Trade, Environment and the WTO UNECA Workshop on Trade and Environment Dakar, Senegal June 2006 Benjamin Simmons Economics and Trade Branch Division of Technology, Industry and Economics

Relevant GATT Rules Article I – Most-Favoured Nation (MFN) Clause Article III – National Treatment Clause Article III – National Treatment Clause Article XI – Elimination of Quantitative Restrictions Article XI – Elimination of Quantitative Restrictions Article XX – General Exceptions Article XX – General Exceptions

Article I: Most Favoured Nation WTO Members must treat equally “like products” originating in or destined for the territory of all other Members

Article III: National Treatment WTO Members must not discriminate between imported and domestic “like products”

Article XI: Quantitative Restrictions No prohibitions or restrictions (other than duties, taxes or other charges such as quotas, import or export licences) allowed on the import or export of any product

Risk of Conflict? Is there a risk of conflict between the WTO and MEAs?

Example: Montreal Protocol Example: Montreal Protocol Article 4 bans imports of controlled substances from non-Parties to the Protocol (who may be Members of the WTO) Is this a violation of GATT Articles I, III or XI? Is this a violation of GATT Articles I, III or XI? Risk of Conflict?

Article XX: Exceptions (CHAPEAU) (CHAPEAU) 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:

Article XX: Exceptions (sub-paragraphs) (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;

Environmental Disputes under GATT US-Canada TunaUS-Canada Tuna Canada-Salmon and HerringCanada-Salmon and Herring Thailand-CigarettesThailand-Cigarettes US-Tuna (Mexico)US-Tuna (Mexico) US-Tuna (EEC)US-Tuna (EEC) US-AutomobilesUS-Automobiles

US-GasolineUS-Gasoline US-Shrimp/TurtleUS-Shrimp/Turtle EC-AsbestosEC-Asbestos Environmental Disputes under WTO

US Shrimp/Turtle Dispute

BASIC FACTS: Section 609 of U.S. Endangered Species Act (Protection of sea turtles)Section 609 of U.S. Endangered Species Act (Protection of sea turtles) Section 609 prohibited the import of shrimp caught using technology that threatens sea turtle populationsSection 609 prohibited the import of shrimp caught using technology that threatens sea turtle populations In practice, exports largely conditioned by the use of TEDs in harvesting nationIn practice, exports largely conditioned by the use of TEDs in harvesting nation

US Shrimp/Turtle Dispute Article XI: Prohibition on quantitative restrictions Article XI: Prohibition on quantitative restrictions Article XX (g): Exception based on exhaustible natural resources Article XX (g): Exception based on exhaustible natural resources

Shrimp (1 st AP Decision) WTO Appellate Body Decision: Violation of Article XIViolation of Article XI Application of Article XX(g)?Application of Article XX(g)? Endangered sea turtles = exhaustible natural resources Endangered sea turtles = exhaustible natural resources Measure “relates” to their conservation Measure “relates” to their conservation However, AB found that there was a failure to engage in negotiations on this issue prior to unilaterally enforcing import prohibition against shrimp exports However, AB found that there was a failure to engage in negotiations on this issue prior to unilaterally enforcing import prohibition against shrimp exports

Shrimp (2nd AB Decision) US revised its Guidelines on the Implementation of Section 609 to respond to the AB decision However, Malaysia challenged its implementation of the ruling Second Test of the Chapeau!

Shrimp (2nd AP Decision) Interpretation of the Chapeau Interpretation of the Chapeau AB noted that US had an obligation to negotiate, as opposed to an obligation to conclude an international agreement AB noted that US had an obligation to negotiate, as opposed to an obligation to conclude an international agreement In this case, the AB found that the US had made good faith efforts to negotiate In this case, the AB found that the US had made good faith efforts to negotiate “Conditioning market access on the adoption of a programme comparable in effectiveness, allows for sufficient flexibility in the application of the measure so as to avoid “arbitrary or unjustifiable discrimination.”” “Conditioning market access on the adoption of a programme comparable in effectiveness, allows for sufficient flexibility in the application of the measure so as to avoid “arbitrary or unjustifiable discrimination.””

WTO Committee on Trade and Environment Since 1995, work has been conducted in the CTE pursuant to a comprehensive work programme. Since 1995, work has been conducted in the CTE pursuant to a comprehensive work programme. Ministers agreed at Doha to start negotiations on certain aspects of the trade and environment relationship. Ministers agreed at Doha to start negotiations on certain aspects of the trade and environment relationship. These negotiations are conducted in a Special Session on the CTE (CTESS) These negotiations are conducted in a Special Session on the CTE (CTESS)

Doha Mandate on Trade and Environment Paragraph 31 (i, ii and iii)Paragraph 31 (i, ii and iii) Paragraph 32 (i, ii and iii)Paragraph 32 (i, ii and iii) Paragraph 33Paragraph 33 Paragraph 51Paragraph 51

Doha Paragraph 31 (i) With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on: With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on: (i) Relationship between existing WTO rules and specific trade obligations set out in MEAs

Doha Paragraph 31 (ii) and (iii) (ii) Procedures for regular information exchange between MEA Secretariats and the relevant WTO committees, and the criteria for the granting of observer status (ii) Procedures for regular information exchange between MEA Secretariats and the relevant WTO committees, and the criteria for the granting of observer status (iii) The reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services (iii) The reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services

Doha Paragraph 32 (i) The effect of environmental measures on market access, especially in relation to developing countries, in particular the LDCs (i) The effect of environmental measures on market access, especially in relation to developing countries, in particular the LDCs (ii) Relevant provisions of the TRIPS Agreement (ii) Relevant provisions of the TRIPS Agreement (iii) Labelling requirements for environmental purposes (iii) Labelling requirements for environmental purposes

Doha Paragraph 33 Technical assistance and capacity building in the field of trade and environment to developing countries Technical assistance and capacity building in the field of trade and environment to developing countries Environmental reviews at the national level: Experience sharing Environmental reviews at the national level: Experience sharing

Doha Paragraph 51 CTD and the CTE shall, within their respective mandates, each act as a forum to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected CTD and the CTE shall, within their respective mandates, each act as a forum to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected

Doha Paragraph 31(i): MEA/WTO relationship vs National Experience WTO rules sufficiently flexible to accommodate MEA measures Sharing of national experience in the negotiation and implementation of MEAs US/Australia/NZ/ US/Australia/NZ/ Developing Countries Developing Countries International Principles Existing rules need to be further clarified/supplement- ed or amended Presumption of Presumption of conformity with WTO conformity with WTO rules rules EC/Switzerland EC/Switzerland TWO APPROACHES

Doha Paragraph 31(ii): information exchange Current Activities UNEP/MEA participation in CTE and CTESS meetings UNEP/MEA participation in WTO regional training workshops Partnership in UNEP/MEA/WTO papers (Dispute Settlement; Matrix of Trade Measures, etc) WTO participation in MEA COP Meetings (side- events)

Doha Paragraph 31(iii): EGS liberalization Main Approaches List-Based Approach (Developed countries) Project-Based Approach (India) Combination Approach MEA Approach ??

THANK YOU! UNEP Economics and Trade Branch