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VI. Article IV back to top
A. Text of Article IV
Article IV: Increasing Participation of Developing Countries
1. The increasing participation of developing country Members in
world trade shall be facilitated through negotiated specific
commitments, by different Members pursuant to Parts III and
IV of this Agreement, relating to:
(a) the strengthening of their domestic services capacity and its
efficiency and competitiveness, inter alia through access to
technology on a commercial basis;
(b) the improvement of their access to distribution channels and
information networks; and
(c) the liberalization of market access in sectors and modes of
supply of export interest to them.
2. Developed country Members, and to the extent possible other
Members, shall establish contact points within two years from the date
of entry into force of the WTO Agreement to facilitate the access of
developing country Members’ service suppliers to information, related
to their respective markets, concerning:
(a) commercial and technical aspects of the supply of services;
(b) registration, recognition and obtaining of professional
qualifications; and
(c) the availability of services technology.
3. Special priority shall be given to the least-developed country
Members in the implementation of paragraphs 1 and
2. Particular account
shall be taken of the serious difficulty of the least-developed
countries in accepting negotiated specific commitments in view of their
special economic situation and their development, trade and financial
needs.
B. Interpretation and Application of Article IV
1. General
49. With respect to application of
Article IV to electronic commerce,
see the Progress Report adopted by the Council for Trade in Services in
the context of the Work Programme on Electronic Commerce on 19 July
1999.(68)
2. Article IV:3
(a) Contact points
(i) General
50. With respect to the contact points provided for in
paragraph 2,
see the “Decision on the Notification of the Establishment of Enquiry
and Contact Points” referenced in paragraph 47
above.
(ii) Accountancy services
51. With respect to contact points in accountancy services, see the
Disciplines on Domestic Regulation in the Accountancy Sector, adopted by
the Council for Trade in Services on 14 December 1998.(69)
VII. Article V back to top
A. Text of Article V
Article V: Economic Integration
1. This Agreement shall not prevent any of its Members from being a
party to or entering into an agreement liberalizing trade in services
between or among the parties to such an agreement, provided that such an
agreement:
(a) has substantial sectoral coverage,(1) and
(footnote original) 1 This condition is understood in
terms of number of sectors, volume of trade affected and modes of
supply. In order to meet this condition, agreements should not provide
for the a priori exclusion of any mode of supply.
(b) provides for the absence or elimination of substantially all
discrimination, in the sense of Article
XVII, between or among the
parties, in the sectors covered under subparagraph
(a), through:
(i) elimination of existing discriminatory measures, and/or
(ii) prohibition of new or more discriminatory measures,
either at the entry into force of that agreement or on the basis of a
reasonable time-frame, except for measures permitted under Articles XI, XII,
XIV and XIV bis.
2. In evaluating whether the conditions under
paragraph 1(b) are met,
consideration may be given to the relationship of the agreement to a
wider process of economic integration or trade liberalization among the
countries concerned.
3. (a)
Where developing countries are parties to an agreement of the
type referred to in paragraph 1, flexibility shall be provided for
regarding the conditions set out in paragraph 1, particularly with
reference to subparagraph (b) thereof, in accordance with the level of
development of the countries concerned, both overall and in individual
sectors and subsectors.
(b)
Notwithstanding paragraph 6, in the case of an agreement of the
type referred to in paragraph 1 involving only developing countries,
more favourable treatment may be granted to juridical persons owned or
controlled by natural persons of the parties to such an agreement.
4. Any agreement referred to in
paragraph 1 shall be designed to
facilitate trade between the parties to the agreement and shall not in
respect of any Member outside the agreement raise the overall level of
barriers to trade in services within the respective sectors or
subsectors compared to the level applicable prior to such an agreement.
5. If, in the conclusion, enlargement or any significant modification
of any agreement under paragraph 1, a Member intends to withdraw or
modify a specific commitment inconsistently with the terms and
conditions set out in its Schedule, it shall provide at least 90 days
advance notice of such modification or withdrawal and the procedure set
forth in paragraphs 2, 3
and 4 of Article XXI shall apply.
6. A service supplier of any other Member that is a juridical person
constituted under the laws of a party to an agreement referred to in
paragraph 1 shall be entitled to treatment granted under such agreement,
provided that it engages in substantive business operations in the
territory of the parties to such agreement.
7. (a)
Members which are parties to any agreement referred to in
paragraph 1 shall promptly notify any such agreement and any enlargement
or any significant modification of that agreement to the Council for
Trade in Services. They shall also make available to the Council such
relevant information as may be requested by it. The Council may
establish a working party to examine such an agreement or enlargement or
modification of that agreement and to report to the Council on its
consistency with this Article.
(b)
Members which are parties to any agreement referred to in
paragraph 1 which is implemented on the basis of a time-frame shall
report periodically to the Council for Trade in Services on its
implementation. The Council may establish a working party to examine
such reports if it deems such a working party necessary.
(c)
Based on the reports of the working parties referred to in
subparagraphs (a) and (b), the Council may make recommendations to the
parties as it deems appropriate.
8. A Member which is a party to any agreement referred to in
paragraph 1 may not seek compensation for trade benefits that may accrue
to any other Member from such agreement.
B. Interpretation and Application of Article V
1. Article V:1
52. The Panel in Canada
— Autos, in a finding subsequently
not addressed by the Appellate Body, considered that, with respect to an
import duty exemption available to only a limited number of firms,
Canada could not claim an exemption from its MFN obligation under
Article II by invoking Article V:1. The Panel noted that the Canadian
measures at issue did not grant more favourable treatment to all
services and service suppliers of members of NAFTA:
“Even assuming that the [Canadian measures at issue] could be
brought within the scope of the services liberalization provisions of
NAFTA, we note that the import duty exemption under the [measures at
issue] is accorded to a small number of manufacturers/wholesalers of the
United States to the exclusion of all other manufacturers/wholesalers of
the United States and of Mexico. The [measures at issue], therefore,
provide more favourable treatment to only some and not all services and
service suppliers of Members of NAFTA, while, according to Article
V:1(b), an economic integration agreement has to provide for ‘the
absence or elimination of substantially all discrimination, in the sense
of Article XVII’, in order to be eligible for the exemption from
Article II of the GATS.
Although the requirement of Article V:1(b) is to provide
non-discrimination in the sense of Article XVII (National Treatment), we
consider that once it is fulfilled it would also ensure
non-discrimination between all service suppliers of other parties to the
economic integration agreement. It is our view that the object and
purpose of this provision is to eliminate all discrimination among
services and service suppliers of parties to an economic integration
agreement, including discrimination between suppliers of other parties
to an economic integration agreement. In other words, it would be
inconsistent with this provision if a party to an economic integration
agreement were to extend more favourable treatment to service suppliers
of one party than that which it extended to service suppliers of another
party to that agreement.
Moreover, it is worth recalling that Article V provides legal
coverage for measures taken pursuant to economic integration agreements,
which would otherwise be inconsistent with the MFN obligation in Article
II. Paragraph 1 of Article V refers to ‘an agreement liberalizing
trade in services’. Such economic integration agreements typically aim
at achieving higher levels of liberalization between or among their
parties than that achieved among WTO Members. Article V:1 further
prescribes a certain minimum level of liberalization which such
agreements must attain in order to qualify for the exemption from the
general MFN obligation of Article II. In this respect, the purpose of
Article V is to allow for ambitious liberalization to take place at a
regional level, while at the same time guarding against undermining the
MFN obligation by engaging in minor preferential arrangements. However,
in our view, it is not within the object and purpose of Article V to
provide legal coverage for the extension of more favourable treatment
only to a few service suppliers of parties to an economic integration
agreement on a selective basis, even in situations where the maintenance
of such measures may explicitly be provided for in the agreement itself.”(70)
2. Article V:7
(a) Format for notifications(71)
53. At its
44th Session on 13 October 2006, the Committee on
RTAs adopted a common and simplified notification format for regional
trade agreements, and agreed to recommend it to the relevant bodies. The
Council for Trade in Services adopted this format at its meeting on 6
November 2007.(72) With respect to the format for notifications
prior to that date, see the Guidelines for Notifications under the
General Agreement on Trade in Services.(73)
(b) Reporting on the operation of regional trade agreements
54. On 20 February 1998, the Committee on RTAs made recommendations
to the Council for Trade in Services with respect to the reporting on
the operation of regional trade agreements to the Committee.(74)
On 23 and 24 November 1998, the Council for Trade in Service took note
of the recommended procedures, as general guidelines with respect to
reports/information on regional trade agreements submitted to it.(75)
(c) Examination and consideration of specific agreements
55. With respect to the procedures for the examination and
consideration of specific agreements, see generally Article IV:7 of the
Chapter on the WTO Agreement and Article XXIV:7 of the Chapter on the
GATT 1994. For a complete list of RTAs notified to the GATT/WTO, see the
table at the end of the Chapter on the GATT 1994.
56. The annual reports of the Committee on Regional Trade Agreements
are contained in the document series WT/REG/-.
VIII. Article V bis
back to top
A. Text of Article V bis
Article V bis: Labour Markets Integration Agreements
This Agreement shall not prevent any of its Members from being a
party to an agreement establishing full integration(2) of the
labour markets between or among the parties to such an agreement,
provided that such an agreement:
(footnote original) 2 Typically, such integration
provides citizens of the parties concerned with a right of free entry to
the employment markets of the parties and includes measures concerning
conditions of pay, other conditions of employment and social benefits.
(a) exempts citizens of parties to the agreement from requirements
concerning residency and work permits;
(b) is notified to the Council for Trade in Services.
B. Interpretation and Application of Article V bis
1. Article V bis:(b)
(a) Format for notifications
57. With respect to the format for notifications under
subparagraph (b), see the Guidelines for Notifications under the General Agreement on
Trade in Services.(76)
IX. Article VI back to top
A. Text of Article VI
Article VI: Domestic Regulation
1. In sectors where specific commitments are undertaken, each Member
shall ensure that all measures of general application affecting trade in
services are administered in a reasonable, objective and impartial
manner.
2. (a)
Each Member shall maintain or institute as soon as practicable
judicial, arbitral or administrative tribunals or procedures which
provide, at the request of an affected service supplier, for the prompt
review of, and where justified, appropriate remedies for, administrative
decisions affecting trade in services. Where such procedures are not
independent of the agency entrusted with the administrative decision
concerned, the Member shall ensure that the procedures in fact provide
for an objective and impartial review.
(b)
The provisions of subparagraph (a) shall not be construed to
require a Member to institute such tribunals or procedures where this
would be inconsistent with its constitutional structure or the nature of
its legal system.
3. Where authorization is required for the supply of a service on
which a specific commitment has been made, the competent authorities of
a Member shall, within a reasonable period of time after the submission
of an application considered complete under domestic laws and
regulations, inform the applicant of the decision concerning the
application. At the request of the applicant, the competent authorities
of the Member shall provide, without undue delay, information concerning
the status of the application.
4. With a view to ensuring that measures relating to qualification
requirements and procedures, technical standards and licensing
requirements do not constitute unnecessary barriers to trade in
services, the Council for Trade in Services shall, through appropriate
bodies it may establish, develop any necessary disciplines. Such
disciplines shall aim to ensure that such requirements are, inter
alia:
(a) based on objective and transparent criteria, such as competence
and the ability to supply the service;
(b) not more burdensome than necessary to ensure the quality of the
service;
(c) in the case of licensing procedures, not in themselves a
restriction on the supply of the service.
5. (a)
In sectors in which a Member has undertaken specific
commitments, pending the entry into force of disciplines developed in
these sectors pursuant to paragraph 4, the Member shall not apply
licensing and qualification requirements and technical standards that
nullify or impair such specific commitments in a manner which:
(i) does not comply with the criteria outlined in
subparagraphs 4(a),
(b) or (c); and
(ii) could not reasonably have been expected of that Member at the
time the specific commitments in those sectors were made.
(b)
In determining whether a Member is in conformity with the
obligation under paragraph 5(a), account shall be taken of international
standards of relevant international organizations(3) applied by
that Member.
(footnote original) 3 The term “relevant
international organizations” refers to international bodies whose
membership is open to the relevant bodies of at least all Members of the
WTO.
6. In sectors where specific commitments regarding professional
services are undertaken, each Member shall provide for adequate
procedures to verify the competence of professionals of any other
Member.
B. Interpretation and Application of Article VI
1. General
(a) Electronic commerce
58. With respect to application of
Article VI to electronic commerce,
see the Progress Report adopted by the Council for Trade in Services in
the context of the Work Programme on Electronic Commerce on 19 July
1999.(77)
2. Article V:4
(a) Professional services/domestic regulation
59. With respect to the Working Party on Professional Services and
its successor, the Working Party on Domestic Regulation, see paragraphs
208–210 below.
(b) Disciplines on domestic regulation in the accountancy sector
60. On 14 December 1998, with a view to ensuring that domestic
regulations affecting trade in accountancy services met the requirements
of Article VI:4, the Council for Trade in Services adopted the
Disciplines on Domestic Regulation in the Accountancy Sector,(78)
which had been recommended by the Working Party on Professional
Services. These Disciplines contain, inter alia, the following provision
under the heading “General Provisions”:
“Members shall ensure that measures not subject to scheduling under
Articles XVI or XVII of the GATS, relating to licensing requirements and
procedures, technical standards and qualification requirements and
procedures are not prepared, adopted or applied with a view to or with
the effect of creating unnecessary barriers to trade in accountancy
services. For this purpose, Members shall ensure that such measures are
not more trade-restrictive than necessary to fulfil a legitimate
objective. Legitimate objectives are, inter alia, the protection of
consumers (which includes all users of accounting services and the
public generally), the quality of the service, professional competence,
and the integrity of the profession.”(79)
61. The disciplines are to be applicable to Members who have entered
specific commitments on accountancy in their schedules.(80) It
was further decided that the Working Party shall aim to develop general
disciplines for professional services, while retaining the possibility
to develop or revise sectoral disciplines, including accountancy.(81)
Whilst adopted, the accountancy disciplines are not yet in force. The
Decision on Disciplines Relating to the Accountancy Sector provided
that:
“No later than the conclusion of the forthcoming round of services
negotiations, the disciplines developed by the WPPS are intended to be
integrated into the General Agreement on Trade in Services (GATS)”.(82)
(c) Relationship with Articles XVI and XVII
62. On 10 December 1998, the Working Party on Professional Services
submitted a report to the Council for Trade in Services on the
development of Disciplines on Domestic Regulation in the Accountancy
Sector, including the informal note by the Chairman entitled “Discussion
of Matters Relating to Articles XVI and
XVII of the GATS in Connection
with the Disciplines on Domestic Regulation in the Accountancy Sector.”(83)
X. Article VII back to top
A. Text of Article VII
Article VII: Recognition
1. For the purposes of the fulfilment, in whole or in part, of its
standards or criteria for the authorization, licensing or certification
of services suppliers, and subject to the requirements of paragraph
3, a
Member may recognize the education or experience obtained, requirements
met, or licenses or certifications granted in a particular country. Such
recognition, which may be achieved through harmonization or otherwise,
may be based upon an agreement or arrangement with the country concerned
or may be accorded autonomously.
2. A Member that is a party to an agreement or arrangement of the
type referred to in paragraph 1, whether existing or future, shall
afford adequate opportunity for other interested Members to negotiate
their accession to such an agreement or arrangement or to negotiate
comparable ones with it. Where a Member accords recognition
autonomously, it shall afford adequate opportunity for any other Member
to demonstrate that education, experience, licenses, or certifications
obtained or requirements met in that other Member’s territory should
be recognized.
3. A Member shall not accord recognition in a manner which would
constitute a means of discrimination between countries in the
application of its standards or criteria for the authorization,
licensing or certification of services suppliers, or a disguised
restriction on trade in services.
4. Each Member shall:
(a) within 12 months from the date on which the WTO Agreement takes
effect for it, inform the Council for Trade in Services of its existing
recognition measures and state whether such measures are based on
agreements or arrangements of the type referred to in paragraph
1;
(b) promptly inform the Council for Trade in Services as far in
advance as possible of the opening of negotiations on an agreement or
arrangement of the type referred to in paragraph 1 in order to provide
adequate opportunity to any other Member to indicate their interest in
participating in the negotiations before they enter a substantive phase;
(c) promptly inform the Council for Trade in Services when it adopts
new recognition measures or significantly modifies existing ones and
state whether the measures are based on an agreement or arrangement of
the type referred to in paragraph 1.
5. Wherever appropriate, recognition should be based on
multilaterally agreed criteria. In appropriate cases, Members shall work
in cooperation with relevant intergovernmental and non-governmental
organizations towards the establishment and adoption of common
international standards and criteria for recognition and common
international standards for the practice of relevant services trades and
professions.(84)
B. Interpretation and Application of Article VII
1. General
63. With respect to application of
Article VII to electronic
commerce, see the Progress Report adopted by the Council for Trade in
Services in the context of the Work Programme on Electronic Commerce on
19 July 1999.(85)
2. Article VII:4
(a) Format for notifications
64. With respect to the format for notifications under
paragraph 4,
see the Guidelines for Notifications under the General Agreement on
Trade in Services.(86)
3. Article VII:5
(a) Guidelines for Mutual Recognition Agreements or Arrangements in
the Accountancy Sector
65. On 29 May 1997, the Council for Trade in Services approved the
voluntary Guidelines for Mutual Recognition Agreements or Arrangements
in the Accountancy Sector.(87)
XI. Article VIII back to top
A. Text of Article VIII
Article VIII: Monopolies and Exclusive Services Suppliers
1. Each Member shall ensure that any monopoly supplier of a service
in its territory does not, in the supply of the monopoly service in the
relevant market, act in a manner inconsistent with that Member’s
obligations under Article II and specific commitments.
2. Where a Member’s monopoly supplier competes, either directly or
through an affiliated company, in the supply of a service outside the
scope of its monopoly rights and which is subject to that Member’s
specific commitments, the Member shall ensure that such a supplier does
not abuse its monopoly position to act in its territory in a manner
inconsistent with such commitments.
3. The Council for Trade in Services may, at the request of a Member
which has a reason to believe that a monopoly supplier of a service of
any other Member is acting in a manner inconsistent with paragraph 1 or
2, request the Member establishing, maintaining or authorizing such
supplier to provide specific information concerning the relevant
operations.
4. If, after the date of entry into force of the WTO Agreement, a
Member grants monopoly rights regarding the supply of a service covered
by its specific commitments, that Member shall notify the Council for
Trade in Services no later than three months before the intended
implementation of the grant of monopoly rights and the provisions of
paragraphs 2, 3 and 4 of Article XXI shall apply.
5. The provisions of this Article shall also apply to cases of
exclusive service suppliers, where a Member, formally or in effect, (a)
authorizes or establishes a small number of service suppliers and (b)
substantially prevents competition among those suppliers in its
territory.(88)
B. Interpretation and Application of Article VIII
1. General
(a) Electronic commerce
66. With respect to application of
Article VIII to electronic
commerce, see the Progress Report adopted by the Council for Trade in
Services in the context of the Work Programme on Electronic Commerce on
19 July 1999.(89)
2. Article VIII:4
(a) Format for notifications
67. With respect to the format for notifications under
paragraph 4,
see the Guidelines for Notifications under the General Agreement on
Trade in Services.(90)
XII. Article IX back to top
A. Text of Article IX
Article IX: Business Practices
1. Members recognize that certain business practices of service
suppliers, other than those falling under Article
VIII, may restrain
competition and thereby restrict trade in services.
2. Each Member shall, at the request of any other Member, enter into
consultations with a view to eliminating practices referred to in
paragraph 1. The Member addressed shall accord full and sympathetic
consideration to such a request and shall cooperate through the supply
of publicly available non-confidential information of relevance to the
matter in question. The Member addressed shall also provide other
information available to the requesting Member, subject to its domestic
law and to the conclusion of satisfactory agreement concerning the
safeguarding of its confidentiality by the requesting Member.
B. Interpretation and Application of Article IX
1. General
(a) Electronic commerce
68. With respect to application of
Article IX to electronic commerce,
see the Progress Report adopted by the Council for Trade in Services in
the context of the Work Programme on Electronic Commerce on 19 July
1999.(91)
XIII. Article X back to top
A. Text of
Article X
Article X: Emergency Safeguard Measures
1. There shall be multilateral negotiations on the question of
emergency safeguard measures based on the principle of
non-discrimination. The results of such negotiations shall enter into
effect on a date not later than three years from the date of entry into
force of the WTO Agreement.
2. In the period before the entry into effect of the results of the
negotiations referred to in paragraph 1, any Member may, notwithstanding
the provisions of paragraph 1 of Article
XXI, notify the Council on
Trade in Services of its intention to modify or withdraw a specific
commitment after a period of one year from the date on which the
commitment enters into force; provided that the Member shows cause to
the Council that the modification or withdrawal cannot await the lapse
of the three-year period provided for in paragraph 1 of Article
XXI.
3. The provisions of
paragraph 2 shall cease to apply three years
after the date of entry into force of the WTO Agreement.
B. Interpretation and Application of Article X
1. Working Party on GATS Rules
69. Negotiations on the question of emergency safeguard measures have
been carried out in the Working Party on GATS Rules, established on 30
March 1995 by the Council for Trade in Services.(92) Members have
extended five times the deadline referred to in Article
X:1. The latest
extension, contained in the Fifth Decision on Negotiations on Emergency
Safeguard Measures adopted by the Council for Trade in Services on 15
March 2004, set no specific end-date:(93)
“1. The first sentence of
paragraph 1 of Article X shall continue
to apply.
2. Subject to the outcome of the mandate in
paragraph 1, the results
of such negotiations shall enter into effect on a date not later than
the date of entry into force of the results of the current round of
services negotiations.
3. Notwithstanding paragraph 3 of Article
X, until the entry into
effect of the results of the negotiations mandated under paragraph 1 of
Article X, the provisions of paragraph 2 of that Article shall continue
to apply.”
XIV. Article XI back to top
A. Text of Article XI
Article XI: Payments and Transfers
1. Except under the circumstances envisaged in
Article XII, a Member
shall not apply restrictions on international transfers and payments for
current transactions relating to its specific commitments.
2. Nothing in this Agreement shall affect the rights and obligations
of the members of the International Monetary Fund under the Articles of
Agreement of the Fund, including the use of exchange actions which are
in conformity with the Articles of Agreement, provided that a Member
shall not impose restrictions on any capital transactions inconsistently
with its specific commitments regarding such transactions, except under
Article XII or at the request of the Fund.
B. Interpretation and Application of Article XI
70. The Panel in US
— Gambling made the following
observations in the context of exercising judicial economy over a claim
under Article XI. The Panel stated that:
“Article XI has not, as yet, been the subject of interpretation or
application by either panels or the Appellate Body. In light of this and
taking into account the limited facts and arguments submitted by the
parties with respect to Antigua’s claim under Article
XI, we believe
that there is not sufficient material on record to enable us to
undertake a meaningful analysis of this provision and its specific
application to the facts of this case. Moreover, in our view, the
findings of violation under Article XVI in Section VI.D above of our
Report should allow the parties to settle this dispute, even in the
absence of a ruling on Antigua’s Article XI claim. We will, therefore,
exercise judicial economy and not rule on Antigua’s claim under
Article XI.(94)
However, the Panel wants to emphasize that Article XI plays a crucial
role in securing the value of specific commitments undertaken by Members
under the GATS. Indeed, the value of specific commitments on market
access and national treatment would be seriously impaired if Members
could restrict international transfers and payment for service
transactions in scheduled sectors. In ensuring, inter alia, that
services suppliers can receive payments due under services contracts
covered by a Member’s specific commitment, Article XI is an
indispensable complement to GATS disciplines on market access and
national treatment. At the same time, the Panel is of the view that
Article XI does not deprive Members from regulating the use of financial
instruments, such as credit cards, provided that these regulations are
consistent with other relevant GATS provisions, in particular Article
VI.”(95)
XV. Article XII back to top
A. Text of Article XII
Article XII: Restrictions to Safeguard the Balance-of-Payment
1. In the event of serious balance-of-payments and external financial
difficulties or threat thereof, a Member may adopt or maintain
restrictions on trade in services on which it has undertaken specific
commitments, including on payments or transfers for transactions related
to such commitments. It is recognized that particular pressures on the
balance of payments of a Member in the process of economic development
or economic transition may necessitate the use of restrictions to
ensure, inter alia, the maintenance of a level of financial reserves
adequate for the implementation of its programme of economic development
or economic transition.
2. The restrictions referred to in
paragraph 1:
(a) shall not discriminate among Members;
(b) shall be consistent with the Articles of Agreement of the
International Monetary Fund;
(c) shall avoid unnecessary damage to the commercial, economic and
financial interests of any other Member;
(d) shall not exceed those necessary to deal with the circumstances
described in paragraph 1;
(e) shall be temporary and be phased out progressively as the
situation specified in paragraph 1 improves.
3. In determining the incidence of such restrictions, Members may
give priority to the supply of services which are more essential to
their economic or development programmes. However, such restrictions
shall not be adopted or maintained for the purpose of protecting a
particular service sector.
4. Any restrictions adopted or maintained under
paragraph 1, or any
changes therein, shall be promptly notified to the General Council.
5. (a)
Members applying the provisions of this Article shall consult
promptly with the Committee on Balance-of-Payments Restrictions on
restrictions adopted under this Article.
(b)
The Ministerial Conference shall establish procedures(4)
for periodic consultations with the objective of enabling such
recommendations to be made to the Member concerned as it may deem
appropriate.
(footnote original) 4 It is
understood that the
procedures under paragraph 5 shall be the same as the GATT 1994
procedures.
(c)
Such consultations shall assess the balance-of-payment situation
of the Member concerned and the restrictions adopted or maintained under
this Article, taking into account, inter alia, such factors as:
(i) the nature and extent of the balance-of-payments and the external
financial difficulties;
(ii) the external economic and trading environment of the consulting
Member;
(iii) alternative corrective measures which may be available.
(d)
The consultations shall address the compliance of any
restrictions with paragraph 2, in particular the progressive phase-out
of restrictions in accordance with paragraph
2(e).
(e)
In such consultations, all findings of statistical and other
facts presented by the International Monetary Fund relating to foreign
exchange, monetary reserves and balance of payments, shall be accepted
and conclusions shall be based on the assessment by the Fund of the
balance-of-payments and the external financial situation of the
consulting Member.
6. If a Member which is not a member of the International Monetary
Fund wishes to apply the provisions of this Article, the Ministerial
Conference shall establish a review procedure and any other procedures
necessary.
B. Interpretation and Application of Article XII
1. Article XII:4
(a) Format for notifications
71. With respect to the format for notifications under
paragraph 4,
see the Guidelines for Notifications under the General Agreement on
Trade in Services.(96)
XVI. Article XIII back to top
A. Text of Article XIII
Article XIII: Government Procurement
1.
Articles II, XVI and
XVII shall not apply to laws, regulations or
requirements governing the procurement by governmental agencies of
services purchased for governmental purposes and not with a view to
commercial resale or with a view to use in the supply of services for
commercial sale.
2. There shall be multilateral negotiations on government procurement
in services under this Agreement within two years from the date of entry
into force of the WTO Agreement.
B. Interpretation and Application of Article XIII
1. General
72. The Panel in US
— Large Civil Aircraft (2nd Complaint)
referred to Articles XIII:2 and XV of the GATS in the context of
interpreting the definition of a subsidy found in Article 1 of the SCM
Agreement. The Panel concluded that transactions properly characterized
as purchases of services are excluded from the scope of Article 1 of the
SCM Agreement, which expressly refers to purchases of goods but omits
any reference to purchases of services. In the course of its analysis,
the Panel observed that “[w]hile the SCM Agreement was being
negotiated, parallel negotiations on trade in services were also taking
place. Article XIII:2 and XV of the GATS reflect the fact that the
negotiators of the GATS were unable to reach agreement on disciplines
regarding governmental purchases of services, or on disciplines
governing the provision of subsidies to service suppliers.”(97)
The Panel concluded that when the omission of “purchases” of “services”
from the text of Article 1 of the
SCM Agreement is read against this
historical background, it offers further confirmation that the drafters
of that provision could not have removed the express reference to “purchases”
of “services” from Article 1 of the
SCM Agreement on the
understanding that the reference was superfluous.(98)
2. Working Party on GATS Rules
73. Negotiations on government procurement in services have been
carried out in the Working Party on GATS Rules, established on 30 March
1995 by the Council for Trade in Services.(99) Members agreed to
complete negotiations under Articles VI:4, XIII and
XV prior to the
conclusion of negotiations on specific commitments (S/L/93).
XVII. Article XIV back to top
A. Text of Article XIV
Article XIV: General Exceptions
Subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where like conditions prevail, or a
disguised restriction on trade in services, nothing in this Agreement
shall be construed to prevent the adoption or enforcement by any Member
of measures:
(a) necessary to protect public morals or to maintain public order;(5)
(footnote original) 5 The public order exception may be
invoked only where a genuine and sufficiently serious threat is posed to
one of the fundamental interests of society.
(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are
not inconsistent with the provisions of this Agreement including those
relating to:
(i) the prevention of deceptive and fraudulent practices or to deal
with the effects of a default on services contracts;
(ii) the protection of the privacy of individuals in relation to the
processing and dissemination of personal data and the protection of
confidentiality of individual records and accounts;
(iii) safety;
(d) inconsistent with
Article XVII, provided that the difference in
treatment is aimed at ensuring the equitable or effective(6)
imposition or collection of direct taxes in respect of services or
service suppliers of other Members;
(footnote original) 6 Measures that are aimed at
ensuring the equitable or effective imposition or collection of direct
taxes include measures taken by a Member under its taxation system
which:
(i) apply to non-resident service suppliers in recognition of the
fact that the tax obligation of non-residents is determined with respect
to taxable items sourced or located in the Member’s territory; or
(ii) apply to non-residents in order to ensure the imposition or
collection of taxes in the Member’s territory; or
(iii) apply to
non-residents or residents in order to prevent the avoidance or evasion
of taxes, including compliance measures; or
(iv) apply to consumers of services supplied in or from the territory
of another Member in order to ensure the imposition or collection of
taxes on such consumers derived from sources in the Member’s
territory; or
(v) distinguish service suppliers subject to tax on worldwide taxable
items from other service suppliers, in recognition of the difference in
the nature of the tax base between them; or
(vi) determine, allocate or apportion income, profit, gain, loss,
deduction or credit of resident persons or branches, or between related
persons or branches of the same person, in order to safeguard the Member’s
tax base.
Tax terms or concepts in paragraph (d) of Article XIV and in this
footnote are determined according to tax definitions and concepts, or
equivalent or similar definitions and concepts, under the domestic law
of the Member taking the measure.
(e) inconsistent with
Article II, provided that the difference in
treatment is the result of an agreement on the avoidance of double
taxation or provisions on the avoidance of double taxation in any other
international agreement or arrangement by which the Member is bound.
B. Interpretation and Application of Article XIV
1. General
(a) Relevance of jurisprudence under Article XX of the GATT 1994
74. The Appellate Body in US
— Gambling elaborated on the
similarities between Article XX of the GATT 1994 and
Article XIV and
stated that the article sets out general exceptions under the GATS
(services) much in the same way as Article XX of the GATT 1994 does
under the GATT (goods). The Appellate Body also found previous decisions
under Article XX of the GATT 1994 relevant for the analysis under
Article XIV:(100)
“Article XIV of the GATS sets out the general exceptions from
obligations under that Agreement in the same manner as does Article XX
of the GATT 1994. Both of these provisions affirm the right of Members
to pursue objectives identified in the paragraphs of these provisions
even if, in doing so, Members act inconsistently with obligations set
out in other provisions of the respective agreements, provided that all
of the conditions set out therein are satisfied. Similar language is
used in both provisions,(101) notably the term ‘necessary’(102)
and the requirements set out in their respective chapeaux. Accordingly,
like the Panel, we find previous decisions under Article XX of the GATT
1994 relevant for our analysis under Article XIV of the
GATS.(103)”(104)
(b) Two-tier analysis
75. The Appellate Body in US
— Gambling stated that Article XIV, like
Article XX of GATT 1994, provides for a ‘two-tier analysis’(105):
“Article XIV of the GATS, like
Article XX of the GATT 1994,
contemplates a ‘two-tier analysis’ of a measure that a Member seeks
to justify under that provision.(106) A panel should first
determine whether the challenged measure falls within the scope of one
of the paragraphs of Article XIV. This requires that the challenged
measure address the particular interest specified in that paragraph and
that there be a sufficient nexus between the measure and the interest
protected. The required nexus — or ‘degree of connection’ — between the measure and the interest is specified in the language of the
paragraphs themselves, through the use of terms such as “relating to”
and ‘necessary to’.(107) Where the challenged measure has
been found to fall within one of the paragraphs of Article
XIV, a panel
should then consider whether that measure satisfies the requirements of
the chapeau of Article XIV.”(108)
(c) Electronic commerce
76. With respect to application of
Article XIV to electronic
commerce, see the Progress Report adopted by the Council for Trade in
Services in the context of the Work Programme on Electronic Commerce on
19 July 1999.(109)
(d) Trade in services and the environment
77. On 1 March 1995, the Council for Trade in Services, pursuant to
the Ministerial Decision on Trade in Services and the Environment,
adopted the Decision on Trade in Services and the Environment.(110)
The Decision stipulates, inter alia:
“In order to determine whether any modification of
Article XIV of
the Agreement is required to take account of such measures, [Ministers]
request the Committee on Trade and Environment to examine and report,
with recommendations if any, on the relationship between services trade
and the environment including the issue of sustainable development. The
Committee shall also examine the relevance of inter-governmental
agreements on the environment and their relationship to the Agreement.”(111)
2. Chapeau to Article XIV
78. The Appellate Body in US
— Gambling stated that the
focus of the chapeau is on the application of a measure already
found by the Panel to be inconsistent with its obligations under GATS
but falling within one of the paragraphs of Article XIV(112):
“The focus of the chapeau, by its express terms, is on the application
of a measure already found by the Panel to be inconsistent with one of
the obligations under the GATS but falling within one of the paragraphs
of Article XIV.(113) By requiring that the measure be applied
in a manner that does not to constitute ‘arbitrary’ or ‘unjustifiable’
discrimination, or a ‘disguised restriction on trade in services’,
the chapeau serves to ensure that Members’ rights to avail themselves
of exceptions are exercised reasonably, so as not to frustrate the
rights accorded other Members by the substantive rules of the GATS.”(114)’(115)
79. The Appellate Body in US
— Gambling stated that, since a
panel is free to decide which legal issues it must address in order to
resolve a dispute, it may proceed to analyse a measure under the
chapeau, even if the panel has found that the measure is not
provisionally justified under one of the subparagraphs of Article
XIV.(116)
80. The Appellate Body in US
— Gambling stated that a panel,
in examining a facially neutral measure for “arbitrary” or “unjustifiable”
discrimination in its application, must place isolated instances of
enforcement in their proper context:
“In our view, the proper significance to be attached to isolated
instances of enforcement, or lack thereof, cannot be determined in the
absence of evidence allowing such instances to be placed in their proper
context. Such evidence might include evidence on the overall
number of suppliers, and on patterns of enforcement, and on the
reasons for particular instances of non-enforcement. Indeed, enforcement
agencies may refrain from prosecution in many instances for reasons
unrelated to discriminatory intent and without discriminatory effect.”(117)
3. Article XIV(a)
(a) General
81. The Panel in US
— Gambling identified two elements that
a party invoking paragraph (a) of Article XIV had to demonstrate:
“(a) the measure must be one designed to “protect public morals”
or to “maintain public order”; and
(b) the measure for which justification is claimed must be “necessary”
to protect public morals or to maintain public order.”(118)
(b) “Protect public morals” and “maintain public order”
82. The Appellate Body in US
— Gambling was asked to examine
only one aspect of the Panel’s findings on whether the relevant US
measures were designed to protect public morals or maintain public
order, namely, whether the Panel failed to apply the standard set out in
footnote 5 to Article XIV(a). The appeal on this issue failed, and is
discussed in paragraph 84 below. The Appellate Body therefore left the
Panel’s reasoning intact.
83. The Panel in US
— Gambling, noting that jurisprudence
under Article XX of the GATT 1994 was applicable to the interpretation
of this provision, stated that the meaning of ‘public morals’ and
‘public order’ varied depending on a range of factors, and that a
Member had the right to determine the appropriate level of protection:
“We are well aware that there may be sensitivities associated with
the interpretation of the terms ‘public morals’ and ‘public order’
in the context of Article XIV. In the Panel’s view, the content of
these concepts for Members can vary in time and space, depending upon a
range of factors, including prevailing social, cultural, ethical and
religious values. Further, the Appellate Body has stated on several
occasions that Members, in applying similar societal concepts, have the
right to determine the level of protection that they consider
appropriate.(119) Although these Appellate Body statements were
made in the context of Article XX of the GATT
1994, it is our view that
such statements are also valid with respect to the protection of public
morals and public order under Article XVI of the
GATS. More
particularly, Members should be given some scope to define and apply for
themselves the concepts of “public morals” and ‘public order’ in
their respective territories, according to their own systems and scales
of values.”(120)
84. The Appellate Body in US
— Gambling summarized the Panel’s
findings, and left them untouched, on the definition of “public morals”
and ‘public order’, and their application to particular measures
related to gambling, in the following terms:
“In its analysis under Article XIV(a), the Panel found that “the
term ‘public morals’ denotes standards of right and wrong conduct
maintained by or on behalf of a community or nation.” The Panel
further found that the definition of the term “order”, read in
conjunction with footnote 5 of the GATS, “suggests that ‘public
order’ refers to the preservation of the fundamental interests of a
society, as reflected in public policy and law.” The Panel then
referred to Congressional reports and testimony establishing that “the
government of the United States consider[s] [that the Wire Act, the
Travel Act, and the IGBA] were adopted to address concerns such as those
pertaining to money laundering, organized crime, fraud, underage
gambling and pathological gambling.” On this basis, the Panel found
that the three federal statutes are “measures that are designed to ‘protect
public morals’ and/or ‘to maintain public order’ within the
meaning of Article XIV(a).”(121)
85. The Appellate Body in US
— Gambling stated that the
Panel had properly applied footnote 5 to Article XIV(a), which states
“that [t]he public order exception may be invoked only where a genuine
and sufficiently serious threat is posed to one of the fundamental
interests of society”, since:
“Having defined “public order” to include the standard in
footnote 5, and then applied that definition to the facts before it to
conclude that the measures “are designed to ‘protect public morals’
and/or ‘to maintain public order’“,(122) the Panel was not
required, in addition, to make a separate, explicit determination that
the standard of footnote 5 had been met.”(123)
(c) “Necessary”
86. The Appellate Body in US
— Gambling observed that the
standard of “necessity” is an objective standard:
“We note, at the outset, that the standard of ‘necessity’
provided for in the general exceptions provision is an objective
standard. To be sure, a Member’s characterization of a measure’s
objectives and of the effectiveness of its regulatory approach — as
evidenced, for example, by texts of statutes, legislative history, and
pronouncements of government agencies or officials — will be relevant
in determining whether the measure is, objectively, ‘necessary’. A
panel is not bound by these characterizations,(124) however, and
may also find guidance in the structure and operation of the measure and
in contrary evidence proffered by the complaining party. In any event, a
panel must, on the basis of the evidence in the record, independently
and objectively assess the ‘necessity’ of the measure before it.”(125)
87. The Appellate Body in US
— Gambling observed that the
assessment of the standard of “necessity” was carried out through a
process of “weighing and balancing a series of factors”:
“In Korea — Various Measures on Beef, the Appellate Body
stated, in the context of Article XX(d) of the GATT
1994, that whether a
measure is ‘necessary’ should be determined through ‘a process of
weighing and balancing a series of factors’.(126) The Appellate
Body characterized this process as one:
… comprehended in the determination of whether a WTO-consistent
alternative measure which the Member concerned could “reasonably be
expected to employ” is available, or whether a less WTO inconsistent
measure is “reasonably available”.”(127)”(128)
88. The Appellate Body in US
— Gambling described the
specific steps in the process of weighing and balancing:
“The process begins with an assessment of the ‘relative
importance’ of the interests or values furthered by the challenged
measure.(129) Having ascertained the importance of the particular
interests at stake, a panel should then turn to the other factors that
are to be ‘weighed and balanced’. The Appellate Body has pointed to
two factors that, in most cases, will be relevant to a panel’s
determination of the ‘necessity’ of a measure, although not
necessarily exhaustive of factors that might be considered.(130)
One factor is the contribution of the measure to the realization of the
ends pursued by it; the other factor is the restrictive impact of the
measure on international commerce.
A comparison between the challenged measure and possible alternatives
should then be undertaken, and the results of such comparison should be
considered in the light of the importance of the interests at issue. It
is on the basis of this ‘weighing and balancing’ and comparison of
measures, taking into account the interests or values at stake, that a
panel determines whether a measure is ‘necessary’ or, alternatively,
whether another, WTO-consistent measure is ‘reasonably available’.“(131)’(132)
89. In determining what constitutes a “reasonably available”
alternative measure the Appellate Body in US — Gambling
observed:
“The requirement, under Article XIV(a), that a measure be ‘necessary’
— that is, that there be no ‘reasonably available’, WTO-consistent
alternative — reflects the shared understanding of Members that
substantive GATS obligations should not be deviated from lightly. An
alternative measure may be found not to be ‘reasonably available’,
however, where it is merely theoretical in nature, for instance, where
the responding Member is not capable of taking it, or where the measure
imposes an undue burden on that Member, such as prohibitive costs or
substantial technical difficulties. Moreover, a ‘reasonably available’
alternative measure must be a measure that would preserve for the
responding Member its right to achieve its desired level of protection
with respect to the objective pursued under paragraph (a) of Article
XIV.”(133)’(134)
90. The Appellate Body in US
— Gambling reversed the Panel’s
finding that the responding Member must have first “explored and
exhausted” all reasonably available WTO-compatible alternatives before
adopting its WTO-inconsistent measure,(135) and the Panel’s
further finding that the United States therefore had “an obligation to
consult with Antigua before and while imposing its prohibition on the
cross-border supply of gambling and betting services”, especially in
light of its existing specific commitments with respect to these
services.(136),(137) The Appellate Body stated:
“In our view, the Panel’s “necessity” analysis was flawed
because it did not focus on an alternative measure that was reasonably
available to the United States to achieve the stated objectives
regarding the protection of public morals or the maintenance of public
order. Engaging in consultations with Antigua, with a view to arriving
at a negotiated settlement that achieves the same objectives as the
challenged United States’ measures, was not an appropriate alternative
for the Panel to consider because consultations are by definition a
process, the results of which are uncertain and therefore not capable of
comparison with the measures at issue in this case.(138)
We note, in addition, that the Panel based its requirement of
consultations, in part, on “the existence of [a] specific market
access commitment [in the United States’ GATS Schedule] with respect
to cross-border trade of gambling and betting services”.(139)
We do not see how the existence of a specific commitment in a Member’s
Schedule affects the “necessity” of a measure in terms of the
protection of public morals or the maintenance of public order. For this
reason as well, the Panel erred in relying on consultations as an
alternative measure reasonably available to the United States.”(140)
(d) Burden of proof
91. The Appellate Body in US
— Gambling clarified that the
burden of proof on the party invoking Article XIV(a) is to establish a prima
facie case that the measure at issue is “necessary”:
“It is well-established that a responding party invoking an
affirmative defence bears the burden of demonstrating that its measure,
found to be WTO-inconsistent, satisfies the requirements of the invoked
defence.(141) In the context of
Article XIV(a), this means that
the responding party must show that its measure is ‘necessary’ to
achieve objectives relating to public morals or public order. In our
view, however, it is not the responding party’s burden to show, in the
first instance, that there are no reasonably available alternatives to
achieve its objectives. In particular, a responding party need not
identify the universe of less trade-restrictive alternative measures and
then show that none of those measures achieves the desired objective.
The WTO agreements do not contemplate such an impracticable and, indeed,
often impossible burden.
Rather, it is for a responding party to make a prima facie
case that its measure is ‘necessary’ by putting forward evidence and
arguments that enable a panel to assess the challenged measure in the
light of the relevant factors to be ‘weighed and balanced’ in a
given case. The responding party may, in so doing, point out why
alternative measures would not achieve the same objectives as the
challenged measure, but it is under no obligation to do so in order to
establish, in the first instance, that its measure is ‘necessary’.
If the panel concludes that the respondent has made a prima facie case
that the challenged measure is ‘necessary’ — that is, ‘significantly
closer to the pole of ‘indispensable’ than to the opposite pole of
simply ‘making a contribution to’’381 — then a panel should find
that challenged measure ‘necessary’ within the terms of Article
XIV(a) of the GATS.”(142)
92. The Appellate Body in US
— Gambling specified that a
respondent invoking Article XIV(a) must nonetheless demonstrate why a
WTO-consistent measure raised by the claimant is not “reasonably
available”:
“If, however, the complaining party raises a WTO-consistent
alternative measure that, in its view, the responding party should have
taken, the responding party will be required to demonstrate why its
challenged measure nevertheless remains ‘necessary’ in the light of
that alternative or, in other words, why the proposed alternative is
not, in fact, ‘reasonably available’. If a responding party
demonstrates that the alternative is not “reasonably available”, in
the light of the interests or values being pursued and the party’s
desired level of protection, it follows that the challenged measure must
be ‘necessary’ within the terms of Article XIV(a) of the
GATS.”(143)
XVIII. Article XIV bis
back to top
A. Text of Article XIV bis
Article XIV bis: Security Exceptions
1. Nothing in this Agreement shall be construed:
(a) to require any Member to furnish any information, the disclosure
of which it considers contrary to its essential security interests; or
(b) to prevent any Member from taking any action which it considers
necessary for the protection of its essential security interests:
(i) relating to the supply of services as carried out directly or
indirectly for the purpose of provisioning a military establishment;
(ii) relating to fissionable and fusionable materials or the
materials from which they are derived;
(iii) taken in time of war or other emergency in international
relations; or
(c) to prevent any Member from taking any action in pursuance of its
obligations under the United Nations Charter for the maintenance of
international peace and security.
2. The Council for Trade in Services shall be informed to the fullest
extent possible of measures taken under paragraphs 1(b) and
(c) and of
their termination.
B. Interpretation and Application of Article XIV bis
1. Article XIV bis:2
(a) Format for notifications
93. With respect to the format for notifications under
paragraph 2,
see the Guidelines for Notifications under the General Agreement on
Trade in Services.(144)
Footnotes:
68. S/L/74,
para. 10. back to text
69. S/L/64, paras. 3–4. back to text
70. Panel Report, Canada — Autos, paras. 10.269–10.272. back to text
71. At its 44th Session held in October 2006, the Committee
agreed to recommend the introduction of a simplified format for the
notification of new RTAs to the Council for Trade in Services (WT/REG/16).
back to text
72. The notification format is circulated in document S/L/310.
See also WT/REG/M/44, paras. 17–19 and
S/C/M/90, paras. 13–16. back to text
73. S/L/5. back to text
74. WT/REG/M/16, section B, in particular, paras. 4–39. The
adopted recommendations can be found in WT/REG/5. back to text
75. S/C/M/31, section E. The procedures can be found in
S/C/W/92. back to text
76. S/L/5. back to text
77. S/L/74,
para. 11. back to text
78. S/C/M/32, section A. The adopted Disciplines can be found in S/L/64. back to text
79. S/WPPS/W/21, para. 2. back to text
80. S/L/63. back to text
81. S/L/63. back to text
82. S/L/63. back to text
83. S/WPPS/4. back to text
84. Paragraph 3 of the Annex on Financial Services relates to
recognition in financial services. back to text
85. S/L/74,
para. 11. back to text
86. S/L/5. back to text
87. S/C/M/19, paras. 4–7. The text of the approved Guidelines
can be found in S/L/38. back to text
88. Paragraph 5 the of Annex on Telecommunications relates to the
access to and use of public telecommunications transport networks and
services. back to text
89. S/L/74,
paras. 12–13. back to text
90. S/L/5. back to text
91. S/L/74,
paras. 12–13. back to text
92. S/C/M/2, paras. 23–25. See also the Reports of the Working
Party on GATS Rules to the Council for Trade in Services: S/WPGR/1–6,
S/WPGR/8,
S/WPGR/12-13. back to text
93. S/L/159. The earlier extensions are found in documents
S/L/43,
S/L/73,
S/L/90 and
S/L/102. back to text
94. (footnote original) Concerning the lack of sufficient
facts for carrying out a legal analysis, see, for instance, Appellate
Body Report on EC — Asbestos, paras. 78–83. Concerning judicial
economy, see our remarks in section 5 of the Introduction to this
Report. back to text
95. Panel Report, US — Gambling, paras. 6.441–6.442. back to text
96. S/L/5. back to text
97. Panel Report, US — Large Civil Aircraft
(2nd Complaint),
para. 7.968. back to text
98. Panel Report, US — Large Civil Aircraft
(2nd Complaint),
para. 7.969. back to text
99. S/C/M/2, paras. 23–25. See also the Reports of the Working
Party on GATS Rules to the Council for Trade in Services, S/WPGR/1–21.
back to text
100. Appellate Body Report, US — Gambling, para. 291. back to text
101. (footnote original) Notwithstanding the general
similarity in language between the two provisions, we note that Article
XIV(a) of the GATS expressly enables Members to adopt measures “necessary
to protect public morals or to maintain public order”, whereas
the corresponding exception in the GATT 1994, Article XX(a), speaks of
measures “necessary to protect public morals”. (emphasis added) back to text
102. (footnote original) See, for example, paragraphs
(a), (b), and (d) of Article XX of the GATT
1994:
(a) necessary to protect public morals;
(b) necessary to protect human, animal or plant life or health;
…
(d) necessary to secure compliance with laws or regulations which are
not inconsistent with the provisions of this Agreement, including those
relating to customs enforcement, the enforcement of monopolies operated
under paragraph 4 of Article II and
Article XVII, the protection of
patents, trade marks and copyrights, and the prevention of deceptive
practices. back to text
103. (footnote original) In this respect, we observe that
this case is not only the first where the Appellate Body is called upon
to address the general exceptions provision of the GATS, but also the
first under any of the covered agreements where the Appellate Body is
requested to address exceptions relating to “public morals.” back to text
104.
Appellate Body Report, US — Gambling,
para. 291. back to text
105. Appellate Body Report, US — Gambling,
para. 292. back to text
106. (Footnote original) Appellate Body Report, US — Shrimp,
para. 147. See also Appellate Body Report, US —
Gasoline, p.
22, DSR 1996:I, 3, at 20. back to text
107. (Footnote original) Appellate Body Report, US —
Gasoline, pp. 17–18, DSR 1996:I, 3, at 16. back to text
108. Appellate Body Report, US — Gambling,
para. 292. back to text
109. S/L/74,
para. 14. back to text
110. S/C/M/1. The adopted Decision can be found in
S/L/4. back to text
111. S/L/4, para. 1. back to text
112. Appellate Body Report, US — Gambling,
para. 339. back to text
113. (footnote original) Appellate Body Report, US —
Gasoline, p. 22, DSR 1996:I, 3, at 20. back to text
114. (footnote original) Ibid., p. 22, DSR 1996:I,
3, at 20–21. back to text
115. Appellate Body Report, US — Gambling,
para. 339. back to text
116. Appellate Body Report, US — Gambling,
para. 344. back to text
117. Appellate Body Report, US — Gambling,
para. 356. back to text
118. Panel Report, US — Gambling,
para. 6.455 back to text
119. (footnote original) See Appellate Body Reports on
Korea — Various Measures on Beef, para. 176 and EC — Asbestos,
para.
168 back to text
120. Panel Report, US — Gambling, para. 6.461. back to text
121. Appellate Body Report, US — Gambling,
para. 296. back to text
122. Panel Report, para. 6.487. back to text
123. Appellate Body Report, US — Gambling,
para. 298. back to text
124. (footnote original) Appellate Body Report, India — Patents (US),
para. 66. back to text
125. Appellate Body Report, US — Gambling,
para. 304. back to text
126. (footnote original) Appellate Body Reports,
Korea — Various Measures on Beef, para. 164. back to text
127. (footnote original) Appellate Body Reports,
Korea — Various Measures on Beef, para. 166. back to text
128. Appellate Body Report, US — Gambling,
para. 304–305.
back to text
129. (footnote original) Ibid., para. 162. See
also Appellate Body Report, EC — Asbestos, para. 172. back to text
130. (footnote original) Appellate Body
Report,
Korea — Various Measures on Beef,
para. 164. back to text
131. (footnote original) Ibid., para. 166. back to text
132. Appellate Body Report, US — Gambling,
para. 306 — 307. back to text
133. (footnote original) Appellate Body Report, EC — Asbestos, paras. 172–174. See also
Appellate Body
Report,
Korea — Various Measures on Beef, para. 180. back to text
134. Appellate Body Report, US — Gambling,
para. 308. back to text
135. (footnote original) Panel Report, para. 6.528. See
also paras. 6.496, 6.522, and 6.534. back to text
136. (footnote original) Panel Report, para. 6.531. See
also para. 6.534. back to text
137. Appellate Body Report, US — Gambling,
para. 315. back to text
138. Appellate Body Report, US — Gambling,
para. 317. back to text
139. (footnote original) Panel Report, para. 6.531. back to text
140. Appellate Body Report, US — Gambling,
para. 318. back to text
141. (footnote original) Appellate Body Report, US —
Gasoline, pp. 22–23, DSR 1996:I, 3, at 21; Appellate Body Report, US
— Wool Shirts and Blouses, pp. 15–16, DSR 1997:I, 323, at 337;
Appellate Body Report, US — FSC (Article 21.5 — EC), para. 133.
back to text
142. Appellate Body Report, US — Gambling,
para. 309–310.
back to text
143. Appellate Body Report, US — Gambling,
para. 311. back to text
144. S/L/5. See also
S/L/93. back to text
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