Document Type

Article

Publication Date

2002

Abstract

In European Communities-Measures Affecting Asbestos and Asbestos-Containing Products (EC-Asbestos) the Appellate Body has told us that (1) in interpreting Article 111:4 of the General Agreement on Tariffs and Trade (GATT), we must take explicit account of the policy in Article 111:1 that measures should not be applied "so as to afford protection to domestic production" [hereafter just "so as to afford protection"]. In Chile--Taxes on Alcoholic Beverages (Chile--Alcohol) the Appellate Body has told us that (2) in deciding whether a measure is applied "so as to afford protection", we must consider "the purposes or objectives of a Member's legislature and government as a whole"-in other words, the regulatory purpose of the measure. Chile--Alcohol was decided under Article 111:2, but it involves the very same "so as to afford protection" that EC-Asbestos says we look to in interpreting Article 111:4. It follows from (1) and (2) that in interpreting Article 111:4, we must consider the regulatory purpose of the measure under review. Q.E.D. That is the doctrinal argument for the relevance of regulatory purpose under Article 111:4. In the ten years since United States-Measures Affecting Alcoholic and Malt Beverages (US-Malt Beverages), we have come full circle on this issue. Although I think the Appellate Body is now on the right track, their double about-face on the relevance of purpose illustrates the instability of doctrine-and the Appellate Body has not yet explicitly drawn the conclusion that their holdings in EC-Asbestos and Chile--Alcohol entail. I shall therefore argue from the text of the Agreement itself that we must consider regulatory purpose in applying Article 111:4. Indeed, I shall argue for a slightly narrower proposition-that the ordinary meaning of "like products" in the context of Article 111:4 directs us to consider regulatory purpose in the course of deciding when products are "like". It may not be obvious that this is a narrower proposition. But it is, since someone might argue that even though regulatory purpose must be considered under Article 111:4, it is not properly considered as part of the "like products" inquiry. Rather, the "like products" inquiry should focus on "competitive relationship", which is one element of the general inquiry into "so as to afford protection", while regulatory purpose should be considered only in connection with a different aspect of Article 111:4, the question whether foreign goods are accorded "less favourable treatment" than domestic goods. There is one puzzling paragraph in the EC-Asbestos report that might suggest precisely this. To my mind, it is much more natural, and more in line with the ordinary meaning of the words of Article 111:4, to consider regulatory purpose as an aspect of "like products". But in arguing for that, I do not mean to exclude the possibility of considering regulatory purpose under the rubric of "less favourable treatment" as well.

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