User:Kaihsu/EnvD2

D2: Trade and the environment

Principle 4 of the Rio Declaration: ‘... environmental protection shall constitute an integral part of the development process ...’.

In the absence of hierarchy, are lex specialis and lex posterior enough to resolve WTO vs multilateral environmental agreements? See the preamble of the Rotterdam PIC Convention.

Trade measures in international environmental agreements

 * Wildlife protection: permit system e.g. Western Hemisphere Convention, or trade restrictions e.g. CITES arts. III, V, X.
 * Protection of environment against harmful imports: trade restrictions e.g. ban, permit; risk assessment + prior informed consent (2000 Cartagena Biosafety Protocol arts. 10(6), 11(8) precautionary principle).
 * Global commons: e.g. 1987 Montreal Protocol arts. 4, 4A, 4B (trade control against non-parties); 2001 non-compliance mechanisms of 1997 Kyoto Protocol.

Lex posterior: 1969 Vienna Convention on the Law of Treaties art. 30(4): “When the parties to the later treaty do not include all the parties to the earlier one: (a) as between States parties to both treaties the same rule applies as in paragraph 3 [the earlier treaty applies only to the extent that its provisions are compatible with those of the latter treaty]; (b) as between a State party to both treaties and a State party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations.” So trade restrictions after the 1994 GATT prevail, e.g. 2000 Cartagena Biosafety Protocol; but not those before e.g. 1987 Montreal Protocol non-party bans (against GATT art. XI), 1989 Basel Convention.

But health & environment exceptions under GATT art. XX: 1998, 2001 Shrimp/Turtle cases. 1994 Marrakesh Decision on Trade and Environment created Committee on Trade and the Environment.

Unilateral environmental measures, international trade
WTO/GATT 1994 contains GATT 1947, whose preamble recognizes sustainable development and environment; key provisions are arts. III (tax, regulations), XI (quota ban), XX (exceptions). Panels assist the Dispute Settlement Body (DSB): (Dispute Settlement Understanding art. 11).

Early caselaw on art. XX GATT 1947
“Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
 * (a) necessary to protect public morals;
 * (b) necessary to protect human, animal or plant life or health; [...]
 * (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption; [...]”: art. XX (General Exceptions) GATT 1947.

1991, 1994 Tuna/Dolphin cases: Panel rejected as “not necessary” trade restrictions for environmental policy; product labelling permitted, not process; but report unadopted. Panel ruled extraterritorial restrictions can only be enforced on own vessels within the States jurisdiction. But some of this is no longer good law.

WTO/GATT 1994 caselaw
1994 WTO Dispute Settlement Understanding allows interpretation under general international law rather than narrow GATT acquis. WTO also introduced GATS, TRIPs, etc. in 1994.

1996 Gasoline standards case: WTO Appellate Body changed the Tuna/Dolphin rule above: US “baseline” rule falls under art. XX(g) but fails chapeau because it is discriminatory to demand a statutory baseline only for imports.

1998, 2001 Shrimp/Turtle cases: Appellate Body provided for clear guidelines on interpreting arts. XX(b),(g), finding US failing chapeau; introducing sustainable development considerations; largely following Gasoline.

2000 EU – Asbestos case DS135: Appellate Body overruled Panel decision and found the French ban necessary and proportionate under art. XX(b).

21st-century caselaw
2007 Brazil – Retreaded tyres: exemption of import ban in favour of Mercosur failed chapeau.

2012 US – Tuna/Dolphin II (Mexico): Appellate Body (AB) found optional “dolphin-safe” labelling to be a technical regulation that was not more trade-restrictive than necessary, though not international standard under TBT. In 2015, AB ruled that different fishing methods and areas need to be considered to determine whether the effect is from legitimate regulatory distinction. In early 2019, AB/DSB ruled against Mexico.

2012 China – Raw materials: AB upheld that China must update export restraints to be consistent with WTO.

2012 US – Clove cigarettes: AB upheld that menthol cigs are “like products” (no less favourable treatment).

2014 EU – Seal products: measures were necessary to protect public morals: art. XX(a).

Technical barriers to trade
Tokyo Round: Agreement on Technical Barriers to Trade (1979 TBT).

Uruguay Round: Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) on (obligatory) regulations; 1995 TBT on regulations e.g. environmental not covered by SPS, and (non-obligatory) technical standards. Adopting international standards is a rebuttable presumption of consistency with the agreements: art. 2 TBT.

Caselaw on SPS Agreement
1995 Agreement on the Application of Sanitary and Phytosanitary Measures requires risk assessment; art. 5.7 allows temporary application of precautionary principle. See other leading cases: 1998 Australian Salmon, 1999 Japanese Varietals.

1998, 2008 EU – Beef Hormones: risk assessment must reasonably support the measure; not precautionary.

2006 EU – Biotech panel finding against GMO moratorium; not appealed: Biodiversity Convention and protocols not applied; application of precautionary principle restricted.

Investment and the environment
Do environmental measures count as unfair treatment or expropriation under the ≈ 3 000 bilateral investment treaties (BITs), or regional multilateral investment treaties? e.g. 1994 NAFTA, 1994 Energy Charter Treaty. These cases are usually litigated before the World Bank Group’s International Centre for Settlement of Investment Disputes (ICSID) or under United Nations Commission on International Trade Law (UNCITRAL) rules. Depending on the varying applicable provisions, claims and counterclaims about environmental protection can be brought in litigation.

NAFTA art. 1110(1) restricts expropiation but art. 1114(2) directs parties not to relax environmental rules to attract foreign investment.

NAFTA caselaw under its Chapter 11 (investor–state dispute settlement) follows closely WTO Gasoline standards in finding against the state party: arbitration cases Ethyl Corp. v. Canada (ethylcyclopentadienyl manganese tricarbonyl), S. D. Myers Inc. v. Canada (polychlorinated biphenyls), Metalclad v. Mexico (appeal to Supreme Court of British Columbia failed in part). But in Methanex v. USA, the tribunal found California methyl tert-butyl ether restriction to be sound.

In Glamis Gold v. USA, NAFTA Ch. 11 tribunal found California measures protecting Quechan sites permissible; but in Bilcon v. Canada, PCA tribunal found measures based on Nova Scotia community core values breached NAFTA art. 1105.

The Energy Charter Treaty case does not protect the investor against the host country’s laws: ICSID tribunal in Plama v. Bulgaria.