Trade and Environment: What Conflict?

By Marcich, Marino | Law and Policy in International Business, Spring 2000 | Go to article overview

Trade and Environment: What Conflict?


Marcich, Marino, Law and Policy in International Business


I. INTRODUCTION

Many of the bonfires and much of the broken glass in Seattle were due to the alleged hostility of the WTO to environmental protection. I will discuss the top four criticisms:

II. THE WTO NEEDS TO INCORPORATE ENVIRONMENTAL CONSIDERATIONS

The WTO should incorporate environmental safeguards. It already does. The agreement contains broad exceptions for "measures necessary to protect human, animal or plant life or health," and "measures related to the conservation of natural resources." Moreover, recent WTO cases, such as Shrimp-Turtle, have interpreted these exceptions broadly, greatly expanding their potential use.

Two WTO agreements explicitly deal with the issue of environment, public health, and safety standards. The Technical Barriers to Trade Agreement (TBT) concerns the development of product standards and the procedures used to determine whether the product meets such standards. The Sanitary and Phytosanitary Agreement (SPS) concerns food safety standards.

The notion that TBT has been used to thwart domestic regulation can be dismissed outright. TBT has never been used successfully to challenge any country's environmental laws. Is there a reason for that? TBT is what is known as "soft law." Ostensibly, it establishes a test to distinguish legitimate standards from protectionist measures. In reality the TBT says "countries should do this and that," instead of "countries shall do this and that." A country would be extremely hard-pressed to challenge another country's environmental laws under TBT.

SPS is more complex and has been used on numerous occasions. Unlike TBT, however, the SPS relies on a test of whether a country's food safety laws have a basis in science and are based on a risk assessment.

III. THE WTO FORCED THE UNITED STATES TO LOWER ENVIRONMENTAL STANDARDS TO COMPLY WITH DISPUTE-SETTLEMENT PANEL RULINGS

In reality, at issue in these cases was unequal treatment--treating some countries more favorably than others, or domestic companies more favorably than foreign companies. The level of protection for public health, safety, and environment was never an issue, nor did the United States relax any laws as a result.

It is claimed that, in the Reformulated Gas Case, the United States weakened its clean air rules to implement a WTO panel decision concerning gasoline quality. How were domestic and foreign refiners required to demonstrate compliance with air quality regulations? The regulations allowed U.S. refiners three ways to meet the standards, while giving foreign refiners recourse to only one, a clear case of discrimination. This, and only this, is what the WTO dispute-settlement panel considered. The United States, the panel reiterated, is "free to regulate in order to obtain whatever air quality it wished."

It is claimed that U.S. species-protection regulations were relaxed as a result of WTO panel decisions. The Shrimp-Turtle case involved a ban on the sale of imported shrimp caught in nets not equipped with turtle-excluder devices (TEDs). The Tuna-Dolphin case barred the sale in the United States of both foreign and domestic tuna caught with purse seine nets that ensnared dolphins.

How did the United States treat some countries in relation to others in the Shrimp-Turtle dispute? The United States gave the four South Asian nations that challenged the United States at the WTO--India, Pakistan, Thailand, and Malaysia--four months to comply with the regulations. In contrast, Latin American nations had three years to comply, a clear case of unequal treatment.

It is important to emphasize what the cases were not about, and that is the right of the United States or any other member of the WTO, to establish its own laws regarding production methods in its own territory or territorial waters. It is quite another matter to extend the reach of U.S. law beyond our borders, as we did in the Tuna-Dolphin case, to regulate other countries' laws concerning production methods and accompany this with unilateral trade sanctions in case they don't comply.

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