Jurisprudence of General Exceptions in the

Multilateral Trading (WTO) System:

Human Rights Perspective

By:
SAIRA ALI* & NAEEM ULLAH KHAN**
Abstract

This paper consists of three parts; first part of the paper examines three different
analytical approaches of International Trade Law experts on the multilateral trading
(WTO) agreements with a view that to, what extant the WTO Trade Agreements protect
the human rights in a globalize world.
Second part discusses general exceptions clauses of the Article XX of GATT, in
particular, the public morals, human life, health and prison labor exceptions, relevant in
connection with human rights measures.
Third part highlights the relevant cases law decided by Dispute Settlement Body (DSB)
of the WTO with conclusion that the case law is still inconclusive regarding the
applicability of these exceptions.

1. Introduction
1.1 The relationship between the Multilateral Trading (WTO) System and human
rights is the current issues of discussions in globalize trade scenario among
different segments of society. Trade can be a principal instrument for the
economic growth and sustainable development. It can also threaten human rights
in some situations.1 In the GATT-WTO regime, there is no single clearly
applicable exception for human rights-oriented measures. There are, however,
several exceptions which might apply if interpreted with human rights
perspectives in mind. 2

1.2 The general exception clauses provide a mechanism by which specific important
state interests and obligations that are not otherwise compatible with the WTO
agreements can find expression.3 They recognize “the importance of a sovereign
nation being able to act to promote the purposes on the list [of exception], even
such action otherwise conflicts with the various obligations relating to
international trade.”4 The WTO appellate body has endorsed this view.5
Part- I
1
* Saira Ali LL.M (Ireland), Deputy Director, Trade Development Authority of Pakistan (TDAP).
** Naeem Ullah Khan, LL.M (Punjab), Lecturer Punjab University Law College.
* This article contains personal views of authors and do not necessarily reflect those of any organization.
United Nations, Human Rights and World Trade Agreements, iii (2005).
2
R. Bhala, International Trade Law: Theory and Practice, 614 (2001).
3
Supra note 1 at 4.
4
John H. Jackson, The World Trading System: Law and Policy of International Economic Relations
(Cambridge, MIT, 1989), 206.

1
2. Perspectives on the WTO:

2.1 Optimistic Perspective – Marrakech Agreement provides that the contracting

parties in their relations in the field of trader and economic endeavor should be
conducted with a view to raising standard of living, ensuring full employment and
a large and steadily growing volume of real income and effective demand and
expanding the production of trade in goods and services, while allowing for the
optimal use of the worlds resources in accordance with the objective of
sustainable development , seeking both to protect and preserve the environment
and enhance the means for doing so in manner consistent with their respective
needs and concern at different level of economic development.6

2.1.1 Agreement on Agriculture (AOA) protects the human rights in the form of fair
and market oriented agriculture trading system. This also provides that the
contracting states implement their commitments of the market access and
developed countries shall fully provide greater opportunities for developing
countries.7

2.1.2 Agreement on the Application of Sanitary and Phytosanitary Measures (SPS)

protects human rights on scientific reasons. The cheapu clause of the agreement
states that no member should be prevented from adopting or enforcing measures,
necessary to protect human, animal or plant life or health, subject to the requirements
that these measures are not applied in a manner which would constitute a means of
arbitrary or unjustifiable discrimination between member countries, where the same
condition prevail or a disguised restriction on international trade.8

2.1.3 Agreement on Technical Barrier to Trade (TBT) recognizes that no country should
be prevented form taking measures necessary to ensure the quality of goods for
the protection of human, animals, plant life, health and environment.9 In the light
of above arguments one may agree that the WTO not only promote the trade but
also protects the human rights standards.

2.2 Pessimistic Perspective – On the contrary, the WTO detractors regard it as an

exploitative, opaque and undemocratic organization, which is completely
detrimental to the interests of developing countries. The negative image of the
WTO is quite wide spread in the third world countries even among the
intelligentsia, businessman, and journalists and otherwise well informed section
of society.10

5
United States – Standards for reformulated and conventional gasoline, Report of the Appellate body
(WT/DS2/B/R), 1996.
6
See Marrakech Agreement establishing the World Trade Organization, para 1.
7
See Agreement on Agriculture para 1 & 5.
8
See Agreement on the Application of Sanitary and Phytosanitary measures, para 1.
9
The Legal Texts “The Results of the Uruguay Round of Multilateral Trade Negotiation” 121 (2002), also
see generally Agreement on Technical Barrier to Trade (TBT).
10
I. Haque, WTO and Pakistan an overview, 5 (2005).

2
2.2.1 The WTO is infamous for its unclear and lack participation of NGO’s because
they have no excess to the WTO works and there is no formal relationship
between them. Individual has not excess to the WTO official documents this
necessarily lead to human rights harmful outcomes. It is enshrined in The
Universal Declaration of Human Rights that every citizen has right to participate
in government of their country.11

2.2.2 These issues of non-availability about the information are inconsistent with the
provision of The Declaration of Human Rights.12

2.3 Moderate Perspective – This approach shows that WTO itself not a bad
phenomena, it is only a Principal instrument through which globalize-trade can be
manage by implementing the WTO agreements with their letter and spirit. There
is a need to reconcile trade rules and human rights towards a chain economic
growth and prosperity.

2.3.1 It would be pertinent to point out that international treaties are solemn agreements
between states and therefore, signatories to treaties/conventions are expected to
abide by them. Under Article 18 of the Convention,13 that a State is obliged to
refrain from acts which would defeat the object and purpose of a treaty it has
signed.

2.3.2 In this connection while establishing the opinion relating to the recognition and
protection of human rights, contracting parties would be accepted to give due
weight the object and the purpose of multilateral trade agreements.

Part- II

3. General Exceptions as an Instrument to Protect Human Rights

3.1 Three of the WTO agreements contain general exception clauses.14 The general
agreement on Tariffs and Trade (GATT),15 the general agreements on Trade and
Services (GATS),16 and the agreement on Government Procurement (GPA).17
However, the Article XX having the closest relationship with regard to the
protection of human rights in the WTO regime.

11
Article 21
12
Id
13
The Vienna Convention on Law of Treaties, 1969. The Convention applies to any treaty which is the
constituent instrument of an international organization and to any treaty adopted within an international
organization without Prejudice to any relevant rules of the organization.
14
Under GPA and TRIPS they are not, strictly speaking “general exception”.
15
Article XX
16
Article XIV
17
Article XXIII

3
3.2 The WTO provides for overriding obligations undertaken by the members in case
of unusual circumstances. Such safeguard measures are of two types; one is meant
to address industry concerns and the other to address non-trade concerns. For
example, there is a provision that allows implementation of anti-dumping
measures.18 When one country is shown to be dumping its goods in another
country, or there is the provision to employ countervailing duties,19 when a
country is subsidizing its goods. Other exceptions are for non-economic concerns.
For example, the national security exception provision is stipulated in Article
XXI.

3.3 There is also a provision for general exception in Article XX of GATT20 and XIV
of GATS21( Article XIV of GATS is parallel to Article XX of GATT, the only
difference is that the former agreement deals with trade in services, and the latter
deals with trade in goods). These exceptions are allowed, provided they are
applied between countries with no discrimination where the same conditions
prevail, and are not a disguised restriction to trade. These exceptions are directed
at safeguarding the public interest described in Article XX and include, for
instance, the protection of "public morals";22 "human, animal or plant life or
health";23 "measures necessary to secure compliance with laws or regulations
which are not inconsistent with the provisions of this Agreement, including those
relating to customs enforcement, enforcement of monopolies";24 "products of
prison labour";25 “for the protection of natural treasures, of artistic, historic or
archaeological value”;26 and the "conservation of exhaustible natural resources"27.

3.4 These safeguard and exception clauses demonstrate that options for members to
withdraw, or cease to fulfill their normal obligations due to specific economic
circumstances or to pursue non-economic objectives are in place. However, these
exist with the caveat that the adopted measures do not constitute a means of
arbitrary or unjustifiable discrimination between countries. In particular, the
provisions in Article XX appear to have commonalities with the rights contained
in the human rights treaties, such as the right to life, health, a clean environment
and freedom from slavery.

3.5 To the extent that WTO law is a part of international law, the exceptions in WTO
law are designed to be congruent with rules of other international laws. It provides
for the application of non-WTO rules within WTO and justifying these measures
as exceptions. According to Joost Pauwelyn, “WTO treaty was not negotiated for
the benefit only of exporters or free traders, the way human right treaties were
18
Article VI
19
Id
20
General Agreement on Tariffs and Trade, regulate the trade of goods.
21
General Agreement on Trade in Services, regulate the four mod of supply of services.
22
Article XX (a)
23
Article XX (b)
24
Article XX (d)
25
Article XX (e)
26
Article XX (f)
27
Article XX (g)

4
 negotiated for the benefit of individuals. The WTO treaty provides for overall
framework regulating trade relations between the states. It must consequently take
account of interests in favor of both trade liberalization and non-trade values
restricting trade”.28 Article XX is one way in which the WTO Agreement intends
to re-balance the interests of trade and non-trade values.

3.6 The WTO restricts the capability of its members to punish human rights violations
through trade sanctions. WTO members are obligated to obey their binding tariffs
in goods and market access commitments in all services areas. “Any trade
restriction in excess of these agreed limits, even in the name of human right
measures, would violate WTO law unless justified by some of the exception to the
WTO rules”.29

3.7 The list of exceptions provided for in Article XX is extremely important for
human rights, as it is means to overrule commitments of the WTO if a member
violates human right norms. As we have seen the list of the exceptions is far from
exhaustive from the human rights perspective. The relevant sub-clauses in Article
XX are (a) dealing with public morals , (b) dealing with animal or plant health
and life, (e) dealing with products of prison labour and (g) relating to conservation
of natural resources. The need exists to make the list more extensive and
inclusive. Maintaining the focus on the adverse impact of the WTO agreements on
human rights, the exceptions of Article XX appear to be far less comprehensive.
Article XX discusses prison labour, but does not address other forms of labour
abuse as in the form of sweatshops, child labour and forced labour. Trade and
competition raise many abuses of labour standards, which are not part of the
WTO exceptions. The liberalization of trade also leads to what critics have called
creation of ‘pollution havens’ and ‘race to the bottom’. In order to become
competitive, the industry tends to shift to locations where the environmental and
labour laws are lax, and cost of compliance is low.30

3.8 Following a review of the limited list of the exceptions of Article XX, it appears
that “WTO law and its numerous safeguard clauses (e.g. GATT Article XX, GATS
XIV, TRIPS Article 8) treat human rights, protection of environment, poverty
alleviation and distribution of income within countries as matters of national
regulation and of international human rights law, environmental law and social
law to be regulated outside the WTO…”31
28
Joost Pauwelyn ‘the Role of Public International Law in WTO: How Far Can We Go?’ (2001)95
American Journal Of International Law 552
29
Alan O. Sykes International Trade and Human Rights: An Economic Perspective in (eds) Frederick M.
Abbot, Christine Breining-Kaufmann and Thomas Cottier International Trade and Human Rights:
Foundations and Conceptual Issues(University of Michigan Press 2006) 23
30
Robert Baldwin and Alan Winters Challenges to Globalization: Analyzing the Economics (Chicago
University Press 2004) 167
Also Raj Kumar Sen and C.A Tidsell Economic Globalization: Social Conflicts, Labour and
Environmental Issues (Edward Elgar Publishing 2004) 300-305
31
Ernst Ulrich Petersmann Human Rights, Cosmopolitan Democracy and the Law of the World Trade
Organization in (eds) Ian Flecther, Loukas Mistelis and Marie Cremona Foundation and Perspectives of
International Trade Law (University of Copenhagen Law School 2001) 83

5
4. Current Position of Article XX
4.1 At present, the scope of Article XX is unclear; the case law does not provide clear
evidence that Article XX can be applied to human rights related abuses. In the
context of import restrictions imposed for human rights considerations, a WTO
member may want to justify its actions by invoking the exceptions of “public
morals” in Articles GATT XX (a) and GATS XIV (a), or “prison labour” in GATT
Article XX (e), or a concept such as “security” or “emergency in international
relations” exceptions pursuant to GATT Article XXI and GATS Article XIV bis.
There is to date no jurisprudence in interpreting such concepts and it is far from
clear whether the violation of human rights could be covered by the term
“protection of public morals”.

4.2 “WTO system of treaties-- reflects the recognition of non-trade public values,
which are meant to prevail in the event of conflict with its free trade rules;
institutional isolation has contributed to a very limited interpretation of this
principle. Specifically, GATT Article XX, which was designed to be a
fundamental pillar of the international trade regime, has often been construed so
restrictively as to almost read it out of text, or to marginalize it.”32 Apart from
being given a restricted interpretation, the application of Article XX is required to
satisfy some additional criteria given in the Chapeau of this Article. The
restrictive interpretation ensures that the measure under exception preserves the
basic objectives and principles of the General Agreement and remains subordinate
to trade rules.
Part - III

5. Relevant Case Law

5.1 In the following paragraphs, the relevant cases brought before the DSB under
Article XX to demonstrate how the rules regarding exceptions work. These cases
are Tuna-Dolphin (1991), Reformulated Gasoline (1995) and Shrimp and Turtle
(1996). In this discussion, investigate the approach by the Penal/Appellate body in
the application of these exceptions.
5.2 In the Shrimp and Turtle case, the Panel/Appellate Body of the WTO interpreted
Article XX (g) for environmental issues. The main contention in the case was the
U.S regulations issued pursuant to the Endangered Species Act, under which all
the U.S shrimp trawlers were required to use turtle excluder devices (TEDs) in
specified areas shrimp trawls resulted in a significant mortality rate of sea turtles.
The rules were subsequently modified to require the use of TEDs at all times in
places where shrimp trawl fishing significantly impacts interacts sea turtles and
their habitat. In 1989, the U.S. Congress enacted Section 609 of Public Law 101-
102.33 It is this law, along with its implementing regulations, that the complaining
parties (India, Pakistan and Malaysia) challenged as inconsistent with the WTO
32
Robert Howse and Makau Mutua Protecting Human Rights in Global Economy: Challenges for World
Trade Organization
<http://www.ichrdd.ca/english/commdoc/publications/globalization/wtoRightsGlob.html> (12 June 2007)

6
 obligations of the United States and in violation of the quantitative restriction of
Article XI. The Panel/Appellate body upheld the measure of the U.S but objected
to the way it is implemented under the Chapeau of Article XX. Hence, the
measure was viewed very restrictively. It was regarded as a discriminatory
measure, and it was declared that the U.S could have used bilateral channels for
environmental protection mandates, as it has done with other countries. The
Appellate Body concluded that the "failure to have prior consistent recourse to
diplomacy as an instrument of environmental protection policy ... produces
discriminatory impacts on countries exporting shrimp to the United States with
which no international agreements are reached or even seriously attempted.”34
“While the United States might enforce such a rigid standard on its own citizens,
the Appellate Body considered it impermissible for a WTO Member to use an
embargo to “require” other Members to adopt the same standards, without taking
into consideration different conditions which may occur in the territories of those
other Members.”35 The United States policy of restriction of trade for the
protection of exhaustible natural resources failed to satisfy the ‘necessity test’
given in the Chapeau of Article XX. The Panel found that other less trade
restrictive options were available to the U.S, such as recourse to diplomacy rather
than trade sanction.

5.3 The Shrimp-Turtle case raises questions regarding the freedom of countries to
establish their environmental polices. Therefore, another question of how to
satisfy tests of the Chapeau of Article XX to qualify for the exceptions arises. Two
of the tests given in the Chapeau are the application of a measure to be applied in
a non-discriminatory fashion, and also a need to apply a necessity test to
demonstrate that no other less trade restrictive option is available. The Chapeau
imposes extraordinary preconditions that members must meet before availing the
exceptions of Article XX. The Panel and the Appellate body have given a broad
construction to sub para (g) of Article XX to include endangered species as
“exhaustible natural resources”. The decision of Shrimp-Turtle was better than
other decisions taken earlier from the WTO forum. The Tuna-Dolphin case 36 is
about the imposition of a U.S ban on imports of tuna caught with commercial
fishing technology that results in the incidental killing of dolphins; the ban was
applicable to imports of tuna from Mexico, Venezuela and Vanuatu. There was
also a requirement to label tuna sold in the U.S market as ‘dolphin safe’. Mexico
challenged this ban in the GATT panel as inconsistent with Article XI prohibiting
quantitative restrictions; it was also argued that the ban was discriminatory as it
targeted a specific geographical region. The U.S argued that the measures were
33
Section 609 further provides that shrimp harvested with technology that may adversely affect certain sea
turtles may NOT be imported into the United States. unless the President certified to Congress that the
harvesting nation has a regulatory programme and fishing environment of the harvesting nation does no
rose a threat to sea turtles. <http://www.american.edu/TED/esp/us-shrimp-turtle.htm> (12 June 2007)
34
WTO United States-Import Prohibition of Certain Shrimp and Shrimp Products From India, Malaysia
and Pakistan Appellate Body Report (6 November 1998) WT/DS58/AB/R para [167]
35
WTO United States-Import Prohibition of Certain Shrimp and Shrimp Products From India, Malaysia
and Pakistan Appellate Body Report (6 November 1998) WT/DS58/AB/R [163]
36
WTO United States-Restrictions on Import of Tuna from Mexico Panel Report (3 September 1999)
DS21/R-39S/155

7
 justified under Article XX (b) and XX (g). The Panel said, “Previous panels had
established that Article XX is a limited and conditional exception from
obligations under other provisions of the General Agreement, and not a positive
rule establishing obligations in it. Therefore, the practice of panels has been to
interpret Article XX narrowly…”37 The Panel remarked that measures mentioned
in Article XX (b) and XX (g) refer to measures taken to protect human, animal
and plant life or health within the jurisdiction of an importing country. At the
same time, it was remarked that the measures of the United States do not fulfill
the necessity test of the Chapeau of Article XX, as the U.S had not exhausted all
possible options that are less trade restrictive, either through negotiations or
cooperative association.38 The approach of the Panel was conservative. The Panel
held that the United States could not invoke the exceptions of Article XX for extra
jurisdictional measures, and therefore not ask other countries to comply with its
policies.

5.4 In Tuna-Dolphin II, a different panel concluded that the U.S tuna embargo did not
qualify under XX (g) because it did not protect the dolphin resource directly but
operated by putting trade pressure on other governments to change their policies.39
The measure of the U.S was regarded as discriminatory and inconsistent with the
object and purpose of the GATT. This Panel was more progressive than the Panel
of Tuna-Dolphin I, in that it determined that measures of Article XX can be
applied extra jurisdictionally. Similarly, the approach of the Panel of Shrimp and
Turtle was progressive in that the Panel gave breadth to the term ‘in-exhaustible
natural resources’ and included endangered animals species. The Panel did not
raise the jurisdictional question or the issue of ‘direct application’ of the measure
as they did in the Tuna-Dolphin II case.

5.5 The application of exceptions to Article XX for trade measures to achieve health
or environmental goals have seen a relatively small number of disputes over the
years. In the case EC-Asbestos (1998), France imposed a ban on the import of
asbestos on the grounds that asbestos is dangerous to the health of workers
(scientific evidence confirms the dust of asbestos is carcinogenic).Canada
challenged the import ban from France and requested the formation of a Panel. To
qualify for an exception under Article XX (b), measures must be designed to
protect human, animal, plant life or health. In addition to this, it must be proved
that measures were necessary and no less trade restrictive alternative was
sufficiently effective or reasonably available. Canada argued that controlled use
was available as a less trade restrictive alternative. The Appellate Body (AB)
decided the measure falls under the exception because the objective pursued by
the measure is the preservation of human life and health. The exception was
supported because asbestos should be eliminated or reduced due to the life
37
WTO United States-Restrictions on Import of Tuna from Mexico Panel Report (3 September 1999)
DS21/R-39S/155 para[5.22]
38
WTO United States-Restrictions on Import of Tuna from Mexico Panel Report (3 September 1999)
DS21/R-39S/155 para[5.28]
39
Sanford Gaines The WTO Reading of GATT Article XX Chapeau: a Disguised Restriction on
Environmental Measures (2001)24 Journal of International Economic law 757-758

8
 threatening health risks posed by asbestos fibers. The decision of the AB was
supportive of the French heath policy. However, the interpretation the Panel and
the AB provided for the ‘like product’ was not based on the toxicity of the
substance to human health. The interpretation did not resolve the issue of
differentiating physically similar products on the basis of effects on human health,
or of differentiating the products based on manufacturing process that may
constitute a danger to the health of workers. The Panel considered only physical
characteristics in determining the ‘likeness’ of products. This determination is
important for the member countries because different regulations can be applied
to physically similar products that are manufactured differently. The WTO
member countries would like to differentiate products on the basis of human
rights issues in production methods. The decision ruled out the application of
discriminatory rules if the products are physically similar. This interpretation can
have serious repercussions. Products may be made in substandard conditions or
produced by child labour and cannot be differentiated and treated differently if
they are physically similar to the product produced without child labour. “In the
end, however, the Appellate Body's treatment of the “like products” question has a
context-dependent, split-the-difference character that may be difficult for national
governments to apply to product regulation with any confidence as to the outcome
in cases in which risks are less clearly established.”40 The Panel decided that in
determination of what is a ‘like product’, only physical characteristics would be
considered and different production processes and methods would be ignored.
Therefore, it hardly matters whether the product is toxic to human beings; if
physical characteristics are similar the product is ‘like’ in WTO terminology.
Thus, the question is whether non-physical process-based distinctions, such as
those based on human rights violations in production methods, can be considered
as resulting in “unlikeness”? The jurisprudence of Article III (which deals with
the question of what constitute ‘likeness of products’) has yet to answer the
question.41

6. Upshot of the Case Law

The case law is still inconclusive regarding the applicability of the exceptions. It
is presumed that Article XX (g) can be invoked for extra-jurisdictional policy
measures (measures that go beyond the territorial limit of the country e.g. the
measures of the U.S in Turtle-Shrimp case).Article XX (b) applies to measures
having affects inside the country (e.g. the measures of France banning use, sale
and import of asbestos). The final test of the application of Article XX is the

40
CJ: Robert Howse & Elisabeth Tuerk, The WTO Impact on Internal Regulations: A Case Study of the
Canada-EC Asbestos Dispute, in (eds) Grainne de Burca and Joanne Scott The EU and The WTO: Legal
and Constitutional Aspects (Oxford Publication 2001) 283,328. Also available at
<http://worldtradelaw.net/articles/howseasbestos.pdf > (13 June 2007)
Also see David A. Writh European Communities-Measures Affecting Asbestos and Asbestos Containing
Products (2002) 96 American Journal of International Law 435-439
41
Gabrielle Marceau The WTO Dispute Settlement and Human Rights in (eds) Frederick M. Abbot,
Christine Breining-Kaufmann and Thomas Cottier International Trade and Human Rights: Foundations
and Conceptual Issues(University of Michigan Press 2006) 107

9
 proviso of its Chapeau. It may also be noted that human rights values in WTO law
are treated as exceptions in Article XX and are subject to limitations given in the
Chapeau. Hence, the treatment of a few human rights norms included in Article
XX of the GATT is improper and the exceptions of Article XX are not conducive
for the protection of the human rights.

7. Conclusion and Suggestions

To round of this brief discussion, we come to the conclusion that international treaties
are solemn agreement between states and therefore, the signatory to treaties to
implement these obligations with their true letter and spirit, in good faith, without
discrimination and for the protection of human rights. As for as the definition of
public morals, public order and human life and health is so wider terms, there is a
need to establish a precise definitions of these terminologies.

Last but not least the case law of the WTO promotes abroad and flexible approach to
the definition of general exception clauses. That in tern helps to justify inclusion of
human rights norms as appropriate to trade rules. However the treatment of a few
human rights norms included in Article XX of the GATT is not appropriate for
protection of human rights.
Followings are the recommendations for consideration.

I. Public morals, public order and human life or health should be exactly defined
by the WTO.
II. Workshop, seminars, symposiums and conferences should be conducted on
article XX of GATT/WTO to create the awareness among the different sectors
of economy.
III. There is a need to change the mind of community through debates that WTO
rules don’t cause human rights infringements.
IV. There is a need to reconcile trade rules and human rights towards achieving
economic growth, prosperity and a life in dignity for all.
V. Each state is required to comply with their international obligations without any
discrimination for the protection of human rights.

10