Achieving a Balance between Trade and the Environment: The Need to Amend the WTO/GATT to Include Multilateral Environmental Agreements

By Nissen, Jill Lynn | Law and Policy in International Business, Spring 1997 | Go to article overview

Achieving a Balance between Trade and the Environment: The Need to Amend the WTO/GATT to Include Multilateral Environmental Agreements


Nissen, Jill Lynn, Law and Policy in International Business


With the completion of the Uruguay Round of the General

Agreement on Tariffs and Trade (GATT) in December 1993, trade barriers

were lowered around the world and the formal World Trade

Organization (WTO) was established.(1) The Uruguay Round also marked a major

step in the recognition of the need to achieve a balance between trade

and the environment, with the inclusion of the following language in

the preamble to the Final Act Embodying the Results of the Uruguay

Round of Multilateral Trade Negotiations in Marrakesh:

Recognizing that their relations in the field of trade and

economic endeavor should be conducted with a view to raising

standards of living, ensuring full employment and a large and

steadily growing volume of real income and effective demand,

and expanding the production of trade in goods and services,

while allowing for the optimal use of the world's resources in

accordance with the objective of sustainable development,

seeking both to protect and preserve the environment and to

enhance the means for doing so in a manner consistent with

their [the Parties] respective needs and concerns at different

levels of economic development....(2)

Furthermore, in April 1994, at the meeting to sign the Final Act, the

members of the GATT also agreed to establish a Committee on Trade

and the Environment.(3)

While taking a positive step in recognizing the relationship between

trade and the environment, the Uruguay Round failed to clarify the

appropriate relationship between existing multilateral environmental

agreements (MEAs) and the WTO. With the inherent conflict between

MEAs, which restrict trade for environmental goals, and the liberalized

trade principles of the GATT, a decision on how MEAs should be

incorporated into the GATT is desperately needed. A balance must be

struck between supporting the environmental objectives of MEAs and

preserving an open, equitable, and nondiscriminatory multilateral

trading system. Multilateral cooperation is the most effective way to

solve global and trans-boundary environmental problems, and MEAa

are a safeguard against a country taking unilateral actions. Good

environmental policy-making and good trade policymaking have the

potential to promote and accelerate sustainable development. Using

MEAs also will ensure that an "environmental goal" is not really a

disguised restriction on trade by achieving environmental objectives

through mutual cooperation rather than unilateralism.

This Note analyzes the different approaches to the relationship

between MEAs and the WTO currently under consideration by the

Committee on Trade and the Environment and suggests that the best

approach is to amend the text of the GATT to incorporate and grant an

exception for MEAs. Part I describes the basic theories underlying why

free trade is not "bad" for the environment. Part II provides a brief

overview of the current GATT provisions affecting the environment as

well as the new WTO provisions affecting the environment. Part Ill

discusses why the incorporation of MEAs into the WTO/GATT system

is the most effective way to ensure that an environmental goal is

reached, analyzes the ways in which the new Committee on Trade and

the Environment is trying to resolve this issue, and suggests that the

most effective way of resolving this issue is to amend the text of the

WTO/GATT.

1. INTRODUCTION

The liberalization of international trade may contribute to

environmental degradation by putting increased pressures on natural

resources.

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Achieving a Balance between Trade and the Environment: The Need to Amend the WTO/GATT to Include Multilateral Environmental Agreements
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