Balancing the relationship between trade and the environment within the world trade organisation: Is this the end of the sea turtle?

Asia Pacific Journal of Environmental Law

Volumn 4, Issue 1, 1999, Pages 37-59

  Schultz, Jenny ^a  

^a MONASH UNIVERSITY   (Australia)

Author keywords

Environment; GATT; Shrimp; Trade; Turtle; World trade organisation

Indexed keywords

EID: 34248092770     PISSN: 13852140     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (111)

1. The WTO will refer to the World Trade Organisation and associated agreements which are contained under the Results of the Uruguay Round of Multilateral Negotiations signed at Marrakesh on 15 April 1994. The G ATT will refer to the 1947 General Agreement on Tariffs and Trade, 55 UNTS 187. In this analysis the text of the GATT is hereafter referred to as the General Agreement or the GATT. The GATT also refers to the institutional framework which implemented the General Agreement prior to the establishment of the WTO.
2. United States - Import Prohibition of Certain Shrimp and Shrimp Products GATT Doc WT/DS58/R (15 May 1998) (Shrimp Turtle Panel Report);
3. and United States - Import Prohibition of Certain Shrimp and Shrimp Products Appellate Body Report, GATT Doc WT/DS58/AB/R (12 October 1998) (Shrimp Turtle Appellate Body Report).
4. For earlier consideration of this dispute see Rohan Hardcastle "Environmental Trade Measures Under Siege: The WTO US Shrimp Case" (1998) 3 APJEL 157-171.
5. Many articles and books analyse in detail the elements of this conflict. See John H. Jackson "World Trade Rules and Environmental Policies: Congruence or Conflict?" (1992) 49 Washington and Lee Law Review 1227;
6. Peter Lallas et al "Environmental Protection and International Trade: Toward Mutually Supportive Rules and Policies" (1992) 16 Harvard Environmental Law Review 271;
7. Steve Charnovitz "GATT and the Environment: Examining the Issues" (1992) International Environmental Affairs 203;
8. Kym Anderson and Richard Blackhurst (eds) The Greening of World Trade Issues (Harvester Wheatsheaf, New York: 1992);
9. Eliza Patterson "GATT and the Environment: Rules Changes to Minimise Adverse Trade and Environmental Effects" (1992) Journal of World Trade 35;
10. Ernst-Ulrich Petersmann International Trade and Environmental Law after the Uruguay Round (Kluwer Law International, London, 1995);
11. Eliza Patterson "International Trade and the Environment: Institutional Solutions" (1991) Environmental Law Reporter 10599;
12. Steven Shrybman "International Trade and the Environment: An Environmental Assessment of the General Agreement on Tariffs and Trade" (1990) 20 The Ecologist 32;
13. Daniel C. Esty Greening the GATT: Trade, Environment and the Future (Institute for International Economics, Washington: 1994). The interrelationship between trade and the environment was also a crucial issue in the negotiation of the North American Free Trade Agreement (NAFTA) and an area of concern in the Uruguay Round of GATT trade negotiations.
14. See Steve Charnovitz "Free Trade, Fair Trade, Green Trade: Defogging the Debate" (1994) 27 Cornell International Law Journal 459 at 468, where he argues that "the supervisory function of the GATT iscontroversial because its influence on environmental policy can only be negative". He perceptively points out that because the GATT does not have rules to regulate the environment the most positive recommendation that can ever be made is that the environmental measure in question does not contravene GATT.
15. The most significant case dealing with the trade/environment conflict is the well published Tuna Dolphin decision, which determined that US import restrictions on tuna to protect dolphins from incidental kill during purse seine fishing operations violated the GATT. The Tuna Dolphin dispute involved two GATT Panel reports which are commonly referred to as Tuna I and Tuna II;
16. United Stares - Restrictions on Imports of Tuna, GATT Doc DS S21/R (3 September 1991) (Tuna Dolphin I)
17. and United States - Restrictions on Imports of Tuna GATT Doc DS29/R (16 June 16 1994) (Tuna Dolphin II), and collectively known as Tuna Dolphin Panel.
18. Robert E. Hudec "GATT Legal Restraints on the Use of Trade Measures against Foreign Environmental Practices" in Jagdish Bhagwati and Robert E. Hudec (eds) Fair Trade and Harmonization: Prerequisities for Free Trade? (MIT Press, Cambridge, Mass.: 1996) 95. In this article two of Hudec's areas of conflict are oudined. The third type of conflict Hudec refers to is the conflict which occurs when countries with more stringent environmental laws try to create a level playing field for their industries by imposing trade restrictions on imports from countries with less rigorous environmental policies.
19. Ibid at 96.
20. Article III is the "national treatment" clause which prohibits discrimination against imported goods once they are across the border.
21. Article XI embodies one of the fundamental principles of GATT, that if protection is to be accorded to domestic industry it should be via tariffs and not via other commercial measures. The Article imposes a general prohibition on quantitative measures such as quotas and embargoes.
22. Article XX(b) and (g) are considered to be the environmental exceptions. The relevant text of Article XX states: "Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: ...(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.
23. Article XX does not explicitly mention the "environment" however clauses (b) and (g) address environmental based trade measures.
24. See United States - Taxes on Petroleum and Certain Imported' Substances (1998) 34th Supp GATT B.I.S.D. (Basic Instruments and Selected Documents) 136 (Superfund Panel Report);
25. Canada - Import Distribution and Sale of Certain Alcoholic Drinks by Provincial Marketing Agencies (1992) 39th Supp GATT B.I.S.D. 27; and
26. Tuna II note 5, note this decision has not been adopted by the GATT Council.
27. Canada-Measures Affecting Exports of Unprocessed Herring and Salmon (1989) 35th Supp GATT B.I.S.D. 98 (Herring and Salmon Panel).
28. Thailand - Restrictions on Importation on Importation of and Internal Taxes on Cigarettes (1991) 37th Supp GATT B.I.S.D. 200 (Thai Cigarette Panel).
29. See note 5.
30. United States - Taxes on Automobiles GATT Doc DS31/R (29 September 1994). reprinted in (1994) 33 ILM 1397 (CAFE Panel).
31. Under the new dispute settlement rules of the WTO, Expert Review groups may be established to facilitate the decision making process. See 1994 Understanding on Rules and Procedures Governing the Setdement of Disputes, Annex 2 WTO Agreement, Art. 13, para 2, reprinted in (1994) 33 ILM 112 (DSU).
32. For a discussion of the case and some of the issues it raises see Matthew H. Hurlock "The GATT, US Law and the Environment: A Proposal to Amend the GATT in Light of the Tuna/Dolphin Decision" (1992) 92 Columbia Law Review 2098;
33. Robert Housman and Durwood Zaelke "The Collision of the Environment and Trade: The GATT Tuna/Dolphin Decision" (1992) 22 Environmental Law Reporter 268;
34. Joel P. Trachtman "International Decision: GATT Dispute Settlement Panel" (1992) 86 American Journal of International Law 142;
35. Steve Charnovitz "Environmental Trade Sanctions and the GATT: An Analysis of the Pelly Amendment on Foreign Environmental Practices" (1994) 9 American University Journal of International Law and Policy 751;
36. Stanley Spracker and David Lundsgaard "Dolphins and Tuna: Renewed Attention on the Future of Free Trade and Protection of the Environment" (1993) 18 Columbia Journal o/ Environmental Law 385;
37. Thomas Skilton "GATT and the Environment in Conflict: The Tuna-Dolphin Dispute and the Quest for an International Conservation Strategy" (1993) 23 Cornell University Lawjoumal 455;
38. Janet McDonald "Trade and the Environment: Greening the GATT: Harmonizing Free Trade and Environmental Protection in the New World Order" (1992) 23 Environmenwl Law 397;
39. Steve Charnovitz "Trade and the Environment: The Environment vs. Trade Rules: Defogging the Debate" (1992) 23 Envt'ronmertta! Law 475;
40. Alison Ferrante "The Dolphin/Tuna Controversy and Environmental Issues: Will the World Trade Organization's 'Arbitration Court' and the International Court of Justice's Chamber for Environmental Matters Assist the United States and the World in Furthering Environmental Goals" (1996) 5 Transnational Lawand Policy 279;
41. Nancy Kubaseketal "Protecting Marine Mammals: Time for a New Approach" (1994/95) 13 UCLA Journal of Environmental Law and Policy 1;
42. Jennifer Ramach "Dolphin-Safe Tuna Labelling: Are the Dolphins Finally Safe!" (1996) 15 Virginia Environmental Lawjoumal 743;
43. Fredrick Kirgis "Environmental and Trade Measures After the Tuna/Dolphin Decision" (1992) 49 Wosfiington and Lee Law Review 1221.
44. In Tuna Dolphin I the complainant, Mexico did not press for immediate adoption of the report, as at that time they were negotiating entry into NAFTA and for political reasons were reluctant to push for adoption. Under the GATT dispute settlement practice prior to the conclusion of the Uruguay Round, after a panel issued a report, it was considered for adoption by the GATT Council. Traditionally, decisions in the Council were made by consensus, which meant that any party, including the losing party, could prevent the Council from adopting a panel report. Alternatively the complainant may not push for adoption of the report. In these cases the unadopted report would represent only the view of three individual panel members. This was viewed as a major failing of the GATT dispute settlement system and the DSU fundamentally changed this procedure. Article 16 of the DSU eliminates the possibility of blockage by providing that a panel report shall be adopted at the second meeting on which it appears on the Dispute Settlement Body's agenda, unless there is a consensus not to adopt it.
45. 15 U.S.C. (United States Code) 2002-2003, Public Law No 92-513 (1975), repealed by Public Law No 103-272 s. 7(b), 108 Stat 1379 (1994) (United States).
46. 26 U.S.C. (United States Code) 4046 (1978).
47. For example the tax did not apply to light trucks or vans.
48. European Commission Report on US Barriers to Trade and Investment (May 1995) 40. It has been argued that the CAFE Panel Report allowed a deliberately protectionist measure to slip through the GATT system;
49. see generally Charles T. Haag "Legitimizing 'Environmental' Legislation Under the GATT in Light of the CAFE Panel Report: More Fuel for Protectionists!" (1995) 57 University of Pittsburg Lau Review 79.
50. See note 20.
51. United States - Standards for Reformulated and Conventional Gasoline (1996) 35 ILM 274 (Reformuloted Gasoline).
52. The Beef Hormone dispute involved two complaints against the EC. One brought by the US and one by Canada. Although the same Panel heard both disputes, it issued two separate but similar reports. For purposes of simplification this article will refer to the US Panel Report and Appellate Body Report only;
53. see EC Measures Concerning Meat and Meat Products (Hormones) GATT Doc WT/DS26/9 (25 September 1997),
54. and Appellate Body Report, GATT Doc WT/DS26/AB/R (16 January 1998) (Beef Hormones dispute).
55. Australia - Measures Affecting Importation of Salmon GATT Doc WT/DS18/R (12 June 1998) and
56. Appellate Body Report GATT Doc WT/DS18/AB/R (20 October 1998) (Salmon dispute).
57. The Uruguay Round of trade negotiations ended in December 1993 and the final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations was signed at Marrakesh on 15 April 1994. Decisions made after that date fall under the new WTO system.
58. See DSU, note 17.
59. DSU, Art. 17 (14) sets out the adoption process. Panel reports are automatically adopted unless a party to the dispute formally notifies the Dispute Settlement Body (DSB) of its decision to appeal, or the DSB decides by consensus not to adopt a report.
60. See DSU, Art. 16 (4)
61. For notes on the case see generally Layla Hughes "Limiting the Jurisdiction of Dispute Setdement Panels: The WTO Appellate Body Beef Hormone Decision" (1998) 10Georgetown International Environmental Law Review 915 and Lisa Seiheimer The SPS Agreement Applied: The WTO Hormone Beef Case" (1998) 4 Environmental Lawyer 537.
62. For an article on the SPS Agreement see generally Julie Cromer "Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations Under GATT" (1995) 36 Harvard International Law Journal 577.
63. There are currently at least four species of sea turtles that now face possible extinction: the loggerhead, the green leatherback, the hawksbill and the Kemp's ridley.
64. Large-scale pelagic driftnets are giant nets, sometimes extending for 30 miles and reaching 40 feet in depth, that entrap everything that swims or drifts into their path. They are sometimes called "curtains of death".
65. In the Magnuson Fishery Conservation and Management Act, 16 U.S.C. (United States Code) (1996), the US banned all US fishing vessels from using driftnets, whether the vessels operate in US, international or foreign waters. The US also adopted two laws that provide for import bans, as well as other sanctions, against the fish products of countries that permit the use of driftnets. The laws are the Marine Mammal Protection Act, 16 U.S.C.A. (United States Code Annotated) (1972) and the High Seas Driftnet Fisheries Enforcement Act, Public Law No 102-582, 106 Stat 4900 (1992) (United States). The United Nations General Assembly also adopted resolutions in 1989 and 1991 calling for a moratorium on large-scale use of driftnets on the high seas, see General Assembly Resolution 44/225 (1990) 29 ILM 1555, and General Assembly Resolution 46/216 (1992) 31 ILM 241.
66. TEDs are metal trap-doors attached to shrimp nets that enable turtles to escape and thereby avoid drowning. It is estimated that TEDs can reduce sea turtle mortality from shrimp fishing operations by 97 per cent.
67. Public Law No 93-205, 16 U.S.C. (United States Code) 1531 (1973).
68. Sea Turtle Conservation; Shrimp Trawling Requirements (1987) 52 Fed Reg (Federal Register) 24244 (United States).
69. Public Law No 101-162, Title IV s. 609,103 Stat 988 (1989) (United States).
70. One example of an alternative, non-TED, turtle-safe shrimping practice is requiring fishermen to manually haul in their shrimp nets, instead of using mechanical hauling devices.
71. See"StateDeparnnentGridelinesImplementSeaTiirdeDecision" (April 1996) 17BNA International Trade Report 687. Although the legislation creating the turtle protection program was enacted in 1989, Congress postponed formal implementation of the certification program until 1 May 1991. Congress was aware that the administrative and economic consequences of the new law might be considerable. Administratively, federal agencies would need time to develop more specific guidelines for certifying foreign countries, and for ensuring that uncertified shrimp was effectively banned from importation into the US. From an economic point of view, foreign shrimp exporters committed to maintaining access to the US market might need time to bring their fishing practices into compliance. The delay in implementation provided agencies and foreign countries with reasonable time period to anticipate and respond to the new law.
72. According to a 1995 US Commerce Department report, US shrimp imports total more than $1.2 billion annually.
73. See "Ruling Seen Barring Most Shrimp Imports to US" Reuters 3 May 1996
74. The language of s. 609 stated that the sea turtle protection requirements applied to all countries, however the State Department promulgated regulations that limited the geographic scope of this language. These regulations interpreted s. 609 as applying only to shrimp fishing nations in the Western Atlantic/Caribbean region. The State Department justified this limited interpretation of s. 609on the grounds that Congress only intended the TED requirement to apply to sea turdes that are harvested in, or migrate through, US coastal waters. As a result, s. 609 was initially applied to only 16 foreign nations, 14 of which were found to be non-compliant. In February 1992, Earth Island Institute, an environmental group in the US, filed suit in a federal district court in San Francisco, challenging the State Department regulations limiting the application of s. 609. In its complaint, Earth Island asked the court for two remedies: (1) an order compelling the State Department to initiate negotiations regarding sea turtle protection with all foreign governments that export shrimp to the US; and (2) an order compelling the State Department, as well as other federal agencies, to apply the shrimp certification requirements to all foreign countries, regardless of geographic location. After a number of jurisdictional challenges on 10 April 1996, the United States Court of International Trade (CIT) issued a decision ordering the US State, Commerce, and Treasury Departments to block the importation of shrimp from all nations that had not adopted adequate policies to protect sea turtles. Interestingly the court claimed that the shrimp certification program did not compromise US international trade obligations.
75. The fishing fleets of those countries do not use TEDs to protect migratory sea turtles.
76. Shrimp Turtle Panel Report, para 7.44.
77. Shrimp Turtle Panel Report, Ibid at para 7.61.
78. On this issue the Appellate Body held that the Panel erred in its legal interpretation that accepting non requested information from non-government sources was incompatible with the provisions of the DSU. They did note however that the Panel acted correcdy in allowing any party to the dispute to attach briefs by non government organisation to their own submissions.
79. See Shrimp Turtle Appellate Body Report, para 110.
80. Shrimp Turtle Appellate Body Report, Ibid at para 98.
81. Article XX(b) was only to be examined in the alternative if the measure was not within Art. XX(g).
82. Shrimp Turtle Appellate Body Report, para 129.
83. They were not prepared to answer the question of whether there was an implied jurisdictional limitation in Art. XX(g) as in this case there was sufficient nexus between the migratory and endangered sea turtles and the US.
84. See ibid at para 133.
85. Ibid at para 141.
86. Ibid at para 156.
87. Ibid at para 160.
88. Open for signature on 1 December 1966 and signed by five countries - Brazil, Costa Rica, Mexico, Nicaragua and Venezuela.
89. Initially the US intention was to limit enforcement of the law to the Western Hemisphere, where the US was negotiating an agreement on turtle protection. However the US Court of International Trade (CIT) ruled in 1995 that the State Department was required to apply the law globally. The court ruling was made only four months before the end of the phase in period which meant that the complaining Asian countries only had four months to comply with the law. See note 43.
90. Shrimp Turtle Appellate Body Report at para 164.
91. Shrimp Turtle Appellate Body Report at para 185.
92. See Jan McDonald 'The WTO's Response to the Trade-Environment Debate: A Preliminary Report Card" paper presented at 23rd International Trade Law Conference, 29 May 1997, Canberra, 18-37 (on file).
93. See note 3.
94. Hudec, note 6 at 120.
95. (1987) 26 ILM 1541.
96. (1989) 28 ILM 657. For a detailed discussion of the relationship between Multilateral Environmental Agreements and the WTO see Richard Tarasofsky "Ensuring Compatibility Between Multilateral Environmental Agreements and GATT/WTO" (1996) 7 Yearbook of International Environmental Law 53.
97. Hudec's argument is that GATT members who have signed such agreements are deemed to have waived their GATT legal rights against such trade restrictions. There are however a number of issues that remain, the major issue being what to do about GATT members who have not signed such international agreements. The imposition of GATT illegal trade restrictions on non signatories would continue to be GATT illegal without some kind of exception. Although it is likely that the agreements being considered have been ratified by almost all the GATT countries. See Hudec, note 6, at 121-142.
98. Article XX(h) creates an exception for GATT illegal trade measures imposed pursuant to obligations in international commodity agreements, overriding the GATT rights of non signatories as well as signatories. The first part of Art. XX(h) sets out criteria as to the substance, structure and negotiating procedure that commodity agreements must meet in order to qualify for an Art. XX(h) exception. The second part goes on to provide that the exceptions may also apply to any commodity agreement submitted to the GATT Contracting Parties and not disapproved by them. See Hudec, note 6 at 137-139.
99. The CITES Standing Committee has sometimes called for broader trade measures by inviting members to take trade measures against members and non members in response to certain behaviour deemed inconsistent with the purposes of the agreement;
100. see Steve Charnovitz "A Taxonomy of Environmental Trade Measures" (1993) 6 Georgetown International Environmental Law Review 1- 46.
101. As Hudec points out it is really only the US and to a lesser degree the European Union who have the power and the inclination to make use of unilateral trade restrictions for environmental purposes; see Hudec, note 6 at 145.
102. See Hudec, note 6, at 147-148, where he outlines that Art. XXI(b) which allows trade restrictions for certain kinds of national security purposes provides one GATT precedent for this type of legal status. He goes on to outline the general lack of consensus for this carte blanche approach and the problems it could cause to the trading system.
103. This proposal has been suggested by Steve Charnoviti; see Steve Charnovitz, "GATT and the Environment: Examining the Issues" (1992) 4 International Environmental Affairs 203 at 218-220.
104. Article IX(3) of the Agreement Establishing the World Trade Organisation provides that the Ministerial Conference may decide to waive the obligation of a Member provided the decision is approved by three-fourths of the Members.
105. Hudec, note 6 at 152-153.
106. Prior to the conclusion of the Uruguay Round the Art. I Most Favoured Nation obligation, Art. II provisions on tariffs and tariff reduction and the Art. XXX rules for amending the GATT could only be amended by unanimous vote for the Contracting Parties, whilst other Articles could be amended by a two-thirds majority. Given the diversity of goals and interests of the parties these amendment requirements were nearly impossible to achieve. Following the Uruguay Round, amendments to the GATT/WTO occur pursuant to Art. X of the Agreement Establishing the World Trade Organisation. The new amending authority is quite intricate. There are basically three different types of amendments: (i) amendments requiring acceptance of all Members; (ii) amendments which require a two-thirds approval after procedures in the Ministerial Conference and Councils seeking consensus for the amendment proposals; and (iii) amendments which would alter "the rights and obligations of the Members". A Member may however refuse to accept such an amendment and that Member will not be bound by the amendment. In such a case the Ministerial Conference can, by a three-fourths vote, require all members to accept the amendment or withdraw from the Agreement or remain a Member subject to the consent of the Ministerial Conference.
107. See Esty, note 3.
108. See note 59 at 40.
109. Particularly in the Tuna Dolphin cases and the Shrimp Turtle dispute.
110. See Tarasofsky, note 63; this article analyses the potential conflict between environmental agreements and the WTO. The CTE has looked at this issue in some detail. However the Members have as yet been unable to agree on an approach to MEA's and more work is being done in this area.
111. Hudec, note 6 at 157.