Trade Commitments, Legitimate Regulation, and Extraterritoriality: Limits Beyond Non-discrimination?

The Appellate Body era of international trade law was marked by a major shift in the prevailing understanding of the permissibility of trade-restrictive measures that pursue legitimate objectives outside a state’s territory. The Appellate Body took a broad view of legal provisions, such as General Agreement on Tariffs and Trade (GATT) Article XX, that preserve World Trade Organization (WTO) Members’ regulatory autonomy, finding that these provisions also permit transnational regulatory action and regulation of production processes taking place abroad, provided that such regulation contributes to fulfilling a legitimate objective and is applied without unjustifiably discriminating against WTO Members. This article reconsiders this jurisprudence, questioning both whether there is a scope in WTO law itself for further limitations – related to territoriality and the non-coercion principle – and whether this reading of trade obligations is now under threat, especially in light of the backlash against the worldwide regulation of production standards through trade policy, in particular by the European Union (EU).