13
D. Included Motives for Discrimination
Trade liberalisation and economic integration may compete with other equally legitimate pol-
icy goals. WTO law and EU law therefore offer a number of exceptions based upon which
discrimination may be lawful.
40
Article XXIV GATT offers exemptions to MFN treatment of
like products (free trade areas and customs unions), complemented by the enabling clause
permitting specific exemptions to the benefit of developing countries, and by individual waiv-
er decisions. Comparable to Article XXIV GATT, Article V GATS permits Members to join,
under certain requirements, regional agreements liberalising trade in services, thus justifying
deviations from MFN treatment. Article XX GATT amounts to the main catalogue of exemp-
tions primarily applicable, but not restricted to discriminatory treatment. Under the GATS,
Members basically remain free to discriminate against foreign services and service providers,
subject to scheduling. Even within scheduled sectors, Members may employ differential
treatment and discriminatory restrictions for different modes of supply. For services that are
not scheduled, a general exemption results under Article XIV GATS which is comparable to
XX GATT. Articles 3 and 4 TRIPS Agreement only allow for a limited range of exemptions
to MFN treatment and NT, mainly induced by policies of reciprocity contained in other inter-
national agreements, in particular the Paris Convention, the Berne Convention and the Rome
Convention. The TRIPS Agreement does not contain a provision on general exceptions.
Lawful motives for discrimination are listed in Article XX GATT and XIV GATS. They
mainly involve the public goods of public morals, human, animal and plant health and life,
natural resources, prison labour and compliance with domestic law not inconsistent with
GATT rules. In services, exemptions were extended to include consumer protection, privacy
and taxation. These motives are generally subject to a necessity test, while less stringent re-
quirements apply in other fields, in particular environmental protection under Article XX(g)
GATT. The necessity test implies a demonstration that the measure is suitable and feasible,
and that less intrusive alternatives are not reasonably available. WTO case law does not em-
ploy the term proportionality principle or test. Panels and the Appellate Body instead embark
on a process of balancing and weighing interests at stake.
41
In practical terms, however, the
analysis is close to the test under the heading of proportionality employed by the Court of
Justice in assessing exceptions under Article 36 TFEU. Restrictions imposed to justify dis-
criminatory treatment largely correspond to WTO law and practice. This is equally true for
the second requirement, as provided for by the chapeau of Article XX GATT, banning arbi-
trary discrimination and disguised restrictions of trade. In both jurisdictions, this provision
was construed to entail the prohibition of abuse of right (abus de droit) and the exclusion of
40
See, for commentaries on the relevant provisions, e.g., R. Wolfrum, N. Wenzel, P.-T. Stoll/L. Strack, N.
Matz-Lück, S. Reyes-Knoche/K. Arend (commenting on the various lit. of Article XX), ‘Article XX
GATT’, in R. Wolfrum/P.-T. Stoll/H. P. Hestermeyer (eds.), WTO – Trade in Goods (Leiden: Martinus
Nijhoff Publishers, 2011); A. Tevini, ‘Article XXIV GATT’, in R. Wolfrum/P.-T. Stoll/H. P. Hester-
meyer (eds.), WTO – Trade in Goods (Leiden: Martinus Nijhoff Publishers, 2011); T. Cottier/M.
Molinuevo, ‘Article V GATS’, in R. Wolfrum/P.-T. Stoll/C. Feinäugle (eds.), WTO – Trade in Services
(Leiden: Martinus Nijhoff Publishers, 2008); T. Cottier/P. Delimatsis/N. Diebold, ‘Article XIV GATS’,
in R. Wolfrum/P.-T. Stoll/C. Feinäugle (eds.), WTO – Trade in Services (Leiden: Martinus Nijhoff Pub-
lishers, 2008); T. Cottier, ‘The Agreement on Trade-Related Aspects of Intellectual Property Rights’, in
P. F. J. Macrory/A. E. Appleton/M. G. Plummer (eds.), The World Trade Organization: Legal, Eco-
nomic and Political Analysis, Vol. I (New York: Springer, 2005), 1041, at 1067-1069.
41
See United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services,
Appellate Body Report, adopted 20 April 2005 (WT/DS285/AB/R); Brazil – Measures Affecting Im-
ports of Retreaded Tyres, Appellate Body Report, adopted on 17 December 2007 (WT/DS332/AB/R).