RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPDR/W/27/Add.1 
18 January 2011 
 
 (11-0291) 
Working Party on Domestic Regulation  
  
 
"NECESSITY TESTS" IN THE WTO
1 
 
Note by the Secretariat2 
 
Addendum  
  
1. At the request of the Working Party on Domestic Regulation, and in the context of the 
negotiations mandated by Article VI:4 of the GATS, this Addendum updat es and expands upon the 
Secretariat Note on "Necessity Tests" in the WTO.
3  The Addendum complements the Secretariat 
Note by reviewing new developments in the WTO ju risprudence.  It should therefore be read in 
conjunction with the earlier Note.  As was requested by Members, and for the purpose of assisting further discussions in the Working Party, it also  adds a discussion of the notion of "disguised 
restrictions on trade" as contained in some WTO Agreements. 
2. Similar to what has been done in the earlie r Note, the present Addendum begins with a 
background section on the concept of a "necessity test" and its relation to GATS Article VI:4.  
Thereafter, a second section examines the issues relating to "necessity tests" arising in WTO 
jurisprudence.  Finally, a third section discusses the notion of "disguised restrictions on trade". 
I. BACKGROUND 
3. The Secretariat Note listed the following prov isions in the WTO Agreements as containing 
"necessity tests": Articles XX and XI of the GATT; GATS Articles XIV and VI:4; paragraph 2(d) of 
Article XII of the GATS and paragraph 5(e) of the Annex on Telecommunications; Articles 2.2 and 
2.5 of the TBT Agreement; Articles 2.2 and 5.6 of  the SPS Agreement; Articles 3.2, 8.1 and 27.2 of 
the TRIPS Agreement;  and Article 23.2 of the Agreement on Government Procurement.  The present Addendum will focus solely on those provisions for which jurisprudence has been developed since 
December 2003. 
4. As was noted in the Secretariat Note, necess ity tests establish the WTO consistency of a 
measure based on whether the measure is "necessary" to  achieve certain policy objectives.  In general, 
these tests are a means of reflecting the balan ce in WTO Agreements between the freedom of 
Members to set and achieve their own regulatory objectives through measures of their own choosing, 
and the goal of discouraging Members from adopting measures that unduly restrict trade.  Necessity 
tests achieve this balance by requiring that measures  which restrict trade in some way (including by 
violating obligations of an agreement) are permis sible only if they are "necessary" to achieve the 
                                                     
 
 1 This Addendum covers only those provisions in the WTO Agreements that were addressed in the 
Secretariat Note on "Necessity Tests" in the WTO (S /WPDR/W/27) and for which jurisprudence has been 
developed since December 2003. 
 2 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO.  
3 See Working Party on Domestic Regulation, "Necessity  Tests" in the WTO. Note by the Secretariat, 
S/WPDR/W/27, 2 December 2003. This document will be referred to hereinafter as  the 'Secretariat Note'. S/WPDR/W/27/Add.1 
Page 2  
 
  Member's policy objective.
4 As will appear from the jurisprude nce covered in this Addendum, these 
tests focus on the "necessity" of the measures , rather than on the necessity of the policy objective .   
The necessity of the measure is tested in the light  of the policy objective selected and pursued by the 
Member. 
5. The Secretariat Note discerned three important elements in a necessity test: the measure, the 
policy objective, and the link between them.  The measure  subject to the test may be unqualified in its 
scope (e.g.  GATT Article XX or GATS Article XIV), or it may be more limited (e.g.  GATT 
Article XI or GATS Article VI:4).  The policy objective in the necessity test may be set out either in a 
closed list (e.g.  GATT Article XX or GATS Article XIV) or in an open illustrative list of "legitimate 
objectives" (e.g.  TBT Article 2.2).  The link between the measure and the objective may sometimes 
be expressed by use of the word "necessary" (e .g.  GATT Article XX(a), (b) and (d) or GATS 
Article XIV), or by other terms such as "not mo re trade restrictive than required" (e.g.  SPS 
Article 5.6). 
6. A general distinction has been drawn between "necessity tests" that are included in an 
obligation provision (e.g.  TBT Article 2.2; SPS Article 2.2; GATS Article VI:4 or Paragraph 2 of the 
Accountancy Disciplines) and those contained in an exception to an obligation (GATT Article XX or 
GATS Article XIV).  In case of the GATS, there exists both a "necessity test" in an obligation 
provision (GATS Article VI:4) and in an excepti on (GATS Article XIV).  The Secretariat Note 
indicated that necessity tests in exception provisions differ in at least two aspects from those tests in 
obligations.  First, the tests in exception provisions typically refer to a finite set of policy objectives, 
whereas obligation provisions usually refer to an illustrative list of objectives.  Second, when 
"necessity tests" are included in an obligation prov ision, the burden of proof is on the complaining 
party in the dispute to show that the measure at issue does not meet the necessity requirement.  In case 
of "necessity tests" in exception provisions, the pa rty who invokes this exception bears the burden of 
proof that the measure, even if violating an obligati on in the relevant agreemen t, is still justified on 
the basis of an exception and that the measure complies with the necessity requirement in that 
provision. 
7. Article VI:4 of the GATS contains a mandate  for WTO Members to establish any necessary 
disciplines with a view to ensuring that me asures relating to qualification requirements and 
procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services.  The provision furt her indicates that these disciplines: 
shall aim to ensure that such requirements are, inter alia :  
(a) based on objective and transparent criteria, such as competence and the ability to supply 
the service; 
(b) not more burdensome than necessary  to ensure the quality of the service; 
(c) in the case of licensing procedures, not in themselves a restriction on the supply of the 
service.  [emphasis added] 
8. The Working Party on Professional Services has already developed such disciplines for the 
accountancy sector.  Paragraph 2 of the Accountancy Disciplines
5 contains a necessity test in the form 
of an obligation .  It can be noted that the Accountancy  Disciplines include a "necessity test" that 
considers the necessity of a measure "to fulfil a legitim ate objective", rather than a test that considers 
                                                      
 4 Ibid., para. 4. 
 5 See Working Party on Professional Services, Discip lines on Domestic Regulation in the Accountancy 
Sector, S/L/64, 17 December 1998.  S/WPDR/W/27/Add.1 
 Page 3 
 
 
  the necessity of a measure "to ensure the quality of th e service" (the language used in Article VI:4(b)).  
The "quality of the service" is listed as an example of a "legitimate objective".  The paragraph reads:  
Members shall ensure that measures not subject  to scheduling under Articles XVI or XVII of 
the GATS, [footnote omitted] relating to licen sing requirements and procedures, technical 
standards and qualification requirements and pro cedures are not prepared, adopted or applied 
with a view to or with the effect of cr eating unnecessary barriers to trade in accountancy 
services.  For this purpose, Members shall ensure that such measures are not more trade-
restrictive than necessary to fulfil a legitimate objective .  Legitimate objectives are, inter alia , 
the protection of consumers (which includes all users of accounting services and the public 
generally), the quality of the service, professional competence, and the integrity of the 
profession. [emphasis added] 
The Accountancy Disciplines were adopted by th e Council for Trade in Services on 14 December 
1998, with the stipulation that they are intended to  be integrated into the GATS no later than the 
conclusion of the current services trade negotiations.6 
9. Pending the entry into force of disciplines de veloped on the basis of the mandate in GATS 
Article VI:4, GATS Article VI:5 already imposes an obligation upon WTO Members.  It cross-
references Article VI:4, including the "necessity" re quirement in Article VI:4(b) of the GATS.  
Article VI:5 of the GATS reads:  
(a) In sectors in which a Member has undert aken specific commitments, pending the entry 
into force of disciplines developed in these sectors pursuant to paragraph 4, the Member shall not apply licensing and qualification requireme nts and technical standards that nullify or 
impair such specific commitments in a manner which: 
(i) does not comply with the criteria outlined in subparagraphs 4(a), (b) or (c); and (ii) could not reasonably have been expected of that Member at the time the specific 
commitments in these sectors were made. 
(b) In determining whether a Member is in c onformity with the obligation under paragraph 
5(a), account shall be taken of international st andards of relevant in ternational organizations
3 
applied by that Member. 
________________________ 
3 The term "relevant international organiza tions" refers to international bodies whose 
membership is open to the relevant bodies of at least all Members of the WTO. 
II. ISSUES ARISING IN WTO JURISPRUDENCE 
10. The Secretariat Note on "necessity tests" provided a review of the relevant WTO 
jurisprudence on necessity tests in the GATT 1994, the SPS Agreement, and the TBT Agreement up 
to 2 December 2003.  The present Addendum compleme nts the Note by reviewing rulings by panels 
and the Appellate Body on necessity tests since the e nd of 2003.  Since then, in addition to the 
jurisprudence on necessity tests in the GATT, th e SPS Agreement and TBT Ag reement, panels and 
the Appellate Body have also made rulings on th e necessity tests in Article XIV of the GATS as well 
as Paragraph 5(e) of the GATS Annex on Telecommunica tions.  The new cases that are referred to in 
                                                      
 6 Decision on Disciplines Relating to the Accountancy Sector, Adopted by the Council for Trade in 
Services on 14 Decembe r 1998, S/L/63, para. 2. S/WPDR/W/27/Add.1 
Page 4  
 
  this Addendum are Mexico – Telecoms ; Canada – Wheat Exports and Grain Imports, US – Gambling ; 
Colombia – Ports of Entry; Dominican Republic – Import and Sale of Cigarettes ; Brazil – Retreaded 
Tyres ; US – Shrimp (Thailand) /US – Customs Bond Di rective, US – Continued Suspension; Canada 
– Continued Suspension; China – Auto Parts;  China – Publications and Audiovisual Products ; US – 
Poultry (China) and Australia – Apples .  
11. In similar manner to the Secretariat Note, th e present Addendum adopts a thematic approach 
in reviewing the relevant issues arising from the juri sprudence.  First, it considers rulings relating to 
the objectives  of a measure.  Second, it examines rulings relating to the level of attainment of an 
objective.  Third, it looks at panel a nd Appellate Body decisions relating to necessity of the measure 
itself .  Lastly, the Addendum focuses on rulings relating to the burden of proof .    
12. It must be recalled that, even if there are simila r thematic issues arising in the "necessity tests" 
in the different provisions in the WTO agreements, an interpretation developed in the context of a 
specific case or specific provision is not necessarily transposable to other provisions.
7 The tests have 
to be read in their context and in the light of the object and purpose of the agreement concerned. 
13. It should also be kept in mind that the discussion in the Working Party on Domestic 
Regulation relating to "necessity tests" is based on Article VI:4 of the GATS, which provides a 
mandate to elaborate a necessity test in an obligation .  To facilitate further discussions, the thematic 
presentation of the jurisprudence in the present A ddendum has thus been divided between case-law 
relating to "necessity tests" in provisions allowi ng an exception, on the one hand, and case-law 
relating to "necessity tests" in provisions imposing an obligation, on the other hand.  These two categories will be referred to as "case-law re lating to exceptions" and "case-law relating to 
obligations". 
A. O
BJECTIVES OF THE MEASURE  
(a) Case-law relating to exceptions 
14. As was noted in the original Secretariat Note, panels and the Appellate Body have 
consistently found that it is not the necessity of the policy objective that is examined but the necessity 
of the measure taken to achieve the intended policy objective.8  
15. With regard to Article XX of the GATT, the Appellate Body in US – Gasoline has stressed 
the large measure of autonomy of Members to determine their own policies on the environment. 
It is of some importance that the Appellate Body point out what [the Appellate Body's 
finding] does not mean.  It does not mean, or imply, that the ability of any WTO 
Member to take measures to control air po llution or, more genera lly, 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 not 
changed 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 , 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 envi ronmental objectives and the environmental 
                                                     
 
 7 See Secretariat Note on "Necessity Te sts" in the WTO, paras. 11 and 50. 
 8 Ibid., para. 12.  S/WPDR/W/27/Add.1 
 Page 5 
 
 
  legislation they enact and implement.  So far as concerns the WTO, that autonomy is 
circumscribed only by the need to respect the requirements of the General Agreement  
and the other covered agreements.9 [footnote in original text omitted] 
16. The Panel in US – Shrimp referred to this statement in its report.10  
17. As mentioned, the policy objectives in "necessity tests" in exception  provisions in the WTO 
agreements are typically exhaustively listed.  Nonetheless, the WTO agreements generally do not 
provide detailed definitions of these policy objectives.  In this respect, it can be noted with regard to 
Article XIV(a) of the GATS, that the Panel in US – Gambling considered that Members should be 
given some scope to define the concepts of "public morals" and "public order" in this provision.  The 
meaning of these objectives depends on the values and standards that prevail in the specific Member. 
We are well aware that there may be sensitiviti es associated with the interpretation of the 
terms "public morals" and "public order" in the context of Article XIV.  In the Panel's view, 
the content of these concepts for Members can  vary in time and space, depending upon a 
range of factors, including prevailing social, cultural, ethical and religious values.  Further, the Appellate Body has stated on several occasions  that Members, in applying similar societal 
concepts, have the right to determine the level of protection that they consider appropriate.  
[footnote omitted]
 Although these Appellate Body statements  were made in the context of 
Article XX of the GATT 1994, it is our view that such statements are also valid with respect 
to the protection of public morals and public order under Article [XIV] of the GATS.  More 
particularly, Members should be given some sc ope to define and apply for themselves the 
concepts of "public morals" and "public order" in their respective territories, according to 
their own systems and scales of values.11 
18. The Panel noted in a similar vein with regard to "public morals" in Article XIV(a) of the 
GATS: 
 'The Panel considers the term "public mora ls" denotes standards of right and wrong conduct 
maintained by or on behalf of a community or nation.'12 
 
19. On appeal, the Appellate Body  upheld the Panel's finding in US – Gambling that the measures 
at issue addressed concerns falling within the sc ope of 'public morals' and/or 'public order'.13 
20. In China – Publications and Audiovisual Products , the Panel referred to the statements by the 
Panel in US – Gambling to interpret the concept "public morals" in Article XX(a) of the GATT14: 
                                                      
 9 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline , 
WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3, page  28.  
10 Panel Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products , WT/DS58/R 
and Corr.1, adopted 6 November 1998, as modified by Appellate Body Report WT/DS58/AB/R, DSR 1998:VII, 
2821, para. 7.26 (footnote 629). See also the GATT Panel reports in Japan – Alcoholic Beverages   I (GATT) . 
(GATT Panel Report, Japan – Customs Duties, Taxes and Labelling Practices on Imported Wines and Alcoholic 
Beverages , L/6216, adopted 10 November 1987, BISD 34S/83, para. 5.13, which reads in relevant part: "The 
Panel found, therefore, that the General Agreement rese rved each contracting party a large degree of freedom to 
decide autonomously on the objectives, level, principles and methods of its internal taxation of goods.") 
 11 Panel Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting 
Services , WT/DS285/R, adopted 20 April 2005, as modified by Appellate Body Report WT/DS285/AB/R, DSR 
2005:XII, 5797, para. 6.461. 
 12 Ibid, para. 6.465. 
 13 Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling 
and Betting Services , WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 
5475), para. 299. S/WPDR/W/27/Add.1 
Page 6  
 
  We note that the panel and Appellate Body in US – Gambling examined the meaning of the 
term "public morals" as it is used in Artic le XIV(a) of the GATS, which is the GATS 
provision corresponding to Article XX(a) .  The panel in US – Gambling , in an interpretation 
not questioned by the Appellate Body, found that "the term 'public morals' denotes standards 
of right and wrong conduct maintained by or on  behalf of a community or nation".[footnote 
omitted]
 The panel went on to note that "the conten t of these concepts for Members can vary 
in time and space, depending upon a range of fact ors, including prevailing social, cultural, 
ethical and religious values."[footnote omitted]  The panel went on to note that Members, in 
applying this and other similar societal concep ts, "should be given some  scope to define and 
apply for themselves the concepts of 'public mora ls' ... in their respectiv e territories, according 
to their own systems and scales of values."[footnote omitted]  Since Article XX(a) uses the 
same concept as Article XIV(a), and since we see no reason to depart from the interpretation 
of "public morals" developed by the panel in US – Gambling , we adopt the same 
interpretation for purposes of our Article XX(a) analysis. 
 
21. On appeal, the Appellate Body did not furthe r refine the meaning of "public morals". 
(b) Case-law relating to obligations 
22. Unlike GATT Article XX or GATS Article XIV, Article 2.2 of the TBT Agreement, which 
has a "necessity test" in an obligation , contains an illustrative list of "legitimate objectives".15 Besides 
those explicitly mentioned, Members may invoke  other legitimate objectives for taking certain 
measures.  In EC – Sardines , an interpretation of Article 2.4 of  the TBT Agreement was made where 
the objectives at issue were consumer protection, market transparency and fair competition.  These 
objectives are not explicitly mentioned in the illust rative list in Article 2.2 of the TBT Agreement.  
The Panel thus had to consider whether they were w ithin the scope of this provision and stated with 
regard to Article 2.4 of the TBT Agreement: 
Only the Member pursuing the legitimate objective is in a position to elaborate the objective it 
is trying to accomplish.  Panels are, however, required to determine the legitimacy of those 
objectives.  We note in this regard that the panel in Canada – Pharmaceutical Patents , in 
defining the term "legitimate interests", stated  that it must be defined "as a normative claim 
calling for protection of interests that are 'justif iable' in the sense that they are supported by 
relevant public policies or other social norms [footnote omitted].16  
23. The Appellate Body confirmed these findings and referred to Article 2.2 of the TBT 
Agreement when considering the meaning of "leg itimate" in Article 2.4 of the TBT Agreement: 
As to the second question, we are of the view that the Panel was also correct in concluding 
that "the 'legitimate objectives' referred to in Artic le 2.4 must be interpreted in the context of 
Article 2.2", which refers also to "legitimat e objectives", and includes a description of what 
the nature of some such objectives can be.[footnote omitted] Two implications flow from the 
Panel's interpretation.  First, the term "leg itimate objectives" in Article 2.4, as the Panel 
concluded, must cover the objectives explicitly mentioned in Article 2.2, namely: "national 
security requirements; the prevention of deceptiv e practices; protection of human health or 
                                                                                                                                                                     
 14 Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Certain 
Publications and Audiovisual Entertainment Products , WT/DS363/R and Corr.1, adopted 19 January 2010, as 
modified by Appellate Body Report WT/DS363/AB/R, para. 7.759. 
 15 See Secretariat Note on "Necess ity Tests" in the WTO, para. 13. 
 16 Panel Report, European Communities – Trade Description of Sardines , WT/DS231/R and Corr.1, 
adopted 23 October 2002, as modified by Appellate Body Report WT/DS231/AB/R, DSR 2002:VIII, 3451, 
para. 7.121.  S/WPDR/W/27/Add.1 
 Page 7 
 
 
  safety, animal or plant life or health, or the environment." Second, given the use of the term 
"inter alia " in Article 2.2, the objectives covered by the term "legitimate objectives" in 
Article 2.4 extend beyond the list of the objec tives specifically mentioned in Article 2.2.  
Furthermore, we share the view of the Panel th at the second part of Ar ticle 2.4 implies that 
there must be an examination and a determina tion on the legitimacy of the objectives of the 
measure.[footnote omitted]17 
 
B. LEVEL OF ATTAINMENT OF THE OBJECTIVE  
(a) Case-law relating to exceptions 
24. Rulings by panels and the Appellate Body on the right of Members to determine the 
objectives of a measure should be read together with those on the level of attainment chosen by a 
Member with respect to these objectives.  The Secretariat Note referred to the Appellate Body statements in Korea – Beef  and EC – Asbestos in the context of GATT Artic le XX that each Member 
has the right to determine the level of attain ment (or protection) it considers appropriate.
18 This was 
again affirmed by the Appellate Body in the Brazil – Retreaded Tyres  report, which reads in relevant 
part: 
At this stage, it may be useful to recapitulate our views on the issue of whether the Import 
Ban is necessary within the meaning of Ar ticle XX(b) of the GATT 1994.  This issue 
illustrates the tensions that may exist between, on the one hand, interna tional trade and, on the 
other hand, public health and environmental concerns arising from the handling of waste 
generated by a product at the end of its useful life.  In this respect, the fundamental principle 
is the right that WTO Members have to determin e the level of protection that they consider 
appropriate in a given context .  [...]19 [emphasis added] 
 
25. In the context of Article XIV(a) of the GATS, the Panel in US – Gambling  referred to the 
statements by the Panel in Korea – Beef and EC – Hormones , and also made a link between the right 
to determine the appropriate level of protection and the leeway of Members to define the concepts of 
"public morals" or "public order".  Reference has been made to this ruling in paragraph 17 of the 
present Addendum.  The Panel report reads in relevant part: 
[...] Further, the Appellate Body has stated on several occasions that Members, in applying 
similar societal concepts, have the right to dete rmine the level of protection that they consider 
appropriate. [footnote omitted]  Although these Appellate Body st atements were made in the 
context of Article XX of the GATT 1994, it is our  view that such statements are also valid 
with respect to the protection of public mo rals and public order under Article XIV of the 
GATS.  More particularly, Members should be given some scope to define and apply for 
themselves the concepts of "public morals" and "public order" in their respective territories, 
according to their own systems and scales of values. 
 
                                                      
 17 Appellate Body Report, European Communities – Trade Description of Sardines , WT/DS231/AB/R, 
adopted 23 October 2002, DSR 2002:VIII, 3359, para. 286. 
 18 See Secretariat Note on "Necessity Tests" in th e WTO, paras. 20-21. See Appellate Body Report, 
Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, 
adopted 10 January 2001, DSR 2001:I, 5, para. 178 and Appellate Body Report, European Communities – 
Measures Affecting Asbestos and Asbestos-Containing Products , WT/DS135/AB/R, adopted 5 April 2001, DSR 
2001:VII, 3243, para. 168.  
19 Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres , WT/DS332/AB/R, 
adopted 17 December 2007, DSR 2007:IV, 1527, para. 210. S/WPDR/W/27/Add.1 
Page 8  
 
  (b) Case-law relating to obligations 
26. In the context of the SPS Agreement, the earlier Se cretariat Note referred to statements by the 
Appellate Body in the Australia – Salmon case.  In particular, the Appellate Body stated that the 
determination of the appropriate level of protecti on is "a prerogative of the Member concerned and 
not of a Panel or of the Appellate Body" and confirmed that Members are not precluded from 
choosing a "zero risk" level of protection.
20 This view was repeated by the Appellate Body in US – 
Continued Suspension21 and in Canada – Continued Suspension.22 The Panel in US – Poultry (China) 
has stated: 
[...] We do not believe that it is an appropriate role for this Panel to engage in a speculative 
exercise of what ALOP [appropriate level of pr otection] a Member should apply to protect its 
own territory from public health risks.  In par ticular, we recall the reasoning of the Appellate 
Body in Australia – Salmon that "'the level of protection deemed appropriate by the Member 
establishing a sanitary ... measure' is a prerogative of the Member concerned and not of a 
panel or the Appellate Body."[footnote omitted]23 
 
27. The Appellate Body in Australia – Apples  repeated this, referring to earlier case-law relating 
to Article 5.6 of the SPS Agreement: 
This appeal concerns the second condition in Artic le 5.6, namely, that an alternative measure 
must meet the importing Member's appropriate level of protection.  The phrase "appropriate 
level of sanitary or phytosanitary protec tion" is defined in Annex A(5) to the SPS Agreemen t 
as "[t]he level of protection deemed appropriate by the Member establishing a sanitary or 
phytosanitary measure to protect human, animal or  plant life or health within its territory." 
The note to Annex A(5) explains that the concept of the appropriate level of protection is also 
referred to as the "acceptable level of risk".  The Appellate Body has held that it is the 
"prerogative"[footnote omitted] of a WTO Member  to set the level of protection it deems 
appropriate[footnote omitted], and has explained that the establishment of "the level of 
protection is an element in the decision-making process which logically precedes and is 
separate from the establishment or maintenance of the SPS measure".24 
 
C. NECESSITY OF THE MEASURE  
1. Structure of the test 
(a) Case-law relating to exceptions 
28. It may be recalled that the Panel in United States – Section 337 Tariff Act described the 
necessity requirement under GATT 1947 as follows:  
It was clear to the Panel that a contracting pa rty 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 
                                                     
 
 20 Secretariat Note on "Necessity Te sts" in the WTO, paras. 22-24. 
 21 Appellate Body Report, United States – Continued Suspension of Obligations in the EC – Hormones 
Dispute , WT/DS320/AB/R, adopted 14 November 2008, DSR 2008:X, 3507, para. 523. 
 22 Appellate Body Report, Canada – Continued Suspension of Obligations in the EC – Hormones 
Dispute , WT/DS321/AB/R, adopted 14 November 2008, para. 523. 
 23 Panel Report, United States – Certain Measures affecting Imports of Poultry from China , 
WT/DS392/R, adopted 25 October 2010, para. 7.334.  
24 Appellate Body Report, Australia – Measures Affecting the Importation of Apples from New Zealand , 
WT/DS367/R, circulated to WTO Members 29 November 2010 [adoption pending], para. 342.  S/WPDR/W/27/Add.1 
 Page 9 
 
 
  GATT provisions is available to it.  By the same token, in cases where a measure consistent 
with other GATT provisions is not reasonably ava ilable, 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.25 
29. The Secretariat Note indicated that the report by the Appellate Body in Korea – Beef 
significantly supplemented the criteria established by  panels for assessing the necessity of a measure.  
In the context of a dispute relating to Article XX(d)  of the GATT, the Appellate Body noted that the 
term "necessary" referred to a "range of degrees of necessary" and stated: 
[...] At one end of this continuum lies "necessar y" understood as "indispensable"; at the other 
end, is "necessary" taken to mean as "maki ng a contribution to." We consider that a 
"necessary" measure is, in this continuum, lo cated significantly closer to the pole of 
"indispensable" than to the opposite pole of simply "making a contribution to [footnote omitted]
26 
30. In the same case, the Appellate Body stated  that assessing the "necessity" of a measure 
involves a process of weighing and balancing a series of factors : 
In sum, determination of whether a measure, which is not "indispensable", may nevertheless 
be "necessary" within the contemplation of Ar ticle 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 prot ected by that law or regulation, and the 
accompanying impact of the law or  regulation on imports or exports .  [emphasis added]27 
 
31. This statement, which was made with regard  to Article XX(d) of the GATT, has been 
consistently cited in later Appe llate Body reports, such as in EC – Asbestos  (with regard to GATT 
Article XX(b))28, US – Gambling  (with regard to GATS Article XIV(a))29, Dominican Republic – 
Import and Sale of Cigarettes  (with regard to GATT Article XX(d))30, Brazil – Retreaded Tyres  (with 
regard to GATT Article XX(b))31, US – Shrimp (Thailand)/US – Customs Bond Directive  (with regard 
to GATT Article XX(d))32 and China – Publications and Audiovisual Products  (with regard to GATT 
Article XX(a)).33 
32. The Appellate Body further clarified in US – Gambling and in Brazil – Retreaded Tyres that 
weighing and balancing involves two steps : first, a preliminary analysis of the necessity of the 
                                                      
 25 United States – Section 337 of the Tariff Act of 1930 , BISD 36S/345-402 (L/6439), para. 5.26 and 
see Thailand – Restrictions on the Importation of and Internal Taxes on Cigarettes , BISD 37S/200 (DS10/R), 
para. 74. 
 26 Appellate Body Report, Korea – Beef , above n 18, para. 161. 
 27 Ibid., para. 164. 
 28 Appellate Body Report, EC – Asbestos , above n 18, para. 172. 
 29 Appellate Body Report, US – Gambling , above n 13, para. 305. 
 30 Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale 
of Cigarettes , WT/DS302/AB/R, adopted 19 May 2005, DSR 2005:XV, 7367, para. 66. 
 31 Appellate Body Report, Brazil – Retreaded Tyres , above n 19, para. 142. 
 32 Appellate Body Report, United States – Measures Relating to Shrimp from Thailand / United States 
– Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties , WT/DS343/AB/R / 
WT/DS345/AB/R, adopted 1 August 2008, DSR 2008:VII, 2385 / DSR 2008:VIII, 2773, para. 316. 
 33 Appellate Body Report, China – Measures Affecting Trading Rights and Distribution Services for 
Certain Publications and Audiovisual Entertainment Products , WT/DS363/AB/R, adopted 19 January 2010, 
para. 239. S/WPDR/W/27/Add.1 
Page 10  
 
  original measure  on the basis of all relevant factors, and second , the conclusion of the preliminary 
analysis must be confirmed by comparing the measure with its possible alternatives .  
33. In its report on US – Gambling (with regard to GATS Article XIV(a)) the Appellate Body 
ruled: 
The process begins with an assessment of the "rel ative importance" of the interests or values 
furthered by the challenged measure.[footnote omitted]
 Having ascertained the importance of 
the particular interests at stake, a panel should then turn to the other factors that are to be 
"weighed and balanced".  The Appellate Body has pointed to two factors that, in most cases, 
will be relevant to a panel's determinati on of the "necessity" of a measure, although not 
necessarily exhaustive of factors that might be considered.[footnote omitted]  One factor is the 
contribution of the measure to the realization of the ends pursued by it; the other factor is the 
restrictive impact of the measure on international commerce. 
 
A comparison between the challenged measur e and possible alternatives should then be 
undertaken, and the results of such comparison should be considered in the light of the 
importance of the interests at issue.  It is on the basis of this "weighing and balancing" and 
comparison of measures, taking into account the interests or values at stake, that a panel 
determines whether a measure is "necessary" or, alternatively, whether another, WTO-
consistent measure is "reasona bly available".[footnote omitted]34 
 34. In its later report on Brazil – Retreaded Tyres (with regard to GATT Article XX(b)), the 
Appellate Body  ruled: 
We begin our analysis by recalling that, in order to determine whether a measure is 
"necessary" within the meaning of Article XX(b)  of the GATT 1994, a panel must consider 
the relevant factors, particularly the importance of the interests or values at stake, the extent 
of the contribution to the achievement of the m easure's objective, and its trade restrictiveness.  
If this analysis yields a preliminary conclusion that the measure is necessary, this result must 
be confirmed by comparing the measure with po ssible alternatives, which may be less trade 
restrictive while providing an equivalent cont ribution to the achievement of the objective.  
This comparison should be carried out in the light  of the importance of the interests or values 
at stake.[footnote omitted]
 It is through this process that a panel determines whether a 
measure is necessary.[footnote omitted]35 
 
35. Nevertheless, in the same report, the Appellate Body indicated that the Panel had a certain 
degree of leeway in reaching its conclusion and str essed that the weighing and balancing exercise is a 
"holistic operation". 
[...] The weighing and balancing is a holistic operation that involves putting all the variables 
of the equation together and evaluating them in relation to each other after having examined 
them individually, in order to reach an overall judgement.  [...]36 
 
36. In its report on China – Publications and Audiovisual Products , the Appellate Body again 
stressed, in the context of GATT Article XX(a), the importance of following the different steps when 
determining the "necessity" of a certain measure. 
                                                      
 34 Appellate Body Report, US – Gambling , above n 13, paras. 306-307. 
 35 Appellate Body Report, Brazil – Retreaded Tyres , above n 19, para. 178. 
 36 Ibid., para. 182.  S/WPDR/W/27/Add.1 
 Page 11 
 
 
  We do not see that the Appellate Body's approach to the "necessity" analysis in Brazil – 
Retreaded Tyres differs from that in US – Gambling , which in turn referred to Korea – 
Various Measures on Beef .[footnote omitted] In each case, a sequential process of weighing 
and balancing a series of factors was involved.  US – Gambling sets out a sequence by using 
the phrases: "The process begins with an assessment of the 'relative importance' of the 
interests or values furthered by the challenged measure"[footnote omitted]; " Having 
ascertained the importance of the particular in terests at stake, a panel should then turn to the 
other factors that are to be 'weighed and balanced'"[footnote omitted]; and "A comparison between the challenged measure a nd possible alternatives should then be 
undertaken".[footnote omitted] The description of this sequence in Brazil – Retreaded Tyres 
mentions, first, the relevant factors to be we ighed and balanced for the measure sought to be 
justified, and continues that the result of this  analysis "must be confirmed by comparing the 
measure with possible alternatives, which may be less trade restrictive while providing an 
equivalent contribution to the achievement of the objective".[footnote omitted] Although the 
language used is not identical, both reports articulate the same approach and, like the 
Appellate Body report in Korea – Various Measures on Beef , emphasize the need to identify 
relevant factors and undertake a weighing an d balancing process including, where relevant, 
with respect to proposed alternative measures th at may be less trade restrictive while making 
an equivalent contribution to the relevant objective.  These three reports also all recognize 
that a comprehensive analysis of the "necessity" of a measure is a sequential process.  As 
such, the process must logically begin with  a first step, proceed through a number of 
additional steps, and yield a final conclusion .  [emphasis added]
37 
 37. It may be added that the Appellate Body in US – Gambling has stated with regard to Article 
XIV(a) of the GATS that the standard of "necessity" is an objective standard.  A Member's 
characterization of a measure's objectives and of the effectiveness of its regulatory approach do not 
bind the panel.  The panel may also find gui dance for assessing "necessity" in the structure and 
operation of the measure at stake. 
We note, at the outset, that the standard of "necessity" provided for in the general exceptions 
provision is an objective standard.  To be sure, a Member's characterization of a measure's 
objectives and of the effectiveness of its regul atory approach—as evidenced, for example, by 
texts of statutes, legislative history, and pronouncements of government agencies or 
officials—will be relevant in determining whether the measure is, objectively, "necessary".  A 
panel is not bound by these characterizations [footnote omitted], however, and may also find guidance in the structure and operation of the measure and in contrary evidence proffered by 
the complaining party.  In any event, a panel must, on the basis of the evidence in the record, 
independently and objectively assess the "necessity" of the measure before it.
38 
 
(b) Case-law relating to obligations 
38. The necessity of the measure itself has not yet b een interpreted under Article 2.2 or 2.5 of the 
TBT Agreement; nor under Articles 3.2, 8.1 and 27. 2 of the TRIPS Agreement, all of which impose 
an obligation.  It has, however, been interpre ted in case of Article 5.6 of the SPS Agreement and 
Paragraph 5(e) of the GATS Annex on Telecommunications. 
39. The requirement in Article 5.6 of the SPS Agre ement that Members shall ensure that sanitary 
or phytosanitary measures are "not more trade-rest rictive than required to achieve the appropriate 
level of sanitary or phytosanitary protection [...]" is  clarified in a footnote to this Article.  Footnote 3 
reads: 
                                                      
 37 Appellate Body Report, China – Publications and Audiovisual Products , above n 33, para. 242. 
 38 Ibid., para. 304. S/WPDR/W/27/Add.1 
Page 12  
 
  For purposes of paragraph 6 of Article 5, a measur e is not more trade-restrictive than required 
unless there is another measure, reasonably av ailable taking into account technical and 
economic feasibility, that achieves the appropria te level of sanitary and phytosanitary 
protection and is significantly less restrictive to trade. 
40. The footnote clarifies the concept "not more tr ade-restrictive than required" by immediately 
referring to a consideration of alternative  measures.  The test in th e SPS Agreement thus seems to 
omit the "first step" (a preliminary analysis of the necessity of the original measure  on the basis of all 
relevant factors) referred to in the reports on US – Gambling , Brazil – Retreaded Tyres and China – 
Publications and Audiovisual Products  relating to exception provisions. 
41. With regard to Article 5.6 of the SPS Agreement, the Appellate Body in Australia – Salmon  
identified a three-pronged test  to establish a violation of this provision:  
We agree with the Panel that Article 5.6 and, in particular, the footnote to this provision, 
clearly provides a three-pronged test to establish a violation of Article 5.6.  As already noted, the three elements of this test under Article 5.6 are that there is an SPS measure which: 
 
(1) is reasonably available taking into account technical and economic feasibility; 
 
(2) achieves the Member's appropriate level of sanitary or phytosanitary protection; 
and  (3) is significantly less restrictive to trade than the SPS measure contested. 
 
These three elements are cumulative in the sense that, to establish inconsistency with Article 
5.6, all of them have to be met.  If any of  these elements is not fulfilled, the measure in 
dispute would be consistent with Article 5.6.   Thus, if there is no alternative measure 
available, taking into account technical and economic feasibility, or if the alternative measure 
does not achieve the Member's appropriate leve l of sanitary or phytosanitary protection, or if 
it is not significantly less trade- restrictive, th e measure in dispute would be consistent with 
Article 5.6.
39 
 42. The Appellate Body has applied this same descrip tion of the test in Article 5.6 of the SPS 
Agreement in Japan – Agricultural Products
40 and in Australia – Apples.41  
43. It is also interesting to note that the foot note to Article 5.6 of the SPS Agreement indicates 
that the alternative must be significantly less trade restrictive. 
44. In Mexico – Telecoms , the Panel considered the meaning of "necessary" in Paragraph 5(e) of 
the GATS Annex on Telecommunications.  When referri ng to the statement by the Appellate Body in 
Korea – Beef with regard to the "range and degrees of necessity", the Panel in Mexico – Telecoms 
considered that the meaning of "necessary"  in Paragraph 5(e) of the GATS Annex on 
Telecommunications is "closer to the meaning of "making a contribution to" one of the objectives 
listed in subparagra ph (e)(i) to (iii)."42 This specific interpretation w as influenced by the specific 
                                                      
 39 Appellate Body Report, Australia – Measures Affecting Importation of Salmon , WT/DS18/AB/R, 
adopted 6 November 1998, DSR 1998:VIII, 3327, para. 194.  
40 Appellate Body Report, Japan – Measures Affecting Agricultural Products , T/DS76/AB/R, adopted 
19 March 1999, DSR 1999:I, 277, para. 95. 
 41 Appellate Body Report,  Australia –Apples , above n 24,  para. 337. 
 42 Panel Report, Mexico – Measures Affecting Telecommunications Services , WT/DS204/R, adopted 
1 June 2004, DSR 2004:IV, 1537, para. 7.342.  S/WPDR/W/27/Add.1 
 Page 13 
 
 
  context of Paragraph 5(e).  For the Panel, the pres ence of the requirement in Paragraph 5(a) of the 
Annex that the terms and conditions must be "r easonable", meant that an interpretation of the 
requirement in Paragraph 5(e) that  no conditions of access shall be imposed "other than as necessary" 
had to be interpreted in a particular manner.  If the meaning of "necessary" were interpreted as being 
close to "indispensable", the term "reasonable" in  Paragraph 5(a) would lose much of its meaning. 
2. Contribution of a measure to the achievement of the objective 
(a) Case-law relating to exceptions 
45. One of the factors to be considered according to the Appellate Body in its Korea – Beef report 
was the contribution  of the measure at issue to the reali zation of the objective pursued.  In the Brazil – 
Retreaded Tyres report, the Appellate Body clarified, with regard to Article XX(b) of the GATT, the 
methodology that must be used to define whethe r a measure contributes to the achievement of the 
objective.  The Appellate Body stressed that a genuine relationship of ends and means between the 
objective pursued and the measure at issue  must exist.  The Appellate Body ruled: 
We turn to the methodology used by the Panel in analyzing the contribution of the Import Ban 
to the achievement of its objective.  Such a contribution exists when there is a genuine 
relationship of ends and means between th e objective pursued and the measure at issue .  The 
selection of a methodology to assess a measure's c ontribution is a function of the nature of the 
risk, the objective pursued, and the level of prot ection sought.  It ultimately also depends on 
the nature, quantity, and quality of evidence existing at the time the analysis is made.  
Because the Panel, as the trier of the facts, is in a position to evaluate these circumstances, it 
should enjoy a certain latitude in designing the appropriate methodology to use and deciding 
how to structure or organize the analysis of th e contribution of the measure at issue to the 
realization of the ends pursued by it.  This  latitude is not, however, boundless.  Indeed, a 
panel must analyze the contribution of the measu re at issue to the realization of the ends 
pursued by it in accordance with the requi rements of Article XX of the GATT 1994 and 
Article 11 of the DSU. 43 
 
46. The Appellate Body further stressed that a marginal or insignificant contribution  to the 
objective pursued by a measure that is as restrictiv e as an import prohibition can result in a failure to 
meet the necessity standard, but added that the fact that a measure is apt to make a material 
contribution  must not necessarily  be demonstrated on the basis of a quantitative assessment , but can 
also be done on the basis of qualitative reasoning based on a set of hypotheses . 
[...] [W]hen a measure produces restrictive eff ects on international trade as severe as those 
resulting from an import ban, it appears to us that it would be difficult for a panel to find that measure necessary unless it is satisfied that the me asure is apt to make a material contribution 
to the achievement of its objective.  Thus, we  disagree with Brazil's suggestion that, because 
it aims to reduce risk exposure to the maximum extent possible, an import ban that brings a 
marginal or insignificant contribution can neve rtheless be considered necessary.  [footnote 
omitted]"  [...] In order to justify an import ban under Ar ticle XX(b), a panel must be satisfied that it 
brings about a material contribution to the achie vement of its objective.  Such a demonstration 
can of course be made by resorting to evidence or data, pertaining to th e past or the present, 
that establish that the import ban at issue mak es a material contribution to the protection of 
public health or environmental objectives pursued .  This is not, however, the only type of 
demonstration that could establish such a contribu tion.  Thus, a panel might conclude that an 
                                                     
 
 43 Appellate Body Report, Brazil – Retreaded Tyres , above n 19, para. 145. S/WPDR/W/27/Add.1 
Page 14  
 
  import ban is necessary on the basis of a demonstration that the import ban at issue is apt to 
produce a material contribution to the achievement of its objective .  This demonstration could 
consist of quantitative projections in the future,  or qualitative reasoning based on a set of 
hypotheses that are tested and supported by sufficient evidence .  [emphasis added]
44 
 
47. The Appellate Body in China – Publications and Audiovisual Products  repeated these 
statements in a dispute relating to Article XX(a) of the GATT45 and criticised the Panel for having 
made neither a quantitative nor a qualitative assessment of the contribution of the measure to the 
achievement of the objective. 
In reaching its finding regarding the contribution made by the State plan requirement to the 
protection of public morals in China, the Panel simply stated that limiting the number of 
import entities "can make a material contribution" to  the protection of public morals in China.   
Yet, the Panel neither addressed quantitative projections nor provide d qualitative reasoning 
based on evidence before it to su pport that finding.  The Panel Report contains no discussion 
of how or to what extent the State plan requirement can or does make a contribution.  For 
these reasons, we disagree with the Panel's fi nding that China had met its burden of proof 
regarding the contribution of the State plan requi rement to the protection of public morals in 
China.46 
 
(b) Case-law relating to obligations 
48. In Australia – Salmon , the Appellate Body considered with  regard to Article 5.6 of the SPS 
Agreement whether the alternative measures suggested were able to achieve the appropriate level of 
protection set by Australia: 
We recall that the second element of the test unde r Article 5.6 requires us to examine whether 
any of the possible alternative SPS measures identified above would achieve Australia's 
appropriate level of protection.  To be able to do this, first of all, we have to know what level 
of protection could be achieved by each of these alternative SPS measures.47 
 49. However, the Appellate Body could not complete th is analysis "due to the insufficiency of the 
factual findings of the Panel and of facts that are undisputed between the parties."
48 
3. Common values and interests 
(a) Case-law relating to exceptions 
50. A further factor that may be considered in  the "weighing and balancing" exercise is the 
importance of the common values and interests pursued.  In Korea – Beef , the Appellate Body stated: 
[...] It seems to us that a treaty interprete r assessing a measure claimed to be necessary to 
secure compliance of a WTO consistent law or re gulation may, in appropriate cases, take into 
account the relative importance of the common inter ests or values that the law or regulation to 
be enforced is intended to protect.  The more vital or important those common interests or 
                                                      
 44 Ibid., paras. 150 and 151. 
 45 Appellate Body Report, China – Publications and Audiovisual Products , above n 33, paras. 252-253. 
 46 Ibid., para. 294. 
 47 Appellate Body Report, Australia – Salmon , above n 39, para. 208. 
 48 Ibid., para. 213.  S/WPDR/W/27/Add.1 
 Page 15 
 
 
  values are, the easier it would be to accep t as "necessary" a measure designed as an 
enforcement instrument .  [emphasis added]49 
 
51. This was repeated in later A ppellate Body reports, such as EC – Asbestos50 (with regard to 
GATT Article XX(b)) and US – Gambling (with regard to GATS Article XI V(a)).  In the latter case, 
the Appellate Body stated: 
The process begins with an assessment of the "rel ative importance" of the interests or values 
furthered by the challenged measure.[footnote omitted] Having ascertained the importance of 
the particular interests at stake, a panel should then turn to the other factors that are to be 
"weighed and balanced".  [...]51 
 
52. The latter statement was further repeated by the Appellate Body in Dominican Republic – 
Import and Sale of Cigarettes52 and in China – Publications and Audiovisual Products .53 
53. It should be noted that the panels and the Appe llate Body have consistently accepted that the 
values and interests at stake are important.  Th e Appellate Body noted in its report in the US – Shrimp 
case with regard to Article XX of the GATT: 
[...] Paragraphs (a) to (j) [of GATT Article XX] comprise measures that are recognized as 
exceptions to substantive obligations established in the GATT 1994, because the domestic 
policies embodied in such measures have b een recognized as important and legitimate in 
character.  [...]54 
54. The values at stake involved for instance human health ( EC – Asbestos55 and Brazil – 
Retreaded Tyres56), protection of the environment ( Brazil – Retreaded Tyres57), fraud prevention 
(Korea – Beef58 and Dominican Republic – Import and Sale of Cigarettes59), yielding revenues by 
                                                      
 49 Appellate Body Report, Korea – Beef , above n 18, para. 162. 
 50 Appellate Body Report, EC – Asbestos , above n 18, para. 172. 
 51 Appellate Body Report, US – Gambling , above n 13, para. 306. 
 52 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , above n 30, para. 69. 
 53 Appellate Body Report, China – Publications and Audiovisual Products , above n 33, paras. 242. 
 54 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products , 
WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, 2755, para. 121. 
 55 Appellate Body Report, EC – Asbestos , above n 18, para. 172: "In this case, the objective pursued by 
the measure is the preservation of human life and health  through the elimination, or reduction, of the well-
known, and life-threatening, health risks posed by asbestos fibres. The value pursued is both vital and important 
in the highest degree." 
 56 Appellate Body Report, Brazil – Retreaded Tyres , above n 19, para. 144: "The Panel found that the 
objective of the Import Ban is the reduction of the "exposure to the risks to human, animal or plant life or health 
arising from the accumulation of waste tyres",[footnote om itted] and noted that "few interests are more 'vital' 
and 'important' than protecting human beings from health risks, and that protecting the environment is no less important."[footnote omitted]" 
 
57 Ibid. 
 58 Appellate Body Report, Korea – Beef , above n 18, para. 178: "We think it unlikely that Korea 
intended to establish a level of protection that totally eliminates fraud with respect to the origin of beef 
(domestic or foreign) sold by retailers. The total elim ination of fraud would probably require a total ban of 
imports. Consequently, we assume th at in effect Korea intended to reduce considerably the number of cases of 
fraud occurring with respect to the origin of beef sold by retailers. [...]" 
 59 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , above n 30, para. 71: 
The Appellate Body agreed with the Panel when referring to the latter's finding: "[...]  The Panel also recognized 
that "the collection of tax revenue (and, conversely, the prevention of tax evasion) is a most important interest 
for any country and particularly for a developing country such as the Dominican Republic." [...]" S/WPDR/W/27/Add.1 
Page 16  
 
  collecting legitimate tariff duti es imposed on imported goods ( China – Auto Parts
60), or public order 
and public morals ( US – Gambling61 and China – Publications and Audiovisual Products62). 
55. The Panel in Colombia – Ports of Entry has noted that Article XX of the GATT does not 
establish any hierarchy of the interests listed: 
While the relative importance of the common inte rests or values that may be addressed within 
the gamut of Article XX of the GATT 1994 (including all its subparagraphs) do not adhere to 
any hierarchical ranking or prioritization of interests therein, an assessment of the importance of interest or values must take into account  the evidence presented as well as the prevailing 
circumstances faced by the respondent.  This proposition holds true in relation to measures 
necessary to secure compliance with laws or regulations relating to customs enforcement.
63 
 
56. It should be recalled that panels and the A ppellate Body have recognised the autonomy of 
Members to determine the objectives they pursue a nd their right to set the appropriate level of 
attainment of this objective.64 
(b) Case-law relating to obligations 
57. In the case-law where "necessity tests" in obliga tions were interpreted, no reference has been 
made to the statement by the Appellate Body in Korea – Beef that the assessment of whether a 
measure is "necessary" involves a process of "weighing and balancing a series of factors".  Hence, the 
relative importance of the common interests and values has not been referred to  in this particular 
manner. 
4. Alternative measures reasonably available 
(a) Case-law relating to exceptions 
58. Once a preliminary conclusion on the necessity of  the measure at issue has been reached on 
the basis of all relevant factors, the reasonable availability of  alternative measures  will be 
considered.65 The Appellate Body in Dominican Republic – Import and Sale of Cigarettes noted with 
regard to Article XX(d) of the GATT: 
[...] The weighing and balancing process of these three factors also informs the determination 
whether a WTO-consistent alternative me asure which the Member concerned could 
reasonably be expected to employ is available,  or whether a less WTO inconsistent measure is 
reasonably available.66 
 
                                                      
 60 Panel Reports, China – Measures Affecting Im ports of Automobile Parts , WT/DS339/R, 
WT/DS340/R, WT/DS342/R, and Add.1 and Add.2, adopted 12 January 2009, as upheld (WT/DS339/R) and as modified (WT/DS340/R, WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R, WT/DS340/AB/R, 
WT/DS342/AB/R, para. 7.360. The findings by the Panel on GATT Article XX(d) were not appealed by China. 
 
61 The Appellate Body referred to the finding by the Panel that "the interests and values protected by 
[the Wire Act, the Travel Act, and th e IGBA] serve very important societal in terests that can be characterized as 
'vital and important in the highest degree'". See Appellate Body Report, US – Gambling , above n 13, para. 301. 
 62 Panel Report, China – Publications and Audiovisual Products , above n 14, para. 7.759. 
 63 Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry , WT/DS366/R and 
Corr.1, adopted 20 May 2009, para. 7.563. 
 64 See Sections II.A and II.B, above. 
 65 See above para. 32. 
 66 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , above n 30, para. 70.  S/WPDR/W/27/Add.1 
 Page 17 
 
 
  59. As mentioned in the original Secretariat Note, the Panel in EC – Asbestos stated that the 
existence of a reasonably available alternative measure must be assessed in the light of the economic 
and administrative realities  the Member concerned is facing.67  
60. In Canada – Wheat Exports and Grain Imports , the Panel listed, in the context of a dispute 
relating to GATT Article XX(d), a number of factors that can be considered in determining whether 
an alternative measure is "reasonably available": 
Therefore, the question remains as to whether th ere is an alternative measure to Section 57(c) 
that is reasonably available.  The Appellate Body has indicated that relevant factors for 
determining whether an alternative measure is "r easonably available" are: (i) the extent to 
which the alternative measure "contributes to the realization of the end pursued"[footnote 
omitted]; (ii) the difficulty of implementation [footnote omitted]; and (iii) the trade impact of 
the alternative measure compared to that of the measure for which justification is claimed 
under Article XX [footnotes omitted].  The Appellate Body has also stated that, in addition to being "reasonably available", the alternative measure must also achieve the level of 
compliance sought.[footnote omitted] In this re gard, the Appellate Body has recognized that 
"Members of the WTO have the right to determ ine for themselves the level of enforcement of 
their WTO-consistent laws and regulations."
68 
 
61. In the US – Gambling report (relating to Article XIV(a) of the GATS), the Appellate Body 
affirmed that the alternative measure must be  reasonably available and should not be merely 
theoretical.  The Appellate Body indicated that th e "reasonable availability" of the alternative measure 
must also be considered in the light of the le vel of protection the Member in question seeks to 
achieve. 
[...] An alternative measure may be found not to be "reasonably available", however, where it 
is merely theoretical in nature , for instance, where the responding Member is not capable  of 
taking it, or where the measure imposes an undue burden on that Member, such as prohibitive 
costs or substantial technical difficulties.  Moreover, a "reasonably available" alternative 
measure must be a measure that would preserve  for the responding Member its right to 
achieve its desired level of protection  with respect to the objective pursued under paragraph 
(a) of Article XIV.  [emphasis added]69 
 62. It could be argued that the higher the Member ha s set its appropriate leve l of protection (e.g.  
a zero tolerance level), the narrower the range of reasonably available alternative measures.  For 
instance, with respect to Article XX(d) of the GATT, the Appellate Body in Dominican Republic – 
Import and Sale of Cigarettes approved the reasoning of the Panel: 
[...] In the light of its analysis of the relevant  factors, especially the measure's contribution to 
the realization of the end pursued, the Panel opi ned that the alternative of providing secure tax 
stamps to foreign exporters, so that those tax st amps could be affixed on cigarette packets in 
the course of their own production process, prior to importation, would be  equivalent to the 
tax stamp requirement in terms of allowing the Dominican Republic to secure the high level 
of enforcement it pursues  with regard to tax collection and the prevention of cigarette 
smuggling.  [footnote omitted]
 The Panel gave substantial weight to its finding that the tax 
stamp requirement is of limited effectiven ess in preventing tax evasion and cigarette 
                                                      
 67 Secretariat Note on "Necessity Tests" in the WTO, para. 35. 
 68 Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain , 
WT/DS276/R, adopted 27 September 2004, as upheld by Appellate Body Report WT/DS276/AB/R, DSR 2004:VI, 2817, para. 6.226. 
 
69 Appellate Body Report, US – Gambling , above n 13, para. 308. S/WPDR/W/27/Add.1 
Page 18  
 
  smuggling ; in particular, it found "no evidence to conclude that the tax stamp requirement 
secures a zero tolerance level of enforcement with  regard to tax collection and the prevention 
of cigarette smuggling."[footnote omitted]
 We consider that the Panel conducted an 
appropriate analysis, following the approach set out in Korea – Various Measures on Beef and 
in EC – Asbestos , and affirmed in US - Gambling .  We see no reason to disturb the Panel's 
conclusions in respect of the existence of a r easonably available alternative measure to the tax 
stamp requirement.  [emphasis added]70 
 63. With regard to GATT Article XX(b), the Appellate Body in Brazil – Retreaded Tyres further 
specified that certain measures may not be alternativ es but rather complements, when they are already 
in place and are part of a comprehensive policy to achieve the objective.  The Appellate Body ruled: 
Among the possible alternatives, the Europ ean Communities referred to measures to 
encourage domestic retreading or improve the retr eadability of used tyres, as well as a better 
enforcement of the import ban on used tyres and of existing collection and disposal schemes.  
In fact, like the Import Ban, these measures already figure as elements of a comprehensive 
strategy designed by Brazil to deal with waste tyres.[footnote omitted] Substituting one 
element of this comprehensive policy for anoth er would weaken the policy by reducing the 
synergies between its components , as well as its total effect.  We are therefore of the view that 
the Panel did not err in rejecting as alterna tives to the Import Ban components of Brazil's 
policy regarding waste tyres that are complementary to the Import Ban.  [emphasis added]
71 
 
(b) Case-law relating to obligations 
64. With regard to the meaning of "reasonably availa ble" in the footnote 3 of the SPS Agreement, 
the Appellate Body in Australia – Salmon agreed with the finding of the Panel and stated: 
On the first element of the test under Article 5.6, i.e., whether there is an alternative SPS 
measure which is "reasonably available, taking into account technical and economic 
feasibility", the Panel noted that the four opti ons were described in the 1996 Final Report [an 
Australian Government Report] as  options "which merit consid eration", and found that "this 
implies that the 1996 Final Report put forward the four alternatives ... as technically or economically feasible options".  The Panel, theref ore, concluded that the first element of the 
test under Article 5.6 is met.  [footnote omitted]
72 
65. The Panel in Australia – Apples referred to the Japan – Apples implementation report when 
noting with regard to the meaning of "reasonably available" in Article 5.6 of the SPS Agreement: 
The Panel agrees with Australia that whether an alternative is considered reasonably available 
taking into account technical and economic feasibility must be assessed "in the real world" as suggested by the compliance panel in Japan – Apples (Article 21.5 – US) .  As stated in the 
same dispute, the "risk of incorrect enforcement" is also part of the technical feasibility of the 
alternative.[...]
73 
                                                      
 70 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , above n 30, para. 72. 
 71 Appellate Body Report, Brazil – Retreaded Tyres , above n 19, para. 172. 
 72 Appellate Body Report, Australia – Salmon , above n 39, para. 183. 
 73 Panel Report, Australia – Measures Affecting the Importation of Apples from New Zealand , 
WT/DS367/R, circulated to WTO Members 9 August 2010,  para. 7.1257. The Appellate Body subsequently 
reversed the Panel's analysis with regard to Article 5.6 of the SPS Agreement because it rejected the 'two-step' 
approach the Panel had developed in that case in dealing with Article 5.6. (See Appellate Body Report,  
Australia –Apples , above n 24,  para. 358-359.) The Appellate Body did not further provide any specific 
pronouncement on the reference statement by the Panel that technical and economic feasibility must be assessed 
"in the real world". The Appellate Body noted that, beca use of the absence of suffic ient uncontested facts or  S/WPDR/W/27/Add.1 
 Page 19 
 
 
   
D. BURDEN OF PROOF  
66. With regard to the burden of proof in dispute settlement proceedings that address "necessity 
tests", the original Secretariat Note re ferred to the Appellate Body report in US – Wool Shirts and 
Blouses.74 In that report, the Appellate Body considered the notion of burden of proof in systems of 
judicial settlement.  The Appellate Body indicated that the burden of proof generally rests upon the 
party, whether complaining or defending, who asserts the affirmative of a particular claim or defence.   
In addressing this issue, we find it difficult, indeed, to see how any system of judicial 
settlement could work if it incorporated the proposition that the mere assertion of a claim 
might amount to proof.  It is, thus, hardly su rprising that various international tribunals, 
including the International Court of Justice,  have generally and c onsistently accepted and 
applied the rule that the party who asserts a f act, whether the claimant or the respondent, is 
responsible for providing proof thereof.[footnote omitted]  Also, it is a generally accepted 
canon of evidence in civil law, common law and, in fact, most jurisdictions, that 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.[footnote omitted]
75 
 
67. This general statement may be made more conc rete when considering the difference between 
"necessity tests" in exceptions, on the one hand, a nd "necessity tests" in obligations, on the other 
hand. 
(a) Case-law relating to exceptions 
68. In the case of "necessity tests" in exceptions, it will typically be the responding party, who 
bears the burden of demonstrating that a measure can be justified under the provision it invokes.  
When the complaining party has made a prima facie case of violation (and the defendant is not able to 
rebut this), the defendant has then to prove that the m easure at issue is in fact justified because it is in 
pursuit of an objective for which the relevant  WTO agreement provides an exception.  The 
complaining party then has to prove that a less tr ade-restrictive alternative measure exists.  The 
burden of proof shifts then to the responding part y to show that the alternative measure is not 
reasonably available.  The Appellate Body in US – Gambling stated in this regard: 
It is well-established that a responding party i nvoking an affirmative defence bears the burden 
of demonstrating that its measure, found to be WTO-inconsistent, satisfies the requirements 
                                                                                                                                                                     
factual findings by the Panel, it could not complete the legal analysis with respect to Article 5.6 of the SPS 
Agreement. (See Appellate Body Report,  Australia –Apples , above n 24,  para. 385 and 402.) 
 74 Secretariat Note on "Necessity Tests" in the WTO,  para. 40 and see the further references in the 
Note.  
75 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and 
Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, 323, page 14. As was 
noted in the Secretariat Note on "Necessity Tests" in the WTO, this ruling has been applied by the Appellate 
Body in inter alia : Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9, para. 73-75; Appellate Body 
Report, EC Measures Concerning Meat and Meat Products (Hormones)  WT/DS26/AB/R, WT/DS48/AB/R, 
adopted 13 February 1998, DSR 1998:I, 135, para. 98; Appellate Body Report, India – Quantitative Restrictions 
on Imports of Agricultural, Textile and Industrial Products , WT/DS90/AB/R, adopted 22 September 1999, 
DSR 1999:IV, 1763, para. 44; and by the Panel in Panel Report, European Communities – Measures Affecting 
Asbestos and Asbestos-Containing Products , WT/DS135/R and Add.1, adopted 5 April 2001, as modified by 
Appellate Body Report WT/DS135/AB/R, DSR 2001:VIII, 3305, para. 8.177. S/WPDR/W/27/Add.1 
Page 20  
 
  of the invoked defence.[footnote omitted]
 In the context of Article XIV(a), this means that the 
responding party must show that its measure is  "necessary" to achieve objectives relating to 
public morals or public order.  In our view, how ever, it is not the responding party's burden to 
show, in the first instance, that there are no reasonably available alternatives to achieve its 
objectives.  In particular, a responding party need not identify the universe of less trade-
restrictive alternative measures and then s how that none of those measures achieves the 
desired objective.  The WTO agreements do not  contemplate such an impracticable and, 
indeed, often impossible burden.  Rather, it is for a responding party to make a prima facie case that its measure is "necessary" 
by putting forward evidence and arguments th at enable a panel to assess the challenged 
measure in the light of the relevant factors to  be "weighed and balanced" in a given case.  The 
responding party may, in so doing, point out wh y alternative measures would not achieve the 
same objectives as the challenged measure, but it is under no obligation to do so in order to 
establish, in the first instance, that its measure is "necessary" .  If the panel concludes that the 
respondent has made a prima facie case that the challenged measure is "necessary"—that is, 
"significantly closer to the pole of 'indispensable ' than to the opposite pole of simply 'making 
a contribution to'"[footnote omitted]—then a panel should find that challenged measure "necessary" within the terms of Article XI V(a) of the GATS.  [emphasis added] 
 If, however, the complaining party raises a WTO- consistent alternative measure that, in its 
view, the responding party should have take n, the responding party will be required to 
demonstrate why its challenged measure neverthele ss remains "necessary" in the light of that 
alternative or, in other words, why the proposed alternative is not, in fact, "reasonably available".  If a responding party demonstrat es that the alternative is not "reasonably 
available", in the light of the interests or valu es being pursued and the party's desired level of 
protection, it follows that the challenged m easure must be "necessary" within the terms of 
Article XIV(a) of the GATS.
76 
 
(b) Case-law relating to obligations 
69. In cases where a "necessity test" is contained in an obligation, the original Secretariat Note 
referred to the statement by the Appellate Body in EC – Asbestos with regard to the SPS Agreement.77 
The Appellate Body in EC – Asbestos considered that the complain ing party needs to make a prima 
facie case that the SPS measure at issue is inconsis tent with a particular provision in the SPS 
Agreement.  The defending party must then rebut this prima facie case.  The report in EC – Asbestos 
reads in relevant part: 
The initial burden lies on the complaining party, which must establish a prima facie case of 
inconsistency with a particular provision of the SPS Agreement on the part of the defending 
party, or more precisely, of its SPS measure or measures complained about.  When that prima 
facie case is made, the burden of proof moves to  the defending party, which must in turn 
counter or refute the claimed inconsistency.78 
70. This finding was repeated with regard to Ar ticle 5.6 of the SPS Agreement by the Appellate 
Body in Japan – Agricultural Products II 79 and Australia – Apples.80 
                                                      
 76 Appellate Body Report, US – Gambling , above n 13, paras. 309-311. 
 77 Secretariat Note on "Necessity Tests" in the WTO, para. 45. 
 78 Appellate Body Report, EC – Asbestos , above n 18, para. 99. 
 79 Appellate Body Report, Japan – Measures Affecting Agricultural Products , WT/DS76/AB/R, 
adopted 19 March 1999, DSR 1999:I, 277, paras. 122 and 126.  S/WPDR/W/27/Add.1 
 Page 21 
 
 
  III. DISGUISED RESTRICTION ON TRADE  
71. Members requested to add in this third secti on of the Addendum a discussion of the use of the 
term "disguised restriction on trade", as well as of the jurisprudence that has interpreted this term.   
A. USE OF CONCEPT "DISGUISED RESTRICTION ON TRADE " 
72. The term "disguised restriction on trade" has b een used in a number of provisions in the WTO 
Agreements.  In certain instances the expression "disgui sed restriction on international trade" is used.  
In the GATS, the words "disguised restri ction on trade in services" can be found. 
73. The term "disguised restriction on international trade" is used in Article XX of the GATT – 
General Exceptions: 
Subject to the requirement that such measures are not applied in a manner which would 
constitute a means of arbitrary or unjustifia ble discrimination between countries where the 
same conditions prevail, or a disguised restriction on international trade , nothing in this 
Agreement shall be construed to prevent the a doption or enforcement by any contracting party 
of measures: [...].  [emphasis added] 
74. The Preambles to the TBT and SPS Agreements  use the same language as contained in 
Article XX of the GATT.  The term "disguised restri ction" also appears in an operational provision of 
the SPS Agreement.  Article 5.5 SPS states: 
With the objective of achieving consistency in the application of the concept of appropriate 
level of sanitary or phytosanitary protection against risks to human life or health, or to animal and plant life or health, each Member shall avoid arbitrary or unjustifiable distinctions in the 
levels it considers to be appropr iate in different situations, if  such distinctions result in 
discrimination or a disguised restriction on international trade .  [emphasis added] 
75. The term "disguised restriction on trade" is also  used in the GATS, namely in Article VII on 
Recognition, which in paragraph 3 states: 
A Member shall not accord recognition in a manner which would constitute a means of 
discrimination between countries in the application of its standards or criteria for the 
authorization, licensing or certification of services suppliers, or a disguised restriction on 
trade in services .  [emphasis added] 
76. Notably the same language is also used in Article XIV of the GATS – General Exceptions: 
Subject to the requirement that such measures are not applied in a manner which would 
constitute a means of arbitrary or unjustifia ble discrimination between countries where like 
conditions prevail, or a disguised restriction on trade in services , nothing in this Agreement 
shall be construed to prevent the adoption or en forcement by any Member of measures: [...].  
[emphasis added] 
77. Finally, the same language is also cont ained in Article 5(d) of the Annex on 
Telecommunications, which reads: 
(c) Each Member shall ensure that service s uppliers of any other Member may use public 
telecommunications transport networks and servi ces for the movement of information within 
                                                                                                                                                                    
 
 80 Appellate Body Report,  Australia – Apples , above n 24,  para. 360. S/WPDR/W/27/Add.1 
Page 22  
 
  and across borders, including for intra-corpor ate communications of such service suppliers, 
and for access to information contained in data bases or otherwise stored in machine-readable 
form in the territory of any Member.  Any new or amended measures of a Member significantly affecting such use shall be notifie d and shall be subject to consultation, in 
accordance with relevant provisions of the Agreement. 
 
(d) Notwithstanding the preceding paragraph, a Member may take such measures as are necessary to ensure the security and confidentia lity of messages, subject to the requirement 
that such measures are not applied in a manner which would constitute a means of arbitrary or 
unjustifiable discrimination or a disguised restriction on trade in services .  [emphasis added] 
B. WTO
 JURISPRUDENCE  
78. In United States – Gasoline , the Appellate Body gave an inte rpretation of the term "disguised 
restriction on international trade" in Article XX GATT.  It indicated that the requirement that a 
measure must not constitute a "dis guised restriction on internati onal trade" seeks to avoid that 
Members abuse their rights under the exceptions in the GATT. 
Arbitrary discrimination", "unjustifiable discr imination" and "disguised restriction" on 
international trade may, accordingly, be read  side-by-side; they impart meaning to one 
another.  It is clear to us that "disguised restriction" includes disguised discrimination in 
international trade.  It is equally clear that concealed or unannounced restriction or 
discrimination in international trade does not e xhaust the meaning of "disguised restriction".  
We consider that "disguised restriction", wh atever 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.  Put in a somewhat different manne r, the kinds of considerations pertinent in 
deciding whether the application of a particular  measure amounts to "arbitrary or unjustifiable 
discrimination", may also be taken into account  in determining the presence of a "disguised 
restriction" on international trade.  The fundamental theme is to be found in the purpose and 
object of avoiding abuse or illegitimate use of th e exceptions to substantive rules available in 
Article XX " [emphasis added]81 
79. In US – Shrimp (Article 21.5 – Malaysia) , the Panel interpreted the term "disguised restriction 
on international trade", in the light of earlier Appe llate Body rulings.  The Panel stated that the abuse 
of an exception and thus the protective application of a measure that is provisionally justified can 
often be discerned from the design, architecture and revealing structure of the measure:   
The Panel is of the view that there would be an abuse of Article XX(g) "if [the compliance 
with Article XX(g) was] in fact only a disgui se to conceal the pursuit of trade-restrictive 
objectives".  As mentioned by the Appellate Body in Japan – Taxes on Alcoholic Beverages , 
the protective application of a measure can most often be discerned from its design, 
architecture and revealing structure .  We therefore proceed to determine whether, beyond the 
protection which automatically results from the imposition of a ban, the design, architecture and revealing structure of Section 609 togeth er with the Revised Guidelines, as actually 
applied by the US authorities, demonstrate that the implementing measure constitutes a 
disguised restriction on international trade.  An  examination of the text of Section 609 and of 
                                                     
 
 81 Appellate Body Report, US  – Gasoline , above n 9, page 23.  S/WPDR/W/27/Add.1 
 Page 23 
 
 
  the Revised Guidelines does not show any elemen t leaning in that direction.  [emphasis 
added]82 
80. In the Brazil – Retreaded Tyres case, the words "disguised restri ction on international trade" 
were interpreted by the Panel.  However, the Appellate Body re jected the reasoning by the Panel 
(which considered the impact of the measure at issue on actual volumes of imports) and, because the 
Appellate Body had already found a violation of the requirement not to discriminate "arbitrary or 
unjustifiably", it did not further interpret the words "disguised restriction on international trade".  The 
Appellate Body only referred to the requirements in  the chapeau of GATT Article XX in general and 
ruled that they seek to ensure th at Members exercise their rights under the exceptions in good faith 
and not as a means to circumvent oblig ations under the relevant agreements. 
The focus of the chapeau , by its express terms, is on th e application of a measure already 
found to be inconsistent with an obligation of the GATT 1994 but falling within one of the 
paragraphs of Article XX.[footnote omitted] The chapeau's requirements are two-fold.  First, 
a measure provisionally justified under one of th e paragraphs of Article XX must not be 
applied in a manner that would constitute "arb itrary or unjustifiable discrimination" between 
countries where the same conditions prevail.  Sec ondly, this measure must not be applied in a 
manner that would constitute "a disguise d restriction on international trade".  Through these 
requirements, the chapeau serves to ensure that  Members' rights to avail themselves of 
exceptions are exercised in good faith  to protect interests considered legitimate under Article 
XX, not as a means to circumvent one Member's obligations  towards other WTO 
Members.[footnote omitted] [emphasis added]83 
 
81. In US – Gambling, the Appellate Body took all three requirements in the chapeau of 
Article XIV of the GATS together and noted: 
[...] By requiring that the measure be applied in a manner that does not constitute "arbitrary" 
or "unjustifiable" discrimination, or a "disguised restriction on trade in services", the chapeau 
serves to ensure that Members' rights to avail themselves of exceptions are exercised 
reasonably, so as not to frustrate the right s accorded other Members  by the substantive rules 
of the GATS.  [footnote omitted] [emphasis added]84 
 
82. In the Australia – Salmon  case the Appellate Body determined that the fact that a measure 
was not based on a risk assessment according to Artic le 5.1 SPS provided a strong indication that such 
measure constituted a disguised restriction on interna tional trade according to Article 5.5 SPS.  It was, 
however, only one of the warning sign als the Appellate Body considered. 
We note that a finding that an SPS measure is  not based on an assessment of the risks to 
human, animal or plant life or health — either because there was no risk assessment at all or 
because there is an insuffi cient risk assessment — is a strong indication that this measure is 
not really concerned with the protection of  human, animal or pl ant life or health  but is instead 
a trade-restrictive measure taken in the guise of  an SPS measure, i.e., a "disguised restriction 
on international trade".  We, therefore, consider  that the finding of inconsistency with Article 
                                                      
 82 Panel Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse 
to Article 21.5 of the DSU by Malaysia , WT/DS58/RW, adopted 21 November 2001, upheld by Appellate Body 
Report WT/DS58/AB/RW, DSR 2001:XIII, 6529, para. 5.142.  
83 Appellate Body Report, Brazil – Retreaded Tyres , above n 19, para. 215. 
 84 Appellate Body Report, US – Gambling , above n 13, para. 339. S/WPDR/W/27/Add.1 
Page 24  
 
  5.1 is an appropriate warning signal for a "dis guised restriction on international trade".   
[emphasis added]
 85 
IV. CONCLUDING OBSERVATIONS 
83. It is important to reiterate that the "necessity tests" contained in different WTO Agreements or 
in different provisions of the same  Agreement cannot necessarily be u sed interchangeably.  They have 
to be read in their context and in the light of the object and purpose of the agreement concerned.  The 
same applies to the interpretation of the term "disguised restriction on trade". 
84. There are nevertheless some general points in  this review of new developments in 
jurisprudence on "necessity tests" that may be of in terest to the discussions in the Working Party on 
Domestic Regulation.   
(a) Such tests do not examine the necessity of the intended policy objectives but the 
necessity of the measure to achieve that in tent.  It is nevertheless essential that 
objectives are identified against which the necessity of a measure is determined.  In this regard, it can be noted that "necessity  tests" in exception provisions typically 
involve a limited list of pre-defined objec tives and that obligation provisions often 
contain an illustrative list of legitimate objectives. 
(b) Panels and the Appellate Body have st ressed, both with regard to exception 
provisions and obligation provisions, that Members have the right to determine the level of attainment of a chosen obj ective they consider appropriate.   
(c) The examination of the "reasonable availab ility" of alternative measures involves at 
least two factors: first, the difficulties the Member in question may experience in 
applying a certain alternative measure and,  second, the ability of this alternative to 
reach the desired level of attainment.   
(d) It was indicated with reference to the juri sprudence that the overall burden of proof 
rests upon the party who asserts the affirmative of  a particular claim or defence.  This 
implies for "necessity tests" in obligations that the complaining party will need to 
show that the measure was more trade-r estrictive than necessary to achieve the 
chosen objective.  In contrast, in case of "necessity tests" in exceptions, the defending 
party will need to prove that the measure w as necessary in the light of the objective.  
(e) In the development of disciplines containing a "necessity test", there is room for 
Members to provide clear guidance on the application of a such a test contained in an obligation provision. For example, Article 5.6 of the SPS Agreement explicitly 
stipulates in a footnote the consideration of reasonably available alternative measures.  
It could be argued that a similar approach may be used in other necessity tests in provisions that impose an obligation. 
85. A general element in the limited jurisprudence on the notion "disguised restriction of trade" is 
that the use of these words seeks to avoid th at Members abuse their rights under the WTO 
Agreements to circumvent obligations  under the relevant agreements.  
_______________ 
 
 
                                                     
 
 85 Appellate Body Report, Australia – Salmon , above n 39, para. 166.  S/WPDR/W/27/Add.1 
 Page 25 
 
 
  ANNEX 
 
WTO Provisions relevant for the discussion in this Addendum  
 
GATT  
  
Article XX (General Exceptions )  
 
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifia ble discrimination between countries where the 
same conditions prevail, or a disguised  restriction on international trade, nothing in this 
agreement shall be construed to prevent the adoption or enforcement by any [Member] of 
measures:  
 (a) necessary to protect public morals; 
 (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 Agre ement (…)"  (emphasis added)   
 
GATS 
 
 
Article XIV (General Exceptions ) 
 
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifia ble discrimination between countries where like 
conditions prevail, or a disguised  restriction on trade in services, nothing in this Agreement 
shall be construed to prevent the adoption or enforcement by any Member of measures:   
 
(a) necessary to  protect public morals or to maintain public order; 
(b) necessary to  protect human, animal or plant life or health; 
(c) necessary to  secure compliance with laws or regulations which are not inconsistent with the 
provisions of this Agreement …"  (emphasis added) 
GATS Annex on Telecommunications
 
 
Paragraph 5(d)  
 
Notwithstanding the preceding paragraph, a Member may take such measures as are 
necessary to ensure the security and confidentia lity of messages, subject to the requirement 
that such measures are not applied in a manner which would constitute a means of arbitrary or 
unjustifiable discrimination or a disguised restriction on trade in services. 
 Paragraph 5(e
) 
 
Each Member shall ensure that no conditio n is imposed on access to and use of public 
telecommunications transport networks and services other than as necessary: 
 
(1) to safeguard the public service responsibilities of suppliers of public 
telecommunications transport networks and services, in particular their ability to 
make their networks or services av ailable to the public generally; S/WPDR/W/27/Add.1 
Page 26  
 
  (2) to protect the technical integrity of pub lic telecommunications transport networks or 
services; or 
(3) to ensure that service suppliers of any other Member do not supply services unless 
permitted pursuant to commitments in the Me mber's Schedule.  (emphasis added)  
TBT Agreement
 
 
Article 2.2  
 
Members shall ensure that technical regulations  are not prepared, adopted or applied with a 
view to or with the effect of creating unnecessar y obstacles to international trade.  For this 
purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a 
legitimate objective, taking account of the risks non-fulfilment would create .  (emphasis 
added)  Such legitimate objectives are, inter alia:   national security requirements;  the 
prevention of deceptive practices;  protection of human health or safety, animal or plant life 
or health, or the environment.  In assessing such risks, relevant elements of consideration are, 
inter alia:   available scientific and technical info rmation, related processing technology or 
intended end-uses of products. 
 Article 2.4
 
 
Where technical regulations are required and rele vant international standards exist or their 
completion is imminent, Members shall use them, or the relevant parts of them, as a basis for 
their technical regulations except when such in ternational standards or relevant parts would 
be an ineffective or inappropriate means fo r the fulfilment of the legitimate objectives 
pursued, for instance because of fundamental clim atic or geographical factors or fundamental 
technological problems. 
 
SPS Agreement  
 
Article 2.2  
 
Members shall ensure that any sanita ry or phytosanitary measure is applied only to the extent 
necessary to protect human, animal or plant life or health,  is based on scientific principles 
and is not maintained without sufficient sci entific eviden ce, except as provided for in 
paragraph 7 of Article 5.  (emphasis added)  
Article 5.5
 
 
With the objective of achieving consistency in the application of the concept of appropriate 
level of sanitary or phytosanitary protection against risks to human life or health, or to animal and plant life or health, each Member shall avoid arbitrary or unjustifiable distinctions in the 
levels it considers to be appropr iate in different situations, if  such distinctions result in 
discrimination or a disguised restriction on international trade.  Members shall cooperate in 
the Committee, in accordance with paragraphs 1,  2 and 3 of Article 12,  to develop guidelines 
to further the practical implementation of this provision.  In developing the guidelines, the 
Committee shall take into account all relevant factors, including the exceptional character of 
human health risks to which people voluntarily expose themselves. 
  S/WPDR/W/27/Add.1 
 Page 27 
 
 
  Article 5.6  
 
Without prejudice to paragraph 2 of Article 3,  when establishing or maintaining sanitary or 
phytosanitary measures to achieve the appropr iate level of sanitary or phytosanitary 
protection, Members shall ensure that such measures are not more trade-restrictive than 
required to achieve their appropriate level of sanitary or phytosanitary protection, taking into 
account technical and economic fe asibility.  (emphasis added) 
 The footnote to SPS Article 5.6 further provides that:  
For purposes of paragraph 6 of Article 5, a measure is not more trade-restrictive than 
required  unless there is another measure, reasonabl y available taking into account technical 
and economic feasibility, that achieves the appr opriate level of sanitary or phytosanitary 
protection and is significantly less restrictive to trade .  (emphasis added) 
 
 
 
__________