Free Trade or Sustainable Development? An Analysis of the WTO Appellate Body's Shift to a More Balanced Approach to Trade Liberalization

This essay examines the evolution of the Article XX General Exceptions provision of the General Agreement on Tariffs and Trade (“GATT 1994”) from its drafting history in 1946, to increasingly narrow interpretations by the GATT panels, and ultimately to the more expansive interpretations by the World Trade Organization Appellate Body (“Appellate Body”) in United States-Standards for Reformulated and Conventional Gasoline (“Reformulated Gasoline”) and United States-Import Prohibition of Certain Shrimp and Shrimp Products (“Shrimp-Turtle”) in 1996 and 1998. Interpretation of Article XX by the Appellate Body indicates that the World Trade Organization (“WTO”) has taken the policies and interests that are outside the realm of trade liberalization, such as the environment, much more seriously than its GATT predecessor. In its decisions, the Appellate Body has recognized that it is no longer possible for the WTO to uphold the free trade goals of the GATT 1994, such as promoting market access, above all other goals and concerns - e.g., health, the environment, and the objectives of sustainable development. This essay maintains that although the Appellate Body held in Reformulated Gasoline and Shrimp-Turtle that the environmental measures at issue were not justified under Article XX, the final holding of the Appellate Body should not overshadow the positive and important implications of its analysis for the future of Article XX. After narrow interpretation by GATT panels, the Appellate Body has expanded the scope of Article XX through the application of the Vienna Convention on the Law of Treaties. As a result, it is now within the realm of possibility that a governmental measure, otherwise inconsistent with a substantive provision of the GATT 1994, can be justified as an Article XX exception. This essay is divided into three parts. Part I reviews the drafting history of Article XX of the GATT 1994 and the important role the United States played in that process. Part II traces the evolution of Article XX by looking at selected GATT panel and Appellate Body decisions that interpret Article XX exceptions both under the GATT 1947 panel procedure and the current WTO Dispute Settlement Understanding (“DSU”). The analysis is limited to the discussions of Article XX in each decision. Part III concludes by briefly addressing the growing importance of Article XX exceptions within the framework of the WTO Agreement and the unique and increasingly important role of the Appellate Body