World Trade Organisation (WTO) and Environmental Regulations

This essay examines the World Trade Organization's (WTO) commitment to regulating trade and protecting the environment, focusing on Article XX of the General Agreement on Tariffs and Trade (GATT). The essay analyzes paragraphs (b) and (g) of Article XX, which provide exceptions to GATT rules for environmental protection and conservation of natural resources. It discusses the requirements for justifying trade-restrictive environmental measures, including the need to demonstrate a direct link between the measure and the environmental goal, as well as compliance with the introductory clause of Article XX. The essay further explores relevant case studies, such as Brazil – Retreated Tyres and US – Shrimp, to illustrate the application of Article XX and the interpretation of 'exhaustible natural resources'. The author provides a critical analysis of the WTO's approach, emphasizing the balancing act between promoting trade and environmental sustainability.

Running head: WORLD TRADE ORGANISATION
World Trade Organisation
Name of the Student
Name of the University
Author Note

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Introduction
There has been a twofold commitment that has vested with the World 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
1 Reid, Emily. "Trade and environment in the EU and WTO: legitimacy, proportionality and institutional
power play." (2019).
2 Jackson, John Howard, and Royal Institute of International Affairs (London). Restructuring the GATT
system. London: Royal Institute of International Affairs, 1990.
3 Bartels, 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.

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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 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 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

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promote discrimination amongst the member states as well as it does not poses any disguised
limitations upon the international trade4.
The paragraph (b) and (g) of the GATT rules contains provisions relating to the
environmental protection and wellbeing. The autonomy of the WTO members has for the
purpose of determining their objective in relation to the environment been reaffirming with
respect to a number of situations. For instance, in the case of Brazil – Retreated Tyres as well
as US – Gasoline case, this reaffirmation has been evidenced. It has been noted by Appellate
Body in the case of US – Shrimp that the conditioning of the access to market with respect to
the contention that whether the members exporting would be complying with certain policy
that has been prescribed unilaterally by the members importing has been an ordinary aspect in
relation to measures, which falls under the scope of any of the exceptions provided under
Article XX5.
There were numerous policies in the past that can be brought under the purview of the
exceptions that the two paragraphs of the Article XX provide. Paragraph (b) of the Article has
been the origin of several restrictive policies that has been imposed upon the trade and
commerce of the member states in relation to the protection of the environment. Some of
these policies have the objectives of reducing the cigarettes consumption, preventing and
curbing the risks that has been posed to human health by the ill effect of asbestos, extending
protection to dolphins as well as the risk that is initiated towards plant, human and animal life
by virtue of the waste tyre accumulation. Again, Paragraph (g) of the Article has also been
the origin of several restrictive policies that has been imposed upon the trade and commerce
of the member states in relation to the conservation of the natural resources belonging to the
4 Cortés, Claudia Jiménez. GATT, WTO and the Regulation of International Trade in Textiles. Routledge,
2018.
5 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.

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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 – 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 – 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
6 Hoda, Anwarul. Tariff Negotiations and Renegotiations under the GATT and the WTO: Procedures and
Practices. Cambridge University Press, 2018.
7 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.

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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
8 Schmit Jongbloed, Wouter Pieter Frans. The Multilateral Standard of Review: Export Restrictions, GATT
Exceptions and Exemptions. Diss. Columbia University, 2018.

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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 — 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
9 Mmereki, Daniel, et al. "Handling scrap tyres in Botswana: Initiatives, practices, and consequences."
Journal of Solid Waste Technology & Management 42.1 (2016).
10 do Amaral Júnior, 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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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 US—Gasoline, 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
pollution of the air, which is natural resource has the probability of disrupting the
11 Tamiotti, Ludivine, and Daniel Ramos. "Climate change mitigation and the WTO framework." Research
Handbook on Climate Change and Trade Law. Edward Elgar Publishing, 2016.
12 Foster, Nicole D. "CARICOM states and the WTO dispute settlement system: the case for greater
engagement." Commonwealth Law Bulletin 43.2 (2017): 153-178.
13 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.

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environmental balance. In this case, the Appellate body has been appending air the category
of the natural resources14.
In the case of US—Shrimp, 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 – 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
14 Shi, Xunpeng, and Sizhong Sun. "Energy price, regulatory price distortion and economic growth: A case
study of China." Energy Economics 63 (2017): 261-271.
15 Cooreman, Barbara. "Addressing Environmental Concerns Through Trade: A Case for
Extraterritoriality?." International & Comparative Law Quarterly 65.1 (2016): 229-248.
16 Schmit Jongbloed, Wouter Pieter Frans. The Multilateral Standard of Review: Export Restrictions, GATT
Exceptions and Exemptions. Diss. Columbia University, 2018.

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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 Brazil—Retreaded Tyres that the purpose of
the chapeau is ensuring that an exercise for the members’ 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 members’ 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 measure’s 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 the possibilities of entering into
cooperative arrangements with the countries that had been affected is not
17 Gaines, 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.
18 Hudec, 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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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,
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.
19 Hao, Han, et al. "The impact of stepped fuel economy targets on automaker's light-weighting strategy: The
China case." Energy 94 (2016): 755-765.
20 Moran, Niall. "The First Twenty Cases Under GATT Article XX: Tuna or Shrimp Dear?." International
Economic Law. Springer, Cham, 2017. 3-21.
21 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.

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Acknowledgement has also been done by the Appellate Body stating
that a multilateral approach is preferred in a strong way over the
unilateral approaches. However it was further added that even though the
conclusions of the multilateral agreements were preferred yet for the
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
the Appellate Body unjustifiable discrimination was constituted by the
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 that 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 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
22 Mustonen, Marika. "Invoking the Security Exceptions under GATT: Are Economic Sanctions Eroding the
Foundation of the WTO?." (2016).
23 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.
24 Bartels, 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.