Cases on Issues of Species Protection and Biological Diversity Direct Import Restrictions

The first noteworthy judicially manifest conflict between domestic environmental law and international trade law was the Tuna Dolphin case, or U.S.— Tuna I. It was brought before the GATT Panel in 1991, more than three years before the establishment of the WTO. Mexico had complained about U.S. import bans on yellow fin tuna being harvested with purse seine driftnets by Mexican ships in the Eastern Pacific. The justification for these import bans was rooted in the 1972 U.S. Marine Mammal Protection Act, which ordered such restrictions towards countries which did not prescribe measures similar to U.S. standards for dolphin protection. The GATT Panel—whose report was never adopted due to an amicable settlement among the conflict parties—interpreted the import bans as a violation of Article XI GATT (prohibiting quantitative import or export restrictions), as well as of the national treatment principle under Article III GATT. As for the latter, the panel's decision was based on a very narrow understanding of the term "like products" with mere regard to their physical features. Only the end-uses, but not the process and production methods (PPMs) in the product's life cycle were taken into account. "Whether the production process of a final product entails a GHG [greenhouse gas]-emitting fossil-fuel-intensive method such as the burning of coal, or something as clean as wind or solar energy, is irrelevant to a WTO decision" [26]. Furthermore, the GATT Panel decided that parties could not refer to Article XX(g) to protect the global commons, but only to protect resources under their national jurisdiction [27,28].f

Three years later, in 1994, the European Community (EC) brought the issue back before another GATT Panel, U.S.—Tuna II, by complaining that the very same U.S. import bans kept it from exporting yellow fin tuna that were caught by

* The WTO Website lists nine environment-related disputes under GATT and the WTO Dispute Settlement Understanding. (cf. [17 April 2006]). In the following, four of these cases will be given particular attention, plus one case (EC—Hormones) which is not listed on the website. t This very restrictive and classically trade-promoting ruling against national environmental standards seems to bolster the arguments of green GATT and WTO critics. This assessment notwithstanding, the panel's decision featured two more characteristics with slightly opposite implications for environmental concerns. First, the panel did not forbid the voluntary labeling of tuna as dolphin proof; and second, the Panel remarked that the U.S.A. had not "exhausted all options reasonably available ... in particular through the negotiation of international cooperative agreements." This ruling implies an aspect which was further elaborated in the Shrimp Turtle case, namely "that internationally adopted standards such as those pursuant to MEAs could be grounds for justifying an exception" (Chambers 2001: 94).

Mexican vessels, but processed in EC countries. Though the Panel followed its predecessor in rejecting the import restrictions as violations of Article IX GATT, there was a slight, but essential difference from the first decision: this time, the justification of import bans because of extraterritorial PPMs was not considered to be fundamentally at odds with WTO law, due to Article XX(g) GATT. In other words: the stretching of environmental standards towards the country of origin was no longer ruled out.*

Such minor concessions notwithstanding, a profound redefinition of the dispute settlement system's stance on environmental protection matters was slow in coming. In fact, it only took place on the occasion of the 1998 Shrimp Turtle decision, well after the WTO Dispute Settlement Understanding (DSU) had entered into force.* Again, the U.S. environmental law was the object of contention—this time challenged by India, Malaysia, Pakistan and Thailand. Washington had justified import bans on shrimp from these countries, since their fishing fleets did not use turtle excluder devices, as demanded by Section 609 of U.S. Public Law. At first glimpse, both Panel and Appellate Body (AB) appeared to continue the tradition of the aforementioned Tuna Dolphin rulings: they considered the import restrictions as a breach of WTO law. Yet, when taking a closer look at the AB report, it significantly upgraded the legal status of both domestic and multilateral environmental standards. For the first time, it comprehensively acknowledged the legitimacy of specific PPM demands voiced by an importing country in order to protect animal species outside its own territory [29]. Specifically, the AB ruled that such extraterritorial PPM requirements must not be decided unilaterally, but should be rooted in specific agreements adopted by the corresponding countries. Such an agreement could, inter alia, be an existing MEA, if applicable. As a reference for the U.S.— Shrimp case, the AB explicitly mentioned the Convention on Biological Diversity (CBD) and the Interamerican Convention for the Protection and Conservation of Sea Turtles. Alternatively to such

* However, the Panel's further interpretation of Article XX(g) turned out far more restrictive than in future cases of WTO dispute settlement, especially when denying the significance of MEAs as acceptable points of references for the conflict parties. More precisely, the Panel concluded that MEAs could not be accepted as a specification of WTO law (lex specialis) in the sense of Article 31(3) of the Vienna Convention on the Law of Treaties. This article states that "[t]here shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation." A more integrative decision by the GATT Panel was nevertheless possible at the time (and would not have needed to take until the Shrimp Turtle decision): the GATT could have embraced the potential meaning of MEAs as "any relevant rules of international law applicable in the relations between the parties" under Article 31(3c) (Neumann 2002: 168).

t Nonetheless, the Shrimp Turtle decision was not the first environment-related report of the WTO Appellate Body: in U.S.—Reformulated Gasoline (U.S. vs. Venezuela and Brazil) of 1996, both the Panel and the AB had interpreted the diversity of verification methods for the composition of imported gasoline (under the U.S. Clean Air Act) as discriminatory, hence violating Article III GATT.

MEAs, the report conceded that import criteria could be developed on an ad hoc-basis in the course of negotiations with the potentially affected exporting countries—possibly flanked by financial support for the changeover of production methods in developing countries.* Unilateral action is hence only permitted if the potentially affected countries refuse to negotiate any such conditions at all.

To sum up the meaning of U.S.—Shrimp for the future practice of environmentally relevant WTO dispute settlement: it could be the starting point for a more extensive inclusion and consideration of non-WTO law. Apart from the enhanced relevance of MEA rules, this observation also concerns the general principle of common, but different, responsibility under Principle 7 of the Rio Declaration. This principle had already found its way into the preamble of the WTO Agreement; now, in its report, the AB picked it up as a point of reference, when requesting financial support for the adaptation of PPMs in exporting developing countries. When taking this request at face value, future tests of import restrictions by an industrialized country could involve examinations of financial fairness among the conflict parties—which again raises the question of the WTO's competency to fulfill such a task [25].

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