The Case forRethinking the WTO

Earthjustice Legal Defense FundNovember 1999

The full story behind the WTO’senvironment and health cases

Earthjustice Legal Defense FundEarthjustice Legal Defense Fund is a nonprofit public interestenvironmental law firm that provides services to citizens'groups seeking greater protection for our natural environment.Since its inception in 1971, the Legal Defense Fund has beeninvolved in many of the nation's most important environmentalbattles. Through its active and diverse litigation practice, theLegal Defense Fund has established valuable precedents incases involving air and water quality, endangered species,forestry, public land use, toxins, international environmentallaw, and environmental justice.

Authors

Martin WagnerEarthjustice Legal Defense Fund

180 Montgomery Street,Suite 1725

San Francisco, CA 94104Phone: 415-627-6725

Fax: 415-627-6749mwagner@earthjustice.org

Patti GoldmanEarthjustice Legal Defense Fund

203 Hoge Building705 Second AvenueSeattle, WA 98104

Phone: 206-343-7340Fax: 206-343-1526

pgoldman@earthjustice.org

The Case fThe Case fThe Case fThe Case fThe Case forororororRRRRRethinking the WTethinking the WTethinking the WTethinking the WTethinking the WTOOOOO

The full story behind the WTO’s

environment and health cases

Published bPublished bPublished bPublished bPublished byyyyyEarthjustice Legal Defense Fund

San Francisco, CA 1999www.earthjustice.org

Copyright © 1999 by Earthjustice Legal Defense Fund

You can find The Case for Rethinking the WTOat the web site www.earthjustice.org

With gratitude for financial assistance fromC.S. Mott Foundation and C.S. Fund

Contents

IntrIntrIntrIntrIntroductionoductionoductionoductionoduction ................................................................................................................................................................................................................................................................................... 11111

U.S. Sea TU.S. Sea TU.S. Sea TU.S. Sea TU.S. Sea Turtle Prurtle Prurtle Prurtle Prurtle Protectionsotectionsotectionsotectionsotections ................................................................................................................................................................ 33333

The PrThe PrThe PrThe PrThe Pre-WTe-WTe-WTe-WTe-WTO ChallengesO ChallengesO ChallengesO ChallengesO Challengesttttto U.S. Dolphin Pro U.S. Dolphin Pro U.S. Dolphin Pro U.S. Dolphin Pro U.S. Dolphin Protectionsotectionsotectionsotectionsotections ........................................................................................................................................................... 88888

U.S. Clean Air RU.S. Clean Air RU.S. Clean Air RU.S. Clean Air RU.S. Clean Air Regulationsegulationsegulationsegulationsegulations ...................................................................................................................................................... 1111111111

EurEurEurEurEuropean Ban on Hormone-Topean Ban on Hormone-Topean Ban on Hormone-Topean Ban on Hormone-Topean Ban on Hormone-Trrrrreated Beefeated Beefeated Beefeated Beefeated Beef ................................... 1313131313

The AThe AThe AThe AThe Asbestsbestsbestsbestsbestos Caseos Caseos Caseos Caseos Case ....................................................................................................................................................................................................................... 1717171717

ConclusionConclusionConclusionConclusionConclusion ................................................................................................................................................................................................................................................................................... 1919191919

NotesNotesNotesNotesNotes ................................................................................................................................................................................................................................................................................................................................ 2222211111

Introduction

The environmental community is calling for major reforms of theWorld Trade Organization’s rules to remove obstacles to strongenvironmental and health protections at the local, state, national,

and international level. Specifically, the environmental community seeksto guarantee countries the right to restrict imports to limit the harmfuleffects of trade, including such effects in the areas of logging, fishing,and production. In addition, the WTO rules should leave countries freeto employ the precautionary principle to protect their people and theenvironment against risks of harm.

When nations entered into the WTO, they agreed to be bound by itsvoluminous sets of rules. These rules prohibit discrimination againstforeign products and bar import restrictions. While the WTO has ex-ceptions for measures intended to conserve exhaustible natural resourcesor to protect human and animal health, the exceptions are riddled withso many conditions that it is extremely difficult for domestic regulationsto pass muster.

The WTO authorizes one country to challenge another country’s lawsor regulations. These challenges are decided by panels of three tradeexperts whose proceedings are shrouded in secrecy. Only the govern-ments involved in the disputes can present arguments to the panels. Ifa law is found to violate the WTO’s rules, and the law is not changed,

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the WTO authorizes the imposition of trade sanctions to force a changein the law.

In its first five years, health and environmental standards have not faredwell before the WTO. In three key cases, the WTO has ruled against aregulation under the U.S. Clean Air Act, the sea turtle protections underthe U.S. Endangered Species Act, and a European ban on beef pro-duced with growth hormones. A challenge to a French ban on asbestosis pending.

The environmental community has drawn on these decided cases to dem-onstrate the need for reform of the WTO rules. Opponents of reformhave painted a picture of these cases as benign in an attempt to refutethe need for change. However, many of these arguments have been maderhetorically, without a careful examination of what was at stake in thedisputes and what the WTO panels decided.

Earthjustice Legal Defense Fund is well-suited to set the record straight.We have represented nongovernmental organizations seeking to defendeach of these laws before the WTO. We have provided assistance to thegovernments defending the laws being challenged, and we instituted thepractice of preparing friend of the court briefs that present the views ofinterested elements of civil society to WTO dispute panels. The WTOreturned our submission in the hormone case, underscoring that “non-governmental organizations may not submit materials to a dispute settle-ment panel.”1 In the shrimp-turtle case, the United States attached ourbrief to its submission, but it adopted only those arguments that con-curred with those made in the U.S. submission and indicated that, in itsview, the Appellate Body need not respond to the other points made inour brief.2

This report describes the context in which each of the challenges arose,the dispute panel decisions, and the impact of the rulings. It is designedto give readers more than the rhetoric and sound bites that are the fodderof much of the current debate.

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U.S. Sea Turtle Protections

Sea turtles are highly migratory, nesting on beaches, swimmingdeep in the ocean, and feeding in coastal areas and river mouths.They have been on this planet for more than 150 million years,

since before the time of the dinosaurs.

Sea turtles are on the brink of extinction. All seven species of sea turtles areclassified as endangered, threatened, or vulnerable under both internationaland national law. The Kemp’s ridley turtle is one of the most endangeredspecies in the world with only about 2000 nesting females remaining.

The leading threat to sea turtle survival is shrimp trawl fishing becausesea turtles become caught in the nets and drown. An estimated 150,000sea turtles drown in shrimp nets each year.

An inexpensive device, called a turtle excluder device or TED, catchesthe turtles in a trap that has an escape hatch, thereby directing the turtleout of the net and saving its life. TEDs reduce the number of turtleskilled by shrimp fishing by 97%.

The U.S. LawSince 1987, federal regulations have required U.S. shrimpers to useTEDs. In 1989, Congress amended the U.S. Endangered Species Act toprohibit the import of shrimp from countries that do not have compa-

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rable sea turtle protections.3 The law became effective in May 1991, butthe U.S. State Department gave countries a three-year period in whichto comply with the law.

The State Department interpreted the law to apply only to 14 countriesin the Caribbean and Western Atlantic. Earth Island Institute, SierraClub, the Humane Society of the United States, and others challengedthis interpretation in court and won. In 1996, the U.S. Court of Interna-tional Trade ordered the U.S. government to apply the turtle law world-wide by May 1, 1996.4

In an attempt to appease our trading partners, the State Departmentissued guidelines, applying the law vessel-by-vessel rather than coun-try-by-country. Under this new interpretation, shrimp could come intothe United States if an exporter declared that it came from a ship thatused TEDs, even if the exporting country allows harmful fishing byother vessels. In October 1996, and again in April 1999, the U.S.Court of International Trade held that the vessel-by-vessel approachviolates the statute.5

The WTO ChallengeThailand, Pakistan, India, and Malaysia mounted a trade challenge inthe WTO. Thailand led the charge, even though it required its shrimpfleet to use TEDs and its shrimp could freely enter the United States. AWTO dispute panel and the WTO Appellate Body both ruled in favor ofthe Asian countries that challenged the U.S. sea turtle protections. Thesepanels consist of three trade experts who conducted their proceedingsbehind closed doors. The U.S. Trade Representative and State Depart-ment defended the law. On behalf of Earth Island Institute and otherenvironmental groups, Earthjustice Legal Defense Fund asked that it bepart of the U.S. delegation defending the law, but the United Statesrefused that request. In a turn of events reminiscent of the fox guardingthe chicken coop, the same lawyers arguing in favor of weak interpreta-tions of the law in U.S. court were its sole defenders before the WTO.

Import bans are generally forbidden by the WTO,6 but there is an ex-ception for conserving exhaustible natural resources.7 WTO exceptions

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have so many prerequisites, however, that the panels found several rea-sons why the sea turtle protections violate the WTO rules.

In the dispute, all the countries agreed that sea turtles are severelyendangered, that it is important to protect them, and that TEDs are theonly effective protection against turtle drownings in shrimp nets.8 TheAppellate Body likewise found that it is a legitimate goal to protecthighly migratory species, such as sea turtles, rejecting the argumentsthat fish and wildlife do not come within the natural resources excep-tion and that the United States can only protect animals that physi-cally reside in its territory.9

Both panels found that the U.S. sea turtle protections are designed toconserve sea turtles since shrimp fishing kills turtles and that TEDs arean effective conservation measure.10 Some WTO defenders have arguedthat this case stands for the proposition that countries may restrict tradeto protect endangered species, but the decision went on to highlight somany rules and pitfalls that it is no wonder no environmental law hassurvived a WTO challenge.

To invoke the WTO natural resources exception, a country must dem-onstrate that its actions have not been “unjustifiable,” “arbitrary” or a“disguised restriction on international trade.”11 The United States ar-gued that it satisfied these conditions because its import bans on shrimpare for the purpose of and linked to conserving turtles. In essence, thefindings the panel had already made should have been sufficient to al-low the sea turtle protections to survive challenge. The panel rejectedthis argument, ruling instead that each of these other requirements mustalso be met.12

These additional tests are inherently subjective, putting the WTO in theposition of deciding whether the United States struck the right balancebetween sea turtle protection and trade. According to the WTO, theUnited States went too far when it blocked trade because other countriesdid not have the desired conservation policies in place: “Perhaps themost conspicuous flaw in this measure’s application relates to its in-tended and actual coercive effect on the specific policy decisions madeby foreign governments.”13 More particularly, the United States required

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other countries “to adopt essentially the same policy (together with anapproved enforcement program) as that applied to, and enforced on,United States domestic shrimp trawlers. . . .[I]t is not acceptable, ininternational trade relations, for one WTO Member to use an economicembargo to require other Members to adopt essentially the same com-prehensive regulatory program, to achieve a certain policy goal, as thatin force within that Member’s territory, without taking into consider-ation different conditions which may occur in the territories of thoseother Members.”14

This was the heart of the Appellate Body’s ruling. While the decisionfaulted the United States for not taking into account the circumstancesin each country, neither the WTO nor any country involved in the dis-pute identified anything other than TEDs that is effective in saving turtlesfrom drowning in shrimp nets. Nor did any country identify any “differ-ent conditions” in their territories that would make TEDs unnecessary.Several of the challenging countries described steps they had taken toprotect nesting areas or fishing in areas where turtles do not swim. Theformer is unrelated to shrimp fishing; the latter is exempt from the U.S.import restrictions. Because there is no other effective safeguard forturtles from shrimp fishing, the WTO was not presented with a situationin which the U.S. measure had been applied unfairly. It went out of itsway to find against the U.S. measure based on a hypothetical concern.

Next, the Appellate Body criticized the United States for not using a ves-sel-by-vessel basis for its import restrictions, although the Appellate Bodydid not decide that such a system would pass muster.15 Of course, a U.S.court has held that a vessel-by-vessel approach violates the U.S. Endan-gered Species Act. As a practical matter, a vessel-by-vessel rule wouldbe less effective at protecting sea turtles since some vessels could fishwithout sea turtle protections and it would be impossible to ensure com-pliance with such a rule. The WTO favors a weaker standard and one thatis illegal under U.S. law.

Finally, toward the end of its decision, the panel stated that the UnitedStates had acted in a discriminatory fashion because it gave Asian coun-tries only six months to comply with the law, while Caribbean countrieshad three years.16 Of course, the reason for this different treatment wasthe U.S. State Department’s illegal interpretation of the law to apply

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only in the Caribbean. A court declared this interpretation illegal andordered the law’s application worldwide within six months. Accordingto the Appellate Body, the fact that the State Department had to complywith a court order did not relieve it of its duty to comply with the WTO.17

In any event, the Asian countries have now had more than three years tocomply with the sea turtle requirements. The passage of time has curedthis WTO violation. Some WTO defenders have tried to depict this tim-ing problem as the heart of the sea turtle ruling. This is not the case. Ifit were, the State Department would not be in the process of changingits regulations.18

But the United States has promised the WTO that it will change itsregulations in early December 1999. While the United States has readthe Appellate Body’s ruling to require rather technical changes in itsregulations, the Asian countries have expressed dissatisfaction with thatminimalistic approach. This dispute may be far from over.

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The Pre-WTO Challenges toU.S. Dolphin Protections

The Tuna-Dolphin disputes were decided before the WTO cameinto existence and do not have formal status as interpretationsof the international trade rules. Nevertheless, the decisions in

these cases have been cited by WTO panels as establishing principlesthat still apply today.19

In parts of the Pacific Ocean, certain species of tuna travel in associa-tion with pods of dolphin. One commonly-used method of catching tunainvolves chasing the dolphins, encircling them with large nets called“purse seines,” driving them to the center of the nets (often by usingchase boats or explosives) and closing the nets to trap the tuna. Thismethod often harms or kills large numbers of dolphins.

The U.S. Marine Mammal Protection Act attempted to address the harmto dolphins caused by this practice. After placing restrictions on U.S.tuna fishers, the law prohibited the importation of tuna caught withpurse seines unless the exporting country had implemented a programto protect dolphins, and had succeeded in reducing the incidental injuryto dolphins to a degree “comparable” to that of the U.S. tuna fleet.20 Atvarious times, the United States had used these provisions to ban tunafrom The Congo, El Salvador, Peru, Senegal, the USSR and Spain.21 In

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1990, environmental groups successfully sued to compel the U.S. gov-ernment to enforce the import ban requirement, leading to a ban onMexican tuna because Mexico’s policies violated the requirements ofthe U.S. law.22

Mexico filed a trade challenge to the ban, and a dispute panel found thatthe U.S. import restrictions violated international trade rules. The heartof the Panel’s decision was its finding that the U.S. ban violated thetrade rules because it was based not on some characteristic of the prod-uct imported (in this case, the tuna), but on the process by which thetuna was caught.23 A basic trade requirement is that foreign productsmust be treated at least as favorably as “like products” produced do-mestically.24 Because the panel had determined that tuna caught in waysthat harm dolphins is the same “product” as dolphin-safe tuna, banningtuna from Mexico while permitting the sale of tuna from the UnitedStates violated this requirement.25 The panel also determined that theU.S. ban violated the international prohibition on trade bans.26

The United States argued that even if its ban did violate these trade rules,the ban was permitted by the recognized exceptions to those rules, whichpermit countries to restrict trade when “necessary to protect human, ani-mal or plant life or health,” or “related to the conservation of exhaustiblenatural resources.”27 The panel rejected this argument for both excep-tions. First, the panel determined that the tuna ban was not “necessary” tothe protection of dolphins. The term “necessary” has been interpreted torequire countries to use the least trade-restrictive method of achievingtheir protective goal. In the panel’s view, the United States should havepursued less trade-restrictive measures – such as attempting to negotiatea cooperative international agreement – instead of imposing a ban.28

Finally, the panel determined that even if the exceptions might otherwiseapply, they could not apply to animals or other resources outside theterritory of the country implementing the protective measures.29 Thetuna ban, aimed at protecting dolphins outside U.S. territory, thus wasnot a legitimate exception to the trade rules.

In 1993, the European Union brought a second challenge to the tuna-dolphin law.30 The second dispute panel agreed with the first tuna-dol-

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phin panel that the methods by which tuna are caught are not a legiti-mate basis for treating tuna from different countries differently.31

The second tuna-dolphin panel diverged from the first in concludingthat a country can restrict trade to protect exhaustible natural resourceslike dolphins outside its territory.32 The panel nevertheless found thatcountries cannot restrict trade to force other countries to change theirpolicies. In the panel’s view, such restrictions would seriously impairthe operation of the international trading system, “in particular, the rightof access to markets.”33

Spurred by the trade panel decision, the United States, Mexico, andseveral other countries adopted a program that allows tuna fishing meth-ods that continue to harm dolphins, but provides for observers on fish-ing vessels. Many environmental groups opposed this change because itprovided less protection for dolphins than the U.S. law required. Overthe objections of these groups, Congress amended the law to implementthis new program, and the U.S. Commerce Department has proposednew regulations that would allow tuna caught using harmful fishingpractices to come into the United States and to carry the dolphin-safelabel as long as the tuna comes from a country that requires observers.34

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U.S. Clean Air Regulations

The 1990 Clean Air Act Amendments require the use of reformulatedgasoline in areas out of compliance with air quality standards inorder to reduce toxic motor vehicle emissions. The Environmental

Protection Agency (EPA) issued a rule in December 1993 spelling outthe methods that refineries must use in calculating their compliance withthe reformulated gasoline requirements. The rule did not allow foreignrefineries to use certain calculation methods because EPA did not believethat the refineries had adequate data or that it could conduct sufficientmonitoring and enforcement abroad to ensure compliance. Through whatit called gaming (or manipulating) the system, EPA feared foreignrefineries would send dirtier gasoline to the areas where reformulatedgasoline was required. In adopting the rule, EPA “determined that therule issued today is necessary to protect the quality of U.S. air andpublic health.”35

Venezuela and Brazil challenged the rule before the WTO. The UnitedStates reiterated the obstacles it faced to ensuring compliance by for-eign refineries and its air quality concerns. A WTO panel and subse-quently the WTO Appellate Body found the U.S. rule to violate theWTO rules because it treated foreign refineries differently from do-mestic ones, without any concern for the enforcement and air qualityconsequences of that ruling.36

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To comply with the WTO decision, EPA changed its regulations to al-low foreign refineries to use all alternative methods of calculating theircompliance with the gasoline requirements, provided the refineries’ gov-ernments agree to subject the refineries to U.S. inspection and enforce-ment authority.37 While this approach removes legal obstacles to U.S.inspections on foreign soil, it forces EPA to devote its scarce enforce-ment budget to these costly monitoring activities, thereby leaving otherimportant environmental problems unaddressed.

Venezuelan gasoline has concentrations of olefins – a pollution-formingsubstance – that are three times the level allowed under the initial EPAapproach. The new rule will allow dirtier Venezuelan gasoline into thenortheastern United States, where it will worsen air pollution and “becounterproductive to . . . efforts to achieve attainment” of air qualitystandards, according to government pollution control regulators fromthe eastern states.38

In a U.S. court challenge to the new regulation, Earthjustice LegalDefense Fund argued on behalf of environmental groups that EPA hadto adopt the approach that would best promote clean air. Rejectingthis argument, the D.C. Circuit court held that EPA had the authorityto consider other factors and that U.S. statutes, like the Clean Air Act,must be construed “wherever possible . . . to avoid an interpretationthat would put a law of the United States into conflict with a treatyobligation of the United States,” such as a decision of the WTO.39

This ruling effectively makes WTO decisions part of U.S. law when-ever an agency or court has any discretion in interpreting that law.

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European Ban onHormone-Treated Beef

For several decades, meat producers have routinely treated livestockwith natural and synthetic hormones to induce rapid growth. In1995, 63 percent of all cattle in the United States and 90 percent

of cattle raised in U.S. feedlots were treated with growth hormones.40

The International Agency for Research on Cancer has recognized ex-tensive scientific evidence demonstrating that exposure to hormones,including those used to promote growth in livestock, causes cancer inlaboratory animals and, in some cases, in humans. In addition, the sameagency has noted that exposure to hormones may magnify the effects ofother carcinogens.41

In 1980, as a result of consumer concern over reports of harm, particu-larly in infants, caused by eating hormone-treated meat,42 the EuropeanUnion (EU) instituted a series of bans on the use of growth hormones inmeat production.43 Subsequently, the EU banned the import of meatfrom animals treated with such hormones.44

In 1996, the United States and Canada challenged the European ban asa violation of the WTO rules. The challenge was the first test of theWTO’s rules on food safety.45 Those rules discourage countries from

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providing greater public health protection than the international statusquo by requiring them to base food safety measures on internationalstandards, where they exist. Any domestic law that provides greaterprotection against risks to health than afforded by a relevant interna-tional standard must comply with a battery of tests in order not to beconsidered an unfair trade barrier.46 Such measures must be based onscientific principles, current scientific evidence, and a risk assessment,and may be applied only to the extent necessary to protect human health.47

The WTO dispute resolution panel found the European ban to violatethe WTO food-safety rules.48 The EU appealed the panel’s decision,and the Appellate Body affirmed the panel’s conclusions. The AppellateBody’s ruling was based on its determination that there was not suffi-cient evidence that the growth hormones would harm humans.49 In reach-ing this conclusion, the Appellate Body downplayed scientific evidenceof the carcinogenic effects of the hormones in question.

The WTO was presented with substantial evidence demonstrating thatexposure to each of the hormones in question has been linked to cancerin laboratory animals.50 The Appellate Body admitted that the studies“do indeed show the existence of a general risk of cancer.”51 Neverthe-less, the Appellate Body did not consider this sufficient scientific sup-port because the studies did not focus on the “specific” potential forcarcinogenic effects from residues of these hormones in “meat derivedfrom cattle to which hormones had been administered for growth pro-motion purposes.”52

The EU had argued that its ban should be permitted as an application ofthe precautionary principle. This principle embodies the admonition “bet-ter safe than sorry” by giving countries the right to implement protec-tive regulations where there is some scientific evidence of harm, even ifthat evidence is in some way inconclusive.53 On this basis, the evidencepresented by the EU should have more than sufficed to justify its ban.However, the Appellate Body’s decision erects huge obstacles to the useof the precautionary principle.54

First, by refusing to credit the evidence presented by the EU, the Ap-pellate Body effectively shifted the burden of proof regarding food

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safety measures. The Appellate Body refused to permit the ban be-cause the EU did not prove that the hormones were harmful. Thisapproach is at odds with a precautionary approach that would per-mit regulation of possibly harmful activities or substances unlessthey are proven to be safe.

Second, the Appellate Body determined that a country cannot use evi-dence that a substance causes cancer in animals – a scientific as well ascommon-sense basis for suspecting a risk in humans – as a basis for

Another WTO Obstacle to Preventing HarmThe WTO’s rules concerning food safety measures place an unre-alistic emphasis on a WTO panel’s judgment whether a countryhas regulated all similar risks consistently.55 In the hormone-treatedbeef case, the Appellate Body considered it an “unjustifiable” in-consistency for the EU to treat growth hormones differently froma carcinogenic substance used as a medical treatment in certainfarm animals.56 In another case – this one concerning a Canadianchallenge to an Australian measure to protect fish from diseasesthat could be carried on imported salmon – the Appellate Bodyconcluded that the measure violated the WTO rules because Aus-tralia had implemented protections against the entry and spread ofdiseases carried by salmon, but had not implemented equivalentmeasures to protect against other fish-borne diseases. Accordingto the Appellate Body, this distinction was “arbitrary and unjusti-fiable” and the Australian measure was therefore a “disguised re-striction on international trade,” in violation of the WTO rules.57

The WTO’s strict emphasis on consistency with respect to all po-tentially risky activities or substances is unrealistic. The WTOapproach fails to recognize that societies place different values ondifferent activities or substances, even if they present similar lev-els of risk. It is also politically unrealistic to require governmentsto address all risks at the same time and in the same way.

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banning it as a food additive in humans. The U.S. National CancerInstitute has stated that “materials that cause cancer in one type of ani-mal usually are found to cause cancer in others. . . . For these and otherreasons, we should expect animal carcinogens to be capable of causingcancer in humans.”58 The U.S. Delaney Clause prohibits food additivesthat cause cancer in animals.59 The zero-risk Delaney Clause standardis based on a policy decision in the face of uncertainties about cancerrisks from the consumption of carcinogens even in small amounts. Thisand other precautionary health protective measures based on risks tohumans deduced from studies on laboratory animals are seriously jeop-ardized by the Appellate Body’s decision.

Despite the Appellate Body’s determination that the European hor-mone ban violated the WTO rules, the EU refused to rescind the ban.As a result, the WTO granted the United States permission to impose$116.8 million in retaliatory trade sanctions each year that the EUmaintains its ban.60

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The Asbestos Case

The carcinogenic effects of asbestos are well known.61 Manycountries, including the United States, have banned or severelyrestricted the use of asbestos.62 In 1997, on the basis of a study

indicating the likelihood of an increasing number of asbestos-relateddiseases and deaths in coming years, France banned the import and saleof all types of asbestos and products containing asbestos.63

Canada, the world leader in asbestos exports,64 has challenged theFrench ban at the WTO.65 That challenge is still pending before theWTO’s dispute resolution panel. A decision is expected in spring 2000,and a possible appeal could delay final resolution of the case until latein the year.

Canada’s primary argument is that the French ban violates the WTOrequirement that measures must not be “more trade-restrictive than nec-essary to fulfil a legitimate objective.”66 Canada claims that a less trade-restrictive alternative was available to France, namely, to ban only themost harmful type of asbestos and to require the “controlled use” – thewearing of protective clothing and other safeguards – of other types.67

However, the French studies demonstrate that such “controlled use”would leave large segments of the public unprotected – in particularconstruction workers like carpenters and plumbers, untrained peoplewho do repair work on their homes, and others who are unlikely to know

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that the materials they work with contain asbestos.68 In light of the Frenchstudies, Canada is essentially arguing that France (and any other gov-ernment) should be required to expose its population to some level ofrisk if avoiding that risk completely would place too great a restrictionon trade.

Canada also argued that the asbestos ban could not be considered theleast-restrictive alternative until France had determined that the sub-stances that would replace asbestos posed no health risks themselves.69

Canada thus took the position that a government cannot regulate a sub-stance that poses a known health risk until it has scientifically ruled outany hypothetical risks of potential substitute substances.

Canada’s challenge is still pending at the WTO. If the WTO acceptsCanada’s interpretation of the trade rules, the ability of governments toregulate toxic substances and encourage the development of non-toxictechnologies could be severely restricted. The U.S. government some-times forces the development of safer technologies by banning thoseknown to present a health or environmental risk. For example, U.S. lawprohibits the use of lead pipes in drinking water systems, but does notspecify an alternate pipe material, thus forcing manufacturers to de-velop non-lead alternatives.70 Canada’s interpretation of the internationaltrade rules would remove the ability of governments to create such strongincentives for the development of non-toxic technologies by requiringthem to prove the safety of all potential alternatives before banning toxicsubstances.

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Conclusion

The WTO’s mandate is to promote free trade and its rules aredesigned to achieve that goal. These rules extend to health andenvironmental protections and generally treat those protections

as obstacles to trade that should be eliminated.

The WTO has made significant policy choices in establishing its rulesand it continues to make important value judgments in applying thoserules in disputes. As the decided cases demonstrate, the WTO has takena stand against trade restrictions to curb the harmful effects of produc-tion, against regulations that provide greater health or environmentalprotection than the international status quo, and against the precaution-ary principle.

In strongly disfavoring the unilateral use of trade measures as a way toimprove environmental and health protections, the WTO eliminates apotentially useful tool for achieving these goals. U.S. dolphin and seaturtle import bans have been the impetus for international negotiationsto address fishing practices that kill dolphins and turtles. Without theUnited States’ bold first steps, those negotiations would probably nothave happened.

The WTO has already staked out its position on some of the most con-troversial and important trade and environment issues. It has codified

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rules that err on the side of trade at the expense of environmental andhealth protection. It has made trade officials the arbiters of disputes andshunned sharing decision-making power with health and environmentalofficials, experts and nongovernmental organizations. These issues arefar too critical to be left to an institution that represents only one per-spective and goal.

That is why the environmental community is calling for reform of boththe WTO’s rules and the process by which it makes its decision. At aminimum, the WTO should be reformed to protect:

✓ The right to restrict trade to curb harmful environmental and healtheffects, including such effects in the areas of logging, fishing, andmanufacturing.

✓ The right to use the precautionary principle to protect people andthe environment against risks.

✓ The public right to access to information and to participate in pro-ceedings that affect domestic health and environmental standards.

The WTO should make these reforms before it further expands its influ-ence in sensitive areas, such as environment and health. Until these re-forms are implemented there should be a moratorium on WTO chal-lenges to health and environmental protections.

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Notes1 Letter to J. Martin Wagner, Sierra Club Legal Defense Fund, from

Jeffrey L. Gertler, Legal Affairs Division, WTO (Feb. 7, 1997).2 WTO Appellate Body Report, United States – Import Prohibition of

Certain Shrimp and Shrimp Products, AB-1998-4, ¶¶ 89-91 (Oct. 12, 1998).3 16 U.S.C. 1537.4 Earth Island Institute v. Christopher, 942 F. Supp. 597 (CIT 1996).5 Id.; Earth Island Institute v. Daley, No. 98-09-02818 (CIT, Apr. 2, 1999).6 Article XI of the General Agreement on Tariffs and Trade (the GATT,

which is one of the trade agreements administered by the WTO) prohibits“quantitative” trade restrictions, which include import bans.

7 GATT’s Article XX permits countries to take actions otherwise inviolation of the trade rules if they are “necessary to protect human, animal orplant life or health” (Art. XX(b)) or “relat[e] to the conservation of exhaust-ible natural resources.”” (Art. XX(g).)

8 WTO Appellate Body Report (Shrimp), ¶ 25.9 Id., ¶¶ 125-145.10 Id., ¶ 140.11 GATT’s Article XX exceptions only apply if the protective measure

is “not applied in a manner which would constitute a means of arbitrary orunjustifiable discrimination between countries where the same conditionsprevail, or a disguised restriction on international trade.” GATT, Art. XX.

12 WTO Appellate Body Report (Shrimp), ¶¶ 148-149.13 Id., ¶ 161.14 Id., ¶¶ 164, 165 (italics in original).15 Id., ¶ 165.16 Id., ¶ 173.17 See 64 Fed. Reg. 36,946 (July 8, 1999).18 Id.19 For example, the WTO Appellate Body cited the tuna-dolphin de-

cision in support of its conclusions in the shrimp-turtle case, describedearlier in this report. See WTO Appellate Body Report (Shrimp), ¶ 36.

20 16 U.S.C. §1350(a)(2)(B).21 53 Fed. Reg. 8911 (Mar. 18, 1988); 53 Fed. Reg. 50420 (Dec. 15, 1988).22 Earth Island Institute v. Mosbacher, 746 F. Supp. 964 (N.D. Calif.

1990), aff’d, 929 F.2d 1449 (9th Cir. 1991).23 GATT Panel Report, United States – Restrictions on Imports of Tuna,

GATT Doc. DS21/R (Sept. 3, 1991) (Tuna I), ¶¶ 5.11, 5.14.24 GATT, Art. III.4.

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25 GATT Panel Report (Tuna I), ¶ 5.14.26 Id., ¶ 5.18; GATT, Art. XI.27 GATT, Art. XX(b), (g).28 GATT Panel Report (Tuna I), ¶ 5.28.29 Id., ¶ 5.33.30 This challenge was based on the U.S. law’s attempt to prevent a

circumvention of the primary tuna ban by also banning tuna from countriesthat import tuna from countries subject to the direct ban. See 16 U.S.C.§1415.

31 GATT Panel Report, United States – Restrictions on Imports of Tuna(Tuna II), 33 I.L.M. 839 (1994), ¶¶ 5.8, 5.9.

32 Id., ¶¶ 5.14-5.20.33 Id., ¶ 5.26.34 Pub. L. No. 105-42.35 59 Fed. Reg. 7716, 7787 (Feb. 16, 1994).36 WTO Appellate Body Report, United States – Standards for Refor-

mulated and Conventional Gasoline, WT/DS2/AB/R (WTO Apr. 29, 1996).37 62 Fed. Reg. 45,533 (Aug. 28, 1997).38 Letter to EPA from Northeast States for Coordinated Air Use Man-

agement (Oct. 22, 1993); Letter to EPA from Mid-Atlantic Regional AirManagement Ass’n (Nov. 15, 1993).

39 George E. Warren Corp. v. EPA, 159 F.3d 616, 624 (D.C. Cir. 1998).40 Beef Facts Index – Growth Promotants in Cattle Production (Na-

tional Cattlemen’s Beef Association, May 1995).41 21 IARC Monographs 62-63 (1979).42 Brie and Hormones, The Economist, Jan. 7, 1989 at 22.43 European Council Directive 81/602/EEC, Art. 2, 1981 O.J. (L 222) 33.44 European Council Directive 88/146/EEC 1988 O.J. (L 70).45 The WTO’s Agreement on the Application of Sanitary and

Phytosanitary Measures (SPS Agreement) places a number of conditions onthe right of governments to implement measures to protect against risks tohuman and animal health arising out of substances in foods or beverages;risks to animals and plants from the entry or spread of pests or diseases; risksto human health from diseases carried by animals or plants; and damagefrom the entry or spread of pests. SPS Agreement, Annex A, Art. 1.

46 SPS Agreement, Art. 3.47 Id. Arts. 2.2, 3.3, 5.1, 5.2, 5.5, 5.6.48 WTO Panel Report, European Communities – Measures Concern-

ing Meat and Meat Products (Hormones) (WTO, Aug. 18, 1997).49 WTO Appellate Body Report, European Communities – Measures

Concerning Meat and Meat Products (Hormones) (WTO, Jan. 16, 1998), ¶193.

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50 See WTO Appellate Body Report (Hormones), ¶ 199. The Interna-tional Agency for Research on Cancer has concluded that exposure to eachof the hormones banned by the EU is either a possible or probable carcino-gen in laboratory animals and that some are probable human carcinogens.See Comments to the WTO Dispute Settlement Panel prepared byEarthjustice Legal Defense Fund on behalf of the Cancer Prevention Coali-tion, Public Citizen and the Institute for Trade and Agricultural Policy, pp.40-45 (Oct. 4, 1996).

51 WTO Appellate Body Report (Hormones), ¶ 200.52 Id., ¶¶ 198-200.53 For example, Principle 15 of the Rio Declaration on Environment

and Development provides: “Where there are threats of serious or irrevers-ible damage, lack of full scientific certainty shall not be used as a reason forpostponing cost-effective measures to prevent environmental degradation.”

54 The one place the WTO recognizes the precautionary principle isextremely limited. The SPS Agreement’s Article 5.7 says that a country mayadopt health measures on a provisional basis “where relevant scientific evi-dence is insufficient,” as long as the country obtains supporting scientificevidence “within a reasonable period of time.” However, this provision ap-plies only to interim measures and does not allow the precautionary principleto be used when additional information cannot be gathered or when scien-tific uncertainty endures long after a risk has been identified.

55 SPS Agreement, Art. 5.5 (“[E]ach member shall avoid arbitrary orunjustifiable distinctions in the levels [of protection] it considers to be appro-priate in different situations, if such distinctions result in discrimination or adisguised restriction on international trade.”).

56 WTO Appellate Body Report (Hormones), ¶¶ 225-235.57 WTO Appellate Body Report, Australia – Measures Affecting Im-

portation of Salmon (WTO, Oct. 20, 1998), ¶¶ 139-177.58 Everything Doesn’t Cause Cancer (NIH Pub. No. 90-2039, March 1990).59 21 U.S.C. § 376(b)(2)(B).60 Decision by the Arbitrators, European Communities – Measures

Concerning Meat and Meat Products (Hormones), Recourse to Arbitrationby the European Communities Under Article 22.6 of the DSU, WT/DS26/ARB (July 12, 1999).

61 See, e.g., Environmental Health Criteria 203 – Chrysotile As-bestos, World Health Organization International Programme on Chemi-cal Safety at 144 (1998) (“Exposure to chrysotile asbestos poses increasedrisks for asbestosis, lung cancer and mesothelioma in a dose-dependentmanner.”).

62 See, e.g., 40 C.F.R. §§ 763.165-763.169 (banning several asbestos-containing products and all new uses of asbestos).

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63 Decree No. 96-1133, Dec. 24, 1996, Relating to the Ban on Asbestos.64 Bridges, Weekly Trade News Digest, Vol. 2, No. 20 (June 1, 1998)

<http://www.ictsd.org/digests/digest2-20.txt>; Press Release, Natural Re-sources Canada and Foreign Affairs and International Trade, “Governmentof Canada Stepping up Action to Fight French Asbestos Ban, McLellan andEggleton Say,” Oct. 8, 1996, <http://www.nrcan.gc.ca/css/imb/hqlib/96102.htm>.

65 First Written Submission of Canada, European Communities – Mea-sures Concerning Asbestos and Asbestos-Containing Products (Apr. 26, 1999).

66 Agreement on Technical Barriers to Trade (TBT Agreement), Art. 2.2.67 First Written Submission of Canada (Asbestos), ¶¶ 230-37.68 First Written Submission of the European Communities, European

Communities – Measures Concerning Asbestos and Asbestos-ContainingProducts (May 21, 1999), ¶¶ 21-22, 108-120.

69 First Written Submission of Canada (Asbestos), ¶¶ 213-17.70 42 U.S.C. § 300g-6.

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About the AuthorsMartin WMartin WMartin WMartin WMartin Wagneragneragneragneragner, Dir, Dir, Dir, Dir, Directectectectectororororor, International Pr, International Pr, International Pr, International Pr, International Progrogrogrogrogram,am,am,am,am,

Earthjustice LEarthjustice LEarthjustice LEarthjustice LEarthjustice Legal Defense Fegal Defense Fegal Defense Fegal Defense Fegal Defense FundundundundundMr. Wagner directs Earthjustice’s International Program, which

promotes the protection of the environment and the human right to aclean and healthy environment through the application of trade

measures, international human rights and trade agreements, and U.S.law. He teaches International Trade and the Environment at the GoldenGate University School of Law, and is treasurer and attorney for AIDA

— the Asociación Interamericana para la Defensa del Ambiente —which collaborates with organizations throughout the Americas todevelop and use international citizen enforcement mechanisms to

supplement domestic environmental protection efforts. Mr. Wagner is a1990 graduate of University of Virginia School of Law, where he wasExecutive Editor of the Virginia Journal of International Law. Before

coming to Earthjustice in 1996, he spent five years litigatingenvironmental citizen suits, civil rights actions, and using international

mechanisms for the protection of human rights.

PPPPPatti Goldman, Managing Aatti Goldman, Managing Aatti Goldman, Managing Aatti Goldman, Managing Aatti Goldman, Managing Attttttttttorneorneorneorneorneyyyyy,,,,,NorthwNorthwNorthwNorthwNorthwest oest oest oest oest officefficefficefficeffice, Earthjustice L, Earthjustice L, Earthjustice L, Earthjustice L, Earthjustice Legal Defense Fegal Defense Fegal Defense Fegal Defense Fegal Defense Fundundundundund

Ms. Goldman is Managing Attorney of the Northwest office ofEarthjustice Legal Defense Fund. From 1985 to 1994 Ms. Goldman

worked for Public Citizen Litigation Group, specializing in tradeand the environment and government accountability. She has been

lead counsel in lawsuits seeking environmental impact statements ontrade agreements, including NAFTA and the WTO Agreements, as

well as lawsuits to obtain trade restrictions to force compliance withthe United Nations moratorium on high-seas driftnetting, to openU.S. trade policy development to public scrutiny, and to ensure

environmental representation on U.S. trade advisory committees.

Earthjustice Legal Defense Fund initiated the practice ofnongovernmental organizations’ preparing friend-of-the-court typesubmissions to WTO dispute settlement panels. Mr. Wagner and Ms.

Goldman have made such submissions concerning the EuropeanUnion hormone-treated beef ban, U.S. sea turtle protections, and

reformulated gasoline standards under the U.S. Clean Air Act.

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trtrtrtrtrade barrierade barrierade barrierade barrierade barriersssss, the, the, the, the, they affy affy affy affy affororororord much-neededd much-neededd much-neededd much-neededd much-needed

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