Issues in International Trade Law: Restricting Exports of Electronic Waste

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Issues in International Trade Law:

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Issues in International Trade Law: Restricting Exports of Electronic Waste

Summary

Electronic waste (e-waste) is a term that loosely refers to obsolete, broken, or irreparable

electronic devices like televisions, computer central processing units (CPUs), computer monitors,

laptops, printers, scanners, and associated wiring. Because e-waste is generated in high volumes

in the United States and contains hazardous materials like lead, mercury, and chromium, it is a

growing area of domestic concern. Currently, e-waste is essentially unregulated at the federal

level and can be disposed of with common household garbage in municipal solid waste landfills

or incinerators. However, the international trade in e-waste is subject to the international

agreements governing the hazardous waste trade. The United States is a party to several of these

agreements, but it is not a party to the largest multilateral agreement in this field: the Basel

Convention.

Although it is difficult to know exactly how much e-waste is exported from the United States,

developing countries in Asia or Africa appear to be active importers of it. Many of these countries

lack, or do not enforce, labor or environmental laws that would mitigate or prevent the harms to

human and environmental health that are associated with e-waste processing. The result is that

some overseas e-waste recycling operations may pose a significant risk to human and

environmental well-being.

Recently, momentum has developed for domestic legislation restricting U.S. e-waste exports.

These restrictions could take many forms, including a partial or total ban on e-waste exports, an

e-waste export licensing system, or a quota on e-waste exports. However, these restrictions may

be difficult to reconcile with the General Agreement on Tariffs and Trade (GATT), one of the

World Trade Organization (WTO) Agreements, and could be susceptible to challenge before a

WTO panel.

In particular, e-waste export restrictions may be deemed inconsistent with Articles XI:1, XIII:1,

and I:1 of the GATT. If declared a violation of the GATT, e-waste export restrictions could be

justified under Article XX of the GATT if they (1) fit under one of the exceptions listed in

paragraphs (a) to (j) of Article XX of the GATT and (2) satisfy the requirements imposed by the

Article XX chapeau. It would be difficult, however, for U.S. export restrictions on e-waste to

meet this standard for justification if they are imposed without serious U.S. engagement in

international negotiations on the hazardous waste trade or without the concurrent operation of

comparable restrictions on domestic e-waste production.

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Contents

Introduction...................................................................................................................................... 1

International Agreements on Hazardous Waste ............................................................................... 1

The General Agreement on Tariffs and Trade .................................................................................. 3

Article XI ................................................................................................................................... 4

Imposing a Ban on E-Waste Exports ................................................................................... 4

Imposing a Licensing System on E-Waste Exports ............................................................. 5

Article XIII ................................................................................................................................ 7

Article I...................................................................................................................................... 7

Article XX ............................................................................................................................... 10

Extraterritorial Application of Article XX......................................................................... 11

Article XX(b) .................................................................................................................... 12

Article XX(g) .................................................................................................................... 13

Article XX Chapeau .......................................................................................................... 14

Conclusion ..................................................................................................................................... 17

Contacts

Author Contact Information........................................................................................................... 18

Acknowledgments ......................................................................................................................... 18

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Issues in International Trade Law: Restricting Exports of Electronic Waste

Introduction

Electronic waste (e-waste) is a term that refers loosely to obsolete, broken, or irreparable

electronic devices like televisions, computer central processing units (CPUs), computer monitors

(flat screen and cathode ray tubes), laptops, printers, scanners, and associated wiring. E-waste has

become a concern in the United States in part because of the high volumes in which it is

generated and the hazardous ingredients it often contains (such as lead, mercury, and chromium).

E-waste is essentially unregulated at the federal level—meaning it can be disposed of with

common household garbage in municipal solid waste landfills (the primary disposal method) or

incinerators.1 U.S. producers of e-waste may also opt to export it overseas for processing.

Although it is difficult to know exactly how much e-waste is exported, developing countries in

Asia or Africa appear to be active importers of it. Many of these countries lack, or do not enforce,

labor or environmental laws that would mitigate or prevent the harms associated with e-waste

processing. The result is that e-waste recycling operations in those countries may pose a

significant risk to human health and the environment. Environmental impacts reportedly include

contamination of the local soil, air, surface water, and groundwater.

Although the United States has been involved in international efforts aimed at regulating the

transboundary movements of hazardous waste for decades, it is not a party to the primary

multilateral agreement governing the international waste trade: the Basel Convention on the

Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel

Convention). This Convention forbids parties from exporting hazardous wastes to a party who has

not received notice of, and consented to, that export. It also requires parties to adopt domestic

policies aimed at reducing the production of hazardous waste. An amendment to that Convention,

which has not yet entered into force, would ban hazardous waste exports from “Annex VII”

parties—members of the OECD, European Union, and Liechtenstein—to other Convention

parties, which are primarily developing countries.

Recently, momentum has developed for domestic legislation restricting e-waste exports from the

United States. These restrictions could take many forms, including a ban akin to the one proposed

by the Ban Amendment to the Basel Convention, an e-waste export licensing system, or a quota

on e-waste exports. These restrictions may be difficult to reconcile with the General Agreement

on Tariffs and Trade (GATT), one of the World Trade Organization (WTO) Agreements, and

could be susceptible to challenge before a WTO panel.

International Agreements on Hazardous Waste

Since the 1980s, the United States has been a party to international agreements governing the

transboundary movements of hazardous wastes.2 These agreements, one among the member

countries of the Organization for Economic Cooperation and Development (OECD) and two

bilateral agreements with Canada and Mexico, condition hazardous waste exports on the

For a comprehensive overview of e-waste management in the United States and the harms associated with it overseas,

see CRS Report R40850, Managing Electronic Waste: Issues with Exporting E-Waste, by (name redacted).

ENVIRONMENTAL PROTECTION AGENCY, INTERNATIONAL TRADE IN HAZARDOUS WASTE: AN OVERVIEW (November

1998), http://www.epa.gov/compliance/resources/policies/civil/rcra/intnltrahazwas-rpt.pdf.

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notification of both exporting and destination countries and the destination country’s consent.3

However, these agreements cover a broader category of waste—all hazardous waste—than the

hazardous electronic waste commonly called e-waste.

Although the United States has engaged in some international efforts to regulate hazardous waste

exports, it is not a party to the primary multilateral agreement governing the international waste

trade: the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes

and Their Disposal (Basel Convention).4 Over 170 other countries are parties to the Basel

Convention, which was negotiated under the auspices of the United Nations Environment

Programme.5 The Basel Convention forbids parties from exporting hazardous wastes to any other

party who has not received notice of, and consented to, that export. Article 4 of the Basel

Convention imposes several other prohibitions and obligations on the parties, including, inter

alia:

•

a prohibition on the export of hazardous wastes to (or importing hazardous

wastes from) non-parties unless the exporting and importing countries have

entered into an international agreement with provisions on environmentally

sound waste management that are at least equivalent to those in the Convention;

•

an obligation to ensure that the generation of hazardous wastes within their

territories is reduced to a minimum;

•

a requirement to prohibit persons within their jurisdictions from transporting

hazardous wastes unless they are authorized to do so; and

•

an obligation to require that hazardous waste exports are managed in an

environmentally sound manner in the state of import.

In addition, in 1995, Basel Convention parties adopted an amendment to the Convention to

impose an absolute ban on hazardous waste export from “Annex VII” parties—members of the

OECD, European Union, and Liechtenstein—to other Convention parties, which are primarily

OECD Council Decision on the Control of Transboundary Movements of Wastes Destined for Recovery Operations,

March 30, 1992, T.I.A.S. No. 11880; Agreement Concerning the Transboundary Movement of Hazardous Waste, U.S.Can., October 28, 1986, T.I.A.S. No. 11099 (entered into force November 8, 1986); Agreement of Cooperation

Regarding the Transboundary Shipments of Hazardous Wastes and Hazardous Substances, U.S.-Mex., November 12,

1986, T.I.A.S. No. 11269 (entered into force January 29, 1987). The United States is also a party to two bilateral

agreements with Malaysia and Costa Rica, both of which govern the export of hazardous waste from those countries

into the United States. Agreement Concerning the Transboundary Movement of Hazardous Waste, U.S.-Malay., March

10, 1995, T.I.A.S. No. 12612; Agreement Concerning the Transboundary Movement of Hazardous Wastes from Costa

Rica to the United States, U.S.-Costa Rica, November 17, 1997.

March 22, 1989, KAV 2634 (entered into force May 5, 1992), available at http://basel.int/text/17Jun2010-conv-e.pdf.

For more information on the Basel Convention, visit http://basel.int/index.html. Notably, in the 1990s, the United

States took some steps towards becoming a party to the Convention: it signed the Convention on March 3, 1990 and the

U.S. Senate provided its advice and consent to ratification in 1992. 138 CONG. REC. 22,860-61 (August 11, 1992). For

information on the procedures a country must follow in order to become a party to the Convention, see

http://www.basel.int/Procedures/BecomingaParty/tabid/1280/Default.aspx.

A list of parties and the status of ratifications is available here: http://www.basel.int/Countries/StatusofRatifications/

PartiesSignatories/tabid/1290/Default.aspx.

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developing countries.6 Although some parties implemented the ban domestically, the “Ban

Amendment” has not entered into force.7

The General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade (GATT) is one of the foundational agreements of the

WTO’s legal regime. At its most general, the GATT sets the maximum tariffs for particular goods

and disciplines certain trade-restricting measures adopted by WTO Members.8 Among the

GATT’s cornerstone provisions are Article XI, which prohibits quantitative prohibitions or

restrictions on the exportation of goods to any other Member country, and Article I, which bans

measures that grant less favorable treatment to the products of one WTO Member country than to

the like products of any other country.

The WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)

provides a means for WTO Members to resolve disputes arising under WTO agreements.9 WTO

Members must first attempt to settle their dispute through consultations, but, if these fail, the

Member initiating the dispute may request that a panel examine and report on its complaint. In

addition, a Member may appeal a panel’s report to the WTO Appellate Body. Members whose

measures are deemed inconsistent with its WTO obligations and unjustified under one of the

GATT exceptions, such as those in Article XX, are expected to implement the panel and/or

Appellate Body’s report. That is, the defending Member must withdraw, modify, or replace its

inconsistent measures. If a disagreement arises as to whether the defending Member has, in fact,

implemented the report, a WTO panel may be convened to hear the dispute over compliance. The

WTO Appellate Body hears appeals of these compliance panel reports.

Ultimately, when a defending Member fails to implement a panel or Appellate Body report within

the established compliance period, the prevailing Member may request that the defending

Member negotiate a compensation agreement. If these negotiations are not requested or if an

agreement is not reached, the prevailing Member may also request authorization to impose certain

trade sanctions against the non-complying Member. Specifically, the WTO may authorize the

Decision III/1 Amendment to the Basel Convention (Third meeting of the Conference of the Parties) (1995), available

at http://basel.int/meetings/cop/cop1-4/cop3decisions_e.pdf.

SECRETARIAT OF THE BASEL CONVENTION, THE BASEL CONVENTION BAN AMENDMENT, http://basel.int/pub/

baselban.html; Daniel Pruzin, Basel Convention Will Consider Plan to Ban Hazardous Waste Shipments, DAILY

REPORT FOR EXECUTIVES (October 6, 2011). Under the so-called CLI decision (the Country Led Initiative to Improve

the Effectiveness of the Basel Convention), the Ban Amendment will enter into force once it is ratified by three-fourths

of the parties that were Convention parties at the time of the Amendment’s adoption. SECRETARIAT OF THE BASEL

CONVENTION, HISTORIC AGREEMENT ENDS 15 YEAR DEADLOCK OVER BANNING NORTH-SOUTH MOVEMENTS OF

HAZARDOUS WASTE (October 25, 2011); Daniel Pruzin, Basel Convention Agrees on Implementation of Proposed

Hazardous Waste Shipment Ban, DAILY REPORT FOR EXECUTIVES (October 24, 2011). As of January 2012, 17 more

ratifications were reportedly required for the Ban Amendment to take effect. Daniel Pruzin, Hazardous Waste Shipment

Restrictions, Reorganization Top Treaty Agendas, DAILY REPORT FOR EXECUTIVES (January 13, 2012). The CLI

decision also established a framework under which countries who wish to participate in the international waste trade

could take steps to minimize its health and environmental impacts. The text of the CLI proposal is available at

http://archive.basel.int/meetings/cop/cop10/documents/05e.pdf.

There are over 150 countries in the World Trade Organization. For an up to date list, see http://www.wto.org/english/

thewto_e/whatis_e/tif_e/org6_e.htm.

For a more detailed overview of the WTO dispute settlement process, see CRS Report RS20088, Dispute Settlement

in the World Trade Organization (WTO): An Overview, by (name redacted).

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prevailing Member to suspend tariff concessions or other trade obligations that it otherwise owes

the non-complying Member under a WTO agreement.

Article XI

Article XI:1 of the GATT bars the institution or maintenance of quantitative restrictions on

exports to, and imports from, any WTO Member’s territory. Quantitative restrictions limit the

amount of a product that may be imported or exported. Common examples are embargoes,

quotas, minimum import or export prices, and certain import or export licensing requirements.

Only duties, taxes, and other charges are Article XI:1 consistent methods of restricting imports or

exports.

Article XI:1’s constraints apply to a broad range of government actions (all “measures”)—

including those, like government agency practices, that are not required by a law or regulation.10

Article XI prohibits WTO Members from taking these actions if they impose or have the effect of

a quantitative restriction.11 Moreover, a measure that expressly institutes an import or export ban

constitutes a quantitative restriction within the meaning of Article XI:1 regardless of whether it

has, in practice, impeded imports or exports.12 Because the GATT protects both existing and

future trade flows, a measure that would, by its terms, preclude certain potential exports is

inconsistent with Article XI:1.13

To date, only a few WTO panels have considered export restrictions under Article XI:1. However,

measures that ban or impose a licensing system on e-waste exports could constitute export

restrictions prohibited by Article XI:1.

Imposing a Ban on E-Waste Exports

As discussed above, any government action that expressly precludes the importation or

exportation of certain goods constitutes a quantitative restriction per se and is necessarily

See PETER VAN DEN BOSSCHE, THE LAW AND POLICY OF THE WORLD TRADE ORGANIZATION 448 (2d ed. 2008). For

example, in Japan – Semiconductors, a GATT panel found that export licensing practices leading to delays of up to

three months in the issuing of licenses for semi-conductors were inconsistent with Article XI:1. Report of the Panel,

Japan – Trade in Semi-Conductors (May 4, 1988) GATT B.I.S.D. (35th Supp.), 31 at ¶ 118.

See Van Den Bossche, supra footnote 10, at 448-49. Measures that, as applied, discourage and reduce exports of a

particular product constitute de facto quantitative prohibition and are also inconsistent with Article XI:1 of the GATT.

See Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and the Import of Finished Leather,

paras. 11.17, 11.20-11.21, WT/DS155/R (December 19, 2000). In one case to consider the de facto consistency of a

measure affecting exports, Argentina – Bovine Hides, the WTO panel ultimately found that the complainant had failed

to allege sufficient facts to prove “clearly and convincingly” that the measures at issue caused the “unusually low”

levels of exports of hides. Id. at ¶ 11.50. However, more recently, in Brazil – Tyres, a measure imposing fines on the

marketing, transportation, and, inter alia, storage of imported retreaded tires was found to have “the effect of”

penalizing the act of importing these tires, and, therefore, deemed inconsistent with Article XI:1. Panel Report, Brazil –

Measures Affecting Imports of Used Tyres, ¶ 7.372, WT/DS332/R (June 12, 2007).

See Report of the Panel, EC – Payments and Subsidies Paid to Processors and Producers of Oilseeds (January 25,

1990) GATT B.I.S.D. (37th Supp.), 36 at ¶ 150 (“An import quota constitutes an import restriction within the meaning

of Article XI:1 whether or not it actually impeded imports.”).

See id. See also Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, paras. 7.326 -7.330,

WT/DS366/R (April 27, 2009) (indicating that a Member has standing to enforce a provision of the GATT even if the

measure being challenged does not, at the time the dispute is heard, restrict existing trade flows between the

complaining and defending Members).

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inconsistent with the GATT. Although there are few GATT or WTO panel decisions on export

bans, as discussed below, panels have consistently found that import bans implemented through

compulsory licensing systems violate Article XI. This jurisprudence can be expected to inform

any WTO panel decision on the GATT consistency of export bans and licensing.14

Brazil – Tyres15 is one example of a WTO panel decision striking down an import ban

implemented through a licensing system. In that case, the European Union challenged the GATT

consistency of a set of Brazilian laws designed to limit imports of certain products—retreaded

tires—that Brazil believed had a negative environmental impact. Specifically, Brazil had adopted

a licensing system under which a person could only import retreaded tires after obtaining a

license, but a person would be ineligible for this license when the retreaded tire imports

originated in a non-MERCOSUR country. 16 Although the panel acknowledged that Brazil did not

explicitly prohibit retreaded tire imports from non-MERCOSUR countries, it found that because

no person could obtain the license required to import these goods, the licensing measure plainly

“operate[d] so as to prohibit” their importation. The panel therefore held that the measure

constituted an import ban barred by Article XI:1 of the GATT.17

In another dispute over a licensing system, India – Quantitative Restrictions,18 a WTO panel

struck down a measure under which both exporters sending specified goods to India and

importers bringing specified goods into India were required to obtain a license. 19 The measure

established license eligibility criteria that distinguished between importers on the basis of their

reasons for importing the covered goods. An importer was ineligible for a license if it was

importing the goods for resale, but an entity importing the goods for its own direct use was

eligible for the compulsory license.20 The panel found that a licensing system based on this

distinction was inconsistent with Article XI:1 because it limited the amount of covered imports by

precluding some entities from importing those goods at all.21

Imposing a Licensing System on E-Waste Exports

A government action that operates as “any form of limitation... on, or in relation to” imports or

exports is prohibited by Article XI:1.22 Whether a measure meets this standard is assessed by its

See Report of the Panel, Japan – Trade in Semi-Conductors, supra footnote 10, at ¶ 118 (“The standard applicable to

import licenses should, by analogy, be applied also to export licenses ... ”); Wen-Chen Shih, Energy Security,

GATT/WTO, and Regional Agreements, 49 NAT. RES. J. 433, 451 (2009) (stating that there are indications that “the

jurisprudence concerning quantitative restrictions on import in the interpretation and application of Article XI:1 also

applies to exports.”).

Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/R (June 12, 2007).

See id. at paras. 2.8, 7.7. Often referred to as a “trade bloc,” MERCOSUR, or the Common Market of the South, is a

cooperative economic and political framework established by Brazil, Argentina, Uruguay, and Paraguay. For more

background on MERCOSUR, see CRS Report RL33620, Mercosur: Evolution and Implications for U.S. Trade Policy,

by (name redacted).

Id. at ¶ 7.14.

Panel Report, India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products,

WT/DS90/R (April 6, 1999).

Id. at paras. 5.139, 5.142.

Id. at ¶ 5.142.

Id. The panel wrote that this precluded the distribution of the affected imports to consumers unable to import the

products for direct use. Id.

See Panel Report, Brazil – Tyres, supra footnote 15, at ¶ 7.371 (quoting Panel Report, India – Measures Affecting the

(continued...)

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design and “its potential to adversely affect” exportation.23 WTO panels have consistently

described “discretionary” or “non-automatic” licensing requirements as falling within this

category of prohibited quantitative restrictions.24 As a result, a system under which the licensing

authority has universally granted licenses to applicants who satisfy the prerequisites may still

violate Article XI:1 if those prerequisites give the licensing authority unfettered discretion to deny

a license.25

The WTO panel decision in China – Raw Materials,26 suggests that a measure could be

inconsistent with Article XI:1 if it, or its implementing regulations, prescribe vague or

unspecified criteria for granting licenses. In that case, a WTO panel assessed the GATT

consistency of China’s export licensing system for certain raw materials (bauxite, fluorspar, etc.)

and rejected China’s argument that the licensing system was “automatic” because no qualified

applicant had been denied a license.27 Instead, the panel found that some of the criteria for a

license were worded so vaguely as to be “unspecified,” which endowed the Chinese licensing

authorities with unfettered discretion to deny a license.28 The panel singled out one qualification

in particular: the requirement that the license application be “complete and accurate.” The panel

wrote that rather than specifying how an application could meet this qualification, the law

authorized the licensing agencies to require applicants to submit unspecified “documents of

approval” and “other materials.”29 As a result, it was impossible, in the panel’s view, for an

applicant to know what documents would be necessary to qualify for a license.30 This uncertainty

would, the panel reasoned, discourage some exporters from seeking export licenses at all and, in

doing so, cause an overall reduction in exports of raw materials.31 The panel therefore ruled that,

by giving its licensing authorities the flexibility to require documents not expressly enumerated in

the law, China had created a discretionary licensing system that restrained exports of raw

materials in violation of Article XI:1 of the GATT.32 In the United States, presumably, principles

of constitutional due process forbid an agency from basing e-waste export licensing decisions on

vague and unspecified criteria. However, it is unclear after the panel’s decision in China – Raw

Materials whether export license criteria that is sufficiently specific for the purposes of

constitutional due process necessarily avoids creating the limiting effect of uncertainty for

exporters hoping to obtain a license.

(...continued)

Automotive Sector, ¶ 7.265, WT/DS146/R (December 21, 2001)). See e.g., Panel Report, China – Measures Related to

the Exportation of Various Raw Materials, ¶ 7.894, WT/DS394/R (July 5, 2011); Panel Report, Colombia – Ports of

Entry, supra footnote 13, at ¶ 7.240; Panel Report, India – Quantitative Restrictions, supra footnote 18, at ¶ 3.11; Panel

Report, Argentina – Bovine Hides, supra footnote 11, at ¶ 11.33 (describing a quantitative restriction as a measure

having an “inherent ‘chilling effect’ on the exporter”).

Panel Report, Colombia – Ports of Entry, supra footnote 13, at ¶ 7.240.

See, e.g., Panel Report, India – Quantitative Restrictions, supra footnote 18, at paras. 5.129, 5.130.

See, e.g., Panel Report, China – Raw Materials, supra footnote 22, at ¶ 7.917.

Panel Report, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/R (July 5, 2011).

Id. at paras. 7.902, 7.917.

See id. at ¶ 7.921.

Id. at paras. 7.945, 7.946.

Id.

Panel Report, China – Raw Materials, supra footnote 26, at ¶ 7.921. “The possibility to deny the license” would, in

this scenario, be “ever present” because “the conditions for granting it are subject to the demands of the particular

licensing authority.” Id. at paras. 7.921, 7.948.

Id. at ¶ 7.948.

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Furthermore, an export licensing system can have a limiting effect in other ways besides creating

uncertainty about the likelihood that a license will be granted. In at least one case, Japan – SemiConductors,33 a GATT panel held that a lengthy license approval process also has a limiting effect

on exportation in violation of Article XI:1. In that case, the panel held that three-month delays in

an agency’s export licensing process restrained exports even though the delays did not result from

any “mandatory” law, regulation, or requirement.34 Japan had required exporters to obtain

licenses before exporting certain quantities of semi-conductors, and, after several years, lowered

the threshold level of semi-conductors that could be shipped without a license.35 As a result of this

change in policy, the number of license applications almost doubled. The licensing agency found

itself unprepared for the sudden increase of applications, and, due to the back-up, applications

often could not be processed for several months.36 The panel held that the practices resulting in

the three-month delays in licensing had a limiting effect on exportation and were, therefore, de

facto quantitative restrictions prohibited by Article XI:1.37 It is possible that the combination of

new budgetary restrictions and the imposition of an export licensing system could cause very

similar delays in the licensing process to the ones deemed inconsistent with Article XI in Japan –

Semi-Conductors.

Article XIII

In addition to violating Article XI, e-waste export restrictions may also violate Article XIII of the

GATT. Article XIII prescribes rules on the administration of quantitative restrictions. Specifically,

it requires Members to administer quantitative restrictions that are otherwise authorized under the

GATT—which a measure would be if it was, for example, justified under Article XX of the

GATT—in a non-discriminatory manner. A WTO panel would strike down an export ban or

licensing system under Article XIII if it does not conform with the principle, discussed in the

following paragraphs, of most favored nation treatment.38 However, in the name of judicial

economy, WTO panels that identify violations of Article XI:1 that are not justified by Article XX

generally decline to examine the measure’s consistency with Article XIII.39

Article I

Article I, also known as the general “most favored nation” (MFN) provision, states that “any

advantage, favor, privilege or immunity granted by a [WTO Member] to any product originating

in or destined for any other country shall be accorded immediately and unconditionally to the like

product originating in or destined for the territories of all other [WTO Members].”40

Report of the Panel, Japan – Trade in Semi-Conductors (May 4, 1988) GATT B.I.S.D. (35th Supp.), 31.

Id. at paras. 108-109, 118.

Id. at ¶ 22.

Id.

See id. at ¶ 118.

Under Article XIII:1, WTO Members may not apply quantitative import prohibitions or restrictions unless the

importation of like products of all third countries is similarly prohibited or restricted. GATT, Art. XIII:1.

E.g., Report of the Panel, India – Quantitative Restrictions, supra footnote 18, at ¶ 5.17; Panel Report, U.S. – Import

Prohibition of Certain Shrimp and Shrimp Products, ¶ 7.22, WT/DS58/R (May 15, 1998).

GATT, Art. I:1.

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Unlike Article XI, which applies to any government action, Article I of the GATT applies only to

specified categories of government measures, including “all rules and formalities in connection

with importation and exportation.”41 This is, however, a broad category.42 WTO panels have

interpreted the phrase “in connection with importation” to encompass measures that both directly

relate to the process of importation and those that might only have an impact on importation.43

Moreover, the panel in U.S. – Poultry held that a prerequisite for importation is a rule or formality

in connection with importation under Article I:1.44 This suggests that a measure that imposes a

prerequisite—licensing—on exportation must accord MFN treatment to goods from WTO

Members.

A measure covered by Article I:1 violates the MFN principle if it:

1. confers any trade “advantage;”

2. affects “like” products; and

3. fails to accord that advantage “immediately and unconditionally” to those

products.45

The term “advantage” in Article I:1 has been given a very broad definition to encompass any

more favorable competitive opportunity or commercial status relative to those of like products

destined to different WTO Members.46 It can include, for example, variations in both the

procedural and administrative requirements for imports.47 As a result, variations in the licensing

requirements for imports can constitute an advantage under Article I:1.48 In EC – Bananas III,49

for example, a WTO panel ruled that the European Union had accorded an origin-discriminatory

advantage to the products of some WTO Members by imposing additional licensing requirements

The other specified categories of government measures are: “customs duties and charges of any kind imposed on or

in connection with importation or exportation or imposed on the international transfer of payments for imports or

exports, and with respect to the method of levying such duties and charges... and with respect to all matters referred to

in paragraphs 2 and 4 of Article III.” GATT, Art. I:1. For reference, Article III:2 of the GATT covers internal taxes or

other internal charges, and Article III:4 governs all laws, regulations, and requirements affecting the internal sale,

offering for sale, purchase, transportation, distribution, or use of a product.

Panel Report, U.S. – Certain Measures Affecting Imports of Poultry from China, ¶ 7.407, WT/DS392/R (September

23, 2010).

Id. at ¶ 7.410 (citing Panel Report, India – Measures Affecting the Automotive Sectors, ¶ 7.257, WT/DS146/R

(December 21, 2001)).

Id. at paras. 7.409 – 7.410.

Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, ¶ 14.138 (July 2,

1998).

Panel Report, EC – Regime for the Importation, Sale, and Distribution of Bananas, WT/DS27/R/GTM, ¶ 7.239 (May

22, 1997); Panel Report, Colombia – Ports of Entry, supra footnote 13, at ¶ 7.341. In Colombia – Ports of Entry, the

panel wrote that a measure also gives rise to an Article I:1 “advantage” when it gives an operator the opportunity to

“choose how to operate his business in order to enhance his profitability and competitiveness.” Id. at ¶ 7.351.

See Report of the Panel, EC – Regime for the Importation, Sale, and Distribution of Bananas, WT/DS27/R/USA,

paras. 7.193, 7.194 (May 22, 1997).

See id. In EC – Bananas III, the Appellate Body affirmed a WTO panel report ruling that the European Union’s

import licensing procedures for bananas were inconsistent with Article I:1 of the GATT because they imposed

heightened requirements for banana importers from some WTO Members but not all. Appellate Body Report, EC –

Regime for the Importation, Sale, and Distribution of Bananas, ¶ 206, WT/DS27/AB/R (September 9, 1997).

Panel Report, EC – Regime for the Importation, Sale, and Distribution of Bananas, WT/DS27/R/USA (May 22,

1997).

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on imports from other WTO Members.50 Notably, a measure may be deemed to accord an

advantage even if it is written in origin neutral terms.51

Similarly, two products may be deemed “like” under Article I:1 even if they are subject to

different tariff classifications or, for other reasons, are not exact duplicates.52 WTO panels and the

Appellate Body assess the “likeness” of two products by examining their characteristics, their

end-uses, their tariff classification, and consumers’ tastes and habits.53 Where a complaining

Member demonstrates that the difference in treatment between imported products is based

exclusively on the products’ different origins, a WTO panel will presume that there can or will be

discrimination between imported products that are “like.”54Although it is often difficult in other

cases to predict whether a given measure would affect “like” products from WTO Members, a

measure that affects a broad range of products may be likely to result in discrimination between at

least some “like” imports.

Once a measure is found to have conferred a trade advantage that affects “like” products,55 that

measure will be deemed inconsistent with Article I:1 if it fails to accord the advantage

“unconditionally.” WTO panels have adopted different interpretations of the term

“unconditionally,”56 but their decisions suggest that conditions may be attached to an advantage

only if they do not discriminate, either on their face or as applied, between “like” products on the

basis of their countries of origin or destination.57 For example, an advantage is not accorded

“unconditionally” if some countries have to do or pay something to receive it.58 Similarly, an

Id. at paras. 7.193, 7.194.

See Panel Report, Canada – Certain Measures Affecting the Automotive Industry, paras. 14.123, 14.147, 15.1(c),

WT/DS139/R (February 11, 2000).

Rex J. Zedalis, A Theory of GATT Like Product Common Language Cases, 27 VAND. J. TRANSNAT’L L. 33, 78-84

(1994). See MICHAEL TREBILOCK, UNDERSTANDING TRADE LAW 40-41 (2011). For example, whether a person could

obtain a license to export a used iPad would depend on its intended end-use—that is, whether the iPad was being

exported for reuse, as result of a recall, pursuant to a warranty, or for recycling. It is possible that a WTO panel would

find that these are not “like” products because their end-uses are different, and, therefore, that a measure discriminating

between them does not violate Article I. It may be more likely, however, that a WTO panel would find that the two

used iPads are “like” products because they have the exact same product characteristics, share the same tariff

classification, and are not distinguished from one another by their consumers.

Van den Bossche, supra footnote 10, at 330-31. See Report of the Panel, U.S. – Poultry, supra footnote 42, at ¶

7.425.

Report of the Panel, U.S. – Poultry, supra footnote 42, at paras. 7.427, 7.428; Report of the Panel, Colombia – Ports

of Entry, supra footnote 13, at paras. 7.356, 7.357.

For a definition of “like” products, see supra footnote 52.

Compare Panel Report, Canada – Autos, supra footnote 51, at paras. 10.23-10.25 (finding that measures are

inconsistent with Article I:1 “not because they involve the application of conditions that were not related to the

imported product but because they involve conditions that entailed different treatment of imported products upon their

origin”) and Panel Report, Colombia – Ports of Entry, supra footnote 13, at ¶ 7.362 (“In line with the approach

elaborated in the Canada – Autos dispute, the Panel considers that it may thus assess whether the advantage is

conferred ‘immediately and unconditionally’ based on whether an advantage... is not similarly accorded to those

products originating in Panama for reasons related to [their] origin or the conduct of Panama.”) with Panel Report, EC

– Conditions for the Granting of Tariff Preferences, ¶ 7.59, WT/DS246/R (December 1, 2003) (writing that the term

“unconditionally” in Article I:1 retains its “ordinary” meaning: “not limited by or subject to any conditions”).

See Panel Report, Colombia – Ports of Entry, supra footnote 13, at paras. 7.362- 7.366; Charles Benoit, Picking

Tariff Winners: Non-Product Related PPMS and DSB Interpretations of “Unconditionally” Within Article I:1, 42 GEO.

J. INT’L L. 583, 600 (2011) (writing that the panel decisions “favoring the flexible interpretations” of the term

“unconditionally” include the latest panel report—Colombia – Ports of Entry—and have “contained lengthier and more

in depth discussions of the meaning of Article I:1.”).

See Van den Bossche, supra footnote 10, at 332.

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advantage is not accorded “unconditionally” if some countries have to take a particular action,

such as adopt a specified policy, for exports to their territories to become eligible to receive it.59

Notably, a measure framed in origin neutral terms so as to appear facially consistent with Article

I:1 violates the MFN principle if it has a discriminatory impact on imports of like products from

some WTO Members relative to others.60 In Canada – Autos,61 for example, a WTO panel

examined a Canadian measure that exempted car imports from a customs duty if their

manufacturers satisfied certain requirements, including establishment in Canada and the use of

Canadian materials in production.62 The panel found that the duty exemption was an “advantage”

and that, although the exemption was origin neutral on its face, the structure and characteristics of

the global automotive industry meant that the criteria for the exemption created origin-based

discrimination among auto imports from WTO Members.63 The panel buttressed this finding with

the measure’s legislative history, which suggested that the exemption was part of a scheme

intended to rationalize production in the North American automotive market and encourage U.S.owned car manufacturers to expand their production operations to Canada.64 In other words, the

panel ruled that Canada’s import duty exemption was a de facto violation of Article I:1 because it

was designed to benefit auto imports from particular sources, namely those in the United States

and North America, and had the discriminatory effect it intended.65

Similarly, in Indonesia – Autos,66 a WTO panel found that an Indonesian measure exempting

certain cars from import duties and sales taxes was also inconsistent with Article I:1. In that case,

an import’s eligibility for the exemptions depended on facially origin neutral factors, such as the

domestic car company’s relationship with the foreign importer, the use of local content, and the

use of the imported car parts in the assembly in Indonesia of a domestic car.67 While these

criteria, like those in Canada – Autos, were framed in origin neutral terms, the panel found that in

practice only car imports from Korea could satisfy them.68 Therefore, the panel ruled that the tax

advantages, as applied, were accorded in a fashion that discriminated against products from WTO

Members on the basis of their origin.69

Article XX

If a measure is found to violate a GATT obligation, a Member may seek to justify it in a WTO

dispute by invoking one of the general exceptions set out in Article XX of the GATT. The

See id.

See Panel Report, Canada – Autos, supra footnote 51, at paras. 14.123, 14.147, 15.1(c); Trebilock, supra footnote

52, at 41.

Panel Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/R (February 11, 2000).

Id. at paras. 2.1, 2.2.

Id. at paras. 10.43-10.45. In particular, the panel found that the automotive industry relies heavily on “intra-firm

trade”—that is, the major automotive corporations in Canada only imported their own make of motor vehicles and

those of affiliated companies. Id. at paras. 10.43, 10.45.

Panel Report, Canada – Autos, supra footnote 61, at ¶ 10.49.

See id.

Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R (July 2, 1998).

Id. at paras. 14.145-14.146.

Id. at ¶ 14.145.

Id.

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defending Member has the burden, at that point, of proving that the measure both fits under one

of the exceptions listed in paragraphs (a) to (j) under Article XX and satisfies the requirements

imposed by Article XX’s opening clauses, which form its “chapeau.”70

Arguably, Article XX(b) may be the most viable provisional defense of a measure restricting ewaste exports. Article XX(b) justifies GATT-inconsistent measures “necessary to protect human,

animal, or plant life or health.” However, relative to the other Article XX sub-paragraphs, Article

XX(b) imposes a high standard—“necessity”—for provisional justification. It is also possible that

paragraph (g) of Article XX could be used to justify export restrictions on e-waste. Article XX(g)

authorizes the imposition of GATT-inconsistent measures “relating to the conservation of

exhaustible natural resources if such measures are made effective in conjunction with restrictions

on domestic production or consumption.”71 While it may be easier for a measure to “relate” to

conservation under Article XX(g) than for it to be “necessary” to protect human, animal, or plant

life or health under Article XX(b), Article XX(g) only applies to export restrictions when they

operate jointly with domestic restrictions.72

Extraterritorial Application of Article XX

Regardless of which Article XX sub-paragraph is most applicable, there is the possibility that

neither is appropriate for defending e-waste export restrictions if the objective of the restrictions

is to protect or conserve natural resources that are permanently inside another Member’s territory.

Neither Article XX(b) nor Article XX(d) state whether the objects of protection or conservation

must be located in the territory of the Member imposing the challenged measure, however, in an

unadopted report, a GATT panel held in Tuna II that policies aimed at the protection and

conservation of animals—dolphins—outside of the territory of the defending Member can fall

within the range of policies covered by Article XX(b).73 No case since the establishment of the

WTO has presented a panel with an opportunity to affirm, narrow, or reject the GATT panel’s

reasoning. Accordingly, if the GATT consistency of e-waste export restrictions reached a WTO

panel, a jurisdictional issue could arise over Article XX applicability to a measure that purports to

protect human and environmental health in countries where e-waste is managed in a potentially

hazardous fashion. In that scenario, the panel would need to clarify Article XX(b)’s territorial

reach to determine whether it is, in fact, available to provisionally justify measures necessary to

achieve extraterritorial effects. A panel could distinguish the objectives of the e-waste export

restrictions (which would presumably be aimed at preserving the lives and health of another

Member’s citizens and/or its soil, air, surface water, and groundwater) from the dolphins in Tuna

II, which move both between the territories of Member countries and within the high seas.74

Alternatively, a panel could find that air, soil, and water are, like dolphins, natural resources that

move between Members, pointing to the transboundary flow of air, water, and chemicals in the

soil. A third possibility is that a panel would hold that concerns about Members applying their

Appellate Body Report, U.S. – Standards for Reformulated and Conventional Gasoline, 22, WT/DS2/AB/R (April

29, 1996); Panel Report, China – Measures Related to the Exportation of Various Raw Materials, ¶ 7.359,

WT/DS394/R (July 5, 2011).

GATT, Art. XX(g) (emphasis added).

Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 20.

Panel Report, U.S. – Restrictions on Imports of Tuna, paras. 5.20, 5.33, DS29/R (June 16, 1994) (unadopted).

See id. at ¶ 5.17. The high seas are an area where Members can, to some extent, jointly exercise regulatory

autonomy. See id.

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environmental policies extraterritorially are addressed by the Article XX chapeau, which

disfavors unilateral and coercive policies, not the provisional Article XX defense.75

Article XX(b)

Article XX(b) states that it may be invoked for measures “necessary to protect human, animal or

plant life or health.” For a Member to make a prima facie case that a measure restricting e-waste

exports is provisionally justified under XX(b) it must show that (1) the measure’s policy objective

is the protection of human life or health; and (2) the measure is necessary to achieve this end.

Presumably, the objective of such a measure is the protection of the life and health of the people

who come into contact with the chemicals and gases released through e-waste recycling and

disposal, but a panel would examine whether the measure’s substance, design, architecture, and

structure support this assumption.76

Satisfying the second element of the test under Article XX(b)—necessity—is often more

problematic. WTO panels begin the necessity analysis by balancing “the relevant factors,

particularly the importance of the interests or values at stake, the extent of the contribution to the

achievement of the measure’s objective, and its trade restrictiveness.”77 In general, the more vital

or important the value being pursued, the more likely it is that the measure will be deemed

necessary to achieve the desired level of protection.78 A “necessary” measure need not be

indispensable, but it must be “apt to produce a material contribution to the achievement of its

objective.” 79 In other words, a measure providing only a “marginal or insignificant” contribution

is not “necessary” to achieve its goal.80 In addition, the required size of the contribution is often

larger for measures, such as import or export bans, that are particularly trade restrictive.81 As a

result, a panel considering the application of Article XX(b) to an e-waste export ban may require

Compare GATT Panel Report, U.S. – Restrictions on Imports of Tuna, paras. 5.27, 5.32 (September 3, 1991), GATT

B.I.S.D. (39th Supp.) (unadopted) (stating that if Articles XX(b) and (g) justified measures with extraterritorial

objectives, each Member “could unilaterally determine” the environmental policies of other Members) with Appellate

Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, paras. 171-172,

WT/DS58/AB/R (October 12, 1998) (finding that the “unilateral character” of a U.S. environmental measure that

restricted certain shrimp imports heightened both its discriminatory nature and its “unjustifiability” under the Article

XX chapeau).

See PETER VAN DEN BOSSCHE, THE LAW AND POLICY OF THE WORLD TRADE ORGANIZATION 622 (2d ed. 2008). See,

e.g., Panel Report, EC – Tariff Preferences for Developing Countries, paras. 7.180-7.210, WT/DS246/R (December 1,

2003) (finding that the policy of the challenged measure is sustainable development, not the protection of human life or

health, and therefore the measure cannot be justified under Article XX(b)); Panel Report, China – Raw Materials,

supra footnote 70, at paras. 7.507 - 7.512 (stating that the panel “needs persuasive evidence of a connection” between

the challenged measures and their asserted environmental goals and concluding that “neither the measures

implementing the export restrictions, nor the contemporaneous laws and regulations, convey in their texts that the

export restrictions are contributing to, or form part of, a comprehensive program for the fulfillment of its stated

environmental objective”).

Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, ¶ 178, WT/DS332/AB/R

(December 3, 2007).

Panel Report, China – Raw Materials, supra footnote 70, at ¶ 7.487. See Appellate Body Report, Korea – Measures

Affecting Imports of Fresh, Chilled and Frozen Beef, ¶ 162, WT/DS169/AB/R (December 11, 2000).

Appellate Body Report, Brazil – Tyres, supra footnote 77, at paras. 150-151.

Id.

Id. at ¶ 61 (stating that quantitative restrictions are “as trade –restrictive as can be”). See Panel Report, China – Raw

Materials, supra footnote 70, at paras. 7.487 - 7.488.

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the United States to establish that the ban takes a particularly substantial step towards realizing its

public health objective.82

If a Member makes a prima facie case that its measure is “necessary,” this initial finding may

ultimately be rejected if the panel finds that a less trade restrictive alternative was “reasonably

available.” 83 To qualify as a reasonably available alternative, a policy must, first, be a “genuine”

alternative—that is, it must be WTO-consistent and make an equivalent contribution to the

achievement of the challenged measure’s objective.84 Second, the alternative policy must be

feasible and not unduly burdensome for the defending Member.85 Alternative policies that are

merely “theoretical” or would impose prohibitive costs or substantial technical difficulties on the

responding Member are not reasonably available alternatives.86

Possible alternative policies to measures restricting e-waste exports could be, inter alia: increased

investments in e-waste recycling infrastructure; policies stimulating greater domestic demand for

e-waste; e-waste production restrictions; and the negotiation or participation in international

agreements that govern trade in e-waste.87 If these alternative policies were identified before a

WTO panel, the burden would shift to the defending Member to show that these policies would

not be either equally effective at realizing the objectives of the challenged export restrictions or

“reasonably available” due to their feasibility, cost, or technical requirements.

Article XX(g)

Article XX(g) provisionally justifies GATT-inconsistent measures “relating to the conservation of

exhaustible natural resources if such measures are made effective in conjunction with restrictions

on domestic production or consumption.”88 Article XX(g)’s “relating to” standard is easier for a

measure to satisfy than the “necessity” standard required under Article XX(b), but Article XX(g)

only applies to export restrictions when they operate jointly with domestic restrictions.89

A measure “relating to” the conservation of an “exhaustible natural resource” is a measure

“primarily aimed” at the conservation of a natural resource, either living or non-living.90 A

Appellate Body Report, Brazil – Tyres, supra footnote 77, at ¶ 210.

Id. at ¶ 156.

Id.

Id. (quoting Appellate Body Report, U.S. – Measures Affecting the Cross-Border Supply of Gambling and Betting

Services, paras. 308, 311, WT/DS285/AB/R (April 7, 2005)).

See, e.g., Panel Report, China – Raw Materials, supra footnote 70, at paras. 7.578 – 7.590 (finding that increased

investments in scrap recycling infrastructure, policies stimulating local demand for scrap, and production restrictions

were all “reasonably available” less trade restrictive alternatives to China’s export restrictions on certain raw materials).

See also Appellate Body Report, U.S. – Shrimp, supra footnote 75, ¶ 170 (reasoning that, because the United States had

signed an international agreement establishing mechanisms for conserving sea turtles affected by shrimping,

“consensual and multilateral procedures are available and feasible” to achieve the same objectives as the challenged

measure); Appellate Body Report, U.S. – Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to

Article 21.5 of the DSU by Malaysia, ¶ 128, WT/DS58/AB/R (October 22, 2001) (stating that the Inter-American

Convention was evidence that an alternative course of action based on cooperation and consensus was reasonably

available).

GATT, Art. XX(g) (emphasis added).

Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 20.

Id. at 18; Appellate Body Report, U.S. – Shrimp, supra footnote 75, at ¶ 128.

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measure generally meets this test if it is not overly broad—that is, if its general structure and

design have a “close and genuine relationship” with the asserted policy goal.91 In addition, to fit

under Article XX(g), an export restraining measure must be “made effective in conjunction” with

measures that restrain domestic production or consumption. The Appellate Body has interpreted

this language as requiring “evenhandedness” in the imposition of restrictions on goods in

international trade and domestic products.92 A measure’s export restraints, in other words, must

coexist with domestic restrictions affecting the same good, and, although these two sets of

restrictions need not be identical in form or effect, the burdens they impose on exports and

domestic goods respectively should be comparable.93 This jurisprudence illustrates that a GATT

inconsistent measure related to conservation is not justified under Article XX(g) without the

concurrent operation of restrictions on domestic production or consumption.94

Article XX Chapeau

If a measure is provisionally justified under Article XX(b) or Article XX(g), it must also satisfy

the Article XX chapeau, which is generally viewed as a more difficult task.95 The chapeau states

that a measure covered by Article XX must be neither “a disguised restriction on international

trade” nor “applied in a manner which would constitute a means of arbitrary or unjustifiable

discrimination between countries where the same conditions prevail.”96 The chapeau strikes a

balance between Article XX’s two purposes: the protection of Members’ sovereign authority to

pursue certain policy goals and the protection of Members’ rights under the GATT’s substantive

provisions.97 A measure’s consistency with the Article XX chapeau is, therefore, highly fact

dependent .98 Ultimately, a measure satisfies the chapeau only if (1) it is not a “disguised

restriction” on trade; and (2) there is “a legitimate cause or rationale in light of the [Article XX]

objectives” for the discrimination it causes.99

Relatively few panel or Appellate Body reports have articulated the standards for determining that

a measure is a disguised restriction on international trade. Ostensibly, this analysis involves a

heightened analysis of the intent behind the measure’s application to discern whether the

defending Member’s true motive was protectionism. 100 Because the intent behind a measure

Appellate Body Report, China – Measures Related to the Exportation of Various Raw Materials, ¶ 355,

WT/DS394/AB/R (January 30, 2012); Appellate Body Report, U.S. – Shrimp, supra footnote 75, ¶ 136; Van den

Bossche, supra footnote 76, at 637.

Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 20-21; Van den Bossche, supra footnote 76, at 637..

See Van den Bossche, supra footnote 76, at 638. However, it is unclear whether a measure that fails to accord

evenhanded treatment to domestic and imported goods would be considered “primarily aimed” at conservation. See

Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 21-22.

See Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 21; Van den Bossche, supra footnote 76, at 638.

Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 22-23.

GATT, Art. XX.

See Appellate Body Report, United States – Shrimp, supra footnote 75, at paras. 158-159.

Id.

Appellate Body Report, Brazil – Tyres, supra footnote 77, at ¶ 225; Appellate Body Report, U.S. – Gasoline, supra

footnote 70, at 23-24.

100

See Van den Bossche, supra footnote 76, at 650. In addition, the term “restriction” has been construed broadly to

encompass both restrictions on international trade and discrimination in international trade. See Panel Report, European

Communities – Measures Affecting Asbestos and Asbestos-Containing Products, ¶ 8.235, WT/DS135/R (September 18,

2000) (citing Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 25).

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“may not be easily ascertained,” panels may scrutinize the “design, architecture, and revealing

structure” for signs of knowing or willful “protective application.”101 A WTO panel may also

consider the extent to which the measure’s application has a discriminatory effect, such as

benefiting a domestic industry to the detriment of a foreign one.102 Given the rudimentary nature

of WTO jurisprudence in this area, it can be difficult to predict whether a given measure would be

indefensible under Article XX because its application constituted a disguised restriction on trade.

In contrast to the jurisprudence on “disguised restrictions,” a host of WTO panels and Appellate

Body reports have declared measures inconsistent with the Article XX chapeau because their

application constituted arbitrary or unjustifiable discrimination. These decisions express a strong

preference for measures applied after international negotiations or pursuant to an international

agreement.103 The seeming corollary of this preference, moreover, is the distaste that panels and

the Appellate Body have shown for measures with a unilateral or coercive character.104 As

discussed below, these preferences are expressed both in the Appellate Body’s interpretation of

the term “discrimination” and its interpretation of the phrase “arbitrary or unjustifiable.”

According to the Appellate Body, “discrimination,” for the purposes of the Article XX chapeau,

occurs when a measure is applied without regard for the similarity of—or differences between—

the conditions in either the importing and exporting countries or two importing countries.105 In

other words, both the differential treatment of countries in which the same conditions prevail and

the uniform treatment of countries where different conditions prevail constitute discrimination.106

Once a measure’s application is deemed discriminatory, a WTO panel will assess the nature of the

discrimination to determine whether it is “arbitrary or unjustifiable.” This analysis depends on

whether the discrimination has “a legitimate cause or rationale in light of the [Article XX]

objectives,”107 and often requires an assessment of the actions, if any, that the defending Member

took to prevent foreseeable discrimination.108 As a result, a measure’s discriminatory application

may be “unjustifiable” if the defending Member failed to undertake “serious, good faith efforts”

to engage in international negotiations to prevent discrimination.

In U.S. – Gasoline,109 for example, the Appellate Body found that a regulation prescribing the

methods for measuring compliance with the Clean Air Act’s gasoline standards did not satisfy the

requirements of the Article XX chapeau. The “Gasoline Rule” required the EPA to measure

foreign refiners’ compliance with these standards against a single statutory baseline even though

U.S. firms’ compliance could be measured via more favorable individual baselines. The Appellate

101

Panel Report, EC – Asbestos, supra footnote 100, at ¶ 8.236.

See, e.g., id. at paras. 8.237 - 8.239.

103

See Appellate Body Report, United States – Shrimp (Article 21.5), supra footnote 87, at ¶ 124 (“Clearly, and ‘as far

as possible,’ a multilateral approach is strongly preferred.”) (quoting Principle 12 of the Rio Declaration on

Environment and Development).

104

Appellate Body Report, U.S. – Shrimp, supra footnote 75, at ¶ 172.

105

See id.; Van den Bossche, supra footnote 76, at 644.

106

Van den Bossche, supra footnote 76, at 644. See Appellate Body Report, U.S. – Shrimp, supra footnote 75, at ¶ 172.

107

Appellate Body Report, Brazil – Tyres, supra footnote 77, at ¶ 225; Appellate Body Report, U.S. – Gasoline, supra

footnote 70, at 23-24.

108

See, e.g., Appellate Body Report, U.S. – Gasoline, supra footnote 70, at 28 (stating that the United States failed to

adequately export international cooperation and “the resulting discrimination must have been foreseen”).

109

Appellate Body Report, U.S. – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (April 29,

1996).

102

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Body found that the measure was applied in a discriminatory manner because the rule was not

adopted or applied with regard to the costs and feasibility of compliance for foreign refiners.110

Furthermore, the Appellate Body ruled that the Gasoline Rule was “arbitrary or unjustifiable”

because the United States had failed to adequately explore international cooperation as a means of

achieving the measure’s objective even though its discriminatory application “must have been

foreseen.”111 U.S. – Gasoline therefore suggests that when a measure’s discriminatory application

can be foreseen but might have been avoided through international cooperation, the failure to

pursue that cooperation necessarily renders the cause or rationale for the discrimination

illegitimate and the measure’s application “arbitrary or unjustifiable discrimination.”

The Appellate Body seemed to confirm this conclusion in U.S. – Shrimp.112 In that case, the

measure in question prohibited the importation of shrimp from countries not certified by the

United States as maintaining a regulatory program or fishing environment that satisfied the U.S.

standards for sea turtle protection.113 First, the Appellate Body found that the shrimp import ban

created discrimination because it was “coercive”—it effectively required other Members to adopt

the same sea turtle-protection policies as the United States regardless of the different conditions

in the territories of those Members.114 The Appellate Body suggested the Department of State

should have incorporated an “inquiry into the appropriateness of the regulatory program for the

conditions prevailing in those exporting countries” into its implementation of the ban.115 The

Appellate Body then assessed whether this discrimination was “arbitrary or unjustifiable,” writing

that its approach to this question was “heavily” influenced by the U.S. failure to engage all

shrimp exporting Members in negotiations before enforcing the ban.116 Indeed, the Appellate

Body ultimately found that the discrimination was unjustifiable because (1) the import ban

reflected U.S. negotiations with some, but not all, WTO Members that export shrimp;117 and (2)

the United States had not even attempted to use existing international mechanisms to achieve

international cooperation.118 As a result, the Appellate Body wrote, the ban had a “unilateral

character” that heightened both its discriminatory nature and its “unjustifiability.”119

The Appellate Body’s reasoning in U.S. – Shrimp was only mildly tempered by its subsequent

decision in U.S. – Shrimp (Article 21.5)120 that the Article XX chapeau did not require the United

States to actually conclude international agreements with shrimp exporting countries so much as

engage in “serious, good faith efforts” to negotiate agreements.121 In that case, Malaysia

110

Id. at 28.

Id.

112

Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, paras. 171-172,

WT/DS58/AB/R (October 12, 1998).

113

Id. at ¶ 161.

114

Id. at paras. 161, 164.

115

Id. at paras. 161, 165.

116

Id. at ¶ 166 (stating that the U.S. failure to engage these WTO Members in “serious across-the-board negotiations

with the objective of concluding bilateral or multilateral agreements” “bears heavily” on the analysis).

117

See Appellate Body Report, U.S. – Shrimp, supra footnote 112, at ¶ 172.

118

See id. at ¶ 171.

119

Id. at ¶ 172.

120

Appellate Body Report, U.S. – Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5

of the DSU by Malaysia, WT/DS58/AB/R (October 22, 2001).

121

Id. at ¶ 134. For a list of actions that, when taken together, qualified as “serious, good faith efforts” in this case, see

paragraph 131 of that report. Ultimately, the Appellate Body found no fault with the panel’s analysis that the United

(continued...)

111

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Issues in International Trade Law: Restricting Exports of Electronic Waste

challenged the adequacy of the measures the United States imposed to implement the Appellate

Body’s decision in U.S. – Shrimp. Specifically, the Department of State had revised its guidelines

so that countries could be certified for shrimp imports once they demonstrated either that their

shrimp fishing environments did not pose a threat of incidental sea turtle capture or that they had

implemented, and were enforcing, a “comparably effective” regulatory program.122 In

determining whether a country’s regulatory program was “comparably effective” to U.S.

standards, the guidelines stated that the Department of State would “take fully into account any

demonstrated differences between the shrimp fishing conditions in the United States and those in

other nations.”123 In addition, the United States commenced international negotiations with

Malaysia, the complaining Member, as well as other countries. Although these negotiations did

not yield an agreement between the United States and Malaysia, the discrimination caused by the

U.S. embargo and shrimp import certification procedures was not “arbitrary or unjustifiable”

because the United States had undertaken “serious, good faith efforts” to avoid it.124

In sum, for a measure regulating e-waste to be justified in imposing burdens on some importing

countries that it does not impose on others with the same conditions, Article XX requires some

legitimate reason for the resulting discrimination. Moreover, no such legitimate reason is likely to

exist if the measure was implemented as a substitute for “serious, good faith efforts” at

international diplomacy with the countries most burdened by its implementation. In the e-waste

context, therefore, a WTO panel could require a Member to repeal or modify a measure

restricting e-waste exports in a discriminatory fashion unless the Member engaged in the Basel

Convention or in serious international negotiations with the e-waste importing countries affected.

Conclusion

There is concern that electronic waste (e-waste) producers in the United States are opting to

export e-waste containing hazardous materials to developing countries rather than disposing of

the waste in the United States. E-waste is one type of hazardous waste, and, as such, its trade is

regulated under a series of international agreements. The United States is a party to several

agreements restricting hazardous waste trade, but it is not a party to the largest multilateral

agreement in this field: the Basel Convention.

The Basel Convention forbids parties from exporting hazardous wastes to any other party who

has not received notice of, and consented to, that export. It also requires parties to adopt domestic

policies aimed at reducing the production of hazardous waste. Basel Convention parties have

adopted an amendment to impose an absolute ban on hazardous waste export from “Annex VII”

parties—members of the OECD, European Union, and Liechtenstein—to other Convention

parties, which are primarily developing countries. Although some parties implemented the ban

(...continued)

States should be judged on the basis of its “active participation and its financial support to the negotiations.” Id. at

paras. 132, 133.

122

Appellate Body Report, U.S. – Shrimp (Article 21.5), supra footnote 120, at paras. 6, 7.

123

Id. at ¶ 6. See also Revised Guidelines for the Implementation of 609 of P.L. 101-162 Relating to the Protection of

Sea Turtles, 64 Fed. Reg. 36,946 (July 8, 1999) (“In reviewing any such information, the Department of State will take

fully into account any demonstrated differences between the shrimp fishing conditions in the United States and those in

other nations, as well as information available from other sources.”).

124

See Appellate Body Report, U.S. – Shrimp (Article 21.5), supra footnote 120, at paras. 123, 134.

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Issues in International Trade Law: Restricting Exports of Electronic Waste

domestically, the “Ban Amendment” has not entered into force and is not expected to do so for

several years.

Despite an international movement to regulate the transboundary flow of e-waste, a country that

imposes restrictions on e-waste exports unilaterally may risk repercussions in the WTO system.

Specifically, these restrictions may be deemed inconsistent with Articles XI:1, XIII:1, and I:1 of

the GATT. Article XI:1 prohibits any government actions that impose, or result in, bans or other

quantitative restrictions on exports and imports destined to WTO Members. Duties, taxes, and

other charges are the only Article XI:1 consistent methods of restricting imports or exports.

Article I:1 prohibits any rule or formality affecting exportation from conferring a trade

“advantage”—such as exemption from export licensing requirements—to exports destined to

particular countries unless it “immediately and unconditionally” confers that same advantage to

“like” products destined to all other WTO Members.

Nevertheless, a WTO panel will uphold export restrictions that are inconsistent with Articles

XI:1, XIII:1, and/or I:1 of the GATT if they fit under one of the exceptions listed in paragraphs

(a) to (j) of Article XX and satisfy the requirements imposed by the Article XX chapeau. There

are several aspects of export restrictions that may make them difficult to provisionally justify

under one of Article XX’s sub-paragraphs and characterize as consistent with the Article XX

chapeau. For example, if e-waste export restrictions are imposed as a substitute for international

diplomacy, it may be difficult to show that they are “necessary” to protect human life or health

under Article XX(b). Although Article XX(g) can be used to justify measures that fail Article

XX(b)’s “necessity” test, it cannot justify e-waste export restrictions imposed instead of, or

otherwise without, comparable restrictions on domestic consumption or production.

Ultimately, if a WTO Member imposed e-waste export restrictions that a WTO panel or the

Appellate Body deemed inconsistent with the GATT, the Member would be expected to lift or

modify those restrictions. If the Member failed to do so, it could face WTO-authorized trade

sanctions from the complaining Member or Members.

Author Contact Information

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

Acknowledgments

This report was originally authored by (name redacted), formerly a Legislative Attorney in the American

Law Division.

Congressional Research Service

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