DUAL FACETS OF HARMONIZING ENVIRONMENTAL PROTECTION POLICIES IN INTERNATIONAL TRADE
Degree awarded: S.J.D. Washington College of Law. American University
A State or an international trade institution, the World Trade Organization (WTO), may recognize that harmonizing environmental policies is necessary when differences of environmental regulations in each State significantly affect competition in international trade. To do so, a State often requires another State to adopt the same environmental policies as a condition of market access, while the WTO requires its Member States to conform their national economic policy goals to coincide with WTO rules. When a State uses a trade measure to enforce its environmental policies, the measure has the effect of indirect or de facto harmonization in that the trading partner must meet its environmental requirements as a condition of market-access. Similarly, even if the WTO agreements do not require its Member States to adopt the same economic policies, they also have an indirect harmonization effect because its Member States' economic policies must be legislated and implemented in accordance with their obligations and commitments under the WTO.The State and the WTO harmonization requirements have different approaches to offset the competitive advantages generated from differences in environmental policies. The State harmonization requirement has a protective effect and affects other States' right to choose their own policies when it unilaterally compells foreign producers to adopt uniform environmental standards. This State protectionist or unilateral measure is not preferred in the WTO because the WTO's primary goal is to prevent protectionist measures in international trade and to secure international trade system by encouraging its Members to use multilateral resolutions. However, in certain circumstances, a State's trade measures are explicit, and this can constrain the rights of the country that is its trading partner. The exporting country must satisfy requirements of the importing country's policies to access the importing country's market. Thus, a certain level of constraint on a State's policy choices is inevitable in international trade relations. In this context, a State can choose trade measures requiring its trading partners to comply with its environmental laws and policies. The WTO agrees that the trading country can require its trading partners to meet its policies and laws as a condition of market-access. Meanwhile, a State that takes measures against its trading partners is also constrained in exercising its rights because a WTO Member State has to legislate and implement their market-access requirements in accordance with WTO rules. Thus, as constraints exist in both the State taking measures and the State accessing the market, rights and responsibilities are given to both in international trade.The WTO Dispute Settlement Bodies (DSBs) have excluded the State's value preferences related to environmental protection in their rulings, even while theoretically recognizing that States have the autonomy to legislate their policies on the basis of value preferences. This approach suggests that the WTO balances the State's policy choices and the DSBs' uniform application of WTO rules. By excluding value preferences in their ruling procedure, the WTO DSBs prevent Member States from misusing de facto harmonization requirements for environmental protection, and contribute to balancing rights between Member States.Even though not every unilateral or protectionist measure shall be prohibited in the WTO, trade measures are not optimal policy choices to deal with environmental problems because many trade measures do not necessarily prevent environmental degradation. Reconciling the State and WTO harmonization effects lies in whether the balance between a State's policy choice and the WTO's goals is achieved through respect and cooperation both between States and between States and the WTO.
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