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International Trade and Protection of the Environment: The Continuing Search for Reconciliation

  • Thomas J. Schoenbaum (a1)


Before 1991, the relationship between the protection of the environment and international trade was an arcane specialty that attracted little attention. In 1971 the GATT Council established a Working Group on Environmental Measures and International Trade. This group did not even meet for over twenty years.

Everything changed with the decision in the Tuna/Dolphin I case, in which a GATT dispute resolution panel declared a United States embargo on tuna caught by fishing methods causing high dolphin mortality to be illegal. The Tuna/Dolphin I decision produced an explosion of rhetoric in both learned journals and the popular press. It was also a very interesting clash of very different “cultures,” trade specialists versus environmentalists. At die outset, neither group knew much about the other. Now, however, the legal and political issues have been identified and ventilated, mutual understanding has increased, and the process has begun to reconcile two values that are absolutely essential to the well-being of mankind: protection of the environment and international free trade.



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1 Concern over the issue of trade and environment was expressed by several observers beginning in the early 1970s. See generally William J. Baumol , Environmental Protection , International Spillovers , and Trade (1971); C. Fred Bergsten , The Future of the International Economic Order : An Agenda for Research 42 (1973); Wolfgang E. Burhenne & Thomas J. Schoenbaum, The European Community and the Management of the Environment, 13 Nat. Res. L.J. 494 (1973) (analyzing problem of harmonizing different environmental standards for products that move in international trade in the context of Community law); Kirgis, Frederic L., Jr., Effective Pollution Control in Industrialized Countries: International Economic Disincentives, Policy Response, and the GATT , 70 Mich. L. Rev. 859 (1972) (analyzing legality under the GATT of various environmental taxes on imports).

2 General Agreement on Tariffs and Trade [GATT], Oct. 30, 1947, TIAS No. 1700, 55 UNTS 188. As a result of the Uruguay Round of trade negotiations, the GATT organization became the World Trade Organization (WTO) on January 1, 1995. Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 14, 1994, 33 ILM 1145 (1994), reprinted in GATT, The Results of the Uruguay Round of Multilateral Trade Negotiations : The Legal Texts (1994) [hereinafter Uruguay Texts ].

3 Decision of the GATT Contracting Parties, GATT Dec. C/M/71 (1971).

4 United States—Restrictions on Imports of Tuna, 30 ILM 1598 (1992) [hereinafter Tuna/Dolphin I]. This decision was not adopted by the GATT Council or contracting parties.

5 The literature is too voluminous to cite here. Among the most prolific and vocal commentators have been, on the environmentalist side, Steve Charnovitz, and on the trade side, Jagdish Bhagwati. See especially Charnovitz, Steve, Free Trade, Fair Trade, Green Trade: Defogging the Debate , 27 Cornell Int’l L.J. 459 (1994); Steve Charnovitz, A Taxonomy of Environmental Trade Measures, 6 Geo. Int’l Envtl. L. Rev. 1 (1993); and Jagdish Bhagwati, Trade and Environment: The False Conflict?, in Trade and the Environment : Law , Economics , and Policy 159 (D. Zaelke et al. eds., 1993). A leading book on the subject is Daniel C. Esty , Greening the GATT: Trade , Environment , and the Future (1994). For a brilliant synthesis of the opposing views, see Petersmann, Ernst-Ulrich, International Trade Law and International Environmental Law , 27 J. World Trade L. 46 (1993).

6 E.g., Dodwell, Patricia, Trade Row Looms over U.S.’s Dolphin-Friendly Trade Policy , Fin. Times (London), Jan. 30, 1992 , at 22. From time to time, environmental groups have taken full-page ads in national newspapers to oppose the GATT. E.g., Sabotage!, N.Y. Times , Apr. 20, 1992, at A9 (nat’l ed.).

7 Agenda 21, ch. 2.19, UN Doc. A/CONF.151/4 (1992). This view is echoed by Principle 12 of the 1992 Rio Declaration on Environment and Development, June 14, 1992, 31 ILM 874, 878 (1992). In principle at least, international economic law also reflects this view. The Preamble to the Marrakesh Agreement Establishing the World Trade Organization [hereinafter WTO Agreement] sets out the goal of “the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so.” Uruguay Texts , supra note 2, at 6.

8 Trade and Environment, GATT Ministerial Decision of 14 April 1994, 33 ILM 1267 (1994).

9 Id. at 1267–69.

10 WTO Doc. WT/CTE/1 (Nov. 12, 1996) [hereinafter CTE Report].

11 Id. at 47.

12 Singapore Ministerial Declaration, para. 16, WTO Doc. WT/MIN(96)/DEC/W (Dec. 13, 1996), 36 ILM 218, 224 (1997).

13 WTO Agreement, Art. IX, Uruguay Texts , supra note 2, at 11.

14 Trade and Environment, supra note 8.

15 WTO Agreement, Art. IV, Uruguay Texts , supra note 2, at 8.

16 Id., Art. X. Amendments to Articles I and II of GATT 1994 require a unanimous vote. Other amendments require a two-thirds vote to take effect for those members that have accepted them. If a member refuses to accept such amendments, the Ministerial Conference can exert pressure by deciding, by a three-fourths majority, that that member “shall be free to withdraw from the WTO or to remain a Member with the consent of the Ministerial Conference.” Id., Art. X:3. Amendments to the WTO Agreement and other multilateral trade agreements can be adopted by two-thirds vote. Id., Art. X:4. For these provisions, see Uruguay Texts , supra note 2, at 12–14.

17 A kind of executive committee, the Consultative Group of Eighteen, was authorized by the GATT Council in 1975; there is some discussion of reviving such a group. See Inside U.S. Trade , Dec. 20, 1996, at 7.

18 In contrast to international economic law, international environmental law is a diverse mixture of treaty law, customary law and nonbinding principles. There is no central international environmental agency, although some have proposed that a “Global Environmental Organization” be created. See Esty , supra note 5, at 80–90. There is also no binding system of dispute setdement in international environmental law.

19 GATT 1994 is the original 1947 GATT, as amended and modified through the Uruguay Round as well as all the ancillary agreements pertaining to GATT 1947 adopted prior to the Uruguay Round. For the official text of GATT 1994, see Uruguay Texts , supra note 2, at 486.

20 GATT 1994, Art. II.

21 Id., Art. XI.

22 These are dealt with in the GATT itself or the side agreements or understandings. Fifteen Agreements are annexed to GATT 1994, the most important being the Agreement on Technical Barriers to Trade, the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Agreement on Sanitary and Phytosanitary Measures, the Agreement on Agriculture, and the Agreement on Services. See Uruguay Texts , supra note 2.

23 This means that the right of access to a market cannot be conditioned on reciprocal market concessions. See Jackson, John H. , The World Trading System 136–38 (1989).

24 Belgian Family Allowances (Allocations Familiales), Nov. 7, 1952, GATT B.I.S.D. (1st Supp.) 59 (1953).

25 Id, para. 3.

26 GATT 1994, Art. III:4.

27 Id., Art. III:1.

28 Id., Art. III:2.

29 Id., Art. III:1.

30 Japan—Taxes on Alcoholic Beverages, Appellate Body Report, WTO Doc. AB–1996–2, at 17–25 (Oct. 4, 1996) [hereinafter Japan Shochu].

31 Italian Discrimination against Imported Machinery, Oct. 23, 1958, GATT B.I.S.D. (7th Supp.) 60, para. 12 (1959) (emphasis supplied). The panel thus ruled that an Italian law that provided special credit facilities to certain farmers for the purchase of agricultural machinery produced in Italy was inconsistent with Article III.

32 United States—Section 337 of the Tariff Act of 1930, Nov. 7, 1989, GATT B.I.S.D. (36th Supp.) 345, para. 5.11 (1990). This ruling means that the actual economic impact of a discriminatory measure or tax is irrelevant. See United States—Taxes on Petroleum and Certain Imported Substances, June 17, 1987, GATT B.I.S.D. (34th Supp.) 136, para. 5.1.9 (1988) [hereinafter Superfund].

33 Japan—Trade in Semi-Conductors, May 4, 1988, GATT B.I.S.D. (35th Supp.) 116, paras. 106–09 (1989). The panel set out a two-part test for determining whether nonmandatory government requests could be regarded as “measures” within Article XI: first, whether there were sufficient incentives for the requests to take effect; second, whether the operation of the measures was dependent on government action. Nonbinding “administrative guidance” by the Japanese Government was ruled in the Semi-Conductor case to be within Article XI.

34 Canada—Administration of the Foreign Investment Review Act, Feb. 7, 1984, GATT B.I.S.D. (30th Supp.) 140, para. 5.14 (1984).

35 Article XI:2 excepts three types of measures from the prohibition of Article XI:1: (a) export restrictions to relieve critical shortages of foodstuffs and other products “essential” to the exporting contracting party; (b) import or export restrictions necessary to the application of standards for grading or classifying commodities; and (c) import restrictions on agricultural or fisheries products that are necessary to the enforcement of certain governmental policy measures. These exceptions are narrowly drawn and would not be relevant to environmental measures. See Canada—Measures Affecting Exports of Unprocessed Herring and Salmon, Mar. 22, 1988, GATT B.I.S.D. (35th Supp.) 98 (1988) [hereinafter Canada Herring].

The difficulty of choosing between the applicability of Article III and drat of Article XI in a given case is apdy illustrated by the Lobsters from Canada case, a decision of a binational arbitral panel established under chapter 18 of the U.S.-Canada Free Trade Agreement. 3 Can. Trade & Commodity Tax Cas. (CCH) 8182 (1990). This case involved a U.S. law that prohibited the transport or importation of lobsters smaller than a certain size. Canada sought relief through the arbitral panel on the ground that the restriction violated Article XI of the GATT. Canada alleged de facto discrimination against imports since in colder waters lobsters tend to be smaller. The majority of the panel upheld the U.S. restriction because the identical restrictions were applied to lobsters caught in U.S. waters. A minority concluded, however, that Article XI should be applied and that Article III was not applicable because the U.S. law had a protectionist purpose and effect.

36 Tuna/Dolphin I, supra note 4.

37 The word “environment” to mean nature and the natural world came into current use only in the late 1960s. The GATT, drafted in 1947, uses the older term, “natural resources.” GATT 1994, Art. XX(g).

38 Canada—Administration of the Foreign Investment Review Act, supra note 34, para. 5.20.

39 See, e.g., United States—Taxes on Automobiles, 33 ILM 1937, paras. 3.212–3.219 (1994).

40 See the discussion in United States—Standards for Reformulated and Conventional Gasoline, Appellate Body Report, 35 ILM 603 (1996) [hereinafter U.S. Gasoline Standards App.].

41 United States—Imports of Certain Automotive Spring Assemblies, May 26, 1983, GATT B.I.S.D. (30th Supp.) 107, paras. 54–55 (1983).

42 Id., para. 55; United States—Prohibition of Imports of Tuna and Tuna Products from Canada, Feb. 22, 1982, GATT B.I.S.D. (29th Supp.) 9, para. 4.8 (1982). Both panels appear to have misconstrued the “disguised restriction” portion of the chapeau. In finding no violation, they relied on the fact that the trade restrictions in question were publicly announced as such. This should not be the standard. What is at issue is whether trade restrictions ostensibly justified under one of the Article XX exceptions are really imposed for protectionist reasons.

43 U.S. Gasoline Standards App., supra note 40.

44 United States—Standards for Reformulated and Conventional Gasoline, 35 ILM 274, para. 8.1 (1996) [hereinafter U.S. Gasoline Standards Panel].

45 U.S. Gasoline Standards App., supra note 40, at 29.

46 Id. at 25.

47 Id. at 28.

48 See, e.g., United States—Restrictions on Imports of Tuna, 33 ILM 839, para. 5.29 (1994) [hereinafter Tuna/Dolphin II].

49 Id., para. 5.35.

50 United States—Section 337 of the Tariff Act of 1930, Nov. 7, 1989, GATT B.I.S.D. (36th Supp.) 345. para. 5.26 (1990).

51 Thailand—Restrictions on Importation of and Internal Taxes on Cigarettes, Nov. 7, 1990, GATT B.I.S.D. (37th Supp.) 200, para. 74 (1990), 30 ILM 1122 (1991).

52 Tuna/Dolphin I, supra note 4, para. 5.28.

53 Vienna Convention on the Law of Treaties, opened for signature May 3, 1969, Art. 31, 1155 UNTS 331. In U.S. Gasoline Standards App., supra note 40, at 23, the Appellate Body applied this interpretation of Article 31.

54 See in this regard Steven P. Croley & John H.Jackson, WTO Dispute Procedures, Standard of Review, and Deference to National Governments, 90 AJIL 193, 211–12 (1996).

55 E.g., Canada Herring, supra note 35, para. 4.4.

56 U.S. Gasoline Standards Panel, supra note 44, para. 6.38; U.S. Gasoline Standards App., supra note 40, at 13–14.

57 Tuna/Dolphin I, supra note 4, para. 5.26; Tuna/Dolphin II, supra note 48, para. 5.13.

58 See U.S. Taxes on Automobiles, supra note 39, para. 5.57 (ruling that gasoline is an exhaustible natural resource).

59 U.S. Gasoline Standards Panel, supra note 44, para. 6.37; U.S. Gasoline Standards App., supra note 40, at 14.

60 See Canada Herring, supra note 35, para. 6.39; U.S. Gasoline Standards App., supra note 40, at 15.

61 U.S. Taxes on Automobiles, supra note 39, para. 5.60–5.61.

62 U.S. Gasoline Standards Panel, supra note 44, para. 6.40.

63 Id.

64 U.S. Gasoline Standards App., supra note 40, at 16.

65 Vienna Convention on the Law of Treaties, supra note 53, Art. 31.

66 U.S. Gasoline Standards App., supra note 40, at 19.

67 Id. at 20 (citations omitted).

68 Id. at 21.

69 Id.

70 See the discussion in text at notes 43–47 supra.

71 Tuna/Dolphin I, supra note 4, paras. 5.26, 5.31.

72 See, e.g., William J. Snape III & Naomi B. Lefkovitz, Searching for GATT’s Environmental Miranda: Are “Process Standards” Getting “Due Process”?, 27 Cornell Int’l L.J. 777, 782–90 (1994); Alison Raina Ferrante, The Dolphin-Tuna Controversy and Environmental Issues, 5 J. Transnat’l L. & Pol ’ y 279, 297 (1996).

73 Tuna/Dolphin II, supra note 48, para. 5.20.

74 Id.

75 Ilona Cheyne, Environmental Unilateralism and the WTO/GATT System, 24 Ga. J. Int ’ l & Comp. L. 433, 453 (1995). Similar points are made by Murase, Shinya, Perspectives from International Economic Law on Transnational Environmental Issues , 253 Recueil des Cours 283, 349–53 (1995).

76 Vienna Convention on the Law of Treaties, supra note 53, Art. 31(1).

77 Id., Art. 31(3) (c). See the careful analysis by Petersmann, supra note 5, at 70–71.

78 See, e.g., Rio Declaration on Environment and Development, supra note 7, Principle 2; United Nations Convention on the Law of the Sea, opened for signature Dec. 10, 1982, pt. XII, UN Doc. A/CONF.62/122 (1982), reprinted in United Nations , Official Text of the United Nations Convention on the Law of the Sea with Annexes and Index , UN Sales No. E.83.V.5 (1983).

79 Cheyne, supra note 75, at 453–54.

80 See Restatement (Third ) of the Foreign Relations Law of the United States §§402–403 (1987) [hereinafter Restatement ].

81 Id. See Rosalyn Higgins , Problems and Process : International Law and How We Use It 56–77 (1994).

82 E sty , supra note 5, at 42.

83 We should not exaggerate the conflicts between environment and trade. A 1994 study by the Organisation for Economic Co-operation and Development (OECD) on the impact of trade on the environment found that the direct effects of trade on the environment are generally small because only a limited share of ecologically sensitive goods enter into trade and because trade is only one of many factors affecting the environment. The report stated:

In general, trade is not the root cause of environmental problems, which are due to market and intervention failures. Market failures occur when markets do not reflect environmental values. Intervention failures occur when public policies do not correct for, create or exacerbate market failures. Such failures can distort the incentives for protecting the environment and can drive a wedge between the private and .socially optimum rates and modes of production and consumption. … International trade can help correct market and intervention failures through providing increased funds and incentives for environmental protection and promoting efficient resource use. But, at times, international trade may exacerbate the environmental problems in the presence of market and intervention failures.

OECD, The Environmental Effects of Trade 8–12 (1994). Thus, the impact of trade on the environment is complex; it may be positive, negative, or neutral, depending on die economic sector and the particular circumstances of the situation.

84 The OECD has produced a series of very constructive reports and studies. See generally OECD, Reports on Trade and Environment , OECD/GD(95)63, 124, 138, & 141 (1995). For a summary of the OECD’s activities, see Michael Reiterer, Trade and Environment: Reflections on the Impact of the OECD Joint Session (JS) of Trade and Environment Experts on the Report of the WTO Committee on Trade and Environment and the Future Role of the JS, paper given at the Royal Institute of International Affairs, London (Nov. 18, 1996) (on file with author).

85 See GATT, Trade and the Environment (1992).

86 The agreements identified in the GATT report, id., include the Convention Relative to the Preservation of Fauna and Flora in their Natural State (1933), the Convention on Nature Protection and Wildlife Preservation in the Western Hemisphere (1940), the International Convention for the Protection of Birds (1950), the African Convention on the Conservation of Nature and Natural Resources (1968), the Benelux Convention on the Hunting and Protection of Birds (1970), the Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973), the Agreement on the Conservation of Polar Bears (1973), the Convention for the Conservation and Management of the Vicuna (1980), the Convention on Conservation of North Pacific Fur Seals (1957), the Montreal Protocol on Substances that Deplete the Ozone Layer (1987), the European Convention for the Protection of Animals during International Transport (1968), the International Plant Protection Agreement (1951), the Plant Protection Agreement for the South East Asia and Pacific Region (1956), the Phyto-sanitary Convention for Africa (1967), the Agreement Concerning Cooperation in die Quarantine of Plants and their Protection against Pests and Diseases (1959), the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989), and the ASEAN Agreement on the Conservation of Nature and Natural Resources (1985).

Another MEA that involves trade measures is the Convention for the Prohibition of Fishing with Long Driftnets in the South Pacific (Wellington Convention), 29 ILM 1449 (1990).

87 Sept. 16, 1987, S. Treaty Doc. No. 10, 100th Cong., 1st Sess (1987), 26 ILM 1550 (1987), as amended, 30 ILM 539 (1991) [hereinafter Montreal Protocol]. See Scott N. Carlson, The Montreal Protocol’s Environmental Subsidies and GATT: A Needed Recmciliation, 29 Tex. I nt’l L.J. 211 (1994).

88 Montreal Protocol, supra note 87, Art. 4. In an earlier article, the author concluded that the discrimination between parties and nonparties involved was inconsistent with the GATT. See Schoenbaum, Thomas J., Free International Trade and Protection of the Environment: Irreconcilable Conflict? , 86 AJIL 700, 720 (1992). For other views, see James Cameron & Robinson, Jonathan, The Use of Trade Provisions in International Environmental Agreements and Their Compatibility with the GATT , 2 Y.B. Int ’ l Envtl. L. 3 (1992); Lallas, Peter L., Environmental Protection and International Trade: Toward Mutually Supportive Rules and Policies , 16 Harv. Envtl. L. Rev. 275 (1992); John Temple Lang, Some Implications of the Montreal Protocol to the Ozone Convention, in Environmental Protection and International Law 179 (W. Lang, H. Neuhold & K. Zemanek eds., 1991).

89 Convention on International Trade in Endangered Species of Wild Fauna and Flora, Mar. 3, 1973, 27 UST 1087, 993 UNTS 243.

90 Id., Art. VIII(1). Such punitive enforcement measures have been recommended against China and Taiwan because of their involvement in trade in rhinoceros and tiger parts. See Christine Crawford, Conflicts Between the Convention on International Trade in Endangered Species and the GATT in Light of Actions to Halt the Rhinoceros and Tiger Trade, 7 Geo. Int ’ l Envtl. L. Rev. 555 (1995).

91 Mar. 22, 1989, 28 ILM 649 (1989) [hereinafter Basel Convention].

92 Id., Art. 4. The transboundary movement of wastes between parties is regulated. Id., Art. 6. See Wirth, David A., Trade Implications of the Basel Convention Amendment Banning North-South Trade in Hazardous Wastes, 19 Int’l Envtl. Rep. (BNA) 796 (Sept. 4, 1996).

93 North American Agreement on Environmental Cooperation, Sept. 8, 9, 12 & 14, 1992, 32 ILM 1480 (1993). The Agreement is designed to raise environmental standards and to create a dispute settlement mechanism to address failures to enforce environmental laws or regulations. See Miller, Stefan R., NAFTA: A Model for Reconciling the Conflict Between Free Trade and International Environmental Protection , 56 U. Pitt. L. Rev. 483 (1994).

94 Charnovitz, Steve, Trade Measures and the Design of International Regimes , 5 J. Env ’ t & Dev. 168, 174 (1996).

95 See Chris Wold, Multilateral Environmental Agreements and the GATT: Conflict and Resolution, 26 Envtl. L. 841 (1996).

96 Schultz, Jennifer, Environmental Reform of the GA TT/WTO International Trading System , 18 World Competition 77, 104 (1994).

97 The conflict of successive treaties is controlled by Article 30 of the Vienna Convention on the Law of Treaties, supra note 53, which provides that, in a case of conflict, the later-in-time treaty prevails as between parties to both. As between two states, both WTO/GATT members, where only one is party to an MEA, the WTO/GATT prevails.

98 For proposals by various WTO members, see CTE Report, supra note 10, at 2–12.

99 Tuna/Dolphin I, supra note 4, para. 5.28.

100 Uruguay Texts , supra note 2, at 11–12.

101 See Douglas Jake Caldwell, International Environmental Agreements and the GATT: An Analysis of the Potential Conflict and the Role of a GATT “Waiver” Resolution, 18 Md. J. Int ’ l L. & Trade 173 (1994). Another critic of the waiver approach is Steve Charnovitz, GATT and the Environment, 4 Int ’ l Econ. Aff. 41 (1992).

102 North American Free Trade Agreement, Dec. 17, 1992, Can.-Mex.-U.S., 32 ILM 296 & 605, Art. 104, para. 1 (1993). See Miller, supra note 93.

103 An interpretation can be adopted by the WTO Ministerial Conference by a three-fourths majority vote. WTO Agreement, Art. IX:2, Uruguay Texts , supra note 2, at 11.

104 These ideas are discussed by Vinod Rege, GATT Law and Environment-Related Issues Affecting the Trade of Developing Countries, 28 J. World Trade 95, 124–29 (1994); and Robert E. Hudec, GATT Legal Restraints on the Use of Trade Measures Against Foreign Environmental Practices, in 2 Fair Trade and Harmonization 95, 120–42 (Jagdish N. Bhagwati & Robert E. Hudec eds., 1996).

105 Hudec, supra note 104, at 125.

106 Id. at 125–45.

107 A similar proposal has been put forward by the European Union. See CTE Report, supra note 10, at 5–6. For a summary of die various proposals to amend GATT Article XX, see Michael Reiterer, GATT, the WTO, and the Environment: The Agenda of the CTE, in particular MEAs, Ecolabeling and Trade Liberalization, paper presented at the Asia Conference on Trade and Environment, Singapore (June 27–28, 1996) (on file at Dean Rusk Center, University of Georgia).

108 There is a great debate as to whether trade measures are effective to protect the environment Many authorities argue that trade measures are at best second- or third-best solutions since they are indirect in their effect. See Charnovitz, supra note 94, at 172. The issue of effectiveness, however, should be left to the parties that are negotiating the MEA. They should have to consult with the WTO beforehand, but the WTO should not be able to invalidate an MEA on the basis of second-guessing the effectiveness of die trade restrictions involved.

109 See text at notes 75–81 supra.

110 Uruguay Texts , supra note 2, at 163 [hereinafter TBT Agreement].

111 Id. at 69 [hereinafter SPS Agreement].

112 Both Agreements, however, provide a broad exception for developing countries. The TBT provides that “developing country members should not be expected to use international standards as a basis for their technical regulations or standards which are not appropriate to their development, financial, and trade needs.” TBT Agreement, supra note 110, Art. 12:4.

113 SPS Agreement, supra note 111, Art. 2:1, 2:2. This repeats the language in GATT Article XX(b).

114 Id., Art. 5:6.

115 “Appropriate” is the level of protection deemed appropriate by the member state. See id., Annex A, para. 5.

116 SPS Agreement, supra note 111, Art. 5:6 n.3.

117 Id, Art. 2:2.

118 John J. Barcelo III, Product Standards to Protect the Local Environment—the GATT and the Uruguay Round Sanitary and Phytosanitary Agreement, 27 Cornell Int ’ l L.J. 755, 769 (1994).

119 SPS Agreement, supra note 111, Art. 2:2.

120 Id., Art. 5.

121 Id, Art. 2:3.

122 Id, Art. 3.

123 For more detailed and informed analysis of the SPS Agreement, see especially Barcelo, supra note 118; Julie Cromer, Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT, 36 Harv. Int ’ l L.J. 557 (1995); Wirth, David A., The Role of Science in the Uruguay Round and NAFrA Trade Disciplines , 27 Cornell Int ’ l L.J. 817 (1994).

124 A candidate for invalidation is die European Union’s ban on hormone-treated beef from the United States, which is apparendy not based on scientific evidence. See generally Adrian Rafael Halpern, The U.S.-E.C. Hormone Beef Controversy and the Standards Code: Implications for the Application of Health Regulations to Agricultural Trade, 14 N.C.J. Int ’ l L. & Com. Reg. 135 (1989).

Another candidate for invalidation might have been the U.S. Delaney Clause (21 U.S.C. §348(c)(3)(A) (1994)), which states that no substance can be added to food if it causes cancer in humans or animals; but this clause was modified in 1996. Food Quality Protection Act of 1996, Pub. L. No. 104-170, 110 Stat. 1489.

125 TBT Agreement, supra note 110, Art. 2:2. “Legitimate objective” is broadly defined as including “national security requirements, prevention of deceptive practices, protection of human health or safety, animal plant life or healdi, or the environment.”

126 This is the conclusion of most experts. See, e.g., Marsha A. Nichols, Sanitary and Phytosanitary Measures, in The World Trade Organization 191 (Terence P. Stewart ed., 1996).

It is informative to compare the WTO/GATT regime of regulation of disguised trade barriers to those adopted by the European Union (EU) and the NAFTA. The European Union operates a tighter system of controls to ensure the free movement of goods under the European Economic Community Treaty (EEC Treaty) and other EU legislation. Articles 30 and 34 of the EEC Treaty are interpreted to require, in principle, freedom of movement of goods between member states. Derogations are allowed under Article 36 for certain reasons, including environmental reasons; but national restrictions are subjected to a balancing test by the European Court of Justice (ECJ), and to survive they must be “necessary” and must meet the test of “proportionality.” Case 120/78, Rewe-Zentral AG v. Bundesmonopolverwaltung fur Branntwein, 1979 ECR 649 (Cassis de Dijon); Case 302/86, Commission v. Denmark, 1988 ECR 4607 (Danish Bottles). In addition, the EU institutions have wide powers to compel harmonization and mutual recognition of standards.

The NAFTA system to regulate SPS and TBT is somewhat looser than the WTO/GATT system. Under NAFTA Article 904:4, no party may maintain a standard that is an “unnecessary obstacle to trade,” but such an obstacle shall not be deemed to be created if the purpose of the standard is to achieve a “legitimate objective.” NAFTA also specifically validates high national standards, those that result in a higher level of protection than would the relevant international standard (Art. 905:3). A similar savings clause applies to SPS standards under NAFTA Article 713:3.

A fourth system for assuring free movement of goods and eliminating “unnecessary” obstacles to trade is, of course, the U.S. Commerce Clause. See City of Philadelphia v. New Jersey, 437 U.S. 617 (1978) (discrimination in interstate commerce is prohibited); Hunt v. Washington State Apple Advertising, 432 U.S. 333 (1977) (facially neutral legislation with discriminatory effect must be justified); and Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) (applying a balancing test for incidental burdens on commerce).

127 V. 20.8.1991 (B.G.B1. I S.1234), translated in 31 ILM 1135 (1992). For commentary, see Goldfine, Stephanie A., Using Economic Incentives to Promote Environmentally Sound Business Practices: A Look at Germany’s Experience with Its Regulation on the Avoidance of Packaging Waste , 7 Geo. Int ’ l Envtl. L. Rev. 309 (1994).

128 B undesministerium für Umwelt , Naturschutz , und Reaktorsicherheit , The Packaging Ordinance and International Trade §1(1) (June 23, 1993).

129 Council Directive 94/62, 1994 O.J. (L 365) 10. See generally Alexandra Haner, Comment: Will the European Union’s Packing Directive Reconcile Trade and the Environment?, 18 Fordham Int ’ l L.J. 2187 (1995); Carol S. Comer, Federalism and Environment Quality: ACase Study of Packaging Waste Rules in the European Union, 7 Fordham Envtl. L.J. 163 (1995).

130 Council Directive 94/62, supra note 129, para. 2(1).

131 For a survey of such laws in the United States, see Jonathan Schneeweiss, Proper Packaging Planning: Do We Need a Federal Law?, 15 Va. Envtl. L.J. 443 (1996).

132 Rod Hunter, European Union Recycle Laws Could Spark Trade War, Nat ’ l L.J., Mar. 18, 1996, at A21.

133 An example of such a counterproductive law was Maine’s now repealed aseptic packaging statute, which actually increased the total volume of waste from beverage packaging. See Schneeweiss, supra note 131, at 448–50.

134 See text at notes 26–31 supra.

135 See text at notes 125–26 supra.

136 A useful balancing test that might be employed is the concept of proportionality, see Danish Bottles case, supra note 126. The ECJ upheld a ban on nonreturnable beverage containers, but held that a limitation on the sale of nonapproved containers was discriminatory against foreign producers and out of proportion to the benefits served.

137 See TBT Agreement, supra note 110, Art. 2.2 and Annex I, para. 1; SPS Agreement, supra note 111, Annex A, para. 1.

138 See notes 4 and 48 supra.

139 Another example of a PPM controversy is the EU proposal to prohibit the import of pelts and manufactured goods of certain animal species caught or killed by methods using leghold traps. See Council Regulation 3254/91, 1991 O.J. (L 308) 1. Such a ban would be invalid under current WTO rules.

140 See especially Snape & Lefkovitz, supra note 72, at 788–92.

141 E.g., Alan Neff, Not in Their Backyards, Either: A Proposal for a Foreign Environmental Practices Act, 17 Ecology L.Q. 477 (1990). See the discussion in Esty , supra note 5, at 163–68.

142 See Esty , supra note 5, at 114–16.

143 Eco-dumping and countervailing duties are not authorized under the GATT Subsidies and Countervailing Duty Codes or current U.S. law. For analysis, see Robert E. Hudec, Differences in National Environmental Standards: The LevelPlayingField Dimension, 5 Minn. J. Global Trade 1, 14–21 (1995).

144 See Japan Shochu, supra note 30.

145 Australian Subsidy on Ammonium Sulphate, Apr. 3, 1950, 2 GATT B.I.S.D. 188, 191, para. 8 (1952). See also EEC—Measures on Animal Feed Proteins, Mar. 14, 1978, GATT B.I.S.D. (25th Supp.) 49, para. 4.2 (1979) (where the panel relied on the fact that the products fell into different internationally accepted tariff classifications); Spain—Tariff Treatment of Unroasted Coffee, June 11, 1981, GATT B.I.S.D. (28th Supp.) 102, para. 4.8 (1982); and Japan—Tariff on Imports of Spruce-Pine-Fir (SPF) Dimension Lumber, July 19, 1989, GATT B.I.S.D. (36th Supp.) 167 (1990).

146 Japan—Customs Duties, Taxes, and Labeling Practices on Imported Wines and Alcoholic Beverages, Nov. 10, 1987, GATT B.I.S.D. (34th Supp.) 83 (1988).

147 Id., para. 5.6.

148 Id., para. 5.7.

149 The two tests were employed cumulatively and each produced a different grouping of “like products.” See id., paras. 5.6 and 5.7.

150 United States—Measures Affecting Alcoholic and Malt Beverages, June 19, 1992, GATT B.I.S.D. (39th Supp.) 206 (1993) [hereinafter U.S. Alcohol].

151 U.S. Taxes on Automobiles, supra note 39. The issue of protective effect was analyzed not in terms of actual sales date, but on the basis of potential effect. The panel noted that there was no evidence that foreign manufacturers lacked inherent capacity to market automobiles below the high tax thresholds. The panel also found that U.S. Corporate Average Fuel Efficiency Rules were in violation of Article 111:4, since certain averaging formulas discriminated against foreign vehicles.

152 Report of the Appellate Body, supra note 30.

153 Id. at 20.

154 Id. at 21.

155 Id. at 25.

156 U.S. Alcohol, supra note 150, para. 5.71.

157 E.g., Cheyne, supra note 75, at 445–46.

158 Spain—Tariff Treatment of Unroasted Coffee, supra note 145, para. 46.

159 See notes 4 and 48 supra.

160 See note 24 supra.

161 See, e.g., Kenneth S. Komoroski, The Failure of Governments to Regulate Industry: A Subsidy Under the GATT?, 10 Hous . J. Int ’ l L. 189 (1988).

162 Under criteria issued by both the WTO and the OECD, such duties would be illegal. The WTO Agreement on Subsidies and Countervailing Measures. Arts. I & II, Uruguay Texts , supra note 2, at 264, defines subsidies in terms of financial contributions. See also the discussion in text at note 207 infra.

163 See Stewart, Richard B., Environmental Regulation and International Competitiveness , 102 Yale L.J. 2039 (1993); and Hudec, supra note 149.

164 See Esty , supra note 5, at 114–18.

165 See, e.g., Huron Cement Co. v. Detroit, 362 U.S. 440 (1960); see also Donald A. Farber & Robert E. Hudec, GATT Legal Restraints on Domestic Environmental Regulations, in 1 Fair Trade and Harmonization , supra note 104, at 59, 64–68.

166 See generally Ian Brownlie , Principles of Public International Law 307–09 (4th ed. 1990).

167 Tuna/Dolphin I, supra note 4; Tuna Dolphin/II, supra note 48.

168 See Reiterer, Michael, The International Legal Aspects of Process and Production Methods , 17 World Competition 111 (1994), and Markus Schlagenhof, Trade Measures Based on Environmental Processes and Production Methods, 29 J. World Trade 123 (1995), which also came to this conclusion.

169 See generally Karl Zemanek, State Responsibility and Liability, in Environmental Protection and International Law , supra note 88, at 187. New draft articles on state responsibility were elaborated by the International Law Commission in 1996. See Report of the International Law Commission on the work of its forty-eighth session, UN GAOR, 51st Sess., Supp. No. 10, at 125, UN Doc. A/51/10 (1996).

170 See, e.g., Trail Smelter (U.S. v. Can.), 3 R.I.A.A. 1905 (1949); Canada–United States Agreement on Air Quality, Mar. 13, 1991, 30 ILM 676 (1991) (accord limiting air pollution emissions in each country).

171 22 U.S.C. §§277–278b (1994). See Steven P. Mumme, Innovation and Reform in Transboundary Resource Management: A Critical Look at the International Boundary Water Commission, United States and Mexico, 33 Nat. Res. J. 93 (1993).

172 See Robert Housman , Reconciling Free Trade and the Environment : Lessons from the North American Free Trade Agreement (UNEP 1994). Mexico and the United States have also established a North American Development Bank. See 32 ILM 1545 (1993).

173 North American Agreement on Environmental Cooperation, supra note 93.

174 June 1992, 33 ILM 936 (1994).

175 With Dolphin Slaughter Ended, U.S. Considers Lifting Tuna Ban, Int ’ l Herald Trib. , June 26, 1996, at 6 [hereinafter Dolphin Slaughter Ended].

176 See Matthew Hulm , A Strategy for the Seas : The Regional Seas Programme , Past and Future (UNEP 1983).

177 See generally Patricia W. Birnie & Alan E. Boyle , International Law and the Environment 260–62 (1992).

178 A highly successful regional pollution control system already in effect is the regulation of long-range transboundary air pollution negotiated under the aegis of the Economic Commission for Europe. See id. at 397.

179 This idea is advanced by Rege, supra note 104, at 113–16. It is already occurring to some extent through particular environmental agreements and the Global Environmental Facility (GEF), a joint project of the World Bank, UNEP, and the UN Development Programme. See Patrick Doherty, The Transfer of Environmentally Sustainable Technologies to Asia, 4 Rev. E.C. & Int ’ l Envtl. L. 33 (1995).

180 Bernabe-Riefkohl, Alberto, “To Dream the Impossible Dream”: Globalization and Harmonization of Environmental Laws , 20 N.C. J. Int ’ l & Com. Reg. 205 (1995).

181 The European Union, in contrast, relies greatly on mutual recognition, as well as harmonization. See id. at 215–17.

182 David W. Leebron, Lying Down with Procrustes: An Analysis of Harmonization Claims, in 1 Fair Trade and Harmonization , supra note 104, at 41.

183 Id. at 84–86.

184 See Stewart, supra note 163, at 2051–57; Jagdish Bhagwati, The Demands to Reduce Domestic Diversity Among Trading Nations, in 1 Fair Trade and Harmonization , supra note 104, at 9.

185 See Alessandra Casella, Free Trade and Evolving Standards, in 1 Fair Trade and Harmonization , supra note 104, at 119; John Douglas Wilson, Capital Mobility and Environmental Standards: Is There a Theoretical Basis for the Race to the Bottom?, in id. at 393.

186 See Roht-Arriaza, Naomi, Shifting the Point of Regulation: The International Organization for Standardization and Global Lawmaking on Trade and the Environment , 22 Ecology L.Q. 479 (1995); Rodgers, Kerry E., The ISO Environmental Standards Initiative , 5 N.Y.U. Envtl. L.J. 181 (1996).

187 See generally Christopher L. Bell, ISO 14001: Application of International Environmental Management Systems Standards in the United States, 25 Envtl. L. Rep. (Envtl. L. Inst.) 10,678 (1995).

188 U.S. Environmental Protection Agency , Status Report on the Use of Environmental Labels Worldwide (1993). The use of eco-labels raises questions that are beyond the scope of this paper, such as whether consumer fraud rules, e.g., §5 of the Federal Trade Commission Act, are violated. See U.S. Environmental Protection Agency , Determinants of Effectiveness for Environmental Certification and Labeling Programs (1994).

189 See Staffin, Elliot B., Trade Barrier or Trade Boon? A Critical Evaluation of Environmental Labeling and Its Role in the “Greening” of World Trade , 21 Colo. J. Envtl. L. 205, 225 (1996).

190 Id. at 230–32.

191 Commission Regulation 880/92, Art. I, 1992 O.J. (L 99) 1.

192 17 U.S.C. §4001 (1994).

193 40 C.F.R. pt. 600 (1996).

194 Supra note 39.

195 Tuna/Dolphin I, supra note 4, para. 5.42.

196 See Brian F. Chase, Tropical Forests and Trade Policy: The Legality of Unilateral Attempts to Promote Sustainable Development Under the GATT, 17 Hastings Int ’ l & Comp. L. Rev. 349 (1994); Staffin, supra note 189, at 241, 272–76.

197 TBT Agreement, supra note 110, Annex I, para. 1.

198 Id., Annex III.

199 The CTE should formulate guidelines and criteria for certification of eco-labeling and encourage mutual recognition of different national programs. With observance of these requirements, eco-labeling holds great promise for fostering both product characteristics and PPMs that safeguard environmental quality.

200 There is a rich scholarly literature debating the merits of the PPP in relation to trade. See, e.g., Charles S. Pearson, Testing the System: GATT + PPP = ?, 27 Cornell Int ’ l L.J. 553 (1994); Candace Stevens, Interpreting the Polluter Pays Principle in the Trade and Environment Context, id. at 578; Charnovitz, supra note 5, at 505–07.

201 OECD, Guiding Principles Concerning International Economic Aspects of Environmental Policies, May 26, 1972, 11 ILM 1172 (1972) [hereinafter OECD, Guiding Principles]. See also OECD, Recommendation on the Implementation of the Polluter Pays Principle, Nov. 14, 1974, 14 ILM 234 (1975) [hereinafter OECD, Recommendation].

202 OECD, Guiding Principles, supra note 201, at 1175.

203 The PPP is thus opposed to the theoretical view of pollution as a reciprocal problem that is value neutral; and it does not make any difference as to whom the entitlement is allocated and who bears the cost. See Ronald Coase, The Problem of Social Cost, 3 J.L. & Econ. 1 (1960).

204 Superfund, supra note 32, para. 5.2.5.

205 Rio Declaration on Environment and Development, supra note 7, Principle 16, 31 ILM at 879.

206 OECD, Recommendation, supra note 201, 14 ILM at 239.

207 Agreement on Subsidies and Countervailing Measures, Uruguay Texts , supra note 2, at 264. Article 8(c) provides that subsidies to upgrade “existing facilities” (defined as facilities in operation for at least two years) to meet new environmental requirements are nonactionable. In addition, the WTO Agreement on Agriculture allows subsidies for research and infrastructure works connected with rural environmental programs. Structural adjustment assistance to farmers to allow governments to retire land from marketable agricultural production is also exempt See Uruguay Texts , supra note 2, at 39.

208 In the U.S. Superfund case, supra note 32, the European Community argued that the taxes in question violated the PPP because they were imposed on someone other than the polluter. This argument has no merit. The PPP does not exclude any form of taxation or border tax adjustment.

209 OECD Guiding Principles, supra note 201, para. 13.

210 The Trade Policy Review Mechanism is a regular assessment of a WTO member’s compliance with WTO/GATT policies and agreements. See Uruguay Texts , supra note 2, Annex 3, at 434.

211 North American Agreement on Environmental Cooperation, supra note 93. For the NAFTA, see note 102 supra.

212 See Robert Carbaugh & Darwin Wassink, Environmental Standards and International Competitiveness, 16 World Competition 81 (1992).

213 Id. at 87–88.

214 H. Jeffrey Leonard , Pollution and the Struggle for the World Product (1988); Charles S. Pearson , Down to Business : Multinational Corporations , the Environment , and Development (World Resources Institute 1985).

215 Carbaugh & Wassink, supra note 212, at 88–90.

216 The Agreement on Trade-Related Investment Measures (TRIMs), Uruguay Texts , supra note 2, at 163, was one of the key agreements of the GATT Uruguay Round.

217 See Michael A. Geist, Toward a General Agreement on the Regulation of Foreign Direct Investment, 26 Law & Pol ’ y Int ’ l Bus. 673 (1995).

218 NAFTA, supra note 102, Art. 1114:2.

219 See WTO Understanding on Rules and Procedures Governing the Setdement of Disputes, Art. 23(2) (a), Uruguay Texts , supra note 2, at 426.

220 An example is President Truman’s unilateral proclamation of U.S. “jurisdiction and control” over the resources of the continental shelves of the United States in 1945. This act matured into the doctrine of the continental shelf formulated in the Geneva Convention on the Continental Shelf, Apr. 29, 1958, 15 UST 471, 499 UNTS 311. Thus, unilateral measures that are “illegal” at first may come to be “opposable” against some states and develop into an international law rule. See Fisheries case, infra note 221 (baselines claimed by Norway).

221 The Fisheries case (UK v. Nor.), 1951 ICJ Rep. 116 (Dec. 18), involved a dispute over the limits of Norway’s internal waters delimited by straight baselines. The ICJ found that the rule limiting artificial baselines to 10-nautical-mile lines to close the mouth of a bay “has not acquired the authority of a general rule of international law” and was inapplicable (“opposable” in the French text) against Norway so that Norway was not limited to such baselines of 10 miles or less. Id. at 131. The straight baselines relied on by Norway were opposable to the UK, meaning the UK could not object to them as violative of international law since it had not objected in a timely fashion. Id. at 139.

222 To be opposable, a unilateral measure must fulfill three requirements: (1) it must be within the effective power of the asserting state; (2) it must conform to a sense of equity and the general interest of the international community (not merely the special interest of a particular state); and (3) it must be asserted in good faith. Murase, supra note 75, at 364–66.

223 Provision is made for countermeasures in the International Law Commission’s draft articles on state responsibility, supra note 169, Arts. 47–50. See generally Oscar Schachter , International Law in Theory and Practice 184–200 (1991); Yoshiro Matsui, Countermeasures in the International Legal Order, 37 Japanese Ann. Int ’ l L. 1 (1994).

224 See Elisabeth Zoller , Peacetime Remedies : An Analysis of Countermeasures 37–42 (1984).

225 Id. at 70–71. See also Restatement , supra note 80, §905 (Unilateral Remedies).

226 See The Naulilaa (Ger./Port.), 2 R.I.A.A. 1011 (1928); Case concerning the Air Service Agreement of 27 March 1946 (U.S./Fr.), 18 R.I.A.A. 417 (1978).

227 See draft articles on state responsibility, supra note 169, Art. 47, para. 2.

228 This harm prevention principle is generally traced to the famous Trail Smelter and Corfu Channel decisions, and was explicitly recognized as customary international law by the International Court of Justice in the advisory opinion on the Legality of the Threat or Use of Nuclear Weapons, 25 ILM 809, para. 26 (1996).

229 See generally Fox, Sean T., Responding to Climate Change: The Case for Unilateral Measures to Protect the Global Atmosphere , 84 Geo. L.J. 2499 (1996).

230 The Spanish vessels employed double nets with holes so small nothing could escape; this was a violation of the Northwest Adantic Fisheries Organization agreement. See generally Taunya L. McLarty, WTO and NAFO Coalescence: A Pareto Improvement for Both Free Trade and Fish Conservation, 15 V a. Envtl. L.J. 469 (1996).

231 Convention on Future Multilateral Cooperation in Northwest Atlantic Fisheries, Oct. 24, 1978, S. Exec. Doc. T, 90th Cong., 1st Sess. (1979).

232 For example, Canada could have adopted a ban on imports of fish products from Spain but did not because Canada chose to retaliate in another way, by pursuing and capturing the offending vessels. See Anne Swardson, Canada’s Fish Affair: Diplomacy or Piracy?, Wash. Post , Mar. 29, 1995, at A25.

233 Pub. L. No. 102-523, 106 Stat. 3425 (1992), codified at 16 U.S.C. §§1411–1418 (1994).

234 Note 174 supra.

235 See Marine Mammal Commission , Annual Report to Congress 121 (1994).

236 Dolphin Slaughter Ended, supra note 175, at 6.

237 Tuna/Dolphin I, supra note 4, para. 5.28. See text at note 52 supra.

238 See, e.g., Dunoff, Jeffrey L., Reconciling International Trade with Preservation of the Global Commons: Can We Prosper and Protect? , 49 Wash. & Lee L. Rev. 1407, 1415–33 (1992).

239 See Chase, supra note 196, at 374–78.

240 Edith Brown Weiss, Environment and Trade as Partners in Sustainable Development: A Commentary, 86 AJIL 728, 732 (1992).

241 The principle of sustainable development was explicidy endorsed by the WTO member states. See supra note 7.

242 7 U.S.C. §1360 (1994).

243 See text at notes 111–26 supra.

244 See Report by the Chairman of the GATT Working Group on Export of Domestically Prohibited Goods and other Hazardous Substances, GATT Doc. L/6872 (July 2, 1991). This group recommended a code that would allow individual member states to decide whether their domestic restrictions should be carried over to exports.

245 See United Nations Draft Proposal for a PIC Instrument, 19 Int’l Env’t Rep. (BNA) 764 (Aug. 21, 1996). This draft was preceded by the London Guidelines for the Exchange of Information on Chemicals in International Trade, as amended in 1989, which was adopted by the UNEP Governing Council in Decision 15/30 (May 25, 1989). The London Guidelines also included a prior informed consent regime. A related treaty regime under consideration would ban trade in 12 persistent organic pollutants, including DDT and dioxin.

246 United Nations Draft Proposal for a PIC Instrument, supra note 245, Arts. 4–6.

247 The Basel and PIC treaty regimes are designed to be complementary and mutually exclusive. See U.N. Delineates When Substances Would Be Controlled by Basel or PIC Treaty, 19 Int’l Env’t Rep. (BNA) 725 (Aug. 21, 1996). The PIC convention would be limited to chemicals and pesticides, however, and would not cover pharmaceuticals, radioactive materials or food additives (including pesticide residues).

248 See text at notes 48–50 supra.

249 See text at notes 71–80 supra. For arguments in favor of a total export ban, see, e.g., Emilie Sebesta, The End of the Free Reign: In Support of a Ban on the Export of Unregistered Pesticides from the United States, 26 Tex. Int ’ l L.J. 561 (1991).

250 See text at notes 110–26 supra.

251 See text at notes 103—05 supra.

252 E.g., Forest Resources Conservation and Shortage Act of 1990, 16 U.S.C. §§620–620j (1994).

253 In Canada Herring, supra note 35, the GATT panel struck down a Canadian export ban on unprocessed sockeye and pink salmon, herring, and herring roe. Similarly, a binational panel established under the U.S.Canada Free Trade Agreement of 1988 invalidated a Canadian regulation that required all salmon and herring caught in Canadian waters to be landed in Canada. In the Matter of Canada’s Landing Requirement for Pacific Coast Salmon and Herring, 2 Can. Trade & Commodity Tax Cas. (CCH) 7162 (1989).

254 This exemption allows only “temporary” export restrictions.

255 See text at notes 55–69 supra.

256 16 U.S.C. §620 (1994). Senator Robert Packwood, who supported the restrictions, asserted that the provision would satisfy U.S. obligations under the GATT. See 7 Int’l Trade Rep. (BNA) 758, 759 (1990).

257 The Forest Service, which is responsible for managing U.S. national forests and selling timber rights on federal lands, posts multibillion-dollar losses each year. See generally Charles F. Wilkinson, The Forest Service: A Call for a Return to First Principles, 5 Pub. Lands L. Rev. 3 (1984).

258 See Unfair and Illegal Foreign Trade Practices and the Upcoming Uruguay Round of Multilateral Trade Negotiations: Hearings Before the Subcomm. on Oversight and Investigations of the House Comm. on Energy and Commerce, 101st Cong., 2d Sess. 169 (1990) (testimony of U.S. Trade Representative Carta A. Hills).

259 See Mark Spalding, Trade and Environment: The British Columbian Timber Trade Example, 4 Rev. E.C. & Int ’ l Envtl. L. 250 (1995).

260 “Old growth” or “ancient” forests are terms given to forest habitat where trees vary considerably in age and size and there is a multilevel canopy that supports a rich ecosystem. See Daniel G. Drais, The Tongass Timber Reform Act: Restoring Rationality and Responsibility to the Management of America’s Largest National Forest, 8 Va. Envtl. L.J. 317 (1989).

261 Supra note 91. Another important initiative is the Bamako Convention, which bans the import of hazardous waste into Africa from noncontracting parties. Bamako Convention on the Ban of the Import into Africa and the Control of Transboundary Movement and Management of Hazardous Waste within Africa, Jan. 29, 1990, 30 ILM 773 (1991). This Convention, which was sponsored by the Organization of African Unity, was signed by all African countries except South Africa.

262 Basel Convention, supra note 91, Art. IV(2) (e), (g).

263 42 U.S.C. §6938 (1994). 40 C.F.R. §262.53(a)–(b) (1996) sets forth the requirements for the principal exporters of hazardous waste.

264 See Wirth, supra note 92. For background, see Jennifer R. Kitt, Waste Exports to the Developing World: A Global Response, 7 Geo. Int ’ l Envtl. L. Rev. 485 (1995).

265 See generally Hugh J. Marbury, Hazardous Waste Exportation: The Global Manifestation of Environmental Racism, 28 Vand. J. Transnat ’ l L. 251 (1995); Gonzalo Biggs, Latin America and the Basel Convention on Hazardous Wastes, 5 Colo. J. Int ’ l Envtl. L. & Pol ’ y 333 (1994).

266 See supra note 7. The Rio Declaration is a nonbinding statement of principles.

267 E.g., Philadelphia v. New Jersey, 437 U.S. 617 (1978).

268 Case C–2/90, Commission v. Belgium, [1993] 1 C.M.L.R. 365 [hereinafter Belgian Waste].

269 The Court upheld the ban as regards the importation of nonhazardous waste that was not covered by a Council directive. However, the Court ruled that to the extent that the ban also related to hazardous waste, Belgium had failed to fulfill its obligation to comply with Council Directive 84/631 on the transboundary movement of such waste. Id., paras. 38, 39.

270 See farther Daniel W. Sincox, The Future of Europe Lies in Waste, 28 V and. J. Transnat ’ l L. 543 (1995).

271 The U.S. Supreme Court has ruled that waste is a product subject to the Commerce Clause. Philadelphia v. New Jersey, 437 U.S. 617 (1978). Similarly, the European Court of Justice has ruled that wastes are goods subject to the free movement regime of Article 30 of the EEC Treaty. See Belgian Waste, supra note 268, para. 36.

272 See text at notes 103–05 supra.

273 See text at notes 244–47 supra.

274 See text at notes 71–90 supra.

275 See text at notes 39–46 supra.

276 There are four basic types of economic incentives: (1) taxes or charges; (2) transferable pollution permits; (3) deposit-and-return systems; and (4) information strategies. See Stewart, supra note 163, at 2093–94.

277 See Geza Feketekuty, The Link Between Trade and Environmental Policy, 2 Minn. J. Global Trade 171, 178 (1993).

278 See Greenery and Poverty, Economist , Sept. 18, 1993, at 80.

279 See text at notes 20–29 supra.

280 Of course, the requirements of Article 111:2 must be kept, which means that imports cannot be charged more than domestic products. However, in the Japan Shochu case, supra note 30, the WTO Appellate Body held that Article 111:2 embodies two standards. See text at note 30 supra.

281 See Paul Demaret & Raoul Stewardson, Border Tax Adjustment Under GATT and EC Law and General Implications for Environmental Taxes, 28 J. World Trade 5, 6–7 (1994).

282 For the history of this distinction, see id. at 9–12.

Article 111:2 of the GATT was the model for Article 95 of the EC Treaty. For the ECJ’s interpretation of Article 95, see id. at 15–30.

283 Border Tax Adjustments, Dec. 2, 1970, GATT B.I.S.D. (18th Supp.) 97, 100–01, para. 14 (1972).

284 G ary C. Hufbauer & J. S. Erb , Subsidies in International Trade 23 (1984).

285 Superfund, supra note 32, para. 5.2.4.

286 Taxes on Automobiles, supra note 39. As seen, Japan Shochu, supra note 30, allows some flexibility in imposing environmental taxes on imports.

287 Canada—Import, Distribution, and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies, Mar. 22, 1988, GATT B.I.S.D. (35th Supp.) 37 (1989) (Canada Beer I); Canada—Import, Distribution, and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies, Feb. 18, 1992, GATT B.I.S.D. (39th Supp.) 27 (1993) [hereinafter Canada Beer II].

288 Canada Beer II, supra note 287, para. 5.33.

289 GATT Doc. EPCT/TAC/PV/26, at 21 (1947), quoted in Superfund, note 32 supra, para. 5.2.7.

290 Superfund, supra note 32, para. 5.2.8.

291 Id., para. 5.2.9.

292 May 9, 1992, 31 ILM 849 (1992).

293 Id., Art. 4.

294 See Decision 1/CP.1, Art. II, UN Doc. FCCC/CP/1995/7/Add.1, 34 ILM 1671, 1677 (1995).

295 At the 1995 Berlin Conference of the Parties it was agreed to establish “joint implementation” projects between Convention parties. Such projects involve investment by one country (or its private sector) in GHG reduction opportunities in another country where reductions can be secured at lower marginal cost. This may be the forerunner of further cooperative measures such as emission trading. Decision 5/CP.l, para. 1, id., 34 ILM at 1685.

296 In 1993 President Clinton proposed a broad-based energy tax that would have applied to all fuels at a basic rate in proportion to their energy content as measured in British Thermal Units (BTUs). A version of the BTU tax passed the House of Representatives, but the Senate substituted a 4.3 cent-per-gallon increase in the tax on motor fuels, which was ultimately passed into law. See H.R. Rep. No. 103–111, 103d Cong., 1st Sess. (1993).

During the 1996 presidential campaign, Republican nominee Robert Dole advocated repeal of die increase. The Republican House Majority Leader, Dick Armey, suggested that the education budget should be cut to make up the lost revenue. President Clinton did not defend the tax, and offered instead to support repeal in return for Republican support for increasing the minimum wage. See Thomas L. Friedman, The Gas Tax Ought to Go Up, N.Y. Times , May 20, 1996, at A15.

297 In 1992 the European Commission proposed a hybrid carbon/energy tax to limit carbon dioxide emissions and to improve energy efficiency. Commission Proposal for a Council Directive Introducing a Tax on Carbon Dioxide Emissions and Energy, 1992 O.J. (C 196) 1. See Amy C. Christian, Designinga Carbon Tax: The Introduction of the Carbon Burned Tax (CBT), 10 UCLA J. Envtl. L. & Pol ’ y 332, 342 (1992). This and modified versions of an energy tax have not been enacted, although the Commission has approved the energy taxes of afew member states. See, e.g., Commission Approves Modifications to Danish Carbon Tax, Grant Scheme, 18 Env’t L. Rep. (BNA) 36 (Jan. 13, 1995).

298 Another environmental tax of this kind is §4681 of the U.S. Internal Revenue Code, which provides for a tax on “any product (other than an ozone-depleting chemical) entered into the United States for consumption, use, or warehousing if any ozone-depleting chemical was used as material in the manufacture or production of such product.” This would cover such products even if the ozone-depleting chemical were completely consumed in the production process.

299 Kristina Haverkamp, The GATT and Environmental Protection 107 (1993) (unpublished LL.M. thesis, University of Georgia) (on file with author); Christian Pitschas, GATT/WTO Rules for Border Tax Adjustment and the Proposed European Directive Introducing a Tax on Carbon Dioxide Emissions and Energy, 24 Ga. J. Int ’ l & Comp. L. 479, 493 (1995).

300 Border Tax Adjustments, supra note 283, at 100–01, paras. 14–15.

301 Paragraph (g) of the Agreement on Subsidies and Countervailing Measures, supra note 207, was carried over unchanged from the 1979 GATT Subsidies Code.

302 See Demaret & Stewardson, supra note 281, at 21.

303 Id. at 30.

304 Henry L. Thaggart, A Closer Look at the Tuna-Dolphin Case: “Like Products” and “Extrajurisdictionahty” in the Trade and Environment Context, in Trade and the Environment , The Search for Balance 151 (James Cameron, Paul Demaret & Damien Geradin eds., 1994).

305 Tuna/Dolphin I, supra note 4, para. 5.13.

306 E.g., Frederic L. Kirgis, Jr., Environment and Trade Measures After the Tuna/Dolphin Decision, 49 Wash. & Lee L. Rev. 1221, 1222 (1992).

307 For a detailed proposal, see Peeyush Jain, Proposal: A Pollution Added Tax to Slow Ozone and Global Warming, 26 Stan. J. Int ’ l L. 549 (1990).

* I would like to thank the Research Centre for International Law, University of Cambridge, and the Institute of Social Science, University of Tokyo, for the opportunity to present and discuss the contents of this article in advance of publication. I am especially grateful for their comments to Ms. Cairo A. R. Robb, and to Professor Junji Nakagawa and Mr. Osamu Hayakawa of the Japan Environment Program.

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International Trade and Protection of the Environment: The Continuing Search for Reconciliation

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