Extract from letter from the former
Parliamentary Under-Secretary of State
for Consumers and Corporate Affairs
at the Department of Trade and Industry (Dr Kim Howells) to the
Chairman of the Committee
COMPATIBILITY WITH WORLD TRADE ORGANISATION
A WTO challenge could arise where a cosmetic product
coming from a third country which had been tested on animals was
prohibited under the marketing ban whereas a 'like' cosmetic product
produced in the Community and not tested on animals was not. In
such an event it could be argued that the fact that Community
cosmetics tested on animals would also be prohibited is irrelevant,
and that what is at issue is whether the imported product is being
treated less favourably than that accorded to 'like' products
of national origin in respect of all laws, regulations and requirements
affecting their internal sale, offering for sale, purchase or
use. If such a case was taken by a third country the outcome would
hinge on whether the imported and domestic products were 'like'
products and if so whether the discriminatory treatment could
be justified under the exceptions permitted under Article XX GATT
In addition, the marketing ban on cosmetics tested
on animals might be challenged by a third country as being in
breach of Article XI GATT as effectively amounting to a restriction
or prohibition on the importation of such cosmetics into the Community.
It is very common for cases involving an alleged breach of Article
III.4 GATT to also include a claim for breach of Article XI (usually
as alternatives). If this claim was upheld by a Panel then the
Community would again have to defend the prohibition on the basis
that the measure fell within one or more of the permitted exceptions
in Article XX GATT.
The Article XX GATT exceptions referred to above
are interpreted narrowly and the only ones which might be invoked
in this case are Article XX(a) and XX(b). The scope of the Article
XX(a) exception (measures necessary to protect public morals)
has never been determined by a WTO panel or the Appellate Body
and it is questionable whether it could be successfully invoked
to defend the marketing ban on animal tested cosmetics. In any
event Article XX(a) is couched in terms of measures which are
'necessary' to protect public morals. Using the approach taken
by Panels and the Appellate Body in other cases, the word 'necessary'
must be read as meaning that no less trade-restrictive alternative
is available to the Community to achieve its desired objective.
It could be difficult to argue that this was the case given that
the Community has come forward with an alternative proposal which
is clearly less trade-restrictive.
As regards the Community placing reliance on the
Article XX(b) exception (measures necessary to protect human,
animal or plant life or health) it is difficult to see how the
Community could establish that the ban on animal testing achieves
that goal. The protection of animal life and health in the Article
XX(b) context is taken to relate to issues such as protection
from diseases rather than protection from testing. The use of
animal testing in no way adversely affects the cosmetic product's
characteristics or quality and it is therefore difficult to see
how the Community could justify its marketing ban on health grounds.
In any event, Article XX(b) is also subject to the 'necessary'
requirement and the same comment made above about the meaning
of the term 'necessary' would apply here as well. If there is
a less trade restrictive means of achieving the Community's stated
objective then the Community will not be able to rely on the Article
XX(b) GATT exception.
There are also a number of provisions in Article
2 of the Technical Barriers to Trade (TBT) Agreement, which may
Article 2.2 of the TBT requires WTO Members to ensure
that technical regulations are not prepared, adopted or applied
with a view to or with the effect of creating unnecessary obstacles
to international trade. It is arguable that a third country would
seek to argue that the marketing ban had the effect of creating
an unnecessary obstacle to international trade and could not be
saved under the legitimate objectives provided for in Article
2 of the TBT; and
Article 2.3 TBT provides that technical regulations
shall not be maintained if the circumstances or objectives giving
rise to their adoption no longer exist or if the changed circumstances
or objectives can be addressed in a less restrictive manner. As
stated above in relation to GATT it is difficult for the Community
to argue that it cannot achieve its stated objective in a less
trade restrictive manner when it has brought forward a proposal
showing how this might be achieved.
27 July 2000