The World Trade Organization and Environment

1

2
Globalization, Environment, and the Battle of
Seattle (1999)

• New alliances of globalization labor,
  environment, anti-globalists
• Worries about governance non-accountable role
  of large corporations and of WTO itself
• Loss of local networks and control
• Loss of jobs concern for both South and North
• Lowering of environmental standards
• Race to the bottom in pay in labor standards
  in environmental quality

3
Institutions of Global Governance

• Spheres of action
• Political United Nations
• Economic World Trade Organization (also World
  Bank, International Monetary Fund)
• Environmental Many institutions have a slice of
  the pie
• Types of international legal frameworks
• Soft law not binding (e.g., codes of conduct,
  Global Compact, Agenda 21)
• Treaties binding powers delegated by nation
  states
• Constitution living federal system (EU?)
• Successive treaties but also practices
• Current strains

4
WTO and the Environment

• Can free trade and environmental protection
  co-exist effectively?
• Are the WTOs governing principles sound?
• What needs to be reformed?
• Is a new institution required?

5
History and Functions of the WTO

• Successor to GATT (General Agreement on Tariffs
  and Trade) 1947, created in Uruguay Round (1994)
• New global norm ? trade liberalization
• Expansion from 50 countries to 185
• Legalization of trade disputes
• Compulsory adjudication
• Binding outcomes, with serious monetary sanctions
• Dispute Settlement Panel
• Appellate Body
• Dispute Settlement Body (reverse consensus)
  must go ahead unless there is consensus against it

6
Central Assumption of Free Trade Product
Equivalence
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Conflicts between Trade and Environment

• Environmental regulations may operate as
  non-tariff barriers (NTBs) to trade
• -- e.g., EPA requires turtle-friendly trawlers
• Cultural preferences may conflict with harmonized
  regulations
• -- e.g., Genetically Modified Organisms,
  hormone-fed beef

8
WTOs Governing Principle Equal Treatment
(except when)

• Overall aims
• Freer trade, through rounds of negotiation
• Predictable environment for trade
• More competitive trading, through elimination of
  unfair practices
• More beneficial for developing countries, with
  adjustment opportunities and special privileges
  where needed
• National Treatment
• Imported and locally produced goods to be treated
  equally
• Most Favored Nation (MFN) status
• Members are required to treat all nations equally

9
Greening the WTO

• Preamble language (cited in Shrimp-Turtle case)
• . . . expanding the production of and trade in
  goods and services, while allowing for the
  optimal use of the world's resources in
  accordance with the objective of sustainable
  development . . .

10
Environmental Exceptions

• Article XX
• So long as such measures are not applied in a
  manner which would constitute a means of
  arbitrary or unjustifiable discrimination, . . .
  .this Agreement shall not be construed to prevent
  the adoption or enforcement by any contracting
  party of measures . . .
• (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. . . .
• Shrimp-Turtle case (1998) - tests scope of Art.
  XX
• Dolphin-Tuna case (1991 panel report)
• Product not process

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Trade in Food The SPS Agreement

• Goals harmonization, technical rationalization
• Key language and features
• based on scientific principles and is not
  maintained without sufficient scientific
  evidence
• Members shall base their sanitary or
  phytosanitary measures on international
  standards (Codex Alimentarius Commission, UN)
• If not in compliance with international
  standards, then must justify deviation.
• Level of protection must be based on risk
  assessment as developed by the relevant
  international organizations (5.1)
• Is Europes precautionary approach justified
  (e.g., beef hormone case)?

12
How democratic is the WTO?

• 153 members in mid-2008
• U.S.A. as 800 lb. gorilla
• Unclear role of citizens transparency standing
  amicus briefs
• Who decides law? Not bound by precedent.
• Who decides (e.g., dispute settlement panels)?
• Validity of basic principles?

13
Do we need a Global Environmental Organization?

• For
• Need explicit authority for environment
• WTOs trade bias
• Economist values may override environmental ones

• Against
• Unnecessary?
• Unwieldy?
• Unrepresentative?
• Unscientific?
• Unrealistic?