A fresh look at the Aim-and-Effects debate: EU – Palm Oil and the centrality of the Chapeau of Article XX GATT

Leonelli, Giulia Claudia (2023) A fresh look at the Aim-and-Effects debate: EU – Palm Oil and the centrality of the Chapeau of Article XX GATT. Trade, Law and Development , ISSN 0976-2329. (In Press)

Abstract

Increasing recourse to extraterritorial leverage in the environmental law field can promote the uptake of environmentally beneficial practices by market actors and raise the levels of environmental ambition of exporting Members. Nonetheless, it also pulls the fabric of the multilateral trade system. This prompts a fresh look at the long-standing debate on aim-and-effects. This article employs an analysis of the anti-deforestation npr-PPM standards under challenge in EU – Palm Oil to highlight the shortcomings of aim-and-effects approaches. Analyses of aim-and-effects to establish product “likeness” cannot address the question whether regulatory distinctions drawn on legitimate policy grounds are applied in such a way that they unjustifiably afford protection to domestic products. In the face of high levels of regulatory complexity, this is problematic. Analyses of aim-and-effects to determine “less favourable treatment” cannot help identify more subtle forms of potential unjustifiable protective application. This also poses several challenges. Against this backdrop, the article highlights the centrality of the Chapeau of Article XX and defends its role in the GATT system. In times of environmental unilateralism, identifying all aspects in the application of a measure that are irreconcilable with good faith and that may unjustifiably afford protection to domestic products will be more important than ever before.

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