The EU, the WTO and indirect land use change

Efforts to meet the European Union’s (EU) alternative energy targets have resulted in increased production of biofuels. This production has resulted in deforestation-related emissions through displacement of agricultural production, a problem known as indirect land-use change. The European Commission (EC) has proposed regulatory options to respond to this problem, but all risk not being in conformity with World Trade Organization (WTO) law.Trade law challenges result from the underlying methodological uncertainty, and the attempt to address a systemic problem on the level of individual producers.Yet, this does not necessarily indicate that the intent of these regulations is to protect EU markets.Thus, this is an instructive case study to examine the relationship between WTO law and complex, emerging environmental problems

Sustainable development in the WTO: from mutual supportiveness to balancing

The WTO Secretariat describes sustainable development as a central WTO principle. Relevant international law treaties have declared sustainable development’s mutual supportiveness with trade liberalization, and also emphasized the need to balance its ‘pillars’: economic development, often equated with trade liberalization, with environmental conservation and social welfare. While ‘mutual supportiveness’ suggests that sustainable development’s environmental and social goals are a side effect of trade liberalization, ‘balancing’ involves weighing these different goals, and prompts the difficult question of which are most important, and who is empowered to decide. This paper traces these two broad theoretical conceptions through WTO legal texts, negotiations and dispute settlement, arguing that they have important pragmatic implications. In particular, to create mutual supportiveness WTO Director-General, Pascal Lamy, has stated the need for adequate domestic policies, suggesting that the WTO should support these. Yet, if they have negative trade impacts, pure ‘sustainable development’ policies may be difficult to balance against the WTO obligation to liberalize trade

Consumer preferences and the National Treatment Principle: emerging environmental regulations prompt a new look at an old problem

Should consumers’ preference for ‘green’ products help justify,from a WTO perspective, emerging regulations such as restrictions on trade in non-sustainable biofuels? Despite the role consumer preferences have played in WTO disputes, in association with the ‘ like ’ products concept, there has not been enough focused examination of their specific influence, particularly in disputes on ethical public policy issues, such as environmental or health regulations. To this end, this paper examines key GATT Article III disputes, pointing out that they included attempts both to measure, and also to interpret, consumer preferences. The latter approach becomes more tempting when consumer preferences are difficult to measure; import bans or restrictions associated with ethical public policy regulations can bring about such a situation. A hypothetical dispute about EC biofuels sustainability criteria demonstrates this problem. Options to make the concept of consumer preferences more coherent include limitations on how they can be invoked, and an increased commitment to capturing them through measurement

Biofuels, sustainability and trade-related regulatory chill

Recent European Union sustainability criteria for biofuels provide an opportunity to understand more precisely the relationship between national sustainable development policies and World Trade Organization (WTO) law. A desire to avoid WTO conflict was one reason for the omission of stronger criteria addressing negative social and environmental impacts of increased biofuels production. Thus, despite declarations of sustainable development’s central importance in WTO legal texts and statements by the Secretariat, national sustainability regulations risked trade law conflict. This article documents potential reasons for a WTO regulatory chill effect on the sustainability criteria. It then outlines challenges that the regulatory concept poses to trade law, which result primarily from its breadth and complexity, as well as the lack of targeted international standards, and its emphasis on production processes which intrude heavily, in an extraterritorial sense, on importers. It is important to identify these limitations to the mutual supportiveness between trade liberalization and national policies to achieve sustainability goals. However, despite these limitations, the case study also suggests that, with regard to sustainability criteria, sustainable development’s soft power as a WTO legal principle is an important source of influence