14 World Trade Rev 337

DATE DOWNLOADED: Fri Sep 9 12:21:21 2022
SOURCE: Content Downloaded from HeinOnline
Citations:
Bluebook 21st ed.

Philip I. Levy & Donald H. Regan, EC - Seal Products: Seals and Sensibilities (TBT
Aspects of the Panel and Appellate Body Reports), 14 WORLD TRADE REV. 337 (2015).
ALWD 7th ed.

Philip I. Levy & Donald H. Regan, EC - Seal Products: Seals and Sensibilities (TBT
Aspects of the Panel and Appellate Body Reports), 14 World Trade Rev. 337 (2015).
APA 7th ed.

Levy, P. I., & Regan, D. H. (2015). Ec seal products: seals and sensibilities (tbt
aspects of the panel and appellate body reports). World Trade Review, 14(2), 337-379.
Chicago 17th ed.

Philip I. Levy; Donald H. Regan, "EC - Seal Products: Seals and Sensibilities (TBT
Aspects of the Panel and Appellate Body Reports)," World Trade Review 14, no. 2
(April 2015): 337-379
McGill Guide 9th ed.

Philip I. Levy & Donald H. Regan, "EC - Seal Products: Seals and Sensibilities (TBT
Aspects of the Panel and Appellate Body Reports)" (2015) 14:2 World Trade Rev 337.
AGLC 4th ed.

Philip I. Levy and Donald H. Regan, 'EC - Seal Products: Seals and Sensibilities (TBT
Aspects of the Panel and Appellate Body Reports)' (2015) 14(2) World Trade Review 337
MLA 9th ed.

Levy, Philip I., and Donald H. Regan. "EC - Seal Products: Seals and Sensibilities
(TBT Aspects of the Panel and Appellate Body Reports)." World Trade Review, vol. 14,
no. 2, April 2015, pp. 337-379. HeinOnline.
OSCOLA 4th ed.

Philip I. Levy & Donald H. Regan, 'EC - Seal Products: Seals and Sensibilities (TBT
Aspects of the Panel and Appellate Body Reports)' (2015) 14 World Trade Rev 337
-- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and
Conditions of the license agreement available at
https://heinonline.org/HOL/License
-- The search text of this PDF is generated from uncorrected OCR text.
-- To obtain permission to use this article beyond the scope of your license, please use:
Copyright Information
World TradeReview (2015), 14: 2 331-319
© Philip 1.Levy and Donald H. Regan doi:10.1017/S1474745615000051
EC-Seal Products: Seals and Sensibilities

(TBT Aspects of the Panel and Appellate
Body Reports)
PHILIP I. LEVY*
The Chicago Council on Global Affairs and Northwestern Kellogg School of Management
DONALD H. REGAN**
University of Michigan Law School
Abstract: The EC Seal Products case stemmed from complaints by Canada and
Norway against European Union regulations that effectively banned the
importation and marketing of seal products from those countries. The EU said it
had responded to European moral outrage at the killing of seals. Canada and
Norway challenged the regime under various provisions of the Technical Barriers
to Trade (TBT) Agreement and the GATT. This article considers TBT aspects of
the Panel and Appellate Body decisions. It discusses issues such as whether there
is any bright line to be drawn between legitimate and illegitimate purposes in
regulation, the proper legal meaning of a 'technical regulation', and the
interpretation of TBT 2.1.
1. Introduction
European Communities - Measures Prohibitingthe Importationand Marketing of

Seal Products' involved complaints by Canada and Norway against European
Union regulations that had the effect of banning the importation and marketing
of seal products in the EU. The EU said it enacted the ban in response to
European moral outrage at the inhumane killing of seals, and to avoid participation
in such inhumane killing by the purchase of seal products. The EU claimed a
general ban was necessary, as opposed to a ban solely on products from seals
killed inhumanely, because it would be impossible to monitor effectively whether
particular seals were killed inhumanely on seal hunts. Three categories of seal pro-
ducts were excepted from the ban: products from seals killed in traditional hunts by
members of indigenous communities such as the Inuit (the 'IC exception'); products
from seals killed in hunts authorized by national governments for marine resources
"Email: plevy@thechicagocounciLorg.
""Email: donregan@umich.edu.
1 WT/DS400 & 401/R (adopted as modified 18 June 2014).
338 PHILIP I. LEVY AND DONALD H. REGAN
management (the 'MRM exception'); and products brought in by travelers for their
own use (the 'Travelers' exception').
Canada and Norway challenged the EU seal products regime under various pro-
visions of the Technical Barriers to Trade (TBT) Agreement and the GATT. Aside
from the threshold TBT issue of whether the regime was a technical regulation, the
principal issues under both agreements revolved around whether the EU's various
purposes were legitimate, whether they were evenhandedly applied, and whether
the general ban on seal products was unnecessarily trade-restrictive. The Panel
found that the measure was a technical regulation within the meaning of TBT
Annex 1.1, and that both the IC exception and the MRM exception violated
TBT 2.1. The Panel also found a violation of TBT 5.1.2, first sentence, as well as
violations of GATT 1:1 (the IC exception) and 111:4 (the MRM exception). The
Appellate Body has already decided the appeals from the Panel's decision. 2 The
Appellate Body found that the measure was not shown to be a technical regulation,
and declared the Panel's discussion of particular TBT violations 'moot and of no
legal effect'. The Appellate Body then confirmed the GATT 1:1 violation, although
on somewhat different reasoning from the Panel. (The EU did not appeal the
Panel's finding of a 111:4 violation.)
This essay comprises two principal sections, Section 2 on economic consider-
ations, and Section 3 on the legal issues. Of course, it is the premise of this entire
series of case reports that there is no essential conflict between the economic and
legal perspectives, and that a unified presentation should be possible in principle.
Both co-authors accept that premise. But regardless of disciplinary background,
people can disagree about how tribunals should approach cases such as EC-Seal
Products, about the relative dangers of protectionism and undue restriction of legit-
imate regulation; and we have not achieved sufficient agreement between ourselves
to allow a unified presentation. So by default, each author has tended to his own
disciplinary last, with input from the other.
Section 2 attempts to describe a general framework for thinking about conflicts
between the right to regulate and rights of market access. One of the most interest-
ing aspects of the case is the extent to which the EU concern was based on the senti-
ments of its citizenry about economic activity occurring in other countries. Section
2 considers different economic approaches to consumer welfare and asks whether
there are any bright lines that can be drawn between different justifications for
regulation. Section 2 also considers how we might use the economic theory of
screening equilibria in trying to identify regulations motivated by illegitimate
national-origin preferences. Finally, Section 2 takes up the economic theory of
incomplete contracting and time-inconsistency, to discuss the effect on trade nego-
tiations of uncertainty about how treaty language will be interpreted by dispute
settlement tribunals; and it asks whether there are lessons for the treaty interpreter.
2 WT/DS400 & 401/AB/R (adopted 18 June 2014).

EC Seal Products 339
Section 3, on the legal issues, faces a special problem, which also turns out to be
an opportunity. The general plan of this series of case discussions requires that we
should discuss the Panel report, and leave the Appellate Body report for discussion
next year. That seems quixotic enough. In addition, the Panel's main focus was on
the TBT; its treatment of the GATT issues was parasitic on its TBT analysis. But, as
noted above, the Appellate Body found that the measure was not shown to be a
technical regulation (reversing the Panel on that), and declared the Panel's discus-
sion of particular TBT violations 'moot and of no legal effect'. In Section 3, we will
discuss the TBT issues (and only the TBT issues) at both the Panel and Appellate
Body levels. We will discuss both the Panel's analysis and the Appellate Body's
analysis of whether the EU seal products regime is a technical regulation; and we
will then discuss the Panel's analysis of the other TBT issues (which the
Appellate Body does not address). Even though the Panel's TBT analysis has no
legal effect, it is nonetheless the first discussion we have by a WTO tribunal of
important TBT issues that will certainly arise again. We will not discuss the
GATT issues at either the Panel or Appellate Body level. The Panel's GATT analysis
has not been declared moot across the board, but it has been largely superseded by
the Appellate Body's treatment, which we leave for discussion next year.
2. Economic considerations
From an economic standpoint, the most interesting facets of the case include the
plausible scope of individual and societal preferences, screening equilibria, and
incomplete contracting. The case revolved around the EU contention that the
sale of seal products within the European market would pose a threat to
European morals. Curiously, throughout the argumentation, there was relatively
little dispute about this assertion. There were disputes aplenty, to be sure, but
they tended to revolve around which line of legal reasoning would arrive at this
conclusion, and in turn, what requirements the ultimate legal approach would
impose on the EU's devotion to its cause, and the actions the EU would take.
In a prescient analysis from 1997,3 Charnovitz discussed the concept of morality
in international trade law. He noted that clauses in trade agreements had made
allowances for measures in support of public morals from the 1920s and earlier.
The explicit GATT provision, Article XX(a), thus had a long provenance, but
had yet to be explored or fleshed out through dispute settlement. 4 The EC-Seal
Products case marks at least the opening round of that exploration.
3 Steve Charnovitz (1997), 'Moral Exception in Trade Policy', The Virginia Journal of International
Law, 38: 689.
4 Although there is no previous jurisprudence on GATT XX(a) itself, the discussion of GATS XIV(a) in
United States Measures Affecting the Cross-Border Supply of Gambling and Betting Services (Antigua
and Barbuda), WT/DS285/R (adopted 22 May 2007) is generally thought to be relevant.
In the dispute, the question of whether the EU seal regime denied Canada and
Norway their rights under TBT or under GATT took center stage. Here, though,
we shunt it aside and focus instead on how one might think of the case in terms
of some of the first principles of economics, such as preferences and consumption.
That leads to some more subtle topics, such as imperfect information and bargain-
ing. In deliberate contrast to a legal approach, we consider these matters afresh,
without worrying about precedents or judicial interpretations. The goal is to
make a connection between conceptual approaches and likely outcomes.
Particularly on a topic that is being freshly litigated, the hope is that this approach
will provide, if not a guide, at least a yardstick against which the legally mandated
approaches can be measured.
A core question in the EC-Seal Products case is the extent and character of EU
concerns over Canadian and Norwegian seal hunts. Section 2.1 asks whether there
are natural bright lines that separate the legitimate topics of national concern from
illegitimate topics. For that section, we stipulate purity of motive on the part of the
EU. Section 2.2 relaxes the purity assumption and considers the quest for a separ-
ating equilibrium which might distinguish the purely motivated from the impurely
motivated. Section 2.3 sets aside questions of the legitimacy of motivation and steps
back from the particular questions of seals and morality to ask what happens if we
observe shifts in the scope of rights and obligations over time.
2.1 Bright lines and hakapiks

2.1.1 Introduction
What are the proper bounds of a country's regulatory powers? If countries are
allowed to lay out the permissible characteristics of a product, what do we mean
by 'characteristics'? As a means of addressing these questions, this section establishes
a basic framework that we will later complicate. Throughout this section, we assume
that there is homogeneity of preferences among a national population. In economic
parlance, one could discuss a representative agent with utility U(.), where all of the
debate will be over the implications of placing ever-broader arguments in the utility
function. In political terms, we will assume that these individuals have an actual
representative agent (government) with no motive other than to maximize the
population's well-being (the discounted stream of utility payoffs over time).
We progress from narrow, uncontroversial determinants of well-being to
broader, more arguable ones. At each stage, we stop to take note of the measurabil-
ity of the product characteristics in question, any natural limitations on the scope of
individuals' concerns, and on the potential for international conflict. This is done in
anticipation of disputes further down the line, when we return to worrying about
more legal matters like establishing a practicable set of rules. The goal is to see
whether there are clear delineations between different motivations for government
action. It is an attempt to classify motives by the way something enters into a
national welfare function.
Before delving in, it may be worth taking a moment to look at the concept of
'natural limitations'. This is not a reference to any sort of divinely ordained categ-
orization. Rather, it is looking for qualitative differences in approach. Of course,
there is nothing that restricts the WTO membership to one category or another
as it describes the limitations on countries' rights to impose trade barriers. But
subtle, quantitative distinctions usually require explicit delineation in agreements
in a way that broad, categorical distinctions do not. Thus, if the Dispute
Settlement Body is in search of safe havens to find consistency in rulings, such
havens are more likely to be found at these categorical boundaries.
The presumption is that there may be a desire to stop short of extreme territorial-
ity. There are two broad checks on the potential for capricious trade restrictions - the
motive must be one that the WTO membership has approved, and the implemen-
tation of the measure must meet particular requirements (e.g. least trade restric-
tive). 5 If governments can act with impunity on any moral indignation of the
citizenry, and that indignation can have any cause (e.g. educational curricula in
6
Timbuktu), then the first of these two checks becomes meaningless.
We proceed through three different categories. First, preferences over the phys-
ical characteristics of a product. Second, preferences over the pedigree of a
product (how it was made). Third, moral sentiments, potentially disconnected
from a product altogether. These are not mutually exclusive, but represent steadily
broader domains of concern.
2.1.2 Preferences over a product

In the most standard approach to economics, we think of consumers drawing utility
from the consumption of a good. A diner consumes some swordfish and is happier
for it. We can also think of disutility in consumption - someone consumes a dose of
mercury and is distinctly worse off for it. Here, then, we get to an obvious scenario
for regulation: if the swordfish contains mercury, this will have a direct effect on the
consumer's well-being. If it were immediately obvious to the naked eye whether
swordfish contained mercury or not, though, there might not be a need for regu-
lation. There would presumably be little market for tainted fish. More likely,
though, is the possibility that it is costly to check the characteristics of the
product. Rather than make individual customers check fish themselves, a regulator
could require and enforce rules that represented public tastes.
When describing the physical characteristics of products, measurability is at its
easiest. One can test to see how much mercury is in the swordfish. The ready obser-
vability of physical characteristics does not render such preferences immune from
5 This generalization abstracts from potential differences between restrictions under the GATT and
TBT.
6 This seems to be a principal source of division between those who are more or less concerned about an
expansive interpretation of the 'moral exceptions' clause. Those who are comfortable with backup protec-
tions against capriciousness are less concerned about allowing a broad range of motives.
conflict. While one can observe the physical characteristics, there could be disputes
over the relevance of those characteristics. A classic example would be genetically
modified organisms (GMOs). Their presence can be measured, but what of their
impact on health? From a trade perspective, under our strong assumption of hom-
ogeneity of tastes, it should not make much difference. If everyone in a country
believes that GMOs pose an unacceptable health risk, there will be no market
for products containing GMOs. 7 Thus, even if another country had a very different
view of the health effects, a non-discriminatory ban on the product would be
unnecessary. As foreshadowing for looser assumptions in Section 2.2, this issue
will reemerge as a major problem with heterogeneity of preferences, under which
one group believed GMOs were risky and another thought them safe. As far as
measurability is concerned, the bottom line is that the physical characteristics
could be readily verified, even if the medical implications could not.
Thus, the simplest argument of the utility function is direct consumption of a
product. We can also consider indirect consumption of a product, when the con-
sumption undertaken by a fellow countryman has positive or negative externalities.
Classic examples could include second-hand smoke or garish house paint, each of
which could provide pleasure to the original consumer but displease a compatriot.
Such externalities provide a well-established basis for regulation, since individual
welfare maximization could lead to a suboptimal outcome. Because we are
talking about the effects of physical characteristics (drifting smoke, visible color),
measurability is not much of a problem here. One certainly could encounter inter-
national disputes in instances in which it appeared that 'like' products with similar
negative effects were being treated differently. This was part of the claim in
US-Clove Cigarettes, in which it was argued by Indonesia that clove and
menthol cigarettes had similar effects, while the United States argued that their
physical characteristics were distinct.8
We conclude the discussion of physical characteristics with a consideration of the
natural limitations on the scope of this type of regulation. The regulations would
cover the physical characteristics of goods sold in the imposing country. As an
importer, the country need take no stance on how the goods achieved their physical
state. So long as the relevant physical characteristics were measurable, there would
be no reason for concern about how the product came to be that way. We note this
as a baseline to contrast with broader concerns to come. We also note that, while
drawing a bright line at observable physical characteristics might be well-grounded
7 So as not to take on every conceivable point of conflict, we set aside questions about the cost of infor-
mational regulation (e.g. country of origin or content labeling) and assume that regulators could make clear
the contents.
8 United States Measures Affecting the Production and Sale of Clove Cigarettes (Indonesia), WT/
DS406/AB/R (adopted 24 April 2012). For a detailed discussion, see Broude et al. (2014), 'Do you mind
if I don't smoke? Products, purpose and indeterminacy in US Measures Affecting the Production and
Sale of Clove Cigarettes', World Trade Review, 13(2): 357 392.
in economic tradition, this approach has previously been rejected by the Appellate
Body in US-Shrimp 21.5. 9
2.1.3 Preferences over process

We turn next to considerations about how a product was made. While this category
could potentially be quite broad, we will intentionally narrow it by directing large
swathes toward the preceding and following categories. One central issue that will
fall into this category is negative production externalities. Suppose a product could
be made with either a 'dirty' or a 'clean' technique. The dirty technique might
release significant pollution, while the clean technique releases none. If this pol-
lution occurs within our regulating country, or sufficiently nearby that the
country suffers the consequences, it can certainly affect the welfare function of indi-
viduals within. The government would have the sovereign right to regulate any
domestic production, but what about the production of goods that ultimately
end up as imports? The effectiveness of regulation in promoting domestic welfare
will now depend on a two-stage process - the way regulation affects domestic con-
sumption and the way changes in domestic consumption affect the quantity of pol-
lution spillovers. 10
In terms of measurability, the challenge here is substantially greater than in the
previous section. It may be relatively straightforward to measure the extent of pol-
lution flowing across the border from a neighboring country, but how much of that
pollution is due to production of the product in question? If we assume that the
output of the dirty and the clean techniques are indistinguishable, then this poses
a significant difficulty for customs. We could hypothesize two different products
differentiated by the characteristic 'how they were made'. 1 1 Since that character-
istic is not physical nor visible at a customs entry point, any difference in regulatory
approach would either require an erroneous approximation or cooperation on the
part of the exporter. Either approach would heighten the possibility of inter-
national conflict - either unjustified blockage of a product, or potential interference
in the domestic practices of another country.
Still, by requiring a measurable negative externality, there are limits to the scope
of such concerns. For example, while one might be tempted to equate this concern
with 'processes and production methods' (PPM), 12 the overlap is imperfect.
9 United States Import Prohibition of Certain Shrimp and Shrimp Products (India; Malaysia;
Pakistan; Thailand), WT/DS58/AB/R (adopted 6 November 1998), Article 21.5.
10 We are assuming here that regulation is limited to working through effects on domestic consump-
tion, as opposed to through adopting penalties that might alter the behavior of foreign producers who also
had interests within the country or through attempting to influence foreign governments.
11 A point of disagreement between the AB and the Panel in EC Seal Productsconcerned whether such
production history counted as a 'product characteristic' or not. The Panel said yes; the AB said no. It was a
distinction critical to whether the EU Seal Regime counted as a technical barrier to trade (Panel) or
not (AB).
12 This is dealt with in Section 3.1 below.
Organic farming, for example, would not fall into this category. While it could well
affect the presence of pesticides in food, that concern would properly fall into the
previous category - the physical characteristic of containing pesticides. The method
would only serve as an imperfect proxy for the true concern. 13 Similarly, this would
not encompass concerns such as those of the EU over an inhumane seal hunt. In the
arguments put forward in EC-Seal Products, there was no allegation that
Canadian or Norwegian practices inflicted physical harm through negative spil-
lovers. The alleged harm was psychic - a moral offense. Thus, those concerns prop-
erly belong in the next category.
2.1.4 Moral offense

This section, in contrast to the familiar analysis of the preceding sections, takes on
the relatively novel question of how to consider moral offense in utility. This is the
unchallenged core of the EC-Seal Products case. According to the EC, Europeans
found the inhumanity of seal hunting repugnant and immoral. It pained them just
to know that it occurred. This was not disutility from the consumption of seal pro-
ducts such as furs or sealskin boots. Nor was it any environmental spillover from
the killing of seals, as one might have if they were migratory and played a key role
in a European food chain. Instead, the Europeans argued that commercial seal
hunts were inevitably inhumane and morally offensive.
There is nothing unusual about members of a community setting standards for
right and wrong. Traditional concepts of sovereignty provide a natural limitation
on the scope of such standards -communities can set the rules under which they
live. There are also traditions of supra-national efforts to establish standards
with much broader reach, as with the United Nations, the International Labor
Organization, or the WTO. In such cases, there is a degree of international consen-
sus about what the standards should be.
The oddity of the claim of moral offense in EC-Seal Productsis that there is very
little natural limitation to its reach. It reaches across boundaries, but requires no
international consensus. The principal test for legitimacy of a 'public morals'
claim under GATT Article XX(a) seemed to be the sincerity of public sentiment.
Such a test presumably protects against completely spurious claims, such as 'My
people are morally offended by the use of minimills to produce cold-rolled steel!'
But there are many plausible topics on which public sentiment would likely pass
a sincerity test. Maskus 14 summarizes a debate over the extraterritorial enforce-
ment of labor standards. He describes first the position of Dani Rodrik, who
advocated
13 In legal parlance, the distinction is between 'incorporated PPM's' (where the process affects the
physical constitution of the product) and 'unincorporated PPM's' (where it does not). Only the latter
are controversial.
14 Keith Maskus (1997), Should Core Labor Standards be Imposed Through International Trade
Policy, Policy Research Working Paper No. 1817, Washington, DC: World Bank.
allowing nations to impose 'social safeguards' tariffs against countries that follow
labor practices that can be shown, through a series of filters, to be morally repre-
hensible to a majority of citizens in the importers. His argument is that high-stan-
dard countries, such as the United States, have expressed in their legislation social
preferences against certain domestic production technologies, such as child labor
use and 'sweat shops'. However, allowing free imports with low-standard
countries is, in his view, simply an additional technology that is equivalent to
importing foreign workers and allowing them to work under these unacceptable
conditions. Accordingly, importing nations should be allowed to prevent access
to this technology as well via trade restrictions.
Maskus quotes T. N. Srinivasan as critiquing the idea:
acceptance of this proposal would pose considerable difficulties for the trading
system. Apart from technical difficulties in calculating appropriate social tariffs,
its logic would open the WTO to trade sanctions imposed by countries for any
purpose related to cost-raising domestic regulations. Countries constrain or pro-
hibit numerous types of processes for environmental, health, aesthetic, and other
reasons. Under Rodrik's approach, any such differences in domestic and foreign
production regulations potentially could invite tariffs to offset resulting cost
variations.
Note that Srinivasan's argument, as quoted, presumes a limitation that need not
exist in the public morals setting. He imagines that there must at least be a
linkage between foreign practice and domestic costs. With public morals, there
need be no such linkage. The public could be offended by multinationals linked
to imperialism, or by countries with objectionable human rights records. All that
seems required is a sincere belief that the act is offensive and commerce would,
directly or indirectly, support the act.
In his consideration of the GATT public morals clause, Charnovitz finds rela-
tively few limitations. He writes:
The danger of protectionist abuse is real. Virtually anything can be characterized
as a moral issue. At this point, however, it seems premature to worry about
overuse of article XX(a). One can imagine nations justifying many import bans
as morally based. Throughout the 50 years of the GATT-WTO system,
however, no member state has challenged a morally based import ban.' -'
That last consolation, of course, no longer applies. In his invocation of protectionist
danger, Charnovitz raises the specter of mixed motives, which we have deferred to
the following section.
The point here is the potential breadth of moral claims. The potential for extra-
territoriality and overreach has drawn dramatic speculative examples from other
authors, particularly in the analyses of the US-Gambling decision, which relied
15 Steve Charnovitz (1998), 'The Moral Exception in Trade Policy', The Virginia Journal of
InternationalLaw, 38(Summer): 21.
on the analogous GATS Article XIV(a). Marwell attributes the growing challenge
of limiting public morals cases under the GATT to the burgeoning membership of
the organization:
Amongst 148 WTO Member States, 'public morals' could mean anything from
religious views on drinking alcohol or eating certain foods to cultural attitudes
toward pornography, free expression, human rights, labor norms, women's
rights, or general cultural judgments about education or social welfare. What
one society defines as public morals may have little relevance for another, at
16
least outside a certain core of religious or cultural traditions.
Wu, in his analysis of US-Gambling, provides a trichotomy of potential public
morals measures:
Type I restrictions are those used to directly safeguard the morals of inhabitants
within one's own country. The US ban on internet gambling would fall into this
category, as would bans on pornography, narcotics, or alcohol. Type II restric-
tions are those linked to the protection of those directly involved in the pro-
duction of the product or service in the exporting state. For example, a ban on
products made by child labor would fall within this category, as would a ban
on services for sex tourism. Type III restrictions are those aimed at products or
services produced in an exporting state whose practices are considered morally
offensive by the importing state, but where the practices are not directly involved
in the production of the products or service being banned. An example would be
an outright ban on imports from Sudan because of its government's human rights
17
violations in Darfur.
Wu goes on to recommend that a natural limitation on morals measures would be
to limit countries to Type I restrictions. This typology matches only imperfectly
with one based on an economic welfare approach. In the Type I examples given
in the quoted paragraph- gambling, pornography, narcotics, or alcohol- we
think of the harm as deriving from either an individual's consumption or the nega-
tive spillovers of the consumption of others in the community. Such a narrow
reading of Type I moral concerns would effectively take us back to the types of
welfare analysis described before this section. In Wu's typology, seal hunting
should properly fall within Type II. However, the EU claim, if taken seriously, is
that EU consumers suffer moral harm from purchasing the products of seal
hunts. If the moral harm is psychic in this way, rather than through consumption,
and if states have the right to try to alleviate this harm, then it is hard to see why it
matters whether the sincere moral offense stems from a production process or from
16 Jeremy C. Marwell (2006), 'Trade and morality: The WTO public morals exception after gam-
bling', New York University Law Review, 81: 802, at 815.
17 Mark Wu (2008), 'Free Trade and the Protection of Public Morals: An Analysis of the Newly
Emerging Public Morals Clause Doctrine', The Virginia Journal of InternationalLaw, 33: 215, at 235.
dealing with an individual, company, or country that the morally sensitive inhabi-
tants of the importing country find objectionable.
This moral category of welfare claim poses commensurate challenges when it
comes to measurability. Though a trade measure would necessarily apply to a
good or service imported from another country, there need be no observable
characteristic of that product to reveal whether it should be subject to the
measure. Nor would there need to be any observable transboundary flows of pol-
lution or other diminished migration.
In fact, the measurability problem runs even deeper. One of the questions raised
in the EC-Seal Productscase was whether the EU seal regime served to ameliorate
the problem. If the 'problem' were the Canadian or Norwegian seal hunts, then evi-
dence of the sort presented in the Panel decision" s should suffice. But the EC-Seal
Products case is emphatically not about animal welfare, which would be covered
under GATT Article XX(b). The Panel writes: 'Based on the examination of the
measure at issue as well as other available evidence before us, we determined
that the objective of the EC Seal Regime was to address the EC public moral con-
cerns on seal welfare. 19 We further found this objective to fall within the scope of
20
the policy objective governed by Article XX(a).'
The extent of public moral concern is substantially more difficult to measure.
Nor is it obvious that such a psychological measure would vary (strongly) mono-
tonically with more observable measures, such as the number of seals hunted. If
we fielded a survey across the EC, for example, which asked the public how
upset they were about seal hunting on a scale of 1 to 10, we might well get the
same level of moral concern in a year in which 400,000 seals were killed as in a
year in which 100,000 seals were killed. There would be nothing irrational or
ignorant about such a finding; an EU citizen could feel strong outrage if even
one seal were killed and need not reserve additional levels of outrage for higher
death tolls. Technically, though, this demonstrates both that the problem (moral
concern) is exceedingly difficult to measure, and that actions to diminish the
subject of concern need not diminish the moral concern itself.
2.1.5 Attempts at limitations

Does the breadth of a moral concerns approach to welfare mean that one should
forsake it altogether and that it should be impossible to restrict trade based on
the characteristics of the production process? No. There can be processes that
everyone agrees are offensive (e.g. slave labor). If the objections are universal,
then there should be no difficulty agreeing to embody them in explicit
18 Para. 7.457.
19 See Section 7.3.3.1 above.
20 Para. 7.640.
exemptions. 21 Both Marwell and Wu explore potential limitations based on the

extent of global support for a moral standard. There are a number of difficulties,
however. Wu notes that geopolitical measures against Taiwan or Israel frequently
garner sufficient support to clear any standard majoritarian hurdle. 22 From a sys-
temic standpoint, if the moral standards themselves are not accepted by all WTO
members, then anything short of unanimity would represent a de facto move to
a new majority voting standard. Extensive experience at international organiz-
ations such as the United Nations or the International Monetary Fund demon-
strates that countries care deeply about the weights and requirements in any such
scheme. 23 Obviously, in a contested dispute such as EC-Seal Products, there is
no consensus about the moral standard in question.
If, on the other hand, there were a consensus on a particular measure, it would
have two ready routes to adoption. First, there would be no member to challenge
the measure. Second, the measure could be adopted explicitly by the membership as
part of any package that might be adopted.
2.2 The screening problem and consistency

In the preceding section, we maintained the assumption that the country acting to
protect the morals of its citizenry had motives that were pure. Virtually every com-
mentator cited, however, notes the potential for an overly broad morals clause to be
used as justification for protection. This concern is described in the chapeau of
Article XX, which warns against 'disguised restriction on international trade',
thereby suggesting the possibility of nefarious motives. The implication is that
there is likely to be a heterogeneity of interests within the importing country's
population (some may be offended by a measure; some may not) and there may
be a multiplicity of motives among the country's leaders.
2.2.1 The consistency check of the Panel and AB

This multiplicity of motives ended up playing a critical role in the E C-Seal Products
decisions. Howse, Langille and Sykes argue that the EU should be able to address
the AB's concerns with ease, on the grounds that the EU could have successfully
defended its Seals Regime had its motives been pure. 2 4 The EU ran into trouble
with both the Panel and the AB when it allowed exceptions for the hunts of
21 This may overstate the ease of reaching agreement, but in an interesting and relevant way. Countries
might oppose agreement because they would fear interpretations of a new rule with which they might dis-
agree. This would be an instance of the dangers of anticipated expansive interpretation, as discussed below.
22 Wu, 'Free Trade and the Protection of Public Morals', supra note 17, p. 241.
23 Note, for example, common US disdain for proceedings of the UN General Assembly, as well as
staunch US defense of its ability to block measure at the IMF.
24 Rob Howse, Joanna Langille, and Katie Sykes (2014), 'Sealing the Deal: The WTO's Appellate Body
Report in EC Seal Products', ASIL Insights, 18(12): 4 June 2014, http://www.asil.org/insights/volume/i8/
issue/12/sealing-deal-wto's-appellate-body-report-ec-seal-products.
Indigenous Communities (IC), Marine Resource Management (MRM) and

Transportation (importation of seals or seal products for re-export). The opining
jurists seemed to question the sincerity of EU motives. If it is morally offensive to
consume the products of a seal hunt, how can that moral offense disappear if the
hunt is conducted by an IC member? 25 Given the potential breadth of a 'moral con-
cerns' exception described above, the sincerity of moral concerns understandably
26
played a significant role.
Howse, Langille and Sykes argue that this requirement for pure motives is unrea-
listic in a world with a range of competing interests:
A requirement of consistency would be unworkable in the real world of policymak-
ing, where different considerations and priorities have to be balanced against one
another, and the ideal of treating like moral challenges alike can never be perfectly
achieved. The proposed approach would also have dramatically expanded the
WTO's powers of legislative review, contrary to the WTO's institutional mandate.
The difficulty with their proposed deference to national political outcomes is that it
would render it virtually impossible to question the sincerity of a moral concerns
claim. Other than an explicit public survey in which there was a resounding 'we
don't care!' response on the subject in question, almost any inference from the
nature of the regime could be deflected with the argument that it was a concession
to necessary political compromise. 27 This only works if we grant the erectors of
trade barriers free rein by assuming that motives are pure.
2.2.2 Troublesome motives and separatingequilibria

Let us postulate, for the moment, that there are at least two 'types' that might back
a regime restricting seals imports: those with permissible motives (e.g. moral con-
cerns) and those with impermissible motives (e.g. protectionist concerns). One
obviously cannot distinguish the two types just by asking (any self-respecting pro-
tectionist would claim pure motives).
This challenge is a familiar one for economics. 2 S There are plenty of examples
when one wishes to distinguish two types on the basis of unobserved
25 The decisions spend ample time establishing that there is no real expectation that IC or MRM seal
hunts would be more humane.
26 It is interesting to note that the EU public apparently has difficulty striking a balance between the
different moral imperatives of protecting seals and supporting indigenous communities. The indigenous
community in Greenland the most likely intended beneficiary of EU Seals Regime exceptions saw a
decline in demand after the adoption of the regime. Even though their products were allowed in, consumers
shunned them. See http://arcticjournal.com/politics/494/eu-ban-bLamed-rapid-decline-greenland-sealing.
This also raises questions that have been neglected in the main text about whether trade action is truly
necessary if there is broad moral concern.
27 This somewhat exaggerates the case. Panels have subjected the stated purposes of defendants to
scrutiny.
28 For a survey, see John G. Riley (2001), 'Silver Signals: Twenty-Five Years of Screening and
Signaling', Journalof Economic Literature, 39(2): 432 478.
characteristics. For example, employers might want to distinguish between dedi-

cated and flighty workers. Insurance companies might want to distinguish
between careful and careless drivers. There is even, arguably, a GATT example -
the attempt to distinguish between a pair of countries with a sincere desire to pursue
closer economic relations and pairings that just want to undermine MFN.
In each case, the solution is to adopt requirements that lead to a separating equi-
librium, in which one group will be willing to meet the requirements and another
group will not. For employers, they can require a college degree. For insurers,
they may require a high deductible. In the GATT context, Article XXIV requires
that FTAs cover substantially all trade and be concluded in a reasonable period
of time.
The important point to note is that separating equilibria are not tailored to maxi-
mize welfare; they are tailored to play off preferences in such a way that different
types reveal themselves. In fact, if an approach is acceptable to both types, then it is
a pooling equilibrium, not a separatingequilibrium.
In the EC-Seal Products case, one interpretation of the Panel's qualms about
multiple motives is that the panel was trying to establish a high threshold for the
necessary intensity of moral concern. By disallowing balanced political compro-
mises, the Panel meant to discern whether the EC's demonstrated preferences
were intense or casual.
2.3 Incomplete contracts and renegotiation

A final economic perspective concerns the systemic effects of the EC-Seal Products
decision. The scholarship and commentary on Article XX(a), along with the key
decisions of US-Gambling and EC-Seal Products reveal two important
characteristics:
1. Ample ex ante uncertainty about the range of permissible actions under the clause
(some of which persists in the wake of the Panel and AB decisions).
2. A very broad range of potential economic outcomes (illustrated by the difficulty
in establishing limits in Section 2.1).
For the purposes of this section, let us distill the trade world down to two
countries: Complainant (a Canadian/Norwegian amalgam) and Respondent
(representing the EC). We imagine that Complainant and Respondent initially
sign a trade agreement in which each offers market access concessions to the
other. The deal is struck when each country assesses that the combination of con-
cessions is preferable to the status quo ante. If the two countries were able to foresee
all potential contingencies and were equipped with inexhaustible lawyers, they
could create a complete contract that would clearly cover any event to come. Far
more likely, however, is that a lack of foresight or legal resources would require
an incomplete contract. Such a contract would use vague phrases such as 'moral
concerns' rather than providing a precise definition of what exactly this covers.
At the decision stage, when each country is trying to decide whether to sign the
contract (trade agreement), they must base their assessments on their interpret-
29
ations and expectations about what such vague phrases will mean in practice.
In this setting, we will treat the EC-Seal Products case as one that establishes a
clear path for the Respondent to restrict Complainant's access in the seal market.
We will further assume that the restriction came as a surprise- Article XX(a)
emerged as more potent than Complainant had expected.
Under these assumptions, what is the implication of the decision for the state of
trade relations between the two countries, present and future? We conclude our
analysis with a number of scenarios:
1. If we interpret EC Seal Products as an unexpected restriction on Complainant's
market access, we can first consider the possibility that the change is symmetric. If
Complainant can identify moral concerns within its populace that justify equiv-
alent restrictions on Respondent's market access, we will end up in a setting very
much like a dispute with retaliation imposed. The balance of concessions will be
preserved, but market access will be less generous.
2. If Complainant cannot plausibly identify equivalent moral concerns, then the
balance of concessions will be upset. Now, from a political perspective,
Respondent will see the reinterpreted agreement as more appealing, while
Complainant will see it as less appealing. Presumably, at some point, an imbal-
ance could cause Complainant to consider whether the agreement was
worthwhile.
3. The situation gets more interesting if we think of the Complainant-Respondent
agreement as evolving through repeated negotiations, rather than as a single-
shot accord. In this case, we can draw on the lessons of Kydland and
Prescott's seminal work on time-inconsistency. 30 If Complainant now expects
to have Respondent limit promised market access in future periods,
Complainant will limit the concessions it makes at the time of agreement.
Typically, the result is that the potential for negative surprises (discretion) can
result in an inferior equilibrium to a precommitment to a set of rules (in this
case corresponding to the expectations of a narrower interpretation of Article
XX(a)).
4. A more difficult situation to analyze occurs if we consider repeated interactions in
which Complainant can use the broader interpretation of Article XX(a) to reba-
lance concessions with Respondent. In this case, we can think of the broadening
29 There is a nascent literature on incomplete contracts and renegotiation in trade agreements. See, in
particular, Giovanni Maggi, and Robert W. Staiger (forthcoming) 'Optimal Design of Trade Agreements in
the Presence of Renegotiation', American EconomicJournal:Microeconomics. While this is one sign of the
importance of the issue, the literature is still at a stage at which it is difficult to apply directly to cases such as
the one at hand.
30 Finn E. Kydland and Edward C. Prescott (1977), 'Rules rather than Discretion: The Inconsistency of
Optimal Plans', The Journal of PoliticalEconomy, 85(3): 473 491.
of interpretation as increasing the variability of outcomes (risk) associated with

any particular clause of an agreement. As with investment risk, this increased
variability can result in outcomes that are considered significantly more positive
or significantly more negative. A question for future political economy research is
how the higher variability would affect the willingness of Complainant and
Respondent to strike deals.
3. Legal analysis
In this section, we discuss the TBT issues in both the Panel and Appellate Body
reports. As we explained in the Introduction, the EU seal products regime bans
the import and marketing of seal products. The ban covers both pure seal products
(such as skins or pure seal oil) and products containing seal (such as seal fur coats,
or food supplements combining seal oil and other ingredients). There are three
exceptions to the ban, the IC (indigenous communities) exception, the MRM
(marine resources management) exception, and the Travelers' exception. The
Travelers' exception was not challenged. As between the IC exception and the
MRM exception, the IC exception is much more important: it gets much more
attention, and all the important legal issues are raised in connection with it. So
we shall discuss only the IC exception, often writing, for convenience, as if it
were the only one. It is worth noting here, for those who worry that tribunals
will be too generous in allowing moral purposes, that while the Panel found the
IC exception had a legitimate purpose that was not evenhandedly applied, it
rejected the MRM exception's purpose outright (and the EU did not bother to
appeal this rejection).
The seal products regime consisted of a basic regulation, adopted by the
European Parliament and Council on 16 September 2009,31 and implementing
regulations for the exceptions, adopted by the Commission on 10 August
2010.32 By general agreement, the basic regulation and implementing regulations
were treated as a single measure. Limiting ourselves to the TBT challenges,
Canada challenged the measure under TBT 2.1,2.2, 5.1.2, and 5.2.1. Norway chal-
lenged the measure under TBT 2.2, 5.1.2, and 5.2.1. The Panel found that the
measure was a technical regulation, and that it violated TBT 2.1 and 5.1.2, first sen-
tence. It found no violation of TBT 2.2, nor of 5.1.2, second sentence, nor of 5.2.1.
The Appellate Body's only finding under the TBT was that the measure was not
shown to be a technical regulation.
31 Regulation (EQ No 1007/2009 of the European Parliament and of the Council of 16 September
2009, Official Journal of the European Union, L Series, No. 286 (31 October 2009).
32 Commission Regulation (EU) No 737/2010 of 10 August 2010, Official Journal of the European
Union, L Series, No. 216 (17 August 2010).
3.1 Whether the EU seal products regime is a 'technicalregulation'

The Appellate Body in E C - Measures Affecting Asbestos and Asbestos-Containing
Products33 set out three requirements for a measure to be a technical regulation,
and hence subject to the provisions of TBT Article 2. The measure must apply to
identifiable products; it must, in the words of TBT Annex 1.1 'lay down product
characteristics or their related processes and production methods, including the
applicable administrative provisions' (or else it must be about labeling and identifi-
cation); and compliance with the measure must be mandatory. There was no con-
troversy in EC-Seal Products about whether the measure applied to identifiable
products, nor about whether it was mandatory. So we shall limit our attention
to the requirement that the measure 'lay down product characteristics or their
related processes and production methods, including the applicable administrative
provisions' (or be about labeling), which we shall frequently refer to just as the
requirement that it 'lay down product characteristics', remembering that that
implicitly includes references to 'their related PPM's', 'applicable administrative
provisions', and labeling and identification.
3.1.1 The Panel'sanalysis

The Panel finds that the EU seal products regime does 'lay down [a] product charac-
teristic', and hence is a technical regulation. Their discussion is brief, and not a
model of organizational clarity. The Panel begins its analysis by rehearsing two
points from EC-Asbestos. First, they say:
The Appellate Body defined the term 'characteristics' in EC Asbestos as 'any
objectively definable "features", "qualities", "attributes", or other "distinguishing
mark" of a product'. Such 'characteristics' include not only features and qualities
that are intrinsic to the product itself, but also related characteristics, 'such as the
34
means of identification, the presentation and the appearance of a product'.
Then they continue immediately with:
In EC Asbestos, the Appellate Body found that the prohibition on asbestos fibres
as such did not, in itself, lay down any 'characteristics' because it simply banned
asbestos fibres in their natural state. The prohibition on asbestos -containing pro-
ducts, however, was found to lay down a product characteristic in the negative
form by requiring that all products must not contain asbestos. 35
After summarizing very briefly the EU regulations, the Panel says that, in light of
EC-Asbestos, the prohibition on seal-containing products lays down a product
characteristic (namely, not containing seal). 3 6 They say in a footnote that their
33 WTDS135/AB/R (adopted 5 April 2001).

34 EC Seal Products (Panel), para. 7.103, quoting EC Asbestos, para. 67.
35 EC Seal Products (Panel), para. 7.104, quoting EC Asbestos, para. 71.
36 EC Seal Products, para. 7.106.
conclusion 'is not affected by the fact that the prohibition of seals 'in their natural
state' might not, in itself, prescribe or impose any "characteristics"'1. 37 But they
never say unambiguously whether they see the EU measure a having a part that
does not lay down a product characteristic, namely the ban on pure seal products
(such as seal skins and pure seal oil). Instead, they jump to a discussion of 'appli-
cable administrative provisions', namely the administrative provisions for enfor-
cing the exceptions. They implicitly recognize that the relevant administrative
provisions must be about product characteristics (or their related PPM's), 3 and
by this route they back into a discussion of whether the exceptions lay down
product characteristics. They decide that the exceptions do lay down product
characteristics; and, on that basis, they decide that the measure as a whole is a tech-
nical regulation.
The Panel finds that the exceptions lay down product characteristics because they
specify 'objectively definable features',"39 a phrase they had quoted previously from
the EC-Asbestos Appellate Body. But what the Appellate Body said in full (and the
Panel had quoted) was that 'characteristics' included 'objectively definable "fea-
tures", "qualities", "attributes", or other "distinguishing mark" of a product'. The
full list here suggests a concern with intrinsic or near-intrinsic properties. This
impression is greatly strengthened by the next sentence of the EC-Asbestos
report, which the Panel did not quote. This sentence says that, 'Such "character-
istics" might relate, inter alia, to a product's composition, size, shape, colour,
texture, hardness, tensile strength, flammability, conductivity, density, or vis-
cosity'. 40 This is a list of intrinsic, or near-intrinsic, properties of the product-
and not, incidentally, properties related to the product's usefulness for particular
purposes. All of them are a far cry from the 'feature' the Panel finds is a product
characteristic, namely 'having been killed by an Inuit'. To be sure, the EC-
Asbestos Appellate Body also said, as the Panel quoted above, that 'product charac-
teristics' are not limited to intrinsic features of the product itself, but include
'related "characteristics", such as the means of identification, the presentation
and the appearance of a product'. But this reference to labeling and means of
identification does not seem like an invitation to regard all non-intrinsic properties
of a product as 'product characteristics'.
In the Panel's defense, we have got to a somewhat surprising place in TBT juris-
prudence. Are the regulations in US-Tuna II (Mexico)4 1 and US-COOL, 42 which
are about labeling, really so different in substance from the EU seal regime? Like the
37EC Seal Products, n.153 to para. 7.106.

38 This is confirmed by the EC Seal Products Appellate Body, in para. 5.13.
39 EC Seal Products, para. 7.110.
40 EC Asbestos, para. 67.
41 US Measures Concerningthe Importation, Marketing and Sale of Tuna and Tuna Products,WT/
DS381/AB/R (adopted 13 June 2012).
42 US Certain Country of Origin Labeling (COOL) Requirements, WT/DS384 & 386/AB/R
(adopted 23 July 2012).
EU seal regime, the regulations in US-Tuna II (Mexico) and US-COOL concern

themselves with the history of the product, rather than with features or qualities
we would think of as intrinsic to the products themselves. And yet both sets of regu-
lations were uncontroversially regarded as 'laying down product characteristics',
just because they involved labeling. What is the magic of labeling, that makes
any regulation about labeling a technical regulation? The Appellate Body could
well have read the references to 'terminology, symbols, packaging, marking or lab-
elling requirements' in TBT Annex 1.1 as being about 'technical' aspects of label-
ing - for example, definitions of terms such as 'net weight' and 'dry weight', or a
requirement that various product specifications be stated in particular units, or
requirements on language or font size for the presentation of certain content,
and so on. But after US-Tuna II (Mexico) and US-COOL, it seems that any regu-
lation on labeling is going to qualify as a technical regulation. I am not sure this is
the best reading of Annex 1.1, but, even so, there is a kind of sense to be made of it.
We can suggest with some plausibility that aspects of labeling and packaging are
'product characteristics' that are intrinsic to the product as it is presented to the
purchaser.When I walk into a grocery store, or a hardware store, I am not con-
fronted with bare tuna-fish, or piles of bolts, or whatever. I am confronted with
labeled cans of tuna-fish; or with packages of bolts; or even if it's a barrel
of bolts that I can scoop some out of, there will normally be a sign to identify
what type and size they are. So, even if the packaging and labeling are not features
intrinsic to tuna-fish in the abstract, they are features intrinsic to the product that
I buy.
Whatever our view about labeling regulations as technical regulations, the EU
seal regime was not about labeling, and 'having been killed by an Inuit' is not plau-
43
sibly regarded as a 'product characteristic' in the sense of TBT Annex 1.1.
Another argument against the Panel's analysis is that it makes the reference in
the first sentence of TBT Annex 1.1 to 'product characteristics or their related pro-
cesses and production methods' pleonastic. On the Panel's approach, according to
which 'having been killed by an Inuit' is a product characteristic, it would seem that
any PPM lays down a product characteristic; so once we have mentioned product
characteristics in the definition of technical regulations, there is no need to say any-
thing further about PPM's. Nor can we understand this as a case of precautionary
redundancy. If that had been the drafters' intention, they presumably would have
said 'product characteristics, including their related processes and production
methods' instead of 'product characteristics or their related processes and pro-
duction methods' (emphasis added). It is particularly ironic that the Panel's
43 The suggestion that PPM's are not 'product characteristics' within the meaning of TBT Annex 1.1 is
perfectly consistent with the argument Rob Howse and I have made that PPM's are relevant to 'likeness' in
GATT I:1and 111:4. The two issues involve different terms, in different contexts. See Robert Howse and
Donald Regan (2000), 'The Product/Process Distinction An Illusory Basis for Disciplining
"Unilateralism" in Trade Policy', European Journal of InternationalLaw, 11(2): 249 289.
approach would turn all PPM's into product characteristics, in view of the fact
that the Panel later claims to have been able to avoid deciding any issue
44
about PPM's.
3.1.2 The Appellate Body's analysis

The Appellate Body disposes very brusquely of the suggestion that 'having been
killed by an Inuit' is a product characteristic. They write: 'We see no basis in the
text of Annex 1.1, or in prior Appellate Body reports, to suggest that the identity
of the hunter, the type of hunt, or the purpose of the hunt could be viewed as
product characteristics.' 4 5 (They also remark in a footnote that TBT 2.9 presup-
poses that technical regulations have 'technical content', which they suggest does
not include the identity of the hunter or the purpose of the hunt.)4 6 But, of
course, deciding that 'having been killed by an Inuit' is not a product characteristic
does not end the Appellate Body's consideration of the case. They appear to
endorse the Panel's suggestion, based on EC-Asbestos, that a simple ban on
pure seal products would not lay down a product characteristic, while a simple
ban on seal-containing products would. So how do they decide that the actual
regime, which bans both pure seal products and seal-containing products, is not
a technical regulation? 47 The Appellate Body emphasizes both that the tribunal
must consider the measure 'as a whole' and that the tribunal must try to identify
the 'integral and essential' aspects of the measure. 4' These ideas, seemingly in
some tension, suggest two distinct approaches, and it is not entirely clear which
the Appellate Body most relies on.
The first approach involves 'nose-counting'. Insofar as it relies on this approach,
the Appellate Body first identifies three salient aspects of the regime: (1) it bans pure
seal products; (2) it bans seal-containing products; and (3) it has an exception for
products (pure seal or seal-containing) that result from Inuit hunts. The Appellate
Body then observes that with regard to the question whether the regime is a tech-
nical regulation, (1) the regime's banning pure seal products counts against its
being a technical regulation; (2) the regime's banning seal-containing products
counts in favor of its being a technical regulation; and (3) the fact that the exception
does not lay down a product characteristic counts against the regime's being a tech-
nical regulation. So the score is two-to-one against, and the regime is not a technical
49
regulation.
44 EC Seal Products (Panel), para. 7.112.

45 EC Seal Products (Appellate Body), para. 5.45.
46 Ibid., n. 942 to para. 5.45.
47 Technically, all they do is overturn the Panel's finding that the regime is a technical regulation. They
decline to decide whether the regime might be a technical regulation because it lays down a 'related process
[or] production method', citing the lack of discussion of this issue by the parties or the Panel. But for con-
venience I shall speak hereafter as if they find that the measure is not a technical regulation.
48 Ibid., para. 5.19.
49 Ibid., paras. 5.30, 5.58 first part.
The Appellate Body's second approach involves identifying the most 'integral
and essential aspect' of the measure, which in the Appellate Body's view is the
exception.5 0 Focusing on this most 'integral and essential aspect', the Appellate
Body concludes that the measure is not a technical regulation, because the excep-
tion does not lay down a product characteristic.5 1 But in general, trying to identify
the most 'integral and essential aspect' of a complicated regulatory scheme is a sen-
seless task. Illustrating that point, the Appellate Body's identification of the excep-
tion as the most 'integral and essential' aspect in this case seems bizarre. The
Appellate Body says the 'prohibition on the products containing seal [i.e.,
the ban] seems to be derivative of the ... permissive component of the measure
[the exceptions]'. 5 2 But how can the ban be 'derivative' of the exceptions, when
its purpose, which is preventing moral outrage at seal suffering, is completely dis-
tinct from the purpose of the exceptions, which is allowing the preservation of Inuit
culture, and so on? Surely it is clear that the EU first conceived of the ban, and only
then realized that it wanted the IC exception (and the others).
There are cases where it does seem plausible to think of the ban as derivative. For
example, the stadium owner who excludes people from the baseball game unless
they buy a ticket. There is no independent purpose for the ban on entry; the
owner is not trying to minimize the number of people in the stadium. It's just
that excluding people who don't have a ticket is the only way to get people to
buy tickets. In this example, there is only one purpose, getting ticket revenue;
and the function of the ban is simply to provide an incentive for people to buy
tickets (that is, to bring themselves within the exception). So the ban does indeed
seem derivative. Conversely, there are cases where the exception may seem deriva-
tive, for example, the final US shrimp-turtle regulation, which (simplified) says that
no shrimp harvested without US-style turtle-excluder devices [TED's] can enter the
US market, except shrimp from places where there are no turtles. Here the only
purpose is protecting turtles, and the ban is what achieves that purpose. The excep-
tion is for cases where the purpose simply is not implicated. But the EC-Seal
Products case is not like either the ball-park case or the shrimp-turtle case. In
EC-Seal Products, there are two distinct purposes, which sometimes conflict;
people cannot act to bring themselves within the exception; and the purpose of
the ban is fully implicated even in the cases where the exception is made. In
truth, EC-Seal Products represents the only sort of case where it is entirely
natural to talk about a 'ban' and an 'exception'. There is something forced
about describing either of the other cases that way. But enough. I hope we have
said enough to establish the oddity of saying the ban is 'derivative' in EC-Seal
50 Ibid., para. 5.41.

51 Ibid., para. 5.58 second part.
52 Ibid., para. 5.41.
Products, and to suggest the fruitlessness of asking, in complex cases, what aspect
53
of the regulation is most 'integral and essential'.
In the end, neither the nose-counting-over-all-aspects approach, nor the
approach of deciding by reference to the most 'integral and essential' aspect,
seems to make much sense. Consider what happens if we try to apply these
approaches to an even simpler case. Imagine that the EU seal regime consisted
only of the ban, on both pure seal products and seal-containing products, with
no exceptions. Would this be a technical regulation or not? On the nose-counting
approach as applied by the Appellate Body, the score over distinct aspects is a one-
to-one tie. We might break the tie by saying it is the complaining Member's burden
to show the measure is a technical regulation; so in case of a tie, the regulation is not
a technical regulation. But this 'burden of proof' approach does not seem apposite
when the issue is the purely legal issue of whether a measure is a technical regu-
lation, where no relevant facts about how the measure operates are in dispute. If
instead we adopt the 'most integral and essential aspect' approach, how do we
decide whether it is the ban on pure seal products or the ban on seal-containing pro-
ducts that is dominant? The only apparent test would be the quantity (or value, or
some such) of commerce in each category; but then the measure would be a tech-
nical regulation or not, depending on whether the commerce in seal-containing pro-
ducts was just more or just less than half the total.
There is another possible approach, overlooked by both the Panel and the
Appellate Body, that might seem more sensible. We could distinguish between
the measure as applied to pure seal products, and the measure as applied to seal-
containing products. If there are doubts about the textual basis for such an 'as
applied to ... ' distinction, we could follow the lead of the Panel in EC-Biotech
54
Products ('GMOs'), in their discussion of a ban justified by multiple purposes.
We could say that the EC seal products regime actually creates two measures,
one applying to pure seal products, and the other applying to seal-containing pro-
ducts. But this approach is problematic as well. There is no apparent reason why a
measure about products containing seal (which would be a technical regulation on
the EC-Asbestos approach) should be subject to the distinctive disciplines of TBT
2.2 and 2.4, while a measure about pure seal products is not.
The true upshot of all this may be that we need a deeper rethinking of our
approach to the TBT. Perhaps we should pay more attention to the idea that the
TBT is supposed to be about technical regulations and standards. As we noted
above, when the EC-Asbestos Appellate Body gave examples of 'product charac-
teristics', it was a very technical-sounding list ('composition, size, shape, colour,
texture, hardness, tensile strength, flammability, conductivity, density, or
53 The Appellate Body's confusion could be made more understandable by discussing the peculiar
drafting of both the EU's basic regulation and the implementing regulations. But space limitations forbid.
54 EC Measures Affecting the Approval and Marketing of Biotech Products,WT/DS291 & 292 &
293/R (adopted 21 November 2006), paras. 7.162 7.170.
viscosity') of intrinsic, or near-intrinsic, properties related to the product's useful-

ness and appropriateness for particular purposes. This case report is not the place
for a full discussion of the possibilities for such a rethinking of the coverage of the
TBT Agreement. But it does not seem too late both to reconsider the EC-Asbestos
distinction between regulation of asbestos in its natural state and of asbestos-con-
taining products (which was arguably dictum in that case, since there was appar-
ently no market in natural fibers), and to look for a more 'technical' approach to
'product characteristics'. In light of US-COOL and US-Tuna II (Mexico), it
may be too late to limit the relevant labeling requirements to technical aspects of
labeling. But the only non-labeling cases before EC-Seal Products are EC-
Asbestos and US - Clove Cigarettes,5 5 both of which seem to involve genuinely
technical requirements (no asbestos, no clove flavoring). And in EC-Seal
Products, despite the unsatisfactoriness of some of the Appellate Body's analysis,
they do reject the idea that 'having been killed by an Inuit' is a product character-
istic. Their overall conclusion that the regime has not been shown to be a technical
regulation may reflect the intuition that it just isn't the sort of regulation the TBT
was supposed to be about.
3.2 Whether the EU seal products regime violates TBT 2.1

TBT 2.1 is about discrimination, and the only source of discrimination in EC-Seal
Products is the IC exception. (Remember we are ignoring the other exceptions.)
The ban itself is non-discriminatory: it does not discriminate among seal products,
and Canada did not argue that it discriminated against Canadian seal products in
favor of European fox or mink products. So, the problem under 2.1 is the legality of
the IC exception. The legality of the ban is an issue for 2.2.
There is no major innovation in the Panel's 2.1 analysis, which by and large
follows the approach laid out in US-Clove Cigarettes. But the Panel does make
the structure of the analysis clearer than the Appellate Body ever has, in particular,
by clarifying whether 'evenhandedness' has a distinct role in the analysis, or
whether it is just another conclusory term like 'discrimination'. The Panel lays
out a blueprint for 2.1 analysis (both the national treatment and most-favored
nation aspects) that precisely tracks the Appellate Body's current scheme for analy-
sis under GATT 111:4. 5 6 In the Panel's analysis, the question whether the measure is
55 US Measures Affecting the Productionand Sale of Clove Cigarettes, WT/DS406/AB/R (adopted

24 April 2012).
561 say 'the Appellate Body's current scheme', because the Appellate Body's GATT III jurisprudence
has been notably unstable. The Appellate Body was generally understood to say in Japan Taxes on
Alcoholic Beverages, WTO/DS8 & 10 & 11/AB/R (adopted 1 November 1996), sec. H.2(c), that regulat-
ory purpose was irrelevant to the existence of violations under GATT 111:2. But in Chile Taxes on
Alcoholic Beverages, WT/DS87 & 110/AB/R (adopted 12 January 2000), paras. 62, 71, the Appellate
Body told us that regulatory purpose was absolutely relevant under 111:2, second sentence, and that
Japan Alcohol had in fact meant precisely that. In EC Asbestos, para. 99, interpreting GATT 111:4, the
Appellate Body excluded regulatory purpose from the 'likeness' inquiry, saying that 'likeness' was a
'evenhanded' under TBT 2.1 corresponds to the question whether it satisfies the
chapeau of GATT XX.
Let us take it step-by-step. The first question in the Panel's 2.1 analysis is whether
the measure involves 'like products'. This is precisely the same question under TBT
2.1 as it is under GATT 111:4, since US-Clove Cigarettes simply imported into TBT
2.1 the current GATT 111:4 definition of 'likeness' in terms of 'competitive relation-
ship'. 57 The next question the Panel asks is whether there is 'less favorable treat-
ment' for some foreign products. This question is subdivided into (a) whether
there is disparate impact on competitive conditions, and (b) whether, if so, the dis-
parate impact 'stems exclusively from legitimate regulatory distinctions'. Question
(a), about disparate impact, corresponds to the question whether there is 'less
favorable treatment' in the Appellate Body's current approach to GATT 111:4,
since they seem to regard 'less favorable treatment' as involving just disparate
impact. 58 The Panel's question (b), about whether the disparate impact stems
from legitimate distinctions, is further subdivided into (i) whether there is a 'legit-
imate regulatory purpose', and (ii) whether the regulation pursues that purpose
'evenhandedly'. Question (i), about legitimate regulatory purpose, corresponds
to the question whether the measure comes within one of the specific sub-para-
graphs of GATT XX; and question (ii), about 'evenhandedness', corresponds to
the question whether the measure satisfies the chapeau of GATT XX. 59 (Despite
matter of competitive relationship; but they then presented us with a mystery box in their enigmatic para-
graph 100 on 'less favorable treatment'. In Dominican Republic Measures Affecting the Importation and
Internal Sale of Cigarettes,WT/DS302/AB/R (adopted 19 May 2005), para. 96, the Appellate Body said
explicitly that there was not 'less favorable treatment' if the disparate impact was explained by factors
unrelated to the foreign origin of the products. Then in US Clove Cigarettes, n.372 to para. 179, the
Appellate Body simply denies that Dominican Republic Cigaretteswas concerned with whether the dispa-
rate impact was explained by foreign origin. The US Clove CigarettesAppellate Body dismisses one sen-
tence where Dominican Republic Cigarettes said that explicitly, and they ignore a later sentence in the
same paragraph that repeated the point. Instead, they quote a sentence from in between those two sentences
about foreign origin. It is true that the sentence the US Clove Cigarettes Appellate Body quotes did not
mention foreign origin; the reason is that it was describing what the other explanation, unrelated to
foreign origin, was in the actual case. In sum, history gives us little reason to expect that the Appellate
Body's GATT 111:4 jurisprudence five years hence will be what it is now. For the full story, and my preferred
approach, see Donald Regan (2012), 'Regulatory Purpose in GATT Article III, TBT Article 2.1, the
Subsidies Agreement, and Elsewhere: Hic et Ubique', in Denise Prevost and Geert Van Calster (eds.),
Research Handbook on Environment, Health, and the WTO, Edward Elgar, pp. 41 78, at 42 61.
571 have suggested elsewhere that importing the GATT 111:4 criterion of 'likeness' into TBT 2.1 was a
mistake. Regan, 'Regulatory Purpose', supra note 53, at 61 68.
58 See, e.g., EC Seal Products, Appellate Body, para. 5.125, and the discussion of US Clove
Cigarettes, supra note 53.
59 Some sub-paragraphs of GATT XX, those stated in terms of 'necessity', require a least-restrictive-
alternative analysis, while others do not. But even when the sub-paragraph does not require least-restric-
tive-alternative analysis, the Appellate Body has read such a requirement into the chapeau, as in the
decision in US Import Prohibitionof Certain Shrimp and Shrimp Products, WT/DS58/AB/R (adopted 6
November 1998), that US-style TED's were not necessary in Malaysian shrimping grounds. So it seems
that, one way or another, least-restrictive-alternative analysis is always required under GATT XX. It is
not entirely clear whether the EC Seal Products Panel would do this analysis under question (b)(i) or
this structural isomorphism, we shall see below that the range of possible justifying
purposes may be broader under TBT 2.1 than under GATT XX; and the burden of
proof may not be allocated the same way.)
In EC-Seal Products, the issue of whether all seal products were 'like' was not
controverted. The issue about disparate impact on competitive conditions was con-
troverted, but the Panel decided without difficulty that there was disparate impact,
and this need not detain us. So we are left with the questions whether there was a
legitimate regulatory purpose, and whether that purpose was implemented
evenhandedly.
3.2.1 Legitimate regulatory purpose: the indigenous culture purpose (and the
phantasmal 'Brazil-Tyres rule')
The EU says the purpose of the IC exception is to allow the preservation of Inuit
culture. (We shall allow the Inuit, the only indigenous communities involve in
the present case, to stand in for all indigenous communities.) It is striking that
the EU apparently does not characterize its concern for Inuit culture as a matter
of public morals, since they do characterize their concern for seal welfare that
way (as we discuss in Section 3.3). Nor does the Panel ever characterize the
concern for Inuit culture as a matter of public morals. 60 In fact, the Panel treats
the concern for Inuit culture as a legitimate purpose, without attempting to bring
it under any bit of WTO text at all. The Panel does point to international conven-
tions and resolutions that assert the rights of indigenous peoples to maintain their
cultures. But it carefully says that it uses these international documents only as
'factual evidence' that 'demonstrate [s] the recognized interests of Inuit and indigen-
ous peoples in preserving their traditions and cultures'. 61 Remarkably, Canada
does not seem to object (or no more than half-heartedly) to the idea that a
purpose to allow preservation of Inuit culture can be a legitimate purpose in prin-
ciple under the TBT. That may be because of Canada's lack of success in arguing
against the consumer-information purpose in US-COOL. Or it may be because
Canada has a different sort of objection to the EU's relying on the Inuit culture
purpose in this context. (We will return to Canada's objection in a moment.)
The Panel does not offer any general discussion of what is a 'legitimate purpose'
under the TBT. But the most natural reading of their approach suggests that they
regard any sincerely held purpose as legitimate, provided it is not protectionism
(b)(ii) above, but there is no reason to doubt that they would regard failure to use a less restrictive alterna-
tive as relevant. (This does not make TBT 2.2 redundant, since 2.2 applies even when there is no disparate
impact.)
60 One could argue that it does so implicitly when it writes, '[W]e did not consider that the evidence
before us supports the European Union's position that the EU public attributes a higher moral value to
the protection of Inuit interests as compared to seal welfare' (EC Seal Products (Panel), para. 7.299.
But this is in any case a negative judgment on the idea that the particularresolution of the seals/Inuit
conflict represents a formed view of the EU public.
61 Ibid., para. 7.295.
(in the national treatment context), or does not involve favoritism for traders of one
country over another (in the most-favored nation context). On this view, we are not
looking for a positive list of legitimate purposes; rather, we have a much shorter list
of purposes that are not legitimate. Both in principle and in practice, these are very
different approaches. And focusing on identifying and restraining illegitimate pur-
poses is more consistent with the general spirit of the WTO as a negative integration
agreement.
Notice that focusing on illegitimate purposes under the TBT may mean that a
wider range of regulatory purposes are acceptable under the TBT than under
GATT Article XX. One has to stretch, for example, to bring the Inuit culture
purpose within GATT XX. Is Inuit culture a 'national treasure of artistic, historic
or archaeological value' under XX(f)? Can we argue under XX(b) that destruction
of indigenous cultures tends to have negative effects on public health? Or must we
rely on the kitchen-sink interpretation of the 'public morals' exception of XX(a)?
As long as the Appellate Body is committed to not considering regulatory
purpose under GATT 111:4 or GATT 1:1, there will be pressure to expand Article
XX to cover all purposes that are not illegitimate. 6 2 And if we do not expand
Article XX, the range of permissible purposes under the GATT will be narrower
63
than the range under the TBT.
Now back to Canada's objection to relying on the Inuit culture purpose to justify
the IC exception. Canada relies on Brazil-Tyres64 for the proposition that if an
exception to a prima facie justified ban has a disparate impact, then that exception
can only be justified by reference to the same purpose that justifies the ban itself.
Confronted with this argument, the EC-Seal Products Panel finds that the IC
exception is not justified by the public morals purpose that justifies the ban, since
the evidence does not establish that Inuit hunts are more humane than commercial
hunts (indeed, the evidence may suggest that they are less humane). 65 But even
though the Panel seems to accept Canada's assertion of the existence of the
'Brazil-Tyres rule' against multiple purposes, they decline to apply the rule in
this case; and they find that the EU can justify the IC exception by the separate
purpose of preserving Inuit culture. The Panel's sketchy argument about why
this case is different from Brazil-Tyres seems entirely conclusory. 6 6 Nonetheless,
62 Similarly, the Appellate Body's very generous interpretation in US Measures Affecting the Cross-
Border Supply of Gambling and Betting Services, WT/DS285/AB/R (adopted 7 April 2005) of 'public
morals or public order' in GATS XIV(a) was necessitated by their mistaken finding of a XVI:2(a) violation.
See Donald Regan (2007), 'A Gambling Paradox: Why an Origin-Neutral 'Zero-Quota' Is Not a Quota
Under GATS Article XVI', Journal of World Trade, 41(6): 1297 1317, and other articles cited there.
63 The EC Seal ProductsAppellate Body, paras. 5.126 5.129, is notably ambivalent about whether
this is the case, and whether they care.
64 Brazil Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R (adopted 17 December
2007).
66 See EC Seal Products (Panel), paras. 7.296 7.298.
the Panel is right to ignore the 'Brazil-Tyres rule'. The rule makes no sense; the only
argument that is suggested for it in Brazil-Tyres is based on a misunderstanding of
US-Shrimp; and there is a charitable reading available on which the Brazil -Tyres
Appellate Body did not mean to lay down the rule at all.
As to why the putative Brazil-Tyres rule makes no sense, reasonable regulators
often have multiple legitimate purposes, which point in different directions in par-
ticular cases. Here the EU wants to discourage inhumane seal hunting, and it also
wants to allow preservation of the Inuit way of life. In the case of Inuit seal hunting,
these purposes come into conflict. There is no reason at all to say that because it is
the former purpose that explains the ban, that purpose must prevail in all cases of
conflict. A fair-minded regulator could perfectly well conclude that when the pur-
poses conflict, it is more important to allow the expression of Inuit culture than to
protect seals. We may well think that as the regulatory regime responds to more
and more purposes, the opportunities for covert protectionism, or for favoritism
between trading partners, increase, so we should look for such covert purposeful
discrimination with special care. But the danger of covert protectionism is not so
great, nor so unmanageable, that it calls for a flat rule that the regulator must
respond to only one purpose, a rule that would do enormous violence to sensible
decision making. If both purposes appear to be genuine, as they do here, the regu-
lator should be free to decide as it will about cases of conflict, unless there is per-
suasive evidence of misbehavior.
The only argument the Brazil-Tyres Appellate Body gave for their supposed sug-
gestion that an exception must be justified by the same purpose as the underlying
ban was an analogy to US-Shrimp. They wrote:
We note, for example, that one of the bases on which the Appellate Body relied in
US Shrimp for concluding that the operation of the measure at issue resulted in
unjustifiable discrimination was that one particular aspect of the application of
the measure (the measure implied that, in certain circumstances, shrimp caught
abroad using methods identical to those employed in the United States would
be excluded from the United States market) was 'difficult to reconcile with the
declared objective of protecting and conserving sea turtles'. Accordingly, we
have difficulty understanding how discrimination might be viewed as complying
with the chapeau of Article XX when the alleged rationale for discriminating does
not relate to the pursuit of or would go against the objective that was provision-
ally found to justify a measure under a paragraph of Article XX'. [Citations to
67
US Shrimp omitted.]
But the situation in Brazil-Tyres was completely different from the situation in
US-Shrimp. The United States in US-Shrimp did not claim to have multiple pur-
poses (as Brazil did in Brazil-Tyres). The only justifying purpose the US offered
for any aspect of the measure was the protection of turtles. So, of course, if some
67 Brazil Tyres, para. 227.

discriminatory feature of the measure was not justified by that purpose, it was not
justified; but only because there was no other purpose on offer. In US-Shrimp, the
Appellate Body did not reject any proffered purpose on the ground that it was
68
different from the purpose of the ban.
There is a way to make sense of Brazil-Tyres, which makes the analogy to US-
Shrimp more plausible, and which suggests that the Appellate Body in Brazil-Tyres
was not really relying on the 'Brazil-Tyres rule' at all. In Brazil-Tyres, the purpose
of the import ban was protection of health, and the purpose that was offered to
justify the exception for Mercosur countries was complying with a Mercosur tribu-
nal's judgment. Arguably, this was not a legitimate purpose at all in the context of
the case. For one thing, it is not clear that Brazil actually had an obligation under
Mercosur, except by virtue of its own incompetence in not relying on Mercosur's
Article XX(b) analogue in the Mercosur proceeding against it. (Incompetence,
unless it was attempting to create a WTO justification for favoring its Mercosur
partners.) Even if Brazil did have an obligation under Mercosur, a WTO
Member cannot simply supersede its WTO obligation, at least not for WTO
purposes, by pointing to some other conflicting treaty obligation. (In some
circumstances, of course, GATT Article XXIV allows precisely this, but the
Brazil-Tyres Appellate Body argued that Article XXIV did not save Brazil in this
case.)6 9 So Brazil's purpose of satisfying its Mercosur obligation was simply not
a legitimate purpose at all, in this context; and that is why Brazil could not rely
on it.
The Brazil-Tyres Appellate Body never says flatly that complying with the
Mercosur judgment is not a legitimate purpose (perhaps because they were
bemused by the fact that it obviously is legitimate in the abstract). But they do
discuss all the reasons we have given for finding the purpose illegitimate in this
context. Furthermore, whenever they explain specifically why Brazil cannot rely
on the compliance purpose, they say things like the following: 'In our view, the
ruling issued by the MERCOSUR arbitral tribunal is not an acceptable rationale
for the discrimination, because it bears no relationship to the legitimate objective
70
pursued by the Import Ban that falls within the purview of Article XX(b)'.
There is always a reference to Article XX, which suggests that the Appellate
Body is troubled, not simply by the fact that the compliance purpose is different
from the health purpose, but more specifically by the fact that the compliance
purpose does not seem to fit under Article XX, as the health purpose does. If we
68 Note also that in US Shrimp, there was no question of justifying an exception to the underlying ban;
there was no exception. The US Shrimp Appellate Body's objection to the feature of the measure they were
discussing was that the ban itself was overbroad with respect to its purpose; the ban forbade more than the
purpose could explain. In effect, the US Shrimp Appellate Body was complaining about the failure to have
an 'exception' that was required by the purpose of the ban.
69 Brazil Tyres, n. 445 to para. 234.
70 Ibid., para. 228.
read the Appellate Body as responding to the reasons for regarding the compliance
purpose as illegitimate in the context, then Brazil-Tyres says nothing at all
about how to deal with multiple legitimate purposes, in EC-Seal Products or any
other case.
The EC-Seal Products Appellate Body discusses the 'Brazil-Tyres rule' briefly,
without clearly relying on it. They write:
[T]he European Union has failed to demonstrate, in our view, how the discrimi-
nation resulting from the manner in which the EU Seal Regime treats IC hunts as
compared to 'commercial' hunts can be reconciled with, or is related to, the policy
objective of addressing EU public moral concerns regarding seal welfare. In this
connection, we note that the European Union has not established, for example,
why the need to protect the economic and social interests of the Inuit and other
indigenous peoples necessarily implies that the European Union cannot do any-
thing further to ensure that the welfare of seals is addressed in the context of
71
IC hunts [which can also cause seal suffering].
The first sentence of this sounds like the 'Brazil-Tyres rule' pure and simple. That
would be unfortunate. But the second sentence suggests something subtler: that we
might allow the exception to be justified by a purpose different from, and even in
conflict with, the purpose of the ban, provided that the exception is designed in such
a way as to minimize the negative effect on the purpose of the ban from any
specified degree of achievement of the purpose of the exception. That makes
better sense. (Or at least, it would make better sense in a context where the ban
itself required a justifying purpose, as it does under TBT 2.2 in the Panel's analysis,
or as it did in Brazil-Tyres, which involved an import ban that violated GATT
XJ:1. But the EC-Seal Products Appellate Body is deciding the case under GATT
1:1, so the ban itself, being non-discriminatory, actually required no formal justifi-
cation. It seems odd to judge the exceptions in part by the purpose of the ban, which
arguably need never have come to the tribunal's official notice.)
3.2.2 Evenhandedness
Having decided that the purpose of preserving Inuit culture was legitimate, the
Panel faced one final question: whether the IC exception implemented this
purpose evenhandedly. Note that the exception might fail to be evenhanded
either (a) with regard to the distinction between the Greenland Inuit and
Canadiancommercial seal-hunters, or (b) with regard to the distinction between
the Greenland Inuit and CanadianInuit. The Panel considers a variety of evidence,
some of which is relevant to both questions, and some of which is relevant only to
the second question, without for the most part saying explicitly which question it
is concerned with. This vagueness leaves it unclear just what violation the Panel
finds, which means it is also unclear what violation must be corrected to bring
71 EC Seal Products (Appellate Body), para. 5.320, and cf. paras. 5.306, 5.321.
the measure into compliance. We should not have to speculate about what the
violation is. Tribunals should make it clear what aspects of a measure they are
finding illegal.
On the whole, it seems likely that the Panel found the measure un-evenhanded
only in the disparate treatment of the Greenland and Canadian Inuit, so we will
focus on that. Deciding whether the measure is evenhanded involves a highly
fact-based inquiry, and it is not our goal to say whether the Panel was right to
find the measure was not evenhanded. But there are things to say about the legal
structuring of the factual discussion, and on the proper interpretive approach to
certain aspects of the evidence. The first requisite is to be as specific as we can
about what 'evenhandedness' requires. The Panel sometimes writes as if the
measure is un-evenhanded just because of its disparate impact. Thus: 'This
[de facto exclusive access for Greenland Inuit] suggests in our view that the IC
exception was not designed or applied in an even-handed manner so as to make
the benefits of the exception available for all potential beneficiaries.' 72 But dispa-
rate impact cannot be enough. After all, the whole point of the general inquiry
into 'legitimate regulatory justification' is to validate some measures with disparate
impact. Also, if the Panel really thought disparate impact was all that mattered, its
discussion of evenhandedness could have been drastically shorter.
If the issue is not simply disparate impact, it is tempting to suggest the issue must
be discriminatory purpose. But this would be too quick. In US-Shrimp, for
example, 'arbitrary discrimination' was found on the basis of procedural inadequa-
cies in the United States' system for certifying other countries' turtle-protection
regimes. And one element of 'unjustified discrimination' was the refusal to
certify countries that did not require US-style turtle-excluder devices [TED's],
even when TED's were not necessary for turtle-protection. Neither of these
defects of the measure involved objectionable purpose. On the other hand, the
EC-Seal Products Panel does not discuss any analogues of these defects in
the EU seal products regime. So it appears that the issue about evenhandedness
in EC-Seal Products must be about purpose.
Even if that is right, there is still an important distinction to be made. Some
people argue that the EU regime cannot have had the purpose of favoring
the Greenland Inuit, because they were hurt by the regime, albeit less than the
Canadian Inuit. 7 3 This is a strong argument against the presence of discriminatory
purpose as we normally conceive it. To illustrate what I mean by 'discriminatory
purpose as we normally conceive it', consider a protectionist tariff. The purpose
of the tariff is precisely to discriminate, to put domestic and foreign producers in
different positions, and thus to improve the fortunes of the domestic producers.

73 As to the harm to Greenland Inuit, see http://arcticjournal.com/politics/494/eu-ban-blamed-rapid-
decline-greenland-sealing.
(And, of course, this sort of discriminatory purpose has an analogue in the most-
favored nation context.) But there is no reason to think that the EU seal pro-
ducts regime was motivated by discriminatory purpose of this sort. Even aside
from the fact that the regime harmed the Greenland Inuit, there is no reason
to think the goal of the measure was to put Greenland and Canadian Inuit in
different positions. But even though there was no discriminatory purpose in
this most traditional sense, there may still have been what we might call 'dis-
crimination in respect of purpose'. Even if the regulator had no desire to
create disparity between the Greenland and Canadian Inuit for its own sake,
we could still think the regulator was more concerned to spare the Greenland
Inuit from the full effects of the ban than to spare the Canadian Inuit. Indeed,
the claim that there was this sort of 'discrimination in respect of purpose' is
very plausible.
Even given this discrimination in respect of purpose, there is a further point to
consider before we can conclude that there was a 2.1 violation. The ultimate ques-
tion under TBT 2.1 is not whether there was discriminatory purpose, or discrimi-
nation in respect of purpose, but whether the measure is discriminatory. Let us
hypothesize that the EU would have struck the balance between the value of indi-
genous culture and the value of seal welfare differently, and there would have been
no IC exception at all, were it not for Denmark's championing of the Greenland
Inuit. Even on this hypothesis, where the existence of the exception depends on
special concern for Greenland, it could still be that the terms of the exception do
not reflect greater concern with market access for the Greenland Inuit. This
would be perfectly clear if the exception turned out to be de facto available to
Canadian Inuit as well. But once we grasp the conceptual point that differential
concern for certain Inuit communities does not necessarily produce a discrimina-
tory exception, we should understand that that could be true even though the
exception has a disparate impact, if there is a non-discriminatory explanation for
that differential impact. And arguably there is. Apparently, the reason the
Canadian Inuit did not take advantage of the IC exception was that the certification
scheme requires segregation of Inuit and non-Inuit seal products (to make sure
commercial seal products are not masquerading as Inuit seal products). Such segre-
gation is practicable for Greenland seal products, because the Greenland Inuit seal
hunt is large enough to support its own processing facility. The Canadian Inuit
hunts are much smaller, and depend on processing facilities that also process com-
mercially hunted seal, and segregation would be too costly. So the disparate impact
of the IC exception seems to be explained by the difference in scale of the Greenland
and Canadian hunts. The obvious analogue here is the required bond to insure
payment of the cigarette tax in Dominican Republic-Cigarettes. Honduras
objected that because they sold fewer cigarettes in the Dominican Republic than
local producers did, the flat-rate bond created a greater burden on them, in the
form of a higher per-cigarette cost. The Appellate Body rejected that argument,
in effect saying that a disparate impact that was fully explained by a difference
in scale was not a GATT 111:4 violation. 74 So far, then, there does not seem to be a
convincing case that the EU seal products regime is un-evenhanded.
The Panel says darkly that the fact the Greenland Inuit can use the IC exception
and the Canadian Inuit cannot is 'not merely an incidental effect of the application
of the measure'.75 This sounds like saying the disparate impact was part of the EU's
purpose. But all the evidence shows is that this disparate impact was not unantici-
pated. The Panel points out that the 2010 COWI Report, done for the Commission,
predicted that only the Greenland Inuit would be able to take advantage of the Inuit
exception, because only they operated on a scale that would make satisfying the
certification requirements economically feasible. 76 So the EU could anticipate the
disparate impact. But that is not the same as being motivated to achieve it.
Arguably, the EU merely chose the certification scheme that would most reliably
prevent commercial seal products from masquerading as Inuit products, which
was central to their concerns.
We quoted the Panel above saying: 'This [de facto exclusive access for Greenland
Inuit] suggests in our view that the IC exception was not designed or applied in an
even-handed manner so as to make the benefits of the exception available for all
potential beneficiaries'. 77 We have explained why this cannot mean that disparate
impact by itself makes the exception un-evenhanded. But it might suggest instead
that the EU regime was un-evenhanded because the EU made insufficient efforts
to facilitate access for the Canadian Inuit. The Appellate Body in EC-Seal
Products, citing US-Shrimp 2 1 .5 ,7s complains specifically that the EU did not
exert 'comparable effort' on behalf of the Canadian Inuit. 7 9 But this case is not
like US-Shrimp. In US-Shrimp, the United States did things for some countries
that it did not do for the complainants: it negotiated more with them (and con-
cluded one regional agreement); and it allowed them a longer phase-in time for
the newly required technology. There is no evidence that the EU did anything to
facilitate access for the Greenland Inuit (aside from Denmark's premature certifi-
cation of some shipments, which the EU explains as a misunderstanding by
Denmark of the new regulation). If the Panel thought that the EU should have
done more for the Canadian Inuit, they give no indication of what they had in
mind. Nor does the Appellate Body, beyond 'cooperative arrangements to facilitate
the access of Canadian Inuit to the IC exception'. 80 The Panel and Appellate Body
almost suggest that the test of whether the EU has made enough effort is whether
the Canadian Inuit can sell in the EU. But US-Shrimp 21.5 made it clear that the
74 Dominican Republic Cigarettes,para. 96.

76 Ibid., citing COWI, Study on Implementing Measures for Trade in Seal Products, Final Report
(January 2010), p. 84.
77 Ibid., para. 7.317.
78 WT/DS58/AB/R (adopted 21 November 2001).
79 EC Seal Products (Appellate Body), para. 5.337.
80 Ibid., para. 5.337.
requirement of 'comparable effort' by the regulator does not mean that the com-
plainant country's goods must be admitted. 8 '
There are unquestionably certain ironies in the effects of the IC exception. The
Greenland Inuit have access to the EU market, and the Canadian Inuit do not,
even though the Greenland hunt is more commercialized than the Canadian Inuit
hunt. Similarly, the Greenland Inuit have access to the EU market, and Canadian
commercial hunters do not, even though the Greenland hunt is in some respects
more inhumane than the commercial hunt. (The Greenland Inuit sometimes use
nets to take seals, which is probably the most inhumane method of all.) But it
should be remembered that even if the Greenland hunt is more commercialized
than the Canadian Inuit hunt, it is still very different from the Canadian commer-
cial hunt. The Greenland Inuit hunters work alone or in pairs; a much greater pro-
portion of the seal products are consumed by the hunters or in their community;
sealing represents a much higher proportion of the hunters' income; and the
hunters have fewer alternative employment opportunities. Most importantly, the
Greenland hunt is the continuation of a long cultural history, which is changing
but still historically rooted and distinctive, and which is much more pervasive in
the lives of the Inuit than seal-hunting is for Canadian commercial hunters. In
sum, protecting the Greenland Inuit is not protecting a commercial hunt. As to
the claim that the Greenland Inuit use more inhumane hunting methods than com-
mercial hunters, this is largely or entirely attributable to the fact that the Inuit of
necessity hunt all year round, and netting is the only practicable technique in the
dark months. The harm to seals may be heightened, but so is the connection to
the distinctiveness of Inuit culture. (Incidentally, it appears that the northern
Canadian Inuit also use nets for similar reasons.) So, ironies, yes, but only
because the world is complicated.
In sum, the facts relevant to 'evenhandedness' are messy. But if we assume that
Canada has the burden of showing un-evenhandedness, as part of its general
burden of proof under 2.1 (remember that the EC-Sardines Appellate Body
imposed on Peru the burden of showing under TBT 2.4 that the Codex standard
was effective and appropriate for the EU);8 2 and if we assume that the Panel has
produced the best evidence available to show that the regulation is un-evenhanded,
then I am not sure the Panel got the right result. Indeed, the evidence seems suffi-
ciently inconclusive in either direction so that it might be that the right answer
under TBT 2.1 is that Canada has not shown the measure is un-evenhanded, so
the EU wins; and the right answer under the GATT XX chapeau is that the EU
has not shown the measure is in compliance with the chapeau, so Canada wins.
81 US Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 of the
DSU by Malaysia, WT/DS58/AB/R (adopted 22 October 2001).
82 EC Trade Description of Sardines, WT/DS231/AB/R (adopted 23 October 2002).
The different burdens of proof would make the GATT more restrictive than the
TBT in national treatment and most-favored nation cases.
Whatever we think about the right result on the facts, let us quickly summarize
the conceptual and legal lessons from our discussion: (1) the evenhandedness
inquiry is not simply about whether there is disparate impact (although there
may be cases like US-Shrimp, involving specific types of disparate impact, where
there can be un-evenhandedness without any illegitimate purpose); (2) even when
there is no discriminatory purpose in the classic sense (exemplified by protection-
ism), there may still be what we have called 'discrimination in respect of
purpose'; (3) the measure may be evenhanded, even if its adoption was motivated
by a distinctive concern for particular beneficiaries; (4) anticipating a disparate
impact is not the same as being motivated by it; (5) disparate impact that results
from differences of scale is not necessarily a violation; and (6) there is no general
requirement that the regulator take measures sufficient to alleviate disparate
impact from an innocently motivated measure.
3.3 Whether the EU seal products regime violates TBT 2.2

TBT 2.2 requires that a measure not be more trade-restrictive than necessary to fulfill a
legitimate objective. So under 2.2, the Panel was required to decide whether the EU's
ban on seal products had a legitimate purpose, and if so, whether the same degree of
fulfillment of that purpose could have been achieved with less trade restriction.
3.3.1 Legitimate Regulatory Purpose:The Public Morals Purpose (and

'Extraterritoriality
')
The Panel finds that the basic purpose of the EU ban is a public morals purpose,
reflecting EU citizens' moral opposition to the inhumane killing of seals, and
their desire not to participate in such inhumane killing by purchasing products
from inhumanely killed seals. And the Panel finds that this is a legitimate
purpose under the TBT. This is the first time a WTO tribunal has found that 'pro-
tecting public morals' is available as a justification under the TBT, but even so, that
hardly seems like a ground-breaking conclusion. Given that the list of purposes in
TBT 2.2 says it is not exclusive (and does not even include all the purposes men-
tioned in the TBT Preamble); and that the Appellate Body in US-Tuna II
(Mexico) suggested looking to other WTO agreements for help in identifying legit-
imate purposes; 3 and that both GATT XX and GATS XIV have 'public morals'
clauses; it would be surprising if the Panel had held that protecting public
morals, at least in the abstract, was not a legitimate purpose under the TBT.
Canada and Norway do not seem to have objected to the idea that public morals
are a legitimate purpose.
83 US Tuna II (Mexico), para. 313.

With regard to how we establish the content of the Member's 'public morals', it
is notable that the Panel does not appear to require polling evidence, or surveys, or
the like. The evidence in the case did include some unsystematic public-comment
evidence, of dubious probative value, collected by a consulting firm that studied
the seals issue for the European Commission.1 4 But the Panel seems to have
relied instead on the long history of more dispersed expressions of public
concern, through NGO's and the like, and by legislative efforts in the various
European countries and the EU itself (on related issues such as the killing of seal
pups), which repeatedly characterized the issue as a moral or ethical one. This is
completely appropriate. Especially in a democratic government (and we must
assume by default for all WTO members), one of the roles of government is to con-
struct and articulate public commitments, moral and otherwise (subject to certain
limits of course), more concretely and distinctly than the population at large has the
means to do. 8 5 In US-COOL, the Panel was explicit that the legislature can estab-
lish a public purpose of providing country-of-origin information to consumers,
without any evidence other than the regulation itself that consumers wanted
86
such information.
There are features of the EU seal products regime that cause some people to
doubt the EU's commitment to avoiding animal suffering. (1) The ban was con-
cerned only with seal products, ignoring the killing of farmed fox and mink for
fur. But the conditions under which seal are killed are very different. (2) The
exempted Greenland Inuit hunt was arguably especially inhumane, because it
allowed netting in some circumstances. But as noted above, this was attributable
to the year-round nature of a subsistence hunt. (3) Perhaps most troubling, the
regime did not prevent the import of seal products for auctioning or other proces-
sing and re-export. This may be partly explained by the idea that prohibiting such
'inward processing' would probably not reduce the overall commerce in seal pro-
ducts (and hence the harm to seals) to nearly the extent that banning local pur-
chases does. But the most persuasive argument for the genuineness of the EU's
moral purpose is just this: Unless we think the seal ban was protectionism for
fox and mink farmers (an argument the complainants apparently thought too
84 Of dubious probative value because most of the respondents were Anglophone, and most of those
who favored the ban were from outside the EU. See Tamara Perisin (2013), 'Is the EU Seal Products
Regulation a Sealed Deal? EU and ETO Challenges', International and Comparative Law Quarterly,
62: 373 405, at 394.
85 See Robert Howse and Joanna Langille (2012), 'Permitting Pluralism: The Seal Products Dispute
and Why the WTO Should Accept Trade Restrictions Justified by Noninstrumental Moral Values', Yale
Journal of InternationalLaw, 37: 367-432.
86 US COOL (Panel), para. 7.649. The Appellate Body in US COOL quoted this point from the
Panel report, without expressly approving or disapproving; but in context the absence of disapproval
suggests approval, since the Appellate Body expressed dissatisfaction with four other specific aspects of
the Panel's discussion of the legitimacy of the US's purpose, even while generally upholding the Panel.
US COOL (Appellate Body), paras. 449 452.
weak to rely on), there is simply no reason for the EU to have enacted the ban, even
with all its limitations and exceptions, other than a concern for seals.
It is striking that the EU does not defend its seal products regime with the 'direct'
argument that it protects seals, but only (or very predominantly) with the 'indirect'
argument that it avoids moral outrage over seal suffering and participation in
immorality by consumption. Presumably the EU was worried that protecting
seals in Canada or Norway would not qualify as a legitimate purpose under the
TBT or under GATT XX(b); whereas the moral outrage and the participation-
by-consumption, even with regard to 'foreign' seals, are located safely inside the
EU. Relying on the public morals argument may have been a prudent litigation
strategy, although it is worth remembering that the Appellate Body has never estab-
lished the sort of territorial limitation the EU was presumably worried about. The
Appellate Body set aside the territoriality issue in US-Shrimp with the observation
that the relevant sea turtle populations were all of species that migrated through US
territorial waters; 87 and in US-Tuna II (Mexico), neither the Panel nor the
Appellate Body found it necessary to discuss territoriality at all (although that
might have been because the dolphins were on the high seas).
Canada and Norway's behavior is harder to understand. If the EU was suffi-
ciently worried about territoriality issues to avoid claiming that they were protect-
ing foreign seals, why didn't Canada and Norway positively assert that the EU
could not protect seals in their countries, and then follow up with the argument
that it should not be possible for the EU to evade that territorial limitation by shift-
ing the focus from the seals to EU citizens' feelings about the seals? Of course, one
can respond to a crude ipse dixit that, 'The EU can't protect seals in Canada and
Norway', with the equally crude response, 'The moral feelings are in the EU'.
But if there is any serious argument that establishes that the EU should not be
able to protect foreign seals (not even using only the mechanism of limiting its
own purchases), then that argument will very probably establish also that the EU
should not be able to act on its feelings about foreign seals. In that case, appeal
to public morals should not be allowed to avoid the territorial limitation.
So the crucial question is whether it would be legitimate for the EU to apply its
consumption ban to Canadian and Norwegian seal products in order to protect
Canadian and Norwegian seals. I think the answer is yes, it would be legitimate.
Why should it not be? It is uncontroversial that a regulator may, as matter of
fact, have a sincere concern for avoiding suffering by its domestic seals; and it is
uncontroversial that the regulator may legally act on that concern. But any sensible
regulator concerned to avoid suffering by its domestic seals would have exactly the
same concern regarding foreign seals. The fact that the regulator acts to protect
foreign seals as well as domestic is not by itself reason to think either that the regu-
lation is motivated by national-origin preference (which is what TBT 2.1 and
87 US Shrimp, para. 133.

GATT 1:1 and 111:4 are designed to prevent), or that the regulation is more trade
restrictive than necessary to protect the foreign seals (which is what TBT 2.2 is
designed to prevent). To be sure, if the case were about different treatment of
seal products, mostly from abroad, and fox or mink products, mostly domestic,
then we would want to take a specially careful look at the sincerity of the
concern for seals, and the reasons for not extending the same protection to fox
and mink, to make sure there is no national-origin preference at work. But the com-
plainants did not make that argument. Similarly, we may sometimes want to take a
closer look at the regulator's assumptions about what degree of trade restriction is
necessary to prevent harm occurring abroad and caused by behavior abroad, just
because the regulator may be less well-informed about such cases. (Arguably
US-Shrimp on TED's is an example of this.) But to my mind, none of these
reasons for a close look justifies a flat ban on concern for foreign animals.
A different sort of argument is often suggested: that it is up to Canada (for
example) to decide how Canadian seals shall be treated, and that the EU's applying
its seal products ban to Canadian seal products is interfering in Canada's internal
affairs. But the EU is not claiming any power to regulate seal-hunting in Canada
directly. All it is doing is collectively refusing to purchase goods that it collectively
does not want. Once we recognize the general right of governments to aggregate the
preferences of their citizens, and to speak for their citizens on economic matters
such as this, this is just the way the market works. Consumers, including countries
as collective consumers, are not expected or required to buy what they do not want.
Indeed, to force countries to buy what they do not want would be a serious inter-
ference in their internal affairs.
It may seem that my argument here is too strong. Can a Member refuse to buy
foreign goods, or goods from some other particular Member, just because it
doesn't want to buy foreign goods, or goods from that other Member? Of course
not. But the reason is not any internal limitation on my argument. Countries
should properly be free to act in this way, unless they have undertaken a commitment
not to. But WTO Members have undertaken a general commitment not to engage in
national-origin discrimination, either protectionism (except by tariffs) or preferences
between foreign countries. 88 A nation that wants to engage in protectionism should
not join the WTO; a nation that wants to be able to discriminate against some par-
ticular other Member should take care to exclude WTO legal relations with that
Member (as WTO Agreement Article XIII allows). Otherwise, each WTO
Member has agreed not to exclude goods from any other Member on national-
origin grounds, even if it regards that Member as a pariahs 9
8 8 There are, of course, important exceptions in the most-favored nation context, for preferential trade
areas and general systems of preferences for developing countries.
89 The hard case here, perhaps the case that requires an exception, is where a good-citizen Member
radically changes its character, and becomes a systematic violator of international norms, like Burma
becoming Myanmar.
The question that has brought our discussion to this point is whether the EU can
protect foreign seals. Protecting foreign seals could be done (indeed, if this were the
only goal, it would be done best) by a simple ban, with no exceptions. Such a ban
would not be a PPM; it would exclude seal products on the basis of properties fully
ascertainable by inspection at the border. Even so, the issue about territorial restric-
tions on regulators' purposes bleeds over into the discussion of PPM's. So let us
shift our focus for a moment to PPM's. Many people used to think that WTO mem-
bership entailed a general commitment not to choose among products on the basis
of their production history (where that production history left no trace in the phys-
ical constitution of the product as it crossed the border). But the Appellate Body in
US-Shrimp 21.5 established definitively that there is no such general commitment.
In fact, I think much of the opposition to PPM's resulted from the fact that the
examples that people used to talk about were country-based PPM's involving
national-origin discrimination. Country-based PPM's are indeed forbidden,
because of the broader commitment not to engage in national-origin discrimination
that we have already discussed.
But not all the opposition to PPM's is directed at country-based PPM's. Even
people who admit the permissibility of the US's revised shrimp-turtle regulation
(either because they are persuaded, or perforce) raise other, more problematic,
examples. The most-popular example is a hypothetical ban by a rich country on
foreign goods made by workers paid less than the rich country's domestic
minimum wage? (Notice this PPM is product-based.) This perennial example is
powerful because no one wants to allow the minimum-wage PPM. Nor do I. But
I also don't think the specter of the minimum-wage PPM is enough to justify pro-
hibiting the US's shrimp-turtles PPM, or the EU's (non-PPM) seal products ban.
The problem is how to distinguish them.
It is possible that we don't need a theoretical justification for the distinction at all.
There has never been an actual minimum-wage PPM, and very likely the fact that
such a PPM would be universally condemned as illegal, ignorant, and deeply
unjust, is enough to deter any Member from enacting one. If such a PPM ever
were enacted, it would presumably be defended on the ground that it protected
exploited foreign workers. (To admit that it was designed simply to protect dom-
estic workers against the low-wage foreign competition would be to admit protec-
tionism outright.) But in fact, such a PPM is virtually certain to hurt the already
vulnerable foreign workers it is nominally designed to benefit. Which means it is
either disguised protectionism, or monumentally stupid. There is no general
WTO principle forbidding stupidity. With regard to the minimum-wage PPM,
however, we might say that the stupidity required to explain the PPM innocently
is so extreme that the PPM is overwhelmingly likely to be protectionist, and
hence it should be held illegal. This may be the best way to deal with the puzzle.
Still, there are other possibilities for distinguishing the minimum-wage PPM from
the shrimp-turtle PPM or the seal products regime. For one thing, the minimum-
wage PPM is potentially much broader. Even if the minimum-wage PPM as actually
adopted applies only to some particular product when made with 'underpaid'
labor, it focuses on an aspect of production (the low wage) that is likely to be
common to all productive enterprise throughout any affected exporting country.
So it threatens to function like a country-based measure. That means we might
justify a rule against such potentially broad PPM's as an implementation (admit-
tedly crude, as rules often are) of the consent-based principle against national-
origin discrimination. The potentially broad PPM also represents much more of
a threat to seriously disturb the agreed balance of concessions. So we might
justify a rule against such PPM's as an implementation (again crude, as rules
often are) of GATT XXIII:1(b).
A different sort of point is that the foreign government is conceived of as speak-
ing for its citizens (even though we know real governments often do not speak for
all their citizens), in a way that it is not conceived of as speaking for its seals, its
shrimp, or its turtles. Aside from the fact that seals and other fauna do not speak
on political matters, a nation's animals are not even 'its' animals in the way that
its citizens are 'its' citizens. So it may seem more disrespectful of the foreign coun-
try's autonomy to reject its view (which, at least by a legal fiction, is its citizens'
view) of how its citizens are to be treated than to reject its view of how animals,
some of which just happen to be found in its territory, should be treated. That is
obviously not to say the animals are more important than the citizens; quite the
90
reverse.
I have no space for further discussion of 'extra-territoriality' and PPM's.
(The reader may imagine a sigh of relief.) Although I have made some suggestions
about how to distinguish the seal products ban (conceived as protecting foreign
seals, not moral sensibilities), and similarly the shrimp-turtle PPM, from the
minimum-wage PPM, I have no definite view at present about how best to do it.
But that they should be distinguished, and treated differently by the WTO
system, I have no doubt. So no damage was done by allowing the EU's end-run
around the territoriality issue, although it should not have been necessary.
3.3.2 Less restrictive alternative

Once the Panel has decided that the EU's public morals purpose is a legitimate
purpose, it remains to consider whether there is any less trade-restrictive alternative
measure that would achieve the EU's purpose to the same degree as the actual
measure. In brief, the complainants suggest various schemes to certify particular
90 A final point , that didn't quite fit anywhere. It is often objected that big-country PPM's (or regu-
lations with 'extra-territorial' purposes) have disproportionate effects on small countries. That is true.
But it is no less true of big country's non-PPM regulations with intra-territorial purposes. Big countries'
decisions have big effects. That is a fact of economic life that the WTO does not attempt to correct for,
except by specific provisions about special and differential treatment, transition periods, and the like.
The general rules must be for all countries. The litigants here are the EU and Canada (big, rich, highly devel-
oped) and Norway (not so big, but rich and highly developed).
shipments of seal products as the result of humane killing, whereas the EU

claims that no effective system for monitoring is possible, given the physical con-
ditions under which seal are hunted. The Panel's analysis is very fact-intensive,
and it is sophisticated in considering possible unintended consequences of
various suggested regimes, but it breaks no significant legal ground. In the end,
the Panel concludes that the complainants have not identified any reasonably
available, equally effective, less trade-restrictive alternative measure, so there is
no 2.2 violation.
By finding no 2.2 violation, the Panel continued what is now a marked trend.
There were challenges under TBT 2.2 in US-Clove Cigarettes, US-Tuna II
(Mexico), US-COOL, and EC-Seal Products, and no final finding of a 2.2 viola-
tion in any of these cases. In US-Clove Cigarettes, the Panel found a 2.1 violation
but no 2.2 violation, and Indonesia did not appeal the 2.2 finding. In US-Tuna II
(Mexico), the most striking case, the Panel found a 2.2 violation and no 2.1 viola-
tion, and the Appellate Body reversed on both counts, finding a 2.1 violation but no
2.2 violation. In US-COOL, the Panel found a 2.2 violation (as well as a 2.1 viola-
tion) and was again reversed on the 2.2 violation. And then we have the EC-Seal
Products Panel, which finds a 2.1 violation but no 2.2 violation. No wonder.
3.4 Whether the EU seal products regime violates TBT 5.1.2 and 5.2.1
This is the first report dealing with TBT Article 5 on conformity assessment pro-
cedures [CAP's]. There were complaints under 5.1.2, first sentence, which requires
that a CAP not constitute an 'unnecessary obstacle to international trade'; 5.1.2,
second sentence, which requires that a CAP not be 'more strict or be applied
more strictly than necessary' to give adequate assurance of conformity; and
5.2.1, which requires that a CAP be undertaken and completed 'as expeditiously
as possible'. In general, the Panel (no doubt correctly) regarded these provisions
as applying, mutatis mutandis, to procedures for accrediting certifying bodies, as
well as to the actual process of product certification.
Under 5.1.2, first sentence, Canada and Norway had two grounds of complaint.
By way of factual background, the EU ban on shrimp products entered into force
on 20 August 2010. The EU at no time had a governmental body competent to
certify products; and the procedures for accrediting private bodies to issue certifi-
cations were announced only on 17 August 2010. Accordingly, it was impossible
in practice for any certifying body to be accredited until some time after the ban
became effective. So for some period after the ban became effective, it was not
possible for even products that qualified under the exceptions to enter the
EU market.
The complainants argued first that the EU was required to guarantee that trade in
qualifying products was possible, so that the EU was required to have some EU
agency that could certify products, until there were accredited private certifying
bodies (or indefinitely, if no private bodies applied for, or were granted,
certification). The Panel rejected this claim with no more argument than the obser-
vation that Article 5 allows a system of third-party accreditation, 1 which does not
seem to fully dispose of the question what happens if no private bodies step up. On
the other hand, the Panel, again without much argument, held that the EU did
create an unnecessary obstacle to trade by creating a situation in which there
was no possibility of certification by the time the ban took effect. 92 These holdings,
both ipse dixit's, may seem to point in opposite directions, but there is no logical
inconsistency. The upshot is that the EU is not required to guarantee that trade
is possible on the date the ban becomes effective, or ever (by creating a government
certifying agency); but it must not guarantee that trade is not possible on the date
the ban becomes effective (by having no procedure for private certifying bodies to
become accredited in time).
It is not clear the Panel was right to find that the late publication of the accred-
itation procedures created an 'unnecessary obstacle'. In the absence of any expla-
nation for why the EU was so late, it surely seems that the EU behaved less than
ideally. But it seems doubtful that the impossibility of certification when the
ban took effect was an 'obstacle' to trade. The only 'obstacle' to trade was the
ban itself (and the Panel had found in its 2.2 discussion that this obstacle was
not unnecessary). 9 3 The IC exception removes an obstacle, for some traders; so it
seems that failure to have the exception is only failure to remove an obstacle,
and not an obstacle in itself. Consider some hypotheticals. There would be no vio-
lation if the EU had simply adopted a ban of seal products, with no thought of any
exception. There would also be no violation if the EU thereafter decided that it
wanted to have an IC exception, and added one. But the Panel is saying in effect
that because the EU knew before it promulgated the ban that it wanted an IC excep-
tion, it could not enact the ban (which is fully justified by its own public morals
purpose) without a functioning IC exception in place. And in the actual case, it
says that without any discussion of what administrative factors might have
accounted for the EU's belated formulation of the certification regime. This
seems a curious jump.
It might seem that the argument here is too strong, that it would mean that failure
to have a functioning exception could never be an unnecessary obstacle, which
seems wrong. But the argument does not have that consequence. Consider a differ-
ent sort of case. Suppose the EU requires that milk be safe, and has a CAP for cer-
tifying safety. In operative terms, this regime will function as a ban on milk, with an
exception for milk certified safe. But this is different from the EC-Seal Products
case, because here the exception is required by the health purpose of the ban.

92 Ibid., para. 7.528.
93 Lest there be doubt, the Panel observed in the 2.2 discussion that the presence of the exceptions
reduced the effect of the ban, which makes it less clear that the ban was 'necessary' (e.g., para. 7.460).
So it would have been even clearer that a ban without exceptions was 'necessary'.
Without the exception for safe milk, the ban on milk would be unnecessarily trade-
restrictive, by reference to its health purpose. In EC-Seal Products, however, a flat
ban of seal products would be fully justified by its morals purpose. The IC excep-
tion is justified by a different purpose from the purpose of the ban. Hence, it is a
matter of legislative grace. In which case, it seems it is not an 'obstacle' for it not
94
to be available in a timely manner.
As to 5.1.2, second sentence, the Panel found that that sentence required it to
consider whether the chosen CAP, once in force, would be stricter than necessary;
and it held there was no violation. The very plausible reasoning tracked the Panel's
2.2 discussion; and so we might add this decision to the trend of not finding viola-
tions of the 2.2 type. Finally, under 5.2.1, with regard to the question whether the
process for accrediting certifying bodies, once under way, operated 'as expedi-
tiously as possible', the Panel held that it had insufficient evidence to find a viola-
tion. In connection with one application for accreditation from 11 Swedish county
administrative boards, there was an initial exchange in which the EU Commission
listed deficiencies in the application, and the boards responded with new documen-
tation. It then took the Commission over 14 months to decide this new documen-
tation was sufficient, and accredit the boards. The Panel said this did not seem
'expeditious'. 9 5 But they later said that the complainants 'have not provided any
specific argument as to how the CAP was not conducted in the concerned instances
as expeditiously as possible'; and so they found no violation. 96 Perhaps their idea
was that one egregious case (the other case they discussed was slow, but not so
extreme) does not make a violation of a provision aimed at a systematic fault.
3.5 Coda: does the TBT matter?

In EC-Seal Products, the Panel focused on the TBT violations; its discussion of
GATT was parasitic on the TBT discussion, and essentially an afterthought. The
Appellate Body held that the EU seal products regime was not a technical regulation
at all ... and then got the same result under the GATT, just as the Panel had. This is
an apt occasion to wonder whether the TBT is actually making any difference. The
two distinctive obligations in TBT Article 2, which is the core of the Agreement, are
the obligation to use least trade-restrictive regulatory means in 2.2, and the con-
ditional obligation to use international standards in 2.4. As we pointed out
above, the tribunals have shown a notable reluctance to find 2.2 violations.
There has been one holding of a violation of 2.4, in EC-Sardines, but it seems
941 have not considered whether there is some other way to argue that the EU's behavior is illegal. It
may have disappointed some producer expectations; but even that is not clear. Producers could see some
time in advance that the exception was not going to be available at the time the ban became effective, and
we are given no evidence about how that 'some time in advance' compares to the time scale on which they
made production decisions.
95 Ibid., para. 7.577.
96 Ibid., para. 7.579 (emphasis in original).
very likely that the same result could have been reached under TBT 2.1, and under
GATT 111:4. Once the Appellate Body held in EC-Sardinesthat the burden was on the
complainant Member to prove that the international standard would be 'effective' and
'appropriate' for use by the respondent Member, they effectively guaranteed that
whenever there is a 2.4 violation, there will be a strong case for a GATT violation
(of 111:4, or 1:1, as relevant), assuming there is disparate impact. Even if there were
no 2.4 and no obligation to use the international standard, the international standard
would still, by hypothesis, describe an effective and appropriate less trade restrictive
alternative measure. The most distinctive feature of TBT 2.2 and 2.4 is that they do
not require disparate impact as part of establishing a violation. But so far, the facts
of all eight TBT cases (including the cases in which no TBT issues were decided
other than issues about what was a technical regulation) have involved disparate
impact. 97 That is not surprising. It is cases involving disparate impact that complai-
nants are most likely to care strongly about, and most likely to be willing to spend
resources litigating. What all this means is that the TBT may not matter much in prac-
tice. Perhaps, heretical thought, the Members should abolish it, to save litigation
resources and focus litigation better on the real issues. 9 8
4. Conclusion
The EC-Seal Products Panel decision dealt with a variety of specific questions
under the TBT. In the process, it also dealt more generally with the balance
between a nation's right to regulate in support of its citizens' moral concerns
and trading partners' rights to market access. The Panel did not settle on any of
the 'bright lines' that have been suggested to limit regulation. It is possible to
wish that the Panel had laid down some bright lines, to give more specific guidance
about what regulations will be upheld or invalidated in the future, and to provide
stronger safeguards against protectionism. Or it is possible to think the Panel gave
about as clear guidance as is desirable or possible for this sort of case, and
additional bright lines would unduly restrict governments' ability to pursue inno-
cent and legitimate purposes.
Whether one welcomes the Panel's analysis or sees it as alarming depends on
how one perceives the prevalence of protectionist motives and the sturdiness of
other safeguards against protectionism. Given the split of opinion and the range
of cases in which these questions might arise, we can expect the discussion to be
prolonged.
97The one case we have had no occasion to mention is EC Protection of Trademarks and
GeographicalIndications for Agricultural Products and Foodstuffs (Australia), WT/DS290/R (adopted
20 April 2005).
98 It would be an argument for keeping the TBT if the TBT Committee has been a useful institution (a
possibility on which I express no view). But it is not clear that we actually need the TBT to get any of the
benefits we now get from the TBT Committee.

14 World Trade Rev 337

Uploaded by

Copyright:

Available Formats

14 World Trade Rev 337

Uploaded by

Copyright:

Available Formats

DATE DOWNLOADED: Fri Sep 9 12:21:21 2022

SOURCE: Content Downloaded from HeinOnline

Bluebook 21st ed.

ALWD 7th ed.

APA 7th ed.

Chicago 17th ed.

McGill Guide 9th ed.

AGLC 4th ed.

MLA 9th ed.

OSCOLA 4th ed.

EC-Seal Products: Seals and Sensibilities

European Communities - Measures Prohibitingthe Importationand Marketing of

2 WT/DS400 & 401/AB/R (adopted 18 June 2014).

2.1 Bright lines and hakapiks

2.1.2 Preferences over a product

2.1.3 Preferences over process

2.1.4 Moral offense

2.1.5 Attempts at limitations

exemptions. 21 Both Marwell and Wu explore potential limitations based on the

2.2 The screening problem and consistency

2.2.1 The consistency check of the Panel and AB

Indigenous Communities (IC), Marine Resource Management (MRM) and

2.2.2 Troublesome motives and separatingequilibria

characteristics. For example, employers might want to distinguish between dedi-

2.3 Incomplete contracts and renegotiation

of interpretation as increasing the variability of outcomes (risk) associated with

3.1 Whether the EU seal products regime is a 'technicalregulation'

3.1.1 The Panel'sanalysis

33 WTDS135/AB/R (adopted 5 April 2001).

37EC Seal Products, n.153 to para. 7.106.

EU seal regime, the regulations in US-Tuna II (Mexico) and US-COOL concern

3.1.2 The Appellate Body's analysis

44 EC Seal Products (Panel), para. 7.112.

50 Ibid., para. 5.41.

viscosity') of intrinsic, or near-intrinsic, properties related to the product's useful-

3.2 Whether the EU seal products regime violates TBT 2.1

55 US Measures Affecting the Productionand Sale of Clove Cigarettes, WT/DS406/AB/R (adopted

67 Brazil Tyres, para. 227.

72 EC Seal Products (Panel), para. 7.317.

74 Dominican Republic Cigarettes,para. 96.

3.3 Whether the EU seal products regime violates TBT 2.2

3.3.1 Legitimate Regulatory Purpose:The Public Morals Purpose (and

83 US Tuna II (Mexico), para. 313.

87 US Shrimp, para. 133.

3.3.2 Less restrictive alternative

shipments of seal products as the result of humane killing, whereas the EU

91 EC Seal Products (Panel), para. 7.524.

3.5 Coda: does the TBT matter?

You might also like