Exceptions & Waivers
Subtitle
General Exceptions in GATT
Article XX (General Exceptions) of GATT 1994 recognizes that governments may need to apply and enforce measures for purposes such as the protection of public morals; human animal or plant life and health; and the protection of national treasures.
GATT Article XX: General Exceptions
Subject to the requirement that such measures are
not applied in a manner which would constitute a
means of arbitrary or unjustifiable discrimination
between
countries
where
the
same
conditions
prevail, or a disguised restriction on international
trade, nothing in this Agreement shall be construed to
prevent the adoption or enforcement by any
Member of measures:
a) necessary to protect public morals;
b) necessary to protect human, animal or plant life or
health;
c) relating to the importations or exportations of gold
or silver;
d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices;
e) relating to the products of prison labour;
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g)relating to the conservation of exhaustible natural
resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption;
h) undertaken in pursuance of obligations under any
intergovernmental commodity agreement which
conforms to criteria submitted to Members and not
disapproved by them or which is itself so submitted
and not so disapproved;
j) involving restrictions onexports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan; Provided that such restrictions shall not operate to increase the exports of or the protection afforded to such domestic industry, and shall not depart from the provisions of this Agreement relating to non-discrimination;
GATT Article XX permits Members to take certain
measures, otherwise prohibited by GATT provisions,
subject to stipulated conditions.
1) The first condition is that the contemplated measure
must fit under one of the 10 categories in
paragraphs (a) - (j) of Article XX. For example,
sub-paragraphs (a), (b), and (d) indicate that the
measures sought to be taken by Members must be
necessary either to, protect public morals; human,
animal
or
plant
life
or
health;
or
to
secure
compliance with certain laws or regulations.
For those three categories, there is an imperative
"necessity" test
that must be satisfied for the measures to
be consistent with Article XX. The determination of whether
a measure, though not indispensable, may nevertheless be
considered "necessary", involves a weighing and
balancing of factors, such as:
The importance of the common interests or values
protected by the measure;
The efficacy of the measure in achieving the intended
policies;
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2) The second condition refers to the opening paragraph of Article XX (commonly referred to as the "chapeau of Article XX"). Measures covered under the General Exceptions must not be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.
Before certain measures are used to derogate from GATT rules, they must meet the requirements of the chapeau i.e. they have to be "applied" in a manner that does not create "arbitrary or unjustifiable discrimination". The chapeau of Article XX of GATT aims to prevent the use of derogation measures to unjustifiably impede the market access rights of other WTO members.
Provisions of Article XX are to set out a two-level test that a
proposed measure must pass before it is deemed
consistent with Article XX, and therefore qualify as an
exception to the obligations in the GATT:
The first test is whether the policy fulfils the criteria in
Article XX (a)-(j);
General Exceptions in GATS
Article XIV of the GATS permits members to maintain restrictions on services and service suppliers if the measure satisfies one of the policy purposes in sub-paragraphs (a) - (e).
Furthermore, Article XIV GATS recognizes that members need to maintain a balance between trade measures and other legitimate policies and interests, such as the protection of the health of its citizens.
GATS Article XIV is very similar to GATT Article XX, which governs trade in goods. Certain measures, which would otherwise be prohibited by other provisions of the GATS, can still be taken provided two conditions are met:
1. The first conditionis that the measure taken must fall into one of thefive categoriesin sub-paragraphs (a) to (e). For example, sub-paragraphs (a), (b) and (c) indicate that the measures must, in similar terms to GATT Article XX, be "necessary" either to protect public morals, or to maintain public order (a specific definition of this latter term is in the accompanying footnote); to protect human health, animal or plant life or health; or to secure compliance with certain laws or regulations.
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2)
As with GATT Article XX governing trade in goods, the
second condition is that the measure must
satisfy the
chapeau
of Article XIV. Measures covered by the GATS
General Exceptions provisions must not be "applied in a
manner which would constitute a means of arbitrary or
unjustifiable discrimination between countries where like
conditions prevails, or a disguised restriction on trade in
services
".
General Exceptions in TRIPS
There are no general exceptions as such under the TRIPS Agreement.
Security Exceptions in the GATT
A WTO Member is allowed to take any action which it considers necessary for the protection of its essential security interests or in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security. Members are not required to furnish information the disclosure of which would be contrary to their essential security interests.
GATT Article XXI: Security Exceptions
Nothing in this Agreement shall be construed: to require any Member to furnish any information the disclosure of which it considers contrary to its essential security interests; or to prevent any Member from taking any action which it considers necessary for the protection of its essential security
interests
(i) relating to fissionable materials or the materials from which they are derived;
(ii) relating to thetraffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
GATT Article XXI allows certain security measures, which would otherwise be prohibited by GATT provisions, to be taken in two specific circumstances:
1. Sub-paragraph (a) refers to the disclosure of information that the WTO Member would consider contrary to its essential security interests. Sub-paragraph (b) prescribes the condition under which a Member may take action that it determines to be "necessary for the protection of its essential security interests including those relating to either:
the trade in fissionable materials; or
traffic in arms, ammunition and other war-related trade.
WAIVERS
A waiver is a permission granted by WTO Membership allowing a particular WTO Member to not comply with its normal commitments. Waivers are time-bound. They have time limits and extensions have to be justified.
In "exceptional circumstances", a WTO Member may be authorized by the other Members to derogate, for a specific time and under certain conditions, from any provision contained in the WTO Agreements. These derogations, called "waivers", are governed by the WTO Agreement and are applicable to trade in goods, trade in services and trade-related aspects of intellectual property rights. Waivers are governed by Article IX of the Marrakesh Agreement (Establishing the WTO).
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Waivers are granted by the whole WTO Membership, through a decision of the Ministerial Conference (in most cases, the decision is adopted by the General Council in between sessions of the Ministerial Conference). Consequently, a waiver may be viewed as a "negotiated right", whereas there is no need to negotiate to take a general exception in GATT Article XX and GATS Article XIV.
