The World Trade Organization and the Environment Saira Bajwa* INTRODUCTION Economic development and environmental protection have been at the forefront of international politics since the 1990s. Economic development through international trade and globalization has been garnering attention and criticism since the inception of the World Trade Organization (WTO) in 1995, and international environmental law has become a hot topic with the emergence of Multilateral Environmental Agreements (MEAs) emphasizing sustainable development. The tense relationship between international free trade and environmental protection has been a widely debated topic in the past two decades. The General Agreement on Tariffs and Trade (GATT) and WTO have dealt with unilateral environmental rules in well- known cases such as the Tuna-Dolphin I and II and Shrimp-Turtle disputes. The WTO has never dealt with an MEA trade dispute, but it is inevitable that an MEA, specifically one with “trade- related environmental mechanisms” (TREMs), will conflict with international free trade rules. This paper addresses the eventual intersection of the WTO‟s trade rules with MEAs and the available options for policymakers to resolve any dispute that may arise from this conflict. There is currently no mechanism in place to deal with such a conflict; this may be because the WTO has not faced any WTO-based challenges against the implementation of an MEA. Some of the MEAs, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the Basel Convention, and the Montreal Protocol, contain TREMs necessary to address harm to the environment. It is questioned whether these MEAs have meaningful dispute resolution provisions to deal with conflicts resulting from the WTO rules. The paper will also address the intersection of ideologies between trade and environmental norms and policy; examine how emerging MEAs and their TREMs handle trade issues with the ultimate goal of sustainable development, and the pros and cons of using MEAs to deal with conflicts with the WTO; and show how the GATT and WTO have dealt with environment and used Article XX general exceptions to deal with the environment-trade issues in the context of unilateral national environmental actions. This section of the paper will also look at the WTO‟s Committee on Trade and Environment and the Doha Round and outline various options for reconciling future international trade-environment disputes to achieve the ultimate goal of sustainable development. I. IDEOLOGICAL DIFFERENCES BETWEEN INTERNATIONAL TRADE AND ENVIRONMENTAL PROTECTION POLICYMAKERS AND INSTITUTIONS The trade-environment relationship has been a tumultuous one in the past two decades. Many of the goals and policies of both sides of the trade-environment paradigm are incongruous, inconsistent, and difficult to reconcile. These ideological differences need to be reconciled in order to achieve the goal of sustainable development.1 Environmentalists think that the environment is being sacrificed in favor of the global market; they fear that free trade will be treated as the primary goal of policymakers, and that the pursuit of this goal will lead to a race to the bottom with worsening global environmental standards.2 Free trade policymakers think that constantly expanding economies are needed to meet human needs.3 They also think that some * LLM candidate International Development Law and Human Rights, University of Warwick, 2009; JD, Gonzaga University School of Law, 2008; BA in Economics, Simon Fraser University, 2004. 1 As per the goals of MEAs since the Rio Conference in 1992. 2 See, e.g., DANIEL C. ESTY, GREENING THE GATT: TRADE, ENVIRONMENT AND THE FUTURE (Institute for International Economics 1994). 3 JOHN J. AUDLEY, GREEN POLITICS AND GLOBAL TRADE: NAFTA AND THE FUTURE OF ENVIRONMENTAL POLITICS, at xi (Georgetown Univ. Press 1997). environmental policies with TREMS are created to hinder trade.4 The WTO Secretariat has also suggested that a non-discriminatory trading system is an important first step for protecting the environment and generating sustainable development.5 It argues that demand for a better environment is income-elastic, in that as income increases, the demand for environmental protection increases as well.6 The paths upon which trade and environment policymakers predict that sustainable development will be achieved are very different. The free trade policymakers believe that trade liberalization creates sustainable development in the long run as demand for environmental protection increases with income; environmentalists think that trade liberalization leads to resource depletion and more resistance to sustainable development.7 It seems that the current focus of liberalized trade is to increase economic growth without many national or multilateral mechanisms to ensure that the growth leads to sustainable development.”8 Another contentious issue prevalent in international environmental law is the developing nations‟ fears that environmentalists will slow their industrial progress. They feel that the environmentalists, who usually reside in industrialized nations, “will generate environmental policies that will act as a barrier to trade, just as their countries begin to emerge into industrialization to provide the wealth necessary to overcome poverty.”9 The developing nations generally believe that they have the right to industrialize, since the developed nations who are 4 EN SUP LEE, LEGITIMATION OF TRADE RELATED ENVIRONMENTAL MEASURES UNDER THE WTO 5 (Berkeley Electronic Press 2006), available at http://law.bepress.com/cgi/viewcontent.cgi?article=8474&context=expresso (last visited Jan. 6, 2009). 5 DAVID HUNTER ET AL., INTERNATIONAL ENVIRONMENTAL LAW AND POLICY 1237 (3rd ed. 2007). 6 Id. 7 MOHAN MUNASINGHE, ENVIRONMENTAL ECONOMICS AND SUSTAINABLE DEVELOPMENT 4 (World Bank 2003), available at http://books.google.com/books?hl=en&lr=&id=lOl9HCNJnkwC&oi=fnd&pg=PA1&dq=%22Munasinghe%22+%22 Environmental+Economics+and+Sustainable+Development%22+&ots=I5nJNnexlb&sig=fRQHtroyNjiPPu1- oa4xI85d60E#PPA4,M1 (last visited Jan. 6, 2009). 8 Hunter, supra note 5, at 1240. 9 Charles E. Di Leva, An Address at the International Law Students Association Conference at Pace Law School, 18 PACE INT‟L L. REV. 227, 227-28 (2006). now pushing environmental policies were allowed to develop by polluting on their way to wealth.10 II. MULTILATERAL ENVIRONMENTAL AGREEMENTS: DEALING WITH SUSTAINABLE DEVELOPMENT, TRADE, AND DISPUTES A. MEAs and the Goal of Sustainable Development The 1987 Brundtland‟s Commission Report popularized the term “sustainable development” and placed it in the center of international policymaking.11 It addressed how the “goals of economic and social development must be defined in terms of sustainability in all countries - developed or developing.”12 Some proponents argue that although sustainable development has never drawn the same level of attraction as the growth model and principles of free trade, it does serve as an alternative paradigm for organizing social and political institutions that is harmonious with the limits to human activity imposed by nature.13 Sustainable development is notoriously an uncertain term that is as much about economic development as it is about environmental protection.14 The concepts of free trade and environmental protection must be integrated in order to achieve sustainable development, but they also must remain distinct.15 For instance, “not all environmental questions necessarily involve sustainable development, or vice versa.”16 The concept of sustainable development was intended to be implemented in various programs and declarations; one of the roles of international law is to give 10 Id. 11 World Commission on Environment and Development, Our Common Future 54 (Oxford Univ. Press 1987) [hereinafter Brundtland Commission]. 12 Id. 13 Audley, supra note 3, at 33. 14 PATRICIA W. BIRNIE & ALAN E. BOYLE, INTERNATIONAL LAW & THE ENVIRONMENT 2 (2d ed. Oxford Univ. Press 2002). 15 Id. at 2-3. 16 Id. at 3. the concept of sustainable development more concrete content.17 However, this process is far from complete. Treaties are the most frequent method of creating binding international environment rules today. The MEAs that are created between nations have progressively included the goal of attaining sustainable development in their treaties.18 Sustainable development is defined as the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”19 It was adopted as a political goal at the Rio Summit in 1992 with The Rio Declaration for the UN Conference on Environment and Development (UNCED) or Earth Summit.20 The Rio Declaration secured near universal endorsement, becoming central to the elaboration of global environmental responsibility. 160 nations accepted “[t]he right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations.”21 Principle 27 of the Declaration calls for “further development of international law in the field of sustainable development.”22 Principle 12 calls for states to co-operate to promote an “open international economic system that would lead to economic growth and sustainable development in all countries” and that “[t]rade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.”23 Agenda 21, the non-binding program of action at the 1992 Rio Conference, refers to sustainable development in 17 Melissa Clack, Book Note, International Law & The Environment: Past Achievements & Future Challenges, 32 DENV. J. INT‟L L. & POL‟Y 145 (2003). 18 See id. 19 Brundtland Commission, supra note 11, ch. 2, U.N. DOC. A/42/427. 20 See U.N. Conference on Env‟t & Dev., Rio de Janeiro, Brazil, June 3-14, 1992, Rio Declaration on Environment and Development. pmbl., princ. 3, 27 A/CONF.151/26 (1992), available at http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=78&ArticleID=1163 (last visited Nov. 4, 2008). 21 Id. at princ. 3. 22 Id. at princ. 27. 23 Id. at princ. 12. its preamble, and the program of action adopted by the UNCED Conference refers to the need for a “global partnership for sustainable development.”24 B. MEAs and TREMs Whether the WTO/GATT system can accommodate MEAs that employ trade restrictions is an important issue to address. There are certain MEAs that have TREMs. “This means that the agreements use restraints on trade in particular substances or products, either between parties to the treaty or between parties and non-parties, or both.”25 The WTO‟s Committee on Trade and Environment (CTE) suggests that some risk of conflict exists between provisions of MEAs permitting trade measures and WTO rules. There are approximately 20 MEAs with TREMs, starting with the 1933 Convention Relative to the Preservation of Fauna and Flora in their Natural State.26 Other MEAs with TREMs include the 1989 Basel convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, which prohibits exportation and importation of hazardous and other wastes by parties to the Convention to and from non-party states,27 and the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, which adopts trade controls that are more restrictive to non-parties than parties.28 The CITES of 1973 regulates importation and exportation of certain species of animals and plants and allows punitive trade restrictions to be imposed on non-complying parties.29 MEAs with TREMs are more likely to conflict with the WTO than other MEAs without TREMs. Most of these MEAs fail to reconcile potential conflicts with WTO obligations. 24 Brundtland Commission, supra note 11, Agenda 21, pmbl. 25 See generally U.N. ENVIRONMENTAL PROGRAMME & THE INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT, ENVIRONMENT AND TRADE: A HANDBOOK (2000). 26 Id. 27 Id. 28 Id. 29 Id. Consequently, how to resolve any conflict that a TREM in an MEA may have with GATT/WTO trading rules for non-discrimination becomes an issue. No WTO/GATT dispute resolution panel has addressed the conformity of any MEA trade restrictions with GATT rules, but one day it may, and there is no set mechanism in place if this happens. The validity of some MEA trade restrictions is doubtful, particularly those involving process and production methods, discrimination between parties and non-parties, and extra-territorial application.30 C. Pros and Cons of Using MEAs for Trade-Environment Issues Most of the MEAs with TREMs fail to reconcile potential conflicts with WTO obligations. In the 1992 United Nations Conference on Environment and Development, Agenda 21 was the international plan of action for achieving certain environmental and development goals, including sustainable development.31 It stressed that the common goals of trade and environmental policy should be to “promote sustainable development through trade liberalization” and to make “trade and environment mutually supportive.”32 The MEAs do not address how to reconcile their TREMs for environmental improvement with WTO trade obligations. The MEAs should strive to reconcile this before a major dispute occurs with the WTO. There will be confusion in choosing which of the multiple dispute settlement forums to use (WTO or MEA), and it impedes the creation of a functional dispute settlement system that both environmentalists and free trade policymakers might craft distinct from the WTO or MEA dispute settling mechanisms. Most MEAs have provided their own dispute settlement procedure, but these are usually based on consultations, dispute avoidance, inspection, and rarely on judicial dispute settlement 30 See Chris Wold, Multilateral Environmental Agreements and the GATT: Conflict and Resolution?, 26 ENVTL. L. 841, 848-49, 856-57 (1996). 31 Brundtland Commission, supra note 11, at Agenda 21. 32 Id. procedures.33 The environmental concerns from specific MEA disputes are settled at the International Court of Justice (ICJ) Environmental Chamber. The Environmental Chamber was established in 1993 under Article 26(1) of the Statute of the International Court of Justice, although no cases have yet been brought to it.34 The WTO Committee on Trade and Environment recommended that disputes concerning MEAs should be settled under the rules of those agreements rather than the WTO.35 However, most MEAs have no provision for binding compulsory settlement of disputes.36 Furthermore, the enforcement mechanisms of the MEAs are questionable.37 Many MEAs, such as the Montreal Protocol, favor “„non-compliance regimes‟ over dispute-settlement proceedings and promote non-confrontational monitoring by an „Implementation Committee‟ as well as financial and technical assistance.”38 The WTO Dispute Settling Understanding provides a more attractive forum for dealing with environmental problems because MEAs lack the teeth needed for strong enforcement. III. GATT/WTO: DEALING WITH THE ENVIRONMENT AND MEAs A. Background of WTO The WTO is an international organization that governs international trade; it was created in 1995 after the Uruguay Round.39 The Uruguay Round took seven and a half years, with 124 countries involved in its creation, and brought the biggest change of the world‟s trading system 33 INTERNATIONAL TRADE LAW & THE GATT/WTO DISPUTE SETTLEMENT SYSTEM 129 (Ernst-Ulrich Petersmann ed., Kluwer Law International 1997). 34 Markus Ehrmann, Procedures of Compliance Control in Int’l Env’t. Treaties, 13 COLO. J. INT‟L. ENVTL. L. & POL‟Y 377, 382-83 (2002). 35 Petersmann, supra note 33, at 132. 36 John H. Knox, A New Approach to Compliance with International Environmental Law: The Submissions Procedure of the NAFTA Environmental Commission, 28 ECOLOGY L.Q. 1, 6 (2001). 37 See id. 38 Id. at 130. 39 See Final Act Embodying the Results of the Uruguay Round of Trade Negotiations, Apr. 15, 1994, 33 I.L.M. 1125, 1263 (1994) [hereinafter Final Act]. since GATT was created at the end of the Second World War.40 The WTO is the successor to the old GATT, a set of global rules that governed trade in goods.41 The WTO includes the GATT 1994 agreement among other things, although it is much broader in scope than its predecessor.42 The WTO is designed to provide a common institutional framework for the conduct of trade relations among its members relating to the Multilateral and Plurilateral Agreements arising from the Uruguay Round.43 There are currently 151 member countries of the WTO, and with the accession of China, its rules govern almost all international trade flows. The WTO's key objective is to help global trade flow smoothly, freely, fairly and predictably.44 The WTO has no special expertise in environmental problems,45 and the GATT rules that were incorporated into the WTO do not specifically state any exceptions for the environment.46 When the Uruguay Round occurred, the WTO began to achieve a balance between trade and the environment with the preamble language of its founding charter. The Final Act Embodying the Results of the Uruguay Round in Marrakesh mentions sustainability as a goal and that WTO members seek “both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.”47 That the 40 Id. 41 Patrick M. Moore, The Decisions Bridging the GATT 1947 and the WTO Agreement, 90 AM. J. INT‟L L. 317, 318 (1996). 42 Final Act, supra note 39, at 1144-45. 43 AN ANATOMY OF THE WORLD TRADE ORG. 30 (Konstantinos Adamantopoulos ed. 1997). 44 Carrie P. Smith, Patenting Life: The Potential and Pitfalls of Using the WTO to Globalize Intellectual Property Rights, 26 N.C. J. INT'L L. & COM. REG. 143, 164 (2000). 45 Intellectual Property Rights, 26 N.C. J. INT'L L. & COM. REG. 143, 164 (2000). 45 INTER-LINKAGES: THE KYOTO PROTOCOL AND THE INT‟L. TRADE AND INV. REGIMES 73 (W. Brandee Chambers ed. 2001). 46 Sikina Jinnah, Emissions Trading Under the Kyoto Protocol: NAFTA and WTO Concerns, 15 GEO. INT'L ENVTL. L. REV. 709, 719 (2003). 47 Final Act, supra note 39. WTO charter mentions “sustainable development” in the preamble is a good first step to reconciling trade and environment.48 Furthermore, in April 1994, at the meeting to sign the Final Act, the members of the GATT also agreed to establish the CTE.49 The Uruguay Round of GATT did not include a mandate to address environmental issues specifically, thus in response to concerns expressed by NGOs, the GATT officials proposed the Subcommittee on Trade and the Environment create the CTE to be a permanent component of the WTO in January 1995.50 The WTO took a positive step in recognizing the relationship between trade and the environment, but it failed to clarify the appropriate relationship between MEAs and the WTO. With the inherent conflict between MEAs and the liberalized trade principles of the GATT and the WTO, a decision of how MEAs should be incorporated into or reconciled with the GATT is urgently needed. A balance must be struck between supporting the environmental objectives of MEAs and preserving an open, non-discriminatory multilateral trading system. Good environmental policymaking and good trade policymaking have the potential to promote and accelerate sustainable development. Using MEAs will also ensure that an "environmental goal" is not a disguised restriction on trade by the inherent choice of achieving environmental objectives through mutual cooperation rather than unilateralism. B. Provisions for Environment and Article XX General Exceptions The GATT primarily deals with the trade in goods, and the environment is not mentioned within its agreements. The only provisions in GATT that may be used for environmental 48 Audley, supra note 13, at 126. 49 Stephanie Showalter, The United States and Rising Shrimp Imports from Asia and Central America: An Economic or Environmental Issue?, 29 VT. L. REV. 847, 867 (2005). 50 Id. protection are the GATT Article XX General Exceptions, adopted in 1995.51 The general exceptions for GATT are Articles I and III: the provisions on non-discrimination in trade.52 The WTO has two non-discrimination clauses from Articles I and III of the GATT, which can serve as a hurdle for environmental protection.53 The first clause in Article I is the Most Favored Nation (MFN) clause which ensures trading partners are treated equally.54 This principle, now known in the United States as normal trade relations (NTR), states that members of the WTO must treat all other members equally and cannot discriminate between trading partners.55 For example, if a country lowers the customs duty on an import from one country, it must do the same for all countries that belong to the WTO. The second clause is the National Treatment (NT) Clause, which calls for equal treatment of foreign and domestic goods and services.56 Article III, Part 4, states that imports must be treated no less favorably than its equivalent domestically produced goods.57 There are two environmental exceptions in GATT Article XX to the non-discrimination provisions. Article XX(b) permits the use of environmental trade measures (ETMs) “if necessary to protect human, animal, or plant life or health.”58 Article XX(b) commonly has a three-step analysis: 1) Does the measure in question protect human, animal, or plant life or health?; 2) Is the measure for which the exception is being invoked necessary for this purpose?; 3) Is the measure applied consistently with the chapeau, avoiding arbitrary or unjustifiable discrimination 51 Jinnah, supra note 46. 52 See id. 53 See id. at 721. 54 General Agreement on Tariffs and Trade, art. 1, Oct. 20, 1947, 61 Stat. A-11, 55 U.N.T.S 194 (1948) [hereinafter GATT]. 55 Id. 56 Id. at art. III. 57 Id. 58 Id. at art. XX. and/or a disguised restriction on international trade?59 Section XX (g) sanctions the imposition of ETMs “relating to the conservation of exhaustible natural resources.”60 Article XX(g) has four separate requirements: 1) that the measures for which the provision is invoked concern “exhaustible natural resources”; 2) that these measures are related to the “conservation” of those resources; 3) that the measures are made effective in conjunction with restrictions on domestic production or consumption; and 4) that the measures are applied in conformity with the requirements of the chapeau of Article XX.61 Measures may be justified under Article XX only if they also meet the requirements of the “chapeau,” or introductory paragraph, which states that measures must not be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.62 The decisions of Tuna-Dolphin I (1991) and Tuna-Dolphin II (1994) interpreted these GATT provisions in a manner that did not generally favor unilateral environmental provisions.63 In the cases, the GATT Panel considered whether the United States Marine Mammal Protection Act (MMPA), which bans the importation of yellow-fin tuna harvested with nets that harm dolphins, violated the GATT non-discrimination provisions.64 The GATT Panel only considered the physical characteristics for “like” products, not the production or process methods, 59 Panel Report, United States – Standards for Reformulated and Conventional Gasoline, ¶ 6.20, WT/DS2/R (Jan. 29, 1996) [hereinafter Panel Report]. 60 GATT, supra note 54, at art. XX. 61 Panel Report, supra note 59, ¶ 6.35. 62 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, ¶ IV, WT/DS2/AB/R (Apr. 29, 1996). 63 See GATT, Dispute Settlement Panel Report on United States Restrictions on Imports of Tuna, 30 I.L.M. 1594, 1620 (1991) [hereinafter Tuna 1]; see GATT, Dispute Settlement Panel Report on United States Restrictions on Imports of Tuna, 33 I.L.M 839, ¶ 5.42 (1994) [hereinafter Tuna II]. 64 Tuna I, supra note 63, at 1598-99, 1602. concluding that the MMPA violated the Article III National Treatment provision.65 The Tuna- Dolphin cases interpreted Article XX so narrowly that very few unilateral environmentally- related sanctions could ever be justified. The WTO was created after the Tuna-Dolphin cases and with the goal of sustainable development enshrined in its preamble; the WTO‟s increasingly environmentally friendly stance manifested itself in the Appellate Body‟s holding in Shrimp- Turtle (1998).66 C. The Eco-Friendly WTO case: Shrimp-Turtle In Shrimp-Turtle, the WTO considered whether the U.S. prohibition on the importation of certain shrimp products caught with commercial technologies that might adversely impact sea turtles fell within either the Article XX(b) or (g) exceptions.67 The Panel found that the U.S. measure failed under Article III because it was unjustifiable discrimination between countries where like conditions prevail.68 The Appellate Body did not find that the U.S. violated the MFN or NT non-discrimination provisions; it did, however, conclude that the U.S. measure failed to comply with the Article XX chapeau because it constitutes a unilateral attempt to impose U.S. environmental rules extraterritorially.69 The WTO Appellate Body showed a willingness to strike a balance between trade and the environment by considering principles of international law. First, the Appellate Body devised the test to interpret the Article XX exceptions by using the customary international law rules of treaty interpretation which are largely contained in Article 31 of the Vienna Convention on the 65 Id. at 1618; Tuna II, supra note 63, ¶¶ 5.8-5.9, 6.1. 66 Anita M. Halvorssen, UNFCC, The Kyoto Protocol and the WTO – Brewing Conflict Or Are They Mutually Supportive?, 36 DENV. J. INT'L L. & POL'Y 369, 376 (2008). 67 Panel Report, United States – Import Prohibition of Certain Shrimp & Shrimp Products, ¶¶. 7.24, 7.26, WT/DS58/R (May 15, 1998). 68 Id. ¶¶ 7.25, 7.49, 7.63. 69 Id. ¶¶ 7.49, 7.61-62. Law of Treaties.70 Article 31(1) provides that “[a] treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”71 This opens up the possibility for the WTO to interpret treaties in the context of the changing normative environment in which they must operate. Although treaty provisions usually override other rules of international law, general principles of international law will still apply unless specifically excluded by the treaty provisions.72 This shows that the WTO is willing to consider the use of general international law. Second, the Shrimp-Turtle court found that the US should have seriously attempted to achieve a MEA rather than applying a unilateral environmental policy to protect the turtles.73 In its decision, the Appellate Body pointed to a number of sources, including the UN Convention on the Law of the Sea, the Convention on Biological Diversity, Agenda 21, and the Resolution of Assistance to Developing Countries in conjunction with the Convention on the Conservation of Migratory Species of Wild Animals.74 It also cited sustainable development and the environment in the WTO‟s Preamble as goals.75 The Appellate Body stated that the WTO‟s preamble emphasizes the members‟ objective of sustainable development and that the Body had “not decided that the protection and preservation of the environment is of no significance to the Members of the WTO . . . [c]learly it is.” 76 70 Vienna Convention on the Law of Treaties art. 31, 1155 U.N.T.S. 33 (1969); WTO, THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS: THE LEGAL TEXTS 405 (1994) (art. 3.2 specifically requires the use of the Vienna Convention rules of treaty interpretation). 71 Vienna Convention, supra note 70. 72 See C. McLachlin, The Principle of Systemic Integration and Art 31(3)(C) of the Vienna Convention, 54 I.C.L.Q. 279, 302-04 (2005). 73 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, ¶ 172, WT/DS58/AB/R (Oct. 12, 1998). 74 Id. ¶ 130. 75 Id. ¶ 153, 185. 76 Id. ¶ 185. The Appellate Body in Shrimp-Turtle referred to external environmental regimes and norms such as sustainable development, the Vienna Convention on Treaties, and MEAs, like the UN Convention on the Law of the Sea.77 However, their actual effect on the ultimate decisions may be minimal because the WTO‟s main imperative is on the promotion of free trade and economic efficiency. The Tuna-Dolphin cases, as well as the Shrimp-Turtle case, suggest that TREMs adopted pursuant to MEAs could be legitimate measures under the Article XX exceptions. However, the WTO Dispute Settlement Body has only addressed trade-environment conflicts between the WTO and Unilateral environment measures. The WTO has not yet encountered a trade- environment dispute arising out of an MEA.78 Furthermore, there is still no centralized authority and no judicial power in international law to deal with these conflicts. These are issues that the CTE still grapples with as the probability that the WTO will be forced to determine WTO-MEA compatibility increases. D. CTE and the Doha Round “At the end of the Uruguay Round in 1994, trade ministers from participating countries decided to begin a comprehensive work program on trade and environment in the WTO, creating the Trade and Environment Committee.”79 As a result, environmental and sustainable development issues have increased in the mainstream of WTO work. The 2001 Doha Ministerial Conference began negotiations on some aspects of the subject. The prior Singapore Conference 77 Report of the Appellate Body, United States - Import Prohibition of Certain Shrimp and Shrimp Products, ¶ 2, WT/DS58/AB/R (Oct. 12, 1998), available at http://www.wto.org/english/tratop_e/dispu_e/58abr.pdf. 78 Cinnamon Carlarne, The Kyoto Protocol and the WTO: Reconciling Tensions Between Free Trade and Environmental Objectives, 17 Colo. J. Int'l Envtl. L. & Pol'y 45, 49 (2006). 79 WTO, Understanding the WTO: Cross Cutting and New Issues, The Environment: A Specific Concern, available at http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey2_e.htm (last visited Jan. 7, 2009) [hereinafter Understanding]. Report of 1996 addressed little on the subject and the CTE made “very little analysis and evaluation and virtually no recommendations for specific actions.”80 The CTE has a two-fold mandate: first “to identify the relationship between trade measures and environmental measures in order to promote sustainable development”; second, “to make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system are required, compatible with the open, equitable and non-discriminatory nature of the system.”81 Although the CTE‟s achievements have been minimal and modest, the CTE has become a symbol of progress in the WTO for the institutionalization of environmental issues within its body. Specifically, it is a venue for trade and environment ministers to meet together. Additionally, the CTE is where representatives from United Nations Environment Program (UNEP) and MEAs can meet with trade officials.82 The CTE is also a sign that environmentalists have influenced the WTO in favor of organizational transparency. However, the CTE has no concrete mandate for policy trade reform: “The [WTO‟s] Committee on Trade and the Environment (CTE), for its part, has provided a valuable forum for discussions on reconciling environmental and WTO treaty obligations and other crossover issues. However, it has not produced concrete proposals for trade policy reform to enforce or promote environmental goals because it has no institutional mandate to do so.”83 The Doha Development Agenda (Doha Rounds) was launched in 2001, and negotiations contained several environmental elements including disciplines for fishery subsidies.84 The Doha Trade and Environment negotiation on the relationship between specific trade obligations in 80 Thomas J. Schoenbaum, International Trade and Protection of the Environment.: The Continuing Search for Reconciliation, 91 AM. J. INT‟L. L. 268 (1997). 81 WTO, Ministerial Briefing Notes: The Trade and Environment Committee, and Doha Preparations, available at http://www.wto.org/english/thewto_e/minist_e/min01_e/brief_e/brief11_e.htm (last visited Nov. 4, 2008). 82 See Understanding, supra note 79. 83 KENT A. JONES, WHO‟S AFRAID OF THE WTO? 107 (Oxford Univ. Press 2004). 84 World Trade Organization, Negotiations: The Doha Development Agenda, CRS Report for Congress 23 (Aug. 18, 2008), available at http://www.usembassy.it/pdf/other/RL32060.pdf (last visited Jan. 7, 2008). MEAs and existing WTO rules was contemplated in order to neutralize the potential negative impact of environmental regulations on environmental rules.85 Paragraph 31 of the Doha Ministerial Declaration states that the CTE operates with a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on: (i) the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs). The negotiations shall be limited in scope to the applicability of such existing WTO rules as among parties to the MEA in question. The negotiations shall not prejudice the WTO rights of any Member that is not a party to the MEA in question; (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.86 Since the Sixth Ministerial Conference, which considered all negotiation mandates under the Doha Ministerial Declaration, ended recently, the relationship between specific trade obligations in MEAs and existing GATT/WTO rules seems to be an unresolved issue. Therefore, the impact of GATT/WTO rules and regulations on the enforcement of international environmental law remains unresolved as well. The Doha Rounds has become another example of how difficult it is in multilateral negotiations for countries to reach a consensus on what to do with the issue of MEAs and the WTO. IV. WTO’S OPTIONS FOR DEALING WITH INTERNATIONAL TRADE- ENVIRONMENT ISSUES Because the MEAs generally do not have the enforcement ability or the provisions for binding compulsory settlement of disputes, this paper‟s focus is the essential changes that the 85 See id. 86 World Trade Organization, Ministerial Declaration of 14 November 2001, WT/MIN(01)/DEC1, 41I.L.M. 746, ¶ 31, available at http://www.wto.org/English/thewto_e/minist_e/min01_e/mindecl_e.htm (last visited Nov. 21, 2008). WTO could make to handle the potential situation of a MEA-WTO dispute. The WTO has dealt, albeit unilaterally, with environmental actions in the past and has a more efficient dispute resolution body than a typical MEA. It has been suggested that there may be value in strengthening the MEA dispute-settlement mechanisms,87 but that is not the case here as the WTO Dispute Settling Body is presently much stronger than any MEA Dispute Settling Body. The following are the main options for the WTO that experts in this area have proposed. A. WTO continue case by case One option for WTO‟s Appellate Body is to assess the MEA-WTO ambiguities case-by- case. It may be more desirable to develop a political consensus in determining the relationship between trade and the environment in regulatory form, but due to the differences in values and interests of environmentalists and free trade advocates, this is unlikely to occur in practice. It may be more satisfactory at this time to achieve results on a case-by-case basis with no predetermined rules. Thus, a case can be decided in a more flexible and context-specific manner. Analyzing arguments and evidence in the structured mechanism of the WTO dispute settlement system could be a better way to achieve a greater understanding of the relationship between multilateral environmental agreements and international trade law. In determining the most appropriate forum for the settlement of a dispute over trade that arises in connection with a MEA in the future, the CTE has recommended that, where possible, disputes concerning MEAs be initially settled under MEA mechanisms, rather than through the 87 See, e.g., Jove R. Oliver, Shared Space: Reconciling Trade and Environment, THE MAXWELL SCHOOL (2002), available at http://126.96.36.199/search?q=cache:3QsG7J5p68UJ:www.undp.org.pl/files/483/Final_Draft.doc+strengthening+th e+MEA+dispute-settlement+mechanisms&hl=en&ct=clnk&cd=4&gl=us&client=firefox-a (last visited Jan. 7, 2009). WTO procedures.88 However, most environmental agreements make no provision for binding compulsory settlement of disputes.89 Sometimes, the WTO is likely to be the only available forum for compulsory settlement.90 MEA instruments are rarely binding, compulsory, or enforceable, which explains why under unilateral environmental agreements, the disputes over trade rules have been in compulsory proceedings before the WTO Dispute Settlement Body, such as Tuna-Dolphin I and II and Shrimp-Turtle.91 Under the old GATT procedure, disputes were investigated by a special panel, but its rulings were subject to a consensus among all the GATT members; every nation possessed a veto over any adverse judgment.92 In contrast, the WTO‟s dispute-resolution panel decision would stand unless reversed by a consensus on appeal.93 Furthermore, these WTO panels are given more explicit standard of review to increase predictability of action.94 The WTO Dispute Resolution system is very efficient and well developed, especially as compared to MEAs. One of the great strengths of the WTO is the system of compulsory binding dispute settlement created by the Understanding on Rules and Procedures Governing the Settlement of Disputes adopted in 1994.95 It is administered by the Dispute Settlement Body (DSB), and disputes are first remitted to consultations; if not successful, it may be adjudicated by panels and appealed to an Appellate Body.96 The WTO Agreements are interpreted by the Appellate Body in compliance with the general rule codified in Article 31(3) of the 1969 Vienna Convention on the Law of Treaties, in that the account may be taken of “any relevant rules of 88 Birnie & Boyle, supra note 14, at 705. 89 Id. 90 Id. 91 See, e,g,, Tuna I; Tuna II, supra note 63. 92 BRUCE E. MOON, DILEMMAS OF INTERNATIONAL TRADE 90 (Westview Press 1996). 93 Id. 94 Id. 95 World Trade Organization, Dispute Settlement Understanding, available at http://www.wto.org/english/tratop_e/dispu_e/dsu_e.htm (last visited Nov. 3, 2008) [hereinafter DSU]. 96 Id. at art. 2, 16, 17. international law applicable in the relations between the parties.”97 The interpretations are not static and, as seen in Shrimp-Turtle, the Appellate Body referred to the Rio Declaration, CITES Convention, and the like.98 Instead of interpreting GATT Article XX(g) consisting of exhaustive natural resources and in tune with the intention of the drafters in 1947, the Appellate Body took account of these much recent and more relevant agreements.99 Additionally, Article 3(2) of the WTO Dispute Settlement Understanding expressly states that existing provisions of the “covered agreements” are to be clarified “in accordance with customary rules of interpretation of public international law.”100 The Appellate Body has made a break with pre-1994 GATT rules by interpreting WTO agreements in accordance with international law on interpretation of treaties as codified in Article 31-3 of the Vienna Convention and not in accordance with specific GATT canons of interpretation.101 This, in addition to the Appellate Body‟s reference to sustainable development in its preamble, departs from the rigid free trade focus seen earlier in the Tuna- Dolphin cases. Article IX(3) of the Agreement Establishing the World Trade Organization, which “allows waiver of any obligation under „exceptional circumstances‟ by [a] vote of three-fourths majority of the member states,”102 poses a problem. This provision seems unsatisfactory for a variety of reasons.103 The “test of „exceptional circumstances‟ is unduly vague.”104 Also, “approval under the waiver provision would be a political decision rather than one on the 97 Birnie & Boyle, supra note 14, at 704. 98 Id. 99 Id. 100 DSU, supra note 95, at art. 3(2). 101 Birnie & Boyle, supra note 14, at 704. 102 Id. at 706. 103 Id. 104 Id. substance of the case.”105 And further, “the status of MEAs would be doubtful until they had received the ex post blessing of a waiver.”106 As much as the WTO Dispute Resolution system has been efficient and well-structured, it cannot be forgotten that it is a system whose primary function is to deal with trade and economics. Since there is such a dichotomy between those principles and environmental protectionism, there is a major conflict of interest for the WTO. Also, the WTO Dispute Resolution System is not a good option because it is not consistent in its rulings and lacks the knowledge of how to deal with MEAs. In a case-by-case analysis, the WTO dispute settlement body can “only define the legal situation between the WTO members involved in a specific case."107 “[T]hey do not create general rules defining the relationship between the WTO and MEAs.”108 It is also difficult to discern a clear policy because “a case involving conflict between the WTO and MEA has not been addressed to the Dispute Settlement Body yet.”109 Additionally, it can be argued that environmental issues are more effective when they are dealt with in bilateral agreements or other regional agreements with only a few countries. This may be why MEAs do not have great enforceability mechanisms and why environmental issues may be difficult to reconcile within the WTO. It may be better reconciled in local or regional dispute mechanisms than by the vast body of the WTO. B. Amend Article XX for better environmental protections A second option is to “amend the Article XX general exceptions to permit trade measures specific to the MEA or simply broaden the exception to provide more room for environmental 105 Id. 106 Birnie & Boyle, supra note 14, at 706. 107 Carlarne, supra note 78, at 85. 108 Id. 109 Id. provisions”110 “or to adopt a collective interpretation of Article XX that would validate the existing MEAs and provide for notification of future MEAs and setting out a „safe harbour‟ they‟d have to fulfill to receive approval.”111 There could be exceptions for trade measures imposed pursuant to obligations in international agreements that are otherwise illegal under the GATT. It would closely resemble Shrimp-Turtle, in which the WTO upheld the right of WTO members to legislate for protection of environment beyond national boundaries, provided they do so pursuant to an MEA.112 The WTO could adopt an environmental clause that defines the WTO- MEA relationship, so that the WTO members could directly negotiate the clause. However, the broadening of the Article XX clause may not be applicable to all types of MEAs, and because the WTO is an economically based organization, it may not distinguish trade issues from environmental issues, regardless of the language of the WTO Preamble. C. WTO give MEA obligation/deference in order to immunize MEA from WTO attack “Many environmentalists believe that international trade rules and dispute settlement procedures should give great deference . . . to highly protective environmental policies.”113 They believe that the WTO should give MEA policies deference and immunize them from WTO attacks in accordance with the Preamble of the WTO.114 The CTE should create criteria that allow it to defer to TREMs, taken pursuant to MEAs that promote sustainable development. However, since MEAs have unclear dispute settlement mechanisms and a low level of enforcement, the WTO is a better place to resolve disputes. The WTO is perhaps the most 110 Id. 111 Birnie & Boyle, supra note 14, at 706. 112 Halvorssen, supra note 66, at 176. 113 Esty, supra note 2, at 101. 114 Preamble, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, 33 I.L.M 1124 (1994), available at http://www.wto.org/english/docs_e/legal_e/04-wto_e.htm (last visited Nov. 10, 2008). developed, legalized, and enforced international dispute resolution system in existence, aside from regional regimes.115 A similar approach is found in the North American Free Trade (NAFTA), which allows certain MEAs, such as Montreal Protocol, CITES, and Basel Convention, to take precedence over NAFTA obligations.116 However, this does not provide a process for the approval of future MEAs and may only be workable for three of the countries. Should environmental goals be incorporated into the WTO, environmentalists fear that the strength of WTO dispute-settlement procedures will compel parties to seek resolution only through the WTO system.117 The parties in the WTO system may then “lock-in” to WTO dispute resolution to avoid other means of resolution which may be more appropriate or environmentally friendly.118 If this does occur, it is important for environmentalists to engage with the WTO. The WTO panel and appellate body will more likely be populated by experts in trade and similar fields, and thus it is important for environmental experts and advisers to deal with the WTO dispute settlement body and share their opinion. D. WTO improve case-by-case consistency by creating interpretive clause with conditions and principles for environment The GATT Article XX General Exceptions are not specific for environmental protection, thus it is easier for the WTO dispute panel or appellate body to overlook the principles of environment and sustainable development in favor of trade principles. More case-by-case consistency may be created by implementing an interpretive clause with conditions and 115 See John H. Jackson & Carlos M. Vazquez, Some Reflections on Compliance with WTO Dispute Settlement Decisions, 33 LAW & POL‟Y INT‟L BUS. 555, 561-62 (2002). 116 North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289, 298 (1993). 117 See, e.g., VICTOR MENOTTI, THE WORLD TRADE ORGANIZATION AND ECOTOURISM, INTERNATIONAL FORUM ON GLOBALIZATION (Nov. 22-24, 2002), available at http://www.ifg.org/analysis/wto/cancun/etourvm.htm (last visited Jan. 7, 2009). 118 See id. principles for the environment.119 It is preferred that the interpretive decision would allow disputes to be deferred to a MEA dispute settlement, provided both parties are members of the MEA and the WTO and that the MEA is transparent and nondiscriminatory.120 “Adopting an interpretive decision is the favored approach [by some authors] because it enables the WTO members to discuss and define the relationship between the WTO and MEAs.”121 CONCLUSION The tense relationship between international free trade and environmental protection has been a widely debated topic in the past two decades. It is important to reconcile the differences between MEAs, especially those with TREMs, with the WTO rules now because it is inevitable that a dispute will occur between them in the future. Because no central international dispute mechanism exists to deal with this problem, the WTO should address it. Although MEAs generally lack dispute settlement bodies and enforcement mechanisms to deal with any disputes, even with the positive steps the WTO has taken towards the environment, it is still an economic body with the primary goal of free trade. With a number of solutions on the horizon, it is possible that policymakers may find reconciliation between trade and environment in the future. 119 John H. Knox, The Judicial Resolution of Conflicts Between Trade and the Environment, 28 HARV. ENVTL. L. REV. 1, 10 (2004). 120 Carlarne, supra note 78, at 86. 121 Id.