Theory and Impact
Critical Issues in Environmental Taxation series
Edited by Larry Kreiser, Soocheol Lee, Kazuhiro Ueta, Janet E. Milne and Hope Ashiabor
Chapter 5: WTO open trade rules and domestic environmental protection policies: a balancing approach
A fundamental principle of the World Trade Organization (WTO) is a commitment to the protection of the environment. However, difficulties arise due to the competition between that commitment and the WTO’s perceived overarching mission of preserving and promoting trade liberalization. WTO dispute panels periodically confront cases where the will to combat trade restrictions and the promotion of environmental protection come into direct conflict. While there are mechanisms in WTO rules to excuse certain trade restrictions on the basis of their environmental protection intent and effect, these are typically subject to an overriding requirement that the impugned policy is not trade protectionism in disguise. This is a legitimate condition, given the WTO’s role as an open trade body and not a conservationist agency, but the fact remains that the WTO has some obligation to the environment and yet its rules, by proscribing or constraining domestic measures, may hinder progress in environmental protection. The literature in this area focuses in large part on legal critique of WTO Panel and Appellate Body (AB) reports and on the extent to which WTO rules constrain domestic policy initiatives. This chapter takes a different approach. With a particular focus on Article XX of the General Agreement on Tariffs and Trade (GATT), and consideration of the interplay between Article XX and paragraph 11.3 of China’s WTO Accession Protocol the chapter proposes a reconsideration of the rules themselves to permit policies that clearly produce positive environmental outcomes.
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