The trade and environment relationship under WTO rules and jurisprudence

LIST OF ABBREVIATIONWorld Trade Organization WTO General Agreement on Tariffs and Trade 1994 GATT 1994 Dispute Settlement Body DSB The Committee on Trade and Environment CTE General Agre

MINISTRY OF JUSTICE

HANOI LAW UNIVERSITY

ASSIGNMENT SUBJECT: ADVANCED LEGAL ENGLISH 1

Topic:

The Trade and Environment Relationship under WTO Rules and Jurisprudence.

HA NOI - 2021

THE LEVEL OF PARTICIPATION AND THE RESULT OF

PARTICIPATION IN GROUP WORKS

SUBJECT: ADVANCED LEGAL ENGLISH 1

Group 07; Class N01 – TL1; Faculty: International Trade Law; Year: 44 Total student number of group: 06

- Present: 05

- Absent: 01 (Nguyen Duc Huy – 442743)

Topic: The Trade and Environment Relationship under WTO Rules and

Jurisprudence

Numbe

r

Member Standar

d Signatur

e

Teacher’s Evaluatio n Full name Studen

t code A B C

1 Nguyen Thuy Hien 442741 x

2 Nguyen Le BaoNgoc 442742 x

5 Dinh Thi Quynh Mai 442746 x

- Assignment’s Result:

+ Teacher 1:………

+ Teacher 2:………

- Presentation’s Result :

Teacher: ……

- Final grade: ……….

Ha Noi, October 20 ,2021 th

LEADER

PHAM NGOC ANH

INTRODUCTION 1

DEVELOPMENT 1

1 WTO jurisprudence related to The Trade and Environment Relationship 1

1.1 GATT 1994 exception 1

1.2 Trade and Environmental Relationship under other WTO agreements 2

2 WTO rules related to Trade and Environment Relationship 3

3 WTO has made efforts and practices in environmental protection 4

CONCLUSION 5

REFERENCES 6

LIST OF ABBREVIATION

World Trade Organization WTO General Agreement on Tariffs and Trade 1994 GATT 1994

Dispute Settlement Body DSB The Committee on Trade and Environment CTE General Agreement on Trade in Services GATS The Agreement on Technical Barriers to Trade TBT The Agreement on Sanitary and Phytosanitary Measures SPS The Agreement on Trade-Related Aspects of Intellectual

The World Trade Organization (WTO) is an international organization whose primary goal is to open trade and encourage economic growth However, trade liberalization is also a factor that enhances the impact of economic activities on the environment The environment is fundamental to life, and environmental concerns often transcend national boundaries involving coordinated action at the international level Therefore, it is necessary to have a connection between the goal of environmental protection and the growth of international trade Aware of this issue, the WTO has shown environmental concerns in its agreements since its establishment in

1995 That’s why my group chose the topic “The Trade and Environment Relationship under WTO Rules and Jurisprudence” to learn about the WTO's regulations on commerce and the environment

DEVELOPMENT

1 WTO jurisprudence related to The Trade and Environment Relationship.

Trade and the environment under WTO law have formed a complementary relationship rather than a mutually exclusive one, which is evidently expressed in Article XX (b), (g) of GATT 1994 and several other related WTO agreements

1.1 GATT 1994 exception

Environmental policies covered by Article XX: WTO members' autonomy to

determine their own environmental objectives has been reaffirmed on a number of occasions (e.g in US - Gasoline, Brazil - Retreaded Tyres) In past cases, a number of policies have been found to fall within the realm of these two exceptions: policies aimed at reducing the consumption of cigarettes, protecting dolphins, reducing risks to human health posed by asbestos, reducing risks to human, animal and plant life, and health arising from the accumulation of waste tyres (under Article XX(b)); and policies aimed at the conservation of tuna, salmon, herring, dolphins, turtles, clean air (under Article XX(g)) The phrase “exhaustible natural resources” under Article XX(g) has been interpreted broadly to include not only “mineral” or “non-living” resources but also living species which may be susceptible to depletion, such as sea turtles (Tức là WTO hướng tới mục tiêu tự do hóa thương mại, xóa bỏ thuế quan và phi thuế quan, tuy nhiên vẫn có điều khoản ngoại lệ đi ngược với mục tiêu này để bảo vệ môi trường, bởi vì môi trường ổn định thì thương mại mới phát triển bền vững Quy định này có 2 khía cạnh: cho phép ngoại lệ để bảo vệ môi trường, và cũng đặt ra giới hạn cho sự bảo

vệ môi trường)

1

Degree of connection between the means and the environmental policy objective:

In order for a trade-related environmental measure to be eligible for an exception under Article XX, paragraphs (b) and (g), a member has to establish a measure relating

to the conservation of exhaustible natural resources (paragraph (g)) To determine whether a measure is “necessary” to protect human, animal, plant life or health under Article XX(b), a process of weighing and balancing a series of factors has been used

by the Appellate Body (e.g see Brazil - Retreaded Tyres case or in EC - Asbestos1

case2), including the contribution made by the environmental measure to the policy objective, the importance of the common interests or values protected by the measure and the impact of the measure on international trade

The importance of the manner in which trade-related environmental measures are applied: The introductory clause of Article XX (its chapeau) emphasizes how the

measure in question is applied Specifically, the application of the measure must not constitute a “means of arbitrary or unjustifiable discrimination” or a “disguised restriction on international trade” The chapeau requires that the measure does not constitute abuse or misuse of the provisional justification made available under one of the paragraphs of Article XX, that is to say, is applied in good faith WTO jurisprudence has highlighted some of the circumstances which may have a connection between its stated environmental policy goal and the measure at issue The measure needs to be either: necessary for the protection of human, animal, plant life or health (paragraph (b)) or help to demonstrate that the measure is applied in accordance with the chapeau

1.2 Trade and Environmental Relationship under other WTO agreements

First of all, Article XIV of GATS is a “general exception” clause which is similar

to GATT 1994 Article XX especially in its preamble In addition, paragraph (b) of both GATS Article XIV and GATT 1994 Article XX, allow state members to adopt inconsistent policies if the case is “necessary to protect human, animal or plant life or

health” Secondly, the TBT aims to assure that product specifications, both mandatory

and voluntary (called “technical regulations and standards''), as well as conformity assessment procedures are non-discriminatory and do not create unnecessary obstacles

to trade The beginning of TBT acknowledges countries’ rights to adopt such measures

to the appropriate extent - for example, to protect human, animal, plant life, health, or the environment WTO members also have the right to take measures to ensure that their standards of protection are met The four significant features of TBT can be listed briefly as non - discrimination, unnecessary obstacles, international standards and

1 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds332_e.htm , accessed on 10/13/2021

2 https://www.wto.org/english/tratop_e/envir_e/edis09_e.htm , accessed on 10/13/2021

2

2

transparency Thirdly, the SPS is also an agreement in the WTO addressing the

relationship between Trade and Environment The agreement regulates safety regulations, animal and plant, food safety and human Members can adopt SPS regulations only to the extent of human, animal or plant life, or health protection (zero unnecessary obstacles to trade) Moreover, the adoption should not become an arbitrary or unjustifiable discrimination among state members in similar conditions The SPS agreement is considered as an additional agreement to the TBT Agreement since the embracement of SPS for environmental protection must subject to risk

assessment, transparency or non-discrimination Finally, TRIPS contains solely in

section 5 (patents) to refer to the environment Paragraph 2 and 3 of Article 27 to Article 27.2 and 27.3 shortly states that members can make certain inventions

ineligible for patenting: “To protect human, animal or plant life or health, to avoid

serious harm to the environment” or “Plants and animals Microorganisms have to be eligible for patenting So do non-biological and microbiological processes for the

production of plants or animals” These articles address environmental problems in the

field of intellectual property protection Members would refuse patent inventions which might endanger the environment and commercial exploitation is prohibited as a possible option to protect the natural world Plants and animals can also be excluded from patentability for ethical or other reasons which are subjected to the conditions mentioned above1

2 WTO rules related to Trade and Environment Relationship

Current WTO rules provide considerable scope to protect the environment and tackle climate change while maintaining free commerce In order to achieve sustainable development, the WTO encourages greater open trade WTO members also have the freedom to pursue environmental and health goals However, there should be distinguish between trade measures with a genuine environmental aim, and measures that are designed as hidden limitations and are applied in an unreasonable and unjustifiable manner

WTO allows trade restrictions for environmental reasons only under certain specific conditions as well as these restrictions have to comply with two fundamental principles of WTO: national treatment (NT) and most favoured nation (MFN) They are emphasized under Article XX of GATT 1994 about general exceptions

NT means treating foreigners and locals equally Imported and locally-produced goods should be treated in the same way - at least after the foreign goods have entered

1 https://www.wto.org/english/tratop_e/envir_e/issu3_e.htm , access date 10/03/2021

4 h t s / www wt o o g eg i h t e wt oe wh a i _/ f e f c 2e t ,ce s a e 1/ / 01

5 hp : www wt o o g e g i / a pe i uea e _/ s _.m ,ce sa / / 2

3

the market The dispute 1 DS04 United States - Gasoline 2 is a typical example of the inconsistence of NT principles The US decided to enact the Gasoline Rule so as to control emissions into the air from cars' fuel with the aim of reducing air pollution levels in major cities Though the complainants (Brazil and Venezuela) alleged that a

US gasoline regulation discriminated against complaints’ gasoline because this regulation set different standards about the quality of US domestic gasoline and imported gasoline from Brazil and Venezuela The Dispute Settlement Body (DSB) of WTO concluded that although the US regulation aimed to protect the environment but

it was inconsistent with Article XX(g) of GATT since it treated imported gasoline less favourably than the domestic one

In addition, MFN sets the rule that countries cannot normally discriminate between their trading parties If one WTO member grants another nation a special favour such as a lower customs duty rate for one of their products, that member has to

do the same for all other WTO members To illustrate, the DSB in dispute DS332

Brazil – Retreaded 3 tyres determined that if Brazil imposed an import ban on retreaded

tyres for environmental and health reasons, Brazil had to limit the quantity of retreaded tyres from all countries similarly The fact that Brazil only allowed retreaded tyres from countries in MERCOSUR (Common Market of the South) showed the arbitrary discrimination of Brazil As a result, Brazil did not satisfy conditions to apply either Article XX(b) or Article XX(d) of GATT 1994

In brief, WTO rules permit governments to restrict trade when the objective is protecting the environment The legality of such restrictive measures depends on a number of conditions including whether they constitute justifiable discrimination These measures should not constitute disguised protectionism Every member is free to determine its appropriate level of protection but must do so in a coherent manner If a country bans the importation from another, it must ban importation from all countries,

as well as banning domestic sales4

3 WTO has made efforts and practices in environmental protection

Since the entry into force of the WTO in 1995, the WTO Dispute Settlement Body has had to deal with a number of negotiations regarding environment-related trade measures Such measures have sought to achieve a variety of policy objectives -from the conservation of sea turtles -from incidental capture in commercial fishing to the protection of human health from risks posed by air pollution In 2001, the WTO's dispute settlement allowed a member to maintain a ban on asbestos imports (European

1

2

3 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds332_e.htm , access date 10/9/2021

4 https://www.wto.org/english/tratop_e/envir_e/bkgrnd_climate_e.pdf , access date 10/9/2021

4

Communities - Asbestos dispute, DS135) that could protect its citizens and5

construction workers In the US-Shrimp dispute (DS 58 ), the WTO pushed members2

towards a strengthening of their environmental collaboration; it required that a cooperative environmental solution be sought for the protection of sea turtles between the parties to the conflict3

There is no denial that WTO dispute settlement practice has confirmed that WTO rules on trade liberalization do not take precedence over environmental issues Besides, the WTO also supports sustainable development and the environment through its specialized committees and bodies One unique institutional venue is the Committee on Trade and Environment (CTE) is created in 1995 In a little more detail, this is a forum for dialogue on trade and the environment The Committee is an incubator for ideas on how to move the discussion forward Already, this is bearing fruit Some issues first raised in the CTE have become fully-fledged negotiations - for instance, on fisheries subsidies and on the relationship between the WTO and multilateral environmental agreements (MEAs) Since environmental problems often transcend national borders, the response must involve concerted action at the international level The current negotiations on the WTO-MEAs relationship provide a unique opportunity for creating positive synergies between the trade and environment agendas at the international level Other WTO bodies are also important For example, the Committee on Technical Barriers to Trade

Moreover, the Doha Round of negotiations focused on achieving a more efficient allocation of resources on a global scale through the continued reduction of obstacles

to trade and on pursuing win-win results for trade, development, and the environment The Doha Round is the first time environmental issues have featured explicitly in the context of a multilateral trade negotiation Other parts of the Doha negotiations are also relevant to the environment, for example, some aspects of the agriculture negotiations and also the disciplines on fisheries subsidies ( These talks take place in

“Special Sessions” of the Trade and Environment Committee.)

CONCLUSION

The WTO has always been an institution with the goal of liberalizing trade and promoting global economic growth rather than focusing only on environmental protection as various international accords on environmental protection have done Efforts to preserve the environment, however, cannot be rejected, which is demonstrated through the creation of environmental protection barriers in terms of trade-related aspects to ensure that trade liberalization does not jeopardize

1 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds135_e.htm , access date 10/8/2021

2 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm , access date 10/8/2021

3 https://www.wto.org/english/tratop_e/envir_e/envt_rules_intro_e.htm , access date 10/8/2021

5

environmental goals and public health With this approach, WTO trade measures have prevented nations from arbitrarily applying environmental protection rules but they are still an effective way to improve the enforcement of the internationalization requirements of the environment in member countries, leading to the strengthening of member-country cooperation in environmental protection

REFERENCES

1 Aprarna Sawhney, WTO - related matters in trade and environment:

relationship between WTO rules and MEAs

<https://icrier.org/pdf/wp133.pdf>, access date 10/9/2021

2 Brazil - Measures affecting imports of retreaded tyres, wto.org

<https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds332_e.htm>, access date 10/9/2021

3 European Communities — Measures Affecting Asbestos and Products

Containing Asbestos (DS135)

<https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds135_e.htm > access date 10/8/2021

4 Principles of the trading system, wto.org

<https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm>, access date 10/9/2021

5 Trade and Environment in the WTO, wto.org

<https://www.wto.org/english/tratop_e/envir_e/bkgrnd_climate_e.pdf>, access date 10/9/2021

6. Textbook on International trade and business law, Youth Publishing House, 2017

7 United States — Import Prohibition of Certain Shrimp and Shrimp Products

(DS58)

<https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm>, access date 10/8/2021

8 United States - Standards for Reformulated and Conventional Gasoline, wto.org

<https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds4_e.htm>, access date 10/9/2021

6