Trading in the Environment

-- the WTO and environmental laws

Earth Island Institute Alert

Winter/Spring 1997

Through repeated conflicts between free trade and environmental protection, it is becoming increasingly clear that provisions of the World Trade Organization (WTO) and national environmental protection laws are on a collision course. The dolphin-safe tuna controversy is but the most prominent of a number of attacks on environmental regulations in the name of free trade. At issue is the integrity of national environmental regulations such as the US's Marine Mammal Protection Act (MMPA).

According to the WTO, which is the successor treaty to the General Agreement on Tariffs and Trade (GATT), imports must be treated no less favorably than "like" products of domestic origin. Protectionism is prohibited. Tariffs and embargoes are largely prohibited.

There are a limited number of special circumstances under which trade restrictions are permitted. Two of these exceptions address environmental concerns by permitting trade restrictions "necessary to protect human, animal, or plant life or health" and/or "relating to the conservation of exhaustible natural resources" so long as these measures "are made effective in conjunction with restrictions on domestic production or consumption." The tuna-dolphin challenges have demonstrated how little protection these protections really offer because their application is subject to interpretation by trade dispute panels. The 1991 challenge by Mexico and the 1992 challenge by the European Union (EU) resulted in dispute panel decisions striking town the tuna import restrictions required by the MMPA. The first dispute panel reached the shocking conclusion that trade restrictions for the protection of any resources outside the national geographic boundaries of the country imposing the restriction were illegal. Further, the panel also ruled that the tuna import embargo was GATT-illegal because the "method of production" of a product could not be taken into account in determining equal treatment under GATT. According to the WTO, tuna produced by environmentally devastating practices such as driftnetting or setting nets on dolphin has to receive treatment identical to tuna produced by dolphin-safe methods. That ruling has never been finally adopted.

The second WTO panel again ruled against the US, yet contradicted the first panel by ruling that protective measures can indeed apply outside of a country's boundaries. Despite the finding that dolphin conservation is a legitimate justification for trade restrictions, the panel ruled against the US because it found that the embargo's application to all tuna from countries that imported any dolphin-unsafe tuna was not, in its view, "primarily aimed at" the goal of dolphin conservation and was instead a masked effort to make other countries change their fishing practices.

Dolphin protection is not the only environmental law at risk. Most recently, a 1996 WTO panel found that the EPA regulations on gasoline pollution are illegal. The Clinton Administration responded by vowing to amend the US Clean Air Act to allow in gasoline previously considered too dirty. Four countries have already requested dispute panels regarding the 1996 US law that now excludes shrimp caught by countries whose trawlers are not equipped with turtle-excluder devices (TEDs). A panel to consider a US challenge to EU restrictions on import of bovine growth hormone containing beef was convened in May of 1996 and has not yet reached a decision.

The WTO has yet to uphold a trade restriction based on an environmental protection measure. The priority of the WTO and the intent of GATT-economic gain through free trade-discourage this. According to a GATT Secretariat report, "In principle, it is not possible under GATT's rules to make access to one's own market dependent on the domestic environmental policies or practices of the exporting country." It is just this belief in "free trade" at any cost that reveals the threat to all our hard-won environmental protection laws by the unelected and unaccountable WTO trade bureaucrats in Geneva.

Environment watch