Under the rules of the World Trade Organization (WTO), WTO members can adopt trade-related measures aimed at protecting the environment, subject to certain carefully crafted conditions. The three trade and environment cases brought under the WTO dispute settlement mechanism to date (the US–Gasoline, US–Shrimp and Brazil–Retreaded Tyres cases) have confirmed WTO members' ability to adopt trade-related environmental measures and have addressed several key concepts of the legal interconnections between trade and environment.
That being said, a number of other legal issues at the juncture of trade and environment remain to be clarified and have been intensely debated in the literature, in particular the consequences of the extraterritoriality of certain domestic environmental measures and the risk of fragmentation of public international law. Erich Vranes' publication intends to shed further light on these legally complex issues. The recent policy debate on the effect of climate-related domestic measures on trade rules also makes this publication particularly timely.
The publication presents in a rather unique fashion the legal linkages between trade and environment from three complementary perspectives: (i) the ‘horizontal’ relationship between WTO law and public international law, including treaty law as contained in multilateral environmental agreements; (ii) the ‘vertical’ linkages between domestic measures that regulate the protection of the environment, including their consequences in other countries, and WTO law; and (iii) the linkages between trade and environment in the context of relevant WTO rules and fundamental principles. The final section of this book applies this three-dimensional analytical framework to two concrete environmental problems of global importance: ozone and climate protection.
Vranes' examination of the first dimension, that is the relationship between WTO law and public international law, focuses on the question of conflicts of norms and the fragmentation of international law. The well-known citation of the WTO Appellate Body in the US–Gasoline case that WTO Agreements should not be read in ‘clinical isolation’ from public international law takes on all its meaning in this chapter. Vranes reviews in detail the general principles for resolving conflicts of norms, such as lex specialis and lex posterior, and discusses how the different principles would interplay, including in the context of the WTO dispute settlement mechanism. In his analysis of the different types of norms, Vranes also tackles the challenging question of whether, and to what extent, a permission may conflict with a prescriptive norm, that is an obligation or a prohibition. He provides a comprehensive review of the existing legal analysis in this domain.
In the context of the second dimension of the trade and environment interface, the author discusses the extent to which unilateral trade measures that are intended to deal with extraterritorial concerns may be permissible, from a domestic and an international point of view. An interesting link is being made between extraterritoriality and the use of the concept of ‘proportionality’ or ‘balancing’ of the trade measure with the objective at hand. The author argues that the conflicting rights of the state resorting to unilateral trade measures for environmental purposes and those of the states affected by such measures should be reconciled by a balancing operation that is structured by the tests of necessity and proportionality.
Regarding the permissibility of unilateral trade measures that address extraterritorial environmental concerns, Vranes argues that trade measures addressing such concerns should be regarded as the exception to the general rule of cooperation as laid down in Article 1 of the United Nations Charter, and in Principle 12 of the Rio Declaration specifically regarding environmental problems. Principle 12 provides that unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided and that environmental measures addressing transboundary environmental problems should be based on an international consensus. This is an interesting point that is particularly relevant in the context of the current multilateral negotiations on climate change under the United Nations Framework Convention on Climate Change (UNFCCC) and the parallel development of national legislations on climate change mitigation.
Finally as a third dimension, the author studies in great detail a number of fundamental issues in WTO law, as they relate to the protection of the environment. For instance, Vranes proposes a three-tier structure for the judicial review of the General Agreement on Tariffs and Trade (GATT) principle of non-discrimination: (i) a finding of likeness, (ii) a finding of differential treatment, and (iii) the examination of whether this differential treatment can be justified under the exception clause of GATT Article XX. Concerning this last aspect, Vranes' analysis of WTO case law led him to the conclusion that justification under Article XX is predominantly determined by considerations of suitability and necessity of the measure in pursuing a legitimate policy goal. Fundamental trade disciplines pursuant to the Technical Barriers to Trade (TBT) Agreement are also reviewed by the author. For instance, through a careful interpretation of Annex 1 of the TBT Agreement, in line with the canon of treaty interpretation set forth in the Vienna Convention on the Law of Treaties, Vranes argues that measures regulating processes and production methods of specific products that do not leave a physical trace in the resulting products can be regarded as being ‘related’ to such products, and therefore fall under the coverage of the TBT Agreement.
In the final chapter, Vranes applies this three-dimensional analytical framework to two current environmental debates: ozone protection and climate change mitigation. The international regimes on ozone and climate change raise a number of different legal challenges in relation to the trade regime. For instance, the legal framework created by the Vienna Convention for the Protection of the Ozone Layer and its Montreal Protocol raise unique jurisdictional issues in relation to possible trade measures against non-parties.
The author points out that unlike the Montreal Protocol, the Kyoto Protocol to the UNFCCC does not prescribe precise domestic measures that its parties must use in order to reduce greenhouse gas emissions, nor does it explicitly ‘permit’ such measures. In fact, the case study on climate change focuses on ‘vertical conflicts’ between domestic measures and WTO rules. In particular, it discusses a few examples of measures (such as carbon labelling), mainly technical requirements, subject to the TBT Agreement. In this context, the author addresses briefly the issue of the relevance of WTO rules to the conduct of private persons, for instance in the context of voluntary labelling schemes. With today's proliferation of privately set environmental standards (such as food miles labelling), this legal issue would have probably deserved further analysis.
Overall, this book goes beyond other publications on the topic of trade and environment by focussing on the legal interplay between trade and environment and dealing with fundamental legal questions in a comprehensive scholarly fashion. Throughout the publication, the author suggests practical ways and legal analysis to approach the trade and environment debate in a mutually supportive and constructive manner so as to avoid a situation of fragmentation of international law. Vranes' treatise provides a valuable contribution to the debate on the legal relationship between trade rules and domestic and international environmental policies. And his analytical framework could probably be applied also to a number of other ‘trade and … ’ issues, such as trade and labor or trade and health.
