World Trade Organisation: Trade and Environmental Issues
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This essay analyzes Article XX of the GATT, which deals with trade and environmental issues in relation to the World Trade Organisation (WTO). It focuses on paragraphs (b) and (g) of the Article and discusses various cases and critiques the topic.
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Running head: WORLD TRADE ORGANISATION World Trade Organisation Name of the Student Name of the University Author Note
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1WORLD TRADE ORGANISATION Introduction There has been a twofold commitment that has vested with theWorld Trade Organisation (WTO). Firstly, the WTO is conferred with the responsibility of regulating a liberal, equitable as well as non-discriminatory system of trade. Again, there is another responsibility that has been conferred upon the WTO to extent protection to the environment. In the furtherance of the protection of the environment, the WTO is also concerned with the promotion of a sustainable development1. This has been inflicted in the General Agreement on Tariffs and Trade (GATT), which mandates certain measures and restrictions to be followed by the member countries of the WTO for the purpose of promoting the trade and commerce. GATT requires the member countries to formulate and impose liberal policies with respect to trade and commerce for the purpose of providing protection to the domestic production. It also requires the member countries to reduce as well as eliminate every unnecessary tariffs as well as other obstacles that prevents the growth of the system of trade and commerce. The member countries are also obligated under the GATT rules to provide discrimination free environment to the individuals involved in the trade and commerce. The GATT rules also require the member countries to refrain from imposing unnecessary levies upon the imported product which would have not been levied in domestic product2. However, the GATT rules have been inserted with Article XX that contains the general exception to the rules contained in the GATT. This Article lays down several principles that requires certain member states to be exempted from the GATT rules in relation to certain aspects of trade and commerce. There are two of such several exceptions that were imposed by this Article, which has been inserted in the GATT for the purpose of promoting the environment protection3. This essay would 1Reid, Emily. "Trade and environment in the EU and WTO: legitimacy, proportionality and institutional power play." (2019). 2Jackson, John Howard, and Royal Institute of International Affairs (London). Restructuring the GATT system. London: Royal Institute of International Affairs, 1990. 3Bartels, Lorand. "The chapeau of the general exceptions in the WTO GATT and GATS agreements: a reconstruction." American Journal of International Law 109.1 (2015): 95-125.
2WORLD TRADE ORGANISATION strive to analyse the Article XX of the GATT, which deals with the trade and environmental issues in relation to WTO. The focus of this essay would lie with the paragraph (b) and paragraph (g) of the Article. This essay would also present a discussion by analysing a variety of cases and provide a critique to this topic. Discussion The paragraphs (b) and (g) contained in Article XX provisions requires the imposition of certain limitationsin the GATT rule for the purpose of ensuring the welfare of the environment to be effective in promoting the trade and commerce. This authorises the member states to formulate policies in relation to trade and commerce that might be inconsistent with the disciplines relating to GATT. However, such policies should only be implemented by the member states if it can be showed to have been necessary for the purpose protecting the humans, plants as well as animals or health of these components of the environment. Such policies can also be implemented as well as formulated for the purpose of conserving the exhaustible natural resources. The General Exceptions provided in Article XX of the GATT rules contains two cumulative requisites. Any environmental measures that is inconsistent with the GATT requirements needs to be justified by the member states under the light of Article XX. This justification needs to be carried out under a twofold aspect. Firstly, the policy that has been formulated in by the member state, which has been considered to be inconsistent with the GATT principles needs to be justified under the exceptions that has been provided under this Article. Secondly, it requires the policies to comply with the restrictions provided in the introductory section of this Article. Under this introductory section of this Article, it needs to be ensured by the member states framing policies inconsistent with the GATT for the purpose of promoting the environment and conserving the exhaustible natural resources that the policies are not arbitrary, it does not
4WORLD TRADE ORGANISATION environment. These policies may have several objectives. These objectives include the conservation of salmon, dolphins, clean air, herring, turtles and other natural resources6. For the purpose of understanding the meaning of the expression natural resources, which are exhaustible that has been mentioned in and forms the subject matter of paragraph (g) of Article XX needs to be interpreted in a broad manner. This might include the non-living as well as mineral resources. This might also include living species that has been facing with the probability of being depleted, for instance sea turtles. For the purpose of supporting this particular interpretation, the US â Shrimp case can be referred. In this case, it has been noted by the Appellate Body that the international conventions are occurring in the modern era as well as the modern declarations contained frequent mentions as well as references to the natural resources, which can be both non-living as well as non-living. In this furtherance, the extent to which the sea turtles are exhaustible has been has been subjected to demonstration by the Appellate body. In the quest to demonstrate the exhaustible nature of the sea turtles, the Appellate Body has made reference to the meaning appended in the Appendix 1 pertaining to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which contains the discussion relating to the species posed with the probability of extinction. The Appellate Body in the US â Shrimp case accepted the fact that all the policies that are formulated under the scope of Article XX of GATT Rules under paragraph (b) and paragraph (g) are applicable to the turtles, which are found within the waters of the United States as well as the turtles those are dwelling in the waters beyond the boundaries of the nation7. It has been conceived by the Appellate Body that there is a nexus 6Hoda, Anwarul. Tariff Negotiations and Renegotiations under the GATT and the WTO: Procedures and Practices. Cambridge University Press, 2018. 7Lincoln, Jennifer M., et al. "Preventing fatal winch entanglements in the US southern shrimp fleet: A research to practice approach." Journal of safety research 60 (2017): 119-123.
5WORLD TRADE ORGANISATION sufficiently visible among the endangered as well as migratory marine population present in the US territorial waters to be covered by the scope of this paragraph of Article XX8. The member states for the purpose of undertaking environmental measures in relations to trade and commerce needs to establish specific relations existing among the goal behind the environmental policies as well as the measure that has been conceived as the issue for including the measures as eligible for being included under the exceptions laid down in Article XX. For this reason, the measure needs to have the following aspects to be included within the purview of the exceptions that has been provided in this Article. Firstly, the protection that measure needs to have the chief purpose of extending protection to the animal, humans as well as plant health or life. Secondly, it needs to be formulated with the aim of conserving the natural resources, which are of exhaustible nature. For the purpose of assessing the necessity of a particular measure in protecting animal, plant as well as human health or life for including the same as compliant with the Article XX paragraph (b), a procedure needs to be carried out as well as implemented in balancing and assessing the weightage in the light of various factors that the Appellate Body uses. These factors may include the contribution that the environmental policy has been made towards the objective by which the policy has been formulated. It may also include the worth of the overall values as well as interests that the measure has been intended to protect. The effect that the measure inflicts upon the international trade is also considered to be an important aspect to be considered. In the case of Brazil - Retreaded Tyres, it has been discovered by the Appellate Body that ban upon the import of retreaded tyres has been appropriate towards delivering a contribution that is material to the accomplishment of the intended objectives. In this case the main objective of the policy was to curb the volumes of the waste tyres. The Appellate Body has discovered that the alternatives, which have been proposed, were of remedial nature in 8Schmit Jongbloed, Wouter Pieter Frans. The Multilateral Standard of Review: Export Restrictions, GATT Exceptions and Exemptions. Diss. Columbia University, 2018.
6WORLD TRADE ORGANISATION most of the cases. This ban that has been imposed upon the import of tyres does not have a real impact as an alternative. However, it has been successful in preventing the tyre accumulation to some extent. It has been recognised by the Appellate Body in the case of Brazil â Retreaded Tyres, there are certain complicated troubles relating to the environment that needs to be combatted by the formulating as well as implementing policies, which consists of various interactive measures. It has also been pointed out by the Appellate Body that certain consequences obtained through certain actions can be assessed with respect to time. Such actions include measures taken for the purpose of addressing climate change as well as global warming9. The Appellate Body in the European Communities---Asbestos, by way of a process that includes weighing and balancing of a series of factors, was seen to be finding no alternate means of the prohibition of trade that could be reasonably available. For the achievement of the highest degree of health protection level that was selected by France this was clearly seen to be designed and the value that has been pursued by the measure could be said to be of highest degree vitality and importance10.The member states for the purpose of undertaking environmental measures in relations to trade and commerce needs to establish specific relations existing among the goal behind the environmental policies as well as the measure that has been conceived as the issue for including the measures as eligible for being included under the exceptions laid down in Article XX. For this reason, the measure needs to have the following aspects to be included within the purview of the exceptions that has been provided in this Article. Firstly, the protection that measure needs to have the chief purpose of extending protection to the animal, humans as well as plant health or life. Secondly, it needs to be formulated with the aim of conserving the natural resources, which are of exhaustible 9Mmereki, Daniel, et al. "Handling scrap tyres in Botswana: Initiatives, practices, and consequences." Journal of Solid Waste Technology & Management 42.1 (2016). 10do Amaral JĂșnior, Alberto, and Cynthia Kramer. "WTO as a Self-Limited Regime: The Case of Article XX of GATT." The WTO Dispute Settlement Mechanism. Springer, Cham, 2019. 69-82.
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7WORLD TRADE ORGANISATION nature.A point was made by the Appellate Body stating that if the common interests or the values that are being pursued are of higher vitality or importance then it would be easier for the acceptance of it as a necessary measure that has been designed for the achievement of the ends. There needs to be an establishment of a substantial relation between the measure and the conservation of the natural resources that can be exhausted, for relating a measure with natural resource conservation11. As per the words of the Appellate Body, there needs to be an establishment by any member that the means (the measure that has been chosen) are related in a reasonable way to the ends (the policy goals that are stated for the conservation of the natural resources that are exhaustible). Further, for being justified under the provisions of Article XX (g), there must be an application of a measure that affects imports simultaneously with restriction towards domestic productions or consumption (the requirement of even- handedness)12. A measure for the reduction of the air pollution had been adopted by the United States, in the case of USâGasoline, that is seen to be regulating the composition and the effect of emission of gasoline13. The selected measure was found by the Appellate Body to be aimed primarily towards the policy goal of clean air conservation in the United States and as result would fall under the provision of Article XX paragraph (g). As for the second requirement that has been mentioned in the paragraph (g), it was ruled by the Appellate Body the requirement for even-handedness had been met by the measurement because it was seen to be affecting both the imported as well as the domestic products. This policy has been chiefly intended for the purpose of ensuring the wellbeing of the natural resources. The pollutionoftheair,whichisnaturalresourcehastheprobabilityofdisruptingthe 11Tamiotti, Ludivine, and Daniel Ramos. "Climate change mitigation and the WTO framework." Research Handbook on Climate Change and Trade Law. Edward Elgar Publishing, 2016. 12Foster, Nicole D. "CARICOM states and the WTO dispute settlement system: the case for greater engagement." Commonwealth Law Bulletin 43.2 (2017): 153-178. 13Liu,Jian,andGeorginaSantos."Decarbonizingtheroadtransportsector:Break-evenpointand consequent potential consumers' behavior for the US case." International Journal of Sustainable Transportation 9.3 (2015): 159-175.
8WORLD TRADE ORGANISATION environmental balance. In this case, the Appellate body has been appending air the category of the natural resources14. In the case of USâShrimp, it was considered by the Appellate Body that the general structure and design of the measure could be seen to be fairly focused in a narrow way and there was no blanket prohibition imposed for importing shrimp without any kind of regard towards the consequences it would have to the sea turtles, hence, it was concluded by the Appellate Body that the regulation was a measure that could be related to conserving natural resources that are exhaustible as per the meaning of Article XX (g)15. It was further found by the Appellate Body that the particular measure was made to be effective simultaneously with the restriction that were being imposed on the domestic harvest of the shrimps, as is the requirement of Articcle XX (g).The Appellate Body in the US â Shrimp case accepted the fact that all the policies that are formulated under the scope of Article XX of GATT Rules under paragraph (b) and paragraph (g) are applicable to the turtles, which are found within the waters of the United States as well as the turtles those are dwelling in the waters beyond the boundaries of the nation. It has been conceived by the Appellate Body that there is a nexus sufficiently visible among the endangered as well as migratory marine population present in the US territorial waters to be covered by the scope of this paragraph of Article XX16. In the introductory clause present in the Article XX (g) (its chapeau) the manner of the application of the measure has been emphasized. It has specifically been mentioned that the application of the said measure should not be constituting any discrimination that is arbitrary or unjustified in nature or is seen to be a restriction on the international trade that 14Shi, Xunpeng, and Sizhong Sun. "Energy price, regulatory price distortion and economic growth: A case study of China." Energy Economics 63 (2017): 261-271. 15Cooreman,Barbara."AddressingEnvironmentalConcernsThroughTrade:ACasefor Extraterritoriality?." International & Comparative Law Quarterly 65.1 (2016): 229-248. 16Schmit Jongbloed, Wouter Pieter Frans. The Multilateral Standard of Review: Export Restrictions, GATT Exceptions and Exemptions. Diss. Columbia University, 2018.
9WORLD TRADE ORGANISATION has been disguised. In the Chapeau it is required for the measure to be not constituting any kind of abuse or misuse of the provisional justification that can be found to be available under one of the paragraphs of Article XX, in other words, the measure has been applied in a good faith. it was recalled by the Appellate Body in BrazilâRetreaded Tyres that the purpose of the chapeau is ensuring that an exercise for the membersâ rights for availing themselves of exception has been done in a good faith for the protection of the legitimate interests and not as any mean for circumventing any obligation of any member towards the other WTO members. Article XX, in other words, can be seen to embody the needs of the WTO members for maintaining balance between the right of any member for invoking any exception and the other membersâ rights under the GATT17. Certain circumstances have been highlighted by the jurisprudence of WTO that can help in demonstrating that the application of the measure has been done according to the chapeau.Relevant activities for co-ordination and co-operation that have been undertaken in the international level of trade and environment are by defendant, the measureâs design, the flexibility off the measure for taking different situations present in different counties into account and the analysis of the rationale that has been put forward for the explanation for any discrimination that is existing is included in this. In this instance, it needs to be taken into consideration that the policies that the member states are supposed to formulate as well as implement needs to be compliant with certain factors, which would bring it under the purview of these exceptions18. In the decision of the US-Gasoline, it had been considered by the Appellate Body that sufficient exploration for thepossibilities of entering into cooperative arrangements with the countries that had been affected is not 17Gaines, Sanford. "The WTO's reading of the GATT Article XX chapeau: a disguised restriction on environmental measures." U. Pa. J. Int'l Econ. L. 22 (2001): 739. 18Hudec, Robert E. "GATT/WTO constraints on national regulation: requiem for an aim and effects test." Int'l L.. Vol. 32. 1998.
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10WORLD TRADE ORGANISATION done by US for mitigating the administrative problems that have been raised by US for the justification of treatment of discrimination19. Further in the case US-Shrimp, the fact that the treatment of US to the WTO members differently by way of adoption of cooperative approach by the US in regard to the sea turtles with some members and not with others showed that the application of the measure was done in a way discriminating towards the WTO members unjustifiably20. It was found by the Appellate Body at the compliance stage of US-Shrimp case (Article 21.5), that for the negotiation of an international agreement for protecting the sea turtles even with the complainants the serious and good faith efforts that have been made by the US, made the measure applicable in a way which could no longer be seen to be unjustifiable21.In this case, it has been noted by the Appellate Body that the international conventions are occurring in the modern era as well as the modern declarations contained frequent mentions as well as references to the natural resources, which can be both non-living as well as non-living. In this furtherance, theextenttowhichtheseaturtlesareexhaustiblehasbeenhasbeensubjectedto demonstration by the Appellate body. In the quest to demonstrate the exhaustible nature of the sea turtles, the Appellate Body has made reference to the meaning appended in the Appendix 1 pertaining to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which contains the discussion relating to the species posed with the probability of extinction. 19Hao, Han, et al. "The impact of stepped fuel economy targets on automaker's light-weighting strategy: The China case." Energy 94 (2016): 755-765. 20Moran, Niall. "The First Twenty Cases Under GATT Article XX: Tuna or Shrimp Dear?." International Economic Law. Springer, Cham, 2017. 3-21. 21Lin, Tsai-yu. "Forward to the Special Issue on Revisiting Exceptions under International Economic Law." Asian J. WTO & Int'l Health L & Pol'y 13 (2018): 275.
11WORLD TRADE ORGANISATION Acknowledgement has also been done by the Appellate Body stating thatamultilateralapproachispreferredinastrongwayoverthe unilateral approaches. However it was further added that even though the conclusionsofthemultilateralagreementswerepreferredyetforthe enforcement of a measure for national environment it could not be a justification of the prerequisite benefit in Article XX22. As per the views of theAppellateBodyunjustifiablediscriminationwasconstitutedbythe rigidity and inflexibility in applying the measure (overlooking the condition of other countries). A member requiring another member to be adopting the same regulatory programs without considering that there might be difference of conditions of the other members and in those conditions the solutions of the policy could be ill-adapted was deemed unacceptable23. Hence, it can be concluded thatthe GATT rules have been inserted with Article XX that contains the general exception to the rules contained in the GATT. This Article lays down several principles that requires certain member states to be exempted from the GATT rules in relation to certain aspects of trade and commerce. There are two of such several exceptions that were imposed by this Article, which has been inserted in the GATT for the purpose of promoting the environment protection24. The paragraphs (b) and (g) contained in Article XX provisions requires the imposition of certain limitations in the GATT rule for the purpose of ensuring the welfare of the environment to be effective in promoting the trade and commerce. This authorises the member states to formulate policies in relation to trade and commerce that might be inconsistent with the disciplines relating to GATT. However, such 22Mustonen, Marika. "Invoking the Security Exceptions under GATT: Are Economic Sanctions Eroding the Foundation of the WTO?." (2016). 23Stewart, David P., and Sherzod Shadikhodjaev. "World Trade Organization-General Agreement on Tariffs and Trade-national treatment-general exceptions-renewable energy-international environmental law." American Journal of International Law 111.1 (2017): 139-148. 24Bartels, Lorand. "The chapeau of the general exceptions in the WTO GATT and GATS agreements: a reconstruction." American Journal of International Law 109.1 (2015): 95-125.
12WORLD TRADE ORGANISATION policies should only be implemented by the member states if it can be showed to have been necessary for the purpose protecting the humans, plants as well as animals or health of these components of the environment. Such policies can also be implemented as well as formulated forthepurposeofconservingtheexhaustiblenaturalresources.Forthepurposeof understanding the meaning of the expression natural resources, which are exhaustible that has been mentioned in and forms the subject matter of paragraph (g) of Article XX needs to be interpreted in a broad manner. This might include the non-living as well as mineral resources. The member states for the purpose of undertaking environmental measures in relations to trade and commerce needs to establish specific relations existing among the goal behind the environmental policies as well as the measure that has been conceived as the issue for including the measures as eligible for being included under the exceptions laid down in Article XX. For this reason, the measure needs to have the following aspects to be included within the purview of the exceptions that has been provided in this Article. Firstly, the protection that measure needs to have the chief purpose of extending protection to the animal, humans as well as plant health or life. Secondly, it needs to be formulated with the aim of conserving the natural resources, which are of exhaustible nature.
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14WORLD TRADE ORGANISATION Lin, Tsai-yu. "Forward to the Special Issue on Revisiting Exceptions under International Economic Law." Asian J. WTO & Int'l Health L & Pol'y 13 (2018): 275. Lincoln, Jennifer M., et al. "Preventing fatal winch entanglements in the US southern shrimp fleet: A research to practice approach." Journal of safety research 60 (2017): 119-123. Liu, Jian, and Georgina Santos. "Decarbonizing the road transport sector: Break-even point and consequent potential consumers' behavior for the US case." International Journal of Sustainable Transportation 9.3 (2015): 159-175. Mmereki, Daniel, et al. "Handling scrap tyres in Botswana: Initiatives, practices, and consequences." Journal of Solid Waste Technology & Management 42.1 (2016). Moran, Niall. "The First Twenty Cases Under GATT Article XX: Tuna or Shrimp Dear?." International Economic Law. Springer, Cham, 2017. 3-21. Mustonen, Marika. "Invoking the Security Exceptions under GATT: Are Economic Sanctions Eroding the Foundation of the WTO?." (2016). Offor, Iyan IH, and Jan Walter. "GATT Article XX (a) permits otherwise trade-restrictive animal welfare measures." Global Trade and Customs Journal 12.4 (2017): 158-166. Reid, Emily. "Trade and environment in the EU and WTO: legitimacy, proportionality and institutional power play." (2019). Schmit Jongbloed, Wouter Pieter Frans. The Multilateral Standard of Review: Export Restrictions, GATT Exceptions and Exemptions. Diss. Columbia University, 2018. Shi, Xunpeng, and Sizhong Sun. "Energy price, regulatory price distortion and economic growth: A case study of China." Energy Economics 63 (2017): 261-271.
15WORLD TRADE ORGANISATION Stewart, David P., and Sherzod Shadikhodjaev. "World Trade Organization-General Agreement on Tariffs and Trade-national treatment-general exceptions-renewable energy- international environmental law." American Journal of International Law 111.1 (2017): 139- 148. Tamiotti,Ludivine,andDanielRamos."ClimatechangemitigationandtheWTO framework."ResearchHandbookonClimateChangeandTradeLaw.EdwardElgar Publishing, 2016.