In US – Tuna, the Appellate Body was asked to consider the question of under what circumstances an instrument elaborated by a treaty body could be a relevant international standard under the TBT Agreement. The answer to this question has implications for any future dispute on plain packaging of tobacco products because it affects whether Guidelines to the WHO Framework Convention on Tobacco Control (WHO FCTC) could be relevant international standards.
As the Appellate Body described in para. 348, the question of what constitutes a relevant international standard is important because Article 2.4 compels WTO Members to use a relevant international standard, or its relevant parts, as the basis for technical regulations (such as product regulations or labeling measures) in certain circumstances. Article 2.5 also provides that technical regulations in accordance with relevant international standards are presumed not to create unnecessary obstacles to international trade (thus reducing the chances of violation of article 2.2).
If either Honduras or Ukraine requests establishment of a panel concerning plain packaging of tobacco products, the question of what constitutes a relevant international standard could arise. The Australian legislation implements Articles 11 and 13 of the WHO FCTC. The Conference of the Parties to the WHO FCTC has adopted implementation guidelines for these provisions. The guidelines recommend adoption of plain packaging.
In my book, I argued that it is problematic for instruments developed by industry bodies to be recognized under the TBT Agreement as international standards if instruments developed by public bodies, such as multilateral treaty bodies, do not also have this status. Thankfully, the panel in US – Tuna found that an instrument elaborated under the Agreement on the International Dolphin Conservation Program (AIDCP) did constitute a relevant international standard. On appeal, however, the United States argued that the instrument was not developed by an “international standardizing organization” because the parties to the AIDCP are parties to an international agreement and not to a body or organization. The United States also argued that the AIDCP does not have recognized activities in standardization. The Appellate Body’s treatment of these arguments has a bearing on use of WHO FCTC Guidelines in disputes concerning tobacco control measures such as plain packaging.
The Appellate Body’s decision leaves open the possibility that treaty bodies (or organizations under whose auspices such bodies operate) may elaborate relevant international standards. The decision stresses that an international standardizing body must (i) have recognized activities in standardization and (ii) be open (in terms of membership) to the relevant bodies of at least all WTO Members ( paras 357 – 358).
To have recognized activities in standardization a treaty body need only be active in standardization (“the activity of establishing, with regard to actual or potential problems, provisions for common and repeated use, aimed at the achievement of the optimum degree of order in a given context”) (para 360). A treaty body need not have standardization as its principal function, or even as one of its principal functions (para. 362). Whether a body has “recognized” activities will also be determined by reference to the TBT Committee Decision on Principles for Development of International Standards, Guides and Recommendations, which sets out procedures that should be followed in standardization (paras 366 – 378). Additionally, widespread participation by WTO Members suggests that a body’s activities in standardization are recognized (para. 390).
For a body to be open, it must be open “at every stage of standards development” (para. 374). A treaty body must also be open on a non-discriminatory basis, meaning that provisions for accession that disadvantage the bodies of some Members as compared to other Members would tend to indicate that a treaty body is not an international standardizing body for purposes of the TBT Agreement (para. 375). (On the facts, the Appellate Body found that the AIDCP was not open because membership of the treaty body was dependent on an invitation to accede to the treaty issued by the Parties.)
So, do WHO FCTC Guidelines constitute international standards under the TBT Agreement? There are strong arguments to suggest that these guidelines would in fact constitute such standards. The WHO FCTC is a treaty with 174 Parties open to all WHO Member States. The vast majority of WTO Members, including Honduras and Ukraine, are Parties. The Conference of the Parties (an international body) establishes Guidelines for implementation of the Convention that are aimed at elaborating how Parties should implement particular tobacco control measures (standardization). In the context of Australia’s plain packaging legislation, the Guidelines to Articles 11 and 13 are also directly relevant to the technical regulations in question.
In summary, US – Tuna supports the argument that WHO FCTC Guidelines may constitute relevant international standards for purposes of the TBT Agreement. This founds a presumption that the regulations in question are not more trade restrictive than necessary under Article 2.2 of the TBT Agreement. This presumption should also affect interpretation of other WTO covered agreements. For example, in determining whether an encumbrance on use of a trademark is unjustifiable under TRIPS Article 20, a panel should have regard to the presumption made under the TBT Agreement (as well as to the WHO FCTC more broadly).
Thanks for such an excellent analysis! It is interesting to focus on the TBT Article 2.5 presumption, which has not been examined by any panels yet and its relationship with the interpretation of Article 2.2. The Second sentence of Article 2.5 stipulates as follows.
Whatever a technical regulation is prepared, adopted or applied for one of the legitimate objectives explicitly mentioned in paragraph 2, and is in accordance with relevant international standards, it shall be rebuttably presumed not to create an unnecessary obstacle to international trade.
Here come a few questions to my mind.
1. Would the Article 2.5 presumption be limited only to the case that the stated objective of a technical regulation at issue corresponds to one of the legitimate objectives explicitly mentioned in paragraph 2, although, as the COOl panel stated, the objective which is not listed in Paragraph 2 can still be considered to be legitimate under Article 2.2? In contrary to Article 2.2 containing the latin term inter alia, Article 2.5 contains the explicit sentence that seems to limit the scope of the presumption function.
2. It would seem that Article 2.5 intends to reverse the burden to prove the violation of Article 2.2 when the conditions set forth in Article 2.5 are met. However, it has been confirmed by the Appellate Body that it is up to a complainant anyway, not a defendant, who bears the burden to prove the violation under Article 2.2, unlike GATT Article XX. On this basis, I wonder to what extent basing its technical regulation on relevant international standard will release the regulating country, defendant, from its evidential burden under Article 2.5 in practice.
3. Would it occur that a technical regulation is in accordance with a relevant international standard, whereas its objective is not legitimate or falls outside of the enumerated scope? If so, it would follow that the Article 2.5 presumption does not apply. In this case, how would the fact that the measure is still in accordance with relevant international standard affect the panel’s analysis as to whether the measure creates an unnecessary obstacle to international trade to fulfil the legitimate objective under Article 2.2?
We would still have to wait for the further rulings to see the answers.
Thanks for the questions Stone.
Before answering them, it is worth noting that only question 2 appears relevant to the plain packaging claims because protecting human health appears to be Australia’s overarching objective.
1. I agree. There may be legitimate objectives beyond those listed in Article 2.2, but the presumption in Article 2.5 only applies to legitimate objectives “explicitly mentioned” in Article 2.2.
2. Yes, this is an important point. In strict legal terms, the presumption could affect the standard of proof i.e. make it more difficult for the complainant to shift the burden to the respondent. (We will have to await case law on this.) In informal terms, a finding that a measure is in accordance with relevant international standards may also make a panel very reluctant to rule that the regulation is more trade restrictive than necessary.
3. To date, the case law has focused on whether the objective of the Member implementing the technical regulation is legitimate (as opposed to whether the regulation is more trade restrictive than necessary to achieve a legitimate objective). Hence, it is conceivable that a WTO Member could be found to implement a measure in accordance with international standards, but for reasons that are not legitimate. My guess is that for evidentiary reasons the prospects of such a finding in any future TBT dispute are low.