Whither Article XX? regulatory autonomy under non-GATT agreements after China—raw materials

On January 30, 2012 the Appellate Body to the World Trade Organization (WTO) released a decision in China—Measures Relating to the Exportation of Various Raw Materials (Raw Materials) in which it condemned China’s refusal to freely export certain raw materials mined within its territory. Apart from the significant political implications of the decision, the Raw Materials report went a good distance towards answering a persistent question in trade law circles: when, if at all, can the savings clause contained in Article XX of the General Agreement on Tariffs and Trade (GATT) be invoked to justify a violation of another WTO agreement? Answering the question is important because if GATT Article XX is generally available as a defense against non-GATT violations, it would ensure that the specialized WTO agreements are as tolerant of public policy motivated trade restrictions as is the GATT. That, in turn, would assuage concerns that certain specialized agreements such as the Technical Barriers to Trade Agreement (TBT) or the Agreement on Subsidies and Countervailing Measures (SCM), which lack their own savings clauses, are insufficiently sensitive to non-trade concerns, such as environmental protection. Stated otherwise, permitting broad recourse to Article XX outside of the GATT would soften the perceived rigidity of the specialized agreements, thereby preventing the WTO from inappropriately encroaching upon members’ domestic regulatory space.