The role of regulatory purpose under Articles III: 2 and 4 – toward consistency between negotiating history and WTO jurisprudence

After years of debate, the issues of whether and where (i.e. under which legal element) regulatory purposes should be considered under Article III:2 and Article III:4 of the GATT – the most invoked provisions of the National Treatment rule – remain unsolved. This article submits that the preparatory work of the National Treatment rule provides significant interpretative guidance on the issues. In relation to Article III:2, 2nd sentence and Article III:4, the WTO jurisprudence has achieved consistency with the interpretative guidance. However, by expanding the reach of Article III:2, 1st sentence to origin-neutral fiscal measures whereas rejecting the relevance of regulatory purposes to the determination of whether such measures are in violation of that sentence, the WTO judges have failed to respect the functions of Article III:1 and Article III:2, 1st sentence as contemplated by the draftsmen. To remedy this failure, this article proposes that the WTO adjudicators should either approve formal purpose inquiries under Article III:2, 1st sentence, or, alternatively, confine the application of that sentence to origin-specific measures only.