Taking Care of Business
the World Trade Organization
by Joel Bleifuss
In These Times, July, 1997
A three-judge panel of the World Trade Organization (WTO)
is currently considering which is more important: the survival
of the world's sea turtles or the sanctity of free trade. In an
effort to protect endangered sea turtles, the United States requires,
through a provision in the Endangered Species Act, that all shrimp
imported into the country be caught by fishermen who use turtle-excluder
devices. If deployed by the entire international shrimp fleet,
these devices would save an estimated 150,000 sea turtles a year.
Three shrimp-fishing nations (Pakistan, Malaysia and Thailand)
have responded to the U.S. initiative by petitioning the WTO to
declare that the United States has, in effect, imposed an illegal
The WTO was established on January 1, 1995 to administer and
enforce the multilateral trade agreements negotiated during the
eight years of the Uruguay Round of the General Agreement on Tariffs
and Trade (GATT). As a condition for joining the organization,
a member country must surrender a tremendous amount of sovereignty.
WTO regulations unequivocally state that all countries must "ensure
the conformity of their laws, regulations and administrative procedures"
with WTO rules. That does not bode well for hard-fought regulations
to protect human health and the environment.
Whereas under the old GATT accords, nations were permitted
to veto rulings that went against them, the WTO forecloses this
possibility. Moreover, the 131 members of the WTO have empowered
the Geneva-based entity to penalize any nation that enacts legislation
that contravenes WTO regulations. Consequently, corporate interests,
acting through what have become, in effect, their client states,
are increasingly turning to the organization to challenge, in
the name of free trade, environmental regulations that interfere
with their ability to exploit the earth's human and natural resources.
"The WTO has set off the race to the bottom for environmental
and health protections that everyone predicted," says Lori
Wallach, director of Public Citizen's Global Trade Watch. "It
is just happening much faster."
Due to heightened public scrutiny, the North American Free
Trade Agreement included side agreements (however ineffective)
meant to protect the environment and labor rights. By contrast,
GATT was formulated in a media vacuum and originally contained
no provision for the environment. Responding to objections from
environmentalists, the Uruguay Round, in one of its final acts,
created the Committee on Trade and the Environment (CTE). The
CTE's principal function is to advise the organization on how
to resolve conflicts between WTO trade rules and international
and national environmental regulations.
"Politically, the CTE is a sop to environmentalists,
who were concerned about the environmental implications of international
trade," says Steven Shrybman, an environmental lawyer who
has worked on trade issues with the Sierra Club of Canada and
Greenpeace USA. "There was tremendous resistance at the WTO
to considering the impact on the environment. The only concession
they were willing to make was to establish this committee."
In the end, says Shrybman, the CTE has concentrated not on how
the WTO can help protect the environment, but rather on how to
dilute those environmental protections that already exist.
Among the most pressing environmental issues that the WTO
must resolve is the legal status of three pre-existing multilateral
environmental agreements: the Montreal Protocol on Ozone Depletion,
the Convention on International Trade in Endangered Species (CITES)
and the Basel Convention on Hazardous Wastes. These multilateral
agreements contravene official WTO policy because they permit
the use of international sanctions to achieve environmental goals.
But rather than make a firm ruling on the issue, the WTO panels
are dealing with each environmental dispute on a case by case
basis. These rulings will set precedent for future cases.
Consider the sea turtle case that was argued before a WTO
panel in June. Sea turtles are protected under CITES, which lists
five of the world's seven kinds of sea turtles as species that
are "threatened with extinction [and] affected by trade."
Aware of the danger that an adverse ruling by the WTO poses to
the world's sea turtles, more than 200 scientists from 25 countries
have petitioned the organization, demanding that the WTO panel
"not interfere in anyway with the right of countries to use
scientifically developed facts-not trade or economic concerns-to
identify and implement appropriate measures necessary to protect
Charlene Barshefsky, the U.S. trade representative, attached
the scientists' petition to a recent U.S. submission to the WTO.
But the administration is hardly a stronger defender of sea turtles.
A coalition of environmental groups, led by Earth Island Institute,
had to sue the U.S. government in federal court to compel the
administration to begin enforcing the provision of the Endangered
Species Act that requires all shrimp imported into the United
States to be caught with boats using turtle-excluder devices.
Furthermore, when presenting the U.S. case to the WTO panel, Barshefsky's
office refused to argue that the U.S. law protecting sea turtles
advances the goals of CITES and therefore does not fall under
the purview of WTO trade rules. Instead, her lawyers argued on
the more narrow grounds that turtles were an exhaustible natural
resource, and that the U.S. regulation was therefore permissible
under a WTO provision that allows countries to protect exhaustible
natural resources. Patti Goldman, a staff attorney with the EarthJustice
Legal Defense Fund in Seattle, explains that the United States
didn't want to set a precedent that would diminish the powers
of the WTO. "While the United States is a defender today
of sea turtle protections, it will be a challenger tomorrow,"
she says. "For example, the United States has its eye on
the European Union ban on fur caught with leghold traps. It doesn't
want to have a rule in place that could stand in the way of its
The WTO is also grappling with the legal status of "eco-labeling,"
the practice of providing information on a label about the environmental
impact of the total lifecycle of a product. The most politically
contentious use of eco-labeling involves wood and paper products
in Europe. The E.U. currently certifies paper products that come
from trees that have been ecologically harvested and are manufactured
by environmentally sound processes. The United States, Canada
and Brazil oppose this practice because their timber and paper
industries would have to meet tougher European pollution limits
for toxins such as dioxin to merit the label.
"U.S. industry doesn't want to be forced to improve its
environmental performance to meet European standards," says
Brennan Van Dyke, director of the Geneva office of the Center
for International Environmental law, which keeps tabs on the WTO.
"They would rather take away the consumers' right to know
about the environmental impact of products. Transnational corporations
are trying to achieve through international trade law what they
would never be able to achieve domestically."
The WTO has already proven that it has no compunction about
riding roughshod over environmental regulations. Venezuela, at
the behest of its oil industry, persuaded a WTO tribunal to gut
an EPA regulation that, as part of the Clean Air Act, eliminated
dangerous contaminants from gasoline. Last year, a three-judge
WTO panel invalidated the U.S. regulation, which was years in
the making and involved substantial compromise between environmentalists
and the oil industry. The WTO panel ruled that "WTO members
were free to set their own environmental objectives, but they
were bound to implement these objectives only through measures
consistent with [the WTO's] provisions." It ordered the United
States to either pay Venezuela $150 million a year or change its
"This is part of why the WTO is so dangerous," says
Wallach from Public Citizen. "Basically in this case, it
allows three trade lawyers to sit in a room and second-guess the
best judgment and research of our entire EPA."
After unsuccessfully appealing the WTO ruling (under WTO regulations,
all appeals go before the same three judges that made the original
ruling), the United States has accepted the WTO verdict on gasoline
standards and has until August 20 to comply. It has indicated
that it will nullify current regulations for gasoline contaminants
and replace them with an oil industry-backed proposal that EPA
has on two previous occasions rejected as unenforceable, unreliable
and too expensive.
The U.S. law protecting sea turtles could suffer a similar
fate. The WTO panel's ruling, which is expected later this year,
is likely to set a binding precedent on whether countries are
allowed to implement species protection laws.
"A huge, well-financed push by corporations around the
world-and a silence that becomes complicity on the part of most
of the press-has allowed both the biggest power grab and the biggest
environmental rollback ever," says Wallach. "If the
WTO is ever implemented fully on its own terms, the implications
for the environment and human health, to say nothing of our standard
of living, would be absolutely devastating."
Years Is Enough