Under Article XX(b) of GATT, WTO Members may adopt measures that violate GATT if it is necessary to protect human health, provided 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.

The general exceptions give WTO Members significant space to design and implement measures to protect public health (and other public interests), provided that measures are adopted and implemented in good faith.

Whether the measure is directed at human health

In order to determine whether a WTO Member can successfully invoke the exception, a panel will first ascertain whether the measure is directed at the protection of human health. In the case of WHO FCTC measures, this stage should be relatively easy to satisfy through evidence of tobacco-related harm. The existence of the FCTC itself is evidence of strong global consensus on the risk to health occasioned by tobacco use and the objective of FCTC measures.

Whether a measure is necessary

A panel will then determine whether the measure in question is addressed toward that health risk and is necessary to protect against that risk, accepting the right of WTO Members to set their own level of protection against that risk. In determining whether a particular measure is necessary to achieve its objective, a panel will weigh and balance several factors, including the contribution that the measure makes to its objective and the degree of restriction that the measure places on international trade.

This process of weighing and balancing takes place in light of the importance of the objective pursued by the government (Brazil — Tyres, Appellate Body, para 156; China — Audiovisuals, Appellate Body, para 240-242). Where a panel determines that the measure appears to be necessary to achieve its objective, it will go on to examine whether there are alternative measures that are reasonably available (Brazil — Tyres, Appellate Body Report, para 178).

The importance of protecting health

On several occasions, WTO panels and the Appellate Body have affirmed the importance of protecting health. For example, in EC — Asbestos the Appellate Body stated that 'the objective pursued by the measure is the preservation of human life and health through the elimination, or reduction, of the well-known, and life threatening, health risks posed by asbestos fibres. The value pursued is both vital and important in the highest degree' (Appellate Body Report, EC — Asbestos para 172).  In Brazil — Tyres, the panel stated that 'the objective of protecting human health and life against life threatening diseases, such as dengue fever and malaria, is both vital and important in the highest degree' (Panel Report, Brazil — Tyres para 7.111).  The Appellate Body agreed with the panel that 'few interests are more "vital" and "important" than protecting human beings from health risks' (Appellate Body Report, Brazil — Tyres para 144).

WHO FCTC parties can be confident that a WTO panel would recognize the importance of protecting health through the adoption of tobacco control measures. In the pre-WTO (and pre-WHO FCTC) case Thailand — Cigarettes, a GATT panel held that tobacco consumption posed a serious risk to human health and that measures designed to reduce the consumption of cigarettes fell within the scope of the exception (GATT Panel Report, Thailand — Cigarettes para 73).  In the US — Clove Cigarettes dispute the panel stated that it was 'self-evident' that measures adopted to reduce youth smoking were aimed at the protection of human health (Panel Report, US — Clove Cigarettes para 7.347).

Contribution made by the measure to the objective

Where a WTO Member seeks to rely on Article XX, it must demonstrate that its measure has contributed to or is likely to contribute to the achievement of the objective.

In Brazil — Tyres, the Appellate Body clarified that a measure does not have to be indispensable to be characterized as necessary, but that its contribution to the objective must be material, rather than marginal or insignificant (Appellate Body Report, Brazil — Tyres para 210). In that case, the Appellate Body held that a WTO Member could demonstrate a material contribution to the protection of public health through evidence or data pertaining to the past or the present (Appellate Body Report, Brazil — Tyres para 151).

Where the measure is part of a package of interrelated measures, the contribution it makes to the achievement of its objective may be demonstrated by showing with quantitative projections or qualitative reasoning that the measure is 'apt to produce a material contribution to the achievement of its objective' in the future (Appellate Body Report, Brazil — Tyres para 150-151).  The Appellate Body stated (Appellate Body Report, Brazil — Tyres para 151):

A state is therefore not required to isolate the impact of each measure that it adopts as part of a complementary package.

The restrictive impact on trade

The Appellate Body has stated that it may be easier to justify as necessary a measure with a less restrictive impact on international trade (Appellate Body Report, China — Audiovisuals para 307). Nevertheless, a WTO member will be able to justify measures with significant effects on trade (such as an import ban) if it can demonstrate that the measures sufficiently contribute to the achievement of the objective (Appellate Body Report, Brazil — Tyres para 150).

The existence of alternative measures

If a complaining WTO Member points to another less trade restrictive measure available to achieve the objective, the responding Member must demonstrate that the proposed alternative is not 'reasonably available' (Appellate Body Report, Brazil — Tyres para 156).

A reasonably available measure is one which would equally achieve or make an equivalent contribution to the achievement of the regulatory objective, which the government is capable of adopting and which does not impose an 'undue burden' in the form of prohibitive costs or technical difficulties (Appellate Body Report US — Gambling para 307-308; Appellate Body Report, Brazil — Tyres para 156; Appellate Body Report, China — Audiovisuals para 318).  The Appellate Body has not fully explained what is meant by an 'undue burden,' although the case law suggests that such a burden would entail more than just some additional costs to government (Appellate Body Report, US — Gambling para 308; Appellate Body Report, China — Audiovisuals para 327; Appellate Body Report, Korea — Beef para 180-181).

In the context of tobacco control, individual measures will invariably be part of a multipronged strategy, as was acknowledged in the Australia — Plain Packaging panel decision. FCTC measures are intended to form a mutually supportive package of measures, meaning that employing one measure is not an alternative to other complementary strategies including measures that are in place at the same time as the challenged measure.

Arbitrary or unjustifiable discrimination or a disguised restriction on international trade

A measure invoked under the health exception of GATT must also satisfy the introductory paragraph or 'chapeau' to Article XX, which provides: '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.' This enquiry aims to identify situations where the measure itself might be necessary to protect public health, but has been applied in practice in a way that: has no rational relationship with the objective of protecting public health, is overly broad, or does not include situations which it logically should include (Appellate Body Reports, US — Shrimp paras 165, 177-181; Brazil — Tyres paras 215, 225-227;US — Gambling para 367-372).

It is unlikely that a WTO panel would regard a measure to be applied in a way that constitutes arbitrary or unjustifiable discrimination or a disguised restriction on trade if any distinctions drawn in the application of the measure were the result of the measure’s public health objective. Similarly, if a measure such as a ban or other restriction on imported goods is applied in an even-handed way, it should survive scrutiny under the chapeau.

To look at GATT obligations more generally, see our page on discrimination.