lhe 1990s have emerged as thedecalde of econiomic globalizationl.More than ever, countries are part

of a global economy that demaneds the elimi-niationi of trade barriers and the smooth flowof goods and services from one place toaniothler. But even as counatries seek the bene-f--its of openi trade, they find themselves hav-ing to resist imports they find undesirable.In socme cases, the overriding concern of theimportinlg country is that a product or classof products could threaten the health of itsenls\ii-onnwaenit or people. The restilt canl be atiade qtiarrel that pits one country s desirefoi- miiarket access againist aniother country SInsistencce on sovereigntx over its owndom1iestic environmiienital policies.

Since its inception in 1 995, the WorldITrade ()iganizationi (WTO) has arbitratedtrade disptites between its members inlvolvinlgpLblic healthi and the eniviroiinmenit. TheWTo is the only international organizationthalt deals solely with the developmenit,im plemlentatiotn, and cnforcement of global

rules of trade. Headquartered in G'eneva,Switzerland, the \VTO was established as asticcessor to the General Agreement oniITariffs and Trade (GA-FT), which was itselfestablished in the ssake of the Second WorldWar. Part of the role of the WTO is todecide whether tinilateral actions by \VTOmembers such as trade bans or restrictionisviolate internationial free trade rules anbd toauthorize penalties againist menmbers thlat aiefouLnd to be noncomnpliant with suLch rules.

Recently the W'IC) has come under criti-cism by those who believe its emilplhasis onfree trade undermines nationial efforts gearedtoward enivironmeiicnital protectioni. I'ublicinlterest groups, in particular, have expressedconcerin that the \X1/O has vet to uphold anxvof the environmental programs and meastireschallenged as trade barriers by WTOi0lmem-bers, leadinig these groups to questionwhether the organiizationi has the mandate-and hence the will to uiphold cenvironlimlcnl-tal priorities over trade. One of their chiefcomiplainiits is that the W\TX1O conidLicts itS

negotiationis behind a sveil of secrecy thlateffectisely exclutdes public participatiot).Critics allege thalt, bs closing its doois to thlcptublic, the " I ()dTendies itself im1portanitinfornmationi that could help it make betterdecisionls garding priblic heacltlh an(d theCns ironnmenit. F'Lrtherimore, these groupsqticstioni w hether the WO1ohas the technicalcapacity to resols e enironmental conlflictPsbased onl scicentific diSpuLteCS.

A numiiber of reccnt WTO decisionts havehighlighted concerins to this effect, includling(an October 1998 rilin1g that a U.S. bain onimlports of slhrimiip catight without ttirtleexcltider desices xssv as atiunnecessary tradebarrier that the Unitcd States must modify.In this case, the WT() determided that theban xvas applied unfairly becatise the UnitedStates hlad given LI itin Atmericanll cotlitriiesthree years to implement the devices whereasIndia, Thailand, Malay sia, and Pakistan wveiegiven only four imionths. Another contentiou.sWT 0 decisioln involved a 1 998 rulilnagainst the Euiropcan Uliiioti (FU), wiichlihad

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previously imposed a ban on hormone-treat-ed beef imports from the United States andCanada. In this case, the EU's claim thatgrowth hormones in cattle might cause devel-opmental, neurotoxic, genotoxic, and car-cinogenic.effects in human consumers wasrejected by the WTO, which ruled that theevidence of adverse health effects presentedby the EU was insufficient to justify a tradebarrier. In a subsequent move that led someto question the WTO's credibility, the EUdisregarded the ruling and upheld the bananyway, prompting the WTO to authorize$116.8 million in compensatory tariffs by theUnited States against the EU in May 1999.

Whether the WTO will preside over acurrent dispute involving exports of genetical-ly engineered crops from the United States tothe EU remains to be seen. These crops arehighly unpopular among European con-sumers, who often refer to them as"Frankenstein foods." To date, the EU hasapproved 16 varieties of genetically modifiedplants for import. But in response to publicfears about health and ecological effects, EUauthorities have suspended the introductionof any new varieties into European marketsand have imposed an eco-labeling require-ment on all genetically engineered imports.The effects of these actions on U.S. farmerscould be devastating.

"Problems arise because valid health andenvironmental measures often have the sec-ondary effect of protecting national produc-ers, as is the case with hormone-treatedbeef," says Matthew Stilwell, a Geneva-basedmanaging attorney with the- public interestlaw firm Council for InternationalEnvironmental Law. "In this case, the EUwill argue that their regulation is a validhealth measure, while the United Statesargues that it is merely thinly veiled protec-tionism. The WTO, as a trade body, is askedto resolve these vexing questions-ones thatgo to the very basis of national policy makingon central issues of health and environment.This brings up the question as to whichinstitution should make these decisions.Should it be the WTO? And what level ofdeference should be given to national laws toprotect health?"

Dispute Resolution at theWTOArbitration of trade quarrels at the WTOtakes place within a formal dispute resolu-tion mechanism that determines whether acountry's actions violate any of 60 agree-ments established by consensus among theorganization's 134 member nations. The res-olution mechanism proceeds as follows: If acompromise between the two parties can'tbe reached, the WTO's Dispute SettlementBody convenes a panel of three to fiveexperts in consultation with the opposing

countries. This panel can draw on a varietyof technical experts as it reviews the case.Upon completing its review of the availabletechnical and legal evidence, the panel pre-pares a report that is released to the publicand reviewed by all WTO members.Following that review, the panel decideswhether the disputed measure violatesWTOagreements or obligations and issues a finalrule that either upholds the contested mea-sure or requires that it be made to conformwith WTO regulations. Rulings can beappealed, but successful appeals require theconsensus of all WTO members to overturna panel or appellate body ruling. Thisrequirement is contentious because the pre-vailing country is unlikely to vote to over-turn a ruling that falls in its favor. Finally, ifthe losing party refuses to comply with theruling, the complaining side can ask theDispute Settlement Body for permission toimpose limited trade sanctions.

An example of an agreement frequentlyapplied to environmental disputes is theAgreement on Sanitary and PhytosanitaryStandards (SPS). This agreement was draftedto ensure that national laws that protecthumans, animals, and plants from pests, dis-eases, and harmful food additives aren't usedas disguised protectionism. The SPS agree-ment was applied in the beef hormone caseand would likely be applied to geneticallymodified crops as well, should that issue bebrought before the WTO. A key element toresolving disputes under the SPS agreement isrisk assessment. Countries trying to provethat a trade ban doesn't violate the SPS agree-ment must produce risk assessments showingthat the product they aim to restrict is capa-ble of causing demonstrable harm. TheWTO has ruled that "it isn't sufficient forgovernments to impose [regulations] simplyon the basis of [the] theoretical risk . .. thatunderlies all scientific uncertainty." TheWTO says that risk assessments must findevidence of "ascertainable" risk without toomuch weight being lent to "unknown anduncertain elements." However, there is nominimally sufficient magnitude of risk thatregulators must find. Many WTO observersare concerned about the scientific evidencethat dispute resolution panels bring to thetable when they review risk assessment con-clusions. Problems emerge because moststakeholders tend to want to interject theirown interpretations of the data. The mostvocal critics by far are those who feel they arebeing shut out ofthe process.

Negotiating Behind Closed Doors?Few would dispute the notion that tradeissues are sensitive; in fact, part of theWTO's mission is to prevent militaryconflicts that might arise from economic

disagreements. Countries therefore have acertain incentive to prevent the release ofsensitive and proprietary information duringboth the negotiation of trade agreementsand the disputes arising from them. But theresultant aura of secrecy that appears toshroud dispute resolutions in particular isdistressing to public-sector nongovernmentalorganizations, which complain that they areexcluded from providing input during dis-pute panel negotiations. Officials at theUnited States Trade Representative (USTR)have voiced similar concerns, and theClinton administration has warned that thewidely held perception that panel negotia-tions take place behind closed doors under-mines public confidence in the WTO.

However, a senior official with the Tradeand Environment Division at the WTOcounters that directing criticisms about secre-cy (or "transparency," as it is commonlytermed) at the WTO is unfair because theorganization neither restricts member nationsfrom releasing documents to the public dur-ing dispute settlements nor forces them to doso. "The WTO does not prevent countriesfrom making their documents public. Eachcountry can do so with its own documents ifit so wishes. When countries do not do that,it is those countries that are to blame and notthe WTO as an organization. Nothing in therules of the WTO says that there should besecrecy," the official says.

John B. Weiner, an attorney with theWashington, DC-based law firm Beveridgeand Diamond who practices in the area ofinternational trade and environmental law,acknowledges that governments engaged indispute settlements can at any time releasetheir own panel submissions (but not thoseof the opposing party without permission)to the public. But the decision to consultany organization prior to the release of thepanel's report rests solely with the govern-ment itself. What this means is that eventhough nongovernmental organizations maywant to participate in the dispute settlementprocess, they are excluded unless their par-ticipation is directly requested or otherwisepermitted by the panel or one of the govern-ments involved. At most, they can consultwith governments or submit their ownmaterials to panels. However, they cannotattend or participate in actual panel sessions.These groups often find themselves in thefrustrating position of sitting out negotia-tions on the sidelines or participating withonly limited information.

Access to Technical Expertise at IssuePublic interest groups' frustration over lackof access is compounded by their percep-tion that dispute settlement panels, whichare usually composed of trade lawyers, lack

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the expertise to understand technical envi-ronmental data. Moreover, they claim thatthe WTO often fails to consult appropriateinternational organizations such as theWorld Health Organization (WHO) andthe United Nations EnvironmentProgramme. Part of the problem, they sug-gest, is that the WTO is a new organiza-tion that is still defining its territory in theinternational policy landscape and thatworking closely with other organizationson technical environmental disputes mightbe seen as relinquishing its authority.Charlie Arden-Clarke, head of the Tradeand Investment Unit at the World WildlifeFund's office in Gland, Switzerland, says,"The WTO is a trade organization, and itdoesn't have environmental expertise in itssecretariat. It doesn't want to expand thatexpertise because its focus is on liberalizingtrade and preventing protectionism; that'sits job. We find that when the WTOmakes its rulings, it doesn't fully considerhealth and environmental measuresbecause it can't."

But neither VWTO representatives norofficials at the USTR share the view that theWTO fails to consult international environ-mental organizations as it formulates its ownpolicies. A senior official at the USTR main-tains that several international organizationswere consulted during preparation of the SPSagreement. These organizations include theCodex Alimentarius (an agency organized bythe United Nations and the WHO to setglobal standards for food safety) as well as theUnited Nations Office for InternationalZootics and the International PlantProtection Convention (an independentintergovernmental animal health organizationheadquartered in Paris). Says a senior officialwith the WTO's Agriculture andCommodities Division in Geneva, "We doconfer with other organizations when wethink it makes sense to do so. WTO isn'tdoing WHO's work and vice versa, but wedo confer with them."

During the recent hormone-treated beefnegotiations, five technical experts with acombined experience base in veterinary medi-cine, toxicology, and risk assessment wereretained by the panel for consultation.Among them was George Lucier, director ofthe Environmental Toxicology Program atthe NIEHS, who noted that the experts wereable to consult freely with one another as theyprepared their technical comments. In assess-ing his experience as a technical expert, Lucierconcluded that the panel in this case wasfocused on scientific issues and that the sci-ence, along with other trade-related issues,was a critical determinant in the outcome ofthe dispute. "I applaud [the WTO] for that,"he says.

In the hormone-treated beef case, theWTO conduded that based on its review ofthe available risk assessments, potentialhealth threats were nonexistent and ruledthat the EU's trade ban was a protectionistmeasure that violated the SPS agreement.However, the EU ignored the WTO's con-clusions regarding the scientific merits of itscase. The union responded with a 139-pagereport-released to the public-that con-cluded that six hormones including 17,B-estradiol, progesterone, testosterone, zeranol,trenbolone, and melengestrol acetate posedrisks to consumers, but with different levelsof evidence. The union also accepted theretaliatory tariffs of the United States pend-ing the results of yet another series of riskassessments it is conducting in hopes ofproving that there is sufficient health reasonto ban hormone-treated beef.

The fact that the EU continued its ban ofU.S. beef in spite of the W']TO ruling ledsome to speculate that the credibility of dis-pute resolution at the WTO could be atstake, especially if the EU's actions set aprecedent in which rulings are flouted rou-tinely by countries on the losing end. Whenasked whether this might be the case, WTOofficials countered that these concerns areunfounded because measures designed toaddress noncompliance among losing coun-tries are built into the dispute resolutionframework. For example, in the hormone-treated beef case, retaliatory measures wereauthorized by the WTO and found to beagreeable by the EU, the United States, andCanada. The fact that the retaliation has pro-ceeded smoothly among the countries has ledto agreement among WTO and USTR offi-cials that the dispute resolution process, inthis case at least, functioned as intended.

The Precautionary PrincipleWhat the ruling failed to do was reassure theconcerns of EU consumers. Public interestgroups, not to mention much of theEuropean population, remain dissatisfiedwith the conclusions of the WTO's panel.Technologically enhanced foods-be theyhormone-treated beef or genetically modifiedcrops (which represent another looming tradedispute between the United States and theEU)-are a big health concern amongEuropeans. European leaders face a difficultprospect in that on the one hand, their peo-ple are demanding that technologicallyenhanced food imports be denied entry,while on the other, they have to deal with aWTO dispute settlement framework thatrules in favor ofhealth- or environment-basedtrade bans only in the event that they can bescientifically justified.

This essential conflict calls into questionthe whole basis by which the WTO resolves

disputes involving environmental risk. Criticsof the current system have argued for greateruse of the precautionary principle, whichholds that in situations where serious or irre-versible damage is possible, lack of full scien-tific evidence should not stand in the way ofactions designed to prevent environmentaldamage. The EU has in fact suggested that itsban on hormone-treated beef, despite a lackof conclusive evidence of adverse healtheffects, was justified by the precautionaryprinciple, which it characterized as a "rule ofcustomary environmental law."

Part of the problem is that there are dif-fering opinions as to how to interpret the pre-cautionary principle. The EU interpretationis that, despite the lack of evidence today,new risks may reveal themselves tomorrow,and the prudent measure is to uphold a banuntil further studies are conducted.Conversely, the United States counters thatapplication of the precautionary principledoesn't warrant implementing conservativemeasures based on zero evidence of risk. Theposition of the United States is that issues ofscientific uncertainty are already addressed byregulatory agencies in their policy decisions.

The prospect of giving greater weight tothe precautionary principle at the WTO isnot being taken lightly by its membernations. The United States has maintainedthat actions taken to restrict trade should bebased on some minimal evidence that risksmay in fact be valid. At stake, of course, is theU.S. genetically modified crop industry,which could be hurt by further restrictions toEuropean markets. Lucier says that precau-tionary measures are necessary to protectpublic health, but he cautions against usingthe precautionary principle in ways that leadto excessive conservatism. Says one seniorofficial at the WTO, "Even when the precau-tionary principle is better defined, there willalways be situations in which countries needto put in place [perhaps] irrational traderestrictions [in response to] strong publicopinion. The WTO is flexible enough toallow them to do so, provided they compen-sate their trading partners or allow themselvesto be subjected to retaliatory trade measuresin the event of a dispute [resolved againstthem]."

Future use of the precautionary principlemay be an agenda item at the next ministerialmeeting of the WTO, to be held in Seartle,Washington, in November 1999. In themeantime, it is dear that the WTO faces con-siderable challenges as it attempts to define itsrole and responsibilities as both an agent forfree trade and an advocate of public healthand environmental protection.

Charles W. Schmidt

Volume 107, Number 1 1, November 1999 * Environmental Health PerspectivesA 564