05 Dec Morality Play at the WTO
“[N]othing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures … necessary to protect public morals.” Article XX(a), GATT 1994
The long-awaited WTO panel decision on the EU’s ban of seal products is now available. The case raises one of the most interesting unanswered questions regarding WTO jurisprudence: to what extent may Member States impose trade restrictions based on moral or ethical concerns? Can a Member State impose a trade ban because the manner in which a product is produced violates the State’s own subjective understanding of public morals? The answer from the WTO panel is a resounding yes.
The case arose out of the EU’s concern for animal welfare. Seal hunting often involves the inhumane killing of seals resulting in needless suffering. The EU banned the importation of seal products, but exempted hunting by Inuit communities (IC hunts) and in furtherance of marine resource management where seals threatened fishing stocks (MRM hunts). Canada and Norway objected to the ban on seal products, and filed a case before the WTO. A WTO panel issued their report last week.
The case required the WTO to assess whether public morals can justify the ban on seal products. Under WTO jurisprudence, the standard for what constitutes “public morals” is exceedingly easy to satisfy. As stated in US–Gambling, “public morals” are “standards of right and wrong conduct maintained by or on behalf of a community or a nation.” The content of public morals “can vary in time and space, depending upon a range of factors, including prevailing social, cultural, ethical and religious values.” (See para. 7.380). In essence, the WTO panel must assess whether there is public concern about a particular issue and whether that concern is animated by that particular Member State’s public morals. (See para. 7.383).
In EU–Seal Products, the WTO panel examined the text of the regulation and the legislative history as evidence that there was public moral concern about the issue. Ethical concerns expressed in the text of a regulation combined with legislative debate about the morality of the issue appeared to be sufficient for the panel. (The panel dismissed public surveys as inconclusive). On finding that there was a EU concern, the panel held that the:
EU seal regime’s objective is to address the moral concerns of the EU public with regard to the welfare of seals, including the incidence of inhumane killing of seals and EU participation as consumers in and exposure to economic activity which sustains the market for seal products derived from inhumane hunts. EU public concerns on seal welfare appear to be related to seal hunts in general and not to any particular type of seal hunts. In other words, all inhumane seal hunts are of concern, not just commercial hunts. (See para. 7.410).
The key holding was that seal welfare is a matter of EU public morals that justifies the ban on seal products. (See para. 7.505; 7.631). As for the exceptions, the WTO panel rejected the EU’s exemptions for IC hunts, finding that Inuit hunts in Greenland were large-scale commercial operations that were similar to the Canadian and Norwegian commercial hunts covered by the rule. In addition, the exception for MRM hunts was rejected because the EU did not apply the exception in an even-handed way as compared to Canadian and Norwegian hunts. (See 7.650).
Several points are worthy of emphasis. First, the WTO has embraced moral pluralism. This includes what Rob Howse and Joanna Langille describe in this YJIL article as “noninstrumental moral beliefs” grounded in philosophical or religious beliefs. Islamic countries may ban alcohol, Hindu countries may ban bovine meat, and Israel may ban non-kosher meat. Not because there is anything inherently harmful about those products, but simply because they violate the public ethic of that community. As Howse and Langille put it, “public morals” may be justified either as “instrumental regulation designed to counter certain social ills, or as expressive regulation designed to express or give force to intrinsic moral intuitions or shared values.” The fact that there is not universal concern for seal welfare, or that Canada and Norway do not share EU’s concerns, is irrelevant for WTO purposes.
Second, the public moral concerns may derive from conduct that is wholly extraterritorial to the Member State. Under this reasoning, a Member State should be free to impose a ban on products that destroy the rainforest in the Amazon, harm child laborers at rubber plantations in Africa, or advance blatant government corruption in Asia. Personally, that makes sense to me in light of the prison labor exception (Art. XX(e)) included in the original GATT 1948 to address extraterritorial evils such as products manufactured in concentration camps and gulags. But it is nonetheless a controversial proposition.
Third, satisfying a WTO panel that a matter is of ethical concern requires little more than the sponsor of the legislation making sure to include appropriate language in the preamble of the draft regulation and raising moral concerns on the floor of the legislature. The test is easily met in the hands of a skillful legislator. The indeterminacy of establishing a genuine moral or ethical public concern regarding a particular practice is fraught with uncertainty.
Fourth, determining whether a restriction is “necessary” to protect public morals requires the WTO panel to determine the efficacy of a means in pursuit of an intangible goal. How does one determine whether a trade ban is necessary to further moral objections to inhumane hunting? The WTO panel indicated that as long as the trade restriction materially contributed to the objective of reducing demand and avoiding exposure, it satisfied the “necessity” requirement. (7.636-7637).
Fifth, the public morals exception may become the new battleground for WTO litigation. Rather than consistently ignoring this exception and rushing to litigate Article XX(b) (protection of human, animal, or plant health or life) or Article XX(g) (protection of exhaustible natural resources), the new litigation strategy may be to identify how a trade restriction advances ethical concerns of the Member State. In the future, we may see IP piracy restrictions justified as a reflection of public concern about the morality of stealing, a carbon tax implemented out of moral concerns for the ethics of sustainable development, and restrictions on any number of Chinese products justified out of concern that Chinese workers are subjected to a mandatory one-child-per-family policy implemented through forced abortions. After EU–Seal Products the public morals argument is open for creative interpretation.
To be clear, I support a liberal reliance on public ethics to justify legitimate trade restrictions. But the difficulty is how to cabin the morality exception to avoid abuse. EU–Seal Products is now before the WTO Appellate Body for review and clarification.