WORLD TRADE
ORGANIZATIONWT/CTE/W/203
8 March 2002
(02-1188)
Committee on Trade and Environment
GATT/WTO DISPUTE SETTLEMENT PRACTICE RELATING TO GATT ARTICLE XX,
PARAGRAPHS (b), (d) AND (g)
Note by the Secretariat
I. INTRODUCTION ..........................................................................................................................3
II. PRELIMINARY ISSUES ..............................................................................................................5
A. B URDEN OF PROOF .....................................................................................................................5
B. S EQUENCE OF STEPS ...................................................................................................................6
1. General sequence of steps ................................................................................................... ........6
2. Specific sequence of steps.................................................................................................. .........7
(a) Under Arti cle XX(b) ........................................................................................................ ..7
(b) Under Article XX(d)........................................................................................................ ..7
(c) Under Arti cle XX(g) ........................................................................................................ ..8
C. T HE POLICY CHOICE ..................................................................................................................8
III. APPLICATION OF THE E XCEPTIONS UNDER ARTICLE XX ..........................................9
A. I DENTIFICATION OF THE POLICY PURSUED THROUGH THE MEASURE ..................................10
1. Protecting human, animal or plant life  or health under Article XX(b) .....................................10
2. Securing compliance with laws or regulations which are not inconsistent with theprovisions of the GATT 1994 under Article XX(d)......................................................................10
3. Conserving exhaustible natural resources under Article XX(g)................................................12
B. N
ECESSITY TEST UNDER ARTICLE XX(b) AND (d).................................................................14
C. "R ELATING TO …" AND "… IN CONJUNCTION WITH RESTRICTIONS ON DOMESTIC
PRODUCTION OR CONSUMPTION " UNDER ARTICLE XX(g) ....................................................16
1. "Relating to …"............................................................................................................. ............16
2. "… in conjunction with restrictions on domestic production or consumption". .......................18
IV. APPLICATION OF THE ARTICLE XX CHAPEAU .............................................................20
A. F UNCTION AND SCOPE OF THE PREAMBLE .............................................................................20
B. A MEANS OF ARBITRARY OR UNJUSTIFIABLE DISCRIMINATION ?.........................................22
1. "Unjustifiable"............................................................................................................. ..............23
(a) Serious effort  to negotiate ................................................................................................ 23
(b) Flexibility of  the measure ................................................................................................2 4
2. "Arbit rary"................................................................................................................. ................25
C. A DISGUISED RESTRICTION ON INTERNATIONAL TRADE ?.....................................................26WT/CTE/W/203
Page 2
ANNEX:  CASES ............................................................................................................................... .29
I. U NITED STATES – CANADIAN TUNA ...................................................................................29
II. C ANADA – SALMON AND HERRING ....................................................................................30
III. T HAILAND – CIGARETTES ...................................................................................................32
IV. U NITED STATES – TUNA (MEXICO ).....................................................................................33
V. U NITED STATES – TUNA (EEC) ...........................................................................................35
VI. U NITED STATES – AUTOMOBILES .......................................................................................36
VII. U NITED STATES – GASOLINE ...............................................................................................38
VIII. U NITED STATES – SHRIMP ...................................................................................................40
IX. E UROPEAN COMMUNITIES – ASBESTOS .............................................................................43
X. U NITED STATES – SHRIMP (ARTICLE 21.5) ........................................................................46WT/CTE/W/203
Page 3
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 is an updated and revisedversion of document WT/CTE/W/53/Rev.1.  An outline of the structure of this Note is provided at the
end of the document.  The Note focuses on paragraphs (b), (d) and (g) of GATT Article XX, which
are the three exceptions usually referred to in so-called "environmental" disputes, the latter term being
understood in a broad sense as covering disputes relating to the protection of the environment, as
such, and also the protection of human health.  The Note is limited to environmental disputes
involving Article XX and therefore excludes health cases brought under the Agreement on the
Application of Sanitary and Phytosanitary Measures (SPS).
2. The Note highlights the most important aspects of relevant panel and Appellate Body reports,
but is not meant to interpret them.  Although the Appellate Body in  Japan – Alc oholic Beverages
rejected the panel's approach that "panel reports adopted by the GATT CONTRACTING PARTIES
and the WTO Dispute Settlement Body constitute subsequent practice in a specific case" 
1 as the
phrase "subsequent practice" is used in Article 31(3)(b) of the Vienna Convention on the Law of
Treaties (the " Vienna Convention "),2 the Appellate Body held that:
"Adopted panel reports are an important part of the GATT acqui s. They are often
considered by subsequent panels.  They create legitimate expectations among WTO
Members, and, therefore, should be taken into account where they are relevant to any
dispute.  However, they are not binding, except with respect to resolving theparticular dispute between the parties to that dispute".
3
In the same case, the Appellate Body agreed with the panel finding that unadopted panel reports had
no binding effects but could nevertheless serve as "useful guidance".4  Furthermore, in the US –
                                                     
1 Japan – Taxes on Alc oholic Beverages (hereinafter Japan – Taxes on Alcoholic Beverages ), Panel
Report adopted on 1 November 1996, as modified by the Appellate Body Report, WT/DS8,10,11/R, para. 6.10.
2 Vienna Convention on the Law of Treaties, 23 May 1969, 1155 U.N.T.S.  331; 8 International Legal
Materials  679.  Article 31 on "General rule of interpretation" reads as follows:
" 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
connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with theconclusion of the treaty and accepted by the other parties as an instrument relatedto the treaty.
3. There shall be taken into acco unt, 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 theagreement of the parties regarding its interpretation;(c) any relevant rules of international law applicable in the relations between theparties.
4. A special meaning shall be given to a term if it is established that the parties so intended."
3 Japan – Alcoholic Beverages , WT/DS8,10,11/AB/R, Appellate Body report, adopted on
1 November 1996, in WTO, Dispute Settlement Reports  1996 (hereinafter DSR 1996 ), volume I, Geneva, 1998,
p. 108.
4 Japan – Alc oholic Beverages , Panel Report, para. 6.10 and Appellate Body Report, p. 108.WT/CTE/W/203
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Shrimp (Article 21.5)  case,5 the Appellate Body held that its reasoning in Japan – Alcoholic
beverages  on the GATT acquis "applies to adopted Appellate Body Reports as well".6
3. Under the GATT, six panel proceedings involving an examination of environmental measures
or human health-related measures under Article XX have been completed ( US – Canadian Tuna,7
Canada – Salmon and Herring,8 Thailand – Cigarettes,9 US – Tuna (Mexico),10 US – Tuna (EEC) 11
and US – Automobiles 12).  Out of the six reports, three remained unadopted ( US – Tuna (Mexico), US
– Tuna (EEC) and US – Automobiles ).  So far, under the WTO, three disputes led to the adoption of
panel and Appellate Body reports ( US – Gasoline,13 US – Shrimp 14 and EC – Asbestos 15) including
one case ( US – Shrimp ) followed by a procedure under Article 21.5 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU") (referred to hereinafter as US – Shrimp
(Article 21.5) ).  A brief description of the relevant facts of each case is provided in the Annex.
4. The relevant 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 oninternational trade, nothing in this Agr eement shall be construed to prevent the
adoption or enforcement by any Member of measures:
(…)
(b) necessary to protect human, animal or plant life or health;
(…)(d) necessary to secure compliance with laws or regulations which are not
inconsistent with the provisions of this  Agreement, including those relating to
customs enforcement, the enforcement of monopolies operated under paragraph 4 of
Article II and Article XVII, the protection of patents, trade marks and copyrights, and
the prevention of deceptive practices;
                                                     
5 United States – Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5
by Malaysia (hereinafter US – Shrimp (Article 21.5) ), Appellate Body Report and Panel Report, adopted on
21 November 2001, WT/DS58/AB/RW.
6 Ibid. , Appellate Body Report, para. 109.
7 United States – Prohibition of Imports of Tuna and Tuna Products from Canada (hereinafter US –
Canadian Tuna ), adopted on 22 February 1982, BISD 29S/91.
8 Canada – Measures Affecting Exports of Unprocessed Herring and Salmon (hereinafter Canada –
Salmon and Herring ), adopted on 22 March 1988, BISD 35S/98.
9 Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes  (hereinafter Thailand –
Cigarettes ), adopted on 7 November 1990, BISD 37S/200.
10 United States – Restrictions on Imports of Tuna (hereinafter US – Tuna (Mexico) ), circulated on
3 September 1991, not adopted, DS 21/R.
11 United States – Restrictions on Imports of Tuna , circulated on 16 June 1994, not adopted, DS29/R,
(hereinafter US – Tuna (EEC) ).
12 United States – Taxes on Automobiles (hereinafter US – Automobiles ), circulated on
11 October 1994, not adopted, DS31/R.
13 United States – Standards for Reformulated and Conventional Gasoline (hereinafter US – Gasoline ),
Appellate Body Report and Panel Report, adopted on 20 May 1996, WT/DS2/R and WT/DS2/AB/R.
14 United States – Import Prohibition of Certain Shrimp and Shrimp Products (hereinafter US –
Shrimp ), Appellate Body Report and Panel Report adopted on 6 November 1998, WT/DS58.
15 European Communities – Measures Affecti ng Asbestos and Asbest os-Containing Products
(hereinafter EC – Asbestos ), Appellate Body Report and Panel Report, adopted on 5 April 2001, WT/DS135.WT/CTE/W/203
Page 5
(…)
(g) relating to the conservation of exhaustible natural resources if such
measures are made effective in conjunction with restrictions on domestic production
or consumption;
(…)".
5. The structure of this Note is based upon the approach followed both by panels and by the
Appellate Body in addressing a defence under Article  XX.  Part II introduces some preliminary issues
of specific concern to the application of Article XX, namely the burden of proof, the sequence of steps
and the policy choice.  The following two parts address a defence under Article XX which is two-
tiered: the challenged measure must meet the criteria of one of the Article XX exceptions and the
measure must pass the requirements of the introductory clause.  Part III details the process of applying
an Article XX exception, i.e. the identification of the policy pursued by the measure and thecompliance with the specific requirements under Article XX(b), (d), and (g).  Finally, Part IV
addresses the conditions a measure has to meet to comply with the introductory clause of Article XX.
II. PRELIMINARY ISSUES
A. B
URDEN OF PROOF
6. As set out in the Appellate Body report on US – Wool Shirts and Blouses , and recalled by
subsequent reports of panels and of the Appellate Body, the burden of proof rests upon the party,
whether complaining or defending, who asserts the affirmative of a particular claim or defence.  If
that party adduces evidence sufficient to raise a presumption that what is claimed is true, the burden
then shifts to the other party, who will fail unless it adduces sufficient evidence to rebut the
presumption.16  It implies that the complaining party will be required to make a  prima facie  case of
violation of the relevant provisions of the WTO Agreement.
7. The Appellate Body in US – Wool Shirts and Blouses  asserted that Article XX contains
"limited exceptions from obligations under certain other provisions of the GATT 1994, not positive
rules establishing obligations in themselves".17  Article XX is an example of provisions which are in
the nature of "affirmative" defences and the Appellate Body noted further that "it is only reasonablethat the burden of establishing such a defence should rest on the party asserting it".
18  Such provisions
are invoked by the party complained against and are considered by the panel only once it has
determined a violation of some other provisions.
8. In the US – Gasoline  case, the Appellate Body found that the burden of showing that a
measure complies with the requirements of the introductory clause of Article XX falls on the
defending party, even after that party has established that the measure qualifies under one of the
subheadings of Article XX.  Therefore a party invoking an exception under Article XX has to prove:
                                                     
16 See United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India
(hereinafter US – Wool Shirts and Blouses ), Appellate Body Report, adopted on 23 May 1997,
WT/DS/33/AB/R, in WTO, Dispute Settlement Reports  1997 (hereinafter DSR 1997) , volume 1, Geneva, 2000,
p. 335. This ruling has been applied by the Appellate Body in inter alia : India - Patent Protection for
Pharmaceutical and Agricultural Chemical Products , WT/DS50/AB/R adopted on 19 December 1997,
paras. 73-75; European Communities Measures Concerning Meat and Meat Products (Hormones),
WT/DS26/AB/R, WT/DS48/AB/R, adopted on 16 January 1998, para. 98; India – Quantitative Restrictions on
Imports of Agricultural, Textile and Industrial Products , WT/DS90/AB/R, adopted on 23 August 1999,
para. 44; and by the Panel in EC – Asbestos , para. 8.177.
17 US – Wool Shirts and Blouses , Appellate Body Report, in DSR 1997 , volume 1, Geneva, 2000,
p. 335.
18 Ibid. , p. 335.WT/CTE/W/203
Page 6
first, that the inconsistent measure comes within the scope of one exception and, second, that the
measure complies with the chapeau of Article XX.  In addition, the Appellate Body indicated that the
latter is more difficult to prove than the former.  The Appellate Body stated:
"The burden of demonstrating that a measure provisionally justified as being within
one of the exceptions set out in the individual paragraphs of Article XX does not, inits 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".
19
B. SEQUENCE OF STEPS
1. General sequence of steps
9. The defending 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 of thepreamble, i.e. is not applied in a manner which 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".  These are cumulative requirements.  In the  US – Gasoline  case,
the Appellate Body presented a two-tiered test under Article XX, as follows:
"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 justification by reason of characterization of the measure
under [one of the exceptions];  second, further appraisal of the same measure underthe introductory clauses of Article XX".
20
10. In the US – Shrimp  case, the Appellate Body disagreed with the panel that had started its
analysis with the chapeau of Article XX and had reasoned that "(…) as the conditions contained in the
introductory provision apply to any of the paragra phs of Article XX, it seems equally appropriate to
analyse first the introductory provision of Article XX".21  The Appellate Body said:
"The sequence of steps indicated above [reference to the US – Gasoline  case, see
above] 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 the United States – Gasoline  'seems
equally appropriate'. [footnote omitted] We do not agree".22
"The task of interpreting the chapeau so as to prevent the abuse or 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 except ion threatened with abuse.  The standards
established in the chapeau are, moreover, necessarily broad in scope and reach (...).
                                                     
19 US – Gasoline , Appellate Body Report, DSR 1996 , p. 21.
20 Ibid. , pp. 20-21.
21 US – Shrimp , Panel Report, para. 7.28.
22 US – Shrimp , Appellate Body Report, para. 119.WT/CTE/W/203
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When applied in a particular case, the actual contours and contents of these standards
will vary as the kind of measure under examination varies".23
"(…) It does not follow from the fact that a measure falls within the terms ofArticle XX(g) that that measure also will necessarily comply with the requirements of
the chapeau".
24
11. This sequence of steps is now part of both panel and Appellate Body practice. In the EC –
 Asbestos case, for instance, the panel observed:
"In accordance with the approach noted by the Panel in United States – Gasoline and
the Appellate Body in United States – Import Prohibition of Certain Shrimp and
Shrimp Products, we will first examine whether the measure falls within the scope of
paragraph (b) of Article XX, the provision expressly invoked by the
European Communities.  If we decide that it does, we will consider whether, in its
application, the Decree satisfies the conditions of the introductory clause of
Article XX".25
2. Specific sequence of steps
12. As noted above, the party invoking Article XX bears the burden of proving that the contested
measure meets the requirements contained in that provision.
(a) Under Article XX(b)
13. Under paragraph (b), the panel, in US – Gasoline , determined that this demonstration includes
the following steps:
"(1) [T]hat the policy  in respect of the measures for which the provision was
invoked fell within the range of policies designed to protect human, animal orplant life or health;
(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".
26
(b) Under Article XX(d)
14. In the Korea – Various Measures on Beef  case, the Appellate Body noted that the party
invoking paragraph (d) had to demonstrate the following steps:
"For a measure, otherwise inconsistent with GATT 1994, to be justified provisionally
under paragraph (d) of Article XX, two elements must be shown.  First, the measure
must be one designed to 'secure compliance' with laws or regulations that are not
themselves inconsistent with some provision of the GATT 1994.  Second, the
measure must be 'necessary' to secure such compliance.  A Member who invokes
                                                     
23 Ibid. , para. 120.
24 Ibid. , para. 149.
25 EC – Asbestos , Panel Report, para. 8.167.  See also US – Shrimp (Article 21.5) , Panel Report,
paras. 5.27-5.28.
26 US – Gasoline , Panel Report, para. 6.20.  See also  US – Tuna (EEC) , para. 5.29.WT/CTE/W/203
Page 8
Article XX(d) as a justification has the burden of demonstrating that these two
requirements are met".27
(c) Under Article XX(g)
15. Finally,  under Article XX(g), the Appellate Body in US – Shrimp  followed a three-step
analysis:
(1) The measure at issue is "a measure concerned with the conservation of
'exhaustible natural resources' within the meaning of Article XX(g)"; 28
(2) "Article XX(g) requires that the measure sought to be justified be one which'relat[es] to' the conservation of exhaustible natural resources"; 
29 and
(3) The measure at issue is "a measure made effective in conjunction with restrictions
on domestic production or consumption".30
C. THE POLICY CHOICE
16. None of the Appellate Body and panel reports questioned the environmental or health policy
choices made by governments.  Already in the US – Tuna (Mexico)  case, the panel observed that it
was the measure and not the policy goal that had to meet the requirements under Article XX.  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 exhaustible natural
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".31
17. Moreover, in the US – Gasoline case, the panel underlined that:
"(…) [I]t 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 theGeneral Agreement, WTO Members were free to set their own environmental
objectives, 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".
32
18. In the same case, the Appellate Body stated as follows:
"It is of some importance that the Appellate Body point out what this [the Appellate
Body's finding] does not mean.  It does not mean, or imply, that the ability of any
                                                     
27 Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef (Hereinafter Korea – Various
Measures on Beef ), WT/DS161/AB/R, WT/DS169/AB/R, Appellate Body Report, adopted on 10 January 2001,
para. 157.
28 US – Shrimp, Appellate Body Report, para. 127.
29 Ibid. , para. 135.
30 Ibid. , paras. 143-145.
31 US – Tuna (Mexico) , Panel Report, unadopted, para. 5.32.
32 US – Gasoline , Panel Report, para. 7.1.  See also para. 6.22.WT/CTE/W/203
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WTO Member to take measures to control air pollution or, more generally, to protect
the environment, is at issue.  That would be to ignore the fact that Article XX of the
General Agreement  contains provisions designed to permit important state interests -
including the protection of human health, as well as the conservation of exhaustible
natural resources - to find expression.  The provisions of Article XX were notchanged as a result of the Uruguay Round of Multilateral Trade Negotiations.
Indeed, in the preamble to the WTO Agreement  and in the Decision on Trade and
Environment , [footnote omitted] there is specific acknowledgement to be found about
the importance of coordinating policies on trade and the environment.  WTO
Members have a large measure of autonomy to determine their own policies on the
environment (including its relationship with trade), their environmental objectives
and the environmental legislation they enact and implement.  So far as concerns theWTO, that autonomy is circumscribed only by the need to respect the requirements of
the General Agreement  and the other covered agreements".
33
19. In the EC – Asbestos  case, the Appellate Body asserted clearly that it was each WTO
Member's "(…) right to determine the level of protectio n of health that [it] consider[s] appropriate in a
given situation".34  Accordingly, the Appellate Body did not question France's goal of reducing the
spread of asbestos-related health risks to zero.  The Appellate Body also ruled that "there is no
requirement under Article XX(b) of the GATT 1994 to quantify , as such, the risk to human life or
health".35  Similarly, in the Australia – Salmon  case, the Appellate Body asserted that the "'appropriate
level of protection' established by a Member and the '(…) measure' have to be clearly distinguished.
[footnote omitted] They are not one and the same thing. The first is an objectiv e, the second is an
instrument chosen to attain or implement that objective".36
20. In the US – Gasoline  case, the panel found that it was the inconsistency of the measure with
the GATT 1994 (the imported gasoline was treated less favourably than domestic gasoline) that
requires justification under Article XX and not the policy goal (the protection of the environment or
of public health, for instance).  The Appellate Body  reversed this panel's finding and found that the
panel erred in law in referring to the inconsistency of the measure instead of the measure at issue.
The Appellate Body held:
"The result of this analysis is to turn Article XX on its head.  (…) 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 findin g of  'less favourable treatment'". 37
III. APPLICATION OF THE EXCEPTIONS UNDER ARTICLE XX
21. The first step in the application of Article XX exceptions is to identify whether the policy
pursued through the measure falls within the range of policies designed either to protect human,
animal or plant life or health, or to secure compliance with laws or regulations which are not
inconsistent with the provisions of the GATT 1994, or to conserve exhaustible natural resources
(Section A).  The second step consists of determining whether the specific requirements under Article
XX(b), (d) and (g) are met. This examination comprises either the elements of "necessary" forparagraphs (b) and (d) (Section B), or of "relating to" and "in conjunction with" for paragraph (g)
(Section C)
                                                     
33 US – Gasoline , Appellate Body Report, DSR 1996 , p. 28.
34 EC – Asbestos , Appellate Body Report, para. 168.
35 Ibid. , para. 167.
36 Australia – Measures affecting importation of Salmon (Hereinafter Australia – Salmon) ,
WT/DS18/AB/R, Appellate Body Report, adopted on 20 October 1998, para. 200.
37 US – Gasoline , Appellate Body Report, DSR 1996 , p. 15.WT/CTE/W/203
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A. IDENTIFICATION OF THE POLICY PURSUED THROUGH THE MEASURE
1. Protecting human, animal or plant life or health under Article XX(b)
22. In the Thailand – Cigarettes  case, the panel acknowledged, in accordance with the parties to
the dispute and the expert from the World Health Organisation ("WHO"), that:
"[S]moking 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".38
23. In the two Tuna  disputes, the panel and the parties accepted - implicitly in US – Tuna
(Mexico) , explicitly in US – Tuna (EEC) -39 that the protection of dolphin life or health was a policy
that could fall under Article XX(b): "(…) [T]he Panel noted that the parties did not disagree that the
protection of dolphin life or health was a policy that could come within Article XX (b)".40
24. In the US – 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 plan t life or health mentioned in Article XX(b)".41
25. In the EC – Asbestos  case, the panel had to provide an assessment on the health risk posed by
chrysotile-cement products because the parties disagreed on its extent.  The panel considered first that"[I]n principle, a policy that seeks to reduce exposure to a risk should fall within the range of policies
designed to protect human life or health, insofar as a risk exists".
42  The panel subsequently found that
"the evidence before it tends to show that handling chrysotile-cement products constitutes a risk to
health (…)",43 and that therefore "the EC ha[s] shown that the policy of prohibiting chrysotile asbestos
implemented by the Decree falls within the range of policies designed to protect human life orhealth".
44  The Appellate Body upheld the finding of the panel and found that "[t]he Panel enjoyed a
margin of discretion in assessing the value of ev idence, and the weight to be ascribed to that
evidence",45 and that "the Panel remained well within the bounds of its discretion in finding that
chrysotile-cement products pose a risk to human life or health".46
2. Securing compliance with laws or regulations which are not inconsistent with the
provisions of the GATT 1994 under Article XX(d)
26. The panel, in the EEC – Parts and Components  case, interpreted the phrase "to secure
compliance with laws and regulations" to mean "to enforce obligations under laws and regulations",
and not "to ensure the attainment of the objectives of the laws and regulations".47  The panel found
                                                     
38 Thailand – Cigarettes , Panel Report, para. 73.
39 US – Tuna (Mexico) , Panel Report, unadopted, paras. 5.24-5.29 and US – Tuna (EEC) , Panel Report,
unadopted, para. 5.30.
40 US – Tuna (EEC) , Panel Report, unadopted, para. 5.30.
41 US – Gasoline , Panel Report, para. 6.21.
42 EC – Asbestos , Panel Report, para. 8.186.
43 Ibid. , para. 8.193.
44 Ibid. , para. 8.194.
45 EC – Asbestos , Appellate Body Report, para. 161.
46 Ibid. , para. 162.
47 European Economic Community – Regulation on Imports of Parts and Components (Hereinafter
EEC – Parts and Components ), Panel Report, adopted on 16 May 1990, L/6657 - 37S/132, para. 5.17.WT/CTE/W/203
Page 11
that "Article XX(d) covers only measures related to the enforcement of obligations under laws or
regulations consistent with the General Agreement".48
27. In the US – Gasoline  case, the panel followed this approach.  It examined whether the aspect
of the baseline establishment methods found inconsistent with the GATT 1994 secured compliance
with a law or regulation not inconsistent with the GATT 1994.49  The panel observed that:
"[A]ssuming that a system of baselines by it self 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.  These  methods were not an enforcement mechanism .  They
were simply rules for determining the individual baselines.  As such, they were notthe type of measures with which Article XX(d) was concerned".
50 (emphasis added)
28. In US – Tuna (Mexico) , the panel examined the second aspect of Article XX(d), i.e. whether
those laws or regulations are not inconsistent with the provisions of the GATT.  The panel noted:
"Article XX(d) requires that the 'laws and regulations' with which compliance is
being secured be themselves 'not inconsis tent' 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 indirectly through third countries.  The Panel found
that, given its finding that the direct embargo was inconsistent with the GeneralAgreement, the 'intermediary nations' embargo and the provisions of the MMPA
[Marine Mammal Protection Act] 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'".
51
29. A similar reasoning was followed in US – Tuna (EEC) , where the panel, "recalling its finding
that the measures taken under the primary nation embargo were inconsistent with Article XI:1 of the
General 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".52
30. In US – Automobiles , the panel followed the same approach:
"The panel recalled its finding that the CAFE [Corporate Average Fuel Economy]
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 theobject 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 were
examined by the Panel, such payments could not be justified under Article XX(d)
since, contrary to the requirements of that provision, the underlying measure (theCAFE requirement) was itself inconsistent with the General Agreement.
                                                     
48 Ibid. , para. 5.18.
49 US – Gasoline , Panel Report, para. 6.33.
50 Ibid .
51 US – Tuna (Mexico) , Panel Report, unadopted, para. 5.40.
52 US – Tuna (EEC) , Panel Report, unadopted, para. 5.41.WT/CTE/W/203
Page 12
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)".53
3. Conserving exhaustible natural resources under Article XX(g)
31. In the US – Canadian Tuna  case, the panel noted that "both parties considered tuna stocks,
including albacore tuna, to be an exhaustible natural resource in need of conservation management".54
In the Canada – Salmon and Herring  case, the panel agreed with the parties that salmon and herring
stocks are "exhaustible natural resources".55  In US – Tuna (Mexico) , the parties and the panel seem to
have implicitly agreed that dolphins are an exhaustible natural resource, whereas in US – Tuna (EEC)
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 naturalresource".
56
32. In US – Automobiles , 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)".57
33. In the US – 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 United States:
"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 – Salmon and Herring ].
Accordingly, the Panel found that a policy to reduce the depletion of clean air was a policy toconserve a natural resource within the meaning of Article XX(g)".
58
34. In the US – 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 the complainants had argued, 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".59  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 theUruguay Round, the preamble attached to the WTO Agreement  shows that the
signatories to that Agreement were, in 1994, fully aware of the importance and
                                                     
53 US – Automobiles , Panel Report, unadopted, para. 5.67.
54 US – Canadian Tuna , Panel Report, para. 4.9.
55 Canada – Salmon and Herring , Panel Report, para. 4.4.
56 US – Tuna (EEC) , Panel Report, unadopted, para. 5.13.
57 US – Automobiles , Panel Report, unadopted, para. 5.57.
58 US – Gasoline , Panel Report, para. 6.37.
59 US – Shrimp , Appellate Body Report, para. 128.WT/CTE/W/203
Page 13
legitimacy of environmental protection as a goal of national and international 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] (…)".60
"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' [footnote referring inter alia  to
Namibia (Legal Conseque nces) Advisory Opinion (1971) I.C.J. Rep., p. 31].  It is,
therefore, pertinent to note that modern international conventions and declarations
make frequent references to natural resources as embracing both living and non-living
resources (...)".61
"Given the recent acknowledgement by the international community of the
importance of concerted bilateral or multilateral action to protect living natural
resources, and recalling the explicit 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 naturalresources. [footnote omitted]  Moreover, two adopted GATT 1947 panel reports
previously found fish to be an 'exhaustible natural resource' within the meaning of
Article XX(g) [reference to US – Canadian Tuna  and Canada – Salmon and
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)".
62
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 ("CITES"),63
and that there was "a sufficient nexus between the migratory and endangered marine populationsinvolved and the United States for purposes of Article XX(g)",
64 the Appellate Body concluded that
the five species of sea turtles involved in the dispute constituted "exhaustible natural resources"
within the meaning of Article XX(g) of the GATT 1994.65
                                                     
60 Ibid. , para. 129.
61 Ibid. , para. 130.
62 Ibid. , para. 131.
63 Ibid. , para. 132.
64 Ibid. , para. 133.
65 In this context, it is worth observing that in US – Shrimp  and in US – Shrimp (Article 21.5) , neither
the panel nor the Appellate Body referred to the approach of US – Tuna (Mexico) and US – Tuna (EEC) .  In
these two unadopted reports, the panel addressed the question of the extra-jurisdictional application of
Article XX.  In US – Tuna (EEC) , the panel looked at the negotiating history of Article XX(b) and (g) and found
that "the statements and drafting changes made during the negotiation of the Havana Charter and theGeneral Agreement did not clearly support any particular contention of the parties with respect to the location ofthe living thing to be protected under Article XX (b) [and (g)]" (paras. 5.20 and 5.33) and further observed thatneither the GATT nor "general international law" prohibited in principle measures related to things or matterslocated outside a country's own territory.  The panel also noted that the text of both Article XX(b) and
Article XX(g) did "not spell out any limitation on the location" of the living things to be protected and of the
exhaustible natural resources to be conserved (paras. 5.15 and 5.31).  It stated that it "could not (…) be said thatthe General Agreement proscribed in an absolute manner measures that related to things or actions outside theterritorial jurisdiction of the party taking the measure" (para. 5.16).WT/CTE/W/203
Page 14
B. NECESSITY TEST UNDER ARTICLE XX(b) AND (d)
35. Paragraphs (b) and (d) of Article XX both require the performance of what has been
commonly refered to as a "necessity test": measures must be necessary  either "to protect human,
animal or plant life or health" or to "secure compliance with laws or regulations".  In  Thailand –
Cigarettes , the panel concluded that the term "necessary" had the same meaning under paragraphs (b)
and (d):
"The 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 toinconsistencies resulting from the enfo rcement of GATT-consistent laws and
regulations while paragraph (b) applies to those resulting from health-related policies
therefore did not justify a different interpretation of the term 'necessary'".
66
36. The examination of whether or not a measure is "necessary" under paragraphs (b) and (d) has
proved to be a crucial step in panel practice.  The "necessity test" was first defined for paragraph (d)in the US – Section 337  case.  A similar approach was followed for paragraph (b) in the  Thailand –
Cigarettes  case.  In these two cases, a requirement of so-called "least-trade restrictiveness" was
established to decide whether a measure was "necessary" under Article XX(b) and (d).  In its report on
US – Section 337 , the panel indicated that concerning Article XX(d) it needed to be determined
whether a GATT-consistent alternative could have been employed:
"It was clear to the Panel that a contracting party cannot justify a measure
inconsistent with another GATT provision as 'necessary' in terms of Article XX(d) if
an alternative measure which it could reasonably be expected to employ and which is
not inconsistent with other GATT provisions is available to it .  By the same token, in
cases where a measure consistent with other GATT provisions is not reasonablyavailable, a contracting party is bound to use, among the measures reasonably
available to it, that which entails the least degree of inconsistency with other GATT
provisions ".
67 (emphasis added)
37. The panel in the  Thailand – Cigarettes  case borrowed the "least-trade restrictive" requirement
from the US – Section 337  panel report.  The panel defined the test of "necessity" applicable under
Article XX(b) as follows:
"[T]he 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 General Agreement, or less inconsistent with it, which Thailand could reasonably
be expected to employ to achieve its health policy objectives".68
38. In the United States - Measures Affecting Alcoholic and Malt Beverages  case , the panel
followed the same approach.  When considering Article XX(d), the panel stated that:
"In the view of the Panel, the United States has not demonstrated that the common
carrier requirement is the least trade-restri ctive enforcement measure available to the
                                                     
66 Thailand – Cigarettes , Panel Report, para. 74.
67 See US – Section 337  of the Tariff Act of 1930, 36S/345, Panel Report adopted on 7 November 1989,
para. 5.26.
68 Thailand – Cigarettes , Panel Report, para. 75.WT/CTE/W/203
Page 15
various states and that less restrictive measures, e.g. record-keeping requirements of
retailers and importers, are not sufficient for tax administration purposes.  In this
regard, the Panel noted that not all fifty states of the United States maintain common
carrier requirements.  It thus appeared to the Panel that some states have found
alternative, and possibly less trade-restrictive, and GATT-consistent, ways ofenforcing their tax laws.   The Panel accordingly found that the United States has not
met its burden of proof in respect of its claimed Article XX(d) justification for the
common carrier requirement of the various states".
69 (emphasis added)
39. In the US – Gasoline  case, the panel also held, in essence, that an alternative measure did not
cease to be "reasonably" available simply because the alternative measure involved administrative
difficulties for a Member.  The panel's findings on this point were not appealed.70
40. The definition of the "necessity test" was supplemented by the Appellate Body in the  Korea –
Various Measures on Beef  case.  In its report, the Appellate Body addressed the issue of "necessity"
under Article XX(d) and found that the panel was correct in following the standard set forth by the
panel in US – Section 337 .71  However, the Appellate Body introduced some additional
considerations.  It first studied carefully the meaning of the word "necessary" and observed that the
reach of this word was not limited to what was "indispensable".  It further considered that "a'necessary' measure is, in this continuum, located si gnificantly closer to the pole of 'indispensable'
than to the opposite pole of simply 'making a contribution to'".
72
41. In the Korea – Various Measures on Beef  case, the Appellate Body bifurcated the necessity
test as follows: 1) situations where the claim may be that a measure is indispensable, i.e. where the
measure is the only available and 2) situations where a Member may be able to justify its measure as"necessary" within the meaning of Article XX, even if there would be other measures available.  For
the second situation, the Appellate Body adopted the following approach:
"A measure with a relatively slight impact upon imported products might more easily
be considered as 'necessary' than a measure with intense or broader restrictive
effects".
73
"(…) [D]etermination of whether a measure, which is not 'indispensable', may
nevertheless be 'necessary' within the contemplation of Article XX(d), involves in
every case a process of weighing and balancing a series of factors  which prominently
include the contribution made by the compliance measure to the enforcement of the
law or regulation at issue, the importance of the common interests or values protected
                                                     
69 United States - Measures Affec ting Alcoholic and Malt Beverages, DS23/R, Panel Report adopted on
19 June 1992, para. 5.52
70 US – Gasoline , Panel Report, paras. 6.26 and 6.28.
71 Korea – Various Measures on Beef , Appellate Body Report, para. 159 ff.
72 Ibid. , para. 161.  The whole paragraph reads as follows:
"We believe that, as used in the context of Article XX(d), the reach of the word 'necessary' is
not limited to that which is 'indispensable' or 'of absolute necessity' or 'inevitable'.  Measures
which are indispensable or of absolute necessi ty or inevitable to secure compliance certainly
fulfil the requirements of Article XX(d).  But other measures, too, may fall within the ambit ofthis exception.  As used in Article XX(d), the term 'necessary' refers, in our view, to a range ofdegrees of necessity.  At one end of this continuum lies 'necessary' understood as'indispensable';  at the other end, is 'necessary ' taken to mean as 'making a contribution to.'
We consider that a 'necessary' measure is, in this  continuum, located significantly closer to the
pole of 'indispensable' than to the opposite pole of simply 'making a contribution to' [footnoteomitted]".
73 Ibid. , para. 163.WT/CTE/W/203
Page 16
by that law or regulation, and the accompanying impact of the law or regulation on
imports or exports".74 (emphasis added)
42. It may be possible to say that there has been some evolution in the interpretation of the
necessity requirement of Article XX (b) and (d).  It has evolved from a least-trade restrictive approach
to a less-trade restrictive one, supplemented with a proportionality test ("a process of weighing andbalancing a series of factors").
43. Finally, in the EC – Asbestos  case, for the first time, an "environmental" measure passed the
necessity test.  The Appellate Body, in recalling the finding of the  Korea – Various Measures on Beef
case, noted that the extent to which the alternative measure "contribute[d] to the realization of the end
pursued" 
75 was to be taken into consideration.  It observed that "[t]he more vital or important [the]
common interests or values" pursued, the easier it would be to accept, as "necessary", measures
designed to achieve those ends.76  This seems to suggest that there might be differing levels of
scrutiny applicable to the analysis of the necessity test, depending on the importance of the "interests
or values" it served.  The Appellate Body noted that in this case, the objective pursued by the measure
was the preservation of human life and health, a value both "vital" and "important in the highest
degree".77
C. "RELATING TO  …" AND "… IN CONJUNCTION WITH RESTRICTIONS ON DOMESTIC
PRODUCTION OR CONSUMPTION " UNDER ARTICLE XX(g)
1. "Relating to …"
44. Article XX(g) provides an exception for measures "relating to the conservation of exhaustible
natural resources".  The first application of the "relating to" clause was made in the  Canada – Salmon
and Herring  case.78  The panel decided to examine the meaning of "relating to" in the light of the
context in which Article XX(g) appears in the GATT and of the purpose of that provision.  It noted
that:
"[S]ome 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 tomeasures '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 merely to ensure that the commitments under the
General Agreement do not hinder the pursuit of policies aimed at the conservation ofexhaustible 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
                                                     
74 Ibid. , para. 164.
75 EC – Asbestos , Appellate Body Report, para. 172, referring to Korea – Various Measures on Beef ,
Appellate Body Report, para. 163
76 EC – Asbestos , Appellate Body Report, para. 172, referring to Korea – Various Measures on Beef ,
Appellate Body Report, para. 162.
77 EC – Asbestos , Appellate Body Report, para. 172.
78 The panel already examined Article XX(g) in US – Canadian Tuna , but did not have to interpret the
terms "relating to" and "in conjunction with" because the panel found that the party invoking Article XX(g) did
not maintain restrictions on the production or consumption of tuna.WT/CTE/W/203
Page 17
exhaustible natural resource to be considered as "relating to" conservation within the
meaning of Article XX(g) ".79  (emphasis added)
The panel introduced thereby the interpretation that the measure had to be "primarily aimed at" and
not "necessary or essential".  Panel and Appellate Body reports thereafter have referred to this
interpretation.
45. In US – Tuna (Mexico) , US – Tuna (EEC) , US – Automobiles , US – Gasoline  and US –
Shrimp , panels progressively complemented the "primarily aimed at" interpretation by introducing
additional elements to be taken into account when determining whether a measure was  relating to  the
conservation of exhaustible natural resources.
46. First, in US – Tuna (Mexico) , the panel found that the measure at issue was not primarily
aimed at the objectives of Article XX(g) because it was based on "unpredictable conditions": "[t]he
Panel considered that a limitation on trade based on such unpredictable conditions could not beregarded as being primarily aimed at the conservation of dolphins".
80
47. Second, in US – Tuna (EEC) , the panel concluded concerning the consistency of a measure
with Article XX(g) 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 at either the
conservation of an exhaustible natural resource, or at rendering effective restrictions on domesticproduction or consumption, in the meaning of Article XX(g)".
81
48. Third, in US – Automobiles , the panel was of the view that "a measure that did not further the
objectives of conservation of an exhaustible resource could not be deemed 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)".82
49. Fourth, in the US – Gasoline  case, the panel remained unconvinced that "the less favourable
baseline establishment methods" at issue were primarily  aimed at the conservation of exhaustible natural
resources on the grounds that there was "no direct c onnection 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  As observed later by the Appellate Body, the panel did
not try to clarify "whether the phrase 'direct conn ection' was being used as a synonym for 'primarily
aimed at' or whether a new and additional elemen t (on top of 'primarily aimed at') was being
demanded".84
50. In US – Gasoline , the Appellate Body reversed the finding of the panel because "the Panel
asked itself whether the 'less favourable treatment' of imported gasoline was 'primarily aimed at' the
conservation of natural resources, rather than whethe r the 'measure', i.e. the baseline establishment rules,
were 'primarily aimed at' conservation of clean air".85  The Appellate Body clarified the meaning of
Article XX(g) by stating that a measure would qualify as "relating to the conservation of natural
resources" if the measure exhibited a "substantial rela tionship" with, and was not merely "incidentally or
inadvertently aimed at" the conservation of exhaustible natural resources:
"Without baselines of some kind, such scrutiny would not be possible and the
Gasoline Rule's objective of stabilizing and preventing further deterioration of the
                                                     
79 Canada – Salmon and Herring , Panel Report, para. 4.6.
80 US – Tuna (Mexico) , Panel Report, unadopted, para. 5.33.
81 US – Tuna (EEC) , Panel Report, unadopted, para. 5.27.
82 US – Automobiles , Panel Report, unadopted, para. 5.60.
83 US – Gasoline , Panel Report, para. 6.40.
84 US – Gasoline , Appellate Body Report, DSR 1996 , p. 15.
85 Ibid.WT/CTE/W/203
Page 18
level of air pollution prevailing in 1990, would be substantially frustrated.  The
relationship between the baseline establishment rules and the "non-degradation"
requirements of the Gasoline Rule is not negated by the inconsistency, found by the
Panel, of the baseline establishment rules with the terms of Article III:4.  We consider
that, given that substantial relationship , the baseline establishment rules cannot be
regarded as merely incidentally or inadvertently aimed at  the conservation of clean
air in the United States for the purposes of Article XX(g)".86 (emphasis added)
51. However, the Appellate Body in US – Gasoline  made it clear 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)".87  But this point was not considered any further since, in the appeal proceeding,
the parties to the dispute had accepted the "primarily aimed at" test as developed by previous panel
reports.  The Appellate Body also observed 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 of
connection or relationship between the measure under a ppraisal and the state interest or policy sought to
be promoted or realized".88
52. Finally, in the US – Shrimp  case, the Appellate Body, recalling the findings it had reached in
US – Gasoline on the "relating to" clause, further stated in order to determine whether the US measure
at issue and the objective of conserving sea turtles were substantially related:
"In the present case, we must examine the relationship between the general structure
and design of the measur e here at stake, Section 609, and the policy goal it purports
to serve, that is, the conservation of sea turtles".89 (emphasis added)
"(…) Focusing on the design of the measure here at stake [footnote omitted], it
appears to us 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, endangeredspecies, 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." 
90
(emphasis added)
2. "… in conjunction with restrictions on domestic production or consumption"
53. Article XX(g) contains as an additional requirement that the measure at stake be "made
effective in conjunction with restrictions on domestic production or consumption".  In the US –
 Canadian Tuna  case, the panel noted that the United States provided no evidence that domestic
consumption of tuna and t una products had been restricted in the United States.91  The panel could
therefore "not accept it to be justified that the Unit ed States prohibition of imports of all tuna and tuna
products from Canada as applied from 31 August 1979 to 4 September 1980, had been made effective in
conjunction with restrictions on Un ited States domestic production or consumption on all tuna and tuna
products".92
                                                     
86 Ibid. , p. 18.
87 Ibid. , p. 17.
88 Ibid. , p. 16.
89 US – Shrimp , Appellate Body Report, para. 137.
90 Ibid. , para. 141.
91 US – Canadian Tuna , Panel Report, para. 4.11.
92 Ibid. , para. 4.12.WT/CTE/W/203
Page 19
54. In the Canada – Salmon and Herring  case, the panel examined the expression "in conjunction
with" and considered that these terms:
"[H]ad 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 bemade effective 'in conjunction with' production restrictions if it was primarily aimed
at rendering effective these restrictions".
93
55. In the US – Gasoline case, the Appellate Body decided that the baseline establishment rules of
the Gasoline Rule fall within the terms of Article  XX(g), including the second requirement, i.e.
"made effective in conjunction with restrictions on domestic production or consumption".  To reach
that conclusion, the Appellate Body interpreted the ordinary meaning of "made effective" and "in
conjunction with" in the following terms:
"[T]he ordinary or natural meaning of 'made effective' when used in connection with
a measure - a governmental act or regulation - may be seen to refer to such measure
being 'operative', as 'in force', or as having 'come into effect'. [footnote omitted]
Similarly, the phrase 'in conjunction with' may be read quite plainly as 'together with'
or 'jointly with'. [footnote omitted] Taken together, the second clause of
Article XX(g) appears to us to refer to governmental measures like the baseline
establishment rules being promulgated or brought into effect together with
restrictions on domestic production or consumption of natural resources.  Put in a
slightly different manner, we believe that the clause 'if such measures are made
effective in conjunction with restrictions on domestic product or consumption' isappropriately read as a requirement that the measures concerned impose restrictions,
not just in respect of imported gasoline but also with respect to domestic 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".
94
"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 a difficult 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 effect s attributable to implementation of a given
measure may be observable.  The legal characterization of such a measure is not
reasonably made contingent upon occurren ce of subsequent events.  We are not,
however, suggesting that consideration of the predictable effects of a measure is never
relevant.  In a particular case, should it become clear that realistically, a specific
measure cannot in any possible situation ha ve any positive effect on conservation goals,
it would very probably be because that m easure 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".95
56. The requirement of "even-handedness" (quoted above in the US – Gasoline  case) was recalled
and followed by the Appellate Body in the  US – Shrimp  case which held that the measure at stake
                                                     
93 Canada – Salmon and Herring , Panel Report, para. 4.6.
94 US – Gasoline , Appellate Body Report, DSR 1996 , p. 19.
95 Ibid. , p. 20.WT/CTE/W/203
Page 20
(Section 609) was an "even-handed measure" and, accordingly, a measure made effective in
conjunction with the restrictions on domestic harvesting of shrimp.96
IV. APPLICATION OF THE ARTICLE XX CHAPEAU
A. FUNCTION AND SCOPE OF THE PREAMBLE
57. Once a measure satisfies the conditions set by one of the paragraphs of Article XX, the panel
or the Appellate Body has turned to the appl ication of the introductory clause (chapeau) of
Article XX.  The chapeau requires that in order to be justified under one of the paragraphs of
Article XX, measures must not be "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".
58. The general scope  of the Article XX chapeau has been defined by the Appellate Body in the
US – Shrimp case. Accordingly, the chapeau is "but one expression of the principle of good faith":97
"The 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 an exception 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 impairthe balance of rights and obligations constructed by the Members themselves in that
Agreement.  The location of the line of equilibrium, as expressed in the chapeau, is
not fixed and unchanging;  the line moves as the kind and the shape of the measures
at stake vary and as the facts making up specific cases differ".
98
59. Concerning the function  of the Article XX chapeau,  in the US – Gasoline  case, the
Appellate Body stated that it is "important to underscore that the purpose and object of the
introductory clauses of Article XX is generally the prevention of  ' abuse  of the exceptions of
[Article XX ]'" 99 and that "[t]he 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".100
Referring then to the negotiating history of that provision, which indicates that the preamble was
meant "to prevent abuse of the exceptions of Article [XX]",101 the Appellate Body noted:
"The chapeau is animated by the principle that while the exceptions of Article XX
may be invoked as a matter of legal right, they should not be so applied as to frustrate
or defeat the legal obligations of the holder of the right under the substantive rules of
the General 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 regard both to the legal duties of the party claiming theexception and the legal rights of the other parties concerned".
102
60. Similarly, in its report on US – Shrimp , the Appellate Body considered that the chapeau of
Article XX "embodies the recognition on the part of WTO Members of the need to maintain a balance
of rights and obligations between the right of a Member to invoke one or another of the exceptions  of
                                                     
96 US – Shrimp , Appellate Body Report, paras. 143-145.
97 Ibid. , para. 158.
98 Ibid. , para. 159.
99 Emphasis added. US – Gasoline , Appellate Body Report, DSR 1996 , p. 21.
100 Ibid. , p. 23.
101 Analytical Index: Guide to GATT Law and Practice , Vol. I, p. 564 (1995).
102 US – Gasoline , Appellate Body Report, DSR 1996 , p. 21.WT/CTE/W/203
Page 21
Article XX, specified in paragraphs (a) to (j), on the one hand, and the substantive rights of the other
Members under the GATT 1994, on the other hand".103
61. Concerning the relationship between the excepti ons in Article XX and the provisions of the
rest of the GATT 1994, the Appellate Body in the US – Gasoline  case indicated that:
"At the same time, Article XX(g) and its phrase, "relating to the conservation of
exhaustible natural resources," need to be read in context and in such a manner as to
give effect to the purposes and objects of the General Agreement .  The 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 areach as effectively to emasculate 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 legal context in a given dispute,
without disregarding the words actually used by the WTO Members themselves to
express their intent and purpose".
104
62. In the EC – Asbestos case, the Appellate Body also clarified this relationship by stating:
"We do not agree with the Panel that consid ering evidence relating to the health risks
associated with a product, under Article III:4, nullifies the effect of Article XX(b) of
the GATT 1994.  Article XX(b) allows a Member to 'adopt and enforce' a measure,
inter alia , necessary to protect human life or health, even though that measure is
inconsistent with another provision of the GATT 1994.  Article III:4 and
Article XX(b) are distinct a nd independent provisions of the GATT 1994 each to be
interpreted on its own.  The scope and meaning of Article III:4 should not be
broadened or restricted beyond what is required by the normal customary
international law rules of treaty interpretation, simply because Article XX(b) exists
and may be available to justify measures inconsistent with Article III:4.  The fact that
an interpretation of Article III:4, under those rules, implies a less frequent recourse to
Article XX(b) does not deprive the exception in Article XX(b) of effet utile .
Article XX(b) would only be deprived of  effet utile   if that provision could  not  serve
to allow a Member to 'adopt and enforce' measures 'necessary to protect human …
life or health'.  Evaluating evidence relating to the health risks arising from the
physical properties of a product does not prevent a measure which is inconsistent with
Article III:4 from being justified under Article XX(b).  We note, in this regard, that,
different inquiries occur under these two very different Articles.  Under Article III:4,evidence relating to health risks may be relevant in assessing the competitive
relationship in the marketplace  between allegedly 'like' products.  The same, or
similar, evidence serves a different purpose under Article XX(b), namely, that of
assessing whether a Member  has a sufficient basis for 'adopting or enforcing' a
WTO-inconsistent measure on the grounds of human health".
105
                                                     
103 US – Shrimp , Appellate Body Report, para. 156.
104 US – Gasoline , Appellate Body Report, DSR 1996 , pp. 16-17.
105 EC – Asbestos , Appellate Body Report, para. 115.WT/CTE/W/203
Page 22
63. Under the Article XX chapeau, three requirements must be satisfied.  First, the panel
determines whether the measure is a means of  unjustifiable discrimination (Section B.1), or a means
of arbitrary discrimination (Section B.2), and if not, the panel proceeds to examine whether the
measure is a disguised restriction on international trade  (Section C).  The Appellate Body, in US –
Shrimp  and US – Shrimp (Article 21.5) ,106 stated that "[t]here are three standards contained in the
chapeau: first,  arbitrary discrimination between countries where the same conditions prevail; second,
unjustifiable discrimination between countries where the same conditions prevail; and third,  a
disguised restriction on international trade".107  In order for the measure not to be entitled to the
justifying protection of Article XX, the existence of only one of these three standards would have to
be proven.  For instance, in the US – Shrimp  case, the Appellate Body, after finding that the measure
at issue was a means of unjustifiable and arbitrary discrimination between countries where the same
conditions prevail, decided that it was not necessary to examine also whether the measure was appliedin a manner that constitutes a disguised restriction on international trade.
108
B. A MEANS OF ARBITRARY OR UNJUSTIFIABLE DISCRIMINATION ?
64. With respect to this requirement, the panel, in its report on US – 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".109  This finding was confirmed by the Appellate Body in
the US – 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".110
65. In order to determine whether the discrimination was arbitrary or unjustifiable, the Appellate
Body in US – Shrimp found that such a determination must address not only "the detailed operating
provisions of the measure" but also the manner in which the measure "is actually applied".111  And
more recently in the EC – Asbestos  case, the panel confirmed that "under the first of the alternatives
mentioned in the introductory clause of Article XX it is required to examine whether the  application
of the Decree constitutes a means of arbitrary or unjustifiable discrimination between countries where
the same conditions prevail".112  As well, in US – Shrimp (Article 21.5) , the panel examined the
Guidelines and the actual practice of the United States under these Guidelines.113  The Panel found,
and this was upheld by the Appellate Body,114 that "Section 609 is now applied in a manner that no
longer constitutes a means of unjustifiable or arbitrary discrimination".115
66. In the US – Shrimp  case, the panel and later the Appellate Body examined thoroughly the
conditions for a measure to constitute a means of arbitrary or unjustifiable discrimination between
countries where the same conditions prevail.116  The panel first observed that the US measure at issue
discriminated between those countries that had been certified and, consequently, could export shrimp
to the US and those non-certified countries that were subject to an import ban.117  The panel noted that
"[p]ursuant to the chapeau of Article XX, a measure may discriminate, but not in an 'arbitrary' or
'unjustifiable' manner".118  As well in the EC – Asbestos  case, the panel indicated that "if the
                                                     
106 US – Shrimp (Article 21.5) , Appellate Body Report, para. 118.
107 US – Shrimp , Appellate Body Report, para. 150.
108 Ibid. , para. 184.
109 Emphasis added. United States – Imports of Certain Automotive Spring Assemblies, Panel Report
adopted on 26 May 1983, BISD 30S/107, para. 56.
110 US – Gasoline , Appellate Body Report, DSR 1996 , p. 21.
111 US – Shrimp , Appellate Body Report, para. 160.
112 EC – Asbestos , Panel Report, para. 8.226.
113 US – Shrimp (Article 21.5) , Panel Report, para. 5.94.
114 US – Shrimp (Article 21.5) , Appellate Body Report, para. 134.
115 US – Shrimp (Article 21.5) , Panel Report, para. 5.137.
116 US – Shrimp , Panel Report, paras. 7.33-7.61; Appellate Body Report, paras. 161-186.
117 Ibid. , para. 7.33.
118 Ibid.WT/CTE/W/203
Page 23
application of the measure is found to be discriminatory, it still remains to be seen whether it is
arbitrary and/or unjustifiable  between countries where the same conditions prevail".119  Therefore, the
determination of unjustifiable discrimination of a measure will be dealt with separately (Section 1)
from the one of its arbitrariness (Section 2).
1. "Unjustifiable"
67. In the US – Gasoline  case, the Appellate Body found that an unjustifiable discrimination
would be one that could have been "foreseen" and that was not "merely inadvertent or
unavoidable".120
68. Two criteria can be identified from the reading of the panel and Appellate Body reports in
US – Shrimp and US – Shrimp (Article 21.5) : first, a serious effort to negotiate with the objective of
concluding bilateral and multilateral agreements for the achievement of a certain policy goal, and
second, the flexibility of the measure.
(a) Serious effort to negotiate
69. As part of the process of determining whether the measure had been applied in a manner that
constituted a means of "unjustifiable discrimination", the Appellate Body in the  US – Shrimp  case
addressed the issue of international negotiations.121  The relevant finding of the Appellate Body
Report reads as follows:
"Another aspect of the application of Section 609 that bears heavily in any appraisal
of justifiable or unjustifiable discrimination is the failure of the United States to
engage the appellees, as well as other Members exporting shrimp to the United States,
in serious, across-the-board negotiations with the objective of concluding bilateral or
multilateral agreements for the protection and conservation of sea turtles, beforeenforcing the import prohibition against the shrimp exports of those other
Members".
122
The Appellate Body concluded that the United States negotiated seriously with some Members, butnot with other Members, including the appellees, that export shrimp to the US: "[t]he effect is plainly
discriminatory and, in our view, unjustifiable".
123
70. As later interpreted by the panel in US – Shrimp (Article 21.5)  and upheld by the
Appellate Body,124 it appears that the Appellate Body was referring to the negotiation and not the
conclusion of an agreement.125  Consequently, the United States had an obligation to make serious
good faith efforts to reach an agreement before resorting to unilateral measures.126  In the Article 21.5
phase, the panel concluded that the US had the following obligations in order to avoid unjustifiable
discrimination:
"(a) [T]he United States had to take the initiative of negotiations with the
appellees, having already negotiated with other harvesting countries
(Caribbean and Western Atlantic countries);
                                                     
119 EC – Asbestos , Panel Report, para. 8.226.
120 US – Gasoline , Appellate Body Report, DSR 1996 , p. 27.
121 US – Shrimp , Appellate Body Report, para. 166.
122 Ibid.
123 Ibid. , para. 172.
124 US – Shrimp (Article 21.5) , Appellate Body Report, para. 134.
125 US – Shrimp (Article 21.5) , Panel Report, para. 5.63.
126 Ibid. , para. 5.67.WT/CTE/W/203
Page 24
(b) the negotiations had to be with all in terested parties ('across-the-board') and
aimed at establishing consensual means of protection and conservation of
endangered sea turtles;
(c) the United States had to make serious efforts in good faith [footnote omitted]
to negotiate; and
(d) serious efforts in good faith had to take place before [footnote omitted] the
enforcement of a unilaterally designed import prohibition [footnote
omitted]".127
(b) Flexibility of the measure
71. In US – Shrimp , the Appellate Body considered that the lack of flexibility in taking into
account the different situations in different countries amounted to unjustifiable discrimination, and in
particular that Section 609, as implemented through the 1996 Guidelines, constituted unjustifiablediscrimination insofar as its certification process lacked flexibility.
128
72. The panel in US – Shrimp (Article 21.5)  also indicated that the pursuance of negotiations was
not necessarily enough, the measure also needed to show flexibility:
"The approach of the Appellate Body leads us to conclude that it is not solely the fact
that the United States negotiated seriously with some Members and less seriouslywith others which is at the origin of its finding of unjustifiable discrimination in
relation to negotiations, even though it would have been sufficient in itself to justify
such a conclusion.  We believe that another reason for the Appellate Body finding is
that the United States, by unilaterally defining and implementing criteria for applying
Section 609, failed to take into account the different situations which may exist in theexporting countries.  In other words, the United States failed to pass the 'unjustified
discrimination' test by applying the same regime to domestic and foreign shrimp".
129
73. As suggested by the panel's analysis in US – Shrimp (Article 21.5) , an approach based on
"whether a measure requires 'essentially the same' regulatory programme of an exporting Member as
that adopted by the importing Member applying the measure is a useful tool in identifying measuresthat result in 'arbitrary or unjustifiable discrimination' and, thus, do  not meet the requirements of the
chapeau of Article XX".
130  Therefore the criteria for determining the unjustifiable character of a
discrimination as introduced by the Appellate Body in US – Shrimp , and further acknowledged in the
Article 21.5 phase by the panel, is one of flexibility in the implementation process of the measure at
stake.  The panel, in the Article 21.5 phase,  interpreted the Appellate Body's finding in US – Shrimp
as meaning that "if, in practice , the implementing measure provides for 'comparable effectiveness',
the finding of the Appellate Body in terms of lack of flexibility will have been addressed".131  The
Appellate Body in US – Shrimp (Article 21.5)  agreed with the approach followed by the panel:
"As we see it, the Panel correctly reasoned and concluded that conditioning market
access on the adoption of a programme  comparable in effectiveness ,  allows for
sufficient flexibility in the application of the measure so as to avoid 'arbitrary or
                                                     
127 Ibid. , para. 5.66.
128 US – Shrimp , Appellate Body Report, paras. 161-164.
129 US – Shrimp (Article 21.5) , Panel Report, para. 5.46.
130 Comments made by the Appellate Body in the US – Shrimp (Article 21.5)  case, para. 141.
131 US – Shrimp (Article 21.5) , Panel Report, para. 5.93.WT/CTE/W/203
Page 25
unjustifiable discrimination'.  We, therefore, agree with the conclusion of the Panel on
'comparable effectiveness'".132
2. "Arbitrary"
74. The Appellate Body found in US – Shrimp  that the measure at issue did not meet the
requirements of the chapeau of Article XX relating to arbitrary discrimination because, through theapplication of the measure, the exporting members were faced with "a single, rigid and unbending
requirement" to adopt  essentially the same   policies and enforcement practices as those applied to,
and enforced on, domestic shrimp trawlers in the United States.
 133  Therefore, the Appellate Body
concluded  that the "rigidity and inflexibility" of the application of the measure by the US constituted
"'arbitrary discrimination' within the meaning of the chapeau".134
75. In its examination of the possible arbitrariness of the implementation of the US measure,
the panel in US – Shrimp (Article 21.5)  took into account "the ordinary meaning of the word 'arbitrary'
most suitable in the context of the chapeau of Article XX, i.e. 'capricious, unpredictable,
inconsistent'".135  In its understanding of the US – Shrimp  Appellate Body report, the panel, in the
Article 21.5 phase, found that there was arbitrary discrimination because the US did not take into
account the conditions prevailing in the countries concerned.136  As further examined by the panel in
the Article 21.5 phase, what caused the Appellate Body in the US – Shrimp case to deem the
application of Section 609 as "arbitrary discrimination" was that:
"(a) It imposed a single, rigid and unbending requirement that countries applying
for certification adopt a comprehensive regulatory programme that is
essentially the same as the United States' programme; and
(b) that this programme was imposed without inquiring into the appropriateness of
that programme for the conditions prevailing in the exporting countries".137
76. In US – Shrimp (Article 21.5),  the panel also considered that with the new US programme of
implementation, the so-called "Revised Guidelines", the US was in a better position to avoid
"arbitrary" decisions:
"A Member seeking certification seems to have the possibility to demonstrate that its
programme - even though not requiring the use of TEDs [turtle excluder devices], is
comparable to that of the United States. On the face of it, the implementing measure
is no longer primarily based on the application of certain methods or standards, but on
the achievement of certain objectives, even though the term "objective" may, in this
case, have a relatively broad meaning. Some evidence of the actual degree of
flexibility of the Revised Guidelines can be found in the authorisation granted to
Australia to export shrimp from the Northern Prawn Fisheries and the Spencer Gulfeven though Australia as such is not certified under Section 609".
138
77. The Appellate Body in US – Shrimp (Article 21.5)  further found that the "provisions of the
Revised Guidelines, on their face, permit a degree of  flexibility that, in our view, will enable the
                                                     
132 US – Shrimp (Article 21.5) , Appellate Body Report, para. 144.
133 US – Shrimp , Appellate Body Report, para. 177.
134 Ibid.
135 US – Shrimp (Article 21.5) , Panel Report, para. 5.124.
136 Ibid. , para. 5.123.
137 Ibid. , para. 5.122.
138 Ibid. , para. 5.124.WT/CTE/W/203
Page 26
United States to consider the particular conditions prevailing in Malaysia if, and when, Malaysia
applies for certification".139
C. A DISGUISED RESTRICTION ON INTERNATIONAL TRADE ?
78. The question of whether a measure constitutes a disguised restriction on international trade
has been studied by several panel and Appellate Body reports, and in particular detail by the panel inthe EC – Asbestos case.  In this case, the panel first recalled that the scope of these words has not been
clearly defined: "Under the GATT 1947, panels seem mainly to have considered that a disguised
restriction on international trade was a restriction that had not been taken in the form of a trade
measure or had not been announced beforehand [footnote omitted] or formed the subject of a
publication, or even had not been the subject of an investigation
 [reference to US – Springs
Assemblies ]".140 The panel then conducted a thorough analysis of the exact wording of this expression:
"Referring also to the remark made by the Appellate Body in the same case [reference
to US – Gasoline ] according to which 'the provisions of the chapeau [of Article XX]
cannot logically refer to the same standard(s) by which a violation of the substantive
rule has been determined to have occurred', we consider that the key to understanding
what is covered by 'disguised restriction on international trade' is not so much the
word 'restriction', inasmuch as, in essence, any measure falling within Article XX is arestriction on international trade, but the word 'disguised'.  In accordance with the
approach defined in Article 31 of the Vienna Convention, we note that, as ordinarily
understood, the verb 'to disguise' implies an intention .  Thus, 'to disguise' ( déguiser )
means, in particular, 'conceal beneath deceptive appearances, counterfeit', 'alter so as
to deceive', 'misrepresent', 'dissimulate'. [footnote omitted]  Accordingly, a restrictionwhich formally meets the requirements of Article XX(b) will constitute an abuse if
such compliance is in fact only a disguise to conceal the pursuit of trade-restrictive
objectives".
141
79. Three criteria have been progressively introduced by panels and by the Appellate Body in
order to determine whether a measure is a disguised restriction on international trade:  (i) the publicity
test,  (ii) the consideration of whether the application of a measure also amounts to arbitrary or
unjustifiable discrimination, and  (iii) the examination of "the design, architecture and revealing
structure" of the measure at issue.
80. (i)  In the US – Canadian Tuna  case, the panel adopted a literal interpretation of the concept
of "disguised restriction on international trade" only based on a publicity test.  It felt that "the
United States' action should not be considered to be a disguised restriction on international trade,
noting that the United States' prohibition of imports  of tuna and tuna products from Canada had been
taken as a trade measure and publicly announced as such".142
81. In the US – Gasoline  case, the Appellate Body considered however that it was "clear that
concealed  or unannounced  restriction or discrimination in international trade does not exhaust the
meaning of 'disguised restriction'". 143  The panel in the EC – Asbestos  case interpreted this sentence as
                                                     
139 US – Shrimp (Article 21.5) , Appellate Body Report, para. 148.
140 EC – Asbestos , Panel Report, para. 8.233.
141 Ibid. , para. 8.236.
142 US – Canadian Tuna , Panel Report, para. 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 bepublicly announced as such for it to be considered not to be a disguised restriction on international trade within
the meaning of Article XX of the General Agreement" (quoted in Analytical Index: Guide to GATT Law and
Practice , Vol. I, p. 565 (1995)).  See also the US – Springs Assemblies  case where the Panel developed the same
criteria of publicity, para. 56.
143 US – Gasoline , Appellate Body Report, DSR 1996 , p. 23.WT/CTE/W/203
Page 27
implying that a measure that was not published would not satisfy the requirements of the second
proposition of the introductory clause of Article XX .  The panel noted that the measure at issue (the
French Decree):
"was published in the Official Journal of the French Republic  on 26 December 1996
and entered into force on 1 January 1997.  We also note that it applies unequivocallyto international trade, since as far as asbestos is concerned both importation and
exportation are prohibited.  In this sense, the criteria developed in United States –
Tuna (1982) and in United States – Automotive Springs have already been
satisfied".
144
The panel further observed that this remark also suggests that the expression "disguised restriction oninternational trade" covers others requirements than the sole publicity test.
 145
82. (ii) In the US – Gasoline case, the Appellate Body also considered that 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":
"'Arbitrary discrimination', 'unjustifiable discrimination' and 'disguised restriction' on
international trade may, accordingly, be read side-by-side;  they impart meaning toone another.  It is clear to us that 'disguised restriction' includes disguised
discrimination  in international trade (…). 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 in Article XX".
146
83. This principle was recalled and followed by the panel in the EC – Asbestos case:
"We recall that in United States – Gasoline , the Appellate Body considered that 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 internationaltrade".
147
84. (iii) Another requirement was taken into account by the Appellate Body in US – Shrimp  and
by the panel in the  EC – Asbestos case.  In EC – Asbestos , after finding that the measure at issue met
the publicity criterion, the panel examined as an additional requirement the "design, architecture and
revealing structure" 148 of the measure as it had already been introduced in Japan – Alcoholic
Beverages149 in order to discern the protective application of a measure:
"However, as the Appellate  Body acknowledged in Japan – Alcoholic Beverages , the
aim of a measure may not be easily ascertained. [footnote omitted] Nevertheless, we
note that, in the same case, the Appellate Body suggested that the protective
application of a measure can most often be discerned from its design, architecture and
revealing structure [footnote omitted]".150
                                                     
144 EC – Asbestos , Panel Report, para. 8.234.
145 Ibid.
146 US – Gasoline , Appellate Body Report, DSR 1996 , p. 23.
147 EC – Asbestos , Panel Report, para. 8.237.
148 Ibid. , para. 8.236.
149 Japan – Alcoholic Beverages , Appellate Body Report, DSR 1996 , p. 121.
150 EC – Asbestos , Panel Report, para. 8.236.WT/CTE/W/203
Page 28
85. The panel then concluded that "[a]s far as the design, architecture and revealing structure of
the Decree are concerned, we find nothing that might lead us to conclude that the Decree has
protectionist objectives".151  Similarly in the US – Shrimp (Article 21.5)  case, the panel demonstrated
that the measure at issue did not constitute a disguised restriction on international trade by examining
the "design, architecture and revealing structure" of the measure.152
                                                     
151 Ibid. , para. 8.238.
152 US – Shrimp (Article 21.5) , Panel Report, para. 5.142.WT/CTE/W/203
Page 29
ANNEX
CASES
I. UNITED STATES – CANADIAN TUNA1
A. PARTIES
Complainant: Canada.
Respondent: United States.
B. TIMELINE OF DISPUTE
Panel requested: 21 January 1980.
Panel established: 26 March 1980.
Panel composed: 26 March 1980.
Panel Report circulated: 22 December 1981.
Adoption: 22 February 1982.
C. MAIN FACTS
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 (within 200 miles of the
West Coast of Canada).  The United States did not recognize this jurisdiction and introduced an
import prohibition on tuna and tuna products from Canada as a retaliation under the 1976 FisheryConservation and Management Act (Section 205).  This regulation was intended to ensure that certain
stocks of fish were properly conserved and mana ged and to support and encourage the implementation
and enforcement of international fishery agreemen ts for the conservation and management of highly
migratory species.  Furthermore, Section 205 cont ained provisions designed to discourage other
countries from seeking to manage tuna unilaterally and from seizing US fishing vessels which werefishing more than 12 miles off their coasts.
2
2. On 29 August 1980, following an interim agreement with Canada on albacore tuna fisheries,
the United States Trade Representative informed the GATT Secretariat that its authorities had decided
to lift the prohibition on imports of tuna and tuna products from Canada.  The prohibition was
subsequently lifted with effect from 4 September 1980.3  At a panel meeting on 3 December 1980,
Canada requested that the panel continue its work because of the possibility of further embargoes
being placed on Canadian fishery products.4  The United States informed the panel that its authorities
doubted the necessity of continuing the case but would continue to cooperate with the panel if the
panel so decided.5  The panel decided to proceed with the case and issued a complete report.  On
                                                     
1 United States – Prohibition of Imports of Tuna and Tuna Products from Canada , adopted on
22 February 1982, BISD 29S/91.
2 Ibid. , para. 4.5.
3 Ibid. , para. 2.7.
4 Ibid. , para. 2.8.
5 Ibid.WT/CTE/W/203
Page 30
26 May 1981, Canada and the Unites States signed the Treaty on Pacific Coast Albacore Tuna Vessels
and Port Privileges which entered into force on 29 July 1981.6
D. SUMMARY OF FINDINGS ON ARTICLE XX
3. The panel found that the US import prohibition was contrary to Article XI:1, and neither
justified under Article XI:2,7 nor under Article XX(g).  The Unit ed States based its arguments
concerning the justification for the action taken against imports of tuna and tuna products entirely on
Article XX(g).
4. Regarding the Preamble of Article XX, the panel found that the discrimination against Canada
might not necessarily have been arbitrary or unjustifiable because the United States had taken similar
actions against imports from other countries and for similar reasons.  The panel considered also that
the US action should not be considered to be a disguised restriction on international trade since the
US import prohibition had been taken as a trade measure and publicly announced as such.8
5. Regarding paragraph (g) of Article XX, the panel observed that both parties considered tuna
stocks as an exhaustible natural resource.9  The panel however noted that the United States had
provided no evidence that domestic consumption of tuna and tuna products had been restricted in the
United States, which was required under the second part of Article XX(g).10
II. CANADA – SALMON AND HERRING11
A. PARTIES
Complainant: United States.
Respondent: Canada.
B. TIMELINE OF DISPUTE
Panel requested: 20 February 1987.
Panel established: 4 March 1987.
Panel composed: 15 April 1987.
Panel Report circulated: 20 November 1987.
Adoption: 22 March 1988.
C. MAIN FACTS
6. Under the 1970 Canadian Fisheries Act, Canada maintained regulations prohibiting the
exportation or sale for export of certain unprocessed herring and salmon.  Governmental measures for
conservation, management and development of salmon and herring stocks in the waters off
British Columbia date back to the early decades of the 20th century.  These have led, over the years, to
                                                     
6 Ibid. , paras. 2.13-.2.14.
7 Ibid. , para. 4.6.
8 Ibid. , para. 4.8.
9 Ibid. , para. 4.9.
10 Ibid. , para. 4.11.
11 Canada – Measures Affecting Exports of Unprocessed Herring and Salmon , adopted on
22 March 1988, BISD 35S/98.WT/CTE/W/203
Page 31
a series of national and bilateral efforts which have been embodied, inter alia , into various bilateral
and multilateral treaties and conventions relating to fisheries in these waters.  Sockeye and pink
salmon and herring fisheries represent the largest share of the West Coast fishery of Canada.  These
species supply a dominant share of Canada's West Coast processing sector, giving employment to
almost five-sixths of the workers in the British Columbia fish processing industry.12
7. The United States complained that these measures were inconsistent with Article XI and not
justified by Article XX.  Canada argued, inter alia , 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).13
D. SUMMARY OF FINDINGS ON ARTICLE XX
8. The panel agreed with the parties that salmon and herring stocks were "exhaustible natural
resources" and that the harvest limitations were "restrictions on domestic production" within themeaning of Article XX(g).
14
9. The panel then interpreted the meaning of the terms "relating to" and "in conjunction with".15
It considered that the purpose of including Arti cle XX(g) in the GATT was to ensure that the
commitments under the GATT did not hinder the pursuit of policies aimed at the conservation of
exhaustive natural resources. The panel concluded that a trade measure 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).  The panel further determined, concerning the term "in
conjunction with" in Article XX(g), that a trade measure could only be considered to be made
effective "in conjunction with" production restrictions if it was primarily aimed  at rendering effective
these restrictions .
10. Consequently, the panel examined whether the export prohibitions on certain unprocessed
salmon and unprocessed herring maintained by Canada were primarily aimed at  the conservation of
salmon and herring stocks and at rendering effective the restrictions  on the harvesting of salmon and
herring.  Canada formulated two arguments: first, that the export prohibitions were not conservation
measures per se  but had an effect on conservation because they helped provide the statistical
foundation for the harvesting restrictions and second, that they increased the benefits to the Canadian
economy arising from the Salmonid Enhancement Program.16
11. On the first argument, the panel noted that Canada had collected statistical data on many
different species of fish, including certain salmon species, without imposing export prohibitions on
them.  Concerning the second argument, the panel noted that the Salmonid Enhancement Program
also covered species not subject to export prohibitions and that Canada limited purchases of
unprocessed fish only by foreign processors and consumers and not by domestic processors andconsumers.  In light of all these factors taken together, the Panel found that these prohibitions 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.
17  The panel concluded therefore
that the export prohibitions were not justified by Article XX(g).
                                                     
12 Ibid. , paras. 2.5-2.6.
13 Ibid. , para. 4.1.
14 Ibid. , para. 4.4.
15 Ibid. , para. 4.6.
16 Ibid. , para. 4.7.
17 Ibid.WT/CTE/W/203
Page 32
III. THAILAND – CIGARETTES18
A. PARTIES
Complainant: United States.
Respondent: Thailand.
Third Parties: The European Communities.B. T
IMELINE OF DISPUTE
Panel requested: 5 February 1990.
Panel established: 3 April 1990.
Panel composed: 16 May 1990.
Panel Report circulated: 5 October 1990.
Adoption: 7 November 1990.
C. MAIN FACTS
12. Under Section 27 of 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 Article XI:1, and considered that they were not justified
by Article XI:2(c)(i), nor by Article XX(b).  The United States also requested the panel to find that theinternal taxes were inconsistent with Article III:2.
13. 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 cigarette imports were
prohibited and because chemicals and other additives contained in US cigarettes might make them
more harmful than Thai cigarettes.  Since the health consequences of the opening of cigarette markets
constituted one of the major justifications for Thailand's cigarette import régime, Thailand requested
the panel to consult with experts from the World Health Organization (WHO).  On the basis of a
memorandum of understanding between the parties, the panel asked the WHO to present its
conclusions on technical aspects of the case, such as the health effects of cigarette use and
consumption.
14. The WHO indicated that there were sharp differences between cigarettes manufactured in
developing countries such as Thailand and those available in developed countries, which used
additives and flavourings.
19  Moreover, locally grown tobacco leaf was harsher and smoked with less
facility than the American blended tobacco used in international brands.  These differences were of
public health concern because they made smoking western cigarettes very easy for groups who might
not otherwise smoke, such as women and adolescents, and created the false illusion among many
smokers that these brands were safer than the native ones which consumers were quitting.  However,the WHO could not provide any scientific evidence that cigarettes with additives were less or more
harmful to health than cigarettes without.
                                                     
18 Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes , adopted on
7 November 1990, BISD 37S/200.
19 Ibid. , para. 52.WT/CTE/W/203
Page 33
D. SUMMARY OF FINDINGS ON ARTICLE XX
15. The panel found that the internal taxes were consistent with Article III:2.20  However, the
import restrictions were found to be inconsistent with Article XI:1 and not justified under
Article X1:2(c).21  The panel concluded further that the import restrictions were not "necessary"
within the meaning of Article XX(b).22
16. The import restrictions imposed by Thailand could not be considered "necessary" in terms of
Article XX(b) because there were alternative measures consistent with the GATT, or less inconsistent
with it, which Thailand could reasonably be expected to employ to achieve its health policy
objectives.23  There were various measures consistent with the GATT which were reasonably
available to Thailand to control the quality and quantity of cigarettes smoked and which taken
together could have achieved the health policy goals pursued by Thailand.24  For instance, the panel
suggested that a ban on cigarette advertising could curb the demand while meeting the requirementsof Article III:4.
25
IV. UNITED STATES – TUNA (MEXICO)26
A. PARTIES
Complainant: Mexico.
Respondent: United States.Third Parties: Australia; Canada; Chile; Colombia; Costa Rica; the European Communities; India;
Indonesia; Japan; Korea; New Zealand; Nicara gua; Norway; Peru; the Philippines; Senegal;
Singapore; Tanzania; Thailand; Tunisia and Venezuela.
B. T
IMELINE OF DISPUTE
Panel requested: 25 January 1991.
Panel established: 6 February 1991.
Panel composed: 12 March 1991.
Panel Report circulated: 3 September 1991.
Panel Report not adopted.
C. MAIN FACTS
17. Tuna are commonly caught in commercial fisheries using large "purse seine" nets.  In the
Eastern Tropical Pacific Ocean (ETP), dolphins are known to swim above schools of tuna.  Tuna
fishermen in the ETP commonly use dolphins to locate schools of tuna, and encircle them
                                                     
20 Ibid. , paras. 86, 88.
21 Ibid. , paras. 67-71.
22 Ibid. , para. 82.
23 Ibid. , para. 75.
24 Ibid. , para. 81.
25 Ibid. , para. 78.
26 United States – Restrictions on Imports of Tuna , circulated on 3 September 1991, unadopted,
DS 21/R.WT/CTE/W/203
Page 34
intentionally with purse seine nets on the expectation that tuna will be found below the dolphins.  It
was claimed that this technique might lead to incidental taking of dolphins during fishing operations.
18. The US Marine Mammal Protection Act (MMPA) of 1972, as revised, 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 thetaking of marine mammals incidental to harvesting yellowfin tuna in the ETP.
19. Under the MMPA, the importation of commerci al fish or products from fish caught with
commercial fishing technology, which results in the incidental kill or incidental serious injury of
ocean mammals in excess of US standards, was 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 established that (i) the government of the harvesting country had
a programme regulating takings of marine mammals that was comparable to that of the United States,and (ii) the average rate of incidental taking of marine mammals by vessels of the harvesting nation
was comparable to the average rate of such takings by US vessels.
27  To meet this requirement, the
exporting country had to prove that the average rate of incidental takings (in terms of dolphins killed
each time the purse seine nets are set) was no higher than 1.25 times the average taking rate of
US vessels in the same period.28  In 1991, countries affected by the primary nation embargo were
Mexico, Venezuela and Vanuatu.29  Imports of tuna from countries purchasing tuna from a country
subject to the primary nation embargo were also prohibited ( intermediary nation embargo ).  In 1991,
countries affected by the intermediary nation embargo were Costa Rica, France, Italy, Japan and
Panama.30
20. Mexico claimed that the import prohibition on yellowfin tuna and tuna products was
inconsistent with Articles XI, XIII and III.31  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).32
D. SUMMARY OF FINDINGS ON ARTICLE XX
21. 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 either Article XX (b), (d) or (g).33
22. The panel found, on the basis of the drafting history, that Article XX(b) did not extend to
measures protecting human, animal or plant life outside of the jurisdiction of the country taking the
measure.34  Moreover, the panel considered that if th e 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 from which other contracting part ies could not deviate wit hout jeopardizing their
                                                     
27 Ibid. , para. 2.5.
28 Ibid. , para. 2.6.
29 Ibid. , para. 2.8.
30 Ibid. , para. 2.11.
31 Ibid. , para. 3.1.
32 Ibid. , paras. 3.6-3.7.
33 Ibid. , paras. 5.38-5.40.
34 Ibid. , para. 5.26.WT/CTE/W/203
Page 35
rights under the GATT.35  The panel also rejected an extrajurisdictional application of Article XX(g) as
well.36
23. The panel further noted that even if Article XX paragraphs (b) and (g) were interpreted to apply
extrajurisdictionally, the US measures would not meet  the requirements set out in these two provisions.
In the panel’s view, the US measure could not be considered to be necessary within the meaning of
Article XX(b) as the United States had failed to dem onstrate that it had exhausted all options reasonably
available to it to pursue its dolphin protection objec tives through measures consistent with the GATT, in
particular through the negotiation of international cooperative arrangements, which would seem to be
desirable in view of the fact that dolphins roam  the waters of many states and the high seas.37
Concerning Article XX(g), the panel recalled that the United States linked the maximum incidental
dolphin-taking rate which Mexico had to meet to the taking rate actually recorded for United States
fishermen.  The panel considered that a limitation on trade based on such unpredictable conditions could
not be regarded as being primarily aimed at the conservation of dolphins in terms of Article XX(g).38
24. Concerning Article XX(d), 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 indirectly through third countri es. The Panel found that, given its finding that the
direct embargo was inconsistent with the GATT, 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 inc onsistent with the provisi ons of this Agreement”.39
V. UNITED STATES – TUNA (EEC)40
A. PARTIES
Complainant: The European Economic Community (EEC) and the Netherlands.
Respondent: United States.
Third Parties: Australia; Canada; Colombia; Costa Rica; El Salvador; Japan; New Zealand; Thailand
and Venezuela.
B. TIMELINE OF DISPUTE
Panel requested: 5 June 1992.
Panel established: 14 July 1992.
Panel composed: 25 August 1992.
Panel Report circulated: 16 June 1994.
Panel Report not adopted.
                                                     
35 Ibid. , para. 5.27.
36 Ibid. , para. 5.32.
37 Ibid. , para. 5.28.
38 Ibid. , para. 5.33.
39 Ibid. , para. 5.40.
40 United States – Restrictions on Imports of Tuna , circulated on 16 June 1994, not adopted, DS29/R.WT/CTE/W/203
Page 36
C. MAIN FACTS
25. The facts of this case are similar to the ones described above in the US – Tuna (Mexico)  case.
The MMPA provided that any nation ( intermediary  nation) exporting yellowfin tuna or yellowfin tuna
products to the US had to certify and provide reasonable proof that it had not imported products
subject to the direct prohibition within the preceding sixth months.41  After the adoption of a new
definition of intermediary  nation, France, the Netherlands Antilles and the United Kingdom were
withdrawn from the list of intermediary  nations.  In October 1992, Costa Rica, Italy, Japan and Spain
were still covered by the intermediary  nation embargo.42
26. The EEC and the Netherlands (on behalf of the Netherlands Antilles) complained that both
the primary  and the intermediary  nation embargoes, enforced pursuant to the MMPA, 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 argued that the intermediary  nation embargo was consistent with
the 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 accrui ng to the EEC or the Netherlands since it did not
apply to these countries.
D. SUMMARY OF FINDINGS ON ARTICLE XX
27. The panel found that the primary  and the intermediary  nation embargo did not fall under
Article III and were contrary to Article XI:1.  It found further that the US measures were not covered
by the exceptions in Article XX (b), (d) or (g).  On Article XX (b) and (g), the panel found that there
was no basis for the contention that Article XX applied only to policies related to the protection of
human, animal or plant life and health or to the conservation of natural resources located within the
territory of the contracting party,43 and concluded that the policy pursued within the jurisdiction over
its nationals and vessels, fell within the range of policies covered by Article XX(b) and (g).44
28. However, the panel found that measures taken so as to force other countries to change their
policies could not be considered "necessary" for the protection of animal life or health in the sense of
Article XX(b),45 or primarily aimed at the conservation of exhaustible natural resources, or at
rendering effective restrictions on domestic production or consumption, in the meaning ofArticle XX(g).
46  Concerning Article XX(d), the panel found that since the primary  nation embargo
was inconsistent with Article XI:1, it could not serve as a basis for the justification of the
intermediary  nation embargo.47
VI. UNITED STATES – AUTOMOBILES48
A. PARTIES
Complainant: The European Communities.
Respondent: United States.Third Parties: Australia; Japan and Sweden.
                                                     
41 Ibid. , para. 2.12.
42 Ibid. , para. 2.15.
43 Ibid. , paras. 5.16-5.17, 5.32.
44 Ibid. , paras. 5.20, 5.33.
45 Ibid. , para. 5.39.
46 Ibid. , para. 5.27.
47 Ibid. , para. 5.41.
48 United States – Taxes on Automobiles , circulated on 11 October 1994, not a dopted, DS31/R.WT/CTE/W/203
Page 37
B. TIMELINE OF DISPUTE
Panel requested: 12 March 1993.
Panel established: 12 May 1993.
Panel composed: 2 August 1993.
Panel Report circulated: 11 October 1994.Panel Report not adopted.
C. M
AIN FACTS
29. 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 Fuel
Economy regulation ("CAFE").
30. A luxury tax of 10% was imposed on the first retail sale of vehicles over $30,000 (a tax paid
by customers).49  The gas guzzler tax was an excise tax on the sale of automobiles within "model
types" whose fuel economy failed to meet certain fuel economy requirements (a tax imposed on
manufacturers).50  The CAFE regulation required a minimum average fuel economy for passenger
automobiles (or light trucks) manufactured in the United States, or sold by any importer.51  F o r
companies that were both importers and domestic manufacturers, average fuel economy was
calculated separately for imported passenger automobiles and for those manufactured domestically.
31. The European Communities complained that the regulation had a disproportionate impact on
EC cars and that treatment based on fleet averaging was inherently discriminatory, since importers of
cars from specialized manufacturers, which tended to be foreign, could not offset the fuel economy of
cars below the standard with those above the standards.52  The European Communities argued that
these measures were inconsistent with Article III and could not be justified under Article XX(g) or(d).  The United States contended that these measures were consistent with the GATT.  However, the
United States considered that it was obvious from the facts that, as a central element of US energy
conservation policy, the CAFE measures were also measures within the scope of Article XX(g).
53
D. SUMMARY OF FINDINGS ON ARTICLE XX
32. The panel found that both the luxury tax and the gas guzzler tax were consistent with
Article III:2.  However, it found the CAFE regulation to be inconsistent with Article III:4, as 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 (i.e. based on origin), rather than on the basis of factors directly
related to the products as such.
33. The panel considered that a policy to conserve gasoline, which is produced from petroleum,
an exhaustible natural resource, was within the range of policies covered by Article XX(g).54  Th e
panel further found that the separate foreign fleet accounting was not justified under Article XX(g)
because the measure did not contribute directly to fuel conservation in the US; thus, a measure that
                                                     
49 Ibid. , para. 2.2.
50 Ibid. , para. 2.5.
51 Ibid. , paras. 2.15-2.16.
52 Ibid. , para. 5.41.
53 Ibid. , para. 3.315.
54 Ibid. , para. 5.57.WT/CTE/W/203
Page 38
did not further the objectives of conservation of an exhaustible resource could not be deemed to be
primarily aimed at such conservation.55  In addition, the panel found that the CAFE regulation could
not be justified under Article XX(d) as the underlying measure (the CAFE requirement) was itself
inconsistent with the GATT.56
VII. UNITED STATES – GASOLINE57
A. PARTIES
1. Panel
Complainant: Brazil and Venezuela.
Respondent: United States.
Third Parties: Australia; Canada; the European Communities and Norway.
2. Appellate Body
Appellant: United States.
Appellees: Brazil and Venezuela.
Third Participants: the European Communities and Norway.
B. TIMELINE OF DISPUTE
Panel requested: 25 March 1995.
Panel established: 10 April 1995.Panel composed: 28 April 1995.
Panel Report circulated: 29 January 1996.
Notice of appeal: 21 February 1996.
Appellate Body Report circulated: 29 April 1996.
Adoption: 20 May 1996.C. M
AIN FACTS
34. 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 and to ensure that pollution from the combustion of
gasoline did not exceed 1990 levels.  These rules were established to address the ozone and pollutiondamage experienced by large US cities, as a result, principally, of car exhaust fumes.
                                                     
55 Ibid. , para. 5.61.
56 Ibid. , para. 5.67.
57 United States – Standards for Reformulated and Conventional Gasoline , Panel Report and Appellate
Body Report, adopted on 20 May 1996, WT/DS2/R and WT/DS2/AB/R.WT/CTE/W/203
Page 39
35. From 1 January 1995, the Gasoline Rule permitted only gasoline of a specified cleanliness
("reformulated gasoline") to be sold to consumers in the most polluted areas of the country.  In the
rest of the country, only gasoline no dirtier than that sold in the base year of 1990 ("conventional
gasoline") could be sold.58  The Gasoline Rule applied to all US refiners, blenders and importers of
gasoline.
36. The EPA regulation provided two different sets of baseline emissions standards.59  First, it
required any domestic refiner which was in operation for at least six months in 1990 to establish an
"individual baseline", which represented the quality of gasoline produced by that refiner in 1990.
Second, EPA established a "statutory baseline", intended to reflect average US 1990 gasoline quality.
The statutory baseline was assigned to those refiners who were not in operation for at least six months
in 1990, and to importers and blenders of gasoline.  The statutory baseline imposed a stricter burden
on foreign gasoline producers.
37. Venezuela and Brazil claimed that the Gasoline Rule was prejudicial to their exports to the
United States and that it favored domestic producers.  Accordingly, the Gasoline Rule was
inconsistent with Articles III and XXIII:1(b) of the GATT 1994, with Article 2.2 of the Agreement on
Technical Barriers to Trade (TBT Agreement), and was not covered by Article XX.60  The
United States argued that the Gasoline Rule was consistent with Article III, and, in any event, wasjustified under the exceptions contained in Article XX, paragraphs (b), (g) and (d), and that the Rule
was also consistent with the TBT Agreement.
61  The United States appealed the panel report but
limited its appeal to the panel's interpretation of Article XX of the GATT 1994.
D. SUMMARY OF FINDINGS ON ARTICLE XX
38. The panel found that imported and domestic gasoline were like products, and that since, under
the baseline establishment methods, imported gasoline was effectively prevented from benefitting
from sales conditions as favourable as domestic gasoline were afforded by an individual baseline tied
to the producer of a product, imported gasoline was treated less favourably than domestic gasoline.62
The Gasoline Rule was accordingly inconsistent with Article III.
39. The panel agreed with the parties that a poli cy to reduce air pollution resulting from the
consumption of gasoline was a policy concerning the protection of human, animal and plant life or
health mentioned in Article XX(b).63  However, the panel found that the baseline establishment
methods were not “necessary” under Article XX(b)  since there were other consistent or less
inconsistent measures reasonably available to the US for the same policy objective.64  The panel
rejected a justification of the measure under Article XX(d) as the baseline establishment methods
were not an enforcement mechanism (to "secure comp liance"), but were simply rules for determining
the individual baselines.65  Finally, the panel considered 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).66  However, the
panel found that the less favourable baseline establishment methods at issue in this case were not
primarily aimed at the conservation of natural resources.67  In light of these findings, it was not
deemed necessary by the panel to determine whether the measure met the conditions set out in the
                                                     
58 Ibid. , Panel Report, para. 2.2.
59 Ibid. , paras. 2.6, 2.8.
60 Ibid. , paras. 3.1-3.2.
61 Ibid. , para. 3.4.
62 Ibid. , para. 6.16.
63 Ibid. , para. 6.21.
64 Ibid. , para. 6.28.
65 Ibid. , para. 6.33.
66 Ibid. , para. 6.37.
67 Ibid. , para. 6.40.WT/CTE/W/203
Page 40
chapeau of Article XX.68  The panel concluded that the Gasoline Rule could not be justified under
Article XX(b), (d) or (g).  The panel finding was reversed on appeal.
40. The Appellate Body held 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.  It noted that the chapeau addressed not so much the questioned measure or its specificcontents as such, but rather the manner in which th at measure is applied.  Accordingly, the chapeau is
animated by the principle that while Members have a legal right  to invoke the exceptions of
Article XX, they should not be so applied  as to lead to an abuse or misuse.
69
41. It concluded that the application of the US regulation amounted to unjustifiable
discrimination and to a disguised restriction on tr ade because of two omissions on the part of the
United States.70  First, the United States had not explored adequately means, including in particular
cooperation with Venezuela and Brazil, of mitigating the administrative problems that led theUnited States to reject individual baselines for foreign refiners.  Second, the United States did not c ount
the costs for foreign refiners that would re sult from the imposition of statutory baselines.
VIII.  UNITED STATES – SHRIMP
71
A. PARTIES
1. Panel
Complainant: India, Malaysia; Pakistan and Thailand.
Respondent: United States.
Third Parties: Australia; Colombia; Costa Rica; Ecuador; El Salvador; the European Communities;
Guatemala; Hong Kong; Japan; Mexico; Nigeria; th e Philippines; Senegal; Singapore; Sri Lanka and
Venezuela.
2. Appellate Body
Appellant: United States.
Appellees: India; Malaysia; Pakistan and Thailand.
Third Participants: Australia; Ecuador; the European Communities; Hong Kong, China; Mexico and
Nigeria.
B. TIMELINE OF DISPUTE
Panel requested: 9 January 1997 (Malaysia and Thailand); 30 January 1997 (Pakistan) and
25 February 1997 (India).
Panel established: 25 February 1997 and 10 April 1997 (for India).
Panel composed: 15 April 1997.
                                                     
68 Ibid. , para. 6.41.
69 US – Gasoline , Appellate Body Report, DSR 1996 , p. 21
70 Ibid. , pp. 25-26.
71 United States – Import Prohibition of Certain Shrimp and Shrimp Products , Appellate Body Report
and Panel Report adopted on 6 November 1998, WT/DS58.WT/CTE/W/203
Page 41
Panel Report circulated: 15 May 1997.
Notice of appeal: 13 July 1998.
Appellate Body Report circulated: 12 October 1998.
Adoption: 6 November 1998.
C. MAIN FACTS
42. Sea turtles at issue arere characterized as highly migratory species, spending their lives at sea,
migrating between their foraging and their nesting grounds.  They 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).  In 1998, all species of sea
turtles were included in Appendix I of the 1973 Convention on International Trade in Endangered
Species ("CITES").72
43. 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 required that shrimp
trawlers used "turtle excluder devices" (TEDs)73 in their nets when fishing in areas where there was a
significant likelihood of encountering sea turtles.
44. Section 609 of Public Law 101-162 (hereafter "Section 609"), enacted in 1989 by the
United States, intended to, inter alia , develop bilateral or multilateral agreements for the protection
and conservation of sea turtles.  Section 609 prohibited that shrimp harvested with technology that
might adversely affect certain sea turtles be imported into the United States, unless the harvesting
nation was certified to have a regulatory programme for the conservation of sea turtles and an
incidental take rate comparable to that of the Unit ed States, or that the particular fishing environment
of the harvesting nation did not pose a threat to sea turtles.74  In practice, countries having any of the
five species of sea turtles within their jurisdiction and harvesting shrimp with mechanical means had
to impose on their fishermen requirements comparable to those borne by US shrimpers, essentially the
use of TEDs at all times, if they wished to be certified and export shrimp products to the
United States. The United States issued regulatory guidelines in 1991, 1993 and 1996 for theimplementation of Section 609 detailing how to assess the comparability of foreign regulatory
programmes with the US programme, as well as the criteria for certification.  The United States
effectively banned shrimp imports from countries that were not certified as having comparable
conservation policies for endangered sea turtles or as coming from shrimp boats equipped with TEDs.
45. The complainants argued that the import prohibition on shrimp and shrimp products was
inconsistent with Article XI:1,
75 with Article I:1,76 and with Article XIII:1 as it restricted the
importation of shrimp and shrimp products from countries which had not been certified, while likeproducts from other countries which had been certified could be imported freely into the US.
77  The
US claimed that the measures at issue were justified under Article XX(b) and (g) given that these
provisions did not contain jurisdictional limitations, nor limitations on the location of the animals or
natural resources to be protected and conserved.78  The complainants argued to the contrary that
                                                     
72 Ibid. , Panel Report, para. 2.3.
73 A TED is a 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.
74 US – Shrimp , Panel Report, para. 2.7.
75 Ibid. , para. 7.11.
76 Ibid. , para. 7.18.
77 Ibid. , para. 7.20.
78 Ibid. , para. 7.24.WT/CTE/W/203
Page 42
Article XX(b) and (g) could not be invoked to ju stify a measure applying to animals outside the
jurisdiction of the Member enacting the measure.
46. On appeal, the US raised, inter alia,  the issue of whether the panel erred in finding that the
measure at issue constituted unjustifiable discrimination between countries where the same conditions
prevail and, thus, was not within the scope of measures permitted under Article XX of theGATT 1994.
79
D. SUMMARY OF FINDINGS ON ARTICLE XX
47. The panel ruled that it was equally appropriate to analyse first the introductory provision of
Article XX, and only thereafter the specific requirements contained in the paragraphs.80  This ruling
was rejected by the Appellate Body.  It indicated that the sequence of steps followed in the US –
 Gasoline  case (first, characterization of the measure under Article XX(g);  second, further appraisal of
the same measure under the introductory clauses of Article XX) reflected not inadvertence or randomchoice, but rather the fundamental structure and logic of Article XX.
81
48. The panel had found that the ban imposed by the United States was inconsistent with
Article XI.82  It had concluded that the US ban could not be justified under Article XX as it
constituted "unjustifiable" discrimination between countries where the same conditions prevail and
thus was not within the scope of measures permitted under Article XX.83  It had reasoned that
allowing such a ban would undermine Members' autonomy to determine their own policies.84  Since
the panel had found that the US measure at issue was not within the scope of measures permitted
under the chapeau of Article XX, it did not find it necessary to examine whether the US measure was
covered by paragraphs (b) and (g) of Article XX.85
49. The Appellate Body further ruled 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.  The Appellate Body found that the sea turtles
involved constituted "exhaustible natural resources" for purposes of Article XX(g),86 and that
Section 609 was a measure "relating to" the conservation of an exhaustible natural resource.87  It ruled
however, with regard to the chapeau, that discrimination resulted not only when countries in whichthe same conditions prevail were treated differently, but also when the application of the measure at
issue did not allow for any inquiry into the appropriateness of the regulatory programme for the
conditions prevailing in the exporting countries.
88  Thereby, the failure of the United States to engage
the appellees, as well as other Members exporting shrimp to the United States, in serious, across-the-
board negotiations with the objective of concludi ng bilateral or multilateral agreements for the
protection and conservation of sea turtles, before unilaterally enforcing the import prohibition against
the shrimp exports of those Members, was also taken into account.89
                                                     
79 US – Shrimp , Appellate Body Report, para. 98.
80 US – Shrimp , Panel Report, para. 7.28.
81 US – Shrimp , Appellate Body Report, para. 119.
82 US – Shrimp , Panel Report, para. 7.17.
83 Ibid. , para. 7.49.
84 Ibid. , para. 7.51.
85 Ibid. , paras. 7.62-63.
86 US – Shrimp , Appellate Body Report, para. 134.
87 Ibid. , para. 142.
88 Ibid. , para. 165.
89 Ibid. , para. 166.WT/CTE/W/203
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IX. EUROPEAN COMMUNITIES – ASBESTOS90
A. PARTIES
1. Panel
Complainant: Canada.
Respondent: European Communities.Third Parties: Brazil; the United States and Zimbabwe.
2. Appellate Body
Appellant and Appellee: Canada.
Appellant and Appellee: European Communities.
Third Participants: Brazil and the United States.
B. T
IMELINE OF DISPUTE
Panel requested: 8 October 1998.
Panel established: 25 November 1998.
Panel composed: 29 March 1999.
Panel Report circulated: 18 September 2000.
Notice of appeal: 23 October 2000.
Appellate Body Report circulated: 12 March 2001.Adoption: 5 April 2001.
C. M
AIN FACTS
50. Chrysotile asbestos is generally considered to be a highly toxic material, the exposure to
which poses significant threats to human health such as risk of asbestosis, lung cancer or
mesothelioma.91  However, due to their special qualities (for instance, resistance to very high
temperatures and to different types of chemical attack), asbestos fibres have found wide use in
industrial and other commercial applications.92
51. In the light of these circumstances, the French Government, which had previously imported
large amounts of chrysotile asbestos, adopted a Decree which provided for a ban on asbestos fibres
and products containing asbestos fibres.  The Decree provided also for certain limited exceptions tothe ban for chrysotile asbestos (also called white asbestos) fibres:
                                                     
90 European Communities – Measures Affecting Asbestos and Asbestos -Containing Products , Appellate
Body Report and Panel Report, adopted on 5 April 2001, WT/DS135.
91 EC – Asbestos , Panel Report, para. 3.66.
92 Ibid. , para. 2.2.WT/CTE/W/203
Page 44
"I.  On an exceptional and temporary basis, the bans instituted under Article 1 shall
not apply to certain existing materials, products or devices containing chrysotile fibre
when, to perform an equivalent function, no substitute for that fibre is available
which:
- On the one hand, in the present state of scientific knowledge, poses a
lesser occupational health risk than chrysotile fibre to workers handling those
materials, products or devices;
- on the other, provides all technical guarantees of safety corresponding to
the ultimate purpose of the use thereof (…)".93
52. The European Communities argued that in proh ibiting the placing on the market and use of
asbestos and products containing asbestos, the Decree sought to halt the spread of the risks due to
asbestos, particularly for those exposed occasionally and very often unwittingly to asbestos whenworking on asbestos-containing products.
94  France contended that it could thereby reduce the number
of deaths due to exposure to asbestos fibres among  the French population, whether by asbestosis, lung
cancer or mesothelioma.
53. Canada is the number two producer and number one exporter of chrysotile.95  Canada did not
dispute that chrysotile asbestos caused lung cancer, but made, inter alia , a distinction between
chrysotile fibres and chrysotile encapsulated in a cement matrix.  Canada challenged the Decree
insofar as it prohibited, inter alia, the use of chrysotile-cement products.  Canada argued that the
Decree altered the conditions of competition between, on the one hand, substitute fibres of French
origin and, on the other hand, chrysotile fibre from Canada.  Accordingly, the Decree imposed less
favourable treatment to imported asbestos as compared to domestic substitutes for asbestos.However, the European Communities held that there was still a risk of accidental contamination,
especially in the case of DIY enthusiasts or professionals working only occasionally in an
environment where asbestos was present.  Data submitted to the panel showed that such exposure
could exceed the statutory limits under ISO 7337,
96 which were themselves higher than those of the
WHO or those applied by France before the ban.97
54. Canada claimed that the Decree violated Articles III:4 and XI of the GATT 1994 and
Articles 2.1, 2.2, 2.4 and 2.8 of the TBT Agreement, and also nullified or impaired benefits under
Article XXIII:1(b).  The European Communities argued that the Decree was not covered by the
TBT Agreement.  With regard to GATT 1994, the European Communities requested the panel to
confirm that the Decree was either compatible with Article III:4 or necessary to protect human health
within the meaning of Article XX(b).
D. SUMMARY OF FINDINGS ON ARTICLE XX
55. The panel found that chrysotile-fibre products and fibro-cement products were like products
with the meaning of Article III:4. The panel further found that the provisions of the Decree relating to
the prohibiting of the marketing of chrysotile fibres and chrysotile-cement products violated
                                                     
93 Decree No. 96-1133 of 24 December 1996 concerning th e ban on asbestos, implemented pursuant to
the Labour Code and the Consumer Code, Journal Officiel  of 26 December 1996.  Reproduced in Annex I to
EC – Asbestos Panel report.
94 EC – Asbestos , Panel Report, para. 8.185.
95 Ibid. , para. 3.20.
96 See International Organization for Standardization, ISO 7337 (1984).
97 EC – Asbestos , Panel Report, para. 8.191.WT/CTE/W/203
Page 45
Article III:4.  Nevertheless, the panel decided that the violation of Article III:4 was justified under
Article XX(b) and that the measure did not conflict with the chapeau of Article XX.98
56. The panel noted that the experts consulted confirmed the health risks associated with
exposure to chrysotile asbestos in its various uses and, therefore, that a prohibition of chrysotile
asbestos fell within the range of policies designed to protect human life or health (Article XX(b)).99
The panel also found that there was no reasonable alternative available (e.g. the controlled use of
asbestos products as suggested by Canada) to the European Communities.100  Concerning the chapeau
of Article XX, the panel found that the application of the Decree did not constitute arbitrary or
unjustifiable discrimination,101 and that the examination of the design, architecture and revealing
structure of the Decree could not lead to concl ude that the Decree had protectionist objectives.102
57. On appeal, Canada disputed two aspects of the panel's findings: the question of whether the
use of chrysotile-cement products posed a risk to human health and whether the measure at issue was"necessary" to protect human life or health.
103  The Appellate Body upheld both findings.  It
reaffirmed the Panel's margin of discretion in asse ssing the value of evidence and the weight to be
ascribed to that evidence,104 and found that the panel remained well within the bounds of its discretion
in finding that chrysotile-cement products posed a risk to human life or health.105
58. The Appellate Body also rejected Canada's arguments against the necessity of the measure.  It
ruled that WTO Members have the right to determine the level of protection of health that they
consider appropriate in a given situation.106  In order to evaluate whether the measure was necessary,
the Appellate Body examined, inter alia,  whether there was an alternative measure consistent with the
GATT 1994, or less inconsistent with it, which a Member could reasonably be expected to employ to
achieve its objectives.  It ruled that one aspect of the weighing and balancing process comprehendedin the determination of whether a WTO-consistent alternative measure is reasonably available is the
extent to which the alternative measure contributes to the realization of the end pursued.  In addition,
the Appellate Body noted that the more vital or important the policy pursued, the easier it would be to
prove that a measure was necessary to meet the objectives of the policy.
107  In this case, the objective
pursued (health) was characterized as "vital and important in the highest degree".108  It found therefore
that the efficacy of the alternative proposed by Canada (the controlled use) was particularly doubtful
in certain situations and that it would not allow France to achieve its chosen level of health
protection.109
                                                     
98 Ibid. , paras. 8.240-241.
99 Ibid. , para. 8.194.
100 Ibid. , para. 8.221.
101 Ibid. , para. 8.230.
102 Ibid. , para. 8.238.
103 EC – Asbestos , Appellate Body Report, para. 155.
104 Ibid. , para. 161.
105 Ibid. , para. 162.
106 Ibid. , para. 167.
107 Ibid. , para. 172.
108 Ibid.
109 Ibid. , para. 174.WT/CTE/W/203
Page 46
X. UNITED STATES – SHRIMP (ARTICLE 21.5)110
A. PARTIES
1. Panel
Complainant: Malaysia.
Respondent: United States.Third Parties: Australia; Canada; Ecuador; Hong Kong, China; the European Communities; India;
Japan; Mexico; Pakistan and Thailand.
2. Appellate Body
Appellant: Malaysia.
Appellee: United States.
Third Participants: Australia; the European Communities; Hong Kong, China; India; Japan; Mexico
and Thailand.
B. T
IMELINE OF DISPUTE
Panel requested: 12 October 2000.
Panel established: 23 October 2000.
Panel composed: 23 October 2000.
Panel Report circulated: 15 June 2001.Notice of appeal: 23 July 2001.
Appellate Body Report circulated: 22 October 2001.
Panel Report adopted: 21 November 2001.
C. M
AIN FACTS
59. In accordance with Article 21.5 of the DSU,111 Malaysia requested that the Dispute Settlement
Body (DSB) refer to a panel its complaint with respect to whether the United States had complied
with the recommendations and rulings of the DSB in United States – Import Prohibition of Certain
Shrimp and Shrimp Products , adopted on 6 November 1998 (see Part VIII above).  The DSB referred
the matter to the original panel.
                                                     
110 United States – Import Prohibition of Certain Shrimp and Shrimp Products. Recourse to article 21.5
by Malaysia , Appellate Body Report and Panel Report, adopted on 21 November 2001, WT/DS58/AB/RW.
111 Article 21.5 of the DSU reads as follows: "Where there is disagreement as to the existence or
consistency with a covered agreement of measures take n to comply with the recommendations and rulings such
dispute shall be decided through recourse to these disp ute settlement procedures, including wherever possible
resort to the original panel. The panel shall circulate its report within 90 days after the date of referral of the
matter to it.  When the panel considers that it cannot provide its report within this time frame, it shall inform theDSB in writing of the reasons for the delay together with an estimate of the period within which it will submitits report".WT/CTE/W/203
Page 47
60. In order to implement the recommendations and rulings of the DSB, the United States issued
the Revised Guidelines for the Implementation of Section 609 of Public Law 101-162 Relating to the
Protection of Sea Turtles in Shrimp Trawl Fishing Operations (the "Revised Guidelines").112  These
Revised Guidelines replaced the guidelines issued in April 1996 that were part of the original measure
at stake.  The Revised Guidelines set forth criteria for certification.
61. Malaysia claimed that Section 609, as currently applied continued to violate Article XI:1 and
that the United States was not entitled to impose any prohibition in the absence of an international
agreement allowing it to do so.  The United States did not contend that the implementing measure was
compatible with Article XI:1 but that it was justif ied under Article XX(g).  The United States argued
that the Revised Guidelines responded to its obligation to remedy all the inconsistencies identified by
the Appellate Body under the chapeau of Article XX.113
D. SUMMARY OF FINDINGS ON ARTICLE XX
62. The panel was called upon to examine the compatibility of the implementing measure with
Article XX(g).  It noted that in US – Shrimp , the Appellate Body concluded that Section 609 was
provisionally justified under Article XX(g).  Therefore, since the implementing measure before the
panel was identical to the measure examined by the Appellate Body in relation to paragraph (g), the
panel held that the implementing measure was provisionally justifiable under Article XX(g).114
63. The panel then recalled the Appellate Body's finding in US – Shrimp  concerning the nature of
the chapeau of Article XX:
"the 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 an exception under Article XX and the rights of the other Members undervarying substantive provisions (…) of the GATT 1994".
115
64. The panel concluded that the recognition that the protection of migratory species was best
achieved through international cooperation significantly moved the line of equilibrium towards a
bilaterally or multilaterally negotiated solution, thus rendering recourse to unilateral measures less
acceptable.116  On this basis, the panel proceeded to dete rmine whether the line of equilibrium in the
field of sea turtle conservation and protection was such as to require the conclusion of an international
agreement or only efforts to negotiate.  It concluded that the obligation of the United States was an
obligation to negotiate, as opposed to an obligation to conclude an international agreement.117  It also
concluded that the US had made serious good faith efforts to negotiate an international agreement.
65. On appeal, Malaysia claimed that the panel erred in finding that the new measure at issue was
applied in a manner that no longer constituted a means of "arbitrary or unjustifiable discrimination"
under Article XX.  Malaysia first asserted that the United States should have negotiated  and
concluded  an international agreement on the protection and conservation of sea turtles before
imposing an import prohibition.  The Appellate Body upheld the panel's finding and rejected
Malaysia's contention that avoiding "arbitrary and unjustifiable discrimination" under the chapeau of
Article XX required the conclusion of an international agreement on the protection and conservation
of sea turtles.118  Malaysia also argued that the measure at issue resulted in "arbitrary or unjustifiable
discrimination" because of the lack of flexibility of the US measure.  The Appellate Body upheld
                                                     
112 US – Shrimp (21.5) , Panel Report, para. 2.22.
113 Ibid. , para. 5.24.
114 Ibid. , paras. 5.39-5.42.
115 US – Shrimp , Appellate Body Report, para.159.
116 US – Shrimp (21.5) , Panel Report, para. 5.59.
117 Ibid. , para. 5.67.
118 US – Shrimp (21.5) , Appellate Body Report, para. 134.WT/CTE/W/203
Page 48
again the panel's finding and agreed with the reasoning of the panel that conditioning market access
on the adoption of a programme comparable in effectiveness , allowed for sufficient flexibility in the
application of the measure so as to avoid "arbitrary or unjustifiable discrimination".119
__________
                                                     
119 Ibid. , para. 144.