Occupied Territories and the Exceptions to WTO and EU Rules on grounds of Public Morality, Public Order and Public Policy

This article discusses whether restrictions on trade with occupied territories imposed by national or sub-national authorities are permitted under exceptions to WTO and EU free trade rules on grounds of public morality, public order or public policy. The relevant provisions have a common origin and similarities in their terms. However, our analysis finds significant differences in their interpretation and application. Restrictions on trade with occupied territories are unlikely to be permitted on these grounds under WTO rules unless there is a strong justification for the restrictions in all the circumstances and they do not discriminate between different territories where relevant conditions are similar. By contrast, such restrictions are unlikely to be permitted under EU law if adopted unilaterally by an EU member state or sub-national authority. The different approaches and potentially different outcomes reflect the different priorities of the WTO and the EU. The primary objective of the WTO is to remove barriers and discrimination in international trade in a diverse global economy in which countries with differing values and alliances participate. By contrast, the highest priority of the EU is the integration of the economies and societies of its member states.