The World Trade Organization’s (WTO) Appellate Body has handed down its decision in the long-running EC-Seal Products trade dispute. The trade measure at issue banned the placing on the European Union (EU) market of products derived from seals, but importantly included exceptions for products the result of indigenous communities’ hunts, products the result of marine resource management and for travellers importing personal quantities of seal products. It was the totality of the measure, that is the ban and the exceptions, which led to the trade dispute with Canada and Norway, whose seal farmers in practice failed to meet the requirements of the exceptions to allow their seal trade to continue with the EU.
Of particular interest has been the EU’s attempt to justify the measure under General Agreement on Tariffs and Trade (GATT) article XX(a) as necessary to protect public morals. While the Appellate Body did not disturb the panel’s findings that seal welfare was a legitimate public moral concern and also found that the EU measure made a contribution to addressing that concern, the measure as a whole was found not to be GATT-compliant. The ultimate problem with the seals measure with regards to its article XX compliance was in its implementation – particularly the operation of the exceptions – and thus its consistency with the chapeau to article XX.
The chapeau requires trade restricting measures under article XX not to be “applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries”. The Appellate Body found the regime failed this chapeau test because in its application, the excepted indigenous communities’ seal products were no more likely to achieve the outcome of seal welfare than those from commercial hunts, the exception’s requirements were problematically vague and discretionary and further the EU had not taken enough steps to ensure Canadian Inuit communities could access the exceptions in the same way they had for Greenlandic Inuit communities. The EU now has the opportunity to adjust the measure’s operation so as to rectify these flaws.
Although the seal products dispute concerned animal rights, the public morals exception has been mooted as a means by which human rights can be protected under the GATT, and the seals decision leaves open this opportunity. The panel and Appellate Body have provided significant guidance, in interpreting the seal products measure, as to how a human rights measure could be designed and implemented so as not to fall foul of the requirements – including both the panel and the Appellate Body’s acceptance, as in previous disputes invoking public morals, that the content of such morals is for states themselves to define and the threshold for evidencing that an issue is in fact a public moral concern within that country is not problematically high. Further, the detailed analysis of the chapeau requirements, traditionally the stumbling block of measures attempting to make use of article XX, provides important design and implementation guidance that would be crucial to the success of a human rights measure.
But two factors the seal measure had in its favour – namely, the substantial ‘cute and cuddly’ factor which contributed to the public moral concern itself and thus the EU’s willingness to legislate for the ban, and the conclusion that it is almost prohibitively difficult to hunt seals in a manner free from animal cruelty – would likely create problems for human rights protection. This is because rights concerns in the context of goods production often relate to people who are far removed from the consciences of consumers across the globe, and often do not relate to inherently ‘immoral’ products but instead to possible production methods, or their social or political context in source countries. And a further question which remains – and was explicitly avoided in EC-Seal Products – is whether the public morals exception can be invoked by states where the content of the public moral concern exists exclusively outside the territory of the regulating state – something probable in any attempt to protect human rights. If it cannot, this will substantially damage the ability of the provision to operate as a de facto human rights clause, as the sorts of states likely to invoke human rights as a trade restriction justification are less likely to be the sorts of states whose own conduct would infringe public morals, thus making a requisite territorial nexus between a public morals problem and a public morals solution unlikely.
Nevertheless, until such a measure is tested before the WTO’s dispute settlement body, it remains open for rights to be protected under the public morals clause. The decision in EC-Seal Products has provided important guidance for how such a measure could be both designed and implemented so as to be consistent with members’ obligations under the WTO agreements, while still offering a significant contribution to human rights protection.