US–Clove Cigarettes

Importantly, before US–Clove Cigarettes, no case had dealt specifically with Article 2.1 of the TBT Agreement.Footnote ²⁰ This case was seminal: a marker to be followed in all future interpretations of the TBT Agreement in relation to non-discrimination.

The dispute arose following the promulgation of measures by the United States in an effort to address the severe public health consequences of tobacco use and addiction, particularly the signing of the Family Smoking Prevention and Tobacco Control Act.Footnote ²¹ Based on evidence collected which suggested that flavoured cigarettes were particularly attractive to the youth, the legislation specifically banned such cigarettes. However an exception was granted for menthol cigarettes purportedly because they are smoked more widely by citizens other than the youth, and the effects of prohibiting them had not been adequately evaluated.Footnote ²² However, menthol cigarettes were mainly US produced, while other flavoured cigarettes were almost completely produced overseas, with Indonesia, the complainant in this case, having the bulk of the US market share in clove cigarettes specifically.

Ultimately the Panel found the United States' ban on flavoured cigarettes inconsistent with Article 2.1, firstly by finding that the products were like, based on an examination of the regulatory purpose of the regulation at issue, and secondly by finding that the regulation treated imported clove cigarettes less favourably than like domestic menthol cigarettes.Footnote ²³ Subsequently, the Panel found that the measure amounted to less favourable treatment in that ‘it altered the competitive relationship between domestic menthol cigarettes and imported clove cigarettes to the detriment of the latter’.Footnote ²⁴

While the Appellate Body, in its final determination, upheld the Panel decision in all major respects, including likeness, its reasoning varied considerably. The Appellate Body report was employed as a decisive initial statement (in the larger TBT jurisprudential sense) on the interpretation of Article 2.1. Noting that the TBT Agreement does not contain exception provisions, such as Article XX of the GATT, the Appellate Body stated that Article 2.1 does not prohibit less favourable treatment which ‘stems exclusively from a legitimate regulatory distinction’.Footnote ²⁵ To quote the Appellate Body in creating this test:

The United States' appeal questioned the Panel's finding that the harm to clove cigarettes was not explained by legitimate regulatory distinctions.Footnote ²⁷ In response, the Appellate Body agreed with the Panel that the reasons cited for exempting menthol cigarettes are not ‘legitimate regulatory distinctions’.Footnote ²⁸ Moreover, the Appellate Body explained that a detrimental impact on imports, by itself, is not sufficient to establish a violation of Article 2.1 of the TBT Agreement, effectively reading in a second stage of enquiry in determining less favourable treatment.Footnote ²⁹

To determine whether or not the test is applicable, the Appellate Body stated that Panels will need to look to the ‘design, architecture, revealing structure, operation and application of the technical regulation at issue, and, in particular, whether that technical regulation is even-handed’.Footnote ³⁰ In essence, the jurisprudence regarding Article III:4 of the GATT, read with Article XX, was adopted and applied to non-discrimination obligations regarding technical regulations. There are differing viewpoints on the correctness and legitimacy of this approach, which will be discussed in detail further on.

US–Tuna II

This case involved a US measure, the Dolphin Protection Consumer Information Act,Footnote ³¹ which monitored and enforced a private, voluntary ‘dolphin safe’ label on tuna sold in the US. The US regulation, confirmed in Earth Island Institute v. Hogarth Footnote ³² prohibited of the use of the label on tuna marketed and sold in the United States unless ‘an observer has certified that no dolphins were killed or seriously injured and no purse seine nets were intentionally deployed or used to encircle dolphins during that fishing trip’.Footnote ³³ Conversely, for tuna caught outside the Eastern Tropical Pacific region (the ‘ETP’), ‘where there is no significant dolphin–tuna association, it will be sufficient for the captain of the vessel to certify the latter’.Footnote ³⁴

Mexico, as a tuna fisher in the ETP, challenged the measure, stating firstly that it violated Article 2.1 of the TBT since this was a method typically used by Mexican fishers, and that not allowing it to qualify for ‘dolphin-safe’ labelling de facto limited the competitive opportunities for Mexican-caught tuna in the United States, even if no dolphins had in fact been harmed.

Subsequently, the Panel found that there was no violation of Article 2.1.Footnote ³⁵ In determining this, the Panel examined the fishing practices of Mexican fisheries and the impact of the regulations on fishers in the ETP as well as the relative effect on those outside it, including the associated costs. In the opinion of the Panel, the impact of the measure on operators in the tuna market was not related to the nationality of the product, but rather to the fishing practices, geographical location, relative integration of different segments of production, and economic and marketing choices.

The Appellate Body significantly modified the Panel's analysis of 2.1 and ultimately found that there had been a violation of Article 2.1. It was in the Appellate Body report that the issue of non-discrimination as a result of a legitimate regulatory distinction again arose. The Appellate Body held that the United States

Essentially the Appellate Body stated that the measure was not applied even-handedly, and thus could not be considered a legitimate regulatory distinction. As the Appellate Body explained: ‘[t]he [subsequent] question before us is thus whether the United States has demonstrated that this difference in labelling conditions is a legitimate regulatory distinction’.Footnote ³⁷ This led to the finding above: that the detrimental impact on Mexican tuna products did not arise exclusively from a legitimate regulatory distinction.

US–Country of Origin Labelling (US–COOL)

Finally, the US–COOL case concerned a mandatory labelling schemeFootnote ³⁸ which imposed on retailers an obligation to provide origin information on certain listed commodities sold, including a range of meat products – specifically at issue were beef and pork.Footnote ³⁹

The complainants, Mexico and Canada, claimed that the labelling measures were inconsistent with Articles 2.1 and 2.2 of the TBT Agreement. More specifically, they argued that the United States' measures accorded imported livestock less favourable treatment than that accorded to like domestic livestock in a manner inconsistent with Article 2.1 of the TBT Agreement as well as Article III:4 of the GATT 1994. The Panel ultimately concluded that the additional costs associated with the COOL measures which arose in respect of foreign products created an incentive for producers to use US meat, to the detriment of Canadian and Mexican imports.Footnote ⁴⁰ Thus the measure was found to violate Article 2.1.

As it was wont to do in all three TBT cases, the Appellate Body upheld the Panel's ruling with regard to its finding that the measure was inconsistent with Article 2.1, but disagreed with its analysis. After agreeing with the Panel as to the measure's detrimental impact, the Appellate Body criticized the Panel for conducting an incomplete Article 2.1 analysis.Footnote ⁴¹ It was specifically noted by the Appellate Body that for a measure to fall under the scope of a legitimate regulatory distinction, the measure would have to be applied even-handedly. To this end, the Appellate Body reiterated the words used in US–Clove Cigarettes,Footnote ⁴² that a panel must ‘carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue’.Footnote ⁴³ It was underscored in US–COOL, following a lengthy discussion, that while a detrimental impact on imported goods may prima facie demonstrate less favourable treatment, this may be rebutted: a detrimental impact on imported goods will amount to less favourable treatment only if it cannot be justified as the outcome of pursuing a legitimate objective. As was demonstrated in all three Appellate Body reports, this requirement is examined in the form of a two-stage test: First, has there been a detrimental impact? Second, does such an impact stem exclusively from a legitimate regulatory distinction? Ultimately, the Appellate Body held that the detrimental impact could not be explained by a legitimate regulatory distinction because the measure resulted in arbitrary and unjustifiable discrimination, ‘such that they [could not] be said to be applied in an even-handed manner’.Footnote ⁴⁴

Likeness, necessity and their place within the disputes

An important discussion and subsequent interpretation took place within the disputes, concerning likeness and how it should be understood. As this argument has far reaching consequences pertaining to discrimination enquiries, it should be discussed briefly here. In this regard, the three Panel reports all had differing views, which were left to be reconciled by the Appellate Body. In particular, the Appellate Body in US–Clove Cigarettes found fault with the Panel's conception of likeness, leading to its own interpretation of the term in the TBT context as ‘market-likeness’.Footnote ⁴⁵ To quote the Appellate Body:

This interpretation, then, is that which is to be employed by future Panels, and I submit that this is problematic for a number of reasons, which will be outlined below.

The likeness test should focus on the treatment of two products which pursue the same objective: this is within the ambit of the TBT Agreement, which concerns itself with differing treatment between policy-like goods.Footnote ⁴⁷ Market-likeness as envisioned by the Appellate Body (that is, likeness determined by consumers treating the products as like) may often lead to bad results, as there is always the possibility of a lack of consumer information regarding the differences in products resulting in an uninformed opinion on likeness. Asking whether two market-like goods have been distinguished by regulation based on their origin, or not, would be to ignore, or at least partially disregard, the focus of the TBT Agreement: the term ‘like products’ in the TBT Agreement, for example, falls under the heading of ‘Preparation, Adoption and Application of Technical Regulations by Central Government Bodies’. This focus on market-likeness means that the subsequent enquiry undertaken by the Appellate Body will be flawed.Footnote ⁴⁸

Under the current analysis the Appellate Body will not make a determination about whether the measure at hand has been applied in a non-discriminatory manner across a range of products originating from different trading partners. While a determination may be made on whether two goods, which are like in the eyes of the consumer, have been treated in a non-discriminatory manner, there is nothing to suggest that the Appellate Body will question whether two goods, which the regulator has deemed to be like, have been treated in a non-discriminatory manner in respect of this treatment. This is akin to acting as if government regulation on the issue had not happened when analysing the dispute. As Mavroidis (Reference Mavroidis2013) points out, ‘responding yes to the first question does not ipso facto amount to an affirmative response to the second question’.Footnote ⁴⁹ His example in the context of US–Tuna II, is illustrative of the correct approach. The question should be: ‘has the US applied the dolphin-safe label in non-discriminatory manner across goods of different origin that meet the necessary regulatory requirements to have access to the label?’Footnote ⁵⁰ Clearly, the issues of product likeness and how the test for it is applied by the Appellate Body has an effect on the current test for non-discrimination, and this is something that will need to be remedied in order to allow for more certainty in the outcomes of future disputes.Footnote ⁵¹

What is the legitimate regulatory distinction test?

As explained in US–Clove Cigarettes:Footnote ⁵² in the preamble to the TBT Agreement, a balance is sought to be struck between, on the one hand, the pursuit of trade liberalization, and on the other, Members' right to regulate. These principles are not far removed from the balance that exists between the National Treatment obligation of Article III or that of MFN in Article I, and the general exceptions provided for under Article XX of the GATT. The two Agreements are linked by the desire to further the objectives of the GATT in the second recital of the preamble of the TBT Agreement.Footnote ⁵³ Article 2.1, and the concept of ‘less favourable treatment’ in the TBT Agreement were not previously subject to exceptions. Both the Panel and Appellate Body in the US–Clove Cigarettes dispute were faced with this issue: the lack of exceptions in the TBT Agreement (such as those present in Article XX of the GATT) which could justify measures which were inconsistent with the obligations of Article 2.1. The Appellate Body in that dispute took up the task of introducing elements based on the balance and purpose of the GATT into the TBT Agreement. In order to achieve this, there were suggestions that the GATT Article XX should be applied mutatis mutandis in cases of provisional Article 2.1 violation. It was also suggested that the terms ‘like products’ or ‘less favourable treatment’ should be reinterpreted in order to include Article XX flexibilities within their interpretation.Footnote ⁵⁴

What happened instead, was that the Appellate Body placed the GATT-like flexibilities under the ‘less favourable treatment’ element of Article 2.1 of the TBT Agreement, holding that the balance in the GATT is expressed by the National Treatment rule in Article III:4 as qualified by the exceptions in Article XX, while in the TBT Agreement this balance is to be found in Article 2.1 itself, read in the light of its context and of its object and purpose.Footnote ⁵⁵

In assessing Article 2.1, the Appellate Body considered that the GATT and TBT ‘overlap in scope and have similar objectives’.Footnote ⁵⁶ Going against the analysis of the Panel, it was found that the GATT could be used as direct comparative setting, based on the parallels between Article 2.1 and GATT III:4.Footnote ⁵⁷ Additionally, the Appellate Body took the view that the TBT preamble could be read to mean that the TBT Agreement intends to expand pre-existing GATT disciplines and provides a balance that is not, in principle, different from the balance set out in the GATT, between Articles III and XX.Footnote ⁵⁸ Finally, the Appellate Body specifically gave weight to the fact that the TBT Agreement does not contain a general exceptions clause as found in the GATT, Article XX.Footnote ⁵⁹

The result of this analysis was the reading in of the ‘legitimate regulatory distinction’. To again quote US–Clove Cigarettes:

Essentially a two stage test had been created: First, has the measure caused a detrimental impact on competitive opportunities for the group of imported products, as compared to domestic like products, in terms of Article 2.1 of the TBT Agreement? If so, could it nevertheless be said that such detrimental impact stems exclusively from a legitimate regulatory distinction, whereby the measure will be held not to be inconsistent with Article 2.1?

Word by word analysis

In order to fully understand the phrase ‘legitimate regulatory distinction’, each word and its meaning should be examined and placed in context through its previous usage within WTO Agreements and decisions.

‘Legitimate’ within the TBT framework, appears only in Article 2.2 and is read into Article 2.1 by way of context. In this sense, we can take it to be tied to the list of legitimate objectives available under Article 2.2, such as the protection of human health or safety, or animal or plant life or health for example, and interpret its meaning in accordance with the scope of that Article, despite the fact that the Appellate Body drew no specific links between the two. It should be remembered, however, that it is not clear whether the ‘legitimate regulatory distinction’ is meant to have the same scope as that of ‘legitimate objectives’ in Article 2.2. The word ‘regulatory’ is clearly derived from the scope of Article 2.1 – for a measure to be considered under that section, it must be a technical regulation. The distinction which is to be considered should similarly be viewed as part of a regulatory framework, and, it is assumed, may not be the result of a standard, or otherwise. Finally, ‘distinction’: This term does not appear in the TBT Agreement, but it can be taken that in this context it is derived from the definition of technical regulations which ‘are measures that, by their very nature, establish distinctions between products’.Footnote ⁶¹ As a whole, the term ‘legitimate regulatory distinction’ can be taken to mean: a measure which has the effect of differentiating between products in pursuance of a reasonable and justifiable objective, in a fair and justifiable manner.

Another facet of the test, as laid down in US–Clove Cigarettes, is that the detrimental impact on imports stems exclusively from a legitimate regulatory distinction. It is submitted that the word ‘exclusively’ is important, though not much attention has been paid to its use by the Appellate Body thus far. Its meaning is clear: for the detrimental impact to be justified, the legitimate regulatory distinction must form the whole of the reason for the detrimental impact. However, questions are raised by this usage.

Does the use of the word mean that the distinction formed must succeed in its purpose? Or should its purpose and objective be the standards by which to judge whether a detriment stems exclusively from it? For example, if the objective is to prevent youth smoking, should the case be judged on whether the detriment is caused purely from issues that arise from trying to prevent youth smoking, or from those that arise if youth smoking is in fact curbed to some degree? While the Appellate Body has provided little guidance in this regard, I submit that Panels should focus on the actual degree of contribution that a measure makes toward its objective, not the contribution it should have made or whether the measure completely achieves or satisfies some minimum level of fulfilment of that objective.

Moreover, what of a case whereby a technical regulation discriminates between like products and leads to detrimental conditions for said product, but is not the sole cause of such detrimental impact? Or where there has been an established legitimate regulatory distinction, but the detrimental impact has been wider than could have been reasonably anticipated, or perhaps stems from other partially related sources. Perhaps imagine a scenario involving multi-stage production of a product where completely separate measures in separate countries combine to cause a detrimental impact on competitive opportunities in the final country of sale. Only through a combination of measures impacting on different stages of production does a detriment arise, and it can be shown that the detriment in the final country does arise from a legitimate regulatory distinction. However, it is clear that the detriment does not arise exclusively from that particular legitimate regulatory distinction. Will the detrimental impact be justified as far as the legitimate regulatory distinction's scope extends? Or will there be an effort made to address the full cause of the detriment by the Appellate Body? Is this even possible, given the limitations of the DSB in relation to its mandate?

A final suggestion: perhaps the Appellate Body's aim here was to prevent the utilization of regulatory distinctions which are motivated by multiple objectives, and in fact considers that these types of distinctions are, in themselves, not legitimate. In fact, the idea of a multiplicity of objectives contained within a measure was used as a reason against the adoption of the likeness test developed by the Panel in US–Clove Cigarettes Footnote ⁶² by the Appellate Body. While that test was not adopted, the idea that multiple objectives could create undue difficulty,Footnote ⁶³ perhaps helped shape the current formulation of the test. If this is the view taken by the Appellate Body, it will naturally raise multiple problems with regard to the way in which states regulate and what will be acceptable in the WTO context. However, it should be noted that nowhere else in the three reports is the concept of multiple objectives mentioned in a negative light; in fact, there seems to be an understanding by both the Panels and the Appellate Body that regulating with multiple objectives in mind is ‘not inconceivable’Footnote ⁶⁴ and is thus something that future panels will inevitably have to take in their stride. An aversion to multi-objective measures thus seems unfounded, though future application of the test is necessary to understand the significance of this word, and its application in particular.

Legitimacy within the TBT Agreement

As mentioned above, the term ‘legitimate’ is used in a number of TBT provisionsFootnote ⁶⁵ and is again used in the new phrase ‘legitimate regulatory distinction’. What will be examined briefly here is whether this use of the word legitimate is consistent with the read-in provision in Articles which use the same phrase.

Article 2.2 provides an open list of what constitutes a ‘legitimate objective’ and it is in this sense that the word is repeated in Articles 2.4 and 2.5 of the Agreement. What is required to be legitimate for the purposes of these Articles is the objective itself. In these types of cases, the objective's legitimacy is determined first and then weighed against the necessity of the measure's trade restrictiveness.Footnote ⁶⁶ Contrast this with Article 2.1, where the word ‘legitimate’ is not found in the text itself, but only appears in the Appellate Body's interpretation of the Article. As discussed above, what is being examined is whether the detrimental impact which stems from the measure may be justified according to its objectives, as well as the ‘design, architecture, revealing structure, operation and application’Footnote ⁶⁷ of the measure. Thus, it is the treatment which differentiates between the product itself, which must be considered legitimate, and not the objective of the measure. This has benefits in its own way, as pointed out by Marceau: no longer can parties tailor their measures so they appear to fall under a ‘legitimate objective’ in terms of Article 2.2.Footnote ⁶⁸

On examination of the above, especially with reference to the Appellate Bodies' drawing parallels with the GATT, one might assume that the legitimate regulatory distinction is in fact a simple transference of GATT jurisprudence into the TBT Agreement, albeit under a different heading. While the Appellate Body in any of the three cases did nothing to dispel this possibility, can it really be said that the chapeau of Article XX of the GATT may be relied upon as the marker for which factors should be taken into account in a panel's examination of even-handedness? It is submitted that this notion would be problematic for a number of reasons. The most prominent reason would be the blurring of the line between the GATT and the TBT's application, mentioned above – this will be dealt with further on. For now, however, it is sufficient to note that the Appellate Body used the words ‘design and application’ of the measure, whereas the GATT, in its relevant provision, deals with the application of the measure only.Footnote ⁶⁹ Thus, it can be assumed that the Appellate Body wished for future Panels to engage in a more holistic interpretation of a measure when determining from where the detrimental impact springs than would be expected under the corresponding provisions of the GATT.

Analysis of the phrase in context

A valuable question regarding the above is: does an assessment of whether a detrimental impact (caused by a regulatory distinction) is ‘legitimate’, necessarily require an examination of whether such a distinction is designed and applied in an even-handed manner?Footnote ⁷⁰

The phrase ‘even-handed’ is used in each of the TBT decisions,Footnote ⁷¹ and is explained through reference in each of the disputes, particularly US–COOL, where the phrase was markedly focused on. Where a regulatory distinction is not designed and applied in an even-handed manner, such as where it is designed or applied in a way which comprises of arbitrary or unjustifiable discrimination under the definition employed by the Appellate Body, that distinction cannot be considered ‘legitimate’, and thus the detrimental impact will result in discrimination prohibited under Article 2.1. As per US–Clove Cigarettes, a panel must methodically analyse

Thus, the question of even-handedness plays into the question of legitimacy of the distinction and implies a measure of fairness.

This discussion, however, begs the question: ‘what exactly is even-handedness’? Employing the language of the three disputes, it can be seen that a valuation of a measure's ‘even-handedness’ involves examining whether the measure is ‘fair’, ‘non-discriminatory’, and ‘calibrated’Footnote ⁷³ to its purpose. In response to a question from the Panel,Footnote ⁷⁴ the European Union explained that the dictionary meaning of ‘even-handed’ refers to ‘fair, evenly-balanced; free of bias or preference’.Footnote ⁷⁵ Accordingly, even-handedness as a concept refers to similar situations and their treatments: Are the situations treated differently, and is the measure calibrated (thereby not going beyond what is necessary) to achieve its purpose? The origin of the phrase is not clear, but is thought to have been drawn from the sixth recital of the preamble to the TBT Agreement, along with the concept of ‘unjustifiable or arbitrary discrimination and disguised restrictions on trade’ in the chapeau of Article XX of the GATT.Footnote ⁷⁶

The lack of clear definition of the phrase ‘legitimate regulatory distinction’ and its reliance on even-handedness is problematic. There are a few instances where the wording has proved confusing.Footnote ⁷⁷ I submit that the Appellate Body in US–COOL, in fact, over-simplified the analysis by boiling it down to merely whether the measure is even-handed or not. It is stated that the question of whether the detrimental impact stems exclusively from a legitimate regulatory distinction may be alternately phrased as ‘whether the [COOL] measure is designed and applied in an even-handed manner, or whether it lacks even-handedness’.Footnote ⁷⁸ It goes on to state that a measure will not be even-handed if it is designed or applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination. Does this reduce the second stage of the test (‘whether the detriment stems exclusively from a legitimate regulatory distinction’) to ‘is the measure designed or applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination’? Here, I submit that what is effectively being said by the Appellate Body is that if the measure constitutes arbitrary discrimination it cannot be even-handed, and if it is found not to be even-handed, then it will not be considered legitimate. I further submit that this would be a less than satisfactory position for the Appellate Body to place itself in. Surely whether or not a detrimental impact stems exclusively from a legitimate regulatory distinction is a question which requires a further analysis over and above whether the discrimination is unjustifiable and arbitrary. As a reference, a panel would have to draw on GATT Article XX jurisprudence in examining the meaning of the phrase ‘arbitrary or unjustifiable discrimination’. If it could be argued that the phrase ‘arbitrary or unjustifiable discrimination’ can in fact be transplanted directly into the realm of TBTs for the purposes of interpretation, there is still the problem of its meaning: what is being searched for is Article 2.1 discrimination – discrimination with regard to National Treatment or MFN but focused on TBTs. To find that the measure is designed or applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination would not be fulfilling of the purpose of the Article. Conversely, to find that the measure is not arbitrary or unjustifiable, it is submitted, would not on its own show that the measure is even-handed and that the measure stems exclusively from a legitimate regulatory distinction. It is not submitted that this is, necessarily, what the Appellate Body entailed in its adoption of the phrase;Footnote ⁷⁹ however, it is worrying that there is little discussion of other factors which may be used to determine when a regulatory distinction is not legitimate. In assuming these Article XX characteristics into Article 2.1, the Appellate Body somehow failed to utilize or benefit from the later judicial interpretations of the chapeau, and instead employed vague terms such as ‘even-handedness’ to describe their fresh interpretation of the Article. In fact, it was pointed out by the Appellate Body in EC–Seal Products Footnote ⁸⁰ that in the context of Article 2.1 it is only the regulatory distinction that leads to the detrimental impact on imported products that should be examined for its legitimacy. Under the chapeau of Article XX, a measure can be found to be applied in a manner that discriminates arbitrarily or unfairly on a number of grounds, including grounds which differ in their ‘nature and quality’ from the discrimination that was found to be inconsistent with the non-discrimination obligations of the GATT.Footnote ⁸¹ Clearly, the chapeau provides a more rounded scheme for assessing claims and thus has more value to a party to a dispute. Those looking to justify a claim under Article XX also will benefit from the abundance of judicial interpretation surrounding it, giving it substance and certainty. Is this indicative of the fact that the legitimate regulatory distinction is lacking substance?

The homogenization of the GATT and the TBT Agreement

Without doubt, and with more than a little significance, throughout the Appellate Body reports discussed above, it can be seen that Articles 2.1 (and 2.2 to a lesser extent) have been considered in terms similar to those of Article XX of the GATT. The advent of the legitimate regulatory distinction introduced an Article XX-type analysis into the TBT Agreement. Similar to the case of the chapeau to Article XX, the focus of the Appellate Body is on how the measure is applied (leading to a detrimental impact) and then whether the distinction which arises from the measure is connected to achieving a legitimate policy objective.Footnote ⁸²

It must be borne in mind that although the TBT Agreement is intended to ‘further the objectives of the GATT’, it does so through a specialized legal regime that only applies to a limited class of measures (TBTs). For these measures, the TBT Agreement imposes obligations on Members that are ‘different from, and additional to’ those in GATT.Footnote ⁸³ This is but one example of a distinction being drawn between the GATT and the TBT Agreement, and it is clear that the differing functions and context in which they were each conceived are important to WTO jurisprudence as a whole. Is it acceptable then that the Appellate Body attempted to import GATT concepts into the TBT Agreement, but failed to take cognisance of the surrounding interpretations which informed and augmented such concepts, resulting in a compromise which is insufficient? It has been suggested that this may have been attempted for simplicity's sake, and it seems apparent that this was a consideration by the Appellate Body – but is it not preferable to have an instrument which is able to clearly and decisively deal with the specialized issues for which it was drafted, in a way which is suited to meet their particular challenges? This importing of GATT jurisprudence into the TBT context has helped compound the problems mentioned above regarding the likeness enquiry.Footnote ⁸⁴ Homogeneity between the agreements is a natural response in the Appellate Body's attempt to utilize the TBT Agreement more where it was applicable; a reaction to the critics of EC–Asbestos and an attempt to mould the TBT Agreement into something more familiar. The question is: Is this result worth it, when the cost is an unsatisfactory and indistinct test?

As an extension of this line of thought, it seems that while finding that a measure is inconsistent with the TBT Agreement may be the end of the examination, a TBT measure consistent with Article 2.1 of the TBT Agreement may still require further examination in terms of the GATT. This follows the conclusion of the Appellate Body in US–Tuna II that the Panel violated DSU Article 11 by refusing to assess the GATT consistency of the challenged measure, after concluding that the said measure was not inconsistent with Article 2.1 of the TBT Agreement.Footnote ⁸⁵ Thus, by importing measures from the GATT directly, in terms of the legitimate regulatory distinction test, has the Appellate Body effectively said that if a measure is consistent with 2.1, it will be consistent with the GATT, considering the GATT origins of the legitimate regulatory distinction?Footnote ⁸⁶ Put another way, the test for whether a detrimental impact stems exclusively from a legitimate regulatory distinction is effectively attempting to be the same as that under Article XX of the GATT – surely a finding of consistency with Article 2.1 will then necessitate a finding of justification under Article XX? Perhaps not yet, but it is my submission that this conclusion is the direction that the Appellate Body's interpretation is heading towards.