World Trade Organization Caught in the Middle: Are TEDS the Only Way Out?

By Sam, Corinne | Environmental Law, Spring 1999 | Go to article overview

World Trade Organization Caught in the Middle: Are TEDS the Only Way Out?


Sam, Corinne, Environmental Law


I. INTRODUCTION

The international community strives to achieve the common goals of environmental conservation and trade liberalization.(1) In the global community environmental conservation protects biodiversity and encourages efficient use of resources; the free flow of commodities promotes efficiency of labor as well as cooperation and unification among nations. These values are not inherently in conflict. Often, however, environmental protection measures are interpreted as contradictory to free trade rules.(2) It is the system of international trade and the interpretation of its obligations that tend to bring the goals of freer trade and environmental protection into conflict.

The General Agreement on Tariffs and Trade (GATT)(3) is the international system that was designed to promote the liberalization of trade. Parties to this agreement incur three main obligations: Article I requires that members not discriminate against products based on national origin,(4) Article III requires that they not discriminate between similar foreign and domestic products,(5) and Article XI limits the imposition of quantitative import restrictions.(6) Although Article XX creates an exception to these rules for environmental conservation measures,(7) GATT Dispute Resolution Panels (Panels) interpret the obligations of the members broadly, while interpreting the exceptions very narrowly.(8) Thus, environmental conservation measures are rarely justified and often interpreted as conflicting with international trade rules.(9)

The most well known example of the conflict between trade and the environment occurred in the GATT Panel decision of the Tuna/Dolphin case involving the United States and Mexico.(10) The United States placed a ban on all imports of tuna from Mexico because Mexican fisherman employed a method of catching tuna that caught and killed dolphins as well.(11) Although the United States implemented the ban as an environmental protection measure, the GATT Panel found that the United States violated its obligations under GATT.(12)

A similar case recently emerged that again addressed the tension between free trade and the environment. The United States implemented a ban on all imports of shrimp or shrimp products from countries that harvest shrimp with commercial fishing technology that may adversely affect species of sea turtles protected under U.S. laws or regulations.(13) The U.S. ban applied to all shrimp imports from countries such as India, Malaysia, Pakistan, and Thailand.(14) This time, however, the GATT Panel had been replaced by the World Trade Organization (WTO).(15) The GATT parties established the WTO to oversee the agreement's implementation and to formalize a system for dispute resolution.(16) The purpose of the WTO is to maintain a multilateral system of trade while pursuing the optimal use of the world's resources in accordance with the objective of sustainable development.(17) The WTO could have decided the Shrimp/Turtle dispute in line with previous GATT Panel rulings that found environmental conservation measures in violation of GATT rules.(18) However, the WTO is not bound by prior GATT Panel rulings and broke new ground by finally recognizing an environmental protection measure as an Article XX exception to GATT obligations. Although the WTO seemed to be moving in the right direction, it ultimately decided that the United States implemented its environmental protection measure in a manner that violated the chapeau, or introductory provision, of Article XX.

This Article analyzes the conflict between free international trade rules and global environmental conservation. First, this Article introduces the international system of trade liberalization and explains the trade obligations under GATT. Part II discusses the outcomes of prior GATT rulings, focusing on the Tuna/Dolphin case. In Part III, this Article comments on the advent of the WTO and the implications of this new organization for GATT.

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World Trade Organization Caught in the Middle: Are TEDS the Only Way Out?
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