Trade and Morality: Preserving "Public Morals" without Sacrificing the Global Economy

By Gonzalez, Miguel A. | Vanderbilt Journal of Transnational Law, May 2006 | Go to article overview

Trade and Morality: Preserving "Public Morals" without Sacrificing the Global Economy


Gonzalez, Miguel A., Vanderbilt Journal of Transnational Law


ABSTRACT

The World Trade Organization (WTO) exists for the purpose of promoting and facilitating trade amongst its member nations. When those member nations acceded to the WTO'S agreements, however, they acknowledged that sometimes trade barriers are useful tools in protecting themselves from certain evils. This Note addresses one of those useful tools--the public morals exception--which allows a member nation to maintain trade barriers with respect to certain goods or services.

Since the WTO agreements have been in effect, the public morals has lacked two critical things: a definition and boundaries. This Note will attempt to define the public morals exception in a way that preserves the spirit of the WTO agreements. Furthermore, this Note will propose a test that will allow future WTO panels to decide whether a country's law or regulation, justified under the public morals exception, can legitimately fall within the ambit of the WTO agreements.

TABLE OF CONTENTS

I.   INTRODUCTION
II.  DEFINING THE BOUNDARIES OF THE "PUBLIC
     MORALS" EXCEPTION
     A. The Vienna Convention Approach
     B. Decisions in International Trade Law Cases
        1. The Tuna/Dolphin Cases
           i.   The Controversy Behind the
                Tuna/Dolphin Regulations
           ii.  Factual Background of the
                Tuna/Dolphin Cases
           iii. Relevant Arguments Raised by
                Parties
            iv. May a Nation Impose Regulations
                on Objects Outside of its Territorial
                Jurisdiction?
             v. The Meaning of "Necessary"
            vi. Conclusions of the Panels
        2. United States--Cross-Border Gambling
           and Betting Services
             i. The Panel Decision
                a. Motives for the Regulation of
                   Gambling
                b. Factual Background
                c. Relevant Arguments Raised by
                   the Parties
                   1. The Meaning of "Necessary"
                   2. The Meaning of "Public
                      Morals"
                   3. The Requirement of WTO
                      Consistency
                d. Conclusions of the Panel
            ii. The Appellate Body Decision
     C. The Usage of "Public Morals"
        1. The United States
        2. Pakistan
        3. Latin America
        4. Australia
        5. Canada
        6. Hong Kong
        7. United Kingdom
III. THE "PUBLIC MORALS" CATCH-ALL DILEMMA
IV.  A TRADE-PROMOTING AND SOVEREIGNTY-PRESERVING
     DEFINITION FOR "PUBLIC
     MORALS"
V.   CONCLUSION

I. INTRODUCTION

   Mr. [U.S. Senator] GRAMM: His amendment also deems exempt those
   State and local laws and ordinances related to a series of
   issues--such as health, safety, environment, or public morals,
   whatever that is (1)

The WTO's lofty ambition is to "usher[] in a new era of global economic cooperation, reflecting the widespread desire to operate in a fairer and more open multilateral trading system for the benefit and welfare of their peoples." (2) Through the WTO, representatives from 124 countries (3) sought "to resist protectionist pressures of all kinds" (4) and pledged that they would not adopt trade measures that would "undermine or adversely affect" (5) the agreements reached during the Uruguay Round negotiations that lasted from 1986 to 1994. In pledging so, the leaders of the nations involved in the creation of the WTO recognized that free trade was an important means of raising global living standards, "ensuring full employment," promoting the growth of the volume of real income and effective demand, "expanding the production of goods and services," preserving the environment, and using the world's resources at optimal levels. (6)

One of the tools the WTO used in promoting this goal is the most favored nation (MFN) principle. Article I of the General Agreement on Tariffs and Trade of 1947 (GATT) states that any benefit that a country confers upon the goods of another country "shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all contracting parties. …

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