Development of Trade and Environmental Conservation - Essay Example

3000 Words Аssignmеnt Question Trade and Environment Law (Law 852) Essay Submitted By: NAME: INSTITUTION: COURSE: INSTRUCTOR: DATE: © 2015 INTRODUCTION Over time, there has been differing views concerning the manner in which the General Exceptions contained in paragraph (g) of Article XX of the Governmental Agreement on Trade and Tariffs (GATT) should be interpreted in regards to the interaction between trade liberalization and environmental sustainability. Despite concerted efforts aimed at resolving this problem through harmonizing ‘trade goals’ and those pertaining to the conservation of natural resources, the matter is still pending. Additionally, it is reported that the committee working on the GATT’s side and that of the Appellate body in trying to understand Article XX is inadequate in elucidating this matter. This inadequacy is attributed to the fact the two sides constantly differ from time to time. The main objective of the present essay remains that of examining the implications of trade in natural resources for environmental sustainability with reference to GATT Article XX (g). The essay will also evaluate the current opportunities and challenges in making two opposing regimes of trade and environment mutually supportive. Implications of trade in natural resources as per GATT Article XX (g) Presently, studies indicate that the effects of trade on the environmental sustainability have become more apparent than ever. This has led to the relationship between global business transactions and the world environment becoming a ‘hot spot’ as espoused by1. Since the formation of GATT in early 1948 and up to until 1995, it is notable that the said interaction between world business transactions and the protection of the environment has never been of much concern. In fact, the World Trade Organization (WTO) together with the Appellate body currently considers trade liberalization as their primary concern as opposed to environmental conservation. This argument is found evident as one considers critically the explanations offered about Article XX of GATT by WTO and the Appellate body. Development of Trade and Environmental Conservation There exist constant differing views within the WTO’s manner of trading regarding the environment and economic issues. Even though the world at large places a lot of emphasis on the conservation and protection of the environment, WTO on the other hand was not formed for the purpose of promoting and attaining the said environmental conservation objectives. According to2, the main purpose of WTO resides in the fact that the body should first of all recognize financial goals via ‘liberalized business transactions’ which aim at allowing free flow of goods internationally and among trading countries without trade discrimination. In view of this, the idea of environmental protection and conservation by WTO is remotely found in certain sections of Article XX of the GATT. Hence; there exist a recognized relationship between global economic law and global environmental law3. During the Stockholm conference on the human environment (1972), it emerged that GATT has been very instrumental in impacting on the conservation measures of the environment in a number of ways. The resident implications are particularly in relation to global business transactions as articulated by reports of accessed extant literature. The results of one such study report that conservation policies concerning the global environment are particularly avoided because they are feared to be ‘big bottlenecks’ to global trade4. For this reason, industry observers argue that a number of the environmental conservation measures can act as ‘tools’ of safeguarding business transactions. Another convention acclaimed to be fundamental in the development of global trade and the conservation of the environment is the “Tokyo round” of global trade cooperation of (1973-1979). At this convention, the main item of discussion was “the Agreement on Technical Barriers to Trade” (TBT). In view of the agreement that emerged from the meeting, all affiliate members persuaded to avoid applying technical rules and standards for protectionist reasons5. Later during the Rio “Earth Summit” of 1992 as noted by6, the concern of global business transactions in relation to poverty alleviation as well as the protection of the environment was overstressed. Moreover, the matter concerning the enhancement of recurrent growth through global business transacting came to the fore. Based on the said discussions, the evolving idea regarding the recurrent growth of the world economy became ‘the link connecting environmental conservation with economic advancement. It was in the views of the WTO’s brainchild, the Uruguay round that that economic endeavors should be carried in a perspective of protecting natural wealth so as to satisfy the inherent objectives of achieving recurrent growth through the conservation of the environment. Although sustainable development was acknowledged as part and parcel of WTO transactions, the inherent policies intended to aid to create recurrent growth and environmental conservation remained a pipedream. GATT Article XX clearly shows that environmental conservation within the WTO trading system is of less concern, clearly confirming that the organization was primarily formed to liberalize business transactions, while paying little if any attention to environmental protection7. Examination of general exceptions of article XX paragraphs b and g Article XX paragraphs b and g observe that as long as the applied trade limitation measures do not constitute a way of trade discrimination or trade protectionism, the GATT agreement allows the member states to impose such measures that are: a) geared toward protection of human, animal and plant health and life as per paragraph b of the article, b) relating to the preservation of non- renewable natural resources as long as such measures are applied in conjunction with domestic laws on the subject under consideration. For the imposed trade limitation measure to be valid, it has to be seen to be covered by the article. If the imposed trade restriction measure is found to be in the article, the next stage is to determine whether it satisfies all specifications of paragraph g of the article, implying that the measure should be relating to preservation of exhaustible natural resources8. How to prove that a measure is valid In order to ascertain whether imposed trade restriction measure is legitimate, it is worth to pay attention to previous reports approved by both WTO and GATT appeal tribunals when examining a specific measure for guidance. In reality, such panel reports lack the binding effect except where they are relevant to dispute under consideration. For example in the ruling of the dispute that concerned taxes on alcoholic beverages by Japan, the Appellate body held that9: “Adopted panel reports are an important part of the GATT acquis. They are often considered by subsequent panels. They create legitimate expectations among WTO Members, and, therefore, should be taken into account where they are relevant to any dispute. However, they are not binding, except with respect to resolving the particular dispute between the parties to that dispute”. When determining particular disputes arising from trade limitation measure, WTO/GATT tribunals requires the disputing parties to proof that the measures imposed are in violation of the GATT Article XX. Consider that X and Y are parties to a dispute and X offers enough evidence supporting an opinion that what is being argued is true, then it is the duty of Y to challenge X’s claims. Y has to provide enough evidence that X violated the provisions of the article. Here, the disputing party is asked to institute a suit to clearly show that the trade limitation measures taken by defendant are in breach of WTO agreements10. If there is clear proof that the trade measures imposed are in violation of article’s provisions, the party imposing the measures has the duty to show that the measure he or she is taking is in line with the general exceptions as provided for by GATT Article XX. Therefore, invocation of the exceptions regarding GATT/WTO provisions summons the imposing party to proof whether the violation of the article is covered by general exceptions of article XX (g) of GATT. The imposed trade measure must satisfy the following: a) it should fall under one exception; b) it must be in accordance with chapeau of the article. Examination of GATT Article XX (g) regarding the Conservation of Exhaustible Natural Resources The understanding of GATT article XX (g) can be derived from evaluating the definition of “Exhaustible Natural Resources” from the WTO/GATT tribunal reports on previously determined disputes. The decision by the GATT tribunal concerning trade restriction measures imposed by US government on restrictions of specific Shrimp and their products is a case to that effect. The panel that determined the suit provided an acceptable meaning of “Exhaustible Natural Resources”. In that case, the panel adopted a dynamic meaning of the word “Exhaustible” instead of a static meaning of the same11. Based on the foregoing definition, the tribunal hearing the case objected the appellants’ primary claim that all living organisms that are capable of reproducing are viewed as “non-exhaustible” resources. The tribunal concluded that although living organisms have the ability to reproduce hence renewable, some of them are prone to ‘extinction, collapse and depletion as a result of harmful human activities. The panel observed that the human activities associated with shrimps and their products may at the long run lead to extinction of sea turtles12. So as to satisfy the needs covered in GATT article XX paragraph g, applied trade restrictions ought to “relate to the conservation of exhaustible natural resources”13. In order to understand whether the imposed trade restriction measure connect with preservation of non-renewable resources, the interpretation of the article with regard to the imposed measure must show evidence that there is a linkage between the measure imposed and the preservation of non-renewable natural resources When concluding the dispute concerning measures taken by the US government on the shrimps and their products – the tribunal considered how the measure was structured and what it was intended to accomplish in the end with respect to policy goal – the protection of sea turtles in this particular case.14. From the above, it can be observed that any trade restriction measure imposed with aim of preserving non-renewable natural resources, it ought to have considerable linkage constructed between the imposed measure and the conservation of non- renewable natural resources as highlighted by15. The imposing country has to clearly show that the adopted measure is convincingly associated to the anticipated ends of preservation of environment as provided for in the GATT provisions. Additionally, the imposing state has to prove that trade restriction measures taken are in conjunction with rules governing the production and utilization of the products at the domestic level.16. In yet another suit concerning measures imposed by the Canada authorities on the importation of raw herring and salmon, the tribunal asserted that the reason why general exceptions in GATT Article XX are applicable is to ensure that there is no interference with trade restriction measures which are undertaken by member states with the aim of preserving non-renewable natural resources. It was further noted that the trade restriction measure imposed ought not to be solely aimed at protecting the utilization of the said resources; however, the trade restriction measure should be principally geared toward preservation of these resources in order to satisfy that it is “relating” to the preservation of the same resources in accordance to GATT Article XX paragraph g. There are claims that GATT Article XX lacks a clear limit as to where it can be applied. Therefore it is essential to understand whether there are jurisdictional confines that can bar countries allied to GATT from imposing trade restriction measures in accordance with the GATT article XX outside their territories. There are various disagreements within the World Trade Organization trading system which may arise from such claims namely: “inward-oriented conflict that entails trade related measures directed toward protection of domestic health and safety or resource protection measures”, and “extra-territorial interest which occurs when the aims of health and safety protection measures are outside the territorial limits regulator state”17. A case to this point is the one that involved trade measures imposed to restrict importation of Tuna in the United States in 1991. The Tuna-Dolphin suit was the first to shed some light on the legality of trade restriction measures geared toward the preservation of non-renewable natural resources outside territorial jurisdiction of a country. In determining the cases, the WTO panel maintained that the key issue is to scrutinize whether the restricting party when seeking to preserve natural environment can impose trade restriction measures that will force another country change its laws regarding concerned products and their use. The WTO panel report on Tuna-Dolphin case of 1991 in the United States stressed that a country principally has no permission to impose trade restriction measures on products from another based on the idea that the supplying country adopts environmental preservation laws which are not similar to its laws on conservation and protection of the environment. From the case, it can be noted that in accordance to WTO trade regulations, it is not legitimate for a country to put in place trade limitation measures on the imports from another country based on their differences in environment protection laws. Pertaining imposition of trade measures outside a country’s territory, it is observed that under the GATT article, a country is only permitted to impose trade limitations that are in violation of the article provisions within its territorial jurisdiction. Critical evaluation of how these disputes were settled informs that extra-territorial trade limitation measures geared toward protecting and preserving environment may only be applied against country’s citizens and vessels and not the citizens or vessels of another member country. Hence, environmental protection provisions provided in the GATT article have extra-territorial effect, although they lack extra-territorial jurisdiction18. Contrastingly, the decision reached on trade restriction measures on specific Shrimps and their related products gave the GATT article an extra-territorial scope. This was due to the fact that GATT/ WTO tribunal did not approach the case with reference to previous reports adopted by panels. Additionally, the panel did not examine whether the issue amounted to indirect jurisdictional restriction or not as provided for by the article. But instead, the panel based its conclusion on the fact that water animals keep on migrating and hence the key reason to impose trade restrictions. This was actually in violation the WTO provisions but was warranted by the provisions in GATT article XX paragraph g. But according to the article’s chapeau, these trade limitations were seen to be untenable because they amounted to subjective trade discrimination and hence they could not be saved under the GATT article. According to GATT provisions, member states are not allowed to put into play domestic trade restrictions legislations which could have an effect above its limits of jurisdiction, unless they satisfy the following two provisions namely: the member state to fully negotiate with all member states impacted by such domestic environmental legislations, and the imposing state’s objectives of such domestic environmental laws have to be legitimate. CONCLUSION It can be concluded that currently the primary goal of the WTO/GATT is liberalization of trade via eradication of trade obstacles while providing little if any support to protection and conservation of the environment. Moreover, WTO emphasized on interpreting article XX of GATT correctly by examining it with respect to objectives and purposes of the agreements between GATT and WTO19 following the dispute arising from dealing with Shrimps and their products. This observation further leads to the chapeau of article allowing signatories to adhere to GATT obligations provided they do not interfere with WTO regulations on trade20. Additionally, GATT Article XX general exception paragraph g is aimed at providing harmony between environmental protection interests with trade advancement interests. Disputes arising from the imposition of measures as a way of protecting the environment but are seen by the disputing parties as trade barriers are resolved by WTO/GATT tribunals. Lastly, the essay has established that trade benefits are given more preference over environmental conservation. In consideration of the existing laws and regulations governing the conduct of trade and the environment, this essay recommends that: there is a need for the revision of GATT/WTO trading system policy framework so that it permits equal emphasis on both trade liberalization and conservation of the environment; and instituting further research into ways of reforming the current policies on trade and environmental conservation. BIBLIOGRAPHY ALsheyab, Mohamad and Saeed, Abdallah, Environmental protection (Laws, regulations and rules); International trade (Environmental aspects); International trade (Laws, regulations and rules), Journal of International Academy of Business and Economics, Volume12; Issue 3 (2012) Dixon, M, McCorquodale, R, and Williams, S, Cases and Materials on International Law, 4th ed. (Oxford University Press, 2011), 290. 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