Article XX(g) to be
applicable to policies related to migratory species of fish, and had made no distinction
between fish caught within or outside the territorial jurisdiction of the contracting party thathad invoked this provision [reference is made to the Salmon/Herring  case and the 1982 Tuna
case]".
95
79. The Panel also considered the context in which Article XX(g) is found and observed:
"measures providing different treatment to products of different origins could in principle be
taken under other paragraphs of Article XX and other Articles of the General Agreement with
respect to things located, or actions occurring, outside the territorial jurisdiction of the party
taking the measure.  An example was the provision in Article XX(e) relating to products of
prison labour.  It could not therefore be said that the General Agreement proscribed in an
absolute manner measures that related to things or actions outside the territorial jurisdiction of
the party taking the measure".96
80. Referring to general international law, the Panel observed:
"states are not in principle barred from regulating the conduct of their nationals with respect
to persons, animals, plants and natural resources outside of their territory.  Nor are states
barred, in principle, from regulating the conduct of vessels having their nationality, or any
persons on these vessels, with respect to persons, animals, plants and natural resourcesoutside their territory.  A state may in particular regulate the conduct of its fishermen, or of
vessels having its nationality or any fishermen on vessels, with respect to fish located in the
high seas".
97
                                                     
94Shrimp , Appellate Body Report, paragraphs 143 to 145.
95Tuna II , paragraph 5.15.
96Ibidem , paragraph 5.16.
97Ibidem , paragraph 5.17.WT/CTE/W/53/Rev.1
Page 25
81. The Panel found that bilateral or plurilateral environmental and trade treaties, referred to by
the parties to support their arguments on the location of exhaustible natural resources, were not
relevant as a primary  means of interpretation of the General Agreement under the general rule of
interpretation of Article 31 of the Vienna Convention on the Law of Treaties.  The Panel argued in
support of that conclusion that (i) those treaties were not concluded among the contracting parties tothe General Agreement and they did not apply to the interpretation of the General Agreement or the
application of its provisions;  (ii) practice under those treaties "could not be taken as practice under
the General Agreement, and therefore could not affect the interpretation of it".
98
82. The Panel also considered that those treaties were not relevant as a supplementary  means of
interpretation of the General Agreement pursuant to Article 32 of the Vienna Convention:
"... those cited treaties that were concluded prior to the conclusion of the General Agreement
were of little assistance in interpreting the text of Article XX(g), since it appeared to the Panel
on the basis of the material presented to it that no direct references were made to these treaties
in the text of the General Agreement, the Havana  Charter, or in the preparatory work to these
instruments.  The Panel also found that the statements and drafting changes made during thenegotiation of the Havana Charter and the General Agreement cited by the parties did not
provide clear support for any particular contention of the parties on the question of the
location of the exhaustible natural resource in Article XX(g)".
83. In view of the aforementioned considerations, the Panel
"could see no valid reason supporting the conclusion that the provisions of Article XX(g)
apply only to policies related to the conservation of exhaustible natural resources located
within the territory of the contracting party invoking the provision.  The Panel consequently
found that the policy to conserve dolphins in the eastern tropical Pacific Ocean, which the
United States pursued within its jurisdiction over its nationals and vessels, fell within therange of policies covered by Article XX(g)".
99
2. The concept of "relating to" and the extrajurisdictional application of Article XX(g)
84. In Tuna I , the Panel rejected an extrajurisdictional application of Article XX(g) for the same
reasons it rejected an extrajurisdictional application of Article XX(b) (see above paragraph 49).
85. In Tuna II , the Panel, recalling the conclusion reached in the Salmon/Herring  case, decided to
examine whether the embargoes imposed by the United States could be considered to be primarilyaimed at the conservation of an exhaustible natural resource and primarily aimed at rendering
effective restrictions on domestic production or consumption.  The Panel examined in particular the
relationship of the United States measures with th e expressed goal of dolphin conservation.  It noted
in particular that both the intermediary  and the primary  nation embargoes could not by themselves
conserve dolphins, but could achieve their conservation objectives only if they were followed bychanges in policies and practices in other countries.  They were then taken "so as to force other
countries to change their policies with respect to  persons and things within their own jurisdiction,
since the embargoes required such changes in order to have any effect on the conservation of
dolphins".  The Panel then noted that Article XX(g) does not provide a clear answer as to whether
"measures primarily aimed at the conservation of exhaustible natural resources, or primarily aimed atrendering effective domestic restrictions on their production or consumption, could include measures
taken so as to force other countries to change their policies with respect to persons and things within
their own jurisdictions, and requiring such changes in  order to be effective".  Examining paragraph (g)
                                                     
98Ibidem , paragraph 5.19.
99Ibidem , paragraph 5.20.WT/CTE/W/53/Rev.1
Page 26
in the light of the object and purpose of the General Agreement, and recalling that the long-standing
practice of panels has been to interpret Article XX narrowly, the Panel found:
"[i]f ... Article XX were interpreted to permit contracting parties to take trade measures so as
to force other contracting parties to change thei r policies within their jurisdiction, including
their conservation policies, the balance of rights and obligations among contracting parties, inparticular the right of access to markets, would be seriously impaired.  Under such an
interpretation the General Agreement could no longer serve as a multilateral framework for
trade among contracting parties.
"The Panel concluded that measures taken so as to force other countries to change their
policies, and that were effective only if such changes occurred, could not be primarily aimed
either at the conservation of an exhaustible natural resource, or at rendering effective
restrictions on domestic production or consumption, in the meaning of Article XX(g)".
100
VI. PARAGRAPH (D) OF ARTICLE XX
A. B URDEN OF PROOF
86. The Gasoline  Panel noted that the party invoking paragraph (d) had to demonstrate the
following elements:
"(1) that the measures for which the exception was being invoked - that is, the particular
trade measures inconsistent with the General Agreement - secure compliance  with
laws or regulations themselves not inconsistent with the General Agreement;
"(2) that the inconsistent measures for which the exception was being invoked were
necessary  to secure compliance with those laws or regulations;  and
"(3) that the measures were applied in conformity with the requirements of the
introductory clause  of Article XX".101
B. "N OT INCONSISTENT WITH ..."
62. In Tuna I , the Panel examined whether the intermediary nations  embargo was justified under
paragraph (d) and noted:
"Article XX(d) requires that the "laws and regulations" with which compliance is being
secured be themselves "not inconsistent" with  the General Agreement.  The Panel noted that
the United States had argued that the "intermediary nations" embargo was necessary to
support the direct embargo because countries whose exports were subject to such an embargo
should not be able to nullify the embargo's effect by exporting to the United States indirectlythrough third countries.  The Panel found that, given its finding that the direct embargo was
inconsistent with the General Agreement, the "intermediary nations" embargo and the
provisions of the MMPA under which it is imposed could not be justified under Article XX(d)
as a measure to secure compliance with "laws or regulations not inconsistent with the
provisions of this Agreement"."
102
63. A similar reasoning was followed in Tuna II , where the Panel, "recalling its finding that the
measures taken under the primary nation embargo were inconsistent with Article XI:1 of the General
                                                     
100Tuna II , paragraphs 5.21-5.27.
101Gasoline , Panel Report, paragraph 6.31.
102Tuna I , paragraph 5.40.WT/CTE/W/53/Rev.1
Page 27
Agreement, concluded that the primary nation embargo could not, by the explicit terms of
Article XX(d), serve as a basis for the justif ication of the intermediary nation embargo".103
64. In Auto Taxes , the Panel
"recalled its finding that the CAFE measure was not a charge under Article III:2, but a
requirement under Article III:4 enforceable by penalty payments.  The fundamental issue
before the Panel, and the object of its finding under Article III:4, was thus the consistency of
the underlying CAFE requirement with the General Agreement, not that of the penalty
payments as such.  Even if the issue of the consistency of the penalty payments as such wereexamined by the Panel, such payments could not be justified under Article XX(d) since,
contrary to the requirements of that provision, the underlying measure (the CAFE
requirement) was itself inconsistent with th e General Agreement.  Accordingly, the Panel
found that those aspects of the CAFE regulation found inconsistent with Article III:4 could
not be justified under Article XX(d)".
104
65. In the Gasoline  case, the Panel examined whether the aspect of the baseline establishment
methods found inconsistent with the General Agreement secured compliance with a law or regulation
not inconsistent with the General Agreement.  The Panel observed that:
"assuming that a system of baselines by itself were consistent with Article III:4, the US
scheme might constitute, for the purposes of Article XX(d), a law or regulation "not
inconsistent" with the General Agreement.  However, the Panel found that maintenance of
discrimination between imported and domestic gasoline contrary to Article III:4 under the
baseline establishment methods did not "secure compliance" with the baseline system.  Thesemethods were not an enforcement mechanism.  They were simply rules for determining the
individual baselines.  As such, they were not the type of measures with which Article XX(d)
was concerned".
105
Note, however, the findings made in this regard by the Appellate Body under paragraph (g) of
Article XX (see above, paragraph 59).
                                                     
103Tuna II , paragraph 5.41.
104Auto Taxes , paragraph 5.67.
105Gasoline , Panel Report, paragraphs 6.32-33.WT/CTE/W/53/Rev.1
Page 28
ANNEX 1
Main Facts106
I. "UNITED STATES - PROHIBITION OF IMPORTS OF TUNA AND TUNA
PRODUCTS FROM CANADA", adopted on 22 February 1982, BISD 29S/91
1. An import prohibition was introduced by the United States after Canada had seized 19 fishing
vessels and arrested US fishermen fishing for albacore tuna, without authorization from the Canadian
government, in waters considered by Canada to be under its jurisdiction.  The United States did notrecognize this jurisdiction and introduced an import prohibition as a retaliation under the Fishery
Conservation and Management Act.
2. The Panel found that the import prohibition was contrary to Article XI:1, and not justified
neither under Article XI:2, nor under Article XX(g) of the General Agreement.
II. "CANADA - MEASURES AFFECTING EXPORTS OF UNPROCESSED HERRING
AND SALMON", adopted on 22 March 1988, BISD 35S/98
3. Under the 1976 Canadian Fisheries Act, Canada maintained regulations prohibiting the
exportation or sale for export of certain unprocessed herring and salmon.  The United States
complained that these measures were inconsistent with GATT Article XI.  Canada argued that these
export restrictions were part of a system of fishery resource management destined at preserving fish
stocks, and therefore were justified under Article XX(g).
4. The Panel found that the measures maintained by Canada were contrary GATT Article XI:1
and not justified neither by Article XI:2(b) nor by Article XX(g).
III. "THAILAND - RESTRICTIONS ON IMPORTATION OF AND INTERNAL TAXES
ON CIGARETTES", adopted on 7 November 1990, BISD 37S/200
5. Under the 1966 Tobacco Act, Thailand prohibited the importation of cigarettes and other
tobacco preparations, but authorized the sale of domestic cigarettes;  moreover, cigarettes were
subject to an excise tax, a business tax and a municipal tax.  The United States complained that the
import restrictions were inconsistent with GATT Article XI:1, and considered that they were not
justified by Article XI:2(c), nor by Article XX(b).  The United States also requested the Panel to find
that the internal taxes were inconsistent with GATT Article III:2.  Thailand argued, inter alia , that the
import restrictions were justified under Article XX(b) because the government had adopted measures
which could only be effective if cigarettes imports were prohibited and because chemicals and other
additives contained in US cigarettes might make them more harmful than Thai cigarettes.
6. The Panel found that the import restrictions was inconsistent with Article XI:1 and not
justified under Article X1:2(c).  It further concluded that the import restrictions were not "necessary"
within the meaning of Article XX(b).  The internal taxes were found to be consistent with
Article III:2.
IV. "UNITED STATES - RESTRICTIONS ON IMPORTS OF TUNA", not adopted,
circulated on 3 September 1991, BISD 39S/155
7. The Marine Mammal Protection Act (MMPA) required a general prohibition of "taking"
(harassment, hunting, capture, killing or attempt thereof) and importation into the United States of
marine mammals, except with explicit authorization.  It governed in particular the taking of marine
                                                     
106The facts highlighted here are those relevant for the purpose of this Note.WT/CTE/W/53/Rev.1
Page 29
mammals incidental to harvesting yellowfin tuna in the Eastern Tropical Pacific Ocean (ETP), an area
where dolphins are known to swim above school s of tuna.  Under the MMPA, the importation of
commercial fish or products from fish which have been caught with commercial fishing technology
which results in the incidental kill or incidental serious injury of ocean mammals in excess of
US standards were prohibited.  In particular, the importation of yellowfin tuna harvested with purse-seine nets in the ETP was prohibited ( primary nation embargo ), unless the competent US authorities
establish that (i) the government of the harvesting country has a programme regulating taking of
marine mammals that is comparable to that of the United States, and (ii) the average rate of incidental
taking of marine mammals by vessels of the harvesting nation is comparable to the average rate of
such taking by US vessels.  The average incidental taking rate (in terms of dolphins killed each timein the purse-seine nets are set) for that country's tuna fleet must not exceed 1.25 times the average
taking rate of United States vessels in the same period.  Imports of tuna from countries purchasing
tuna from a country subject to the primary nation embargo are also prohibited ( intermediary nation
embargo  ).
8. Mexico claimed that the import prohibition on yellowfin tuna and tuna products was
inconsistent with Articles XI, XIII and III of GATT.  The United States requested the Panel to find
that the direct embargo  was consistent with Article III and, in the alternative, was covered by
Articles XX(b) and XX(g).  The United States also argued that the intermediary nation  embargo was
consistent with Article III and, in the alternative, was justified by Article XX, paragraphs (b), (d) and(g).
9. The Panel found that the import prohibition under the direct  and the intermediary  embargoes
did not constitute internal regulations within the meaning of Article III, was inconsistent with
Article XI:1 and was not justified by Article XX paragraphs (b) and (g).  Moreover, the intermediary
embargo was not justified under Article XX(d).
V. "UNITED STATES - RESTRICTIONS ON IMPORTS OF TUNA", not adopted,
circulated on 16 June 1994, DS29/R
10. The EEC and Netherlands complained that both the primary  and the intermediary  nation
embargoes, enforced pursuant to the MMPA (see above paragraph 7), did not fall under Article III,were inconsistent with Article XI:1 and were not covered by any of the exceptions of Article XX.
The United States considered that the intermediary  nation embargo was consistent with GATT since it
was covered by Article XX, paragraphs (g), (b) and (d), and that the  primary  nation embargo did not
nullify or impair any benefits accruing to the EEC or the Netherlands since it did not apply to these
countries.
11. The Panel found that neither the primary  nor the intermediary  nation embargo was covered
under Article III, that both were contrary to Article XI:1 and not covered by the exceptions in
Article XX (b), (g) or (d) of the GATT.
VI. "UNITED STATES - TAXES ON AUTOMOBILES", not adopted, circulated on
11 October 1994, DS31/R
12. Three US measures on automobiles were under examination:  the luxury tax on automobiles
("luxury tax"), the gas guzzler tax on automobiles ("gas guzzler"), and the Corporate Average FuelEconomy regulation ("CAFE").  The European Community complained that these measures were
inconsistent with GATT Article III and could not be justified under Article XX(g) or (d).  The
United States considered that these measures were consistent with the General Agreement.
13. The Panel found that both the luxury tax -which applied to cars sold for over $30,000 - and
the gas guzzler tax - which applied to the sale of  automobiles attaining less than 22.5 miles per gallon
(mpg) - were consistent with Article III:2 of GATT.WT/CTE/W/53/Rev.1
Page 30
14. The CAFE regulation required the average fuel economy for passenger cars manufactured in
the United States or sold by any importer not to fall below 27.5 mpg.  Companies that are both
importers and domestic manufacturers must calculate average fuel economy separately for imported
passenger automobiles and for those manufactured domestically.  The Panel found the CAFEregulation to be inconsistent with GATT Article III:4 because the separate foreign fleet accounting
discriminated against foreign cars and the fleet averaging differentiated between imported and
domestic cars on the basis of factors relating to control or ownership of producers or importers, rather
than on the basis of factors directly related to the products as such.  Similarly, the Panel found that the
separate foreign fleet accounting was not justified under Article XX(g);  it did not make a finding onthe consistency of the fleet averaging method with  Article XX(g).  The Panel found that the CAFE
regulation could not be justified under Article XX(d).
VII. "UNITED STATES - STANDARDS FOR REFORMULATED AND CONVENTIONAL
GASOLINE", adopted on 20 May 1996, WT/DS2 /9 (Appellate Body Report and Panel
Report)
15. Following a 1990 amendment to the Clean Air Act, the Environmental Protection Agency
(EPA) promulgated the Gasoline Rule on the composition and emissions effects of gasoline, in order
to reduce air pollution in the United States.  From 1 January 1995, the Gasoline Rule permitted onlygasoline of a specified cleanliness ("reformulated gasoline") to be sold to consumers in the most
polluted areas of the country.  In the rest of the co untry, only gasoline no dirtier than that sold in the
base year of 1990 ("conventional gasoline") could be sold.  The Gasoline Rule applied to all US
refiners, blenders and importers of gasoline.  It required any domestic refiner which was in operation
for at  least 6 months in 1990, to establish an individual refinery baseline, which represented thequality of gasoline produced by that refiner in 1990.  EPA also established a statutory baseline,
intended to reflect average US 1990 gasoline quality.  The statutory baseline was assigned to those
refiners who were not a operation for at least six months in 1990, and to importers and blenders of
gasoline.  Compliance with the baselines was measured on an average annual basis.
16. Venezuela and Brazil claimed that the Gasoline Rule was inconsistent, inter alia , with
GATT Article III, and was not covered by Article XX.  The United States argued that the GasolineRule was consistent with Article III, and, in any event, was justified under the exceptions contained in
GATT Article XX, paragraphs (b), (g) and (d).
17. The Panel found that the Gasoline Rule was inconsistent with Article III, and could not be
justified under paragraphs (b), (d) or (g).  On appeal of the Panel's findings on Article XX(g), theAppellate Body found that the baseline establishment rules contained in the Gasoline Rule fell within
the terms of Article XX(g), but failed to meet the requirements of the chapeau of Article XX.
VIII. "UNITED STATES - IMPORT PROHIBITION OF CERTAIN SHRIMP AND
SHRIMP PRODUCTS", adopted on XXX, WT/DS59/XXX (Appellate Body Report andPanel Report)
18. Seven species of sea turtles are currently recognized.  Most of them are distributed around the
globe, in subtropical and tropical areas.  They spend their lives at sea, where they migrate between
their foraging and their nesting grounds.  Sea turtle s have been adversely affected by human activity,
either directly (exploitation of their meat, shells and eggs), or indirectly (incidental capture in
fisheries, destruction of their habitats, pollution of the oceans).
19. The US Endangered Species Act of 1973 ("ESA") lists as endangered or threatened the five
species of sea turtles occurring in US waters and pr ohibits their take within the United States, within
the US territorial sea and the high seas.  Pursuant to the ESA, the United States requires that shrimpWT/CTE/W/53/Rev.1
Page 31
trawlers use "turtle excluder devices"107 (TEDs) in their nets when fishing in areas where there is a
significant likelihood of encountering sea turtles.   Section 609 of Public law 101-102, enacted in 1989
by the United States, provides, inter alia , that shrimp harvested with technology that may adversely
affect certain sea turtles may not be imported into the United States, unless the harvesting nation is
certified to have a regulatory programme and an incidental take rate comparable to that of the UnitedStates, or that the particular fishing environment of the harvesting nation does not pose a threat to sea
turtles.  In practice, countries having any of the fi ve species of sea turtles within their jurisdiction and
harvesting shrimp with mechanical means must impose on their fishermen requirements comparable
to those borne by US shrimpers, essentially the use of TEDs at all times, if they want to be certified
and export shrimp products to the United States.
20. The Panel considered that the ban imposed by the United States was inconsistent with
GATT Article XI (General elimination of quantitative restrictions) and could not be justified under
GATT Article XX (General exceptions).  The A ppellate Body found that the measure at stake
qualified for provisional justification under Article XX(g), but failed to meet the requirements of the
chapeau of Article XX, and, therefore, was not justified under Article XX of GATT 1994.
                                                     
107A TED is a grip trapdoor installed inside a trawling net which allows shrimp to pass to the back of the net
while directing sea turtles and other unintentionally caught large objects out of the net.WT/CTE/W/53/Rev.1
Page 32
 ANNEX 2
Excerpts from the Vienna Convention on the Law of Treaties
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be
given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the
text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in
connection with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connection with the
conclusion of the treaty and accepted by the other parties as an instrument related to
the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the
treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the
agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of inte rpretation, including the preparatory work of the
treaty and the circumstances of its conclusion, in  order to confirm the meaning resulting from the
application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure;  or
(b) leads to a result which is manifestly absurd or unreasonable.
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