27 Apr GATT/GATS and the General Exceptions Quandry
When I teach International Trade, one of my favorite parts of the class is the discussion of trade linkages. How does a state balance competing concerns such as labor, the environment, and human rights? Typically the WTO accommodates those concerns through the General Exceptions that permit a state to violate the WTO rules if doing so is, say, “necessary” to protect “human health or life.”
One of the more curious aspects of the WTO General Exceptions is the differences the WTO has established for trade in services versus trade in goods. The regime for trade in goods allows a state to violate WTO rules if the measure “relates to the conservation of exhaustible natural resources.” Not so for trade in services. Thus, a state could prohibit the trade in products that contain CFCs because they cause ozone depletion, an exhaustible resource. It could also prohibit the importation of shrimp caught without devices that exclude endangered sea turtles. But a state could not, say, easily impose limits on the landing rights of jumbo jets because they contribute to global warming. Nor could Chile easily prohibit the docking of cruise ships at Cape Horn because they drop high-sulfer “bunker” fuel in the Antarctic Ocean. Instead, Chile would have to meet the more stringent requirement of proving that such restrictions are “necessary” to protect human, animal, or plant life or health. It seems that when it comes to the environment and trade in services, all concerns about natural resources are derivative.
On the other hand, trade in services can be restricted in order to protect public order, but trade in goods cannot. (Trade in goods must somehow offend a more value-laden public morals exception). China could, for example, have an easier time restricting Internet services that disrupt public order–such as pro-democracy websites, but have a harder time justifying its ban on the importation of pro-democracy T-shirts because their sale would disturb the peace. Or even more radical, if one takes the working language of the WTO seriously, then the GATS seems to have incorporated a general public policy exception (ordre public in French) for trade in services, but not for trade in goods.
I have yet to discover a satisfactory explanation for the disparate treatment that the WTO drafters have given to the general exceptions in GATT versus GATS.