WTO Effectiveness in Resolving EU-US Trade Conflict

Abstract

One of the major strategic challenges facing the transatlantic trade relationship is the ability to regulate such risk areas as the environment whilst maintaining important trade flows. Much scholarship has emphasised formal US-EU trade disputes when considering the treatment of risk. However, these cases represent a minority of the trade conflict at the World Trade Organisation (WTO). A majority of trade conflict gets raised, debated and resolved informally in the WTO committee structure. The Sanitary and Phytosanitary (SPS) Agreement is the WTO institutional arrangement that seeks to reconcile environmental, health and food safety regulations with trade objectives. The SPS embodies ‘in-house’ dispute resolution mechanisms that are based on the notion of constructive engagement. Mechanisms like ad-hoc consultations, registering official protests, use of the chair’s good offices and coordination with international standard setting organisations have been effective in promoting harmonisation between states. The current paper elucidates a good news story how American and EU policy-makers have resolved differences over environmental regulations at the SPS Committee, through a case study on wood-packing material and offers specific recommendations on what more can be done.