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Comment: United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services: Prepared for the ALI Project on the Case Law of the WTO

  • FEDERICO ORTINO (a1)
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1 I have raised several criticisms towards the way the Appellate Body has reached its conclusion with regard to the scope of Article XVI GATS in ‘Treaty Interpretation and the WTO Appellate Body Report in US – Gambling: A Critique’, JIEL (2006).

2 This presumption may also stem from the perception that quantitative restrictions have a discriminatory or protectionist tendency since, by limiting how many suppliers operate within a specific market, they are bound to constitute protection to existing domestic operators (sub-paragraph (f) of Article XVI:(2) seems to confirm this view). However, this is not always true, especially with regard to new service fields or products and to developing countries. In these circumstances, Article XVI GATS could even be perceived as a pro-competitive instrument, insofar as it prohibits national governments to protect, not just domestic, but any incumbent service supplier.

3 As previously noted, (similar to tariffs) Article XVI market-access limitations are not prohibited immediately because it would not be economically and thus politically feasible to do so. For example, protection of a specific infant-service industry might be achieved through one of the quantitative measures listed in Article XVI. However, in the ideal world designed by the GATS, these types of justification are only temporary, and thus market-access restrictions are subject to the progressive liberalization ‘commitments’ in Article XIX GATS.

4 There is also empirical evidence that a measure, which has been found to violate a per se prohibition type of discipline (such as Article II or Article XI GATT), has never been found to be justified on the basis of one of the legitimate public-policy objectives listed in the general-exception provision (Article XX GATT). The only case where Article XX GATT was successfully employed to justify a violation of Article XI was USShrimp 21.5. However, the measure at issue in that dispute was the border arm of an internal regulation and thus should have been reviewed on the basis of Article III rather than Article XI GATT. For a fuller discussion of the issue see Ortino, Basic Legal Instruments for the Liberalisation of Trade: A Comparative Analysis of EC and WTO Law (Oxford: Hart 2004) at 220–221.

5 Appellate Body Report on Korea–Beef, para. 164.

6 Appellate Body Report on Korea–Beef, para. 176.

7 I would submit that the Appellate Body's reference to the extent of the restrictive effects on international commerce produced by the GATT-inconsistent compliance measure should not be regarded as introducing this type of ‘weighing and balancing’, but simply as the necessary limb in the determination of the existence of a less-restrictive measure that may equally secure compliance with the relevant ‘laws and regulations’.

8 Gambling, para. 309.

9 Gambling, para. 308.

Comment: United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services: Prepared for the ALI Project on the Case Law of the WTO

  • FEDERICO ORTINO (a1)

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