Sustainable Production and Trade Discrimination: An Analysis of the WTO

Abstract

This article aims to examine the legality of trade measures addressing environmental conditions of production (PPMs) in the context of non-discrimination provisions under the General Agreement on Tariffs and Trade (GATT) and the Agreement on Technical Barriers to Trade (TBT Agreement). It shows that the notion of de facto discrimination is still a sensitive subject in the analysis of origin-neutral measures, including those based on environmental PPMs. Much of the discussion regarding PPMs focuses on the issue of ‘like products’. The interpretation of ‘likeness’ has also served to classify PPMs into the two categories of product related and non-product related. Such distinction rests on how the PPM affects the final product. However, it is important to analyse to what extent these measures can accord less favourable treatment to like products. The author argues that this requires a competition analysis. This article also elucidates how depending upon the applicable law (the TBT Agreement or the GATT) PPMs are likely to face different legal challenges, particularly in terms of less favourable treatment. The author also assesses the possibility of transposing concepts such as ‘legitimate regulatory distinctions’ stemming from the TBT jurisprudence into GATT cases involving PPMs, and whether there will be an additional ‘test’ for PPMs characterised as TBT measures. This article is based on an extensive literature review and doctrinal legal research