The Jean Monnet Program

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This paper has analyzed the “case law” of the WTO AB&P regarding the SPS Agreement and GATT Article XX from the viewpoint that ETM-imposing countries tend to choose measures which impose a heavy burden on international trade because they do not have an incentive to take into account the trade harms on other countries. Three things have been the primary concerns of this paper: the use of “trade-off devices”, the essence/application dichotomy, and the allocation of the burden of proof.

This paper has found that the “case law” of the AB&P is generally justifiable in light of an economic perspective. Although it is sometimes said that the AB&P have treated international trade as a pre-eminent value in comparison with other non-trade values, this paper has shown that this view is not necessarily correct.

With regard to the use of “trade-off devices”, the AB&P have appropriately invoked the LTRA test for ETMs for protecting the domestic environment and the “means and ends” test for ETMs for preserving the global environment. This distinction between domestic-environment-oriented and global-environment-oriented measures could be justified based on the difference in some factors such as their beneficiaries (only the measure-imposing countries or all countries) and who has the right to decide the appropriate level of protection (the measure-imposing countries or no one). The invocation of the LTRA test in the context of ETMs for protecting the domestic environment does not necessarily mean that the WTO put higher value on international trade than on environmental protection.

As to the essence/application dichotomy, its benefits, for example the enhancement of the legitimacy of the WTO Dispute Settlement System, are likely to outweigh the costs derived from the ambiguousness of the border between the essence and the application of a measure.

The allocation of the burden of proof by the AB&P has been generally appropriate. However, the threshold for shifting the burden of proof in the context of Article 5.6 of the SPS Agreement is too high. This very high threshold actually emasculates the LTRA obligation under Article 5.6. The threshold should be lowered by shifting the burden of proof when complaining parties are able to show that there are no relevant studies or research, since it is unlikely that the measure-imposing countries who fail to show sufficient scientific justification for their SPS measures have deliberately considered whether their measures are the least trade restrictive among available ones.

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