International Environmental Law course
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1 1 Introduction International Environmental Law course Professor Hans Chr. Bugge Trade and the environment. 1. The Trade and Environment Problem what is it? The question of the mutual relationship between two areas of international and national law, which may conflict, namely free trade law and environmental law. The issue is twofold: Possible conflicts between free trade rules and multilateral environmental agreements (MEAs) which restrict or influence trade. Possible conflicts between free trade rules and unilateral national measures to protect the environment. Free trade rules may imply limitations for national environmental policy The two issues may overlap. The issue as part of the sustainable development agenda: balancing the need for free trade (in particular for developing countries) and the need for environmental protection. Main points in the Brundtland report. Rio Declaration principle 12: some elements. 2. The free trade rules what are we talking about? 2. 1 The big picture : Global free trade agreements: maily the WTO system. Regional free trade agreements: EU, NAFTA, MERCOSUR... Bilateral Investment treaties (BITs) Many of the same principles and also problems/conflicts at the different levels. (Here we concentrate on the global agreements.)
2 2 2.2 The World Trade Organization WTO Result of the Uruguay Round of free trade negotiations: January 1995 Intergovernmental Organization, 153 members. Purpose: to facilitate the implementation, administration, and operation as well as to further the objectives' of the WTO Agreements. The WTO Agreement is an umbrella agreement, establsihin gthe organisation and binding together several special agreements, some of which dates back to the 1940s (GATT). 2.3 The general aim of the WTO system: To promote free trade and equal competition conditions. Reduction of trade and market access barriers Promoting non-discrimination in trade relations; equal treatment of goods regardless of country of production. Preventing various types of border measures, tariffs, quota, customs regulations, import licensing, certification, etc. Preventing national regulations and practices that have a protective effect (in particular explicit, government imposed trade obstacles). Preamble art. 1 of the WTO Agreement states that sustainable development is an objective, seeking both to protect and preserve the environment.... But what does this mean, and how does the WTO work to this effect? Not yet a proactive approach to environmental issues. Rather: Environmental concerns seen as something which has to be taken into account, and which may justify exceptions to WTO rules. The Committee on Trade and Environment (CTE). 2.4 WTO Agreements, the most important: General Agreement on Tariffs and Trade (GATT) General Agreement on Trade in Services (GATS) Agreement on sanitary and phytosanitary measures (SPS) (food safety, animal and plant health) Agreement on Technical Barriers to Trade (TBT) (product standards) Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS).
3 3 2.5 The Dispute Settlement System (Dispute Settlement Understanding DSU) What are typical disputes? A compulsory system The organs Administered by the Dispute Settlement Body (DSB) Consultations, adjudication by panels (ad hoc), appeal to the Appellate Body (standing body) (and then adopted by the DSB) Jurisdiction, method and legal effect Jurisdiction: Art. 1 ( covered agreements ) listed in Appendix I of the DSU. Art. 3.2 DSU: disputes to be solved in accordance with customary rules of interpretation of public international law (= reference to the Vienna Convention on the Law of Treaties VCLT), and not only GATT interpretation tradition Art. 31.3(c) VCLT application of any relevant rules of international law applicable in the relations between the parties Legal effect: Panel and Appellate reports are binding on the parties to the dispute (if adopted by the DSB). Decisions must be implemented within reasonable time, otherwise subject to sanctions II. Free trade and multilateral environmental agreements (MEAs) 3. The problem in general. The fragmented structure of public international law. Many different agreements may interfere with each other. Equal legal status of different multilateral agreements, which may be in conflict. No a priori hierarchy. International Environmental Law and International Trade Law develop in separate fora, but for both: global concerns proliferation of treaties building of regimes, incl. compliance structures.
4 4 4. How may WTO-rules and MEAs conflict? 4.1. MEAs may include trade restrictions or Trade Related Environmental Measures (TREMs): Restricting or prohibiting trade in certain products. Restricting access to markets Favouring goods from certain countries (MEA member states) Treating imported goods less favourably. 4.2 Examples: Convention on International Trade in Endangered Species (CITES) Vienna Convention for the Protection of the Ozone Layer, Montreal Protocol art. 4: ban on import of certain products. Basel Convention on the Control of Transboundary Movements of Hazardous Waste The Kyoto protocol: trade in allowances only for member states. The Cartagena protocol under CBD on trade in living GMOs. 4.3 Not a clear solution but a tendency to accept these trade restrictions, at least when both states are parties to the MEA in question. May be based on the lex specialis and lex posterior rules. Accepted that state may take measures to protect resources beyond national boundaries if this is pursuant to an MEA (Shrimp/turtle case) III. Free trade rules and national environmental measures. 5. General introduction to the issue Free trade could prevent nations from adopting measures to protect their domestic environment (e.g. environmental standards for products and services etc.). Free trade could obstruct efforts to compel other countries to adopt high environmental standards (such as border tax adjustments, restrictions on import of tropical timber).
5 5 Free trade rules could frustrate attempts to protect resources and theenvironment beyond areas of national jurisdiction (as in the Tuna/dolphins cases). 6. The main example: Issues under GATT. 6.1 The main rules. Part I, Article I: General Most-Favoured-Nation Treatment: With respect to customs duties and charges of any kind, like products shall be treated equally regardless of country of origin. Part. I, Article III, 4: National treatment: Equal treatment of foreign and domestic like products in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. Part I, Article XI, 1: Elimination of quantiative restrictions: No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party. 6.2 The exception clause in Article XX National measures in conflict with Art. 1 or Art. 4 may be accepted if:... (b) necessary to protect human, animal or plant life or health;... (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption 6.3 The basic conditions in the chapeau of art. XX:...such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.
6 6 6.4 Questions to be clarified/decided. Are the products in question like products? How to interpret and apply XX b): necessary, and human, animal or plant life or health - How to interpret and apply XX g): relating to, exhaustible natural resources, in conjunction with domestic restrictions. The special issue of geographical scope extraterritorial/(extrajurisdictional) jurisdiction? (Tuna/dolphin II) Whether conditions in the chapeau are fulfilled The product versus process and production methods (PPM) debate ( like products if different production or harvesting methods?). 6.6 A basic question here: What weight to be given to environmental concerns and rules in general, and what role for legal principles in other parts of international law/international environmental law? Sustainable development? Precautionary principle? 6.7 Three important cases under GATT art. XX. United States Restrictions on Imports of Tuna ( Tuna/dolphin Cases (1991 and 1994), USA vs. Mexico (pre WTO)) United States Standards for Reformulated and Conventional Gasoline (USA vs. Brazil and Venezuela) United States Import Prohibition of Certain Shrimp and Shrimp Products ( Shrimps/turtles Case, USA vs.india, Pakistan, Malaysia and Thailand). A positive trend. Remark the balancing of various concerns, in particular in the Shrimps/turtles case. (SPS, see BBS p and in particular the EC Beef Hormones case) 7. Summing up: Where do we stand? Some suggestions under discussion.
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