Environmental Engineering Reference
In-Depth Information
While important in the long run, the negotiations on subsidies and procurement are far
from producing results. Meanwhile, a third forum has advanced through several drafts of
a complete text of new GATS 'disciplines' on domestic regulation.
Article VI:4 of GATS authorizes the WTO's Council on Trade in Services to adopt dis-
ciplines that the WTO's sta
cally
for regulations that are not discriminatory (WTO, 2006; Gould, 2008). Article VI implies
that the disciplines could apply to government measures in all sectors. However, the
Wo r king Party on Domestic Regulation (WPDR) reached a consensus on applying any
new disciplines only in sectors where countries have commitments under Market Access
or National Treatment (WTO-WPDR, 2007).
After six years of plodding negotiations, the chairman of the WPDR pushed through
several drafts in an e
ff
describes as a yellow light for the right to regulate, speci
fi
ort to forge a consensus between two opposing camps. The deman-
deurs are led by big-island economies that are the most trade-dependent. Australia, Hong
Kong, New Zealand and others want strong disciplines including 'necessity' tests. The
Appellate Body has interpreted 'necessary' to mean that measures must be least trade-
restrictive, or as applied to service suppliers, least burdensome (WTO-
US - Gambling
Services
, 2005; WTO-
Korea
-
Various Measures on Beef
, 2000).
A necessity test would reverse the constitutional deference that US courts give to eco-
nomic regulations. So long as they are not discriminatory, regulations in the USA need
only be rational, almost the opposite of 'necessary' (Supreme Court, 1985). With encour-
agement from state and local governments, US negotiators have opposed necessity tests
and held to the position that the only disciplines that are necessary at this time are those
that promote transparency (USTR, 2007e).
At the outset, developing countries championed tough disciplines as a way to push back
against developed countries. But within a few years, developing countries were rede
ff
ning
their self-interest to preserve policy space to regulate complex service industries (Tayob,
2006). This puts Brazil, the Philippines, the Africa Group, Venezuela and Cuba on
roughly the same side of the argument with the USA, an awkward alliance for some (Kwa,
2006).
In early 2006, the WPDR chairman started presenting a series of draft disciplines that
included necessity tests. US negotiators responded by restating their opposition to 'oper-
ational necessity tests'. As an alternative to 'ensuring that measures are necessary', US
negotiators stated their willingness to support a more balanced purpose of recognizing
the right to regulate so long as it is not used to avoid trade obligations (USTR, 2007d).
8
In later drafts, the chairman dropped the necessity test. Yet what remains are more than
40 other disciplines that would cover laws that neither discriminate (covered by national
treatment) nor set quantitative limits (covered by market access). Examples include disci-
plines (WTO-WPDR, 2008) that require regulations to be:
fi
pre-established (para. 11);
●
relevant to the supply of services to which they apply (para. 11);
●
based on objective criteria (para. 11); and
●
as simple as possible (para. 18).
●
Pre-establishment test
In the USA, courts presume that legislation has a prospective
e
ff
ect. Yet environmental licenses do not grant rights to operate a service or use resources
