ENVIRONMENTAL PROTECTION AND INTERNATIONAL ECONOMIC LAW

SCHOOL OF INTERNATIONAL STUDIES

(SOIS)

GFLA3133: INTERNATIONAL ENVIRONMENTAL LAW

GROUP ASSIGNMENT

TOPIC: ENVIRONMENTAL PROTECTION AND INTERNATIONAL ECONOMIC LAW

Lecturer: Prof. Madya Dr. Ratnaria Binti Wahid

PREPARED BY:

NAME NO MATRIC

MOHAMED ABDIAZIZ MOHAMED 237131

NURUL BASYIRAH BT ABDUL HAMID 242106

NABILA ASTRIDILLA 701627

ENVIRONMENTAL PROTECTION AND INTERNATIONAL ECONOMIC LAW

BY: GROUP 11

1. NABILA ASTRIDILLA

2. NURUL BASYIRAH

3. MUHAMMAD DEK ABDIAZIZ

1. This topic basically wants to explain about the relations between environmental protection under MEA’s (Multilateral Environmental Agreement) and WTO (World Trade Organization). WTO wants to make sure the implementation about GATT article XX which is talk about WTO rules of Environmental policies. The article XX of GATT that international trade necessary to protect human, animal or plant life or health. This article is one of the general exceptions of article XX of GATT.

2. This topic explain about what is the WTO law and how the development of the WTO law, explain about the GATT treaty framework then case law related to article XX of GATT

3. And also explained about agreement of sanitary and phytosanitary (TBT Agreement) and agreement on technical barriers to trade (SPS Agreement). Also WTO build the special Committee on Trade and Environment and relationship between WTO agreements and MEA’s and Trade issues beyond the WTO, the last is a bit explain about financial institution.

1.0 Introduction

How related Environmental Protection and International Economic Law is a bit debatable, is become conflict or complementary. There is an inherent conflict between economic development on the hand and environmental protection on other hand about the implementation and on possible obstacles to further development of international environmental law suggest. Hence, many of developing countries perceive international environmental obligations as obstacles to raising-up their economic development. The countries called BRIC’s countries which Brazil, Russia, India and China which countries that assumed to be a similar level and got the critical positions if they perceive that environmental obligations reduce their perspectives for economic growth. Therefore, the emerging market countries for multilateral environment regimes was stronger opposition against strengthening. To more liberalizing trade and strengthening trade and environment as mutually supportive policies called agenda 21 calls upon economic actors to contribute sustainable development.

To ensure the stability of the international financial system and to strengthen development assistance, avoid distortion of competition, to protect foreign investments and the international financial system the agenda 21 calls was support for the liberalization of trade, to promote integrated and sustainable development and will be in position to develop in environmentally sound manner assumed by all states. Also, it will be more explain about the rule of international economic law to protect the environmental law based on WTO role which has potential role for the development of comprehensive environmental agreements and sustainable development goals for international trade. As we know that the WTO is focused on the liberalization of trade and goods and services and should protect the environmental considerations are construed as an exception to such liberalization under Multilateral Environmental Agreements (MEAs) which is explain to oppose the free movement of certain goods (be it protected species under the convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) or chlorofluorocarbons under Montreal Protocol). However, to partition markets by any other means than customs and duties will does not allowed by liberalized of international trade. Also, including for the protection of transboundary or global environment by the following unilateral trade restrictions may be permissible under certain circumstances. Based on WTO, there is one of the main efforts to promoting sustainable development goals to protect environment take by Committee for Trade and Environment. Then, based on the article XX of the GATT about the international trade necessary to protect human, animal plant life or health (WTO.org , p. 562)

2.0 WTO Law and the Development of WTO Law

Part of the rules developed, implemented and supervised by World Trade Organization today is the main body of international economic law. As a regards the settlement of disputes, the latter serves as a normative model both in terms of substance and in terms of procedure and may in total outnumber the WTO agreements is other instruments including regional agreements and bilateral investment treaties. In addition, the article XX of the GATT will be discussed about the Agreement on Sanitary and Phytosanitary Measures and the exemptions of the article XX OF GATT to liberalized trade. The treaty framework of the General Agreements on Tariffs and Trade (GATT) in particular will be illustrated by taking a look at the development of WTO Law.

The development of the WTO Law, that the protection of environmental protection was not explicitly addressed in the next of the GATT 1947. Since the 1970s the secretariat and council of the GATT have considered the ecological aspects of trade. While some environment-related instruments were agreed upon during the Tokyo Round (1973-1979), in particular on non-tariff barriers, the Uruguay Round (1986-1994) only took up environmental issues in the run-up to the 1992 Rio Conference, eventually leading to the agreements establishing the WTO as adopted at Marrakesh in 1994. The final Act of Marrakesh, apart from number of decisions and declarations adopted by the Ministerial Conference, includes the WO agreements which in itself consist of a bundle of instruments. The WTO agreements, which entered into force on 1 January 1995, serves as an umbrella agreement. Annexed are the agreements on goods (Annex 1A, including the GATT 1994 dealing with trade in goods, but also agreements on agriculture, sanitary, phytosanitary measures, technical barriers to trade, and others), (Annex 1B, General agreement on trade in services and intellectual properties), (Annex 1C, agreement on Trade-Related Aspects of Intellectual Properties Rights to disputes settlement), (Annex 2, Disputes Settlement Understanding (DSU)) for trade policy review mechanism (Annex 3), this agreements which is a legal binding to all members based on article II (2) of WTO. Then, annexed are called plurilateral agreements which means that this agreement for those members that have accepted them, and are binding on those members based on article II (3) of WTO.

With its three organs, the Ministerial Conference, the General Council and the Secretariat, it provides a common institutional framework for the conduct of trade relations based on article II (1) of WTO. With its 153 member states and the European Union alongside its member if perceives itself as a rules-based and member-driven organization by The establishment of the WTO in 1995 meant a paradigm shift in international economic law.

The quasi-judicial dispute settlement mechanism that had been developed under the GATT was continued under the WTO agreements but with decisive improvements. Whereas previously recommendations adopted by GATT panels had to be approved unanimously, the DSU provides that the Disputes Settlements Board (DSB) decides by “reverse” or “negative” consensus. In effect this means that the approval is virtually automatic, because recommendations will only be rejected if the DSB unanimously decides to do so (articles 6.1, 16.4, 17.14 and 22.6 DSU. In addition, there are tight times limits and there is an appellate procedure which allows each party to a dispute to have the case reconsidered by an Appellate Body (Article 17 DSU). The Appellate Body can uphold modify or reverse the legal findings and conclusions of the panel. Meanwhile, the DSB has addressed several disputes emerging from conflicts between trade and environment and will be discussed in analysis.

3.0 The GATT Treaty Framework

The GATT or known as The General Agreement on Tariffs and Trade is come into force on 1 January 1948. GATT is a set of multilateral trade agreements aimed at the abolition of quotas and the reduction of tariff duties among the contracting nations. The GATT is aiming at trade liberalisation. In Article I GATT has mentioned that constitutive are the most- favoured nation principle. Which is a party must not normally discriminate between their trading partners. If they grant one of their trading partners a favour (reducing duties for one of their products) they must do the same to all other WTO members. Meanwhile in Article III GATT, refers to the principle of national treatment. National treatment means that imported and locally produced goods should be treated equally after having entered the market.

In Article XI GATT, has mentioned the prohibition of quantitative restriction. There is no prohibitions and restriction other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained in international trade and only providing for few exceptions. The GATT itself allows for a number of exceptions to these principles. Firstly, in Article XI (2) GATT has includes the three exceptions which may be potentially relevant with a view to environmental protection; which is export prohibitions or restrictions to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting party, second, import and export restrictions necessary for the application of standards or regulations for the classification, grading or marketing of commodities in international trade and lastly import restrictions to preserve the competitiveness of the party’s agricultural or fishing industry.

The most important general exception applicable to all GATT provision is in Article XX GATT. In this article, there are includes two cumulative requirements which is; the measure in question must fall under at least one of the ten exceptions expressly included with two of them related to environmental considerations and secondly, the measures in question must satisfy the requirements of the introductory paragraph of Article XX GATT which is often called the ‘chapeau’. The chapeau requires that the measure is not applied in a manner which would constitute ‘a means of arbitrary or unjustifiable discrimination between countries where the same condition prevail’, and is not ‘a disguised restriction on international trade’.

This exceptions listed in Article XX GATT, paragraphs (b) and (g) are of particular relevance to the protection of the environment. Which is in paragraph (b) refers to measures necessary to protect human, animal or plant life or health; meanwhile in paragraph (g), concern on measures relating to the conservation of exhaustible natural resources.

However, there are interpretative challenges of these exceptions which is in paragraph (b), just only protect fauna and flora as well as the bodily integrity of humans and it does not cover the environment as such. Nevertheless, the environment may be included in so far as natural resources are indispensable for human livelihood. Secondly, uncertainties are linked to the interpretation of what is ‘necessary’ to protect human, animal or plant life or health. Thirdly, the question may arise in paragraph (g), whether a natural resource is exhaustible. Fourthly, the qualification of paragraph (g) is difficult to interpret since it requires that the measures in question are made effective in conjunction with restrictions on domestic production or consumption. Fifthly, none of the two exceptions specifies the geographical location of the resource to be protected.

Article XX GATT thus has given rise to an extensive case law under the earlier GATT dispute-settlement mechanism as well as under the new WTO mechanism. An early case related to ecological issues arose out of a dispute between Canada and United States. Another case is between Canada and United States arose out of Canada’s prohibitions on the export of unprocessed herring and salmon. In 1990, there a dispute arisen between US and Thailand which is Thailand had prohibited the import of cigarettes and similar products, but authorized the sale of domestic cigarettes, arguing that chemicals and other additives contained in.

Among others, US cigarettes might make them more harmful than Thai cigarettes. There is also case adopted under the old GATT, which is the tuna-dolphin case between Mexico and others against US. Next, is the tuna- dolphin report by the EU against U.S. Another dispute is the gasoline case between Venezuela and Brazil against U.S. Lastly, the so-called Shrimp-turtle case brought by India, Pakistan, Malaysia and Thailand against U.S. The case arose out of the application of U.S legislation on endangered species.

4.0 The TBT and the SPS Agreements

The Perspective of Environmental Protection is to balancing of trade and environmental concerns. Most important, however, from the perspective of environmental protection is the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). The SPS Agreement is to identify how to meet the need to apply standards and at the same time avoid disguised protectionism. Besides, SPS also deals with food safety and animal and plant health and safety. They also allow members to set their own standards but must base on science which is necessary to protect of human, animal or plant life or health. They should not arbitrarily or unjustifiably discriminate between countries with identical or similar conditions.

The Agreement on Technical Barriers to Trade (TBT Agreement) also can be used to take into consideration environmental concerns when applying technical standards. The TBT also deals with product standards in general. There are the case law related to SPS and TBT agreement, which is the hormones case brought by Canada against the European Community and Biotechnology disputes based on complaints by the US, Canada, Argentina against European Community.

5.0 The WTO Committee on Trade and Environment (CTE)

Committee on Trade and Environment (CTE) established on 1 January 1995. It is open to entire WTO membership, with some international organizations as observers. Besides, it intended to explore the links between international trade and environment within the framework of the WTO Agreement and its annexed agreements. Its mandate includes the identification of the relationship between trade and environmental measures in order to promote sustainable development. CTE Make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system are required. CTE covers a range of issues, from trade and environment to individual sectors, and relations with environmental organizations

CTE has 4 Parameters, first, confirms that the WTO is not an environmental protection agency and considers that the WTO has only a limited policy co-ordination role with regard to trade and environment, second, it stresses that the WTO agreements already provide for significant scope for members to pursue national environmental policies, third, tt supports co-ordinated policy making but stresses that this must not be trade-restrictive od discriminatory and lastly it underlines that secure market access opportunities are essential to help developing countries work towards sustainable development.

There are performance of CTE which is CTE prefers environmental multilateralism over unilateralism and it is not very clear on its positions related to trade restrictions in MEAs and their relationship to WTO obligations. Besides, it stresses the contribution of the dispute-settlement system of the WTO to addressing conflicts between trade and environment. Next, it seems to have no major problems with labelling for products but it objects to labelling for process and production methods. There have been fruitful discussions on the interrelationship between TRIPS and the Convention on Biological Diversity, though without clear findings. Last but not least, there is no NGO’s involve in this committee.

6.0 WTO Agreements and MEAs

In principal, MEAs and WTO agreements are co-equal. on the other hand The conflicting obligations have to be solved based on the lex posterriori derogat legi priori and lex specialis derogate legi generali. CITES is the only MEA seeking protection of fauna and flora by way of import and export limitations. And If there is a dispute between two parties of CITES, it should be considered both article XX GATT and other means of harmonising it. Article 41 VCLT states that “Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone”.

There are certain conditions laid down in article 41(1) and (2) VCLT and it has to be considered, Parties implementing and applying such MEAs do not run the risk of being held responsible for violating WTO agreements. Some other MEAs make use of trade restrictions as a means pursue environmental objectives, on the other hand these include: the 1985 Vienna Ozone convention and the 1987 Montreal protocol and the 1989 Basel convention on the control of Transboundary movements of hazardous wastes and their disposal. The prohibition of imports or exports under the Basel convention, an import ban concerns hazardous wastes to a non-tariff barrier as prohibited by article XI (1) GATT. In the case of an export ban it may be argued that, assuming that extraterritorial goods can be protected, hazardous wastes typically affect human, animal or plant life or health and that the export ban thus is necessary. The situation may be much more difficult in the case of non-hazardous In the case of Montreal protocol, Article 4 includes trade restrictions vis-à-vis non-parties.

7.0 Trade Issues beyond the WTO

Free trade Agreements and customs unions have become important instruments for regional economic development, to name a few, the EU, NAFTA, MERCOSUR, SADC and the ASEAN free trade Area. As we know NAFTA was signed in 1992 and entered force on 1st January 1994, its provisions includes a number references to the environment and Article 904(1) NAFTA includes part 3 of the agreement which deals technical barriers to trade. It allows each part adopt maintain standard related measures such as protection of animals plant life and environment. Article 2101 (1) NAFTA refers to the GATT and thus makes the general exception of article XX GATT available to NAFTA parties.

Three parties, in 1994 adopted the (NAAEC), which is the legal basis for (CEC). The commission primarily looks in to the state of the environment rather than protecting natural resources as such. As far as MERCOSUR is concerned, its constitutive treaty refers to the environment, ‘making optimum use of available resources and preserving the environment of MERCOSUR’. In addition to participatory mechanisms, it includes provisions on standards, a section on protected areas, on conservation and ‘sustainable utilization of natural resources and effective protection of the environment’.

8.0 International Financial Institutions.

International Financial Institutions are international bodies with a mandate related to the financial sector. Most prominent are World Bank, IMF & Regional development banks and their objectives largely concern financial market governance and poverty alleviation, the world Bank has its own environmental strategy, mobilises financial resources for environmental concerns through the Global Environment facility (GEF), Their activities often have significant environmental impacts., this is particularly true for the world bank. The World Bank contributes to the administration and implementation of MEAs through Inter alia. The World Bank inspection panel is designed to increase the accountability of the World Bank and to improve compliance with its own environmental policies

CONCLUSION

Economic and Environmental concerns are either always compatible neither with each other nor in continuous conflict. It’s noteworthy that a large number of MEAs internationally chosen economic means to pursue Environmental objectives, and lastly this brings the two areas of public international law even closer towards each other.

REFERENCES

Beyerlin. U & Marauh. T (2011). International Environmental Law. United Kingdom: Hart Publishing.

A. Goyal (2006). The WTO and International Environmental Law. Oxford

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Rodrik, Dani. (2000). "How Far Will International Economic Integration Go"? Journal of Economic Perspectives, 14 (1): 177-186. DOI: 10.1257/jep.14.1.177

Charlesworth, H., Chinkin, C., & Wright, S. (1991). Feminist Approaches to International Law. American Journal of International Law, 85(4), 613-645. doi:10.2307/2203269