## Facts

- France adopted a decree (effective 1997) that banned the manufacture, processing, importation, sale, and marketing of asbestos and products containing asbestos fibers, with limited exceptions for certain chrysotile-containing materials subject to specified conditions.
- Canada, a major exporter of chrysotile asbestos and chrysotile-cement products, challenged the French measure in the WTO against the European Communities, arguing the ban restricted trade and violated GATT 1994 disciplines.
- Canada maintained that chrysotile-cement products did not present unacceptable health risks when subject to “controlled use,” and that a total ban was not needed to protect human life or health.
- A WTO Panel report was circulated in September 2000. Canada appealed multiple aspects of the Panel’s legal analysis to the WTO Appellate Body; the European Communities also appealed parts of the Panel’s reasoning on “like products.”
- The Appellate Body report was circulated on March 12, 2001. The Dispute Settlement Body adopted the Panel and Appellate Body reports (as modified) on April 5, 2001.

## Issues

1. Whether the French decree was a “technical regulation” under the Agreement on Technical Barriers to Trade (TBT), so that TBT obligations applied.
2. Whether asbestos-containing products and certain substitute products were “like products” under GATT 1994 Article III:4, including whether product health risks could be considered in the likeness analysis.
3. Whether the measure was inconsistent with GATT 1994 Article III:4 (national treatment for internal regulation), including whether it accorded “less favourable treatment” to imported products.
4. If there was a GATT inconsistency, whether the measure was justified under GATT 1994 Article XX(b) as “necessary to protect human life or health,” and whether it satisfied the Article XX chapeau.
5. Whether the Panel failed to make an “objective assessment of the matter” under DSU Article 11 in its evaluation of evidence.

## Decision

- The Appellate Body found that the French decree was not a “technical regulation” within the meaning of TBT Annex 1.1 and therefore did not reach (and did not uphold) TBT-violation findings based on that agreement.
- On GATT Article III:4, the Appellate Body reversed the Panel’s finding that the relevant asbestos-containing products and their substitutes were “like,” holding that the health risks associated with asbestos are part of a product’s characteristics and may be weighed in the likeness inquiry.
- Given the Appellate Body’s conclusion that the products were not “like” within Article III:4, the national-treatment claim could not succeed on the “like products” element as framed in this dispute.
- The Appellate Body upheld the Panel’s conclusion that, to the extent the measure was inconsistent with GATT obligations, it was justified under Article XX(b) as necessary to protect human life or health, and it upheld the Panel’s chapeau analysis.
- The Appellate Body rejected Canada’s DSU Article 11 challenge, finding no failure by the Panel to make an objective assessment of the evidence.
- The adopted reports allowed the European Communities (through France’s decree) to maintain the asbestos prohibition.

## Legal Principles

- A measure falls within the TBT Agreement as a “technical regulation” only if it lays down mandatory product characteristics (or related processes and production methods) for identifiable products; a general market-prohibition measure may fall outside TBT Annex 1.1.
- “Like products” under GATT Article III:4 is assessed case-by-case using traditional indicia (such as physical properties, end uses, consumer behavior, and tariff classification) as tools for assessing the competitive relationship between the products.
- Health risks associated with a product can be considered as part of the product’s physical properties, nature, and quality when assessing “likeness” under GATT Article III:4.
- Article XX(b) “necessity” involves a weighing-and-balancing approach that considers the importance of the protected interest, the measure’s contribution to the objective, and the degree of trade restrictiveness, together with whether reasonably available alternatives would achieve the Member’s chosen level of protection.
- WTO Members may choose their own level of health protection; an alternative is not “reasonably available” if it cannot achieve that level in practice or would impose unreasonable burdens.
- Under the Article XX chapeau, an otherwise justified measure must not be applied in a manner that results in arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.
- A DSU Article 11 violation requires more than disagreement with a panel’s weighing of evidence; it requires a showing that the panel did not make an objective assessment of the matter.

## Conclusion

In *European Communities—Asbestos*, the WTO Appellate Body upheld France’s ban on asbestos and asbestos-containing products, ruled that the TBT Agreement did not apply because the measure was not a “technical regulation,” held that serious health risks may be taken into account in the GATT Article III:4 “like products” analysis, and agreed that the ban was justified under GATT Article XX(b) as necessary to protect human life or health and consistent with the Article XX chapeau.


European Communities—Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R (April 5, 2001)