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Unresolved Issues in WTO Law

Introduction

Measures aimed at addressing climate change raise legal issues regarding the relationship between WTO law and international environmental law and the relationship between various WTO agreements. This chapter analyzes several unresolved issues in WTO law that may affect the WTO-consistency of unilateral and multilateral measures that are likely to be taken to address climate change:

(1) how to deal with environmental subsidies under the GATT 1994, the SCM Agreement,[1] and the Agreement on Agriculture;[2] (2) whether processing and production methods are relevant to determining the issue of “like products” in GATT Articles I and III, the SCM Agreement, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Antidumping Agreement),[3] and the Agreement on Technical Barriers to Trade (TBT Agree- ment);[4] (3) the relationship between GATT Article XX, other WTO Agreements, and multilateral environmental agreements; and (4) the interpretation and application ofArticle 2 ofthe TBT Agreement. The focus ofthis chapter is these unresolved issues rather than the WTO-consistency of specific climate change measures.

Recent WTO jurisprudence has shed some light on these issues. Recent jurisprudence on the TBT Agreement has further clarified the extent to which GATT jurisprudence can be used to interpret the similar provisions in other WTO agreements, in what might be called judicial cross-pollination. This jurisprudence is especially important regarding the interpretation of provisions that use the terms “like products” and “less favorable treatment” and provisions that incorporate language that is similar or identical to terms used in GATT Article XX. The interpretative approach of the WTO Appellate Body to these issues also should influence the approach taken by other international tribunals that interpret provisions in international agreements that incorporate language that is similar or identical to terms used in GATT Article XX.

The focus of this chapter is on unresolved issues. However, climate change measures also need to comply with other provisions, such as GATT Article XI (quantitative restrictions) and GATT Article II (maximum tariff levels). Moreover, competitiveness concerns due to differences in climate change regulation between countries (such as carbon taxes) cannot be addressed with antidumping duties (because the relevant comparison is not between regulatory differences, but rather prices in the domestic market and the export market, or a constructed price or third country market and the export market) or countervailing duties (because not taxing carbon, or taxing carbon at a lower level in one country than in another, does not qualify as a “subsidy”).[5]

  • [1] Agreement on Subsidies and Countervailing Measures GATT Secretariat, The Results of theUruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva, 1994) 231 (SCMAgreement).
  • [2] Agreement on Agriculture, GATT Secretariat, The Results of the Uruguay Round of MultilateralTrade Negotiations, the Legal Texts (Geneva, 1994), 33.
  • [3] Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994,GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the LegalTexts (Geneva, 1994), 147 (Antidumping Agreement).
  • [4] Agreement on Technical Barriers to Trade, GATT Secretariat, The Results of the Uruguay Roundof Multilateral Trade Negotiations, the Legal Texts (Geneva, 1994), 121 (TBT Agreement).
  • [5] Joost Pauwelyn, “U.S. Federal Climate Policy and Competitiveness Concerns: The Limits andOptions of International Trade Law” (2007) Nicholas Institute for Environmental Policy SolutionsWorking Paper NI WP 07-02.
 
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