2017
Amsterdam School of Law
LLM European and International Law - Public International Law Master Thesis – International Environmental Law
Andreea Cucos
Supervisor: René Lefeber
Date of submission: 14
thof July 2017
The Influence of Paris Agreement on the WTO Panels' Appreciation
of the Environmental Exceptions in Article XX of GATT
Abstract: WTO panels‘ appreciation of environmental exceptions in Article XX of
GATT: a time for change? Does the Paris Agreement have the potential to fuel that change? What are the patterns in WTO panels‘ appreciation of the environmental exceptions?
2
Table of Contents
1. Introduction ... 3
2. The Paris Agreement in context ... 6
3. The role of the environmental exceptions in Art XX GATT ... 14
4. Trends in interpretation of the environmental issues in WTO law ... 17
5. The Paris Agreement and its influence in WTO panels – prospective trends ... 25
6. Conclusion ... 33
3
1. Introduction
Pollution, loss of biodiversity and climate change are some of the environmental problems we face nowadays and they do not know borders. Even though these issues have been recognized internationally and have been the subject of many conferences and agreements, as will be shown below, progress in effectively addressing them has not presented itself at the expected rate. A great number of reasons can stand at the root of this problem and one of them is the fragmentation of International Environmental Law1 and Public International Law as a whole2. The concept of fragmentation of International Environmental Law describes the approach that environmental issues have been dealt with so far. Different issues are tackled by different Multilateral Environmental Agreements (MEAs) which, along with the lack of an International Environmental Organisation, pave the way for a disorganized regime with overlapping or conflicting instruments that can potentially undermine the credibility of the system as a whole. Furthermore, the fragmentation of Public International Law refers to the proliferation of self-contained systems like trade law or environmental law, each with its own separate set of rules, principles and institutions. This phenomenon can lead to conflicting rules, contradictory jurisprudence and loss of the sense of security and predictability that the international legal systems should offer.
In other words, the former can have the effect of hindering the effective implementation of the environmental instruments and the latter could affect the way different areas of law interact with each other. For the purposes of this thesis only the interplay between International Trade Law and International Environmental Law will be considered, with a particular focus on the perception of climate change at the World Trade Organization (hereinafter WTO) level.
Over time, it became apparent that sometimes economic development has gone hand in hand with the degradation of the environment3. Therefore, it is increasingly difficult for trade policies
1
See John Carter Morgan III, Fragmentation of International Environmental Law and the Synergy: A Problem and a 21st Century Model Solution, Vermont Journal of Environmental Law, 2016
2
See Final Report of the study group on fragmentation, UN Doc. A/CN.4/L.702, 58th session, International Law Commission, available at http://legal.un.org/docs/?symbol=A/CN.4/L.702, last accessed 01.04.2017
3 This is also referred to as the Kuzents curve, which shows the connection between per capita income and the
environment; The WTO panel referred to the Kuzents curve in China – Raw Materials in para 7.551 and stated that export restrictions are not necessary for environmental gains even if statistically growth makes environmental
4
not to conflict with the environmental policies of the states. Unilateral environmental measures taken by states are rarely purely environment related, usually there are many facets of the same problem and therefore it is highly probable that these measures will have trade related consequences.
The GATT exceptions that can be said to make room for environmental measures are related to the conservation of exhaustible natural resources, the protection human, animal or plant life or health, and the protection of public morals. There have been numerous cases where the states invoked these exceptions, but in all of them the measures taken by the states were not allowed to stand, either because the particularities of the exception were not met or because the general requirements in the chapeau were not fulfilled.
This of course raises some of the following questions. Is it because states are using the environmental façade to mask their own economic interests and therefore, the exceptions should not be upheld or because the environmental problems are not taken as seriously as they should be? Or is it because the environmental law as it stands today is a weak system and cannot create a proper framework for addressing these issues, or the panels are naturally inclined to protect the WTO system and apply trade law? Or is it because they are too strict, or not properly qualified4, or they just give little consideration when it comes to non-trade aspects? These are questions that cannot be easily answered without looking into the development of both trade and environmental law and the efforts made in each field to integrate the other.
While in the 90‘s the conservative approach of the panels could be more easier to understand, nowadays we can see that there have been major developments in international environmental law, particularly in climate change mitigation, the most recent one being the adoption of the Paris Agreement. Even if some countries feel it more than others, climate change is an issue that will eventually affect the whole world and therefore it should be the concern of the entire international community in order to avoid irreversible consequences. The role that trade law
protection more likely; see Rafael Leal-Arcas, Climate Change and International Trade, Edward Elgar Publishing, 2013, p.3-7
4
No measures were taken whatsoever, at least until after the Uruguay and the Doha Round, to ensure that GATT panel members have accurate and sufficient environmental information; for more information on the
environmental aspects of the negotiations, please visit
5
plays in these events can be either positive or negative, and the effects can be easily seen by following this train of thought: the increasing population calls for increased consumption, which in turn triggers the intensification of trade which will lead to increasing the levels of greenhouse gas emissions5. The connection between climate change and trade law may perhaps not have been considered relevant at the time of the creation of GATT in 1947, but it should have been in 1994 when the WTO came to existence. In the same year, the United Nations Framework Convention on Climate Change (hereinafter UNFCCC) acknowledged the importance of keeping a harmony between measures adopted to combat climate change and international trade6 and stated that the former should not constitute a means of arbitrary or unjustifiable discrimination or disguised restrictions on the latter and so did the Kyoto Protocol7 later on. Climate investment funds, carbon leakage, carbon markets, and carbon trading are examples of how international trade impacted on climate change mitigation. The Agreement on Technical Barriers to Trade (TBT Agreement) was adopted with the purpose of furthering the objectives of GATT and it can also be relevant when it comes to the freedom of a state to implement environmental policies8. A more coordinated action between states and International Organizations (hereinafter IOs), an international field where they consult with each other and share information in order to align their efforts and enhance coherence within different systems9, working wisely and efficiently towards a common goal, would be ideal10. The Paris Agreement11 was designed as such type of
5
Rafael Leal-Arcas, op. cit. p. 2
6 See Article 3.5 UNFCCC and Article 2.3 of the Kyoto Protocol 7
Kyoto Protocol to the United Nations Framework Convention on Climate Change, Kyoto, 1997
8
The TBT Agreement states the following in its preamble: “no country should be prevented from taking measures
necessary to ensure the quality of its exports, or for the protection of human, animal or plant life or health, of the environment, or for the prevention of deceptive practices, at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade, and are otherwise in accordance with the provisions of this Agreement”, Agreement on Technical Barriers to
Trade, available at https://www.wto.org/english/docs_e/legal_e/17-tbt_e.html, last accessed 20.05.2017
9
The idea that international environmental law and international trade law both have lessons to learn from each other and should build on what each of them already created has been advanced by many authors, including Rafael Real-Arcas, op. cit. Environmental law has goals that are fundamentally different than those of trade law, but it uses some of its mechanisms, like international standards, taxes, permissions, prohibitions, labeling (eco-labels) while trade law should integrate the environmental aspects of the concept of sustainable development.
10
Gregory L. Rose, Gaps in Implementation of Environmental Law at the National, Regional and Global Level, First Preparatory Meeting of the World Congress on Justice, Governance and Law for Environmental Sustainability, 2011, pp. 11-15
11
UNFCCC Decision 1/CP.21, Adoption of the Paris Agreement, Proposal by the President, 12 December 2015, UN Doc FCCC/CP/2015/L.9/Rev.1.
6
framework. This inevitably raises the question: could the Paris Agreement influence the WTO panels‘ appreciation of the environmental exceptions in Article XX of GATT?
This thesis will focus on analysing the law as it is, showing the past and current trends in the appreciation of the environmental exceptions in the Panel and Appellate Body (AB) reports of the WTO, and finally make an attempt at identifying prospective ways that might have the ability to shift their conservative interpretation towards a more progressive, environmentally oriented one.
I will use an external perspective, and I will analyse these research questions not only from a descriptive view, but also from a normative point of view.
2. The Paris Agreement in context
In answering the research question an analysis of the Paris Agreement and the context within which it was adopted is necessary. Article 1.2 of the UNFCCC defines climate change as ―a
change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time period‖. The root cause of this problem is believed to be the high
level of greenhouse gas emissions12 which in turn determines an increase in temperature, precipitation and a rise in sea level. Inevitably, these changes will impact on human settlements and the economy in general and possibly result in a massive climate migration phenomenon13. To avoid this, over time, many plans regarding mitigation and adaptation of climate change have been set in motion by governments all around the world14.
12
GHG emissions are defined in the UNFCCC Article 1.5 as “gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and re-emit infra-red radiation”
13
Thomas Faist, Jeanette Schade, Disentangling Migration and Climate Change, Springer Netherlands, 2013; G. White, Climate Change and Migration: Security and Borders in a Warming World, Oxford University Press, 2011; for a brief analysis on the link between climate migration and trade, see Rafael Leal - Arcas, op cit. pp 54-71
14
R. Warren, The Role of Interactions in a World Implementing Adaptation and Mitigation Solutions to Climate Change”, Philosophical Transactions of the Royal Society A, 2011, Vol.369(1934), pp.217-241
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However, there is still controversy at a scientific level regarding the rate at which the predicted changes can happen and the exact impacts on the natural environment15. Despite the many reports of the Intergovernmental Panel on Climate Change (IPCC) that provide scientific evidence and technical assessment of climate change, there are still climate change deniers in both the scientific and political world and this inevitably has an impact on the development of environmental law around the issue and also on how it interacts with other fields of law, like international trade.
In environmental law, scientific uncertainty is seen as the trigger for the applicability of the precautionary principle16, but thinking in these terms also limits the intensity and the scope of the actions that states can unilaterally take. We will see in Chapter 4 that in its previous cases the WTO panels did not consider that uncertainty gives the right to adopt powerful trade restrictive measures17.
Furthermore, when adopting the Rio Declaration, the parties at the UN Conference on Environment and Development also adopted a non-binding action plan called Agenda 21 which
inter alia tackled the interplay between trade and environmental measures, and suggested several
guidelines for the adoption of environmental trade measures (ETMs), for instance, saying that such measures "should be the least trade-restrictive necessary to achieve the objectives."18 Even if this approach seems reasonable enough since, indeed, in the end it leads to the achievement of the objectives, in practice the adoption of the least restrictive measure can lead to major delays in reaching the desired result19. Whether this approach is still appropriate more than two decades
15
Visit Publication and data, Intergovernmental Panel on Climate Change at
http://www.ipcc.ch/publications_and_data/publications_and_data_reports.shtml for a full list of reports; last accessed on 10.05.2017
16 Principle 15: Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not
be used as a reason for postponing cost-effective measures to prevent environmental degradation, Rio Declaration on Environment and Development, United Nations Conference on Environment and Development (UNCED), U.N. Doc. A/Conf.151/5/Rev. 1, (1992).
17 See European Communities – Measures Concerning Meat and Meat Products (Hormones), AB Report, 16 January
1998, WT/DS26/AB/R, WT/DS48/AB/R, ‘EC – Hormones’
18
UNCED, Agenda 21, ch. 11, sec. 11.24, ch. 17, sec. 17.118, ch. 39, sec. 39.3(d), final advanced version as adopted on the 14th of June, 1992
19
See, for instance US – Shrimp case, where the measure adopted by the US, that was considered not in line with the Chapeau of article XX, in practice was very effective and achieved the objectives of saving turtles and
preserving biodiversity. Taking a measure after engaging in negotiations with all concerned counties would have been time consuming and would have meant waiting for responses while witnessing the damage occurring to the environment with the hands tied.
8
later when the effects of climate change already begin to show, is a question that the members of the panels should ask themselves when assessing ETMs.
Despite these stumbling blocks, the general opinion20 is still that lack of absolute certainty cannot and does not mean that the better option will be inaction. Agenda 21 also suggested that international organisations should give proper consideration to "public input in the formation, negotiation and implementation of trade policies‖21
. The way that public opinion interplays with politics and can persuade states to unilaterally adopt environmental measures is also an important factor that needs to be considered in the WTO decision making process and that will be explored in the further chapters.
Climate change is a collective problem by default, which means it requires collective action from all states and the Paris Agreement is trying to achieve this purpose by adding onto the United Nations Framework Convention on Climate Change. I will start my analysis of this instrument by acknowledging one of the most relevant sources that generated criticism: the Paris Agreement22, although legally binding, per se, lacks enforcement mechanisms. There are no binding targets imposed on the Parties, no agreed mechanism to deal with non-compliance, and no International Climate Justice Tribunal23. These were all issues that arose during the negotiations, but had to be dismissed due to lack of consensus24. However, if we look in the past, this is not necessarily an indication of the states‘ willingness to achieve the treaty‘s aim. The Montreal Protocol on Substances that deplete the Ozone Layer is an example of how an environmental treaty can succeed and achieve its purposes by focusing on finding methods to facilitate implementation and improve compliance through techniques oriented towards assistance and efficiency. This is the model that the Paris Agreement was also built on, and Article 15 provides the following:
20
See Pierre-Marie Dupuy, Jorge E. Vinuales, International Environmental law, Cambridge University Press, United Kingdom, 2015, p. 41
21 UNCED, Agenda 21, ch. 2, sec. 2.22(k) 22
More information about the background in which the treaty was adopted and its specifics in Charlotte Streck, Paul Keenlyside, Moritz van Unger, The Paris Agreement: A New Beginning, Journal for European Environmental & Planning Law 13, 3-29, 2016
23
This Tribunal would have the mandate to penalize the parties in case of non-compliance, if the parties did not agree to the settlement of disputes by the ICJ, according to Article 14 UNFCCC
24 Forbes, Expect Climate Catastrophe: Paris Agreement Lacks Enforcement,
https://www.forbes.com/sites/anderscorr/2016/12/01/expect-climate-catastrophe-paris-agreement-lacks-enforcement/#6f9a4b163313 last accessed on 5.05.2017
9
1. A mechanism to facilitate implementation of and promote compliance with the provisions of this Agreement is hereby established.
2. The mechanism referred to in paragraph 1 of this Article shall consist of a committee that shall be expert-based and facilitative in nature and function in a manner that is transparent, non-adversarial and non-punitive. The committee shall pay particular attention to the respective national capabilities and circumstances of Parties
However, the nations of the worlds agreed to make efforts towards holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels25, but many issues that influence the achievement of this purpose were left out and these could lead to increased friction with the trade regime. For instance, no common international mechanism for carbon pricing was established and countries are at liberty to choose between carbon taxes, regulations, emissions-trading schemes, or rely on innovative technology26. The consequences that could follow are that competitiveness in some areas of the industries could increase and some states would feel the need to impose restrictions on imports coming from those states with less strict carbon regimes, which might be conflicting with the WTO principles. The carbon emissions policies that states might individually adopt and the rules of international trade law, might interact in ways that might destabilize both the climate change and the trade regime, and therefore ways of mitigating and minimizing these effects need to be found27. Since there is a slim chance that states will gather and convene to a treaty settling clear parameters for this issue, this is where the WTO could intervene through its dispute settling mechanism and try to find a balance between the need to mitigate climate change whilst protecting the free trade. In this scenario, the WTO dispute settlement body will be facing a challenging dilemma, but choosing to rigorously uphold a rigid interpretation of the long established trade principles and exceptions over the new arising carbon emissions mitigation measures states might choose to implement in light of the Paris Agreement, cannot be a viable and durable solution in today‘s reality. Most probably, states will mitigate climate change by enacting national legislation. GATT recognizes ―border tax
25
Paris Agreement, Article 2 (1) (a)
26 Michael O. Moore, Carbon Safeguard? Managing the Friction Between Trade Rules and Climate Policy, Kluwer
Law International BV, 2017, pp. 1-2
27
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adjustments‖ which can be implemented by states if no discrimination occurs between domestic
and international industries, but most probably states will try to incorporate domestic environmental policies related to carbon emissions by making use of Article XX exceptions. This is where the power of the WTO panels to decide over the legitimacy of such measures can play an important role. Having to change their environmental policies to reinstate conformity with trade law can have the effect of damaging public confidence within the concerned state in the international trade system.
In order to keep up with the intended nationally determined contributions states declare, according to the Paris Agreement, their own individual carbon emissions mitigation schemes to control emissions within their jurisdictions28. However, since a burden will be placed on domestic industries, a problem may arise when imports in the same industry come from counties with less stringent carbon mitigation rules, or none at all. The solution that Michael O. Moore offers is a ―carbon safeguard‖ that would allow states to implement the same tax for both domestic and imported products, which could in turn induce the industries from the other countries to reduce carbon emissions29. However, clear parameters need to be established around the carbon safeguard, so it does not turn into a protectionist or discriminatory policy that would conflict with trade law principles. Another problem that might arise is that the strict rules in a country can create incentives for imports to move to other states that did not impose the same restriction, or none restriction at all. This phenomenon, usually referred to as carbon leakage30, can lead to an increase of GHG emissions globally even though some countries undertake considerable efforts to limit or reduce such emissions. Besides this issue, a world within which every country has its own environmental regulations can lead to confusion. The topic of other potential solutions that would allow the implementation of environmental measures will also be explored in Chapter V.
28
For example, when the EU extended its emissions trading system (ETS) to domestic aviation, which also included foreign flights that landed or took off from the territory of its member states, it received very strong criticism from states like the US, China or India, and it was urged to remove the obligations imposed on their airlines, even though it was in accordance with the national treatment requirement; more on the EU ETS regarding aviation, can be found at European Commission, Climate Action, Reducing Emissions from Aviation,
https://ec.europa.eu/clima/policies/transport/aviation_en, last accessed on 6.06. 2017
29
For more information about the carbon safeguard solution and the required parameters that would make it a legitimate measure, check Michael O. Moore, op. cit. pp. 4-5
30
For more information, see Carbon Market Watch, Carbon Leakage, available at
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This Chapter will focus on the legal character of the Paris Agreement. The legally binding character of a norm ―refers to the extent to which the provision creates rights and obligations for
Parties, sets standards for State behaviour and lends itself to assessments of compliance / noncompliance and the resulting visitation of consequences‖31. As we will see below there is certain interplay between hard, soft and non-obligations and to the extent that we are talking about a hard obligation that is not fulfilled, of course, general international law could become applicable, particularly the law on state responsibility32. If a breach of an international obligation occurs and the breach is attributable to one or more states, then as Article 47 ARSIWA provides, ―the responsibility of each State may be invoked in relation to that act‖. This might be part of the reasons why careful consideration was given in the process of drafting the Paris Agreement so as to find a balance between the legal effect of the provisions, to which every state could comfortably agree.
Therefore, although it can be considered a treaty as the Vienna Convention on the Law of Treaties (hereinafter VCLT)33 describes it, rather than having a genuine legal character, some of its provisions seem to be designed to fulfil political interests34 and lack normative substance or have none at all35. This has led some scholars36 to question its usefulness and effectiveness in the future, more specifically whether it will lead to any noticeable change in GHG emissions since they lack specificity and their fulfilment will depend mostly on a state‘s willingness to comply with the standards the treaty sets37. However, others have seen this just as a method of ensuring a common understanding between the parties of the implications that such a complex
31
Lavanya Rajamani, The 2015 Paris Agreement: Interplay Between Hard, Soft and Non-Obligations, Journal of Environmental Law, 2016, 28, 337–358, pp. 6-7
32
See International Law Commission, Responsibility of States for Internationally Wrongful Acts (ARSIWA), 2001
33 See Vienna Convention on the Law of Treaties, available at
https://treaties.un.org/doc/publication/unts/volume%201155/volume-1155-i-18232-english.pdf, last checked on 5.05.2017
34
Charlotte Streck, Paul Keenlyside, Moritz van Unger, op. cit, pp. 5-6
35 Lavanya Rajamani, op. cit. 36
Anne-Marie Slaughter, The Paris Approach to Global Governance,
http://scholar.princeton.edu/sites/default/files/slaughter/files/projectsyndicate12.28.2015.pdf, last checked 5.05.2017;Richard Falk, Voluntary International Law and the Paris Agreement, 16.01.2016,
https://richardfalk.wordpress.com/2016/01/16/voluntary-international-law-and-the-paris-agreement/, last checked 5.05.2017
37Financial News, The real fight against emissions is being waged by markets
https://www.fnlondon.com/articles/un-climate-conference-cop21-laurent-fabius-carbon-emissions-calpers-calstrs-20160125, last checked 5.05.2017
12
treaty involve and a way to intertwine the cascading levels of treaty obligations38. Needless to say, norms are drafted in a broad manner in other fields of law as well, but their scope is nonetheless explored and they end up being defined by scholarship and jurisprudence, and there is no reason not to follow the same course in environmental law also39.
In spite of such criticism, the Paris Agreement is considered a landmark in international environmental law, among other reasons, because it tries to fill the void between developed and developing countries, an issue that always comes up when cooperative actions amongst the two are on the table, and also because it places emphasis on aspects like accountability, particularly through systems of transparency and review40.
Another issue that was open to criticism is that the Parties need to engage in further negotiations in order to make the treaty efficient in the long term. This can be seen as a negative aspect, since lack of specificity of a treaty can hinder its efficiency in practice. However, this factor can also become an incentive for both developed and developing countries to try to make ends meet. This distinction between countries has become operable since the creation of the climate regime in 1992 and was perpetuated by the Kyoto Protocol, which excluded developing countries from the binding emission reduction or limitation targets, due to socioeconomic and fairness considerations41. Furthermore, at the UNFCCC COP 15 meeting, all countries, irrespective of those criteria, were invited to engage in emission reductions for the following years. A move towards a different kind of climate agreement with a regime applicable to all states could be anticipated, not completely foregoing the principle of common but differentiated responsibilities, but enhancing it by promoting the role of new arising powers in the mitigation of climate change42. As a result, the way the principle is portrayed in the Paris Agreement43
38 Lavanya Rajamani, op. cit. pp. 105
39 Pierre-Marie Dupuy, Jorge E. Vinuales, op. cit, p. 400 40
Daniel Bodansky, The Legal Character of the Paris Agreement, Review of European Community and International Environmental Law, 2016
41 Jeffrey McGee, Jens Steffek, The Copenhagen Turn in Global Climate Governance and the Contentious History of
Differentiation in International Law, Journal of Environmental Law, 2016, 28, 37–63, p. 2
42
Idem, pp. 26-27
43
Article 2 Paris Agreement
1. This Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by:
13
―reflects the understanding by Parties that the principle‟s burden-sharing formula,
whether understood in terms of climate justice or pragmatic problem-solving, remains essential to the legitimacy and hence viability of a long-term, global climate regime, but, at the same time, that it needs to stand for a broader concept that goes beyond the simple distinction between developed and developing countries”44
.
This is specifically shown by the nationally determined contributions for emission reductions that each Party declares it intends to achieve45. Since, in the past, there have been various disagreements46 between the developed and the developing countries when it comes to burden-sharing and also, since some of the latter have lately emerged as economic powers, there have been arguments that they should have an enhance role and ―they should bear a share of the
burden of ecological interdependence as a price for the huge benefits they have gotten from global economic integration‖47. Like the UNFCCC48, The Paris Agreement creates an obligation to mitigate incumbent on all Parties49, but a disparity continues to be reflected with a duty on developed countries to take the lead by ―undertaking economy-wide absolute emission reduction
targets” and being obliged to ―provide financial resources to assist developing country
(a) Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change;
(b) Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production;
(c) Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
2. This Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
Also see Article 4 (3) Paris Agreement
3. Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
44
Daniel Bodansky, op.cit. p. 7
45 Paris Agreement, Article 4 46
Jeffrey McGee, Jens Steffek op. cit. p. 3
47
Esty, D. & Moffa, A. , Why Climate Change Collective Action has Failed and What Needs to be Done Within and Without the Trade Regime, J Int Economic Law, Vol. 15 (3), 2012, p. 6
48
UNFCCC, Article 4.1(a)
49
14
Parties”50
. This discrepancy has been listed by the US as one of the causes of its withdrawal
from the Agreement51.
Overall, there are some drawbacks in the Paris Agreement, but it is still a milestone in the development of International Environmental Law and it might lead to further developments and recognition of the importance of environmental issues and the integration of environmental policies into other areas of law, like international trade law52.
3.
The role of the environmental exceptions in Art XX GATT
GATT Article XX General Exceptions
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
(a) necessary to protect public morals;
(b) necessary to protect human, animal or plant life or health; (…)
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption
International Trade Law has the objective of incorporating free trade policies amongst the member states of WTO Agreements and it has been successful in doing so. The fundamental principles of GATT can be found in Article I (the most favoured nation clause), Article III (the
50
Idem, Article 4 (4), (1)
51 See United States withdrawal from the Paris Agreement, available at
https://en.wikipedia.org/wiki/United_States_withdrawal_from_the_Paris_Agreement, last accessed on 06.06.2017
52 For example see the New Zealand-Malaysia Agreement on Environmental Cooperation designed to "improve the
capacities and capabilities of New Zealand and Malaysia to deal with environmental issues and establish a framework for cooperation, as part of the New Zealand-Malaysia Free Trade Agreement."
15
national treatment clause) and Article XI (eliminating quantitative restrictions); and sometimes the unilateral environmental measures taken by states can conflict with these provisions. In that case, Article XX comes into play.
When the WTO panels are asked to decide whether an environmental measure that happens to clash with the GATT principles is justified as an exception under Article XX, their finding has such power that eventually the state can be forced to strike down the measure in order to be again in a position of compliance with the WTO rules.
When GATT was conceived, liberalization of trade was its main focus. Little regard was given to environmental issues, but nonetheless, exceptions (a), (b) and (g) can be read as giving way for limiting trade for environmental purposes. Moreover, at the Uruguay Round when the WTO was created, environmental matters were present on the agenda and this led to the creation of the Committee on Trade and Environment53, but not to the amendment of Article XX.
In its preamble, the WTO Agreement54 states that the optimal use of the world‘s resources shall be done ―in accordance with the objective of sustainable development‖, but besides this, no other reference to the environment can be found. Nonetheless, this particular formula is a breakthrough and even though it is only included in the preamble, it can be seen as a guideline for the interpretation of the Agreement. ―Sustainable development‖ expresses the need to reconcile economic, social and ecological interests, to find a balance between the planet, people, prosperity and profit. The fact that there is some controversy55 regarding the content and legal status of sustainable development, and that it is not entirely clear whether it can be seen as a principle of public international law or not, does not make it easier for the decision making process in the panels. The underlying idea is that if it were indeed a principle of international law, then perhaps the rules regarding conflict of norms could become applicable and environmental measures could have a better chance to stand.
53 More information can be found at World Trade Organisation, The Committee on Trade and Environment
(‘regular’ CTE) https://www.wto.org/english/tratop_e/envir_e/wrk_committee_e.htm, last accessed on 5.05.2017
54
Agreement Establishing The World Trade Organization, 15 April 1994
55 See Gabčíkovo-Nagymaros Project (Hungary v. Slovakia), Judgment, ICJ Reports 1997, p. 7 (‘Gabčíkovo -
Nagymaros Project ’), para. 140 where the ICJ deliberately referred to sustainable development as a concept, not a principle of law
16
The question of finding balance between trade and environment was also present at further negotiation rounds, but due to the sensitivity56 of the issues no major changes occurred57. While developed states often push forward environmental policies, developing states fear the environmental measures will stand in the way of their economic progress.
The principle of common concern of mankind along with the principle of common but differentiated responsibilities58 emerged for addressing this push and pull friction, and enhancing interstate cooperation in, inter alia, mitigating the challenges brought by climate change59. Climate change can be seen as a common concern of humankind, but some states60 are still reluctant to turn these principles into action61, partly because the concept of shared responsibility implies in the first place that states somehow have concerted policies, their responsibilities are well defined and there are sufficient means of implementation and monitoring62. Furthermore, in applying the principle of common but differentiated responsibilities, the Kyoto Protocol required developed states to meet quantified emissions targets, as opposed to developing states upon which no such obligations were imposed63.
These principles however are not seen as law, in the sense that they are only guidelines by which the provisions in agreements like the UNFCCC or the Kyoto Protocol are interpreted, but they are not part of customary international law. For instance, if a state adopts a measure with the
56
Pierre Marie-Dupuy, Jorge E. Vinuales, op. cit. pp. 391-405
57
Further details can be found at World Trade Organization, Doha WTO Ministerial 2001: Ministerial Declaration WT/MIN(01)/Dec/1 20 November 2001, available at
https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm#tradeenvironment, last accessed on 5.05.2017
58
Principle 7 Rio Declaration states the following: “States shall cooperate in a spirit of global partnership to
conserve, protect and restore the health and integrity of the Earth’s ecosystem. In view of the different contributions to global environmental degradation, States have common but differentiated responsibilities. The developed countries acknowledge the responsibility that they bear in the international pursuit for sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command.”; Article 3 (1) UNFCCC: “The Parties should protect the climate system for the benefit of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof.”
59
See Pierre-Marie Dupuy, Jorge E. Vinuales, op. cit. pp. 73–74, 85-86
60 Jane Holder, Maria Lee, Environmental Protection, Law and Policy, Second Edition, Cambridge University Press,
2007, pp. 241-243
61
L. Tamiotti, Trade and the Environment: Fundamental Issues in International Law, WTO law and Legal Theory, World Trade Review, pp. 258-8
62
Rafael Leal-Arcas, op. cit. pp. 86-87
63
17
purpose of addressing environmental concerns regarding climate change in line with these principles, but which somehow clashes with a WTO Agreements, there will be no conflict of norms and that measure will have to pass the rigorous test of Article XX of GATT. A question may arise in this situation as to whether it is equitable and appropriate that the WTO panels have the power to intrude into a state‘s authority to legislate and ultimately decide over the legitimacy of a domestic environmental measure. This thesis will try to distance itself from such discussions and instead focus on shedding light on the existing trade law and jurisprudence, and their interplay with unilateral measures that states might take to address the climate change issue, in light of the Paris Agreement.
I stated in Chapter 2 that climate change is a collective problem by default, therefore requiring action from all states, because each and every one of them is in charge of controlling the levels of emissions within its borders. However, international law has moved beyond the inter-state approach and nowadays we witness a proliferation of non-state actors that participate in the international field and influence its course, particularly IOs, like the WTO. Consequently, for collective action to succeed it requires the genuine efforts of all actors. In today‘s globalized world, it is inevitable that trade will continue to increase, as the environmental conditions will continue to worsen with the potential of becoming irreversible. Will the WTO recognize the importance of supporting a state‘s actions in response to climate change?
In the following Chapter, I will look at a few pertinent WTO cases that touched upon environmental issues and I will analyse the points that appear to be evolutionary in the interpretation of the exceptions. As we will see below, in a number of cases the WTO panels admitted that the measures taken by states are genuinely aimed at protecting the environment, but in none of those cases were they able to meet the criteria imposed in the chapeau of Article XX.
4. Trends in interpretation of the environmental issues in WTO law
During the years of activity of the GATT and WTO panels there are a few instances that can be seen as landmarks for the evolution in the interpretation of the environmental exceptions or of18
the exceptions in general. Needless to say that any treaty needs to be interpreted according to the general rules of interpretation set in the VCLT64, but there are some key moments when we can notice that the panels adopted an evolutionary approach that paved the way for other panels to further develop the case law of Article XX with more openness regarding environmental issues. I will also look at the way the panels interpreted the key issues in the environmental exceptions that point towards the finding that the proportionality principle has indeed been applied in the context of Article XX, in what I considered the most relevant cases. The exact content of the proportionality principle and whether it has been applied in the international trade system has been a matter of debate between scholars65. Proportionality generally refers to the need of balancing competing interests in order to reach a fair and equitable result. In international law scholarship, proportionality is believed to consist of three different elements that need to be assessed cumulatively: suitability, necessity, and proportionality stricto sensu66. Suitability refers to the capacity of the measure to reach its purpose and necessity speaks to the existence of an alternative measure that is less trade restrictive and can achieve the purpose in similar ways. Finally, proportionality stricto sensu implies an analysis of the effects of the measure (which has been prima facie found suitable and necessary) in comparison with the interests at stake and ―at
this final step of the full proportionality test, it is the level of protection of an interest chosen by the Member adopting the measure at issue, which is questioned‖67. The proportionality principle is relevant in this context because admitting it into the realm of trade law could mean that the WTO panels have taken upon themselves more power than what was initially agreed by the states at the conclusion of the WTO Agreements.
Precedents are not binding in international law, but the panels often refer to older adopted reports that addressed similar issues and it can be noticed that usually the core obligations are interpreted in an extensive way, while the exceptions are interpreted as narrow as possible68. Environmental policies that were implemented through trade measures were initially conceived and argued
64
Article 31 VCLT states that "A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose."
65
Peter Van den Bossche, Looking for Proportionality in WTO Law, Legal Issues of Economic Integration 35(3): 283–294, 2008
66 Peter Van den Bossche, op. cit. p. 3 67
idem
68
19
under exceptions (b) and (g). Further on, I will look at the key phrases in these exceptions that, if interpreted differently, could shift the way the proportionality of a measure is assessed.
1. Exception (b) - ―Necessary‖
One of the key words that need to be examined is the term ―necessary‖ in Article XX (b). In the case of United States - Standards for Reformulated and Conventional Gasoline69 where the US invoked exceptions (b) and (g), the WTO panel concluded that a U.S. Environmental Protection Agency regulation was breaching the non-discriminatory clause in GATT. When examining the case, the panel formulated that when assessing if a measure is provisionally justified under article XX (b), an inquiry has to be made as to whether the measure is meant to achieve the stated purposes (suitability, as described above) and then the conclusion that needs to be reached for the measure to be considered necessary is that no other alternative measure is available (necessity, as described above). The last part of this two-tier test, the necessity, builds on previous reports where it was said to imply that there was ―no alternative measure consistent with the General Agreement or less inconsistent with it, which Thailand could reasonably be expected to employ‖70
. It does not come as a surprise that in the end the panel found that the measure was not necessary according to this high standard.
With a few exceptions71 in the 90‘s, the panels chose to interpret the term ―necessary‖ in a narrow way as to mean that if another reasonable measure can be adopted, which is not inconsistent with other GATT provisions, than the initial measure is not necessary.72 The same line of reasoning was adopted later on in Tuna/Dolphin I73 and Tuna/Dolphin II74 where it was underlined that before adopting a restrictive measure a state must exhaust all operations reasonably available to it to achieve its goals and first engage in negotiations of agreements with
69 Panel Report, United States – Standards for Reformulated and Conventional Gasoline (‗US – Gasoline‘),
WT/DS2/R, adopted 20 May 1996, as modified by the Appellate Body Report, WT/DS2/AB/R, para. 6.20.
70
GATT Panel Report, Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes (‘Thailand – Cigarettes’), adopted 7 November 1990, BISD 37S/200, paras. 73-75.
71
Necessary was interpreted to mean that no satisfactory and effective alternative existed; see Section 337 I, para. 60
72 GATT Panel Report, United States – Section 337 of the Tariff Act of 1939 (‘US – Section
337’), adopted 7 November 1989, BISD 36S/345, para. 5.26
73
United States — Restrictions on Imports of Tuna, not adopted, circulated on 3 September 1991, available at
https://www.wto.org/english/tratop_e/envir_e/edis04_e.htm, last accessed on 20.05.2017;
74
United States — Restrictions on Imports of Tuna, not adopted, circulated on 16 June 1994, available at
20
the other interested states75, rather that unilaterally imposing restrictive measures hoping that other states will change their policies too. Following this line of reasoning in both cases, the US measures were decided not to be in compliance with Article XX (b), (g) or (d)76. This restrictive interpretation completely overlooks that fact that even if an alternative measure exists, that measure will most probably be less effective and even though the initial goal can be achieved through it, it might be less time-effective or have less impact. In these early stages, the proportionality stricto sensu was not part of the analysis of exception (b)77.
Korea – Certain Measures on Beef is a more recent case concerning exception (d), but nonetheless the findings of the panels regarding the necessity test are transposable to exception (b). This is the first time that a panel said that determining whether a measure is necessary requires a ―process of weighing and balancing a series of factors‖78
, making way for the applicability of the proportionality inquiry. This case also underlined that the burden of proof rests with the respondent state79 when proving the applicability of the exceptions under Article XX GATT80.
Furthermore, in EC – Asbestos, a case that concerned a ban on asbestos products, we can notice a different way of reasoning. The AB stated that the level of protection that a state wants to implement cannot be challenged, and the inquiry can only focus on whether the specific measure is necessary to achieve that specific level of protection81. That is because the measure adopted was one concerning the protection of human health, measures in regard of which the WTO demonstrated to adopt a deferential standard of review. The AB continued to say that in assessing whether the measure is necessary, looking at the possible WTO law consistent
75
Tuna/Dolphin II, paras. 5.27- 5.29
76 Article XX (d) necessary to secure compliance with laws or regulations which are not inconsistent with the
provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices;
77 Peter Van den Bossche, op. cit. p. 6 78
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef (‘Korea – Various Measures on Beef´), WT/DS161/AB/R, adopted 10 January 2001, para. 164-166
79 Korea – Beef, para 174 80
It is important to mention that in cases falling under the scope of the TBT Agreement of the SPS the burden of proof rests with the complainant, which has to demonstrate that the defendant did not comply with international standards.
81
Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products (‘EC – Asbestos´), WT/DS135/AB/R, adopted 5 April 2001, para. 172
21
alternative measures that a state could have reasonably been expected to adopt, “[t]he more vital
or important [the] common interests or values‟ pursued, the easier it would be to accept as „necessary‟ measures designed to achieve those ends‖82
. However, since the text in Article XX (b) does not distinguish between the levels of protection, then why is the DSB?
Unlike in the previous case discussed, the AB did not explicitly consider the restrictive impact that the measure had on international trade, as part of the weighing and balancing process, and we can notice a shift from the least trade restrictive measure approach to a less trade restrictive measure approach83.
Later on in Brazil - Retreaded Tyres, which can be seen as a landmark case in the evolution of the necessity test, the AB found that the less restrictive the measure is, the more probable it is that the measure will be deemed necessary84. This last case confirms the views of the WTO Dispute Settlement Body as expressed in its previous case law:
―the fundamental principle is the right that WTO Members have to determine the level of
protection that they consider appropriate in a given context. Another key element of the analysis of the necessity of a measure under Article XX (b) is the contribution it brings to the achievement of its objective. A contribution exists when there is a genuine relationship of ends and means between the objective pursued and the measure at issue. To be characterized as necessary, a measure does not have to be indispensable. However, its contribution to the achievement of the objective must be material, not merely marginal or insignificant, especially if the measure at issue is as trade restrictive as an import ban.‖85
This suggests the following line of reasoning: first, the importance of the regulatory goal that the state pursues through the measure needs to be analysed and then, if the panel finds that the goal is of major importance, then it is more likely that the measure will pass the necessity test. This syllogism can constitute both good and bad news, and it was criticized by scholars because it
82
Idem
83
Rafael Leal – Arcas, op. cit. p. 107; Ec –Asbestos, para. 172
84 See Panel Report, Brazil – Retreaded Tyres, para. 7.104; Appellate Body Report, Brazil – Retreaded Tyres, para.
143
85
22
appears to grant the WTO‘s adjudicatory body too big a power to decide over the worth of a social value protected by the internal policies of a state86.
Therefore, these cases can be promising if states want to argue the legitimacy of their ETMs that might be at odds with trade law, because when it comes to climate change mitigation measures, in theory, essentially they all can be said to have the purpose of protecting human, plant, animal life and health. Nonetheless, to further integrate environmental law in the WTO system87, the
activity of the Committee on Trade and Environment should be intensified, so it does not follow into the steps of its predecessor, the GATT Group on Environmental Measures and International Trade (EMIT group), which did not fulfil its purposes.
In the past, other multilateral environmental agreements like the Montreal Protocol on Substances that Deplete the Ozone Layer or the Convention on International Trade in Endangered Species made use of trade measures88 in order to achieve their purposes and induce compliance, but the Paris Agreement leaves them out and instead relies on national governments to adopt the necessary policies that would eventually lead to a reduction in GHG emissions. Hence, it is highly likely that the states will rely on trade measures to do so, since they have proven to be efficient in the past. It is necessary then that the GATT be interpreted in a way that allows for this new need of states to be met while also preserving their trade interests.
2. Exception (g) - ―in relation to‖ / ―in conjunction with‖
In Canada – Salmon and Herring89, the Panel was called upon to interpret the meaning of ―relation to‖ and ―in conjunction with‖ in Article XX (g) and it found that the former refers to the use of means "primarily aimed at" conservation, and that "in conjunction with" domestic measures means "primarily aimed at rendering effective these restrictions"90. However,
86
Rafael Leal – Arcas, op. cit, pp 104-105; C. P. Bown, J. P. Trachtman, Brazil - Measures Affecting Imports of Retreaded Tyres: A Balancing Act, World Trade Review, Vol. 8, No. 1, pp. 85-135;
87 Pierre Marie Depuy, Jorge E. Vinuales, op. cit. pp. 392-393 88
Article 6 of the Paris Agreement recognizes the power of the parties to engage in cooperation in order to implement their nationally determined contributions as well as their ability to undertake international transfers of mitigation outcomes. Therefore if they are willing to, the Parties are able to create an international market “that
may/will lead to the convergence of domestic carbon prices, over time”. See Andrei Marcu, Carbon Market
Provisions in the Paris Agreement (Article 6), CEPS Special Report, 2016
89
Panel Report, Canada — Measures Affecting Exports of Unprocessed Herring and Salmon, 22.03.1988
90
23
following this decision, the AB decided that ―relating to‖ does not mean ―primarily aimed at‖, admitted that the exception could apply, continued with the analysis of the preamble but finally rejected its application. However, it did so without properly analysing whether the discrimination was arbitrary and unjustified under Article XX, and merely by finding that a violation of Article III:491 occurred. This way of reasoning basically said that the measure cannot be allowed to stand because it is in breach of Article III, without really testing the measure‘s potential to reach the status of an exception. Although this reasoning can only be found in this judgment, a strong sense of protecting the trade law system could be noticed at that time.
Later on, in US – Shrimp and US – Gasoline92, the AB referred to the existence of a ―substantial
relationship‖ between the ends and means93, the measure and policy aim. Therefore, with regard to this exception, it seems that, unlike exception (b), the state is not required to reach such a high threshold and pursue by all means the least trade-restrictive alternative94, which made the invocation of this exception more appealing.
From the environmental law perspective, with regard to this exception, it is important to mention that in its judgment on US – Gasoline the Panel admitted that renewable resources, such as the air, can also be exhaustible in certain cases but then proceeded to say that the measure is not per
se meant to protect the resource. The AB modified this finding of the Panel, but in the end
decided that the measure was applied in a discriminatory manner and constituted a disguised restriction on trade because the US omitted to properly cooperate with the governments of Venezuela and Brazil and did not show consideration to foreign refineries in the same way that it did to national ones95. Similarly, in US - Shrimp, interpreting the GATT through the objective of sustainable development, the AB admitted that turtles, living natural resources can be considered exhaustible for the purposes of Article XX (g), but then rejected the measure for not being in compliance with the chapeau96. The AB found that the measure constituted arbitrary
91 A full critique of the case can be found in T. Alana Deere, Balancing Free Trade and the Environment: A Proposed
Interpretation of GATT Article XX’s Preamble, International Legal Perspectives 1, pp. 4-5, 1998
92
Appellate Body Report, United States - Standards For Reformulated And Conventional Gasoline, WT/DS2/9 20.05.1996, p. 19
93
Appellate Body Report, United States - Import Prohibition Of Certain Shrimp And Shrimp Products, WT/DS58/AB/R, US – Shrimp, 12 October 1998, para 141
94 Rafael Leal – Arcas, op. cit. p. 106 95
US – Gasoline, pp.27-29
96
24
discrimination because there was not enough flexibility in the certification procedures that foreign states had to undergo in order to gain access on the US market. Also it reached the conclusion that the measure was of a discriminatory nature because the US negotiated the conditions for establishing protection and conservation measures of the turtles only with certain states and also because some countries were helped to acquire the necessary Turtle Exclusion Device technology, whereas others were not97.
3. The chapeau – ―arbitrary or unjustifiable discrimination between countries where the same conditions prevail‖
After deciding that a measure falls within the scope of the exceptions enshrined in Article XX, when it comes to the interpretation of the chapeau of Article XX, there are a number of tests that a measure needs to pass. First, the measure should neither constitute arbitrary or unjustified discrimination nor a disguised restriction on trade, and the conditions in the affected countries should be the same. Also, the term ―conditions‖ is in need of interpretation.
The US – Shrimp case makes a detailed analysis of what constitutes arbitrary and unjustified discrimination from a WTO viewpoint. In this regard, I consider noteworthy the argument of the US stating that ―If a measure differentiates between countries based on a rationale legitimately
connected with the policy of an Article XX exception, rather than for protectionist reasons, the measure does not amount to an abuse of the applicable Article XX exception‖98. The AB expressly rejected this argument, before elaborating on the analysis regarding the discriminative character of the measure, stating that a legitimate policy goal cannot justify incompliance with the chapeau. However, with this argument, the US was arguing that if conditions differ from country to country, than a different treatment can be adopted, which is exactly what the Article states. It appears that the AB knew from the start that the measure would be found to constitute an arbitrary and unjustifiable discrimination. Even though welcomed in some respects, as pointed out in the previous section, this report was criticized as being rigid and unbending when
97
Ibid, paras 170-180
98
25
assessing how a measure should be applied in practice to fulfil the requirements of the
chapeau99.
Another important case from an environmental law viewpoint is the EC – Hormones, where the DSB100 refused to recognize the existence of the precautionary principle as a rule of customary international law or as a general principle of law, which would have legal value according to article 38(1)(c) of the Statute of the ICJ. While other International Courts and Tribunals (hereinafter ICTs) have been more open to the emergence of such a principle101, the WTO maintains a very restrictive approach. One of the reasons behind this might be that admitting the existence of such principle or rule of customary law would open the door for states to adopt environmentally oriented trade aversive measures that could potentially be per se disguised restrictions on trade. Notwithstanding the likeliness of accuracy of this scenario, the WTO panel is already entrusted under the chapeau of Article XX with unravelling whether a measure is in fact a disguised restriction, which means that, in any case, it would have to carry out this analysis.
The same reasoning as in EC - Hormones was followed in EC – Biotech Products several years later, when the WTO Panel stated that the invocation of the precautionary principle does not offer sufficient grounds for the EC‘s measure102.
5. The Paris Agreement and its influence in WTO panels – prospective
trends
This Chapter will explore the ways in which the evolution of environmental law, more specifically, the Paris Agreement, could determine the WTO to change its practice in the area we think is the most relevant when it comes to climate change, which is interpretation of Article XX.
99
Jane Holder, Maria Lee, op. cit. p. 278-280
100
EC – Hormones, paras. 123–5
101 See Pierre-Marie Dupuy, Jorge E. Vinuales, op. cit. pp. 62-64 102
European Communities – Measures Affecting the Approval and Marketing of Biotech Products, Panel Report (29 September 2006), WT/DS291/R, WT/DS292/R, WT/DS293/R (‘EC – Biotech Products’), paras. 7.88–7.89.
26
The adoption of the Paris Agreement required such high efforts from the Parties and the fact that they were willing to gather and negotiate for such long period of time and in such high numbers has the effect of creating awareness on the importance of addressing the issue of climate change effectively. A world in which the climate predictions103 become reality will significantly impact not only on the environment, but also on the political and economic fields. If, for instance, a state will have to deal with massive climate migration, this might be able to trigger the applicability of Articles 61 and 62 of the VCLT104 regarding to the WTO Understanding. This means that states can find themselves in impossibility of performance or facing a fundamental change of circumstances, as defined by the Articles, and resort to suspension or withdrawal from the treaty and proceed to conclude more flexible bilateral or multilateral trade agreements. Therefore, at least for the sake of self-preservation the WTO system should consider embracing climate change policies.
103 See IPCC, 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth
Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151, available at Intergovernmental Panel on Climate Change,
http://www.ipcc.ch/report/ar5/syr/, last accessed on 01.06.2017
104
Article 61 Supervening Impossibility Of Performance
1. A party may invoke the impossibility of performing a treaty as a ground for terminating or withdrawing from it if the impossibility results from the permanent disappearance or destruction of an object indispensable for the execution of the treaty. If the impossibility is temporary, it may be invoked only as a ground for suspending the operation of the treaty.
2. Impossibility of performance may not be invoked by a party as a ground for terminating, withdrawing from or suspending the operation of a treaty if the impossibility is the result of a breach by that party either of an obligation under the treaty or of any other international obligation owed to any other party to the treaty.
Article 62 Fundamental Change Of Circumstances
1. A fundamental change of circumstances which has occurred with regard to those existing at the time of the conclusion of a treaty, and which was not foreseen by the parties, may not be invoked as a ground for terminating or withdrawing from the treaty unless:
(a) The existence of those circumstances constituted an essential basis of the consent of the parties to be bound by the treaty; and
(b) The effect of the change is radically to transform the extent of obligations still to be performed under the treaty.
2. A fundamental change of circumstances may not be invoked as a ground for terminating or withdrawing from a treaty:
(a) If the treaty establishes a boundary; or
(b) If the fundamental change is the result of a breach by the party invoking it either of an obligation under the treaty or of any other international obligation owed to any other party to the treaty.
3. If, under the foregoing paragraphs, a party may invoke a fundamental change of circumstances as a ground for terminating or withdrawing from a treaty it may also invoke the change as a ground for suspending the operation of the treaty
