Brazil took measures to combat the adverse effects of waste tyres on both the environment and human health.
Therefore, it enacted a ban on import of new and reatreated tyres. Yet, some MERCOSUR countries benefited from an exception on the import ban for retreated tyres. On 20 June 2005, the European Communities requested consultations with Brazil on the ground that this difference of treatment constitutes a discrimination. According to article XX(b) of GATT, a State can take such measures Dz necessary to protect human, animal or plant life or health dz except if it is a Dz means of unjustifiable discrimination between countries where the same conditions prevail dz
or a Dz disguised restriction on international trade dz. The Appellate Body upheld the Panel's finding that the Import Ban was provisionally justified as Dz necessary dz within the meaning of Art. XX(b). The Panel Dz weighed and balanced dz the contribution of the Import Ban to its stated objective against its trade restrictiveness, taking into account the importance of the underlying interests or values. The Panel correctly held that 3 none of the less trade-restrictive alternatives suggested by the European Communities constituted Dz reasonably available dz alternatives to the Import Ban. The Appellate Body determined that the assessment of whether discrimination is arbitrary or unjustifiable should be made in the light of the objective of the measure, and found that the MERCOSUR exemption, as well as the imports of used tyres under court injunctions, had resulted in the Import Ban being applied in a manner that constituted arbitrary or unjustifiable discrimination and a disguised restriction on international trade within the meaning of the chapeau of Art. XX. The Appellate Body thus upheld, albeit for different reasons, the Panel's findings that the Import Ban was not justified under Art. XX.