Trade Related Environmental Measures in Multilateral Environmental Agreements

Content

I: Introduction

II: Conflicts among the Trade and Environment interface
II.a. Unspecific conflicts and synergies
II.a.1. Synergies
II.a.2. Conflicts
II.b. Specific conflicts and synergies
II.b.1. The process and production methods provision and the problem of extraterritoriality
II.b.2. The Precautionary Principle
II.b.3. The TRIPS-Agreement
II.b.4. The Role of MEAs in WTO-rulings

III: Trade measures in MEAs
III.a. The purpose of TREMs
III.b. Available alternatives

IV: The state of TREMs in MEAs: necessary or superfluously?

V: Literature

Chapter I: Introduction

The Trade and Environment Debate became prominent around 1990^[1] and gained more and more attention over the years. Famous disputes like the Tuna-dolphin dispute between Mexico and the US over the use of dolphin-safe nets mobilized people and NGOs in the US and around the world. As this is the general conflict line, a particular problem exists where Multilateral Environmental Agreements (MEAs) come into conflict with the WTO. Although this case didn’t occur yet (at least not in a direct manner and with a legal decision at the end), MEAs, the WTO, legal experts, politicians and many others are debating about solutions in this case. As negotiations show there exist different perceptions about how much importance should be given to the environment when it collides with trade (and the other way round).^[2]

In this paper I ask the question whether MEAs are dependent on Trade-related Environmental Measures (TREMs) or if they can be constructed without using them. I start the paper outlining the general Trade and Environment Debate, the motivations and attitudes of the actors, the underlying conflicts and synergies and the economic theories that come into play. In the following I focus on TREMs in MEAs, find out their purposes and try to present where they can be important to enhance the effectiveness of MEAs. In the last Chapter I summarize and conclude that TREMs are under certain circumstances important for MEAs but they should be built into an environment that serves to make them less WTO-inconsistent. This is not only to serve the interests of WTO-panels but primarily to circumvent losses in credibility if the TREMs seem to have only low chances before WTO-jurisprudence.

Before we start the main part of this paper we should define what we exactly mean when we talk about TREMs, because literature offers a great variety of broader and narrower definitions. The WTO distinguishes between four different types of TREMs:^[3]

1. Trade bans
2. Export/import licenses
3. Notification requirements
4. Packaging, Labelling requirements

Because the term TREM is a WTO-invention and because we’re working with WTO-rules and interpretation in this paper, I will use this narrow definition. Nevertheless one should be aware that the term TREM can mean a lot and could therefore be further splitted: we could, for instance, divide real trade restrictions – like bans, quotas etc. from softer measures like labelling requirements. Further we could distinguish between trade-measures that are designed to directly target an environmental unfriendly product or measures that shall just change the attitude of a foreign country towards whatever.^[4] Finally we have to be aware of whether a TREM in an MEA is explicitly mentioned in the treaty-text or whether the text offers them a free ticket to choose whatever measure they want to use. Here the struggle about the right interpretation of the treaty text would give these measures another dimension.

You could sketch the mentioned distinctions in the following way:

illustration not visible in this excerpt

Table 1: Dimensions of the TREM-definition; own

Using the WTO-definition therefore causes uncertainty – in effect the WTO-definition only covers the ´extend´ column which already led and will lead to problems in the future.

Let us now begin to examine the basic conflict in the trade and environment debate.

Chapter II. Conflicts among the trade and environment interface

Before we can begin to examine the role of TREMs in MEAs and their necessity with WTO-rules in mind we have to clarify the general clashes and synergies between free-traders and environmentalists. To make my point clear I decided to distinguish between ´specific´ and ´unspecific´ conflicts and synergies. The former is related to potential conflicts that arise because of the nature of these two issues, meaning basic ideas, norms and aims that people have in mind when they devote themselves either to freer trade or cleaner environment. The latter goes more into detail i.e. it focuses on (potential) conflicts regarding the potentially environment-related rules and legal aspects of the WTO and relating them to environmental efforts.^[5]

II.a. Unspecific conflicts and synergies

II.a.1. Synergies

What many protesters on the street, politicians in negotiations and book-authors often ignore when they crusade against the ´Flipper-eating-GATT´ or Globalization as such^[6] is that there exist a lot of parallel ideas and aims between these two issues. As Esty (1994) notes: “As good economists, most free traders see both, trade liberalization and environmental protection directed toward more efficient use of resources and thus fundamentally compatible”.^[7] This finding helps to define the problem in another way and to pay more attention to synergies instead of clashes thereby facilitating the solution-finding process. What we have to regard is a fact (environmental degradation) that arises not in an environment of two incompatible goals (Trade vs. Environment) but that has to be regarded as a failure when you pursue the trade-goal. In economist terms we are confronted with a problem of externalities which exists in many cases because of the absence of prices for common environmental goods, human life, etc., in other cases because the costs are not carried by the stakeholders of the environmental degradation (producers and consumers).^[8] In this situation, the term ´tragedy of the commons´^[9] fits perfectly because there exists a situation where harmful actions of few persons or groups will have no effect on a common resource but harmful actions by a large group of people destroy it.^[10] Examples of this dilemma range from global problems like CO2-emissions to local problems like drawing water from a well (local problems are not the focus of this paper). So we realize that the very basics of the problem are considered as such by economists as well as environmentalists who jointly agree that we can evade this dilemma by inserting the ´polluter-pays-principle´ meaning that we have to charge polluters and consumers of environmental damaging products with a payment for the use or destruction of a common resource.^[11]

After having clarified the basic relationship between Trade and Environment we will first seek further points of synergies.

One important aspect regarding trade and environment is the problem of development, i.e. the correlation between income and pollution and between trade and income. Since both of these correlations are positive you are free to conclude that more intensive trade may also improve the environment. Bhagwati substantiates this suggestion with the rising of environmental NGOs with development and the shift from pollution intensive primary production to manufactures and then to traded services as well as with the rise of environmental groups.^[12] So, as we can easily recognize, there is – in theory – no basic conflict between development and environment.

A last point I’d like to mention is the claim about a race to the bottom in environmental standards for purposes of locational competition and to save or strengthen the domestic industry. Vogel offers a detailed (and widely accepted) study concluding that there is usually a greater tendency towards a race to the top.^[13] An illustrative example is portrayed by the ´California Effect´ when the state of California ´unilaterally´ aggravated its emission-standards for automobiles which forced the car-producers to invest in the contraction of catalytic converters to meet the standards in the large marked of California. Because of sunk costs and economies of scale these industries pushed other states to raise their standards up to the California level.

This should suffice to clarify that there exist various basic principles and processes that are in no way conflicting and that give hope to find solutions in cases where some potential for struggles exist. Let us turn to these issues now.

II.a.2. Conflicts

Above we regarded points at issue that can escape criticism by protesters if these pay attention to empirical evidence. Nevertheless there also exist various conflicting positions even on this rough level of analysis.

Bhagwati (2004) acknowledges some basic points at issue concerning the unspecific level of our analysis. His first statement is that environmentalists “tend to value environment over income, whereas trade (and other) economists conventionally tend to value income over the environment”.^[14] So there exists a difference in the process of tackling the problem – environmentalist tend to do it direct, economists indirect over income (remember the income-environment correlation). A problem that has fundamental impacts for policy recommendations but no impact on the basic understanding of the problem.

A second difference in the thinking-tradition of free-trades and environmentalists^[15] can be discovered in their regard towards the basic function of the state. While free-traders tend to give the individual a strong position free from state-intervention, environmentalists don’t trust in corporations and firms and therefore claim for more state intervention to solve the problems that arose through externalities of economic enterprises.^[16] This also poses an obstacle to unproblematic solution-seeking but can not be regarded as being a fundamental threat to a solution at all.

These examples provide an (not complete but covering the most important points) overview over the variety of issues that arise under the large, normative roof of the Trade-and-Environment-debate and clarify that the potential conflicts result primarily from differences in subordinate understanding and considerations not about the issue itself but about the best way to achieve common objectives. The chances to reconcile free-traders and environmentalists therefore tend to be understated – the potential is much higher.

In the following I want to examine the synergies and conflicts that may arise in ´real politics´ - i.e. we consider law and particular circumstances where trade and environmental issues meet each other. This general analysis helps us to understand and assess the differences that arise in particular TREMs – the topic of Chapter III.

II.b. Specific conflicts and synergies

Because we are going much more into detail in this part of the paper we will drop our former rough distinction between synergies and conflicts as a basic structural path but outline WTO-rules that may come into conflict with environmental efforts. They include the potential for conflict but are often free for interpretation and may therefore also involve the potential for synergies or at least relax the situation. Before we begin with the examination of MEAs and whether their TREMs are necessary, we take a look at the four main ´specific´ conflicts and the trends in WTO-rulings to face them.

II.b.1. The process and production methods provision and the problem of extraterritoriality

In order to save its citizens from the^[17] effects of environmental degradation, pollution, exhaust of resources or health threatening substances in products, national legislation sometimes wants to address the production process of an imported product. Because this process takes place in a foreign country but the effect of the bad production method may have consequences for the importing country itself, a country might think about putting restrictions on these products.

The process and production methods (PPMs) provision derives from the chapeau of GATT-Article I and Art. III mentioning the ´like´ products^[18] as the measuring unit and thus ignoring measures undertaken by countries to prevent environmental damage in a production process by a foreign country. As a connected hurdle serves the problem of measures that aim to conduct outside the home territory, called extraterritorial (ET) measures. Because these two problems usually go together I won’t distinguish in detail in this paper.

PPMs and ET are dealt with among others in the famous Tuna-Dolphin and Shrimp-Turtle decisions^[19]. After ruling in favour of the challenging Party in the first Tuna-Dolphin decision on the basis of action taken with regard to production processes, the Appellate Body (AB) revised the decisions (also in Tuna-Dolphin II and the Shrimp-Turtle case). The Appellate Body’s decisions finally indicate that environmental efforts are by all means serious exceptions but should be balanced with the duties of the member state to pay respect to sovereignty and necessity^[20]. The AB also defines the ´unjustifiable´-test demanding a serious negotiation-effort and flexibility in the measure to fulfil the provision of not being unjustifiable.^[21] Nevertheless there PPMs may be regarded as part of the definition of a ´like´ product^[22].

We can conclude that interpretation of the ´like´- products discussion as well as the extraterritoriality-discussion developed over the years in favour of the environment and there is a good chance that this will continue in the future.

II.b.2. The precautionary principle

In order to save its citizens from health or environment damaging products, countries sometimes consider to restrict the import of products because of a risk (not certainty) that this product could cause harm to health, environment or animals. The EC-Asbestos-Case serves as a famous case in this discussion – France (represent Ted by the EC) imposed a ban on Chrysotile and chrysotile containing products because this substance was suspected to be highly toxic and to cause cancer. Canada challenged this decision before the WTO and lost. The AB finally ruled that a risk to human or animal health could by all means lead to a justified exception under GATT-rules and that this should even be included in defining the ´likeliness´ of a product (see II.b.1.)^[23]. All in all the precautionary principle became a widely accepted exception but the question is still on the table which risk should be acceptable for states and what exactly is scientific evidence^[24].

We can state the same as for the PPM/ET-issue. There is a high potential for conflict but also a good chance for a solution that satisfies both sides.

II.b.3. The TRIPS agreement

The often criticised TRIPS agreement^[25] that aims to save intellectual property rights is a third focal point in this analysis. The basic problem underlying the trade and environment conflict in this case is one of different perceptions of intellectual property rights (IPRs). Whereas environmentalists refer to the sovereignty of the countries to decide what to do with the genetic material within their borders,^[26] the TRIPS agreement considers this material to be patentable and patents to be private in nature.^[27]

Above all there exist problems that are nearly all addressed in the relationship between TRIPS-rules and the Convention on Biological Diversity (CBD).^[28] These include the transfer of environmental friendly technology, the access to fair and equitable sharing of benefits arising form the use of genetic resources, the problem of patenting of traditional knowledge and the patentability of life forms.

The current discussions emerge around the problems of technology-transfer and the access/benefit provision and are therefore presented in this paper.^[29]

The former problem lies in the importance of best available techniques for many countries to fulfil MEA-obligations, to remedy environmental harms or just to improve their environment. If these techniques are controlled and sold by firms some countries could possibly not be able to afford them and therefore wouldn’t be able to improve their environment.^[30]

The second discussion concerns two CBD-provisions which state that countries may restrict access to genetic material within their territory and should be granted benefits by the exploiters of that material.^[31] The arising problem is often a case of DCs vs. LDCs^[32], since the latter accommodate the vast majority of genetic material within their territory whereas the former are usually the ones exploiting such material.

Until now there has been no case where CBD and WTO came into legal conflict before a dispute settlement body, if this would be the case it would probably lead to a scrutiny concerning public international law, where the provisions of ´lex posterior derogat lex anterior´ and ´lex specialis derogat lex generalis´ would come into play.^[33] Other cases judged under TRIPS-rules paid no or only marginal reference to TRIPS-Articles 7 and 8 where topics such as health, and reciprocal benefits are mentioned as principles (8) or goals (7). The Doha-Declaration on the contrary at least paid attention to health issues citing TRIPS-Article 27.2 where member states are allowed to take measures for health protection (if they don’t violate WTO-rules, of course). This seems to constitute a pathway for further interpretations that could also be applied in environment-concerning disputes.^[34] It is now up to negotiations to modify the agreements in the way that the synergies, that lie above all in the economic incentives for conserving the biological diversity^[35], can be captured.

II.b.4. The Role of MEAs in WTO-rulings

This part of the paper shall give an overview over how MEAs are regarded when it comes to dispute settlement before the WTO-Panel and AB. By examining this we explore a further step of consistency and inconsistency of trade restrictions with WTO-law that will be of value in the next chapters.

If we regard trade restrictions that are written into MEAs we have to consider international law because we have to cope with two sets of rules that may be conflicting. In general the already mentioned principles of ´lex specialis´ and ´lex posterior´ come into play. Generally, ´lex specialis´ prevails over ´lex posterior´, a circumstance that would give power to MEAs which rules are often more specified than WTO-rules.^[36] However, the WTO-Panel- and AB-decisions show that MEAs are as a rule not considered under this comparison but they have to show that a measure has not been introduced ´arbitrarily´ and the exception is ´necessary´, i.e. the WTO-jurisdiction just checks whether the MEA fulfils the obligations under the chapeau of Art. XX if it is found to be in violation of WTO-rules. This suggests a consideration of MEAs almost analogue to international standards^[37] which derives (among others) from the Shrimp-Turtle Case where Panel and AB honoured US-attempts to negotiate an international agreement.^[38]

What can we conclude at this point? First, that MEAs indeed have reasons for being optimistic concerning the potential to win a conflict before the WTO-jurisdiction. Both – rules and interpretations of various aspects in this discussion – got ´greener´ in the last decade and seem to continue on this path in the following years. These interpretations help to benefit from the synergies inherent in this conflict. So called Win-win-win-Situations^[39] are available.

In the following chapter I want to change my view and examine whether MEAs, too, can undertake steps towards the WTO, i.e. whether their trade provisions are really important or perhaps too strict. My idea at this point is that negotiators of an MEA have to consider two important points when the decide over the implementation of TREMs into MEAs: are they really necessary for the effectiveness of the regime and are there less trade-restrictive measures available that may also be able to achieve this effectiveness.

III. Trade measures in MEAs

III.a. The purpose of TREMs

Before we begin talking about TREMs and their purposes we first have to remember our definition of TREMs from the introduction and be aware of the fact that the term ´Trade related Environmental Measure´ can also include a variety of parameters that are very different in their design, effect and in their impact on international trade. When we consider alternatives to TREMs these different measures come into play.

Barrett states that TREMs in MEAs have two basic purposes: they want to punish countries that do not participate or are not in compliance with the MEA and they want correct the loss in competitiveness that eventually arises from participation.^[40] Covering all perspectives, from the very outside to the MEA-internal purposes I would suggest to distinguish the purposes of TREMs in one main and three sub-divisions: coming from a broad perspective, TREMs in MEAs are of course primarily introduced to achieve an environmental goal, for example the recovery of the ozone-layer, the receipt of plants or animals or others – you could equate this with the purpose of the MEA itself. If we look into this MEA and ask for what reasons TREMs can be incorporated we find several points that are hierarchically ordered as well and can be summarized as the following:

illustration not visible in this excerpt

Table 2: Perspectives of TREM-purposes; own^[41]

We notice that there are the three goals: achieving credibility (by overcoming the dilemma of reciprocity)^[42], participation (by making every participant better off than non-cooperation) and compliance (by making everyone better off and eventually threaten with sanctions). These are by themselves achieved through punishing ´non-cooperation´ and reward co-operators so that they needn’t fear a great loss in competitiveness. This can be achieved by measures managing international trade where trade is part of the problem^[43], where they make regulatory systems comprehensive in their coverage, where they discourage free-riding and prevent leakage.^[44] Especially the last two reasons are always present when MEAs are negotiated – they are essential to sustain cooperation and to enforce broad participation.

We can summarize that TREMs are introduced to achieve very important purposes that are essential for the effectiveness of MEAs. In the following paragraph we want to examine whether there are other, less trade-influencing measures that can be introduced in order to fulfil the objectives mentioned above.

III.b. Available Alternatives

When we talk about alternatives to TREMs and other policy instruments we have to consider that there exists a hierarchy even within these measures – that will mean that an import ban normally affects international trade in another way than does a transfer of technology. In the following I’d like to give an overview over available alternatives^[45] and discuss exemplarily the advantages or disadvantages contrasted to Trade Restrictions (I call them TRs) – the most trade-disturbing form of TREMs.

illustration not visible in this excerpt

Table 3: Hierarchy of Measures (in terms of compatibility with the WTO); own^[46]

Because of the trade-disturbing nature of TRs, I’d like to outline which other TREMs or other policy instruments could possibly be considered when negotiators construct MEAs.

Because TRs may lead to clashes with the WTO and their enforcement may therefore be incredible, alternatives should in my eyes be found in relation to the purpose of the particular TR. TRs are as a rule directed towards punishing non-cooperation and so this should be the effect of an alternative. Since every MEA is a unique case we can not make general recommendations and since we don’t have counterfactual evidence we cannot be sure that another solution would work but we can make suggestions depending on the purpose and therewith propose opportunities to elude a struggle.

By the way, we face a curiosity when we consider TRs which lies in the fact that if the regime is well designed, these restrictions will not have to be enforced because they fulfil their job in threatening countries to non-cooperate and if the threat is credible, there countries won’t fall out of line. So we discuss problems in theory that (when designed in the right way) aren’t problems in practice and therefore they often don’t have practical potential to violate trade rules.

The search for alternatives will be (partly) illustrated by referring to the Ozone Regime (Montreal Protocol). In his analyses of the Montreal Protocol, Duncan Brack concludes that “Less GATT-inconsistent trade restrictions were not feasible. The problem of incompatibilities between the existing trade provisions and the GATT, although at this stage only a potential one, is nevertheless real. This both undermines the credibility of the ozone regime (...)”.^[47] Brack argues that no alternatives exist and that a potential GATT-challenge undermines the credibility of the MEA. In this part of the paper we address the former claim:

If we consider, for example, to incorporate labelling requirements instead of quantitative restrictions we hope that the consumer is willing to pay for probably more expensive products (least at the beginning) in order to save the planet. This worked in the tuna-dolphin case^[48] where consumers were really enthusiastic about sweet dolphins and paid some cents for tuna that was caught dolphin-free. But would this also work when people would have to pay 100$ extra for CFC-free refrigerators? – Probably not and this case arises only if industry begins to provide substitutes. If industry wouldn’t see a chance to make profit out of the invention of a new substance there wouldn’t be a chance for a labelling requirement to enter into force.

Let us continue our search for an alternative to the ban of CFCs or CFC containing products: as we see that labelling isn’t an appropriate answer we could try to find out if positive measures, i.e. financial assistance would be (at least nearly) as effective as the TR in question. The Montreal Protocol contains financial assistance in form of a Multilateral Fund (for some countries it’s the Global Environment Facility) that serves to make participation easier for developing countries and is financed by developed countries. This institution helps to correct losses for participants (see above) while the TR is responsible for the threat towards non-participants. If you would cut the TR out of the agreement you would have to step up the fund – that means to pay for all countries so that the potential losses would be compensated directly through money transfers. It’s obvious that no country would be willing to pay for this because there wouldn’t occur any gain for the paying country. The TR helps to change the underlying game and therefore the incentives of the participants.^[49] The milder policy instruments are serving as an additional compensation-mechanism within the participants.

The only way out of the search for less trade restrictive TREMs is to change the goals of the MEA. If the negotiators of the Montreal protocol would have tried to achieve a greater extend of CFC-free commodities they could also have created a Multilateral Fund that was financed by Countries and invested in R&D towards new CFC-free substances. Ex post we can say that – because the new substances are often cheaper in production that CFCs^[50] - that the outcome would have eventually be nearly the same for the developed world. However, because of the absence of the Multilateral Fund (because developing countries wouldn’t have been forced to participate and therefore wouldn’t be rewarded for participation) developing countries would have to bear great costs because their technologies would be obsolete. An additional transfer of technology provision to solve this problem would probably not be effective because it wouldn’t be connected to a provision of ´reciprocity´^[51] - meaning that only one of the two ´partners´ (developed and developing countries) would have something to offer – and would probably not give it away for free.

Of course this was only one example where no alternatives could be found, but the underlying problems are often the same: TRs often fulfil objectives that can only be fulfilled by TRs. At least at Montreal, there appear to be no alternatives to the considered TR – the further lessons we can learn from this are written down in the following concluding Chapter.

IV. The state of TREMs in MEAs: necessary or superfluously?

As our analysis shows so far, TREMs are in some cases (e.g. in the Montreal Protocol) of substantial importance for the outcome of the MEA. They are especially useful where it comes to achieve participation and compliance through posing threats for non-cooperation, but only if they are credible.

However as we regard the potential conflict with WTO-rules, TREMs need to be introduced only in cases where it is really necessary and only in an appropriate environment. Let us at first find out what constitutes an appropriate environment.^[52]

As an often cited OECD-paper states, TREMs in MEAs are appropriate when the international community

- collectively wants to tackle and manage trade as a part of the environmental problem,
- when trade controls are required to make regulatory systems comprehensive in their coverage,
- when free-riding should be discouraged and
- compliance ensured ^[53]

These points are already mentioned in Chapter III.a. as ´purposes of TREMs´ and should be implemented with great care especially concerning clear language in the treaty text, so that there exists transparency about what has to be achieved by whom.^[54] But additional to an appropriate purpose should there exist some mechanisms that give further justification to TREMs before the WTO-authorities and the international community.

Especially positive measures^[55] play an important role under this regard.^[56] They often help to enhance the perception of equity in distributing costs and benefits with regard to the needs and capacities of the countries. In this sense, positive measure can effectively complement TREMs – in some situations they even reduce or obviate the need for TREMs.^[57] Further, flexibility is an important factor. Since it encourages participation and leaves space for countries to fulfil their obligations in various ways so that the outcome is enhanced.^[58]

We can conclude until now that TREMs should be designed with an appropriate purpose and be in accompany with provisions that enhance equity and flexibility. These factors are responsible to legitimize the TREMs and therefore the MEA. Only with substantial backing from the international community can a MEA be effective and be a potent player should there occur conflicts with the WTO.

The second important factor for to achieve effectiveness to a TREM is its´ credibility. As I mentioned in Chapter III.b. credibility is substantial to the whole architecture of the MEA. TREMs are often introduced because simple reciprocity isn’t credible,^[59] TREMs that don’t fulfil this purpose can be easily kept out.

Finally we can summarize that:

- TREMs are sometimes (depending on the situation and problem structure) necessary to punish non-co-operators
- TREMs alone often don’t help to enhance the outcome
- If introduced, TREMs should go together with other policy measures to achieve flexibility and credibility

If these recommendations are pursued by negotiators of MEAs they appear to have good chances to be regarded as WTO-consistent. Concerning the ´necessity-test´ (see II.b.1) to evaluate whether MEAs can be regarded as exceptions under Art. XX there unfortunately only exist vague demands: there has to be no GATT-consistent or at least no less GATT-inconsistent measure available for justification than a country could reasonably be expected to employ.^[60] As we have see have seen in this paper, the question whether there exist alternatives that are at least almost as effective as a TREM is a difficult task – we even cannot be sure ex post whether a TREM has been an effective instrument since we lack counterfactual evidence.^[61] Since this test is so difficult to accomplish, WTO-officials should pay more attention to the chapeau of Art. XX and evaluate the ´negotiation effort´ and the ´flexibility criteria´.^[62] We can be confident that a MEA that designs its´ TREMs with regard to our recommendations won’t be condemned by WTO-panels or the AB of having violated WTO-law.

The result of reasonable TREMs is a win-win-Situation between Trade and the Environment that is necessary for the environment and (requiring a certain amount of positive attitude towards environmental needs by WTO-officials) WTO-consistent.

V. Literature:

- Balaam D.N./Verseth M. (2001): Introduction to International Political Economy, New Jersey: Prentice Hall
- Barrett, Scott (1997): The Strategy of Trade Sanctions in International Environmental Agreements, in: Resource and Energy Economics, Vol. 19 (1997), pp. 345-361
- Barrett, Scott (1999): The Credibility of Trade Sanctions in International Environmental Agreements, in P. Fredriksson (ed.), Trade, Global Policy, and the Environment, World Bank Discussion Paper No. 402, pp.161-172
- Barrett, Scott (2003): Environment and Statecraft – A Strategy of Environmental Treaty-Making, New York: Oxford
- Bhagwati, Jagdish (2004): In Defence of Globalization, New York: Oxford
- Brack, Duncan (1996): International Trade and the Montreal Protocol
- Brack, D./Gray, K. (2003): Multilateral Environmental Agreements and the WTO, Report, Royal Institute of International Affairs & International Institute for Sustainable Development
- Brack (2004): Trade and Environment, in: Hocking/McGuire (ed.): Trade Politics
- Campbell, Laura (1999): Interlinkages: Multilateral Environmental Agreements and Trade and Investment Regimes, Draft Report to the International Conference on Synergies and Coordination Between Multilateral Environmental Agreements, Tokyo
- Charnovitz, Steve (1992): GATT and the Environment: Examining the Issues, in: International Environmental Affairs 4, no. 3
- Conrad, Klaus (2001): Locational Competition under Environmental Regulation when Input Prices and Productivity Differ, Paper, Foundazione Eni Enrico Mattei
- Cropper/Oates (1992): Environmental Economics: A Survey, in: Journal of Economic Literature, Vol. 30, June 1992, pp. 675-740
- Esty, Daniel C. (1994). Greening the Gatt – Trade, Environment and the Future, Washington D.C., Institute for International Economics
- Hardin, Garrett (1968): The Tragedy of the Commons, Science, Vol. 162, Dec.1968, pp. 1243-1248
- Hasenclever, A./Mayer, P./Rittberger, V. (1997): Theories of International Regimes, Cambridge: Cambridge University Press
- Hoffmann, Ulrich (2002): Clear and Effective Trade Measures in Multilateral Environmental Agreements and their Compatibility with the Rules of the Multilateral Trading System, Discussion Paper, UNEP/UNCTAD
- Knigge, Markus (2003): Trade and Multilateral Environmental Agreements, Draft Report, European Commission
- Mann, H./Porter, S. (2003): The State of Trade and Environment Law, Winnipeg, Manitoba: Institute for Sustainable Development
- Nordhaus, William D. (1994): Locational Competition and the Environment: Should Countries harmonize their Environmental Policies?, Discussion Paper, Crowles Foundation
- OECD (1999): Trade Measures in Multilateral Environmental Agreements: Synthesis Report of Three Case Studies, www.oecd.org
- Vogel David (1997): Trading up and governing across: transnational governance and environmental protection, in: Journal of European Public Policy 4:4, pp. 556-571
- Vogel, David (1997): Trading Up: Consumer and Environmental Regulation in a Global Economy, Harvard: Harvard University Press
- Wallach/Woodhall (2004): Whose Trade Organization – A Comprehensive Guide to the WTO, New York: The New Press
- Wheeler, David (2001): Racing to the Bottom? – Foreign Investment and Air Pollution in Developing Countries, in: Journal of Environment & Development, Vol. 10, No. 3, pp. 225-245
- WTO (2004): Trade and Environment, www.wto.org

[...]

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^[1] See Mann/Porter (2003): 1

^[2] See Campbell (1999): 15

^[3] WTO (2004): 36

^[4] Esty (1994: 249) calls these measures ´sanctions´

^[5] Whether or not they are already represented in MEAs (most of them are) is not important since we want to outline the potential of challenges in the future

^[6] E.g. Wallach/Woodhall (2004)

^[7] Esty (1994): 63

^[8] See Cropper/Oates (1992): 675-677

^[9] Origin of the concept: Hardin (1968), here drawn among others from Balaam/Verseth (2001): 407/408

^[10] See Esty (1994): 13

^[11] ebd.: 68

^[12] See Bhagwati (2004): 144/145; Although empirical analyses support the connection between trade and income as well as income and environment I disagree with Bhagwatis thesis of the positive effects of shifts from primary to service production because of the Theorie of Trade-Ladders that suggests that economies may shift from one production to another shifting away the primary production to other countries and not eliminating them. So the connection should in my eyes be drawn with regard to the ability and will of the industry to use cleaner production methods.

^[13] See Vogel (1997), and further e.g. Vogel (1997), Wheeler (2001), Nordhaus (1994), Conrad (2001)

^[14] Bhagwati (2004): 136/137

^[15] Of course there almost never exist ´pure´ types of free-traders or environmentalists that consider the other issue as being completely unimportant and subordinate – I use these terms relating to Esty (1994): BOX 1, p. 3

^[16] Bhagwati (2004): 137

^[17] I don’t distinguish in this paper between extraterritorial (imposition of domestic standards on transactions occurring abroad) and extrajurisdictional (regulation abroad through transaction controls at the border). For a deeper analysis regarding this distinction, see: Charnovitz (1992): 208/209

^[18] Definition of ´like´ products: WTO (2004): 50

^[19] For a detailed analysis of these cases see among others Mann/Porter (2003)

^[20] See Mann/Porter (2003): 14

^[21] See WTO (2004): 53

^[22] See Brack (2004): 231

^[23] See WTO (2004): 65/66

^[24] For a detailed examination see: Mann/Porter (2003): 27-37

^[25] As one example for strong criticism of TRIPS serves Baghwati (2004): 182/183

^[26] This is quite amusing if one thinks of environmentalists´ attitude towards sovereignty in the PPM/ET-debate

^[27] See Mann/Porter (2003): 38

^[28] See WTO (2004): 42

^[29] See ebd.: 42/43

^[30] As Esty (1994: 199/200) notes, low environmental standards in less developed countries (LDCs) often don’t reflect a conscious decision to degrade the environment to gain competitive advantage, but are results of a lack of capacity

^[31] See Mann/Porter (2003): X

^[32] i.e. Developed Countries vs. Less Developed Countries

^[33] See Mann/Porter (2003): 43

^[34] See ebd.: 43-45

^[35] See ebd.: 37

^[36] See Brack/Gray (2003): 27

^[37] Mann/Porter (2003): 24

^[38] WTO (2004): 63/64

^[39] Free trade, environmental improvement and development

^[40] See Barrett (2003): 307ff

^[41] The points listed are drawn partly from Barrett (2003), Brack (1996) and OECD (1999): I changed the order and lifted ´compliance´ to the upper level (it was originally listed in OECD (1999: 6) in line with the other points) while inserting ´prevent leakage´ (see Barrett 2003, Ch. 12) as an additional purpose. Brack (1996: 51) defined ´leakage´ and maximal participation as the main objectives.

^[42] See Barrett (2003): 209

^[43] See ´direct´ measures in the introduction

^[44] ´Leakage´ is exemplarily defined in Barrett (1999: 162) as a situation where “comparative advantage in the pollution-intensive industries is likely to shift to non-signatories, with the consequence that global emissions fall by less than the reduction undertaken by signatories”.

^[45] Unfortunately we are at this juncture faced with a problem of definition since literature offers various or often even no real definition of TREMs in general and trade restrictions in particular. I already defined the latter above and the former in the introduction; I just want to call attention to this problem.

^[46] Content drawn from Esty (1994): 249-255 and adapted to WTO-understanding, esp. WTO (2004): 36

^[47] Brack (1996): 116

^[48] See e.g. ebd.: 70/71

^[49] See e.g. Barrett (2003): 398

^[50] See Brack (1996): 31/32

^[51] See Hoffmann (2002): 13, for a detailed discussion about ´the strategy of reciprocity´, see Barrett (2003): 269-292

^[52] Of course the term ´appropriate environment´ also includes factors that are analysed in detail in regime theory. These factors are often distinguished along the ´situation-structure´ and ´problem-structure´- line (See Hasenclever/Meyer/Rittberger (1997): 44-68) and analyse the overall situation and problem we’re faced with. Because I already mentioned that you cannot generalize recommendations for the introduction of particular TREMs this discussion can be left out here.

^[53] See OECD (1999): 37/38 and earlier in this paper

^[54] See Hoffmann (2002): 19

^[55] i.e. Measures that support instead of imposing threats

^[56] See Hoffmann (2002): 11-14

^[57] See. ebd.: 12

^[58] See Brack (1996): 50

^[59] See Barrett (2003): 307/308

^[60] WTO (2004): 52

^[61] see earlier in this paper

^[62] WTO (2004): 53