Vicente Paolo B. Yu III

The key trade obligations assumed by Members of the WTO are:

1. Most Favored Nation (MFN) treatment -- i.e. providing the same treatment between goods, services, service suppliers, and intellectual property rights coming from other Members (GATT Art. I, GATS Art. II, TRIPS Art. 4);
2. National treatment -- i.e. non-discriminatory treatment between domestic and imported goods, services, service suppliers, investments, and intellectual property rights (GATT Art. III, TRIMS Art. 2(1), GATS Art. XVII, TRIPS Art. 3); and
3. Non-imposition of quantitative restrictions in favor of tariff-based measures or other non-quota based standards (GATT Art. XI, TRIMS Art. 2(2), GATS Art. XVI(2)).

Derogation by Members from their trade obligations above may be done only in very specific circumstances and subject to the provisions of the texts of the WTO agreements themselves.

Environmental objectives are among the policy objectives identified in key WTO agreements as sufficient to justify measures that are inconsistent with WTO obligations. Environmental considerations are referred to in the following various WTO texts:

Since its creation, the WTO�s dispute settlement process and the Appellate Body have come out with decisions that have clarified the extent to which the environmental provisions above interact with other WTO obligations. The following section lists the key GATT and WTO dispute resolution panel and Appellate Body decisions relating to GATT Articles III and XX and the SPS and GATS Agreements that are relevant in this context:

An analysis of the jurisprudence that has been developed by GATT and WTO panel and Appellate Body decisions regarding various provisions of the GATT, the SPS Agreement, and the GATS, bring out the following points with respect to regulatory measures adopted and implemented by governments to pursue environmental and other non-trade objectives:

• In Pursuit of Legitimate Policy Objectives -- such measures must be in pursuit of legitimate policy objectives explicitly recognized in the various WTO agreements -- i.e. environmental protection and the other objectives identified in, for example, GATT Art. XX. There must be a reasonable, close, substantial and objective relationship between the measure as the means and the policy objective as the end to be achieved;
• Least Trade Restrictive Measure -- the regulatory measure must generally be the least trade restrictive or least WTO-inconsistent alternative that is reasonably available to the government for the policy objective sought to be addressed. Multilateral cooperative action is preferred over unilateral action;
• No Discrimination or Disguised Trade Restriction -- even if it is the least trade restrictive alternative available, the regulatory measure must not be implemented in such a way that it would constitute "arbitrary discrimination" -- i.e. done without due process, non-transparent, and unfair -- or "unjustifiable discrimination" -- i.e. done for purposes of forcing other countries to conform to one�s own laws, or to provide differential preferential treatment for some countries only -- between countries. Neither should the measure�s implementation constitute a "disguised restriction on international trade" -- i.e. it is implemented in a trade restrictive or discriminatory manner;
• The Role of Science -- the decision to adopt and maintain the regulatory measure must be supported by scientifically objective evidence or objective facts that will indicate its relationship to the policy objective sought to be addressed and that such relationship is substantial and objective or ascertainable. This means that only considerations that have a scientifically ascertainable or objective basis -- i.e. health risks, environmental damage -- can be used to support the adoption and maintenance of a regulatory measure that would other violate WTO obligations. Social or cultural considerations -- i.e. cultural norms and traditions, community preferences, religion, ethics -- cannot be used to justify a regulatory measure;
• Only Products, Not PPMs -- the processes and production methods used in producing a product generally cannot be used as the basis for imposing differing regulatory treatment on similar or identical products.

Factoring in the production and processing methods of a product for the determination of whether a particular environmental measure is GATT-compatible or not is important from the viewpoint of sustainable development. The process by which products are made is as important as the product. Without the ability to ban products produced by environmentally unsustainable practices, countries will lack an essential measure for achieving environmentally sustainable development, since the measure is precisely tailored to deterring the unwanted practice. This does not mean that all such PPM-based trade measures be immediately acceptable, but rather that the starting point for judging such measures should be that they may be necessary to achieve environmentally sustainable development.

However, current WTO jurisprudence requires that differential regulatory treatment may be accorded to products only if they are different (i.e. not "like") from each other based on "objective" and "transparent" market competition-related criteria such as: physical characteristics, market end uses, consumer preferences, tariff classifications, etc. Differentiating between products on the basis of how they were made (i.e. their PPMs) in order to impose differing regulatory treatment is not allowed under current WTO rules, because to allow such PPM-based differentiation will allow "subjective" factors to enter into a "rules-based" and "objective" international trade regulatory regime. That is, a regulation that gives preference to products produced through a more environmental PPM will, in the eyes of the WTO, discriminate and adversely affect the ability of similar or identical products produced through a less environmental PPM.

This "products per se"-focused approach, and excluding PPMs, in determining whether one product is "like" or un-"like" another product for purposes of imposing differential regulatory treatment in GATT Article III has placed limited the ability of WTO Members to impose unilateral environmental protection measures that imposes a policy preference for more environmentally sustainable PPMs.

The key point that WTO jurisprudence brings out is that WTO Members are free to adopt their own policies aimed at protecting the environment as long as, in so doing, they fulfill their obligations and respect the rights of other Members under the WTO Agreement.

The WTO Appellate Body in Shrimp-Turtle pointed out that the WTO Agreement recognizes the policy objective of sustainable development as being among the objectives that provides the context for the implementation and interpretation of the WTO Agreement and its annexed agreements. However, there has yet been no WTO case that involves a trade-restrictive measure taken under a provision of an MEA.

Both the 1992 Rio Declaration on Environment and Development and Agenda 21 are non-binding international legal instruments. They are merely statements of policy intent by the States that made them, and do not provide for any mandatory international obligations. They are not considered as international treaties or agreements.

Principle 12 of the Rio Declaration states that:

States should cooperate to promote a supportive and international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation. Trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus.

This principle clearly is reflected in both WTO texts and jurisprudence. Agenda 21, Paragraph 39.3(d) also reflects this principle, and goes further in identifying the principles that should be observed when trade measures as used to promote environmental objectives:

39.3. Specific objectives are:

x x x

(d) To promote, through the gradual development of universally and multilaterally negotiated agreements or instruments, international standards for the protection of the environmental that take into account the different situations and capabilities of countries. States recognize that environmental policies should deal with the root causes of environmental degradation, thus preventing environmental measures from resulting in unnecessary restrictions to trade. Trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus. Domestic measures targeted to achieve certain environmental objectives may need trade measures to render them effective. Should trade policy measures be found necessary for the enforcement of environmental policies, certain principles and rules should apply. These include, inter alia, the principle of non-discrimination; the principle that the trade measure chosen should be the least trade-restrictive necessary to achieve the objectives; an obligation to ensure transparency in the use of trade measures related to the environment and to provide adequate notification of national regulations; and the need to give consideration to the special conditions and development requirements of developing countries as they move towards internationally agreed environmental objectives;

The 1985 Vienna Convention for the Protection of the Ozone Layer (Vienna Convention) and the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol) are international treaties that require States to undertake cooperative international action to protect the ozone layer from ozone-depleting substances. The Vienna Convention itself does not contain any express reference to the use of trade measures to achieve the objectives of the treaty. However, Article 4 of the Montreal Protocol expressly requires Parties thereto to ban trade (both import and export) in ozone-depleting substances and products containing ozone-depleting substances with States that are not Parties to the Protocol. Although Parties are theoretically not required to ban the trade in ozone-depleting substances from other Parties, and in fact may trade with each other portions of their respective production levels, they are, however, required to impose domestic production and consumption reduction measures on ozone-depleting substances. In order to implement these reduction measures, Parties are allowed to resort to trade measures -- ranging from import licensing, labeling, differential tariffs, excise taxes, quantitative restrictions, and outright import and export bans. Article 4A of the Protocol likewise requires a Party that has been unable to stop its domestic production or consumption of ozone-depleting substances to ban the export of used, recycled, or reclaimed ozone-depleting substances.

There is currently no ban imposed on trade with non-Parties in products produced or made with, but not containing, ozone-depleting substances. This means that Montreal Protocol Parties cannot restrict the importation or exportation of products from non-Parties that may have been produced using processes or methods that used ozone-depleting substances.

The trade restrictions imposed on Parties to the Montreal Protocol vis-à-vis non-Parties are not qualified. The Montreal Protocol actually requires Parties to discriminate against non-Parties with respect to the trade in ozone-depleting substances and in products containing ozone-depleting substances. This Protocol is one of the strongest and most explicit trade restrictive MEA currently in force. The trade-restrictive and -discriminatory measures required by the Protocol are inconsistent with the most-favored-nation, national treatment, and elimination of quantitative restrictions obligations in the GATT. However, the Secretariat of the Vienna Convention and the Montreal Protocol, in a 1999 communication to the WTO�s CTE (see WT/CTE/W/115), has pointed out that these inconsistencies can be justified under the GATT:

The answer by many experts to the charge of inconsistency is based on exceptions provided by Article XX of GATT. Article XX (b) provides for measures "necessary to protect human, animal or plant life or health" and Article XX (g) provides for exceptions for measures "relating to conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption". Many experts consider that the exceptions of Article XX of GATT are applicable to the trade provisions of the Montreal Protocol for the following reasons:

• The ozone layer is an exhaustible natural resource and its depletion adversely affects human, animal and plant life and health.
• the Protocol has been based on international scientific assessment of what is necessary to protect the ozone layer. These assessments are backed by an international consensus.
• free trade in ozone depleting substances increases production and consumption of ozone depleting substances and affects the ozone layer.
• Article 4 exempts non-Parties from trade restrictions if they comply with the control measures.
• the trade measures are but a part of an integrated set of policy instruments used within the Protocol.
• there is no arbitrary and unjustifiable discrimination between countries where same conditions prevail.
• the terms of the Protocol are fully transparent.

On the other hand, the Montreal Protocol and the Vienna Convention are MEAs that have the same legal status as the WTO agreements in international law. Arguing that the trade-restrictive and -discriminatory measures authorized in the Montreal Protocol are "exceptions" to WTO obligations implies that obligations under the Montreal Protocol and the Vienna Convention are subordinate to WTO obligations, protected from being struck down only by the application of GATT Art. XX.

A better argument might be that rather than saying that the Montreal Protocol�s trade measures are GATT Art. XX "exceptions" to WTO obligations, Montreal Protocol trade measures lie outside the scope of WTO obligations and hence should not be judged or assessed for WTO "consistency." Montreal Protocol trade rules are specific to ozone-depleting substances and related products, and hence carves these products and substances out from the coverage of the general trade rules embodied in the WTO.

The UN Framework Convention on Climate Change (UNFCCC), on the other hand, clearly indicates that the adoption of trade measures by Parties for purposes of implementing it should not "constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade." This is seen in Article 3(5) of the UNFCCC, which reflects Principle 12 of the Rio Declaration as well as existing WTO texts and jurisprudence with respect to the use of trade measures to combat climate change:

5. The Parties should cooperate to promote a supportive and open international economic system that would lead to sustainable economic growth and development in all Parties, particularly developing country Parties, thus enabling them better to address the problems of climate change. Measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.

The Kyoto Protocol, which is not yet in force, provides for specific greenhouse gas (GHG) emissions reductions commitments that primarily industrialized countries are supposed to implement. Neither the UNFCCC nor the Kyoto Protocol provides for Parties to ban trade in GHG emitting products with Parties or non-Parties. In fact, Art. 2(3) of the Protocol requires Annex I countries to "strive to implement policies and measures [to reduce GHG emissions] in such a way as to minimize adverse effects, including � effects on international trade ..."

Read together, Art. 3(5) of the UNFCCC and Art. 2(3) of the Kyoto Protocol allows the imposition of trade-restrictive or trade-discriminatory measures in order to implement UNFCCC and Kyoto Protocol obligations, so long as such measures do not "constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade." This qualifier is virtually identical to the chapeau of GATT Art. XX.

Currently, the only authoritative interpretation of the phrase "arbitrary or unjustifiable discrimination or a disguised restriction on international trade" that exists is that made with respect to the chapeau of GATT Art. XX by the WTO Appellate Body. This might mean that any Kyoto Protocol Party or non-Party, which at the same time are WTO Members, can say that the trade measures adopted by another Kyoto Protocol Party to implement its climate change obligations constitute arbitrary or unjustifiable discrimination or a disguised restriction on international trade, as interpreted by the WTO Appellate Body. Such aggrieved WTO Member will most likely bring a complaint against the trade measure before the WTO rather than to the Kyoto Protocol and UNFCCC�s dispute settlement mechanism for the simple reason that the WTO�s dispute settlement system has more teeth and is binding.

The existence of the GATT Art. XX chapeau-type qualifier, hence, clearly indicates that even though the Kyoto Protocol and UNFCCC have co-equal status in international law as the WTO agreements, climate change-related trade measures under the UNFCCC and Kyoto Protocol would most likely still be subject to the application of WTO rules. Since neither the UNFCCC nor the Kyoto Protocol, unlike the Vienna Convention and the Montreal Protocol, authorizes the outright imposition of unqualified trade restrictions or trade-discriminatory treatment as a means towards achieving GHG reductions, the "lex specialis" principle of international law cannot be invoked. The closest that the Kyoto Protocol comes to setting up a specific trade regime is with respect to the trading of GHG emissions reductions units under Arts. 6 and 12 of the Protocol. Emissions reductions units trading would constitute the only case in which the Protocol�s trade provisions would take precedence over WTO trade provisions. In all other cases, it would seem that climate change-related trade measures which impose trade restrictions or require trade-discriminatory treatment will be vulnerable to challenge before the WTO.

Hence, although Kyoto Protocol Parties may take trade measures to pursue their climate change obligations, they can do so only to the extent that such measures either: (a) do not violate their WTO obligations; or (b) if such measures, which would otherwise be inconsistent with their WTO obligations, can be justified under GATT Art. XX(b) or (g) -- in the case of regulations relating to trade in energy products -- or GATS Art. XIV(b) -- in the case of regulations relating to trade in energy services. This indicates that specifically with respect to the use of trade measures for climate change mitigation purposes, the Kyoto Protocol�s trade measures, once the Protocol is in force, would be subject, in practice, to WTO rules.

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), currently in force, creates a special trade regulatory regime for endangered species. It requires Parties to strictly regulate international trade in endangered species listed in the CITES Appendices. Such trade regulation includes stricter import and export controls, trade documentation requirements, and may even include trade bans -- the trade regulation regime in CITES is contained in Articles II (Fundamental Principles), III (Regulation of Trade in Specimens of Species Included in Appendix I), IV (Regulation of Trade in Specimens of Species Included in Appendix II), V (Regulation of Trade in Specimesn in Species Included in Appendix III), VI (Permits and Certificates), VII (Exemptions and Other Special Provisions Relating to Trade), VIII (Measures to be Taken by the Parties), X (Trade with States not Party to the Convention), and XIV (Effect on Domestic Legislation and International Conventions).

The comprehensive system of domestic import and export controls on trade in listed endangered species that may be adopted under the CITES provisions above is not qualified by any implied or expressed reference to GATT rules. As such, the CITES trade regime, like the Montreal Protocol trade regime and unlike the Kyoto Protocol trade regime, constitutes a special system of trade rules that exist outside the scope of WTO rules. Trade measures that are consistent with and adopted to implement CITES would generally be exempt from the application of WTO rules and obligations.

Art. XIV(1) of CITES expressly allows Parties to adopt trade measures more stringent than that provided for in CITES with respect to species that are or are not included in the CITES Appendices:

1. The provisions of the present Convention shall in no way affect the right of Parties to adopt:

1. stricter domestic measures regarding the conditions for trade, taking, possession or transport of specimens of species included in Appendices I, II and III, or the complete prohibition thereof; or
2. domestic measures restricting or prohibiting trade, taking, possession or transport of species not included in Appendix I, II or III.

This provision of CITES can very well be used by Parties as the legal basis for the adoption of more stringent measures, including unilateral trade bans, against the trade, taking, possession or transport of any species, including those not listed in the CITES Appendices. Any trade measures taken pursuant to this provision of CITES would most likely not be susceptible to challenge before the WTO.

However, if the more stringent CITES trade measure was adopted under Art. XIV(2) of CITES for purposes of public health, or veterinary or plant quarantine, i.e. for sanitary and phytosanitary purposes, then the potential for conflict with WTO rules arises. Art. XIV(2) of CITES states that:

2. 2. The provisions of the present Convention shall in no way affect the provisions of any domestic measures or the obligations of Parties deriving from any treaty, convention, or international agreement relating to other aspects of trade, taking, possession or transport of specimens which is in force or subsequently may enter into force for any Party including any measure pertaining to the Customs, public health, veterinary or plant quarantine fields.

By its very terms, the WTO SPS Agreement is one such "treaty, convention, or international agreement relating to other aspects of trade, taking, possession or transport of specimens which ... subsequently may enter into force for any Party including any measure pertaining to the ... public health, veterinary or plant quarantine fields." The SPS Agreement is applicable to measures relating to the entry and quarantine of imported plants and animals for purposes of ensuring public, animal, and plant life and health in the importing country. Hence, any trade measure taken pursuant to Art. XIV(2) of CITES (i.e. for plant or animal quarantine) must comply with the requirements for a valid SPS measure set out in the SPS Agreement. To this extent, and this extent only, a CITES trade measure can be deemed to be subject to WTO rules.

The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Convention), already in force, sets up an international legal regime governing international trade in specified hazardous wastes.

Its 4^th, 6^th and 7^th preambular clauses expressly recognize the right of States to regulate international trade in toxic wastes and to prohibit the importation of hazardous wastes into their territory. The Basel Convention does not ban international trade in hazardous wastes outright but rather requires Parties, in Article 4(2)(d), to reduce such trade to the minimum "consistent with the environmentally sound and efficient management of such wastes, and is conducted in a manner which will protect human health and the environment against the adverse effects which may result from such movement." To achieve this reduction in international trade, Article 4(1) of the Basel Convention provides express recognition that States may prohibit imports of hazardous wastes, and requires States to prohibit or prevent the exportation of hazardous wastes to States which have banned imports thereof, or which have not consented to the importation in writing. Article 4(5) clearly prohibits Parties from exporting to or importing hazardous wastes from non-Parties.

Articles 5 to 10 of the Basel Convention defines the mechanisms and procedures under which international trade in hazardous wastes are regulated and may be conducted only for the limited purposes stated in Article 4(9) of the Convention:

9. Parties shall take the appropriate measures to ensure that the transboundary movement of hazardous wastes and other wastes only be allowed if:

c. The State of export does not have the technical capacity and the necessary facilities, capacity or suitable disposal sites in order to dispose of the wastes in question in an environmentally sound and efficient manner; or

d. The wastes in question are required as a raw material for recycling or recovery industries in the State of import; or

e. The transboundary movement in question is in accordance with other criteria to be decided by the Parties, provided those criteria do not differ from the objectives of this Convention.

Article 11 of the Basel Convention also allows Parties to enter into bilateral or multileral agreements regarding the international trade of hazardous wastes so long as such agreements do not violate the provisions of the Basel Convention.

Any national regulatory measure or action taken by a Party pursuant to its Basel Convention obligations to regulate or prohibit trade in those wastes identified as hazardous in the Convention will be "safe" from any WTO challenge. This applies also to any trade-discriminatory action against imports from or exports to non-Parties, considering that such action is expressly provided for in Article 4(5).

The Basel Convention and the WTO agreements have equal status in international law, and there are no provisions in the Basel Convention that indicate that WTO obligations should be taken into consideration in adopting and implementing trade regulatory actions relating to hazardous wastes under the Basel Convention. The detailed and special trade regulatory regime set up by the Basel Convention clearly indicates the intent of the Parties to ensure that hazardous wastes, as a distinct and separate class of products that may be the subject of international trade, are governed by a special trade regime and hence not subject to the general rules for international trade in goods embodied in the GATT and the WTO.

Although the trade-restrictive and trade-discriminatory actions that may be taken by a State under the Basel Convention vis-à-vis hazardous wastes would, theoretically, be inconsistent with that State�s WTO obligations -- i.e. the MFN, national treatment, and elimination of quantitative restrictions obligations in the GATT or on domestic regulation, MFN, market access, and national treatment in the GATS -- such inconsistency is more theoretical than real. By setting up clear, detailed, and specific rules with respect to international trade in hazardous wastes, the Basel Convention carves out or exempts (as opposed to "excepts") such trade in hazardous substances from the application of WTO rules. As a separate legal regime governing international trade in hazardous wastes that is co-equal to the WTO�s general rules governing international trade in goods, the Basel Convention (and any measures taken pursuant to it) is, like the Montreal Protocol and CITES, not subject to WTO rules and hence need not be "justified" in the light of the GATT Art. XX exceptions.

This means that WTO obligations do not and should not apply with respect to measures taken by States to regulate or prohibit trade in hazardous substances pursuant to Basel Convention obligations. Basel Convention measures need not even be considered as "exceptions" to WTO obligations, for to do so would imply that WTO obligations would be applicable to them and that their inconsistency with such WTO obligations are justified only by the application of the GATT Art. XX(b) exception or the SPS or TBT Agreements.¹

The relationship of the UN Convention on Biological Diversity (Biodiversity Convention), already in force, to the WTO is governed by Article 22(1) of the Biodiversity Convention:

Article 22. Relationship with Other International Conventions

1. The provisions of this Convention shall not affect the rights and obligations of any Contracting Party deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity.

In light of Article 30(2) of the Vienna Convention on the Law of Treaties, which states that "when a treaty specifies that it is ... not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty shall prevail", Article 22(1) of the Biodiversity Convention expressly indicates that it will be subordinate to other international agreements. This subordination, however, is qualified and balanced such that the provisions of the Biodiversity Convention will then prevail "where the exercise of those rights and obligations [in the other international agreement] would cause a serious damage or threat to biological diversity."

The Biodiversity Convention does not expressly provide for the adoption by Parties of trade measures in order to implement its provisions. Such authority, however, may be implied from the following provisions:

Article 8. In-situ Conservation

Each Contracting Party shall, as far as possible and as appropriate:

x x x

Regulate or manage biological resources important for the conservation of biological diversity whether within or outside protected areas, with a view to ensuring their conservation and sustainable use;

x x x

(g) Establish or maintain means to regulate, manage or control the risks associated with the use and release of living modified organisms resulting from biotechnology which are likely to have adverse environmental impacts that could affect the conservation and sustainable use of biological diversity, taking also into account the risks to human health;

Prevent the introduction of, control or eradicate those alien species which threaten ecosystems, habitats or species;

x x x

(k) Develop or maintain necessary legislation and/or other regulatory provisions for the protection of threatened species and populations;

Article 9. Ex-situ Conservation

Each Contracting Party shall, as far as possible and as appropriate, and predominantly for the purpose of complementing in-situ measures:

1. Adopt measures for the ex-situ conservation of components of biological diversity, preferably in the country of origin of such components;
2. Establish and maintain facilities for ex-situ conservation of and research on plants, animals and micro-organisms, preferably in the country of origin of genetic resources;
3. Adopt measures for the recovery and rehabilitation of threatened species and for their reintroduction into their natural habitats under appropriate conditions;
4. Regulate and manage collection of biological resources from natural habitats for ex-situ conservation purposes so as not to threaten ecosystems and in-situ populations of species, except where special temporary ex-situ measures are required under subparagraph (c) above; and
5. Cooperate in providing financial and other support for ex-situ conservation outlined in subparagraphs (a) to (d) above and in the establishment and maintenance of ex-situ conservation facilities in developing countries.

Furthermore, Article 16 of the Biodiversity Convention provides for access to and transfers among Parties of technology "that are relevant to the conservation and sustainable use of biological diversity or make use of genetic resources and do not cause significant damage to the environment." However, such technology access and transfers must be "provided and/or facilitated under fair and most favourable terms, including on concessional and preferential terms where mutually agreed." Article 16(2), (3) and (5) of the Biodiversity Convention, however, require that where the technology is subject to patents and other intellectual property rights, such access and transfer shall be "provided on terms which recognize and are consistent with the adequate and effective protection of intellectual property rights." Furthermore, such recognition and protection of patents and intellectual property rights, "subject to ... international law", must be "supportive of and do not run counter" to the Convention�s objectives.

Hence, in view of Article 22(1) of the Biodiversity Convention, any trade-related measures that a Party may undertake pursuant to their obligations under the Biodiversity Convention above would be subject to the WTO trade obligations of that Party. This means that trade measures under the Biodiversity Convention must generally conform to WTO rules. Biodiversity-related trade measures that would violate WTO rules may be adopted only in instances where the application of WTO rules "would cause a serious damage or threat to biological diversity."

Biodiversity-related trade measures that are inconsistent with WTO rules may, therefore, be subjected to WTO challenge. In such a case, the determination of what would constitute "a serious damage or threat to biological diversity" would then be made by a WTO dispute resolution panel or the WTO Appellate Body, rather than through the dispute settlement processes under the Biodiversity Convention -- i.e. negotiation, mediation, arbitration, or a case before the International Court of Justice. This will have the effect of making the protection of biological diversity subordinate to trade concerns, since WTO panels and the Appellate Body have consistently addressed environmental concerns in trade disputes in ways that prioritize trade concerns.

Article 16(2), (3) and (5) of the Biodiversity Convention�s reference to patents and intellectual property rights subjects biodiversity-related technology access and transfers to WTO rules embodied in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) -- i.e. TRIPS Article 3 on national treatment and TRIPS Article 4 on MFN.

Another area in which TRIPS will impinge most directly on the Biodiversity Convention is with respect to the application of the Biodiversity Convention�s Article 8(j) -- recognition and protection of indigenous knowledge relating to biological diversity and resources, Article 15 -- access to genetic resources, and Article 19 -- handling of biotechnology and distribution of its benefits. TRIPS Article 27(2) and (3)(b) are most relevant in this regard because of Article 22(1) of the Biodiversity Convention.

TRIPS Article 27(2) allows WTO Members to "exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law." TRIPS Article 27(3)(b) allows WTO Members to exclude plants and animals from being patented, while at the same time prohibiting WTO Members from excluding microorganisms, nonbiological and microbiological processes from patenting.

The language of TRIPS Article 27(2) and (3)(b), however, is discretionary, such that WTO Members may decide not to provide for such exclusions -- i.e. lifeforms -- from patentability. In the absence of a decision to provide for the exclusions from patentability allowed under TRIPS Article 27(2) and (3)(b), the indigenous knowledge systems, genetic resources, and biotechnology referred to in Articles 8(j), 15 and 19 of the Biodiversity Convention would be made subject to patenting, and hence the application of WTO rules.

Most patents, and the financial and technical resources to undertake and develop scientific research leading to patentable invention, are held by multinational corporates based in industrialized countries -- primarily the US and the EU. Hence, the application of WTO rules via TRIPS on indigenous knowledge, genetic resources, and the results of biotechnology will mean that such multinational corporations will most likely continue to gain greater exclusive economic control, and the legal power to prevent others from enjoying their benefits or utilizing them, over products and technologies that may be derived from the indigenous knowledge and genetic resources of peoples and communities in the South.

Article 19(3) of the Biodiversity Convention mandated the Parties to "consider the need for and modalities of a protocol setting out appropriate procedures, including, in particular, advance informed agreement, in the field of the safe transfer, handling and use of any living modified organism resulting from biotechnology that may have adverse effect on the conservation and sustainable use of biological diversity." As a result, the Cartagena Protocol on Biosafety to the Convention on Biological Diversity (Biosafety Protocol) was agreed upon in January 2000.

The Biosafety Protocol, not yet in force, sets up a special legal regime to govern transboundary movements, transit, handling and use of all genetically organisms (GMOs) "that may have adverse effects on the conservation and sustainable use of biological diversity" � referred to as "living modified organisms" in the Protocol. The Protocol, however, under Article 5, does not apply to the transboundary movement of GMOs for humans which are already addressed under other international agreements or organizations (i.e. the 1970 Pharmaceutical Inspection Convention and the World Health Organization).

The Biosafety Protocol will govern international trade in all GMOs (except those that are pharmaceuticals for humans) that may have adverse effects on biodiversity and human health. It sets up a comprehensive system of written export notification and import consent procedures -- the advanced informed agreement (AIA) procedure -- for GMOs that are intended to be introduced into the environment of the importing country, and for the first importation of GMO that are intended for direct use as food, feed, or for processing. GMOs that are identified by the Parties as likely not to have any adverse effects on biodiversity and human health, as well as subsequent importations of GMOs that are intended for direct use as food or feed, or for processing in the importing country, are exempt from the coverage of the AIA procedure. Also exempt from the AIA procedure are GMOs in transit and GMOs that are for contained use.

All decisions regarding the importation of GMOs under the AIA procedure must be based on a risk assessment that conforms to Annex III of the Biosafety Protocol. This requires that risk assessment should be done in a "scientifically sound and transparent manner" and takes into account the "expert advice of, and guidelines developed by, relevant international organizations."

Trade considerations played a big role in determining the final text of the Biosafety Protocol. These considerations are reflected in the 9^th, 10^th, and 11^th preambular clauses and in Article 2(4) of the Protocol:

Recognizing that trade and environment agreements should be mutually supportive with a view to achieving sustainable development,

Emphasizing that this Protocol shall not be interpreted as implying a change in the rights and obligations of a Party under any existing international agreements,

Understanding that the above recital is not intended to subordinate this Protocol to other international agreements,

Article 2

x x x

4. Nothing in this Protocol shall be interpreted as restricting the right of a Party to take action that is more protective of the conservation and sustainable use of biological diversity than that called for in this Protocol, provided that such action is consistent with the objective and the provisions of this Protocol and is in accordance with that Party's other obligations under international law.

The references in the provisions above to "existing international agreements" or "other international agreements" point to the WTO Agreement and its annexed agreements. Although the 11^th preambular clause states that the Biosafety Protocol is not "subordinate ... to other international agreements", Article 2(4) read together with the 9^th and 10^th preambular clauses creates an obligation under the Protocol to ensure that any trade-related measures adopted by a Party under the Biosafety Protocol, including those measures "more protective of the conservation and sustainable use of biological diversity than that called for" in the Protocol, must be consistent with that Party�s WTO obligations.

Of all the MEAs, implementation of the Biosafety Protocol has the biggest potential for both coming into conflict with WTO rules, as well as of being made subordinate to WTO rules as a means of "reconciling" or making them "mutually supportive." Under the Biosafety Protocol�s AIA procedure in Article 10(3), a Party may decide to prohibit importation, or impose conditions on the first and subsequent importations, of GMOs, so long as such decision is based on a "scientifically sound" risk assessment. Articles 10(6) and 11(8) of the Biosafety Protocol reflect the precautionary principle and allow countries to regulate or prohibit importations of GMOs as a precautionary measure if there is a "lack of scientific certainty due to insufficient relevant scientific information and knowledge regarding the extent of the potential adverse effects" of the GMO on the biodiversity and health of the human population of the country.

International trade in GMOs as goods or commodities, in the absence of the Biosafety Protocol, would be governed by WTO rules, especially those contained in the SPS, TBT, and GATT Agreements. The fact that the Biosafety Protocol itself refers, implicitly in its preamble and text, to these WTO rules, indicates that these rules are to be taken into consideration in the implementation of the Protocol. In much the same way, the cross-border trade in GMO-related services -- i.e. risk assessment, risk management, containment, handling, etc. -- that is referred to in the Protocol would also fall under the scope of the GATS.

However, the WTO annexed agreement that would is most relevant to international trade in GMOs under the Biosafety Protocol would be the SPS Agreement. The preamble of the SPS Agreement states that it is intended to elaborate the rules "for the application of the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX(b)." It applies to all sanitary and phytosanitary (SPS) measures, as defined in Annex A(1) of the agreement, that directly or indirectly affect international trade. WTO Members have the right to take SPS measures "necessary for the protection of human, animal or plant life or health, provided that such measures are not consistent with the provisions of" the SPS Agreement.

GMO regulations authorized to be implemented under the Biosafety Protocol with respect to the transboundary movement, handling, and use of GMOs are clearly "appropriate" SPS measures that fit the definition of SPS measures under the SPS Agreement. They are intended to protect human, plant, and animal health and safety. As such, they fall within the definition of an SPS measure in Annex A(1) of the SPS Agreement. The GMO import and export regulations contemplated by the Biosafety Protocol, since they are applicable with respect to the transboundary movement of GMOs, clearly "directly or indirectly, affect international trade."

Under Article 2(2) of the SPS Agreement, SPS measures must be: (1) applicable "only to the extent necessary to protect human, animal or plant life or health"; (2) based on "scientific principles"; and (3) not maintained without "sufficient scientific evidence." The only exception to the requirement of "sufficient scientific evidence" is found in Article 5(7) of the SPS Agreement, which allows WTO Members to adopt an SPS measure "in respect of a situation where �relevant scientific information is insufficient ... on the basis of available pertinent information.�" In so doing, the WTO Member adopting the measure must "seek to obtain the additional information necessary for a more objective assessment of risk"; and must further "review the ... measure accordingly within a reasonable period of time." Article 5(7) of the SPS Agreement reflects the precautionary principle to some degree, in much the same way that Articles 10(6) and 11(8) of the Biosafety Protocol does.

Article 5(2) of the SPS Agreement requires that SPS measures should be based on a risk assessment, taking into account "available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions; and quarantine or other treatment." This is similar to the requirements for a "scientifically sound" risk assessment contained in Article 15 and detailed further in Annex III of the Protocol. Although the WTO Appellate Body in the Beef Hormones case has stated that risk may be defined quantitatively or qualitatively, so long as it is ascertainable and creates a rational relationship between the measure and the risk to be addressed, the requirement remains that such risk assessment must be based on scientific principles. This would effectively preclude the use of non-scientific considerations -- i.e. culture, ethics, religion, customs, social acceptability -- as factors upon which risk assessment, and hence the GMO SPS or import measure or decision, would be based.

As SPS measures that are also subject to WTO rules, GMO import measures implemented under the Biosafety Protocol should not, under Art. 2(3) of the SPS Agreement, arbitrarily or unjustifiably violate the WTO MFN or national treatment obligations nor applied in a manner that would constitute "a disguised restriction on international trade." GMO import measures taken under the Biosafety Protocol would be imposed for normally justifiable SPS purposes -- i.e. environmental protection and human health and safety. As discussed above, "arbitrary or unjustifiable differences" in SPS regulatory treatment by a particular SPS measure is a necessary element for a violation of the SPS Agreement, in particular Article 5(5), to be found.

Since socio-economic factors cannot provide sufficient scientific basis for purposes of Article 5(5) of the SPS Agreement, adopting and implementing a differentiated import regime among GMOs on the basis of socio-economic considerations would normally be considered as "arbitrary or unjustifiable difference," and hence a violation of the SPS Agreement. However, there might be room for the eventual inclusion of socio-economic considerations as factors for risk assessment under the SPS Agreement as influence by the Biosafety Protocol.

There is a conclusive presumption in Article 3(2) of the SPS Agreement that a particular SPS measure, such as GMO import measure based on risk assessment that includes socio-economic factors, may be an SPS measure that conforms with the provisions of the SPS Agreement if the SPS measure "conforms to" international standards, guidelines or recommendations. Under Article 3(1) of the SPS Agreement, SPS measures which are "based on" international standards, guidelines or recommendations, provided that they conform to the provisions of the SPS Agreement, and even if they provide for higher levels of protection than such international standards, guidelines or recommendations in accordance with the provisions of Article 3(3) of the SPS Agreement, would be compatible with the SPS Agreement and GATT 1994.

The phrase "international standards, guidelines and recommendations" is defined in Annex A(3)(d) of the SPS Agreement as including, "for matters not covered" by the Codex Alimentarius Commission (on food safety), the International Office of Epizootics (for animal health), or the Secretariat of the International Plant Protection Convention (for plant health), "appropriate standards, guidelines and recommendations promulgated by other relevant international organizations open for membership to all [WTO] Members, as identified by the Committee [on Sanitary and Phytosanitary Measures]."

Decisions on imports of GMOs or domestic GMO measures designed to implement the Biosafety Protocol are "matters not covered" by the other international organizations identified in Annex A(3)(a) to (c) of the SPS Agreement. Measures designed to implement the Biosafety Protocol are measures that relate specifically to the transboundary movement, handling, and use of GMOs. Measures that fall within the purview of competence of the Codex Alimentarius Commission (on food safety), the International Office of Epizootics (for animal health), or the Secretariat of the International Plant Protection Convention (for plant health), are general domestic SPS measures. The Biosafety Protocol, therefore, sets out special rules for transboundary GMO movements, handling, and use, and carves these matters out from the general SPS measures that are the subject of other international organizations� mandates.

Although the WTO Committee on Sanitary and Phytosanitary Measures has not yet "identified" the Biosafety Protocol�s Meeting of the Parties as a "relevant international organization" for purposes of Annex A(3)(d) of the SPS Agreement, this is a procedural requirement that may be easily remedied by appropriate action in the WTO Committee on SPS Measures by States that are Parties to the Biosafety Protocol and Members of the WTO.

Under Article 29(4)(a) of the Biosafety Protocol, the Conference of the Parties serving as the Meeting of the Parties may "make recommendations on any matters necessary for the implementation of" the Protocol. The scope of this recommendatory function includes making recommendations on how Article 26 (Socio-Economic Considerations) of the Protocol may be implemented by the Parties to the Protocol. Since the Protocol applies to the transboundary movement of GMOs that may have adverse effects on human health and the environment, any recommendations made by the Conference of the Parties serving as the Meeting of the Parties to the Biosafety Protocol with respect to its implementation (including that of Article 26) would be an appropriate "standard, guideline or recommendation" within the meaning of Annex A(3)(d) of the SPS Agreement.

Hence, any SPS measure that "conform to" or are "based on" any standards, guidelines, or recommendations promulgated by the Meeting of the Parties to the Biosafety Protocol for purposes of implementing Article 26 of the Biosafety Protocol with respect to socio-economic considerations would, under Article 3(1) and (2) of the SPS Agreement, be considered as consistent with the SPS Agreement or GATT 1994. Of course, this will only highlight the point that in both theory and practice, the Biosafety Protocol will, once it is in force, be subordinate to WTO rules.

The International Tropical Timber Agreement 1994 (ITTA 1994) continues the existence of the International Tropical Timber Organization (ITTO). Among the objectives stated in Article 1 of the ITTA 1994, and hence the ITTO, are:

(a) to provide an effective framework for consultation, international cooperation and policy development among all members with regard to all relevant aspects of the world timber economy;

(b) to provide a forum for consultation to promote non-discriminatory timber trade practices;

x x x

(d) to enhance the capacity of members to implement a strategy for achieving exports of tropical timber and timber products from sustainably managed sources by the year 2000;

(e) to promote the expansion and diversification of international trade in tropical timber from sustainable sources by improving the structural conditions in international markets, by taking into account, on the one hand, a long term increase in consumption and continuity of supplies, and, on the other, prices which reflect the costs of sustainable forest management and which are remunerative and equitable for members, and the improvement of market access;

(h) to improve market intelligence with a view to ensuring greater transparency in the international timber market, including the gathering, compilation, and dissemination of trade related data, including data related to species being traded;

(i) to promote increased and further processing of tropical timber from sustainable sources in producing member countries with a view to promoting their industrialization and thereby increasing their employment opportunities and export earnings;

(j) to encourage members to support and develop industrial tropical timber reforestation and forest management activities as well as rehabilitation of degraded forest land, with due regard for the interests of local communities dependent on forest resources;

(k) to improve marketing and distribution of tropical timber exports from sustainably managed sources;

(l) to encourage members to develop national policies aimed at sustainable utilization and conservation of timber producing forests and their genetic resources and at maintaining the ecological balance in the regions concerned, in the context of tropical timber trade;

The ITTA 1994 itself does not contain any provisions that expressly authorize ITTO Members to undertake trade-related measures in relation to timber trade. Under Article 32(1) of ITTA 1994, ITTO Members are subject to a "best efforts" obligation to promote and cooperation in the achievement of the objectives of the ITTA 1994 -- i.e. the promotion of international trade in tropical timber. Art. 36 states that nothing in the agreement authorizes the use of measures to restrict or ban international trade with respect to import and utilization of timber and timber products.

In view of this, tropical timber trade would be governed by the general WTO trade rules. This is clearly shown in proposals in recent years from the United States and other timber-exporting countries within the Asia Pacific Economic Cooperation (APEC) forum for negotiations within the WTO for accelerated tariff liberalization in the forest products sector.

Most likely the only time that trade in a particular tree species would not be subject to WTO rules is if the timber species is an endangered species listed in one of the CITES Appendices, in which case international trade in such species would be subject to the special legal trade regime of CITES.

The newly agreed Stockholm Convention on Persistent Organic Pollutants (POPs Convention), not yet in force, creates a separate legal regime to govern transboundary movements of chemicals that are POPs that would otherwise have been subject to WTO rules. It requires Parties to prohibit the import and export of certain listed chemicals, among other obligations (Art. 3(1)(a)(ii)). Article 3(2)(b)(iii) effectively allows Parties to discriminate, in terms of exports, against non-Parties on the basis of the latter�s compliance or non-compliance with specific provisions of the POPs Treaty.

The POPs Convention, however, contains the following clauses in its Preamble that may be relevant in assessing how it will relate to WTO rules:

x x x

Recognizing that this Convention and other international agreements in the field of trade and the environment are mutually supportive;

x x x

Reaffirming Principle 16 of the Rio Declaration on Environment and Development which states that national authorities should endeavour to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment;

x x x

Implementation by State Parties of their obligations to prohibit and regulate imports and exports of specific chemicals once the POPs Convention enters into force may bring them into conflict with the provisions of the SPS and TBT Agreements. Such conflict may arise as a result of the imposition of trade restrictions on POPs Convention-prohibited chemicals by a State Party wherein such trade-restrictive measure may not necessarily comply with all the requirements laid down in the SPS and TBT Agreements with respect to non-tariff barriers.

Although these provisions effectively allow Parties to theoretically violate their WTO obligations with respect to trade in POPs, such violation is again only theoretical rather than real. As a special international legal regime governing trade in POPs, the POPs Convention -- like the Montreal Protocol (with respect to ozone-depleting substances), CITES (with respect to endangered species), and the Basel Convention (with respect to hazardous wastes) -- takes trade in POPs out from the scope of application of WTO rules. This means that WTO rules and obligations do not apply to measures that would be taken pursuant to the POPs Treaty. Hence, no WTO violations will occur.

The Rotterdam Convention, not yet in force, lays down obligations on States Parties with respect to the import or export of specifically listed chemicals. It allows Parties to prohibit the importation of such listed chemicals (see Art. 10). It also lays down some informational requirements on Parties that export specified chemicals (Arts. 11 to 13).

Like some other MEAs, however, the Rotterdam Convention tried to provide some textual guidance in terms of establishing how its obligations will relate to that of the WTO. Its Preamble also contains the following clauses:

x x x

Recognizing the trade and environmental policies should be mutually supportive with a view to achieving sustainable development.

Emphasizing that nothing in this Convention shall be interpreted as implying in any way a change in the rights and obligations of a Party under any existing international agreement applying to chemicals in international trade or to environmental protection.

Understanding that the above recital is not intended to create a hierarchy between this Convention and other international agreements.

x x x

Like the Biosafety Protocol, the Rotterdam Convention�s "WTO savings clauses" in its Preamble can be interpreted as requiring that WTO rules be considered by a Party that is also a WTO Member when it adopts implementing measures for the Convention insofar as the Preamble provides part of the context within which the Conventions provisions must be interpreted.

There are many formulations in the "Precautionary Principle" in international agreements -- especially in legally binding MEAs such as the Montreal Protocol, the UNFCCC and the Kyoto Protocol, the POPs Treaty, and the Biosafety Protocol. The non-binding Rio Declaration also contains a formulation of this principle. In the context of the WTO, the WTO Appellate Body in Beef Hormones has stated that this principle is reflected in some of the provisions of the SPS Agreement.

However, there is still much debate, and no definitive answer, with respect to the question of whether this principle is a customary norm or general principle of international law. If so, this principle will have a legally binding effect on States even in the absence of a binding treaty provision. The WTO Appellate Body in Beef Hormones declined to make a clear statement to this effect. However, within the EU, this principle seems to be on its way to being integrated into EU law and policy.

The currently unclear legal status of the Precautionary Principle in international law means that it cannot be invoked and does not provide for any substantive rights or obligations. It is only when a clear provision can be pointed to in the text of an MEA or an annexed WTO agreement to support its application, that the Precautionary Principle will give rise to binding rights and obligations subject to the precise formulation contained in such MEA or WTO annexed agreement (i.e. SPS Agreement).

A MEA vs. WTO conflict might also arise with respect to the dispute settlement mechanism that will be used in the event of any dispute arising from the implementation by a State of its MEA or WTO obligations. The following matrix outlines the situations in which MEA dispute settlement rules might possibly come into conflict with WTO dispute settlement rules:

It is in the last situation above that a conflict between WTO and MEA dispute settlement mechanisms would most likely arise. One party might wish to interpret the regulatory measure being questioned as subject to an MEA obligation while the other party would consider it as being subject to WTO rules. This conflict in treaty interpretation and application obviously will have to be brought before some form of dispute settlement. The question is, which treaty rules should prevail?

In general, both MEAs and the WTO prioritize dispute avoidance mechanisms in the form of detailed reporting, regulatory transparency and compliance provisions, and view dispute settlement as last resort measures.

Public participation and access in both MEA and WTO dispute settlement procedures also tend to be limited. Most MEAs do not expressly provide for public transparency in dispute settlement proceedings. However, considering that MEA discussions are generally more transparent and accessible to NGOs than are WTO discussions, it seems likely that any invocation by MEA Parties of that MEA�s dispute settlement mechanisms will also likely be open and publicly transparent. Under the WTO�s dispute settlement rules, NGOs may not observe or participate in WTO dispute settlement proceedings. Although the WTO Appellate Body in the Shrimp-Turtle case has stated that the WTO panels and Appellate Body may, at their discretion, seek or accept input about the case from NGOs and other non-parties, there is no guaranteed public or NGO access or transparency in WTO dispute settlement.

Dispute settlement provisions in MEAs and the WTO prioritize political means of dispute resolution -- i.e. consultations, negotiation, mediation, conciliation, consensus-building -- and allows resort to quasi-judicial and judicial dispute settlement processes -- i.e. arbitration, referral to the International Court of Justice (for MEAs) or the WTO panels (for WTO) -- only when the opposing parties have not been able to agree or negotiate mutually politically acceptable solutions to their dispute.

However, MEA and WTO dispute settlement mechanisms differ in one key aspect -- enforceability. Any decision or action that come out from a MEA�s dispute settlement mechanism are generally non-binding, only recommendatory, and generally require additional action by the MEA parties. Furthermore, MEA dispute settlement normally are not time-bound. These apply to the MEAs discussed above.

On the other hand, dispute settlement in the WTO is a time-bound process and a decision rendered by a WTO panel or the Appellate Body, under WTO rules, can be enforced against the losing party. Such decisions are deemed adopted by the WTO Dispute Settlement Body (DSB, composed of all WTO Members) unless there is a consensus by the DSB NOT to adopt the decision. Although WTO panel or Appellate Body decisions are normally couched as "recommendations" on how to make the challenged measure WTO-consistent, a failure by the losing party to comply with the "recommendation" within a "reasonable period of time" -- normally 15 months -- will allow the winning party to seek authorization from the DSB for compensation from the losing party or to impose retaliatory trade sanctions against the losing party�s exports. Such authorization is deemed granted by the DSB unless there is a consensus not to grant such authorization. This aspect of rules-based, time-bound, and objective enforceability for WTO dispute settlement decisions has made WTO dispute settlement more "judicial" rather than political. WTO Members now increasingly favor a judicial resolution (by WTO panels and the Appellate Body) to their trade disputes in the WTO rather than a politically negotiated one. This is a complete reversal from the original intent of the GATT and the WTO in favoring political solutions to trade disputes.

Hence, for States who might feel aggrieved by a trade measure imposed by another State under an MEA, resorting to the WTO dispute settlement mechanism to settle the dispute would be more useful and would have a much fiercer bite as opposed to the MEA�s own dispute settlement mechanism. In cases where a State�s (or its MNCs�) economic interests are at stake and there is ambiguity as to which set of rules -- MEA or WTO -- would apply with respect to a regulatory measure adopted by another State, it is most likely that the "aggrieved" State would choose to resort to the dispute settlement mechanism that offers quick and enforceable results.

This in practice would tend to give WTO panels and the WTO Appellate Body a greater role in determining the exact relationship of MEAs� trade rules to that of the WTO. From past cases, WTO panels and the Appellate Body have tended to prioritize consistency with WTO rules as the standard which environmental measures must meet in order to be deemed "justifiable" and thus protected from being deemed violative of a country�s WTO obligations. In the event of an MEA-WTO rules conflict, such practice within the WTO�s dispute settlement system could effectively render MEAs subordinate to WTO obligations.

On the other hand, WTO dispute settlement bodies, by virtue of amendments to the Dispute Settlement Understanding, can rule to dismiss the dispute on grounds of lack of jurisdiction over the subject matter if an MEA rule or obligation is invoked as the justification for the disputed measure. WTO dispute settlement bodies can also be required to take MEA obligations into account in their deliberations in the event that a dispute is brought before them involving conflicts between MEA and WTO provisions. Among the instances that MEA rules or obligations should be taken into account in the WTO�s dispute settlement system are when, assuming that both parties to the WTO dispute are also parties to the MEA in question:

1. A party to the dispute raised an MEA rule or obligation as its justification for the adoption of the trade measure in question. This should, however, be without prejudice to such party raising such MEA rule or obligation as a prejudicial jurisdictional issue that removes the dispute from the jurisdiction of the WTO dispute settlement system;
2. The MEA rule or obligation in question reflects a customary or peremptory (jus cogens) norm of international law; or
3. The MEA rule or obligation is made particularly applicable to the WTO dispute by virtue of an express statement in the MEA that it should not conflict with WTO rules.

The trade-related provisions (and regulatory measures implementing such provisions) of the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (except those under CITES Art. XIV(2)), the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, and the Stockholm Convention on Persistent Organic Pollutants, can be seen, in relation to WTO rules, in two ways:

4. They constitute separate, distinct and co-equal international legal trade regimes exempt from the application of WTO rules with respect to the specific products or things that they cover. This implies that WTO rules need not be considered nor taken into account in implementing the trade provisions of these MEAs. Neither should WTO panels have any jurisdiction over disputes arising from the implementation of these MEA trade provisions; or

5. They are violations of WTO obligations that are justifiable as exceptions under the applicable WTO agreements -- i.e. GATT Art. XX(b) or (g); GATS Art. XIV(b). This implies that these MEAs are subordinate to WTO rules because any measure adopted to implement these MEAs� trade rules will still have to comply with WTO rules defining what constitutes a valid "exception" to WTO obligations. This also further implies that WTO panels will have jurisdiction to determine whether the implementation of MEA trade rules are consistent with WTO rules and obligations.

Strategically, it will make it more difficult for countries that are WTO Members to comply with their MEA obligations (especially vis-à-vis the Montreal Protocol, CITES, Basel Convention, POPS Treaty) if they are to be considered as "exceptions" to WTO rules. Rather, they should be argued and considered as constituting separate international legal trade regimes for the things that they apply to.

The "separate but equal" line of reasoning will allow countries to fully comply with their MEA and WTO obligations. Under this reasoning, any MEA-WTO conflict that may arise as a result of the implementation by a country of its MEA or WTO obligations should be resolved based on the nature of the measure in question. That is, if the trade-related measure in question was adopted and implemented in pursuit of a MEA right or obligation, dispute resolution should fall under the jurisdiction of the MEA�s dispute settlement mechanism. On the other hand, if the trade-related measure in question was adopted and implemented in pursuit of a WTO right or obligation, then the WTO�s dispute settlement mechanism should settle the issue.

The Kyoto Protocol, the Cartagena Protocol on Biosafety, CITES Art. XIV(2) (to some extent), the International Tropical Timber Agreement, 1994, and the Rotterdam Convention on Prior Informed Consent, on the other hand, would be more difficult to argue as constituting separate legal regimes that is co-equal to WTO rules. The legal texts of these MEAs seem to indicate their subordinate status to WTO rules.

As we have seen in this paper, MEAs provide for a wide variety of trade rules -- some of which make the MEA exempt from WTO rules, while others (by their own language) are made subordinate to WTO rules. Furthermore, given a choice between using a MEA�s dispute resolution mechanism and the WTO mechanism to address conflicting interpretations of a trade measure undertaken pursuant to an MEA which, at the same time, violates WTO rules, it seems more likely that the "aggrieved" State will seek redress from the WTO rather than from the MEA. This is simply because of the fact that the WTO can provide enforceability while the MEA generally cannot.

However, most of the MEAs discussed above generally provide for the Parties to agree on and come up with dispute settlement remedies that can be used to address violations of their provisions. Hence, perhaps one way to make resort to MEAs� dispute settlement mechanism more viable for States, especially with respect to the "WTO-exempt" MEAs above, would be to propose for the creation of a common compliance system with enforceable remedies for violations of MEA trade rules. This will require enormous political will and extensive negotiations because each MEA is separate from each other, have different State memberships, and have different procedures for amendments or the imposition of binding consequences.

What MEAs lack is a common institutional treaty framework that would tie them all together into a comprehensive package of treaty rights and obligations relating to the protection and conservation of the global environment and natural resources. The WTO, on the other hand, provides such a framework with respect to global trade in goods, services, and intellectual property rights.

At present, there is no overarching and binding international framework that will ensure that an equitable and just balance between the economic concerns represented by the WTO (and its sisters the World Bank, IMF, and regional development banks), and the social and environmental concerns that are represented by various UN instruments (i.e. the MEAs and human rights treaties) and institutions, is achieved.

* Vicente Paolo B. Yu III, FOEI WTO Program Officer, Geneva, Switzerland, 8 March 2002. This paper does not necessarily reflect the official positions of FOEI or of its member organizations.

1 | However, a recent NAFTA Chapter 11 (Investor-State Disputes) case, SD Myers vs. Canada, has held that "where a party has a choice among equally effective and reasonably available alternatives for complying with ... a Basel Convention obligation, it is obliged to choose the alternative that is ... least inconsistent ... with the NAFTA." The UNCITRAL Tribunal that decided this case, however, cited no legal authority for this assertion. To the contrary, NAFTA Article 104 and Annex 104.1 states that the trade-related provisions of CITES, the Montreal Protocol, and the Basel Convention take precedence over NAFTA provisions in cases of conflict.