Free Trade vis-à-vis Morality: Revisiting the Public-Morals Exception Clause in the World Trade Organization

Abstract

The most sanctified obligation of the World Trade Organization (WTO) is the promotion and facilitation of international trade and liberalisation of the world economy. Although WTO members are committed to the WTO principle of free flow of goods and services among its members, the WTO permits its members to retain certain regulatory powers under its system to impose trade-restrictive measures based on certain exceptions, like, among other things, public morality under Article XX(a) of the General Agreement on Tariffs and Trade (GATT, 1994). Nevertheless, the question remains: what is public morality for a WTO member, and how far may this clause be invoked in defence of adopting trade-restrictive measures? Recently, the WTO panel on the US tariff case revived the long-standing debate on international trade versus public morality. Is a WTO member free to choose any trade-restrictive measure under the cloak of public morality? Then, what mechanism has the WTO panel/AB (Appellate Body) envisaged to check WTO members from adopting any trade-restrictive measure based on public morals? This article tries to answer these questions by analysing previous WTO disputes related to trade and morality. Against this background, this article looks back at the history of the public-morals exception clause, revisits previous WTO case laws on the public-morals exception and tries to ascertain the precise meaning of public morality—how the WTO Dispute Settlement Body (DSB) checks and balances two conflicting principles, that is, the right to regulate and the principle of free trade—and whether WTO has successfully developed a coherent jurisprudential approach to deal with contradictory interests, that is, trade versus morality.

JEL Codes: F, F1, F13

Keywords

WTO public morality GATT GATS public morals exception clause

Introduction

The Dispute Settlement Body (DSB) of the World Trade Organization (WTO), on 15 September 2020, ruled that tariffs on Chinese goods worth $200 billion were illegal and eventually inconsistent with the rules of WTO (BBC News, 2020). This high-profile case concerns US imposition of additional duties on listed Chinese goods according to the findings of a Section 301 Report that addresses Chinese malpractices related to technology transfer, intellectual property and innovation which the United States considers to be state-sanctioned theft, misappropriation of intellectual property and technology.¹ China claimed that imposition of additional duties are trade-restrictive and inconsistent with WTO objectives and requested WTO to establish a Dispute Settlement Body (DSB) panel for resolving the dispute.² The United States argued that a 301 Report demonstrated Chinese practice of state-sanctioned theft of US intellectual property and technology which had violated US public morals and justified the imposition of additional duties on listed Chinese goods as a measure necessary to protect public morals of US citizenry under Article XX(a) of the General Agreement on Tariffs and Trade (GATT), 1994 (WTO Panel Report, 2020).³ The public-morals exception clause (Article XX[a]) is one of the 10 listed general exceptions, which is rarely invoked by WTO members in their defence against restrictive trade practice and measures inconsistent with WTO laws. As already mentioned that a handful number of cases where WTO members argued public morals exception in defence, the dispute in the case the US—Tariff Measures on Certain Goods from China is the latest which involved Article XX (a). In this article, the author looks into previous WTO disputes involving the public-morals exceptions clause, compares them with the US tariff case and appreciates, first, development of jurisprudence on the public-morals exception clause, second, whether the WTO DSB is successful in developing jurisprudence coherently or if there are discrepancies in interpretations and applications of Article XX(a) and, third, whether the latest case follows the jurisprudence developed in pervious disputes by the WTO DSB or the approach differs from the already established WTO jurisprudence on the public-morals exception clause of GATT, 1994.

The Public-Morals Exception and the World Trade Organization

The system of world trade has been established on the principles of trade liberalisation, non-discrimination and free trade (GATT, 1947, 1996; Serpin, 2016; UNCTD, 2003; Wu 2008). However, one very fundamental question is the manner and degree of regulatory power WTO members would retain despite its commitment to the unrestricted flow of goods and services (Marwell, 2006). Complexity arises in the context of growing apprehensions concerning public morality in international trade (Charnovitz, 1997). In WTO, the clash between free trade and state regulatory measures ascends often in the context of environmental and health regulations but seldom in the context of public morals (Marwell, 2006). At the centre of the issue is Article XX(a) of the GATT, which is universally known as the ‘public morals’ exception clause (Wu, 2008). This clause allows the WTO members to adopt and enforce regulatory measures ‘necessary to protect public morals’ which are otherwise inconsistent with the WTO laws (GATT, 1994).⁴ Before the WTO DSB, a respondent state is required to pass a two-tier test for successfully invoking the Article XX general-exceptions clause.⁵ First, the challenged measures must fall under one of the listed exceptions contained in Article XX, and second, it should meet the requirements of the chapeau of Article XX (AB Report, 1996, 2000, 2001).⁶ Thus, to invoke the general-exceptions clause, a WTO member has to justify that the measures have been designed to protect public morals. Once it is satisfied that the measures do essentially and have been formulated to protect public morals, the next step is that the adjudicators should evaluate whether the requirement of the chapeau prescribed under Article XX is fulfilled. According to Charnovitz (1997), the requirement of the chapeau is: ‘measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade’ (WTO Panel Report, 2004).⁷

Meaning, Content and Interpretation of Public Morals and the World Trade Organization

Lack of a Precise Meaning

At the United Nations (UN) Conference on Trade and Employment, the states framed the first ever draft of the GATT (UNCTD, 1948). Between 1946 and 1948, the states successfully negotiated a charter for the International Trade Organisation (ITO) (Charnovitz, 1997). It was decided that until the implementation of ITO charter, the GATT agreement would work as an interim arrangement (Agreement on International Trade Organisation, 1947). During negotiation in the year 1945, the United States conceived the idea of allowing states to restrict trade on the ground of public morals (Wu, 2008). Eventually, it was the United States that drafted the original provision of the public-morals exception at an early stage of legal drafting of the founding GATT agreement (Martins, 2015). Since then, every subsequent draft incorporated this important exception (Babu, 2018). Although states have recognised the importance of incorporating the public-morals exception, they have done little to elaborate or could not agree on the meaning of public morality (Charnovitz, 1997; Serpin, 2016). There is not much GATT’s legislative history in the public domain except one Norwegian delegation remarked that Norway would restrict the import, sale, and production of alcohol, based on protecting public morals (Wu, 2008). Thus, the enquiry regarding what types of trade-restrictive measures WTO members can adopt or enforce on the basis of the public-morals exception remains critically open.

Clarification and Interpretation of the Public-Morals Exception and the World Trade Organization

The public-morals exception clause remained inactive till the signing of GATT and the General Agreement on Trade in Services (GATS) and the coming into existence of WTO in the year 1995 (Serpin, 2016). Except banning alcohol, the travaux préparatoires help little with what types of trade restrictions come within the ambit of the public-morals exception clause. GATT dispute resolution panels before WTO was established, under GATT, 1994, addressed at least 200 trade disputes, although according to some the number reached 500.⁸ During the first decade of WTO, over 300 trade disputes were brought before it, and in none of the disputes did the panel have the chance to discuss the meaning and scope of the public-morals clause.⁹ By no measure does this imply that WTO members did not adopt or enforce trade-restrictive measures in due course of time. WTO members have imposed several trade-restrictive measures on various goods based on the public-morals exception. Saudi Arabia invokes Article XX(a) to justify the ban on importation of, among other things, the Holy Quran, alcoholic beverages, such as whisky, rum, vodka, sparkling wine, etc., live swine, the meat of swine, opium, cocaine, hemp seeds, etc.¹⁰ Israel bans importation of all licentious or indecent films, tickets or publicity items for lottery or gambling, goods containing false information in contravention of the Consumer Protection Law of 1981, etc.¹¹ Indonesia bans based on, among other things, public health importation of alcoholic beverages, chicken parts (non-halal) and lubricants.¹² Bangladesh restricts the importation of live swine, any item of pork, horror comics, obscene literature and maps and charts not drawn following standards specified by the Department of Survey, Bangladesh.¹³ Restrictions on alcoholic beverages, narcotics, pornographic films and obscene literature might well serve the objective of protection of public morals, and WTO members would not challenge these before WTO DSB, but some trade-restrictive measures are undoubtedly controversial. For example, the United States banned products made by indentured child labour, and the Council of Europe imposed restrictions on import of all fur from animals caught using leg-hold traps (Wu, 2008). Charnovitz (1997) argued: Since these measures are not protecting the public morals within the states’ territory, how could the public-morals exception cover these restrictions? Both Israel and Indonesia restricted the import of all non-kosher meat and alcoholic beverages, respectively, based on religious/cultural reasons and, among other things, public morals. However, the legality of such trade-restrictive measures can be questioned, because religion did not have a place in the legislative history of the public-morals exception; yet, no WTO member till date has challenged such trade-restrictive measures before the WTO DSB.

At least two mechanisms can be envisaged for the clarification of vague treaty provisions: first, by merely revisiting the treaty provisions and adding or amending, issuing clarification notes and, second, the adjudicatory bodies applying several interpretative techniques that could shed light on the vague treaty provisions.

Article 31 of the Vienna Convention on the Law of Treaties (VCLT), UN (1969), provides ‘a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose’ (Hollis, 2020; Linderfalk, 2007; UN, 1969).¹⁴ Thus, the appropriate way is taking recourse to an authentic English-language dictionary of that time for ascertaining the definitions of morals or public or public morals.¹⁵ However, dictionary meaning may not throw light on the questions of what types of morals are covered and whose morals are covered. An interpretation taking into account the object and purpose of the treaty could lead to the realisation of the intended purpose. The object and purpose of GATT is to facilitate international trade by allowing the free flow of goods, mutually advantageous trade arrangements, reduction of tariffs and elimination of non-discriminatory treatment among WTO members. On the other hand, the object and purpose of Article XX(a) is to allow the WTO members to adopt trade-restrictive measures based on public morality. Consequently, the object and purpose of the treaty would fail to clarify and enlighten the meaning of Article XX(a) (Charnovitz, 1997). VCLT provides quite a few other interpretative techniques, such as recourse to subsequent agreements relating to the conclusion of the treaty¹⁶ and interpretation instruments between the parties,¹⁷ or the taking into account of subsequent practice in the application of the treaty (Buga, 2018; Murphy, 2013; Roberts, 2013).¹⁸ However, there is neither any such agreement regarding Article XX(a) nor any subsequent treaty practices in the application of Article XX(a).

Article 32 of VCLT, 1969, provides for ‘supplementary means of treaty interpretation’ (Dörr & Schmalenbach, 2011; Rosenne, 2009; Villiger, 2009). The term ‘supplementary’ indicates to the preparatory works and circumstances of the conclusion of the treaty.¹⁹ Supplementary means of interpretation can only be taken into account after exhausting the primary rules of interpretation techniques; (a) to confirm the meaning applying Article 31; (b) leaves the meaning ambiguous or obscure; c) leads to a result manifestly absurd or unreasonable. Thus, preparatory works of Article XX(a) may be taken into account for ascertaining the meaning.²⁰ Since there is hardly any legislative history of Article XX(a), this interpretative technique would not be of much help.

The US gambling case was the first ever dispute involving the public-morals exception clause before the WTO.²¹ This case presented WTO with the opportunity to clarify the public-morals exception provision and develop the first line of jurisprudence relating to the public-morals exception clause.²²

Next, the author deliberates upon jurisprudential aspects of Article XX(a), starting from the US gambling case, such as the meaning of public morals under WTO jurisprudence, the necessary elements developed by the WTO panels and Appellate Body (AB) and the requirement of non-discrimination under Article XX.

Meaning of Public Morals in World Trade Organization Jurisprudence

In the absence of a precise meaning for the term ‘public morals’ and lacking prior jurisprudence, the important obligation to interpret and decide what types of trade-restrictive measures could take safe refuge under the public-morals exception falls upon the WTO panel.²³ Before the US gambling case, it was not settled whether the public-morals exception clause should be interpreted statically or dynamically. If the adjudicators adhered to the static interpretative technique, they would freeze the scope of public morals as prevailing in the society at the time of treaty conclusion, that is, 1947 or 1994. Contrarily, a dynamic interpretation would permit expansion of the scope of public morals over time and space as new moralities emerge in the continually changing society.

For the first time, in the Shrimp–Turtle case, the AB, while interpreting the words ‘exhaustible natural resources’ of Article XX(g), favoured the application of dynamic interpretation.²⁴ The WTO AB remarked that words that were crafted more than 50 years ago should be interpreted ‘in the light of contemporary concerns of the community of nations about the protection and conservation of the environment’.²⁵

This approach was endorsed by the WTO panel, as well as the AB in the US gambling case (although the case involved Article XIV, Article XIV of GATS, 1995, and Article XX GATT, 1994, are mostly identical), with further clarifications.²⁶ The panel indicated that depending upon a range of factors, including, among other things, the prevailing social, cultural, ethical and religious values, the concept of public morality for WTO members can vary with time and space.²⁷ Further, the panel held that the WTO members should be given the liberty to define and apply the concept of public morals within their territory according to their own systems and scales of values.²⁸ While defining ‘public morals’, the panel consulted its ordinary meaning from an English-language dictionary²⁹ and resorted to the effective treaty interpretation method,³⁰ holding that the term signifies ‘standards of right and wrong conduct maintained by or on behalf of a community or nations’.³¹

The China Audiovisual & Publications case was the first case where the WTO panel interpreted Article XX(a) of GATT, 1994 (WTO Panel Report, 2009, August 12). The panel endorsed and adopted the interpretation technique envisaged by the US-gambling-case panel, noting that since Article XX(a) of GATT and Article XIV(a) of GATS are identical, there was no valid reason to depart from the interpretation developed by the panel in the US gambling case.³² The panel noted that since the concept of public morals in Article XX(a) of GATT and that in Article XIV of GATS are similar, it sees no reason to deviate from the interpretation of public morals developed in the US gambling case.³³

The panel followed the interpretation technique and jurisprudence developed concerning the meaning of ‘public morals’ in the two cases mentioned above also in the EC Seal Products case.³⁴ While interpreting Article 2.2 of the Technical Barriers to Trade (TBT) Agreement, it noted that though the concept of public morals was developed in the context of provisions of GATT, 1994, and GATS, 1995, ‘it is equally applicable in ascertaining a regulating member’s alleged moral objective in the context of Article 2.2 of TBT Agreement’.³⁵

The US tariff panel followed the jurisprudence developed by prior WTO panels. It held that the notion of public morals is related to a group of individuals, community or nation and that the scope and content of public morals vary from one WTO member to another depending upon members’ systems and scales of values.³⁶ Even the scope and content of public morals are dynamic in relation to time and space and are influenced by various factors, such as ‘prevailing social, cultural, ethical and religious values’.³⁷

Necessary Requirements of the Public-Morals Exception in World Trade Organization Jurisprudence

After ascertaining that the measure is covered under the public-morals exception, the next step is performing the ‘necessary test’.³⁸ A measure adopted or enforced based on the public-morals exception is valid only if the measure is ‘deemed necessary’. This ‘necessary test’ works as a ‘safety valve’ for the complainant WTO member. Since WTO panel(s)/AB(s) has developed jurisprudence where WTO members are allowed to decide the types of public morals in according to their own system and societal values within their territory and holding the public morals are dynamic concerning time and space, “This ‘necessary test’ works as a ‘safety valve’ for the complainant WTO member”. Eventually, this ‘necessary test’ developed by the WTO panel/AB allows it to determine what public morals actually could be cited in defence and their probability of success, sorting out or narrowing down the scope of the public-morals exception in defence. Without this, a WTO member could claim literally all types of measures as being based on the public-morals exception and succeed in defence.

The US Gambling case, following the jurisprudence of EC-Asbestos and Korea-Beef, developed a three-pronged approach for the first time to determine whether measures adopted based on public morals exception.³⁹ The test requires weighing and balancing of the alleged measures.⁴⁰ based on, (a) the alleged measures must be intended to protect vital societal values and interests; (b) intended measures should contribute in the realisation of the objectives, i.e., the relation between the means and ends; (c) impact on the trade and prior assessment of the availability of WTO consistent alternatives.⁴¹

However, the WTO AB reversed the panel’s decision that the responding party is required to assess the availability of a WTO-consistent alternative measure and noted that the burden falls upon the complainant to ensure that such WTO-consistent alternative is available .⁴²

The China Audiovisual & Publications case is slightly different. Here, unlike in the US gambling case, the complainant, the United States, did not challenge the prohibited measures that China asserted had been taken on the grounds of public morality. Instead, the United States claimed that China failed in the necessary test, as there existed alternative WTO-consistent measures. Following jurisprudence laid down by the AB in the US gambling case, the panel held that the respondent member had to show that its measures were necessary to achieve the objectives based on protecting public morals—they must contribute to the realisation of the ends pursued by the challenged measures, and the restrictive impact on the international trade as well.⁴³ In addition to existing jurisprudence, this WTO panel held that in order to meet the necessary requirement, the alleged measures do not ‘essentially need to achieve all the desired objectives by itself’.⁴⁴ However, the WTO panel only agreed to apply this rule in these specific circumstances of the case. Nonetheless, the jurisprudential value of the same can be questioned, because the WTO panel had not had the opportunity to examine whether the issue was agreed upon by both parties. The tribunal noted, ‘we see no need to take a position on whether this would be correct in all circumstances’.⁴⁵

The WTO AB in the EC Seal Products case, in line with prior jurisprudence, held: ‘a necessity analysis involves a process of weighing and balancing a series of factors, including the importance of the objective, the contribution of the measure to that objective, and the trade-restrictiveness of the measure’.⁴⁶ Moreover, a comparative analysis between the challenged measures and possible alternatives would be done. It was also stated that only after weighing and balancing all the factors (holistic approach) and taking into account all the interests or values involved must the panel come to any conclusion on whether the necessary test was met or a WTO-consistent alternative measure was available.⁴⁷ In the necessary test, the contribution of the measures to the objective is just one aspect; various other components, including the availability of alternative WTO-consistent measures, should also be taken into account.⁴⁸

In the Colombia tariffs case, the WTO AB remarked that a two-step analysis was required to ascertain whether the alleged measures satisfied the chapeau of Article XX(a): whether the alleged measures are designed to protect public morals and whether such measures are necessary for achieving the objective.⁴⁹ Furthermore, the panel commented that it is required to assess not only whether the alleged measures contribute in persuading ends but the extent of the contribution made by the alleged measures in terms of qualitative and quantitative manner to pursue the means/objectives intended. According to the panel, the greater the contribution, the more easily a measure might be considered to be necessary.⁵⁰ This comparative approach also applied in the assessment of the degree of trade-restiveness of alleged measures and not only if such alleged measures are barely trade-restrictive.⁵¹ The WTO AB, also along the lines of established jurisprudence, adopted a three-pronged test to determine the necessary-test requirement.⁵² As Colombia did not show that the alleged measures were designed to achieve the purpose, there was no need for assessment through the necessary test.⁵³

Recently, once again, the public-morals exception came to the forefront in the US tariff case before the WTO DSB. Again, the WTO panel in this case endorsed the holistic weighing-and-balancing approach and remarked that such procedure requires assessment of several variables, that is, the relative importance of the pursued policy objective, the restrictive impact of the challenged measures on trade, the contribution of the measures in realising the objective pursued, etc.; in addition to this, the panel had to enquire about the availability of WTO-consistent or less trade-restrictive measures.⁵⁴

Non-discrimination Requirement of the Public-Morals Exception under Article XX and World Trade Organization Jurisprudence

The non-discrimination criterion is the nucleus of Article XX of GATT, and all other criteria revolve around this. One of the most important notions in free trade, which can be observed as the non-discrimination requirement, is placed in the introductory part of the General Exceptions of Article XX. The WTO AB in the US gasoline case noted that the drafting history of Article XX indicates that the purpose of the introductory clause is the prevention of abuse or misuse of the general-exceptions clause. Moreover, although such exceptions can be invoked as a legal right, such legal rights cannot be invoked to defeat the legal obligations of the holder of such legal rights under GATT (1994).⁵⁵ Additionally, the WTO AB remarked that any measure taken under Article XX should not be applied in a manner that constitutes arbitrary and unjustifiable discrimination.⁵⁶ It is not the challenged measures or their specific contents but the application of such measures which should be taken into account to address whether the challenged measures qualify the test of non-discrimination.⁵⁷ Thus, a WTO member has to show that their measures taken under Article XX do not contain any disguised restrictions or make any arbitrary or unjustifiable discrimination between countries where similar conditions prevail.

The panel of the US gambling case observed that the chapeau requires, ‘the measures in question are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in service’.⁵⁸ Not the challenged measures or their content but the manner of their application would reveal whether the challenged measures cause arbitrary or unjustifiable discrimination.⁵⁹ Following the jurisprudence developed by the WTO AB in the US shrimp case, the panel remarked that ‘a balance must be struck between the right of a Member to invoke an exception under Article XX and the duty of that same member to respect the treaty rights of other Members’.⁶⁰ This balance of rights and obligations under the chapeau should be linked to the principle of good faith.⁶¹ Again, the panel resorted to the US shrimp case for guidance on ascertaining whether the application of the challenged measures was arbitrary or unjustifiably discriminatory in countries where similar conditions prevailed. The test requires that: (a) Application of the measures must result in discrimination; (b) Discrimination must be arbitrary or unjustifiable in nature; and (c) Discrimination should take place between countries where similar conditions prevail.⁶² On disguised restrictions, the panel noted that disguised restriction includes disguised discrimination in international trade. Moreover, there may be some overlap in the sense that the challenged measures could constitute arbitrary and unjustifiable discrimination and pose as a disguised restriction on international trade simultaneously.⁶³

In another case, the WTO AB noted that the main purpose of the chapeau of Article XX is the prevention of abuse and misuse of WTO members’ right to invoke listed exceptions.⁶⁴ This way, the chapeau maintains an appropriate equilibrium between a WTO member’s right under listed exceptions contained in Article XX and the rights of other WTO members under various provisions of GATT.⁶⁵ Under Article XX, arbitrary and unjustifiable discrimination results when countries ‘in which the same conditions prevail are treated differently’.⁶⁶ A state’s ‘condition’ could potentially encompass several dynamics prevailing in the state. The WTO AB in the EC Seal Products case remarked that the term ‘conditions’ has fairly several meanings, such as ‘a way of living or existing’, ‘the state of something’, ‘the physical state of something’, ‘the physical or mental state of a person or thing’, etc.⁶⁷ Article XX is concerned with the manner of application; it requires investigation as to how the measures are applied. Moreover, the WTO AB considers the design, architecture and revealing structure of measures to ascertain whether the measures constitute arbitrary or unjustifiable discrimination between countries where the same conditions prevail.⁶⁸

Following the US gambling and EC Seal Products cases, the panel in the Colombia tariffs case also pronounced that the object and purpose of the chapeau of Article XX is to prevent abuse or misuse of the exceptions listed in Article XX of GATT.⁶⁹ The panel, following the Brazil-Retreaded Tires case, noted that the chapeau is not concerned about the challenged measures or their specific contents but how, in practice, such measures are applied.⁷⁰ In line with the jurisprudence developed by the AB in the US shrimp case, the panel pronounced that while applying the measures in a manner constituting arbitrary or unjustifiable discrimination between countries where the same conditions prevail, three conditions must be satisfied: (a) Application of the measures should result in discrimination; (b) The nature of discrimination must be arbitrary or unjustifiable; and (c) The case must take place between countries where the same conditions exist.⁷¹

Concluding Remarks

A global economy based on the free flow of goods and services around the world has always been the antithesis to the regulatory power of a state, which ingrained in the State sovereignty. Thus, a state may regulate and restrict international trade on the basis of public health, environment, human rights, public morality, etc. One of the highly disputed matters in international trade is the conflict between free trade and public morality. Although the disputes related to trade and morality are of recent origin, a transition has been observed which indicates more and more trade disputes arising out of health, environment, human rights and public morality than based on tariff barriers. The US-gambling-case panel was the first to deal with this issue and developed the first line of jurisprudence, and other similar cases followed the trail and developed jurisprudence. Occasionally, the panel/AB deviated in certain circumstances, but the deviation was not substantial. The US gambling case and subsequent cases have recognised the right of WTO members to decide what public morality is. This approach is very much appreciated, since the concept of public morality is exceptionally subjective and diverse around the world. However, this does not mean that a WTO member can take refuge under public morality for any trade-restrictive rule. Diverse public morals are subject to strict scrutiny from the panel/AB. The ‘necessary test’ by the WTO panel/AB works as a safety valve, enabling WTO to narrow down a state’s power to make trade-restrictive rules based on public morality. Even if a rule qualifies through both tests, then the WTO panel/AB looks at the availability of an alternative less trade-restrictive measure that could achieve the same objective and puts it through a non-discrimination test. A challenged rule is qualified. If all the assessments are satisfied, but it is implausible that a trade-restrictive rule based on public morals exception could satisfy all the requirements. Thus, although the WTO members have the prerogative to choose what could be public morals for themselves, the WTO panel/AB has set a very high threshold for such public morals to qualify as grounds for lawful trade-restrictive measures under WTO regime.

Recently, once again, the US tariff case has rekindled the public-morality issue in international trade and compelled the author to revisit the topic. From the detailed discussion above, it is revealed that there was no new approach followed or new interpretation technique developed by the panel in the US tariff case. As already noted that a high threshold is set for the WTO members who invoke the public morality exception as defence, the panel has found that the US has failed to demonstrate that the chosen measures are not necessary to protect public morals. Consequently, the panel does not require further investigation to satisfy the chapeau of Article XX.

This article does not discuss facts of the cases, how the panel/AB applied particular WTO rules considering the facts and circumstances to reach a decision or who won the cases and how. However, it discusses the approach or method and interpretation techniques the panel/AB has adopted and applied considering particular facts and circumstances of a case to render a decision and thereby develop a particular jurisprudence in the area of the public-morals exception. Then, it examines whether the subsequent panels/ABs dealing with the same issues have relied on the established prior jurisprudence or deviated and, in the latter case, the reason for such deviation. It is found that the panels/ABs have been consistently taking a similar approach as their predecessors and embracing interpretation techniques developed in previous cases and in this manner have established homogeneity in jurisprudence. Indeed, the panels/ABs have helped in the expansion of the jurisprudence but only in a way that they were required to interpret different facts and circumstances or to deal with an identical rule such as Article XIV of GATS or 2.2 of TBT Agreement. However, such newly developed jurisprudence is yet to be time-tested.

Footnotes

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author received no financial support for the research, authorship, and/or publication of this article.

Notes

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