GATT and the Environment: Reconciling Liberal Trade Policies with Environmental Preservation

Abstract

I. INTRODUCTION With the passage of the Uruguay Round(1) of the General Agreement on Tariffs and Trade (GATT)(2) and the creation of the World Trade Organization (WTO),(3) there has been much debate over what role, if any, the WTO should play in reconciling tension between liberal trade policies and environmental protection.(4) In the words of the WTO Committee on Trade and Environment, the multilateral trading system must be able to apply [the principle of] non-discrimination(5) while ensuring that countries can implement domestic environmental policies appropriate for their social, political, economic and environmental preferences.(6) Many environmentalists, however, argue that the very premise of the WTO, that of free-trade,(7) directly conflicts with environmental preservation and protection.(8) Furthermore, they argue that the most troubling aspect of the Uruguay Round and the WTO is that the new legalism of the WTO(9) will diminish the effectiveness of United States environmental legislation(10) by allowing the WTO the final say over what domestic legislation is or is not GATT legal.(11) This article analyzes the interplay between the principle of non-discrimination and the need for a comprehensive system for environmental protection. Part II examines the principle of non-discrimination in the WTO and the WTO's new dispute resolution process. Part III explains some of the domestic forces that corrupt the multilateral trading system by influencing domestic environmental regulations in the direction of protectionism. Part IV analyzes how trade and the environment interplay within the WTO, paying particular attention to some recent GATT/WTO panel decisions: the Reformulated Gasoline Case and the Tuna-Dolphin Case. Finally, this article concludes with the observation that, despite the criticism levied against the WTO the new legalism of the WTO is a blessing in disguise for environmentalists because it is only through the principles of non-discrimination and legalism that environmental concerns can be shielded from political forces that use environmental protection as a guise for protectionism. In effect, the Uruguay Round will allow national decision makers to focus on the real and important concern of protecting the environment. II. THE GENERAL AGREEMENT ON TARIFFS AND TRADE Some scholars have suggested that the collapse of the world economy and ultimately the cause of World War II arose from the nationalistic sentiments and economic protectionism that existed during the 1930s.(12) As such, one of the primary purposes behind the creation of many of the post-World War II international organizations was the prevention of this type of nationalistic protectionism.(13) GATT, in particular, was adopted(14) to address specific issues thought to hinder the free flow of goods between countries.(15) The original agreement addressed both overt governmental interference(16) as well as individual corporate actions(17) believed to be counterproductive and injurious to the world economic order.(18) Although the original GATT agreement and subsequent rounds of negotiations addressed a variety of Issues,(19) essentially three basic principles underlie GATT: (1) trade should be conducted on the basis of non-discrimination,(20) (2) markets should remain open and any protection afforded domestic industries should be accomplished exclusively through overt measures such as tariffs and import quotas,(21) and (3) violations of the principle of fair trade should be adjudicated exclusively through GATT.(22) These substantive benchmarks are also largely premised on a liberal notion of free-trade.(23) The method by which free-trade is accomplished is through the harmonization and containment of the domestic barriers to the free-flow of goods.(24) In essence, the GATT was created to facilitate economic integration to further the ultimate goal of convergence by adopt[ing] rules of international behavior and . …