Trade and Environment in the World Trade Organization: Dispelling Misconceptions

• Author: Doaa Abdel Motaal
• Date: 01 November 1999
• Published date: 01 November 1999
• DOI: http://doi.org/10.1111/1467-9388.00217

Trade and Environment in WTO Volume 8 Issue 3 1999

Trade and Environment in the

World Trade Organization:

Dispelling Misconceptions

Trade and Environment in the

World Trade Organization:

Dispelling Misconceptions

Doaa Abdel Motaal

Introduction

Numerous misconceptions abound about the role and

work of the World Trade Organization (WTO) on trade

and environment issues. To much of the outside world,

the WTO is an organization which has exceeded its man-

date – in addition to setting the rules for international

trade, it has done so for environmental protection, and

perhaps even gone as far as to set the environmental

protection standards that its member governments must

adhere to. This article identif‌ies common misconcep-

tions and attempts to dispel them. It is particularly

important to do so in the light of the WTO’s Ministerial

Conference in Seattle, Washington, in November 1999

(which, will launch a new round of negotiations), so that

expectations about the outcome of possible trade and

environment negotiations in the round are not mis-

placed.

Does the WTO have Rules on

Environment?

The WTO Secretariat is frequently asked what WTO rules

are on environment. Those who ask are often struck by

the response that the WTO does not have rules for

environmental protection. It is not an environmental pro-

tection agency and does not aspire to be one. The WTO’s

principal mandate is to work towards an open, equitable,

non-discriminatory trading system. It only addresses

environmental issues in so far as environmental policies

have trade-related aspects with a signif‌icant impact on

trade, which is very different from setting rules for

environmental protection. Several other international

organizations have been created with environmental

protection as their principal mission, such as the United

Nations Environment Program (UNEP), and the WTO has

neither the mandate nor the competence to duplicate

their role.

Well then, how does the WTO deal with the trade-related

aspects of environmental policies, which is the right

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question to ask. To answer, one must begin by categoriz-

ing the types of environmental policies that have an

impact on trade: while some take the form of product

standards (e.g. a requirement by a government that all

vehicles be equipped with catalytic converters), others

take the form of bans on certain products (e.g. a ban on

a certain environmentally hazardous chemical), of sub-

sidies for environmental protection, etc.

Product standards are dealt with primarily through the

WTO Agreement on Technical Barriers to Trade (TBT

Agreement). The TBT Agreement has been designed by

WTO member governments in such a way that it

acknowledges the right of each individual government

to set environmental protection standards at the level it

considers appropriate. However, the Agreement

attempts to ensure that these standards are neither dis-

criminatory nor create unnecessary obstacles to inter-

national trade (the non-discrimination principle is the

cornerstone of the WTO system as a whole and extends

beyond the TBT Agreement). In other words, a country

must apply any environmental standard for a product to

all such products regardless of their source. It must not

relax its standards towards those which are imported

from a particular source (but not to those that are

imported from another), nor towards those that are

domestically produced – a requirement that comp-

lements the environmental protection objective since it

ensures its consistent application. Second, while mem-

ber governments may develop product standards that

create obstacles to trade, they must ensure that those

obstacles are not avoidable ones. If avoidable, less trade-

restrictive measures must be sought, which would allow

both the environmental protection objective to be achi-

eved, and the open, equitable and non-discriminatory

trading system to be maintained.

Well, what about bans, how does the WTO deal with

those? Article XI of the General Agreement on Tariffs and

Trade (GATT), on the General Elimination of Quantitat-

ive Restrictions, outlaws the imposition of quantitative

restrictions and prohibitions. So any ban that is put in

place by a WTO member government would automati-