Environmental Engineering Reference
In-Depth Information
Body seems to view the SPS Agreement as embodying a choice between trade and
life/health. Another rule in the SPS Agreement is that regulatory measures (for example,
a maximum residue limit on pesticides) not be more trade restrictive than required to meet
the importing government's appropriate level of protection.
The Agreement on Subsidies and Countervailing Measures (SCM) supervises the use
of domestic and export subsidies by governments, and the imposition of countervailing
duties against subsidies. The SCM Agreement does not contain disciplines exclusively for
environmental subsidies. Nor does it incorporate the polluter-pays principle. As negoti-
ated in the Uruguay Round, the SCM Agreement contained an article (Article 8) making
certain subsidies non-actionable.
Listed among the non-actionable subsidies were
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nancial contributions by governments for adapting existing facilities to new environ-
mental requirement (subject to speci
ed conditions). In so far as these subsidies are used
to address market failure, the SCM Agreement manifested some sensitivity to the fact that
some subsidies may be justi
fi
able for economic reasons even if they distort trade. At the
end of 1999, however, SCM Article 8 expired. With the expiration of this provision, an
environmental subsidy can be 'actionable', which means that if a subsidy is 'speci
fi
fi
c' and
causes 'adverse e
ects' to the interests of other WTO members, then that subsidy would
violate the SCM Agreement.
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The remedy for such a violation would be for the subsi-
dizing government to withdraw the subsidy or remove the adverse e
ff
ects.
The foundational agreement on trade in services, the General Agreement on Trade in
Services (GATS), contains General Exceptions to all rules in the Agreement. The struc-
ture of the GATS General Exceptions, found in GATS Article XIV, is similar to the struc-
ture of GATT Article XX in having a chapeau like the one in Article XX and a list of
speci
ff
c exceptions. The GATS includes an exception for measures necessary for the pro-
tection of life and health, but does not include an exception regarding conservation or the
environment. So far, this omission has not proved signi
fi
cant because no environment-
related service measure has been challenged in WTO dispute settlement. The Preamble to
the GATS recognizes 'the right of [WTO] members to regulate, and to introduce new reg-
ulations, on the supply of services within their territories . . .'
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Nevertheless, that lan-
guage did not impede the
nding of a violation in the
US-Gambling
case, which involves
a US ban on internet gambling without regard to whether the gambling services originate
domestically or in other countries. In that dispute, the Appellate Body held that the chal-
lenged measure came within the scope of the GATS General Exception, but further held
that the US measure did not qualify for an exception because the US government had not
demonstrated that, with respect to horseracing, the regulations on remote gambling were
not less favorable to foreign suppliers than to domestic suppliers.
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If this decision means
that government consistency is a precondition for a right to regulate, then that principle
could work against the integrity of environmental regulations.
The foundational WTO agreement on intellectual property rights, the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), does not contain an
overall environmental exception. Article 8 of TRIPS states that WTO members 'may'
adopt measures necessary to protect public health and nutrition, provided that such mea-
sures are consistent with TRIPS. Thus this provision is merely circular and lacks any
content. The rules in TRIPS that would seem most likely to be in interface with environ-
mental regulation are the requirements in Part II, Section 5 regarding the granting of
patent rights to nationals of other WTO member countries. Section 5 provides that WTO
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