Beyond Multilateral Treaty Reforms Adapting International Trade to Environmental Objectives
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Abstract
International trade law is primarily concerned with facilitating the flow of goods and services across national borders by minimizing tariff and non-tariff barriers to trade. However, there is a nexus between international trade and the environment. First, international trade is reckoned to have destructive environmental effects. The liberalization of global trade results in increased economic activity, including industrial processes, manufacturing, innovation of new technology, and extraction of natural resources from the earth and the sea, which inevitably results in environmental externalities such as biodiversity loss, pollution, and climate change. Second, international trade law intersects environmental law whenever trade restrictive measures such as import bans, export control and border taxes are adopted by states as a means of achieving environmental goals.[1] Such measures condition market access on the fulfilment of environmental norms related to the characteristic of the product or the process of its production. The World Trade Organization (WTO) currently oversees the largest multilateral regime for international trade. WTO covered agreements expressly recognises some exceptions to trade liberalization commitments for environmental objectives, this policy space is subjected to a system of strict limitations and review procedures designed to protect the global trading system from arbitrariness and disguised restrictions on trade. This scrutinized policy space accounts for the contention that the multilateral trading system constrains environmental regulation and requires treaty reforms for the purpose of adapting to contemporary environmental concerns. Others have focused on a change of approach in the reasoning of WTO adjudicators in their review of trade-restrictive environmental measures. However, the process of multilateral negotiations for new agreements needed to effect rule change is notably complex and has been fraught with deadlocks in the last couple of decades. The stalemate over appointment of members of the Appellate Body has hampered the effective functioning of third-party adjudication in the WTO and the prospect of ‘pro-environmental’ approaches in the interpretation of WTO law on environmental measures. Meanwhile, numerous environment-related measures continue to be notified within the WTO. I argue that notwithstanding the absence of treaty reforms, international trade law continuously evolves through various formal and informal norm-generating practices by member states and trade stakeholders. Viewed through the lens of legal pluralism, these practices contest, modify and transform normative meaning in the multilateral trading system thereby creating a permissive setting for trade-restrictive environmental measures within the framework of extant international trade law.
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References
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In this context, “obligation” means that the behavior of actors is governed by a set of legally binding rules as opposed to soft instruments or non-binding norms. “Precision” implies that such rules are unambiguous as to their requirements, authorizations, and proscriptions, in contrast to vague principles. “Delegation” refers to consent of actors to the interpretative and decision-making authority of third-party adjudicators, as opposed to diplomacy. See Kenneth W Abbott et al, “The Concept of Legalization” (2000) 54:3 International Organization 17 at 21, 25–35.
Ibid at 21; Judith Goldstein & Lisa L Martin, “Legalization, Trade Liberalization and Domestic Politics: A Cautionary Note” (2000) 54:3 International Organization 219 at 235.
For a discussion on the limits of formalist conceptions of legalization and international law, see Martha Finnemore & Stephen J Toope, “Alternatives to ‘Legalization’: Richer Views of Law and Politics” (2001) 55:3 International Organization 743.
Kenneth W Abbott & Duncan Snidal, “Hard and Soft Law in International Governance” (2000) 54:3 International Organization 37 at 38.
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See for instance Sanford Gaines, “The WTO’s Reading of the GATT Article XX Chapeau: A Disguised Restriction on Environmental Measures” (2001) 22:4 University of Pennsylvania Journal of International Economic Law 739; Andrew Green, “Climate Change, Regulatory Policy and the WTO: How Constraining are Trade Rules” (2005) 8:1 Journal of International Economic Law 143.
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See Michael M Weinstein & Steve Charnovitz, “The Greening of the WTO” (2001) 80:6 Foreign Affairs 147.
See Amrita Narlikar & Pieter van Houten, “Know the enemy: uncertainty and deadlock in the WTO”in Amrita Narkilar, ed, Deadlocks in Multilateral Negotiations: Causes and Solutions (Cambridge: Cambridge University Press, 2010) 142. The adoption of the WTO Agreement on Fisheries Subsidies at the 12th Ministerial Conference (MC12) on 17 June 2022 after over 20 years of negotiations illustrates the slow pace of updating multilateral trade agreements to address environmental challenges. Negotiations for the agreement began at the World Trade Organization in 2001 as part of the Doha Round.
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Ibid.
Ibid.
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Ibid at 380, 384.
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See generally, Ruggie, supra note 24.
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Ibid.
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Such as the costs that businesses and private enterprises shift to society, including socio-ecological problems. See K William Kapp, The Social Costs of Private Enterprise (New York: Schocken Books, 1950).
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Understood as “acts of self-restraint undertaken by the States themselves”. See Sabino Cassese, “Global Standards for National Administrative Procedure” (2005) 68:3 Law and Contemporary Problems 109 at 111.
The right of member states to invoke exceptions. See Chios Carmody, “Theory and Theoretical Approaches to WTO Law” (2016) 13:2 Manchester Journal of International Economic Law 152 at 155.
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Ibid at 466.
Ibid at 467.
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Ibid at 733.
Ibid at 730.
Ibid at 735.
Ibid at 744–46.
See Gregory C Shaffer, “The World Trade Organization Under Challenge: Democracy and The Law and Politics of WTO’s Treatment of Trade and Environment Matters” (2001) 25:1 Harv Envt’l L Rev 1.
Article 4(2), Annex 2 of the WTO Agreement – Understanding on rules and procedures governing the settlement of disputes, 1994.
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Teubner, supra note 40 at 77; Macdonald, supra note 19 at 319.
Wolfe, supra note 20 at 347.
Teubner, supra note 40 at 78.
McDougal & Reisman, supra note 25 at 255.
Wayne Sandholtz, “Explaining International Norm Change” in Wayne Sandholtz & Kendall Stiles, eds, International Norms and Cycles of Change (New York: Oxford University Press, 2008) 1 at 13; On the conjunction of implicit and explicit norms, see generally Macdonald, supra note 19.
Krasner, supra note 23 at 18.
Wolfe, supra note 20 at 348.