Copyright c 2002 The Yale Journal of International Law Inc The Yale Journal of International Law Winter 2002 27 Yale J Int l L 59 LENGTH 28658 words ARTICLE The Law of Environmental PPMs in the WTO Debunking the Myth of Illegality NAME Steve Charnovitz BIO Steve Charnovitz practices law at Wilmer Cutler Pickering in Washington D C This Article is based on a lecture delivered at the Institut Universitaire de Hautes Etudes Internationales in Geneva in October 2000 Support for this research was provided by the Ford Foundation through the Global Environment Trade Study at the Yale Center for Environmental Law and Policy Yale University Thanks to Rob Howse and Gabrielle Marceau for their helpful comments SUMMARY Processes and Production Methods PPMs are the subject of one of the most knotty controversies in the debate over trade and environment A central disagreement is whether the rules of the WTO s General Agreement on Tariffs and Trade GATT prohibit PPMs per se or whether they are permitted in certain circumstances These PPMs can be contrasted to an import ban that has no connection to production methods While the TBT Agreement uses the term regulation for mandatory provisions the taxonomy laid out in this Article uses the term standard rather than regulation for two reasons first while some environmental PPMs are regulations applied equally to foreign and domestic products many PPMs are import bans that may not come within the scope of TBT second the term regulation has a connotation of jurisdiction to prescribe individual behavior that does not fit PPMs which set conditions for entry or sale that the exporter may or may not seek to meet Even without explicit language however GATT rules may still prohibit environmental PPMs The U S import ban was a government policy standard aimed at foreign laws Furthermore the Commission administering an environmental treaty can authorize non product related PPMs To scrutinize PPMs the WTO will assess the validity of the environmental purpose underlying the trade measure TEXT 59 I Introduction Processes and Production Methods PPMs are the subject of one of the most knotty controversies in the debate over trade and environment n1 At 60 issue is the appropriateness of imposing trade measures contingent on the production process n2 Commentators often claim that the World Trade Organization WTO prohibits PPM based restrictions affecting trade n3 Such claims have convinced many environmentalists that the WTO led trading system interferes with ecological protection n4 The reality of international trade law is different PPMs affecting trade are not prohibited per se Recognizing the correct legal status of PPMs is a precondition to achieving a much needed reconciliation between the World Trade Organization and environmentalists One of the best known examples of a PPM based restriction is the U S trade ban on shrimp from countries that have not been certified as having regulatory regimes in place to prevent the killing of sea turtles in the course of shrimping n5 The U S government imposed a ban on shrimp imports from countries that federal officials believed were not doing enough to prevent shrimp trawlers from killing endangered sea turtles The enforcement of the U S ban led to a high profile dispute in the World Trade Organization when 61 four countries India Malaysia Pakistan and Thailand brought a case against the United States n6 This famous WTO dispute is known as the Shrimp Turtle case n7 Shrimp Turtle demonstrates the cloud of suspicion surrounding the application of PPMs This Article argues that rather than a covert tool of protectionism a PPM can be an appropriate instrument of environmental policy A number of international instruments already bear witness to this fact For example the World Charter for Nature approved by the United Nations General Assembly in 1982 calls on governments to establish standards for products and manufacturing processes that may have adverse effects on nature as well as agreed methodologies for assessing these effects n8 In fact the WTO treaty acknowledges the importance of production methods for environmental policy The WTO Agreement on Agriculture in prescribing criteria for domestic support measures that remain exempt from reduction states that payments under environmental programs must be dependent on specific conditions such as conditions related to production methods or inputs n9 Of course neither the World Charter for Nature nor the Agreement on Agriculture provides an explicit endorsement of a PPM affecting trade So long as a government applies PPMs only to domestic producers no other government is likely to complain at the WTO Trade conflicts are likely to arise however upon application of a PPM to imported products or to foreign service suppliers With the goal of promoting the resolution of such potential trade conflicts this Article presents a new taxonomy of PPM based restrictions PPMs that focus on the manner of production are preferable to PPMs that focus on the country of production Recognizing that form matters can allow the WTO and the environmental community to communicate thus enabling environmentalists to articulate their demands in a manner consistent with the principles of non discriminatory trade embodied in the WTO Several WTO agreements already recognize the validity of PPMs that clearly affect trade n10 The Agreement on the Application of Sanitary and 62 Phytosanitary Measures SPS states that governments shall allow a reasonable interval between the publication of a regulation and its entry into force in order to allow time for producers to adapt their products and methods of production to the requirements of the importing Member n11 The Agreement on Technical Barriers to Trade TBT has a similar provision n12 The Agreement on Trade Related Aspects of Intellectual Property Rights TRIPS requires governments to establish a procedure enabling the holder of an intellectual property right to ask customs authorities to detain goods produced with a counterfeit trademark or pirated copyright n13 In all of these agreements however the foreign production process is of concern only because of its impact on the importing country The quarrel with PPMs is not about this kind of measure rather it is about the use of trade measures with an outwardly directed purpose The U S import ban on shrimp was outwardly directed in that it sought to save turtles being killed hundreds or thousands of miles away Such
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