Case note: EC Seals–A Review of the Decision of the Appellate Body

Abstract

The question of the extent to which non-trade related matters can place limitations on the freedom to trade has been a long-standing one. From the days of the GATT, the so-called “general exceptions” to the non-discrimination treatment obligations under the multilateral trade agreement were included as a safeguard measure for state parties. Broadly these provide for exceptional circumstances under which state parties could deviate from the obligations imposed on them under the GATT on grounds such as the protection of public morals, protection of human, animal or plant life or health, compliance with municipal law, conservation of exhaustible natural resources and prohibition of the fruits of prison labour. The ever-present danger was that these exceptions could be abused as a disguised restriction on free trade and protection of domestic industry. In order to guard against that, the standard practice under the GATT had been to interpret the requirement of purposive necessity very strictly that almost no measure could satisfy it. This interpretative approach has been modified somewhat under the WTO regime and the WTO Appellate Body, since the US-Shrimp/Turtle case, has consciously taken a different route in applying the general exceptions. Instead of a strict interpretation of the necessity element, the standard practice now is not to scrutinise too closely the question of whether the measure is necessary for achieving the purpose but place more weight and emphasis on the prohibition under the chapeau of the general exceptions clause regarding the manner of the application of the measure, requiring that it should not be used as means of an arbitrary or unjustifiable discrimination. One of the allowed grounds of general exceptions is the protection of public morals. But how does one determine what public morals are? Is there a global yardstick or a standard by which public morals may be judged? Or should we accept relativistic moral values? After all, morals are formed by communities and the culture and standards of various communities around the globe differ significantly. In this regard, the recent WTO Appellate Body’s decision in the case of the European Communities – Measures Prohibiting the Importation and Marketing of Seal Products(EC Seals case) provide some guidelines as to how one should approach this question of the protection of public morals. In essence, the approach of the Appellate Body was a confirmation of the WTO case law tradition, which is not to place the contents of the public morals under too strict or close a scrutiny. In this case, all three parties concerned, that is, the European Union, Norway and Canada, simply agreed or acquiesced without much argument that the protection of public morals included concern for humane treatment of seals. The Appellate Body, upholding the new interpretative approach focused more on the manner in which the measure complained of had been applied by the responding party. However, this outcome means that there is still left open the question of what would happen if the dispute itself concerned the content of the public moral values. This case note provides a brief summary of the Appellate Body report in the EC Seals case and considers how the main issues that were examined on appeal, with a focus on the question of the analysis and application of the general exception under Article XX of the GATT 1994.