In its palm oil disputes with Indonesia and Malaysia at the WTO, the EU proposed a novel approach to invoking three exceptions in framing an affirmative legal defence under Article XX of the General Agreement on Tariffs and Trade (GATT). The EU explained that it was raising subparagraphs (a), (b), and (g) as a ‘composite whole’. While respondents have relied on multiple GATT XX items before, the EU’s insistence that these items were non-separable represented a departure from established WTO practice. We argue that the EU’s composite defence was both analytically unsound and legally consequential. Drawing on how composite variables are used in empirical research, we submit that the EU’s defence was not intended to clarify the relationship among multiple regulatory objectives, but to obscure it. The main payoff was to prevent the complainants from proposing less trade-restrictive alternatives, which would increase the likelihood that its GATT XX defence would be provisionally justified and almost entirely obviate the function of the chapeau. If accepted by future WTO panels, this framing would risk Article XX’s two-tier test, and upend the careful balance sought between regulatory autonomy and trade discipline.
Journal of World Trade