Whose Margin is it? State Discretion and Judges’ Appreciation in the Necessity Quicksand

Abstract

This chapter aims at scrutinizing a sample case-law of the panels and the Appellate Body (AB) that specifically questions the right of Members States to pass measures necessary to promote certain values. Such analysis accounts for the diversity-friendly approach of the WTO system vis-a-vis national regulations and policies. The somewhat codified "necessity test" was designed to serve as a limit for judicial discretion, in that it should provide Members’ conduct with a presumption of WTO-consistency. However, this essay concludes that the panels and the AB provided such an interpretation of the necessity requirement that de facto the diversity-friendly rationale of Art. XX GATT has been sidelined. In light of these findings, it appears that the DSB is left with the power to implement a case-by-case appreciation pattern, somewhat differently from the European Court of Human Rights (ECHR). The ECHR, indeed, has applied the doctrine of the margin of appreciation precisely to leave Member States with a reasonable freedom to act within the limits set by the Convention, whereas the doctrine of necessity in the WTO system, short of providing a consistent guideline for the State Parties, has turned the judicial review of their action into a hybrid assessment, based alternatively on a scrutiny of proportionality and strict necessity.

Keywords: WTO, Appellate Body, necessity, Art. XX GATT, margin of appreciation, regulatory authority