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Published online by Cambridge University Press: 01 December 2021
The ‘public morals’ exception remains a key aspect of the international trade system; however, its outer bounds have never been precisely defined. This question became pertinent in the US–Tariff Measures panel report, which expansively read the exception to justify a wide range of economic interests, including prohibitions on economic espionage, anti-competitive behaviour, and the regulation of government takings. This note challenges the panel's interpretation, arguing that it is flawed and essentially amounts to a factual standard of review. It proposes an alternative approach to public morals review, which involves an objective standard of review of facts and law, while providing adequate deference to Members’ own factual determinations. It further engages with the issue of extraterritoriality, defending an approach based on Members’ legislative jurisdiction as this strikes a balance between Members’ right to regulate trade for moral purposes and the interests of the international community.
1 For instance, Mavroidis, P.C. (2015) The Regulation of International Trade, Volume 1: GATT. MIT Press, 428; Charnovitz, S. (1998) ‘The Moral Exception in Trade Policy’, Virginia Journal of International Law 28(4), 689.
2 Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, paras. 296–299 (hereinafter Appellate Body Report, US–Gambling (2005)).
3 Appellate Body Report, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R; WT/DS401/AB/R, adopted 16 June 2014, para. 5.167 (hereinafter Appellate Body Report, EC–Seal Products (2014)).
4 Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/R, adopted 19 January 2010, paras. 7.751–7.766 (hereinafter, Panel Report, China–Audiovisual Products (2010)).
5 Panel Report, Brazil – Certain Measures Concerning Taxation and Charges, WT/DS472/R; WT/DS497/R, adopted 11 January 2019, para. 7.568 (hereinafter Panel Report, Brazil–Taxation (2019)).
6 United States Trade Representative, ‘Findings of the Investigation into China's Acts, Policies, and Practices related to Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974’ (2018), 4, ustr.gov/sites/default/files/Section%20301%20FINAL.PDF (accessed 7 October 2021).
7 Panel Report, United States – Tariff Measures on Certain Goods from China, WT/DS543/R, not yet adopted, para. 7.113 (hereinafter Panel Report, US–Tariff Measures (not yet adopted)).
8 Ibid., ibid.
9 Ibid., para. 7.115.
10 Ibid., para. 7.116.
11 Ibid., para. 7.135.
12 Ibid., para. 7.133.
13 Ibid., para. 7.136.
14 For Article XX(j) GATT, Appellate Body Report, India – Certain Measures Relating to Solar Cells and Solar Modules, WT/DS456/AB/R, adopted 14 October 2016, paras. 5.62–5.63.
15 Panel Report, US–Tariff Measures (not yet adopted), para. 7.137.
16 Ibid., para. 7.137 and fn 268.
17 Ibid., para. 7.137.
18 Appellate Body Report, EC–Seal Products (2014), paras. 5.191–5.193.
19 Ibid., para. 7.138.
20 Ibid., paras. 7.139–7.140.
21 Gardiner, R. (2015) Treaty Interpretation. Oxford University Press, 168, 179–181. Notably, Panel Report, US–Tariff Measures (not yet adopted), para. 7.156 makes recourse to effective interpretation, a corollary of the principle of good faith.
22 For effet utile as part of good faith interpretation, Territorial Dispute (Libyan Arab Jamahiriya v Chad) (Merits) (1994) ICJ Rep 6, para. 47; Application of the Interim Accord of 13 September 1995 (The Former Yugoslav Republic of Macedonia v Greece) (2011) ICJ Rep 644, para. 92. For harmonious interpretation, Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, paras. 80–81.
23 Panel Report, Russia – Measures Concerning Traffic in Transit, WT/DS512/R, adopted 26 April 2019, para. 7.128 (hereinafter Panel Report, Russia–Traffic in Transit (2019)).
24 Panel Report, US–Tariff Measures (not yet adopted), paras. 7.222–7.227.
25 Feddersen, C.T. (1998) ‘Focusing on Substantive Law in International Economic Relations: The Public Morals of GATT's Article XX(a) and Conventional Rules of Interpretation’, Minnesota Journal of International Law 7, 75, 115. Howse, R. (1999) ‘The World Trade Organization and the Protection of Workers’ Rights’, Journal of Small & Emerging Business Law 3(1), 131, 142 argues for this based on Article 31(3) Vienna Convention on the Law of Treaties (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331 (VCLT).
26 Feddersen (n 25) 117–121.
27 Ibid,, 119.
28 Gonzalez, M.A. (2006) ‘Trade and Morality: Preserving Public Morals without Sacrificing the Global Economy’, Vanderbilt Journal of Transnational Law 39(3), 939, 945, 971.
29 Feddersen (n 25) 106 stating ‘While all contracting parties would agree on the same formal definition of ‘public morals,’ nothing has been said about the material content of public morals.’
30 Panel Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/R, adopted 20 April 2005, para. 6.465 for Article XIV(a) GATS; Panel Report, China–Audiovisual Products (2010), para. 7.763 for Article XX(a) GATT.
31 Compare Feddersen (n 25) 106, Gonzalez (n 28) 945, and Charnovitz (n 1) 703–705.
32 Appellate Body Report, European Communities – Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R; WT/DS48/AB/R, adopted 13 February 1998, para. 104 (hereinafter Appellate Body Report, EC–Hormones (1998)); Whaling in the Antarctic (Australia v Japan: New Zealand Intervening) (Judgment) (2014) ICJ Rep 226, para. 58.
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, paras. 223–229 (hereinafter, Appellate Body Report, China–Audiovisual Products (2010)).
34 Howse, R. and J. Langille, (2012) ‘Permitting Pluralism: The Seal Products Dispute and Why the WTO Should Accept Trade Restrictions Justified by Noninstrumental Moral Values’, Yale Journal of International Law 37, 368, 427.
35 Ibid, 429–430, challenging whether ‘public morals’ have to be proven in front of panels, and arguing that ‘such decisionmaking would be inherently at odds with one of the major purposes of allowing moral regulation under the WTO in the first place: preserving the pluralism of the members of the international community that constitute the WTO’. (417)
36 Howse, R., J. Langille, and K. Sykes (2015) ‘Pluralism in Practice: Moral Legislation and the Law of the WTO After Seal Products’, The George Washington International Law Review 48(1), 81, 105.
37 Panel Report, US–Tariff Measures (not yet adopted), paras. 7.139–7.140.
38 Howse, Langille, and Sykes (n 36) 95.
39 Ibid, 144–145. At 105, Howse, Langille, and Sykes acknowledge that a level of factual review may exist but limit it to the ‘moral nature’ of the claim.
40 Appellate Body Report, EC–Seal Products (2014), paras. 5.195–5.201 affirming Panel Report, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/R; WT/DS401/R, adopted 16 June 2014, para. 7.380 (hereinafter, Panel Report, EC–Seal Products (2014)).
41 Article 17.6 of the DSU.
42 Panel Report, EC–Seal Products (2014), para. 7.370 in fn 623.
43 Panel Report, Brazil–Taxation (2019), para. 7.558 ('this latitude does not excuse a responding party in dispute settlement from its burden of establishing that the alleged public policy objective at issue is indeed a public moral objective according to its value system’); Panel Report, Indonesia – Importation of Horticultural Products, Animals and Animal Products, WT/DS477/R; WT/DS478/R, adopted 22 November 2017, para. 7.648.
44 Case 121/85 Conegate v HM Customs and Excise [1986] ECR 1007, para. 16. For deferential standard, Case 34/79 Regina v Maurice Donald Henn and John Frederick Ernest Darby [1979] ECR 3795, paras. 15–16.
45 Case T-526/10 Inuit Tapiriit Kanatami and Others v European Commission [2013] EU:T:2013:215, paras. 71–72.
46 Whitsitt, E. (2014) ‘A Comment on the Public Morals Exception in International Trade and the EC–Seal Products Case: Moral Imperialism and Other Concerns’, Cambridge International Law Journal 3(4), 1376, 1381–1384.
47 An ‘objective’ standard has been applied even to security exceptions. Consider Panel Report, Russia–Traffic in Transit (2019), para. 7.101 and Panel Report, Saudi Arabia – Measures Concerning the Protection of Intellectual Property Rights, WT/DS567/R, not yet adopted, paras. 7.244–7.246. If, as Howse, Langille, and Sykes (n 36) 103 contend, public morals ‘legislation does not conform, at least as strongly, with these (sic) features’ of national security measures, then a contrario an objective standard of review is justified.
48 Howse, Langille, and Sykes (n 36) 105 make a similar proposal, although limiting legal review to ‘jus cogens, international human rights law, and basic compatibility with core WTO norms’.
49 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, para. 119 (hereinafter Appellate Body Report, US–Shrimp (1998)).
50 Consider 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, paras. 163–166; Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011, para. 179. For challenges to how the Appellate Body has reasoned based solely on the subparagraphs, Bartels, L. (2015) ‘The Chapeau of the General Exceptions in the WTO GATT and GATS Agreements: A Reconstruction’, American Journal of International Law 109(1), 95, 108.
51 Consider WTO Agreement, preamble, referring to ‘the basic principles’ and ‘the objectives underlying this multilateral trading system’.
52 Appellate Body Report, China–Audiovisual Products (2010), para. 229.
53 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States of America) (Merits) (1986) ICJ Rep 14, paras. 272–276.
54 Kritsiotis, D. (2018) ‘The Object and Purpose of a Treaty's Object and Purpose’, in M.J. Bowman and D. Kritsiotis (eds.), Conceptual and Contextual Perspectives on the Modern Law of Treaties. Cambridge University Press, 273 (emphasis removed).
55 For normative conflict, consider Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural Products, WT/DS457/AB/R, adopted 31 July 2015, paras. 5.110–5.117; Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R, adopted 22 April 1998, para. 74. Appellate Body Report, EC–Hormones (1998), paras. 120–125 refused to recognise the precautionary principle as a norm overriding WTO obligations, and yet highlighted the role of precaution for treaty interpretation. For interpretation based on non-WTO legal sources more broadly, consider Appellate Body Report, US–Shrimp (1998), paras. 130–134, 158; Panel Report, European Communities – Measures Affecting the Approval and Marketing of Biotech Products, WT/DS291/R; WT/DS291/R; WT/DS293/R, adopted 21 November 2006, paras. 7.65–7.72, 7.90–7.96.
56 Panos Merkouris, Article 31(3)(c) VCLT and the Principle of Systemic Integration (Brill/Nijhoff 2015) ch 1 equates the conditions of Article 31(3)(c) VCLT to elements underpinning a single ‘proximity’ criterion which are weighed by international courts and tribunals. For ‘between the parties’, see discussion in Section 4 below.
57 See generally Schrijver, N. (2009) Sovereignty over Natural Resources: Balancing Rights and Obligations, Cambridge University Press, ch 10; Nolte, G. (2005) ‘Sovereignty as Responsibility?’, Proceedings of the ASIL Annual Meeting 99, 389, 390–392.
58 Consider Barcelona Traction, Light and Power Company, Limited (Belgium v Spain) (1970) ICJ Rep 3, para. 33; Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion) ICJ Rep 226, paras. 83–84.
59 UNGA Res 2625 (XXV) (24 October 1970) further notes the duties ‘to respect the personality of other States’, ‘co-operate’, settle disputes peacefully, and the prohibition on intervention in other States’ ‘territorial integrity and political independence’.
60 Benvenisti, E. and A. Harel, (2017) ‘Embracing the Tension between National and International Human Rights Law: The Case for Discordant Parity’, International Journal of Constitutional Law 15(1), 36, 40 ('The protection of rights is a duty of the state—including its pouvoir constituant—rather than contingent on its good will or discretion.’). For human rights protection as a ‘principle’ and its role within UNGA Res 2625, see Riedel, E. (2020) ‘Human Rights Protection as a Principle’ in J.E. Viñuales (ed.), The UN Friendly Relations Declaration at 50: An Assessment of the Fundamental Principles of International Law. Cambridge University Press.
61 Pulp Mills on the River Uruguay (Argentina v Uruguay) (Judgment) [2010] ICJ Rep 14, para. 101; Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion) [1996] ICJ Rep 226, para. 29; Trail Smelter case (USA/ Canada) [1941] 3 RIAA 1907, 1965. For a systemic account of the norms embodying prevention broadly understood, see Dupuy, P.-M. and J.E. Viñuales (2018) International Environmental Law, 2nd edn. Cambridge University Press, 61–80.
62 Charnovitz (n 1) 695.
63 Ibid, 703–705; Feddersen (n 25) 84–86; Wu, M. (2008) ‘Free Trade and the Protection of Public Morals: An Analysis of the Newly Emerging Public Morals Clause Doctrine’, Yale Journal of International Law 33(1), 215, 217–219.
64 Feddersen (n 25) 117–121. A broad approach should be taken here, including where the ‘public morals’ of Members’ nationals are affected indirectly by imported goods, such as by benefitting from child labour. See, e.g., Charnovitz (n 1) 695; Diebold, N.F. (2007) ‘The Morals and Order Exceptions in WTO Law: Balancing the Toothless Tiger and the Undermining Mole’, Journal of International Economic Law 11(1), 43, 70–71.
65 Howse and Langille (n 34) 414.
66 UN Economic and Social Council, ‘Report of the Drafting Committee of the Preparatory Committee of the United Nations Conference on Trade and Employment’ (29 May 1947) UN Doc E/PC/T/34/Rev.1, 31.
67 Charnovitz (n 1) 705–715.
68 Bartels, L. (2002) ‘Article XX of GATT and the Problem of Extraterritorial Jurisdiction: The Case of Trade Measures for the Protection of Human Rights’, Journal of World Trade 36(2), 353, 359. For silence in WTO treaty interpretation practice generally, Van Damme, I. (2008) ‘The Non-Politics of Interpreting Silences in the WTO Covered Agreements’, Proceedings of the American Society of International Law 102, 420.
69 Bartels (n 68) 357; Wu (n 63) 235 addressing what he describes as ‘Type III restrictions’.
70 Panel Report, US–Tariff Measures (not yet adopted), paras. 7.220–7.222.
71 Wu (n 63) 245–246. Concerning the second category, this is a development from the suggestion in Cleveland, S.H. (2001) ‘Human Rights Sanctions and the World Trade Organization’, in F. Francioni (ed.), Environment, Human Rights, and International Trade, Hart Publishing, 239 that this will be met where the value has been adopted by both Members, constitutes a jus cogens norm, or is an erga omnes obligation. Howse (n 25) 142–143 and Marceau, G. (1999) ‘A Call for Coherence in International Law: Praises for the Prohibition Against ‘Clinical Isolation’ in WTO Dispute Settlement’, Journal of World Trade 33(5), 87, 123–128 have argued for a definition based on Article 31(3) VCLT.
72 Panel Report, US–Gambling (2005), para. 6.461. Compare with similar phrasing in Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) Notwithstanding Security Council Resolution 276 (1970) (Advisory Opinion) (1971) ICJ Rep 16, para. 53.
73 Linderfalk, U. (2007) On the Interpretation of Treaties. Springer, 178; Jennings, R. and A. Watts (2008) Oppenheim's International Law. Longmans, 1274. This position is perhaps most compatible with the WTO dispute settlement system obligation to ensure ‘security and predictability’, per Article 3.2 of the DSU.
74 Palmeter, D. and P.C. Mavroidis (1998) ‘The WTO Legal System: Sources of Law’, American Journal of International Law 92(3), 398, 411.
75 McLachlan, C. (2005) ‘The Principle of Systemic Integration and Article 31(3)(c) of the Vienna Convention’, International & Comparative Law Quarterly 54(2), 279, 314 citing the argument that United Nations Convention on the Law of the Sea (adopted 10 December 1982, entered into force 16 November 1994) 1833 UNTS 3 reflects customary international law in Appellate Body Report, US–Shrimp (1998), para. 130 at fn 110.
76 Pauwelyn, J. (2003) Conflict of Norms in Public International Law. Cambridge University Press, 258. This approach seems to have been adopted given that multilateral treaties to which most (but not all) Members are parties were cited in Appellate Body Report, US–Shrimp (1998), para. 130. See also Panel Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia (US–Shrimp (21.5 – Malaysia)), WT/DS58/AB/RW, adopted 21 November 2001, para. 5.57 reaffirming this position.
77 Bartels (n 68) 364–365.
78 ‘Jurisdiction’ is here understood to mean the State's ability to act in a manner in accordance with international law. Consider Bucher, A. (2005) ‘La compétence universelle civile en matière de réparation pour crimes internationaux’,Insititut de droit international, Séssion de Tallinn 76, 1, 89–90. The legislative jurisdiction argument has been developed in Bartels (n 67) 365–402 and Manzini, P. (1999) ‘Environmental Exceptions of Art XX GATT 1994 Revisited in the Light of the Rules of Interpretation of General International Law’, in P. Mengozzi (ed.), International Trade Law on the 50th Anniversary of the Multilateral Trade System, Giuffrè, 839–840.
79 For instance, The Case of the S.S. ‘Lotus’ (France v Turkey) PCIJ Rep Series A No 10, 19, 30–31; Hertogen, A. (2006) ‘Letting Lotus Bloom’, European Journal of International Law 26(4), 901, 906–913 for analysis. Overlapping jurisdiction is also implied in multilateral treaties, consider Article VI, Convention on the Prevention and Punishment of the Crime of Genocide (adopted 9 December 1948, entered into force 12 January 1951) 78 UNTS 277.
80 Mann, F.A. (1964) ‘The Doctrine of Jurisdiction in International Law’, Recueil des Cours 111, 1, 36–37, 46 concerning a ‘genuine connection’; Mann, F.A. (1984) ‘The Doctrine of International Jurisdiction Revisited after Twenty Years’, Recueil des Cours 186, 15, 28–30 concerning legal ‘closeness of connection’.
81 Bartels (n 67) 374–375.
82 Ibid, 376, concerning human rights protection. Regarding the pacta tertiis principle, Bartels argues that this would not be affected given that States do not have exclusive jurisdiction over their own nationals (367).
83 This rests upon the distinction between the legal obligations and political disputes. Lauterpacht, H. (2011) The Function of Law in the International Community. Oxford University Press, 197 describes political disputes as follows: ‘an obligation whose scope is left to the free appreciation of the obligee … does not constitute a legal bond’.
84 Bartels (n 67) 375.
85 Ibid.