Clarification of Evolution of the Principle of Non-Discrimination under the WTO Agreement: Recent developments in case law and their implications for Members' policy space

         
Author Name KAWASE Tsuyoshi (Faculty Fellow, RIETI)
Creation Date/NO. February 2015 15-J-004
Research Project Comprehensive Research on the Current International Trade/Investment System (pt.II)
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Abstract

The General Agreement on Tariffs and Trade (GATT) articles I, III, XX all provide for the principle of non-discrimination (Most-favored nation treatment (MFN) and national treatment) which forms the foundation of the WTO law aquis, and a series of quisi judicial adjudications have attempted to clarify their texts in abstract and generic terms since era of the GATT 1947. We can observe delicate fluctuations in trends of these adjudications periodically, which has been going back and forth between the bipolar goals of complete accomplishment of non-discriminatory, free and multilateral trade and assurance of flexible policy space for Members. In relatively early days of the WTO, its establishment of the WTO through around 2000, the Appellate Body presented notable rulings in these respects, and trends in the adjudications seemed constant for some time. In 2010's, however, the Appellate Body has successively issued the adjudications relating to these GATT articles, as well as art. 2.1 of TBT Agreement that has a close relationship with the formers, and some changes and developments in their interpretation of these articles are observable.

This paper will follow the evolution of the relevant case law with respect to every issue on which important developments in the interpretation of the non-discriminatory principle are cognizable, in order to examine how the WTO strikes a balance between accomplishing free trade and policy space for Members. So far, panels and the Appellate Body have decided that the non-discriminatory principle amounts to a prohibition of origin-based discrimination. On the other hand, through flexible understanding of the normative structure of article XX of the GATT, they seem to have attempted to positively appreciate non-trade regulatory purposes that are pursued by a discriminatory measure in question. Also, in interpreting the non-discriminatory principle provided in the TBT Agreement, they have shown deference to Members' policy discretion as much as possible, by inquiring whether discriminatory treatment in question embodies a legitimate regulatory distinction.