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(Project towards the partial fulfilment of assessment in the subject of Trade Law)

Submitted By: Submitted To:

Shubh Dixit (1245) Bipin Kumar
Section-B Faculty of Law


INTRODUCTION ..................................................................................................................... 3
RISE OF “GREENING THE GATT” ....................................................................................... 4
The Tuna-Dolphin Case ......................................................................................................... 5
Shrimp-Turtle Case ................................................................................................................ 6
WTO AND THE ENVIRONMENT .......................................................................................... 7
Protection of Environment under the WTO ........................................................................... 8
Article XX of the GATT .................................................................................................... 8
Preventing abuse – the role of the Agreement on Sanitary and Phytosanitary Measures
(SPS) .................................................................................................................................. 9
Preventing abuse II – the role of the Agreement on Technical Barriers to Trade (TBT) .. 9
Sound regulation, standards and eco-labeling. ................................................................ 10
Production and Process Methods ..................................................................................... 10
The case for extraterritorial reach .................................................................................... 12
Other environmental provisions....................................................................................... 12
“GATTING THE GREENS”-NOT JUST “GREENING THE GATT” .................................. 12
CONCLUSION ........................................................................................................................ 14


Until recently, trade policymakers and environmental officials worked on separate tracks,
rarely perceiving their paths as intersecting. Now that environmental protection has become a
central issue on the public agenda, trade and environmental policies seem deeply intertwined
and in some cases badly tangled. Environmentalists are calling the General Agreement on
Tariffs and Trade (GATT) out-dated or worse and are demanding a "greening" of the GATT
to reflect environmental concerns. Trade experts have responded with a sharp defence of the
international trade regime and have expressed fear that further progress toward free trade will
be undermined by protectionism in the guise of environmentalism.
Sustainable development and protection and preservation of the environment are fundamental
goals of the WTO. They are enshrined in the Marrakesh Agreement, which established the
WTO, and complement the WTO’s objective to reduce trade barriers and eliminate
discriminatory treatment in international trade relations. While there is no specific agreement
dealing with the environment, under WTO rules members can adopt trade-related measures
aimed at protecting the environment provided a number of conditions to avoid the misuse of
such measures for protectionist ends are fulfilled.
First part of the project identifies the trends in world affairs that have brought the formerly
distinct worlds of trade and environment into contact and, all too frequently, conflict. Second
part reviews the possible effects of trade liberalization on the environment and the impact of
environmentalism on international trade. It identifies four core propositions of
environmentalists that are related to trade:

 Trade may cause environmental harm by promoting economic growth that, without
environmental safeguards, results in the unsustainable consumption of natural
resources and waste production.
 Trade rules and trade liberalization often entail market access agreements that can be
used to override environmental regulations unless appropriate environmental
protections are built into the structure of the trade system.
 Trade restrictions should be available as leverage to promote worldwide
environmental protection, particularly to address global or transboundary
environmental problems and to reinforce international environmental agreements.
 Even if the pollution they cause does not spill over onto other nations, countries with
lax environmental standards have a competitive advantage in the global marketplace
and put pressure on countries with high environmental standards to reduce the rigor of
their environmental requirements.
The first two propositions constitute the “defensive” environmental agenda. In this regard, the
environmentalists’ goal, which many free traders share, is to ensure that trade liberalization
does not harm the environment. Of course, in some circumstances trade liberalization may
actually enhance environmental quality. For example, the elimination of agricultural
subsidies that distort trade also reduces the incentive to use environmentally damaging,
chemical intensive farming practices. Although more attention should be paid to these cases
where trade and environmental interests are coterminous, the trade and environment debate
centers on cases where these two policy goals appear to be in conflict.
The second two propositions represent the environmental "offensive” agenda. Of course, the
term “offensive” in this context does not mean obnoxious or distasteful (although some free

traders do find this agenda to be offensive in this sense). Instead, the term reflects the interest
of the environmental community in using trade as a point of leverage to advance
environmental goals.


“Trade and environment" is a hot topic in political circles. The issue loomed large in the
North American Free Trade Agreement (NAFTA) debate. It also emerged as a concern in
efforts to bring the Uruguay Round of global trade negotiations under the General Agreement
on Tariffs and Trade (GATT) to an end. It has become a central focus of discussions aimed at
setting a course for future multilateral trade talks. And it is the source of numerous bilateral
tensions as the United States squabbles with Norway over whaling, China and Taiwan over
tiger bones and rhinoceros horns, Mexico over tuna fishing and dolphin deaths, Japan over
protection of endangered sea turtles, and Brazil over rain forest preservation. It represents,
furthermore, a key issue in environmental policy debates from climate change to hazardous
waste exports to ozone layer depletion, as well as a central element of efforts to promote
”sustainable development” and to advance the policy agenda approved at the 1992 Earth
Unfortunately, trade and environment policy encompasses not a single issue but a multiplicity
of related (and unrelated) concerns that have been bundled under the "trade and environment”
rubric. The debate over the NAFTA alone raised a number of trade related environmental
concerns, including: fears that expanded trade would result in pollution spillovers into the
United States from increased industrial activity in Mexico; lower US environmental standards
and a loss of US sovereignty as laws and regulations were "harmonized” at compromise or
baseline levels; limitations on the ability of the United States to use trade measures in support
of international environmental agreements; and market place disadvantages for US facilities
competing against plants located in pollution haven- Mexico- resulting in job losses o
downward pressure on US environmental standards. 1
The battle lines between trade and environmental policymakers need not become entrenched.
Both camps defend principles that foster long-term security and prosperity, deter
irresponsible shifting of costs to other nations or generations and face a constant threat of
erosion from special interests. Much of the discussion to date has focused on possible legal
refinements to the GATT to build environmental sensitivity into the international trading
Two events have catapulted the previously arcane trade and environment linkage onto center
stage. (i) the debate over NAFTA and (ii) a GATT dispute settlement panel recommendation
against the US imposition of a trade ban against Mexican tuna imports to support US dolphin
protection efforts.3 Before NAFTA, environmentalists paid little attention to trade issues. But
the US government’s announcement in the fall of 1990 of plans to negotiate a trade
agreement with Mexico rang alarm bells in the environmental community in North America

Daniel C. Esty, “Greening the GATT: Trade, Environment, and the Future”, June 1994 ISBN: 9780881322057
pg 25
Ibid pg 23
Ibid pg 29

and launched trade and environment as a prominent issue.4 US environmentalists in particular
saw potentially serious ecological harm arising from expanded trade with a developing
country. 5
At the same time, some politically shrewd members of the environmental community
perceived an opportunity in NAFTA. Specifically, they saw a chance to use the negotiations
with Canada and Mexico as leverage to advance environmental issues on which it was
otherwise hard to sustain political attention (e.g., pollution problems along the US-Mexico
border). The difficulty of achieving a pro-NAFTA congressional majority and the existence
of a sizable bloc of generally pro—free trade, pro-environment senators and congressmen
who appeared to be NAFTA swing votes ensured the environmental community an ongoing
high profile in the NAFTA debate. Drawing on their experience in the 1980s in building
environmental sensitivities into the World Bank and other multilateral development
institutions, the environmentalists used their time in the NAFTA spotlight to demand not only
a “green” US-Canada-Mexico trade deal but broad changes in international trade
policymaking and the GAIT (“Greens Talk Trade,” National Journal, 13 April 1991). The
environmental provisions of the NAFTA and the existence of a special environmental side
agreement are testament to the environmental community’s success.
The NAFTA debate also exposed the often unnoticed fact that the environmental community
is not monolithic. Indeed, the issue sharply split US environmentalists.’ One fissure separated
those who believe that economic growth is a positive environmental force that generates
resources that can be invested in pollution control and resource conservation from those who
see growth as inextricably linked to increased industrial activity, which creates pollution. A
second divide set “national” groups—those that feel powerful enough to affect federal
government decisions that see their role as shaping policy from the “inside,” and that are
therefore comfortable with the environmental policymaking process NAFTA puts in
motion—against grass-roots

The Tuna-Dolphin Case

This case needs a more elaborate discussion. The origin of what became known as the “tuna-
dolphin” case was the United States’ Marine Mammal Protection Act (MMPA), which
imposed a ban on imports of tuna from countries that did not have a conservation program
designed to protect dolphins in the tuna-fishing process. Dolphins swimming above the tuna
would be caught at the same time and die in the nets along with the tuna.
The MMPA therefore required American tuna fishermen to adjust their fishing practices to
avoid such deaths and banned tuna from countries in which dolphin deaths from tuna fishing
exceeded deaths from U.S. tuna fishing by more than 25 percent. As a result, tuna from
Mexico, Venezuela, Panama, Ecuador, and the tiny Pacific island of Vanuatu were banned in
1990. Mexico and Venezuela challenged the U.S action and won the case.
The dispute resolution panel decided that the United States could not justify the MMPA’s ban
on Mexican tuna imports for several reasons.

 First, the panel said that Article XX’s exceptions must be interpreted narrowly so that
any one country cannot undermine the multilateral trade rules.

Esty, Daniel C. “Making Trade and Environmental Policies Work Together: Lessons from NAFTA.''
Aussenwirtschaft [Swiss Review of International Economic Relations] 1994

 Second, the panel said that the United States had not proved that the tuna ban was
“necessary,” i.e., that it was the least-trade restrictive way to protect dolphins, in
contrast to, for example, negotiating dolphin-protection agreements with other
 Third, the panel said that the percentage link to U.S. dolphin deaths made it difficult
for Mexican authorities to predict in advance the acceptable level of Mexican dolphin
 Finally, the panel said that the United States could not use the Article XX exceptions
to regulate natural resources outside of its borders.
The case thus laid out some of the issues that have continued to frame the debate over the
environment and trade. The panel approached the dispute with a distinct pro-trade bias,
analyzing each of the contested points from the perspective of the effect of the MMPA on
free trade.6 Furthermore, the panel viewed preserving the multilateral free trade system as
more important than any one country’s evaluation of the need to protect the environment.
These results should not be too surprising, however. After all, the GATT panel’s mandate
was to interpret the GATT—a trade treaty.7 The panel evidently could not find any authority
for placing environmental concerns on par with the thrust of the GATT to promote free trade.
In addition, the decision explicitly limited the right of a country to protect environmental
resources extra-territorially. The panel could not find authority within the language of the
agreement to allow one country to affect the environmental resources in another. This should
not be surprising, since the prospect of one country taking actions to interfere with the
resources of another country could be abused and lead to innumerable disputes.8
Shrimp-Turtle Case
With that in mind, the first major test of how the newly created WTO would deal with
environmental issues came in the 1998 shrimp-turtle case. The United States had
implemented a ban on shrimp from countries whose fishing fleets did not have special “turtle
excluder devices,” to prevent endangered sea turtles from being killed in the shrimping
process. India, Malaysia, Thailand, and Pakistan claimed that the law was a disguised
restriction on free trade and challenged the measure in the WTO’s dispute resolution process.
The United States argued, as it had in the tuna-dolphin case, that the exceptions in Article XX
of the GATT allowed for the ban. And, as in the tuna-dolphin case, the United States lost, for
virtually the same reasons. The dispute resolution panel deciding the case said that the shrimp
ban was not justified under the Article XX exceptions because environmental protection
measures could not be used to undermine the overall multilateral trading system.9
The United States appealed the decision, however, under the new appeal procedure that had
been created by the revision of the GATT in the Uruguay Round. The WTO appellate body
again ruled against the United States, but with a significant difference from the rationale of
the initial dispute resolution panel. The appellate body said that the panel had read Article
XX too narrowly within the context of the overall goal of maintaining free trade. Article XX,
the appellate body said, was meant only to prevent abuse of environmental protection laws to
undermine the multilateral trading system.

Chang, Howard F., "Toward a Greener GATT: Environmental Trade Measures and the Shrimp-Turtle Case"
(2000). Faculty Scholarship. Paper 1209.
Perrin, W. F., Wursig, B., & Thewissen, J. (n.d.). The tuna-dolphin issue. Encyclopedia of Marine Mammals,
World Trade Organization. (n.d.). EU versus U.S.: ‘son of dolphin-tuna.
Supra Note 6 pg 1210

Furthermore, the appellate body said, the new language in the preamble of the GATT, quoted
above, established that the WTO members agreed that sustainable economic development
was a goal of the trading system and should be taken into account as “color, texture, and
shading” in interpreting the agreement. The apellate body went on to say that the way the
United States implemented its shrimp ban, however, was discriminatory, and ordered the
United States to end the ban. Still, it emphasized that:

“In reaching these conclusions, we wish to underscore what we have not decided in this
appeal. We have not decided that the protection and preservation of the environment is of no
significance to the WTO. Clearly, it is. We have not decided that sovereign nations that are
members of the WTO cannot adopt effective measures to protect endangered species, such as
sea turtles. Clearly, they can and should. And we have not decided that sovereign states
should not act together bilaterally, plurilaterally or multilaterally, either within the WTO or
in other international for a, to protect endangered species or to otherwise protect the
environment. Clearly, they should and do.”

Despite these reassuring words from the WTO, environmentalists and other members of the
American and international public focused on the result of the case and what it seemed to
mean. That is, an international tribunal had overturned a democratically enacted law for the
protection of an endangered species. Like the tuna-dolphin case, therefore, the shrimp-turtle
case galvanized opposition to globalization that appeared to be running roughshod over the
environment for the benefit of free trade.


The contention of critics of the WTO is that the Organization is inadequate for the purposes
of protecting the environment. This is not so. The WTO gives great latitude to members to
restrict trade to protect the environment. This is rarely conceded. The contention also slides
over another point. The WTO is an agreement for managing trade, not managing the
environment or any other area of public policy. If it is to be given the task of realizing other
international public policy objectives, such as protecting the environment, its capacity to meet
is core function - raising prosperity through trade - will be undermined.
There are two general arguments for “including” environment in the WTO. The first is that
the GATT is out of date;10 when it was drafted, environmentalism was not a public issue. The
second is that the environment is of such importance that WTO rules should allow trade
restrictions to support protection of the environment.11 A more specific argument is that when
the rules of free trade apply to agriculture, exemptions should be made for the
“multifunctional” role in society of agricultural producers, including protection of the
It is true the word “environment” doesn’t appear in the GATT. Sustainable development was
added as one of the general objectives of the World Trade Organization when it was
established in 1994. While “environmentalism” and “ecology” were not common terms in
public policy until the nineteen seventies, governments had been acting for many years to

Centre for International Environmental Law and Greenpeace International, Safe Trade in the 21st
Century – A Greenpeace Briefing Kit, September 1999
International Institute for Sustainable Development, Principles for Trade and Sustainable
Development, Winnipeg, 1994

conserve and protect natural resources. The first international institution for conservation, the
World Conservation Union (IUCN) was established in 1948. The key difference between
1948 and today is that environmentalism enjoys a higher political priority in most countries
and appreciation of its importance is wider in the community.
The contention that the environment is so important that WTO rules should be subordinated
to environmental measures is generally argued with four cases. First, the WTO does not
permit controls on trade according to how products are processedor the environmental effects
of those processes.12 Second, the observance of respect for national sovereignty upon which
the WTO is based prevents extraterritorial application of trade measures to protect the
environment.13 Third, the WTO threatens to invalidate trade provisions in some multilateral
environment agreements.14 Fourth, the WTO does not give adequate expression to the
precautionary principle.15

Protection of Environment under the WTO

There are several provisions in the WTO agreements dealing with environment. There is a
reference to sustainable development as one of the general objectives to be served by the
WTO in the Marrakech Agreement which established the WTO. There are provisions in the
Agreement on Agriculture and the General Agreement on Trade in Services (GATS).
However by far and away the most important provisions as far as environmental issues are
concerned are Article XX of the GATT and the Agreements on Sanitary and Phytosanitary
Measures and the Agreement on Technical Barriers to Trade.
Article XX of the GATT
The core agreement of the WTO system is the General Agreement on Tariffs and Trade
(GATT). The principal purpose of the GATT was to oblige members to use the same rules to
regulate trade and to ensure in particular that there was no discrimination in trade. All
international agreements need exemptions clauses. These are the mechanisms that ensure that
governments retain the capacity to perform essential functions that might be eroded if the
basic rules of the treaty are applied.
The most common exemption in most agreements is to preserve freedom of action to protect
national security. Article XX specifies what activities are exempt from GATT rules. These
exemptions give members very wide latitude to control trade to protect the environment.
Article XX waives members of the obligation to apply fundamental commitments,
particularly non-discrimination, in certain cases. They include protection of national security,
protection of morals, preservation of national cultural heritage. Of particular importance is
the right to waive the rules in order to protect human, animal, plant health and safety.
Article XX.b permits restrictions on trade to protect human, animal and plant life health and
safety. Article XX.d permits restrictions on matters not inconsistent with the objectives of the
GATT. Article XX.g also permits restrictions if they complement national programs for
conservation of resources.
Centre for International Environmental Law and Greenpeace International, Safe Trade in the 21 Century –

A Greenpeace Briefing Kit, September 1999, www.greeenpeace.org

Steven Shrybman, Canadian Alliance on Trade and Environment, c/o Sierra Club of Canada, An
Environment Guide to the WTO, May 1997
WWF International, Sustainable Trade for a Living Planet, Reforming the World Trade Organisation,
September 1999.
Centre for International Environmental Law and Greenpeace International, Safe Trade in the 21 Century –

A Greenpeace Briefing Kit, September 1999,

This is the basis upon which health and quarantine restrictions are applied to trade in
pharmaceuticals, hazardous products, toxic products and products carrying risk of disease, for
example. The capacity of governments to prevent the entry of such products into their
national territory in this way enables governments to maintain the integrity of national
environmental programs in the vast majority of cases. Of necessity, exemptions clauses must
be limited. If they are too wide, they undermine the effect of the principal provisions of the
Treaty. Article XX is limited to a few areas. Members are also bound to utilize the
exemptions only to the extent that it is necessary and are obliged to ensure they are not
disguised restrictions on trade.
The provision relating to conservation of natural resources (Article XX.g) appears not to have
been drafted with living natural resources in mind, however GATT/WTO panels have stated
that it is reasonable that it should be so interpreted. Experience with use of Article XX of the
GATT over many years revealed weaknesses in some provisions, particularly where the
latitude to act was so wide that governments used the provisions to secure economic
protection. Actions were taken to reduce the amount of discretion governments had to restrict
Preventing abuse – the role of the Agreement on Sanitary and Phytosanitary Measures (SPS)
Many countries used the quarantine provisions to secure economic protection rather than to
protect health and safety. The SPS Agreement was negotiated in the Uruguay Round16 to
contain such abuse. It states that if countries base restrictions on trade on recognized
international standards, the restrictions are deemed as complying with the agreement.
Countries could apply other standards, but they were subject to challenge by other WTO
members to demonstrate that they were based on science and supported by a risk assessment
process.17 The development of the SPS Agreement coincided with a global trend to shift
away from dealing with risk on a “no-risk” basisto “risk management”. The latter approach
leads to better use of resources and better enjoyment of benefits.
The requirement that decisions be based on science and a process of risk assessment
introduced transparency into decision-making by creating a visible check on abuse of
executive discretion. This not only protected the rights of members of the WTO, it also gave
assurance to consumers that governments were not abusing their powers.
Preventing abuse II – the role of the Agreement on Technical Barriers to Trade (TBT)
The Agreement on Technical Barriers to Trade (TBT) was negotiated in the Uruguay Round,
replacing the Standards Code. It was designed to reduce the scope for countries to use
technical standards as disguised barriers to trade. It obliges members to ensure that national
treatment and non-discrimination apply when technical standards are adopted as mandatory
Technical standards with restrictive trade effects are permitted for four “legitimate purposes”,
(including standards developed for the protection of the environment, for national security
requirements, for the prevention of deceptive practices and for the protection of human health
and safety and animal and plant health and life), provided the effect is not more restrictive
than necessary to meet one of those objectives, taking into account the risk of non-fulfillment.
In assessing that risk, the agreement stipulates that relevant elements of consideration are,

The Uruguay Round of Trade Negotiations, 1986-1994.
Articles 2.2, 3.3 and 5
Article 2.1

inter alia, available scientific and technical information, related processing technology or
intended end uses of products.19
Members are also required to base their standards on those developed by international bodies
which are presumed to be in compliance with the Agreement.20 In other cases, and where
measures have a significant impact on trade, parties are obliged to notify the measure and
provide opportunities to other WTO members to comment.
Sound regulation, standards and eco-labeling.
Making decisions transparent and setting objective criteria by which they could be challenged
as provided or in the SPS and TBT Agreements is consistent with the doctrine that
regulations should be imposed by governments only to protect health and safety. When
Governments regulate for other reasons, they interfere in the market and exercise influence
which favours some parties in the economy and damages others. There is large body of
standards which aim to improve the quality of goods and services and provide information to
consumers. Most of these are national standards and are set by national standard setting
organizations. A set of international standards is produced by the International Standards
Organization. Well-known quality standards developed by that organization include the ISO
9000 series (to improve quality in organizations) and ISO 14000 (to set quality standards to
improve environmental management.). These are voluntary standards and in most countries
are developed by private organizations.
When Governments adopt these standards and make compliance compulsory, they become
official regulations. If a company requires suppliers to comply with specified standards struck
by national standards organizations or ISO, this does not constitute a trade barrier. It is a
commercial requirement. However when a government stipulates that unless such standards
are complied with imports or exports are not permitted, these are trade restrictions that must
comply with WTO rules, including the provisions of the SPS and TBT Agreements.
Where eco-labelling systems are not mandated by governments, but are applied by
commercial entities for the information of consumers, these are voluntary standards and
WTO provisions do not apply. When an eco-label is mandated under government regulation,
then the regulation needs to comply with the provisions of the WTO. As shown in the
foregoing, the terms of Article XX and of the SPS and TBT agreements make ample
provision for use of eco-labels.
Production and Process Methods
A complaint about the WTO provisions is that trade restrictions on how a product is produced
or processed are not permitted. Challenges under GATT and WTO provisions held that US
restrictions on imports of tuna in cases where fishing methods did not minimize the incidental
kill of dolphin were lost. The general point was that the WTO did not permit one member to
restrict trade with another on the basis that they did not apply policies which the first party
preferred. The environmental case is that if one method of processing (such as a method of
fishing for tuna) causes environmental damage (high levels of incidental kill of dolphin) then
an importer should be able to express preference for the product (tuna) processed in a way
that does not cause environmental damage (caught using fishing methods that reduced the
incidental kill of dolphin).21

Article 2.2
Article 2.4
Centre for International Environmental Law and Greenpeace International, Safe Trade in the 21st

WTO provisions generally do not allow trade to be restricted on those grounds. The TBT
Agreement recognizes “related processing technology” as a relevant consideration for
applying a mandatory technical standard to protect the environment. However this is a limited
application and the extent of its meaning has not been tested. The general case for not making
provision in the WTO for the right to restrict an import according to the environmental effect
of the way in which it was processed or produced is that to do so assumes the WTO should
include provisions to secure public policy objectives other than trade. There is a difference
between allowing exceptions to protect national policies and creating provisions which
enable governments to force other to adopt non-trade objectives.
The purpose of the WTO is to enable countries to gain the benefits of an open trading system.
If it is to be used as an instrument to achieve environmental purposes, the case in principle is
made for it to be used to secure objectives in other areas of international public policy such as
health, labor standards, postal services, human rights and air transport standards. If this were
to happen, the WTO would cease to be effective in meeting its primary purpose, not just
because it would be overloaded with policy objectives which have not intrinsic functional
relationship to trade, but because giving members of the WTO the right to pick and choose
specific areas in which they could insist on certain standards being met before trade was
permitted would undermine the capacity of the WTO to allow members to exploit
comparative advantage.
The case to alter the WTO to permit trade restrictions on environment grounds is loaded
anyway. Those who make that claim are obliged first to explain why more normal means of
achieving international agreement to meet international public policy objectives are not used.
The United Nations Conference on Environment and Development (UNCED) in 1994 laid
down some principles on trade and environment. They stated that the preferred international
approach to protecting the environment was to create multilateral agreements expressly for
that purpose in which members would agree to adopt commonly agreed measures in their
national law or practice. They also stated that use of trade measures to protect the
environment should be avoided. To apply this approach in the case of the tuna/dolphin issue,
rather than have one country threaten a trade sanction unless another complied with its
preferred environmental (fishing) policy (as was the US position) to achieve international
environmental protection, all countries fishing in the region would enter an international
agreement to required their fishing fleets to use the same fishing techniques, as they now do
in a regional fishing agreement.22
The proponents of the sanction approach would argue that were it not for thecoercion, the
regional agreement would not have been adopted. This may be so, but this is to justify the
morally-odious and internationally-censured option of applying coercion because it
disregards the national sovereignty of nations simply on the grounds that the more normal
approach of seeking an international agreement is too slow. In the case of the effect of
dolphin in the Eastern Tropical Pacific region, there was no case for urgency. The species
concerned were not endangered.
In every instance where the case to secure the right to restrict trade on production and process
grounds, the preferred option exists for the nations concerned to come together to negotiate
an international agreement to apply in national law common standards for the product and
process concerned.

Century – A Greenpeace Briefing Kit, September 1999

The Agreement on International Dolphin Conservation Program 1999, Inter-American Tuna Commission.

The case for extraterritorial reach
A related contention by environmentalists is that degradation of the environment in the global
commons requires extraterritorial reach.23 Who will protect the atmosphere, the high sees, the
migratory species? This argument does not go far. Again the regional fishing agreement in
the Eastern Tropical Pacific demonstrates the point. Countries can oblige nationals to follow
national law outside national jurisdiction. Fishing fleets in that region are obliged by national
governments to apply common national fishing policies laid down in the regional agreement.
That global common is protected by that means.
What to do about the countries which do not comply, the fishing fleets in the area which are
from countries not party to the agreement? This is not a new issue in international relations. If
a country feels that it wants to apply some form of encouragement to another to adopt
common policy, there other options. Why not offer incentives? If pressure is chosen, why use
trade sanctions given the welfare benefit of creating a global trading system in which
members are not permitted to discriminate among each other? Why look to other areas of
public policy such as restricting entry of nationals or threatening to cease to collaborate in
another area of common bilateral interest?
Other environmental provisions
In the Agreement on Agriculture, there is scope to permit subsidies which are for
environmental protection. This was part of the Agreement on Agriculture which was
negotiated in the Uruguay Round. Re-negotiation of that agreement has begun. The European
Union has indicated that it wants general provisions to permit trade restrictions on
environment grounds. Others, such as members of the Cairns Group coalition of agricultural
exporters want to minimize the extent to which such measures can create new grounds for
protection of economic interests.
There is a general recognition in the General Agreement on Trade in Services of sustainable
development as an objective of the Agreement.


Much of the discussion to date has focused on possible legal refinements to the GATT to
build environmental sensitivity into the international trading system. But creating a new
parallel international regime designed to defend the environment as a necessary element of a
prosperous global economy and to coordinate policies with the GATT would offer the
prospect of a broader peace between the trade and environmental communities. Like GATT,
it would provide a bulwark against domestic political pressures that undermine long-term
thinking and serve as an honest broker for the economic future, allocating costs, benefits and
responsibilities in transnational disputes. In sum, instead of just greening” the GATT, we
should GATT” the greens.
The lack of an Institutional Environznental Organization to protect environmenttal values the
way the GATT guards free trade principles lies at the heart of the antagonism between trade
and environmental interests. Although never pure in its focus and now encumbered by 50
years of compromises designed to maintain reciprocal benefits among the parties to the
agreement, the GATT establishes parameters for behavior in the international trading system

Steven Shrybman, Canadian Alliance on Trade and Environment, c/o Sierra Club of Canada, An
Environment Guide to the WTO, May 1997

and defends an open (or at least relatively open) global marketplace against encroachments.
GATT perceived singular mission an relative success makes environmentalists both angry
and envious. They see the GATT as insular, rigid and inpenetrable. But they also recognize
the efficacy, which is in part a function of its narrowly tailored mission and ability to shield
itself from political forces advancing other priorities. Thus, while denouncing the GATT,
environmentalists admire its power and would like to remould it to serve “green” purposes.
Concern in the environmental community over the negative effects of free trade began to heat
up in igo with the announcement of plans for a North American Free Trade Agreement,
which eco-skeptics argued would allow Mexico to become a “pollution haven” and would
undermine higher U.S. environmental standards. In 1991 this discontent boiled over when a
GATT dispute settlement panel appeared to elevate trade obligations above environmental
protection efforts by declaring the United States to be in violation of its GATT obligations for
instituting an import ban on Mexican tuna caught using nets that killed large numbers of
dolphins. In the face of the perceived hostility of free trade for ecological interests, some
environmentalists launched an all-out attack on the GATT.
Papering Washington with posters of a dolphin-eating, pollution-spewing GATTZilIa” and
running newspaper advertisements under the headline a Sabotage,” free-trade critics painted
an unflattering portrait of the GATT as a secretive, international conspiracy of faceless
bureaucrats in Geneva carrying out sneak attacks on democracy and American sovereignty In
truth, the GATT is not hostile to the environment but agnostic. In defence of its
environmental posture, the GATT recently issued a report that suggests, among other things,
that trade liberalization contributes to environ mental protection by improving the efficiency
of resource use and raising incomes, making possible increased expenditures on the
environment. GATT officials further argue that using trade threats or sanctions is not a cost-
effective or first best” way to obtain compliance with environmental agreements or promote
environmental policy goals.
They insist that the adoption of proper environmental policies such as the ‘polluter pays”
principle—which requires pollution costs to be internalized in the prices producers and
consumers see- can ensure that trade liberalization also results in environmental gains.
It is here that the debate between the trade and environmental communities breaks down.
Economic growth does not necessarily translate into more resources for environmental
protection. More significantly, first best environmental policies (e.g., taxing pollution) are
frequently politically unachievable. Nevertheless, trade theorists have become consumed with
policy proposals to make trade and environment policies mutually supportive by means of
economically appropriate environmental policies, which would force polluters to pay for the
damage they cause. But their relative disinterest in the real-world political difficulty of
getting such measures adopted casts doubt on the seriousness of their commitment to
incorporating environmental concerns into trade policy making. Their inattention to the
political failure that stymies movement toward economically sound environmental policies
seems particularly ironic, since the GATT was created because governments left to their own
devices find it politically nearly impossible to maintain appropriate trade policies.
Environmentalists, while acknowledging the universal currency of market incentives,
accepting the need to internalize pollution costs and even conceding the value of proper
resource pricing as a way to reconcile trade and environmental interests, have become fixated
on changing the rules and procedures of the GATT. As a result, they have largely failed to
consider the possibility that restructuring environmental policy


In the case of national laws, where reasonably democratic political structures are in place, one
generally makes assumptions concerning the source of authority for any positive law being
However, supranational or multilateral trade law is rather distinctive in this regard. It may
even be distinguished from most public international law, if only because it does not codify
the traditional behavior of nations, and because it has a far greater power than is normal with
treaties to coerce nations in their everyday economic choices. Thus, trade law wields
enormous influence over the lives of citizens who may not even be aware of the existence of
such law. Given its power to alter the very fabric of people's lives, it would seem illogical
that the legal processes of international economic law should remain so invisible, and thus
impervious to being altered by ordinary processes of political input.
Thus far, scholars and international lawyers have dealt with this conceptual problem by
repeating that since the GATT/WTO system is producing wealth and social benefits for
people, it is therefore a self-evident good. Lately, several very strong arguments have been
put forward to challenge this point of view.24 It must be asked, therefore, whether it is
possible for the international legal scholar to content himself or herself with merely
recounting the history of the GATT/WTO, or explicating the provisions of the GATT and
later codes and agreements, without examining the actuality of life on the ground, in both
developing and developed worlds, for those affected by our system of "ever freer trade."
Trade law scholars must begin the indispensable task of evaluating the legal nature of the
GATT/WTO, and setting out the exact basis upon which it carries its authority. For
international legal scholars to assume the rightness of the GATT/WTO system does not
relieve them of the burden of analysis-a type of analysis which is taken for granted when it
comes to other branches of the law.
The Uruguay Round introduces areas of economic life into the "ever-freer trade" system
which were formerly the principal concern of national decision-makers. Whereas until 1995
the GATT system mainly encompassed trade in goods, both manufactured and primary, in
1995, with the adoption of the Uruguay Round agreements, as well as the creation of the
WTO, trade in services, agriculture, and investments will begin to move forward according to
the same instrumentalism that dismantled tariff barriers to trade in goods around the world.
Concurrently, national decision makers will have less control over the outcome of trade
disputes within the GATT/WTO.
The GATT was set up after World War II with a number of national governments ostensibly
agreeing to a principle of international trade through the lowering of tariffs.25 But in actuality,
the GATT members signed onto a process whereby trade was mandated to become freer and
freer, and national economies increasingly interdependent. Under such a system, it appears
that people are precluded from choosing just some trade bound by limits. The many
mainstream commentators currently engaged in the trade and environment debate assume the
ability of the GATT/ WTO to "generate wealth" that might be used to solve environmental
degradation. Similarly, they assume that the gains from unlimited free trade are so great as to
overwhelm any of trade's negative effects. This paper has presented a brief survey of the

Herman E. Daly, The Perils of Free Trade, Sc. AM., Nov. 1993, at 50
Edmund Jan Osmanczyk, The Encyclopedia Of The United Nations And International Relations 317-18 (2d
Ed. 1990)

profoundly serious objections being raised to the ever-freer trade ethos. Such concerns
require an adequate response, and on a sufficiently nuanced issue-by-issue basis. Without
facing up to the question of whether or not unlimited and ever-expanding international trade
is in fact altering the face of the natural and cultural environments forever, it hardly seems
responsible for international lawyers to simply continue to report on technical changes in the
GATT/WTO. It is long overdue to ask if the GATT/WTO, as an institution representing such
an extraordinary concentration of economic power, ought to be allowed to continue to operate
unchallenged as it subjects global natural resources, conditions of labour and employment,
and cultural identities to the harsh winds of "global competition." There is a grave danger to
the environmental movement in accepting a compromise alliance with the GATT/ WTO. The
GATT/WTO will inevitably continue to consider the fostering of increasingly liberalized
trade as its highest priority. It may well be that such an ever-liberalizing process in its turn
cannot be anything but inimical to the interests of the global environment.