Environmental Engineering Reference
In-Depth Information
were distinguishable from renewable resources (such as turtles) by holding that exhaustible
natural resources includes both living and non-living resources. The issue of whether there
is an implied jurisdictional limit to Article XX(g), that is, whether the natural resources
being protected by the contested measure must be within the territory of the defendant
country, remains unresolved. In the US-Shrimp case, the Appellate Body seemed to
suggest that there had to be a 'su
cient nexus' to the defendant country. 9 The term 'relat-
ing to' has been interpreted by the Appellate Body to require an examination of whether
the general structure and design of the measure is reasonably related to the ends sought
and are not disproportionately wide in scope. In addition, the (g) exception further requires
that a measure applying to imports be made e
ective in conjunction with restrictions on
domestic production or consumption. In US-Gasoline , the Appellate Body held that this
clause requires 'even-handedness' in the imposition of restrictions, in the name of conser-
vation, upon the production or consumption of exhaustible natural resources. 10
The applicability of GATT Article XX to process-related measures (PPMs) is contro-
versial. In the US-Shrimp case, the Appellate Body ultimately ruled that a US import ban
on shrimp from Malaysia was WTO-consistent even though it was linked to Malaysia's
conservation practices. 11 On the other hand, the WTO Secretariat continues to declare
that 'trade restrictions cannot be imposed on a product purely because of the way it has
been produced'. 12 The issue of process-related taxes can also raise questions regarding the
exceptions in Article XX as well as the underlying GATT rules on the imposition of taxes
on imported products and border tax adjustments on imported or exported products. If
taxes get used more widely as an instrument to address climate change and to promote
the use of clean energy, some tax disputes may be brought to the WTO. The availability
of Article XX to justify measures against so-called eco-dumping or against MEA viola-
tions has not been litigated.
As for all WTO rules, the WTO dispute settlement system prescribes trade sanctions as
an instrument to induce compliance when trade rules are being violated. Ironically, the
WTO is the only international organization (other than the UN Security Council) to use
trade sanctions in that manner. The implementation system for MEAs relies more on the
soft powers of persuasion and capacity-building. When MEAs use trade controls, the only
trade blocked is the natural resource being regulated by the MEA.
Violations of GATT obligations were found in the US-Gasoline and US-Shrimp cases,
and in both instances the US government corrected the violation without sacri
ff
cing its
environmental policies. The experience in both cases demonstrates the focus of panels on
the means used to achieve an environmental aim, not a second-guessing of the ends
sought to be achieved. Of course, one should note that both of these cases involved an
Appellate Body decision that reversed the lower-level panel on key points. The original
panel decisions, if carried to their logical conclusion, had seemed to undermine the right
of a government to carry out environmental regulation that a
fi
ected trade.
The only pending environmental case is Brazil-Measures A
ff
ff
ecting Imports of
Retreaded Tyres . This is a complaint
led by the European Communities about Brazil's
import ban on retreaded tires. In June 2007, the panel issued a report rejecting Brazil's
invocation of the GATT Article XX(b) exception. As of this writing, that panel report
has not been adopted.
Besides the GATT, several other WTO agreements supervising trade in goods also
include provisions pertaining to the environment. For example, the Agreement on
fi
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