ENVIRONMENTAL LAW PROJECT PAPER

TOPIC: Trade and Environment: The WTO Regime

PUNEETH GANAPATHY
ID NO: 209056 THIRD YEAR

Environmental Law

................................................................................................. Protection Exhaustible Natural Resources ................................. 1 INTRODUCTION ........ 7 I.................................................................................................... 4 II................................... THE ARTICLE XX REGIME ............... THE EVOLUTION OF ENVIRONMENTAL PROTECTION UNDER THE WTO .............. 9 CONCLUSION..................................................................... 11 BIBLIOGRAPHY .............................................................................................. The Tuna Dolphin Dispute (US/Mexico) ..TABLE OF CONTENTS TABLE OF CONTENTS ............................. 12 Articles and Reports .......... Animals and Plants ............................................................................ 13 Environmental Law .......................................................... 6 2............................. 3 1............................................................... Environmental Sensitisation of the GATT ..... 12 Cases .......................................... 4 I. 12 Books and Treatises ................................................................................................................................................................. Protection of Humans.................................................................................................................................................................................................................... 7 II...................................................................................................................

Environmental Law . This paper shall first seek to trace historically how the WTO evolved measures to safeguard the environment. (g) & the Chapeau. The following are some of the most notable conventions adopted during this time: CONVENTION FOR THE REGULATION OF MESHES IN FISHING NETS.. the probability of such trade regulating body being called in for the protection of the environment was clearly plausible. 1950. Also see Gary Sampson & John Whalley eds. The establishment of a uniform international regulatory regime of commercial conduct was the guiding objective at the time of the drafting of the GATT. Thus. while the second part of this paper will attempt an analysis of the environmental protection measures enshrined in the WTO as it stands today. 2005. Contemporaneous with the genesis of an international body to regulate trade was a shift in the international legal consciousness to establish a body to regulate the environment. with the final entry into force being in January 1948. Elgar. The present day counterpart of this body is the World Trade Organization (WTO). it has to be noted that a number of important environmental treaties were being created during the phase of these discussions. 1946. The World Trade Organisation and the Environment. The International Union for the Conservation of Nature and Natural Resources3 was formed in 1947. INTERNATIONAL CONVENTION FOR THE NORTHWEST ATLANTIC FISHERIES. This analysis will be supported by the adoption of relevant case law which has emerged from the decisions of the Dispute Settlement Body. 1949. (1998) 8 YIEL 98. 5 Exceptions contained under Article XX (b). THE WTO. INTERNATIONAL CONVENTION FOR THE REGULATION OF WHALING. 2 However. TRADE & ENVIRONMENT. Williston.2 An equally notable body. The issue of trade and its interplay with the environment was never a component of the initial rounds of the GATT. INTERNATIONAL CONVENTION FOR THE PROTECTION OF BIRDS. 1949. The realization that there existed an extremely relevant and important impact of international trade practices upon the environment thus came to be.4 The chance of this probability did later on proceed to a realisation in the present age with measures being included in the GATT5.INTRODUCTION The General Agreement on Tariffs and Trade1 was opened for the invitation of signatures of willing member states on 30th October 1947. even in the absence of direct talks on concomitant issues. CONVENTION FOR THE ESTABLISHMENT OF THE TROPICAL TUNA COMMISSION. 3 Hereinafter referred to as the IUCN. (d). 1946. 1 Hereinafter referred to as the GATT. 4 Steve Charnovitz. The allegation that the GATT was formed in an era where environmental consciousness did not exist is a farce.

1997. dates back to the very beginnings of trade. Trade and Environment: Stuck in a Political Impasse at the WTO after Doha and Cancun Ministerial Conferences. the inculcation of environmental concerns into public policy considerations regarding trade is of relatively modern vintage. 10. 10 This group later came to known as the EMIT Group and was subsequently replaced by the Special Sessions of the Committee on Trade & Environment (CTE). However. within which it operated. 19. Environmental Law . 1933. Young. green protectionism. Nevertheless. THE WTO. MIT.1.. 1971.e. 7 In 1972. Thomas. The purpose of the study was to focus on the probable impact of environmental control measures on trade liberalisation.10 This group was supposed to convene upon the request of the contracting parties with participation being open to all. See Urs P.Env.6 The Stockholm Conference formed a watershed moment in the introduction of concerns for the environment as affected by trade in an international forum7 and continued to be deliberated upon as the effect of environmental policies upon trade became more and more apparent. At this meeting it was decided that the Group on Environmental Measures and International Trade will be set up. Williston. Massachusetts.8 The period extending from 1971 to 1991 witnessed the nurturing of this debate on the international stage. Global Governance: Drawing Insights from the Environment Experience. The unfortunate reality was that this 6 Gary Sampson & John Whalley eds. a meeting of the GATT Council of Representatives was convened. 8 It can be presumed that the rather complex relationship between trade and environment had not emerged before the nineties because the relevant international regimes had not matured sufficiently to allude to this debate as being unavoidable.Pol. the United Nations had held the CONFERENCE ON HUMAN ENVIRONMENT in Stockholm. TRADE & ENVIRONMENT. See 9 Oran R. The view was that the implementation of environmental protection measures would give birth to a new form of trade protectionism i. this trend too can be traced back to the trade related provisions contained in THE CONVENTION OF FLORA AND FAUNA. (2004) 9 Glo. THE HISTORICAL DEVELOPMENT OF AN ENVIRONMENTAL PROTECTION REGIME UNDER THE WTO I. Elgar. 2005 at p. The Secretariat of the GATT had presented a study entitled Industrial Pollution Control and International Trade. EVOLVING ENVIRONMENTAL SENSIBILITIES BY THE GATT The influence of trade and commerce upon the natural environment.9 In November.

also known as the Standards Code was negotiated at the same time. rather than to obligate member states issues unnecessary subsidies when Environmental Law . Lowenfeld. INTERNATIONAL LAW & POLICY OF SUSTAINABLE DEVELOPMENT.14 This phase is the most prominent and important in the development of the subject of trade and environment. 13 In the preamble to the Agreement. It was during the sessions in this round that environmental measures were seriously discussed in the General Agreement on Trade in Services (GATS). INTERNATIONAL ECONOMIC LAW. Environmental concerns arising with regard to food safety. the diverse Agreement on Agricultures (AoA). member states had wanted to shift discussions on these issues at a delayed stage. Juris/Manchester Press. The Agreement placed special importance on the fact that the adoption of such measures should not create unnecessary barriers to trade. animal and plant health were addressed in the SPM Agreement. The SCM Agreement was suitably modified to allow member states to address environment externalities as when they occurred. Initially. with similar restrictions based on non-discrimination and necessity. See Duncan French. Importance was also accorded to accusations of unilateral action being undertaken by the more influential member states. The WTO Agriculture Agreement adopted at the same time reiterated the commitment of the members to reform agricultural practices so as to protect the environment. Oxford. 15 Article XIV of the GATS was designed upon similar lines of Article XX of the GATT to contain a general chapeau and provisions allowing member states to adopt restrictions necessary to protect human animal and plant life. during the Tokyo Round discussions the primal question regarding this issue which came up for discussion was the determination of the level of impositions that could be levied by environmental trade restriction measures. This is absolutely identical to the mandate of Article XX(b) of the GATT. it was recognised that countries have a right to adopt such measures to the extent they consider it to be appropriate. 2005 at p.body was not convened till the year 1991. 2005. Manchester. Juris/Manchester Press.. Subsidies and Countervailing Measures and the Trade Related Aspects of Intellectual Property Rights (TRIPS). 2003. such measures must be in accordance with the standard of protection laid down by the code. The primary thrust of this code was to ensure non-discrimination and transparency in imposing technical barriers to trade. However. This is suspected to be a procedural attempt to sideline environmental impositions on trade. Oxford University Press. INTERNATIONAL LAW & POLICY OF SUSTAINABLE DEVELOPMENT. Issues concerning dispute resolution and the adoption of reservations by member states were discussed to prevent fragmentation of the GATT.15 11 Duncan French.13 The GATT Uruguay Round marked the start of the second phase in this evolution which lasted from 1984 to 1994. This was known as the conformity assessment procedures. 14 It has to be noted that the additions of sustainable development and environmental protection to the preamble of the round was attained later. 203. Manchester.12 The Tokyo Round Agreement on Technical Barriers to Trade. See Andreas F. Sanitary and Phytosanitary Measures (SPM).11 Subsequently. 12 The Tokyo Round marked the change in focus of the GATT to those issues which involved serious questions on implementation and subsequent realisation of principal goals of the body.

given the fact that dolphins are found in the territorial waters of several member states should have been exploited before resorting to anti-GATT measures under Article XX. France. It subsequently determined that the scope of application of the provision was not intended to grant to state actors extra-territorial jurisdiction over the other member states. alleging that the nets used to catch tuna resulted in the accidental deaths of dolphins. Further. the United States of America placed an embargo on tuna caught in Mexican waters. THE UNITED STATES EMBARGO ON THE ISSUE OF DOLPHIN DEATHS The very first test to the various attempts at tuning the GATT to accommodate environmental sensitivities came about to shake the foundations of the international trading community in their vociferous commitment towards saving the environment in a non-discriminatory manner. (d) and (g) of the GATT. they were not required. such a restriction could not be allowed.II. This directly harmed the trade interests of Costa Rica.17 The panel disregarded the justification under Article XX (g) stating that the embargo was based upon the unpredictable criteria of comparing of the taking of death rates on US vessels. The US embargo directly affected the countries of Mexico. It had further argued that the extension of the embargo to intermediary nations was also correct in accordance with Articles XX (b). referred to the drafting history of Article XX (b). Venezuela and Vanuatu. whilst considering the arguments tendered. or pose threats to humans and the environment. The panel was of the opinion that the adoption of international arrangements on this issue. The TRIPS was modified to allow member states to refuse patentability to products which may harm animal or plant life. Since the embargo’s intended effect was beyond US territory. The embargo was also expanded to ban importation of tuna from countries that supported the international sale of tuna by the directly affected countries. The facts of the dispute were as follows: In 1991. 16 The US had contended the embargo on the directly affected nations was justified by Article III of the GATT. and subsequently covered for under Articles XX (b) and (g). The United States had sought to justify the embargo upon application Article XX (b) (d) and (g). The US took a hard line stance on the conservation of dolphins. Mexico disputed this embargo by contending that the embargo was in violation of GATT articles III. XI and XIII. Environmental Law . the panel nullified the effect of the embargo on intermediary nations as a consequence of the direct embargo.16 The panel. 17 The panel also took cognizance of the fact that the US had failed to establish the fact that it had exhausted all reasonable measures to further dolphin protection objectives before opting for the exercise of this trade embargo. This according to them could not possibly foster dolphin protection. Japan and Panama. Italy.

THE REGULATION OF INTERNATIONAL TRADE. animal and plant life or if these measures aimed directly at the conservation of exhaustible natural resources. Of these instances. or a disguised restriction on international trade. 21 Report of the Appellate Body in US – Gasoline Case. (b) necessary to protect human. 19 Article XX of the GATT states specific instances when member states may be exempted from liability to protect international trade under GATT rules.2. PROTECTION OF HUMANS. These provisions are in the nature of exceptions. ENVIRONMENT AND TRADE: A GUIDE TO WTO JURISPRUDENCE. 20 Further it has been specifically established that the party responsible for invoking the exception has to establish that it falls under any of the exceptional situations under the Article.21 I. Routledge. 2006. (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption. London. Trebilcock & Robert Howse.18 When member states act in pursuance of the provisions contained in this Article. 20 See Michael J. two are of particular significance. Also see NOTE BY THE SECRETARIAT OF WTO. London.22 18 ARTICLE XX: Subject to the requirement that such measures are not applied in manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail. 2005. ……. ARTICLE XX AND ENVIRONMENTAL RESPONSIBILITY Articles XX (b) and (g) of the GATT have been specifically formulated to achieve a reconciliation between trade interests and the need for protection of the environment. These exceptions permit member states to prioritise environmental policies ahead of trade obligations under certain specific circumstances. WT/CTE/203. ……. Articles XX (b) and (g) permit member states to justify their actions as being GATT – inconsistent measures if these are either necessary to ensure protection of human. 8 MARCH.. Earthscan. ANIMALS AND PLANTS The application of Article XX (b) is evaluated against the necessity test. Environmental Law . 22 See Bernasconi – Osterwalder et al. animal. 2002..19 The panels and the Appellate Body have devised a certain manner of implementing the provisions of Article XX.. plant life or health. This test has been developed for the purpose of determining whether a patently GATT – inconsistent measure would continue to be justified under the exception prescribed in Article XX (b). nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member of measures. the measure is labelled as a GATT – inconsistent measure.

25 There were two disputes concerning tuna fishing on this point involving the European Community and the Mexico against trade embargos imposed by the US.28Notwithstanding these permissions. namely: 1. 23 This was observed for the first time by the Panel in the US – Gasoline Case. member states were permitted to implement environmental safety standards to reduce this definite risk to human life. the Panel noted the harmful consequences of smoking and stated that member states reserved the right to enact environmental policies to foster protection against such harm. The Mexican Tuna dispute has been discussed earlier in this paper. the WTO has remained steadfast in its position. 28 In the Brazil – Retreaded Tyres Case.24 protection of dolphin life. Environmental Law . The disintegration of the ozone layer was a reality and one of the major reasons attributed to such depletion was indeed pollution caused by gasoline fumes. that most environmental policies are denied recognition as a valid exception under Article XX. animals or plants.26 exposure to asbestos fibres27 and the accumulation of tire wastes. Cambridge. 2. 27 In the EEC – Asbestos Case. 26 In the US – Gasoline Case. It is simply concerned with the level of trade restriction that such measures entail.25 reduction of air pollution due to gasoline. Some of the most notable instances are policies against the consumption of cigarettes. THE LAW OF WORLD TRADE ORGANISATION. Therefore. it was determined by the Panel that a policy for the protection of the ozone layer over the cities and other urban areas was a definitely indicative of the addressing of a pressing environmental concern. It is often on the extent of restrictions caused to trade. In such cases member states could be permitted to prioritise environmental protection at the cost of trade liberalisation. In US – Tuna (EEC) Case.The necessity test is supposed to consist of two parts. it will not in any event interfere with the environmental policy or the level of environmental protection accorded by member states through anti – GATT measures. 2006. it was noted by the panel that policies for the protection of dolphin life could be brought within the ambit of Article XX. This instance of nesting of mosquitoes does pose a threat of causing widespread attacks of dengue and malaria fever. The objective of the policy being pursued by the GATT – inconsistent measure must directed towards the protection of the life or health of humans.23 There have been instances where the first part of the necessity test was adhered to. 24 In the Thailand – Cigarettes Case. See Peter van den Bossche. it was observed by the Dispute Settlement Body that accumulation of waste tyres often led to the nesting of mosquitoes in tropical conditions as water collects in the tubes of the discarded tyres. the Dispute Settlement Body agreed with the observation of the Panel that lung cancer was caused by exposure to asbestos fibres. Cambridge University Press. There must be a degree of necessity justifying the adoption of such measure.

32 In US – Automobiles Case. Elli Louka. Some of the most notable instances are conservation of tuna stocks. 31 In Canada – Salmon and Herring Case. Oxford. concerning non renewable natural resources is governed by a three step process called the relation test.34 29 P. Cambridge. where trade restrictions have been placed to protect exhaustible natural resources. following which it has to be in adherence with the requirements of the chapeau of Article XX. PROTECTION OF EXHAUSTIBLE NATURAL RESOURCES The applicability of the provisions of Article XX (g). 2nd ed. Boyle. and member states could seek protection of Article XX (g) of this point. Birnie & A. Cambridge University Press. INTERNATIONAL LAW AND THE ENVIRONMENT. The measure must relate to the conservation of exhaustible natural resources. such policy fell within range of Article XX (g).W. there have been instances.32 protection of clean air33 and the conservation of sea turtles. Therefore. 2002. policies for there conservation could be undertaken. the measure must satisfy the contents of the relation test. The measure must involve the conservation of exhaustible natural resources 2. the panel adjudicating in the dispute agreed that salmon and herring population constituted natural resources which were exhaustible in nature. 3. 2006. and therefore. 30 In the US – Canadian Tuna Case. provided they fulfilled the necessary tests for relevance and adherence to the chapeau. Environmental Law . EFFECTIVENESS & WORLD ORDER. This test involves the following: 1.29 On a parallel comparison with Article XX (b). there is a marked similarity in the implementation of Articles XX (b) and (g). the panel observed policies directed toward the protection of tuna stocks in the maritime waters of states were indeed in consonance with the need to preserve marine natural resources.31 petroleum conservation.II. Petroleum was undoubtedly an exhaustible natural resource and therefore..30 protection of herring and salmon population. Oxford University Press. The measure must impose restrictions on domestic production and consumption of the natural resource concerned. Also see.E. the panel was required to consider whether a certain regulation to conserve gasoline was relevant under Article XX (g). INTERNATIONAL ENVIRONMENTAL LAW: FAIRNESS. in order to be granted the status of an exception under Article XX (g). The Panel noted that gasoline was a product derived from petroleum. Therefore.

the Appellate Body noted that the scope of Article XX (g) was not limited to the conservation of mineral and non – living resources only. interestingly. Oxford. it has to be noted that the level of restrictions placed by the measure on imports and produces for domestic consumption are of primal importance in determining the legality of the measure. THE LAW RELATING TO PROTECTION OF ENVIRONMENT.36 33 In the US – Gasoline Case. the application of chapeau with specific regard for non discrimination. It was noted that though such species are in principle renewable. 36 Stuart Bell & Donald McGillivray. 2007. so as to include living resources also within its ambit. 2000. 2001. Cambridge. Washington Heinrich Boll Foundation. Therefore. LAW AND POLICY. 2003. Oxford. The Panel.35 Despite the wide amplitude of application evidenced above. Environmental Law . measure concerning an exhaustible natural resource is indeed fulfilled. measures to conserve living resources deemed to be exhaustible are justified under GATT. Even if the first part i. certain circumstances make them susceptible to depletion. Oxford University Press. Venezuela contended that clean air was only a condition in which air could exist and not an independent resource in itself. Oxford University Press. 35 Holder and Lee. ENVIRONMENTAL PROTECTION. the caveat must always be borne in mind that no legally binding guarantee may be culled out stating that such environmental policies will always be regarded as exceptions. Also see Jake Caldwell. Furthermore. It also extended to living species. 34 In the US – Shrimp Case. Also see Lavanya Rajamani. Multilateral Environmental Agreements and the GATT/WTO Regime. rejected Venezuela’s contention and observed that clean air was indeed a resource and it could be depleted. often disallow the passage of such environmental policies.e. Cambridge University Press. DIFFERENTIAL TREATMENT IN INTERNATIONAL ENVIRONMENTAL LAW.Thus the conclusion may be reached that the Dispute Settlement Body is agreeable to according a broad interpretation to the text of Article XX (g). it was argued by the United States that clean air was an exhaustible natural resource. However.

CONCLUSION After having reviewed in substantial detail the contents of two of the most significant environmental protection clauses of the GATT/WTO Regime. Environmental Law . However. it is simply not enough to recognise a problem and then nullify a proposed solution. A majority of the environmental policies have been sacrificed at the altar of trade on the grounds that they imposed unreasonable restrictions on trade. Even. if this were the case. more often than not the Panel and the Appellate Body have recognised the importance or pertinence of the issue. it can be stated that there has been a considerable effort by the Dispute Settlement Body to effect reconciliation between the conflicting issues of trade interests and environmental degradation. An alternate solution has to evolved. but has failed to subsequently act upon such recognition to enact an environmental policy to address the same. otherwise the problem though accorded recognition will never be resolved and as a result environment will continue down its path of destruction by unscrupulous trade practices.

.......... 9 US – Shrimp Case ............................ 1997 ........................................................... Multilateral Environmental Agreements and the GATT/WTO Regime......................... 2002................... 8 Canada – Salmon and Herring Case ........... WT/CTE/203..... Young................................... 2 Urs P........................................ Thomas.......................................................... Washington Heinrich Boll Foundation...................................................................... Trade and Environment: Stuck in a Political Impasse at the WTO after Doha and Cancun Ministerial Conferences........... 9 NOTE BY THE SECRETARIAT OF WTO...............................................Env. 9 US – Canadian Tuna Case .................................................................... 8 ARTICLES AND REPORTS Jake Caldwell........................... 7 US – Automobiles Case............ 9 US – Gasoline Case ............................................................... (2004) 9 Glo................. 8 Thailand – Cigarettes Case ........................ (1998) 8 YIEL 98 ....................................................... 3 Steve Charnovitz....................................................... 2001 ................................... Global Governance: Drawing Insights from the Environment Experience................BIBLIOGRAPHY CASES Brazil – Retreaded Tyres Case ..................... .................................................................................... 6 Oran R............................................................................................................. 10 ........... 3 Environmental Law ................... The World Trade Organisation and the Environment................................................. Massachusetts. 8 MARCH............................ 7.......................................................................... 8.......... MIT.......... 9 EEC – Asbestos Case .......... 9 US – Tuna (EEC) Case ...Pol...........

........... Oxford University Press................................................ INTERNATIONAL ECONOMIC LAW..... TRADE & ENVIRONMENT.......................................... 2005 .. Earthscan........ Oxford University Press............... 9 Lavanya Rajamani........................ Cambridge................................. ENVIRONMENTAL PROTECTION........ 7 Stuart Bell & Donald McGillivray............................................E....... Elgar................ 8 Gary Sampson & John Whalley eds..................................................... Oxford................. London............ 2006 .............. Birnie & A.............. LAW AND POLICY......... 2003.... 9 Environmental Law ... 9 Michael J. Cambridge University Press. EFFECTIVENESS & WORLD ORDER.......... Oxford................... THE LAW RELATING TO PROTECTION OF ENVIRONMENT........ INTERNATIONAL LAW AND THE ENVIRONMENT.. Oxford...... Lowenfeld........ 2006 ...................................... DIFFERENTIAL TREATMENT IN INTERNATIONAL ENVIRONMENTAL LAW.......... 2006 .......................... 2003 ................ Routledge.............................. Cambridge........... INTERNATIONAL ENVIRONMENTAL LAW: FAIRNESS........... 4 Elli Louka... 2007 ........ 6 Duncan French.................... Oxford University Press.......... 4 Bernasconi – Osterwalder et al............................. Trebilcock & Robert Howse................ ENVIRONMENT AND TRADE: A GUIDE TO WTO JURISPRUDENCE............... 3 Holder and Lee........... Boyle... Cambridge University Press........ 6 P...... Oxford..... 8 Peter van den Bossche....................................... Manchester...................... Oxford University Press..... 2005...................... INTERNATIONAL LAW & POLICY OF SUSTAINABLE DEVELOPMENT.......W... 2002 ................ THE REGULATION OF INTERNATIONAL TRADE....... 2005 .......................................... Cambridge...... THE LAW OF WORLD TRADE ORGANISATION...... London.................... THE WTO........ Cambridge University Press............................ 2nd ed.......... 2.. Williston......... 2000 ................................................................................................................... Juris/Manchester Press....BOOKS AND TREATISES Andreas F.................

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