General exceptions under the GATS: A legal commentary on Article XIV GATS

The general and specific obligations undertaken under the General Agreement on Trade in Services (GATS) by Members in relation to non-discrimination and market access and a level playing field in services, may under certain circumstances, considerably restrict the pursuit of equally legitimate, non-economic policy goals and competing public interests and values, such as public health, public order, safety, public morals or the environment. WTO law seeks to establish a proper balance between these different policy goals, notably through general exceptions applicable to all provisions and existing commitments under an agreement. Art. XIV GATS follows the model of Art. XX GATT 1994, and given that the case law relating to Art. XIV GATS is still in its infant stage, WTO adjudicating bodies have recourse to precedents developed under Art. XX GATT 1994, albeit taking into account the different structure and flexibility of the GATS and commitments made by Members. Nonetheless, the experience in case law is still limited and it is difficult to anticipate future needs or developments in appropriately shaping and construing Art. XIV GATS. Any such effort to interpret Art. XIV should bear in mind that it is arguably only when Members’ regulatory concerns are accommodated that they will be willing to engage in enhanced commitments to liberalize trade. Both the requirement of necessity or proportionality and the function of the chapeau protect Members from excessive and abusive recourse to exemptions for purely protectionist or rent-seeking reasons of a particular domestic service industry.