The rules governing international trade have long raised concerns among citizens and decision makers for undermining national and international efforts to improve animal welfare standards. However, trade restrictions aimed at protecting animal welfare comply with World Trade Organisation (WTO) rules due to a public morals exemption provided in the General Agreement on Tariffs and Trade (GATT) article XX. This exemption allows countries to adopt measures that are "necessary to protect public morals", which can include those to uphold animal welfare standards.
Here we take a closer look at the ins and outs of GATT article XX and how it has enabled countries to enact trade restrictions for the sake of animal welfare.
What tariffs and barriers to trade existed before GATT?
In the first part of the 20th century trade barriers between countries were generally very high. Trade agreements were often bilateral (between two countries), leading to a complex web of trade rules and tariffs, creating uncertainty and inefficiency in international trade.
Between the two world wars (1918-1939), many countries, particularly the United States and European nations, implemented “protectionist” policies. The most notorious example is the U.S. Smoot-Hawley Tariff Act of 1930, which raised U.S. tariffs on over 20,000 imported goods to record levels, with average tariffs reaching around 45%. In response, many countries retaliated by increasing their own tariffs. This led to a sharp decline in international trade, exacerbating the effects of the Great Depression.
The high level of trade barriers combined with the Great Depression reduced global trade volumes by approximately 66% between 1929 and 1934. The global economy became increasingly fragmented, with countries trading within blocs rather than on a multilateral basis. This lack of a coherent international trade system was regarded as having hindered economic recovery and growth.
How did GATT reduce tariffs and facilitate economic growth?
The devastating impact of World War II underscored the need for a stable and cooperative international economic system. On October 30, 1947, 23 countries met in Geneva, Switzerland, and signed a General Agreement on Tariffs and Trade (GATT), establishing a legal framework for international trade.
GATT contributed significantly to the liberalisation of global trade by reducing tariffs and other trade barriers. The first round resulted in 45,000 tariff concessions affecting $10 billion (USD) in trade. With the following rounds reducing tariffs further, the agreement helped facilitate post-war economic recovery and growth, promoting international economic cooperation.
What shortcomings of GATT did the establishment of the WTO address?
While GATT primarily focused on reducing tariffs and addressing trade in goods, It lacked a formal institutional structure and had limited scope in addressing trade in services, intellectual property, and investment. Additionally, its dispute resolution mechanism was considered weak and slow, often relying on consensus for the adoption of panel reports, which made it difficult to enforce rulings effectively.
The Uruguay round of negotiations, launched in 1986, aimed to address not only tariffs but also non-tariff barriers, trade in services, intellectual property rights, agriculture, textiles, and the establishment of a more effective dispute settlement mechanism. The negotiations were concluded with the signing of the Marrakesh Agreement in April 1994. This agreement formally established the World Trade Organization (WTO), which came into existence on January 1, 1995.
The original GATT agreement, now referred to as GATT 1947, was incorporated into the GATT 1994, which remains a key part of the WTO framework.
What concerns has GATT raised around animal welfare?
GATT and its successor, the WTO, have caused significant concern around trade and animal welfare. One of the main concerns has been that GATT/WTO rules might undermine national and international efforts to improve animal welfare standards. Countries with stricter animal welfare regulations might be at a disadvantage compared to importing countries with more lenient standards and be pressured to lower their standards to remain competitive.
However, during the negotiations leading to the creation of GATT in 1947, countries recognized the need to balance trade liberalisation with the ability to uphold important national policies. As a result, GATT included a range of general exceptions under Article XX to accommodate these needs.
Public morals exemption in GATT allows for animal welfare protection
Article XX of GATT provides a list of specific exceptions that allow countries to enact measures otherwise inconsistent with GATT obligations if such measures are necessary to achieve certain policy objectives, including the protection of public morals. This Public Morals clause was included to ensure that countries could maintain their cultural and ethical standards without violating their international trade commitments.
“This Public Morals clause was included to ensure that countries could maintain their cultural and ethical standards without violating their international trade commitments.”
The public morals exemption in GATT emerged from the recognition that trade liberalisation should not override important societal values. It reflects a balance between promoting international trade and allowing countries to uphold their ethical standards, and it continues to be relevant in addressing contemporary issues within the WTO framework.
Initially, the public morals exemption was rarely invoked. With the establishment of the WTO and the expansion of global trade, issues related to public morals began to surface more frequently. The scope of what constitutes "public morals" has been interpreted broadly to include a range of social, cultural, and ethical concerns.
EC-Seal products ban showcases GATT’s application on animal welfare
Regarded as the most important animal welfare related case in the WTO case law is the EC — Seal Products case, when the European Union banned the importation and placing on the market of seal products in 2009 (“EU Seal Regime”). In the same year, Canada requested consultations with the European Communities, claiming that the measures were inconsistent with the obligations of the European Communities. The Appellate Body, which acts as a court in the WTO, upheld the Panel's finding that the EU Seal Regime is ‘necessary to protect public morals’ within the meaning of Article XX(a) of the GATT 1994.
The case is significant because it confirmed that animal welfare concerns are a legitimate reason for WTO members to regulate trade. It was also stated that animal welfare is “an ethical responsibility for human beings in general” and “a globally recognised issue.”
“animal welfare is “an ethical responsibility for human beings in general” and “a globally recognised issue.””
Most animal welfare import restrictions have not been challenged before the WTO
Import bans and market access requirements are already relatively common in the regulatory practice of some WTO Members. Several measures make market access for certain foreign products conditional on meeting domestic animal welfare requirements. These include for example:
California’s ban on the sale of foie gras if it is produced by force feeding geese or ducks
California’s Proposition 12 (as well as similar laws in other states) pairing a local ban on the production of eggs obtained from hens kept in battery cages with a sales ban applicable to imported products
EU Cosmetics Regulation banning marketing of cosmetics containing ingredients tested on animals
With animal welfare being recognised as falling under the public morals exemption and most cases never being challenged before the WTO, countries can use their right to maintain their ethical standards and not override important societal values.
It is unsustainable in the long term to increase animal welfare standards without applying them also to all products on the market, including imports. Only then the objectives of better animal welfare standards are met by eliminating outsourcing of cruelty to countries with weaker protections for farmed animals.
References
Kenton, W. (2024) What Is the Smoot-Hawley Tariff Act? History, Effect and Reaction. https://www.investopedia.com/terms/s/smoot-hawley-tariff-act.asp
DS400: European Communities — Measures Prohibiting the Importation and Marketing of Seal Products. (2015) World Trade Organization. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds400_e.htm
The General Agreement on Tariffs and Trade (GATT 1947). (1947) World Trade Organization. https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm
Conconi, P., Voon, T. (2016) EC–Seal Products: The Tension between Public Morals and International Trade Agreements. https://www.cambridge.org/core/journals/world-trade-review/article/ecseal-products-the-tension-between-public-morals-and-international-trade-agreements/4166B2E41E7D83070837509BC3AB0436
The Uruguay Round. (n.d.) World Trade Organization. https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm