European Communities—Measures Affecting Asbestos and Asbestos-Containing Products

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Decisions of the Appellate Body of the World Trade Organization

European Communities—Measures Affecting Asbestos and Asbestos-Containing Products

Joel P. Trachtman

WTO Appellate Body Report: European Communities—Measures Affecting Asbestos and Asbestos-Containing Products, AB-2000-11 WT/DS135/AB/R (00-1157), adopted by Dispute Settlement Body, 5 April 2001. Canada, Appellant/Appellee, European Communities, Appellant/Appellee. Brazil and United States, Third Participants. Division: Feliciano, Bacchus and Ehlermann. Major Topics Addressed by Appellate Body: Article III of GATT; Like Products; Article XX(b) of GATT; Definition of “Technical Regulation” under Annex 1.1 of the TBT Agreement; Non-Violation Nullification or Impairment; Scope of Appellate Review.

1. Abstract

This case involved several important issues. First, the Appellate Body rejected a narrow conception of “like products” propounded by the Panel, which would have excluded impact on health from consideration in determining the likeness of products. The good news is that the Appellate Body found that health risks can be considered in connection with an evaluation of likeness that focuses on the competitive relationship among products. The bad news is that this focus on competitive relationship might not reliably allow for regulatory distinctions to translate into “unlikeness,” resulting in invalidation of regulation. However, the Appellate Body applied a second test under Article III:4: whether the domestic regulation treats a class of imported products less favourably than a class of domestic products. This latter test would presumably protect regulation that does not differentially affect domestic and foreign products.

Second, following the Korea—Beef decision, the Appellate Body interpreted the necessity test under Article XX(b) of GATT to require a more extensive balancing than previously understood. This balancing test considers the degree to which national regulatory ends are met by alternative measures, instead of assuming that national regulatory ends must be met in full, and considers the importance of the common interests or values pursued. The Appellate Body found that the French measure qualified for an exception under Article XX(b).

Third, the Appellate Body found that measures exempted under Article XX could, in theory, still be subject to claims for non-violation nullification or impairment under Article XXIII.

Finally, the Appellate Body reversed the Panel decision to the effect that a total ban on asbestos is not a technical regulation under the TBT Agreement, finding that such a ban could be a technical regulation. As the TBT Agreement covers matters different from the GATT provisions considered in this case, and the Panel had not created a record sufficient to support a determination on these matters, the Appellate Body did not complete the analysis.

2. Facts

This case concerned a French law, Decree No. 96-1133, concerning asbestos and products containing asbestos, which entered into force on 1 January 1997 (the “Decree”). The Decree prohibited manufacture, processing, and import of all types of asbestos fibres, whether or not incorporated in other products. The Decree recited that it was for the purpose of protecting workers and consumers.

3. Analysis of the Appellate Body Report

Scope of Application of TBT Agreement

The Panel found that the TBT Agreement did not apply to the part of France’s Decree setting out the prohibition on goods containing asbestos. The Panel separated this prohibition from the Decree’s exceptions for purposes of analysis.[1] Canada appealed this separation, and the finding that the TBT Agreement did not apply. Furthermore, Canada argued that a “general prohibition” can qualify as a technical regulation under Annex 1.1 of the TBT Agreement. The Appellate Body found that the measure must be examined as a whole.[2] When...
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