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24 ELR 10109 | Environmental Law Reporter | copyright © 1994 | All rights reserved Environmental Trade Barriers and International CompetitivenessRay V. Hartwell III and Lucas Bergkamp Editors' Summary: In their attempts to promote environmental protection domestically, countries are adopting measures that have impacts beyond their borders -- primarily on international trade. The interrelationship of environmental protection and free trade is especially evident from the recent negotiations involving NAFTA and the Uruguay Round of GATT. Harmonizing conflicts between environmentalists and free trade advocates has emerged as a major challenge to governments and other international players. This Article examines the extraterritorial effects of national environmental laws and the impact of these laws on international economic competitiveness. After introducing a number of pending and recently adopted environmental measures in Europe, the authors discuss the current legal framework governing the impacts of "eco-barriers" -- the authors' term for environmental protection measures that act as impediments to free trade. The authors analyze U.S., European Union, and international law. Finally, the authors briefly address the impacts of eco-barriers on international competitiveness. The authors conclude that fostering international free trade agreements with adequate measures to address environmental protection concerns is the most effective means of achieving the goals of all concerned. Ray V. Hartwell III is a partner in the law firm of Hunton & Williams in Brussels, Belgium and Warsaw, Poland. Mr. Hartwell is a graduate of Washington & Lee University (B.A. 1969; J.D. summa cum laude, 1975). Lucas Bergkamp is an associate with Hunton & Williams in Brussels. Dr. Bergkamp is a graduate of the University of Amsterdam Faculty of Law (J.D. 1985; Ph.D. 1988), and holds degrees from the University of Amsterdam Faculty of Medicine (M.D. 1988) and Yale Law School (LL.M. 1989). Within a relatively short time span, environmental issues have come to rank high on the agendas of many governments, international organizations, and businesses. The most obvious way in which environmental issues have taken on an international dimension has been through cross-border air and water pollution. Recently, however, a variety of legislative and regulatory responses to other environmental problems have given rise to international trade concerns, as their implications for global competition and multilateral efforts to lower trade barriers have become increasingly apparent. Differences in national environmental laws have resulted in two distinct sets of international trade problems. First, dissimilar national laws and policies have created barriers to international trade either by banning from national markets products that are perceived as burdening the environment or by subjecting such products to specific national requirements. Thus, the exercise of domestic jurisdiction in environmental matters has international -- or in legal terms "extraterritorial" -- effects.1 Countries have even imposed restrictions on products that are perceived as environmentally friendly. Examples of this phenomenon are European eco-labelling laws, which differ from one country to another. Second, nations have come to realize that environmental regulation and corresponding liabilities affect the international competitiveness of their domestic industries. Consequently, some nations have begun to consider measures to compensate for the unfair advantage apparently held by producers from countries with less stringent environmental standards. This is one of the issues that plagued efforts to ratify the North American Free Trade Agreement.2 This Article focuses on the extraterritorial application of environmental laws, and discusses conditions under which [24 ELR 10110] environmental protection measures may permissibly restrict international and interstate trade. These restrictions, which the Article terms "eco-barriers," are analyzed under U.S., European Union, and international law. The Article then turns to an overview of key issues relating to the effect of environmental legislation on the international competitiveness of domestic industries. The current debate on eco-barriers can be characterized as a clash between environmentalists and advocates of international trade.3 Maintaining that environmental protection deserves higher priority, environmentalists argue that measures designed to protect the environment must be allowed to restrict international trade insofar as necessary to accomplish their objectives. International trade advocates, on the other hand, emphasize the promotion of economic growth through free trade. They argue that environmental protection, while important, must be balanced against economic objectives so that unnecessary trade restrictions can be avoided. Indeed, proponents of free trade could further argue that international trade and environmental protection go hand-in-hand, since the increase in prosperity resulting from trade may facilitate the implementation of costly environmental protection measures. A number of recent disputes under international law illustrate the conflict between these two perspectives. Perhaps the most prominent example is the well-publicized dispute under the General Agreement on Tariffs and Trade (GATT or the Agreement)4 that resulted from the U.S. embargo against certain Mexican tuna, which was based on the U.S. Marine Mammal Protection Act (MMPA).5 In addition, future international disputes could arise under the Basel Convention,6 which prohibits the cross-border shipment of hazardous waste -- including recyclable waste -- to a nonsignatory. The United States has not yet ratified the Basel Convention, and U.S. industry has voiced its concern that legitimate U.S. trade in recyclable materials could be disrupted. A host of other proposed and recently enacted European environmental initiatives could have substantial implications for competition and trade, and are already impacting companies in a variety of ways. These initiatives include: Product and Packaging "Take-Back" Requirements7 Regulatory schemes of this sort have been adopted or are being considered in a number of European Union (EU) and European Free Trade Agreement (EFTA) member states, as well as in a few central and eastern European countries. A take-back requirement is an obligation imposed on a producer, distributor, or retailer to take back a product at the end of its useful life so that the product does not enter a waste stream. The objective of product and packaging take-back schemes typically is to implement EU waste management principles, which establish the following hierarchy of waste management techniques: prevention (source reduction); reuse, material recycling, and energy recycling; incineration; and finally -- only as a last resort -- landfilling.8 The EU Commission has proposed a packaging waste directive9 aimed at eliminating trade barriers arising from divergent national schemes and, pursuant to its "priority waste streams"10 approach, has commenced examining other products. Legislatures throughout Europe are currently drafting laws for take-back and recycling schemes covering a wide range of products, including cars, tires, chlorinated solvents, hospital waste, electronics and electrical appliances, construction waste, and waste paper. Statutes, regulations, or covenants are already in effect in Austria, Belgium, France, Germany, the Netherlands, Norway, and Sweden.11 Similar proposals are under consideration in Denmark, Italy, Spain, and the United Kingdom.12 Eco-Labelling Regulations13 The EU and various EU and EFTA member states have adopted regulatory schemes under which manufacturers of products meeting certain environmental criteria may mark [24 ELR 10111] their products with an "eco-label."14 These eco-labels are intended to influence consumers to choose products perceived as environmentally friendly. The EU recently adopted award criteria for washing machines and dish washers.15 Participating countries have established award criteria for various other products, including paints, electrical bulbs, and lawn mowers. In defining product categories and setting award criteria, however, disguised protectionism may play a role as countries endeavor to tailor their requirements toward qualifying domestic manufacturers for participation in these "green" marketing schemes. The Belgian legislature recently adopted a law that will impose on selected products and packaging a tax designed to penalize products and practices considered harmful to the environment.16 Taxed products include phytopharmaceutical products (such as pesticides), disposable razors, disposable photocameras, batteries, paper, and certain industrial and beverage packaging. The law exempts from taxation products that are considered to be environmentally friendly, such as recyclable disposables, refillable or recyclable packaging, and paper containing a certain minimum level of recycled material. This Belgian initiative may prompt individual European countries or the EU as a whole to implement similar schemes. There is enormous potential for protectionism in selecting products subject to taxation, as well as in setting rates and exemption criteria.17 Standardization18 Under its new approach to technical harmonization, the EU adopts directives setting the "essential requirements" necessary for ensuring the free movement of a particular product and then delegates to the European Standardization Organization the task of developing more detailed, technical standards.19 Increasingly, the EU has sought to apply standardization to matters involving sensitive public choices, such as the environmental performance of substances, products, and companies. The ensuing European technical standards will not necessarily accommodate foreign products and production processes, and thus may effectively exclude some products from the EU market. The problems in reconciling international trade and environmental policies are analogous to disputes that can arise between regions and levels of government within a single country. Thus, to understand EU and international standards applicable to product-related environmental protection measures, it is useful to examine the U.S. Constitution's protection against erection of trade barriers between the states, which is rooted in the Commerce Clause.20 Analysis of U.S., EU, and international law reveals that they all share the following basic principles with regard to upholding eco-barriers: nondiscrimination (or at least a ban on unjustifiable discrimination); legitimacy of the objectives; proportionality of the measures; and use of the least restrictive means to achieve the objectives. If applied correctly and in the context of international agreements on environmental protection, this framework should be sufficiently flexible to accommodate both trade and environmental interests, and strict enough to prevent protectionist and disproportionate trade barriers. In the United States, eco-barriers to interstate trade are created by environmental product standards and other environmental regulations that differ among the various states. These barriers are limited, however, by the Commerce Clause of the U.S. Constitution, which restricts the ability of states to adopt and enforce laws that burden interstate commerce. As Justice Cardozo put it, the Constitution "was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union, not division."21 Commerce Clause doctrine applies a "virtually per se rule of invalidity" to state laws that amount to "simple economic protectionism," i.e., discrimination.22 A state statute that clearly discriminates -- either in purpose or effect23 -- against interstate commerce is unconstitutional unless "demonstrably justified by a valid factor unrelated to economic protectionism."24 Thus, New Jersey could not lawfully enact a statute to bar the importation of most forms of solid or liquid waste for disposal in New Jersey's privately owned sanitary landfills.25 Factors that may justify discrimination against interstate commerce include protection of health, safety, or the environment.26 A state must prove, however, that the challenged measure furthers legitimate, local "health and safety concerns that cannot be adequately served by non-discriminatory alternatives."27 Thus, in Maine v. Taylor,28 the Supreme Court upheld a Maine law banning the importation of live baitfish from other states, because the measure was designed to protect the state's fisheries from foreign parasites, and there were no sufficient alternatives to achieve this purpose. Even nondiscriminatory state environmental measures may constitute impermissible eco-barriers if they impose incidental burdens on interstate commerce that are disproportionate to legitimate local purposes. Courts generally apply a balancing test, weighing the burden on interstate commerce against the "putative local benefits."29 For example, a federal district court employed such a test to strike down a nondiscriminatory provision of an Indiana law that required waste haulers to be certified.30 Burdens on interstate commerce have also been permitted without balancing, however, when state environmental concerns and economic loss constitute "non-comparable benefit[s] and injur[ies]."31 Thus, a state court upheld the Oregon Bottle Bill, which required that all soft drinks and beer sold in Oregon be packaged in returnable containers -- a requirement that was at least facially nondiscriminatory.32 The court reasoned that the appropriate local, non-economic interests at issue were "not divisible by the same units of measurement as [the] economic loss to [outside] industry."33 In general, however, to be enforceable, state-created eco-barriers must meet the following conditions of nondiscrimination and proportionality: (1) The law must effectively serve a legitimate, non-protectionist local objective;34 and (2) if the law has a discriminatory purpose or effect, there must be no available nondiscriminatory alternatives that are adequate to meet the objective;35 and (3) the burden imposed on interstate commerce must not be excessive in relation to the putative local benefits.36 One of the main objectives of the EU is to eliminate and prevent trade barriers between its members. Toward this end, Article 30 of the Treaty of Rome (EC Treaty)37 prohibits member states from imposing "quantitative restrictions on imports and all measures having equivalent effect."38 Article 36 exempts from the free movement of goods principle measures that can be "justified on grounds of the protection of health and life of humans, animals or plants," but only if such prohibitions or restrictions do not constitute "a means of arbitrary discrimination or a disguised restriction on trade between Member States."39 In Cassis de Don,40 a case involving a German ban on certain French fruit liquor, the Court of Justice restrictively interpreted the Article 36 exemptions and ruled that a product that is lawfully sold in one member state cannot be banned from another member state's market on consumer-protection grounds, as long as the product is adequately labelled. The Court added, however, that "in the absence of common rules relating to production and marketing, it is for the Member States to regulate … [these] matters … in their own territory."41 The trade barriers resulting from such regulations may be acceptable if they are "recognized as being necessary in order to satisfy mandatory requirements," particularly regarding protection of health and safety, and the environment.42 Thus, although EU member states cannot impose an outright ban on the importation of other member states' lawful goods, they may condition trade in such goods in order to further national policies that are in harmony with EU law. In the famous Danish Bottle Case,43 beverage importers unsuccessfully challenged a Danish law that required certain beer and soft-drink beverages to be sold only in returnable containers. Building on the Cassis de Don decision and related cases, the Court of Justice upheld the law, which required beverage manufacturers and importers to establish a deposit-and-return system for their used containers. The Court recognized that disparities between EU member states' national laws mustbe accepted insofar as such laws: (1) apply to domestic and imported products without distinction; (2) are considered necessary to satisfy mandatory requirements recognized by Union law;44 (3) are in proportion to the aim in view;45 and (4) are the least restrictive means.46 The Court ruled that Denmark could impose an across-the-board ban on nonreturnable bottles, because the measure was "an indispensable element of a system intended to ensure the reuse of containers and therefore appears necessary to attain the aims pursued by the contested rules."47 Consequently, the Court concluded that "the restrictions which [the ban] imposes on the free movement of goods cannot be regarded as disproportionate."48 At the same time, however, the Court used the proportionality requirement to strike down a provision of the law that required producers and importers to use only containers that were approved by Danish authorities. The Court noted that this rule could force beverage companies that were using non-Danish-approved containers to switch to approved containers at great expense. The Court found that if nonapproved bottles were subject to a deposit-and-return system, the environmental protection objective would still be achieved. Thus, the additional restriction requiring use of approved containers was disproportionate to the objectives pursued. A recently enacted German Packaging Ordinance49 that requires producers and distributors to take back waste packaging has come under attack, primarily from foreign producers who would theoretically have to ship waste packaging back over long distances. Relying on the Danish Bottle Case, several EU member states and private entities have complained to the EU Commission about the German law's restrictive effect.50 In particular, the complainants argue that the Ordinance's imposition of a 28 percent cap on sales of disposable bottles puts importers at a competitive disadvantage, since they will incur much higher transportation costs if they must take bottles back for refilling.51 The German packaging law, by analogy to the Danish bottle law, could be viewed as nondiscriminatory, proportionate to its objectives, and the least restrictive means of achieving its objectives. On the other hand, if the effect on cross-border trade is considered to be disproportionate to the environmental objectives, or if the legislation is not found to be the least restrictive means to achieve these objectives, all or certain provisions52 of the German law may be held to violate the EC Treaty. As of this writing, however, the Commission has not taken any action against Germany in response to these complaints. GATT,53 which has been signed by over 100 developed and third-world countries, is the principal international legal regime governing international trade, and serves as a forum for discussing and resolving trade problems. Although GATT and its liberal trade policies have been criticized as being inimical to environmental protection, the Agreement does offer a vehicle for resolving conflicts between trade and environmental interests. GATT's exceptions to the basic principles that prohibit discrimination against imported goods, excessive tariffs, and quantitative restrictions on imports and exports are directly relevant to eco-barriers. The following language of Article XX addresses the trade impact of environmental measures: Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Contracting Party of measures …: (b) necessary to protect human, animal, or plant life or health; (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.54 In the Tuna/Dolphin dispute,55 the United States relied primarily on these exceptions to justify its ban on Mexican tuna. Following precedent, the GATT Dispute Settlement Panel noted in their Panel Report that Article XX must be interpreted restrictively and that it constitutes a limited and conditional exception to the Agreement's free trade principles.56 The Panel concluded that Article XX does not cover measures "necessary to protect human, animal or plant life or health" outside the jurisdiction of the contracting party taking such measures. If Article XX were viewed differently, each contracting party could unilaterally determine the environmental and health protection policies of other contracting nations. This would create a large loophole with great potential for conflict and protectionist abuse. The Panel went on to say that if Article XX did permit extraterritorial environmental protection, the United States had nevertheless violated GATT, because the measure in question was not "necessary," and was disproportionate to its objectives.57 The Panel Report distinguishes between environmental requirements relating to a product and environmental requirements relating to the process by which the product is manufactured -- i.e., the production method. Pursuant to the Panel's ruling, a state may not ban from its market imports of a product that meet other applicable standards simply because the production method does not comply with domestic requirements. The U.S. Department of Commerce's General Counsel's office has expressed concern regarding the consequences of the Panel Report, arguing that its adoption might affect the U.S. ability to enforce other domestic legislation in an effort to protect resources beyond its jurisdiction.58 The GATT Council has deferred consideration of the Panel Report at the joint request of Mexico and the United States, pending these countries' efforts to resolve the dispute bilaterally.59 A recent study by the GATT Secretariat confirmed the Panel's decision, stating that "[i]n principle, it is not possible under GATT's rules to make access to one's own market dependent on the domestic environmental policies or practices of the exporting country."60 On the other hand, the study confirms a country's freedom to protect its own environment against damage from either domestic production of goods, or the domestic consumption of domestically produced or imported products.61 If not regarded as merely minimum environmental protection requirements, international agreements may also serve to resolve the differences of opinion that have arisen with respect to the issue of whether environmental measures that pose eco-barriers are proportional to the purposes they seek to accomplish.62 Various commentators have argued that the proportionality principle should be applied to the level of environmental protection sought.63 If so, a national law giving environmental protection absolute priority to the detriment of free trade would likely fail the test. Yet courts have generally declined to assess the reasonableness of the environmental protection objective sought by legislation giving rise to trade barriers.64 In the Danish Bottle Case, advocate general Sir Gordon Slynn suggested employing a balancing test to determine whether environmental protection objectives are acceptable, stating: There has to be a balancing of interests between the free movement of goods and environmental protection, even if in achieving the balance the high standard of protection sought has to be reduced. The level of protection sought must be a reasonable level.65 If international agreements were to establish reasonable levels of environmental protection, then national laws imposing more stringent measures could not be enforced in a manner that would impede international trade. At the same time, stronger national laws would continue to be enforceable to the extent that they do not -- or only minimally -- affect international trade. Differences between nations' environmental regulation and liability regimes can significantly affect international competitiveness. Complying with environmental laws often requires substantial investment. Liability regimes, such as the U.S. Superfund legislation,66 may impose higher production costs. As a result, domestic producers in countries with stringent environmental laws have to compete with imported goods carrying lower production costs. Such domestic producers have an economic interest in establishing a level playing field through harmonization of environmental standards, or if that is unattainable, in seeking import tariffs or nontariff trade barriers to compensate for differences in environmental compliance costs. Environmental and competitiveness concerns have spawned a variety of proposals. For example, a bill was introduced in the U.S. Senate in 1991, proposing a tariff that would, in theory, impose on foreign producers the same costs they would incur if they were required to adhere to U.S. environmental standards.67 Moreover, the European Parliament adopted a resolutionin January 1993, calling for a "strengthening of GATT articles and practices" on environmental matters, including "clarification that in GATT rules environmental dumping is prohibited" and that parties to GATT may "use non-tariff trade barriers to protect the environment … provided that they are not used as a pretext for protectionism."68 The European Parliament's Committee on External Economic Relations has also suggested amending several articles of GATT, for example by permitting "externalized" environmental costs to be considered an "inadmissible subsidy" for purposes of antidumping and countervailing duty proceedings;69 excepting export and import prohibitions designed to protect the environment from the general provision on the [24 ELR 10115] elimination of quantitative restrictions;70 and amending Article XX's general exceptions to expressly include measures "necessary to protect … habitats and the environment in general."71 The implications of these and similar proposals for international trade, competitiveness, and environmental protection are enormous. As such, the wisdom of such measures continues to be hotly debated worldwide. Rejecting such proposals, the GATT Secretariat observes that "firms which find their market shares and profits under competitive pressure are prone to label as unfair any source of cost advantage enjoyed by their foreign rivals."72 The Secretariat points out that the existence of less strict environmental standards in a lower income country is not a sufficient basis for claiming that the environmental standards are "too low," and argues that "in principle there is no difference between the competitiveness implications relating to different environmental standards and the competitiveness consequences of many other policy differences between countries -- tax, immigration and education for instance."73 National or international environmental protection measures could well produce a trade war, and might fail to advance their originators' objectives, if such measures prove to be too economically restrictive. Indeed, promoting free trade, rather than erecting eco-barriers, may better facilitate and improve environmental protection -- for example, through generating funds that could be used to purchase cleaner technology. At a minimum, therefore, the focus should be on concluding adequate international environmental agreements and not on fostering national or regional protectionism. Environmental regulation promises to have an ever greater impact on international trade and on day-to-day competition and marketing issues in Europe and elsewhere around the globe. Thus, the interrelationship between environmental protection and international trade policies will continue to pose dilemmas with no easy solutions. Allowing progress on international cooperation to stall, however, would be counterproductive from the standpoints of both free trade and environmental protection advocates. Thus, advancing both important -- though occasionally conflicting -- goals will require flexibility and creativity on the part of all involved. 1. Not all international effects of such laws and regulations constitute the extraterritorial exercise of jurisdiction. For instance, a ban on the import and export of certain products (e.g., chemicals) has extraterritorial effects but is in essence an exercise of domestic jurisdiction. Nonetheless, a state's power to impose such a ban may be restricted by international agreements, such as the General Agreement on Tariffs and Trade (GATT). Implications of GATT's trade barrier restrictions are discussed infra. 2. See, e.g., John J. Kim & James P. Cargas, The Environmental Side Agreement to the North American Free Trade Agreement: Background and Analysis, 23 ELR 10720 (Dec. 1993). 3. See Kyle E. McSlarrow, International Trade and the Environment: Building a Framework for Conflict Resolution, 21 ELR 10589, 10591 (Oct. 1991). 4. See GATT, opened for signature Oct. 30, 1947, 61 Stat. A3, 55 U.N.T.S. 187. 5. 16 U.S.C. §§ 2361-1421h, ELR STAT. MMPA §§ 2-309. This Act requires U.S. fishermen to use certain fishing techniques to reduce the taking of dolphins (marine mammals) incidental to tuna fish harvesting. The MMPA also requires the U.S. government to ban the importation of tuna caught in a manner that results in the incidental killing of marine mammals in numbers that exceed U.S. standards. Thus, the Act subjects imported tuna to U.S. environmental protection standards governing fishing techniques. The dispute precipitated by the embargo resulted in a GATT-issued report adverse to the United States. See GATT, UNITED STATES -- RESTRICTIONS ON IMPORTS OF TUNA (adopted Sept. 3, 1991) (Panel report No. DS21/R) [hereinafter PANEL REPORT]. The Tuna/Dolphin dispute is discussed more fully infra. 6. Basel Convention on the Control of the Transboundary Movements of Hazardous Wastes and Their Disposal, opened for signature Mar. 22, 1989, 28 I.L.M. 657 (entered into force May 21, 1992). Under the Basel Convention, no hazardous waste may be exported from a party to the Convention to a nonparty, unless the shipment is in accordance with a bilateral or multilateral agreement under the Basel Convention. 7. For an analysis of European packaging take-back laws, see Turner T. Smith Jr. & Lucas Bergkamp, Packaging Waste Developments in Europe, 14 Int'l Envtl. Rep. (BNA) 522 (Sept. 25, 1991); Smith, Testimony Before House of Lords on Proposed EC Packaging Waste Directive (May 1993); Bergkamp, Multinational Food Companies and the European Packaging Waste Revolution: Green Is Beautiful?, 1 WORLD FOOD REG. REV. 5/17, 6/18 (Oct./Nov. 1991); and Bergkamp, Food Packaging Waste Developments in Europe: An Update, 1 WORLD FOOD REG. REV. 9/8, 10/18 (Feb./Mar. 1992). The theories and policies that have been developed with respect to packaging will inform the debate on take-back and recycling laws concerning a broad range of other products. 8. A Community Strategy for Waste Management, EC Bull. 9-1989, 1.1.8. 9. Amended Proposal for a Council Directive on Packaging and Packaging Waste, 1993 O.J. (C 285/1). 10. The EU has identified a number of waste streams -- such as packaging, tires, electronics, and cars -- that it wants to subject to a specific regulatory scheme to assure optimal environmental impact reduction through reuse and recycling, for example. 11. See supra note 7. 12. See id. 13. For a discussion of the market risks associated with eco-labelling schemes, see Ray V. Hartwell and Lucas Bergkamp, Eco-Labelling in Europe: New Market-Related Environmental Risks?, 15 Int'l Envtl. Rep. (BNA) 623 (Sept. 23, 1992). 14. In addition to the EU "European flower," various national labels are available, including the German "Blue Angel," the French "Green Leaf," the Dutch "Environmental Stamp," and the Nordic "White Swan." 15. See Commission Decisions 93/430 and 93/431 Establishing the Ecological Criteria for the Award of the Community Eco-Label to Washing Machines and Dish Washers, 1993 O.J. (L 198). Award criteria include: key criteria (energy, water, and detergent consumption); best practice criteria (user instructions and recycling encouragement); and performance criteria (wash performance and rinse efficiency). 16. Ecotaxes, Moniteur Belge 17013 (Aug. 7, 1993). 17. For example, under the Belgian law, PVC beverage packaging is subject to an eco-tax and does not qualify for an exemption. At the time the law was being drafted, virtually all French mineral water producers were using PVC bottles, while all Belgian water bottlers had switched to other plastics. 18. For an analysis of the EU's new approach to standardization and the competitiveness risk it poses, see Roszell D. Hunter, Standardization and the Environment, 16 Int'l Envtl. Rep. (BNA) 185 (Mar. 10 1993). 19. Council Resolution on a New Approach to Technical Harmonization and Standards, 1985 O.J. (C 136). 20. U.S. CONST. art. I, § 8, cl. 3. 21. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 523 (1935). 22. Philadelphia v. New Jersey, 437 U.S. 617, 624, 8 ELR 20540, 20542 (1978). The threshold question is whether the law "is basically a protectionist measure, or whether it can fairly be viewed as a law directed to legitimate local concerns, with effects upon interstate commerce that are only incidental." Id. 23. See Chemical Waste Management, Inc. v. Hunt, 112 S. Ct. 2009, 2015 n.6, 22 ELR 20909, 20911 n.6 (1992). 24. Fort Gratiot Sanitary Landfill v. Michigan Dep't of Natural Resources, 112 S. Ct. 2019, 2024, 22 ELR 20904, 20905 (1992), quoting New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 274 (1988). 25. Philadelphia v. New Jersey, 437 U.S. 617, 624, 8 ELR 20540, 20542 (1978). If a state is unable to "identif[y] any reason, apart from its origin, why solid waste coming from outside the [state] should be treated any differently from solid waste within the [state]," discriminatory restrictions on waste importation are impermissible. Fort Gratiot Sanitary Landfill v. Michigan Dep't of Natural Resources, 112 S. Ct. 2019, 2024, 22 ELR 20904, 20906 (1992). See also Chemical Waste Management, Inc. v. Hunt, 112 S. Ct. 2009, 2015, 22 ELR 20909, 20911 (1992) (applying same reasoning to hazardous waste). 26. See Chemical Waste Management, 112 S. Ct. 2009, 2016, 22 ELR 20909, 20912 (1992). 27. Fort Gratiot Sanitary Landfill, 112 S. Ct. 2019, 2027, 22 ELR 20904, 20907 (1992). 28. 477 U.S. 131 (1986). 29. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). See also Philadelphia v. New Jersey, 437 U.S. 617, 624, 8 ELR 20540, 20542 (1978); Chemical Waste Management, 112 S. Ct. 2009, 2014 n.5, 22 ELR 20909, 20911 n.5 (1992). 30. Government Suppliers Consolidating Servs. v. Bayh, 753 F. Supp. 739, 21 ELR 20584 (S.D. Ind. 1990). 31. American Can Co. v. Oregon Liquor Control Comm'n, 517 P.2d 691, 697, 4 ELR 20218, 20220 (Or. 1973). 32. See id. 33. Id. Professor Laurence Tribe points out that in this situation "the process of weighing burdens against benefits seems inescapably political," as opposed to legal. LAURENCE H. TRIBE, AMERICAN CONSTITUTIONAL LAW 415 (2d ed. 1988). 34. See, e.g., J. Filiberto Sanitation Inc. v. New Jersey Dep't Envtl. Protection, 857 F.2d 913, 18 ELR 21303 (3d Cir. 1988) (regulation requiring deposition of waste at a specified transfer station); see also supra notes 27-29 and accompanying text. 35. See supra note 27 and accompanying text. 36. See supra notes 29-30 and accompanying text. 37. Treaty Establishing the European Economic Community, Mar. 25, 1957, 298 U.N.T.S. 11. The European Community, which was commonly referred to as the EC, is now known as the European Union (EU). 38. Id. art. 30. 39. Id. art. 36. 40. Case 120/78, 1979 E.C.R. 649. 41. Id. at 662. 42. Id. 43. Commission v. Denmark, Case 302/86, 1988 E.C.R. 4607. 44. According to the Court, protection of the environment is such a requirement, since it constitutes one of the EU's essential objectives. 45. This prong of the Court's test is known as the "proportionality requirement." See Turner T. Smith Jr. & Roszell D. Hunter, The European Community Environmental Legal System, in EUROPEAN COMMUNITY DESKBOOK 3, 13 (Envtl. L. Inst. ed., 1992). 46. Denmark, Case 302/86, 1988 E.C.R. 4607, 4629-4630, citing Procureur de la Republique v. Association de Defense des Bruleurs De Huiles Usagees, Case 240/83, 1985 E.C.R. 531. 47. Id. at 4630. 48. Id. 49. See Ordinance on the Avoidance of Packaging Waste (Verpackungsverordnung), BGB1.IIF.1234 (June 12, 1991). This ordinance is currently being revised. 50. The EU Commission is charged with "supervising member state implementation and application of Community law" under Article 155 of the EC Treaty. Smith & Hunter, supra note 45, at 4. 51. Some have suggested that Germany secretly intended to discriminate against foreign beer bottlers in order to protect domestic beer producers. 52. For example, the provision that exempts soft-drink and beer containers from the deposit scheme as long as no more than 28 percent of such containers is disposable may be regarded as improper if it is established that recycling disposable bottles is as environmentally beneficial as reusing returnable bottles. 53. See GATT, supra note 4. 54. Id. art. XX, 61 Stat. at A61, 55 U.N.T.S. at 262. 55. See supra notes 4-5 and accompanying text; see also Robert F. Housman & Durwood J. Zaelke, The Collision of the Environment and Trade: The GATT Tuna/Dolphin Decision, 22 ELR 10268 (Apr. 1992). 56. See PANEL REPORT, supra note 5, at 45-47. 57. Id. at 46. 58. See Steve Charnovitz, Trade Negotiations and the Environment, 15 Int'l Envtl. Rep. (BNA) 144 (Mar. 11, 1992). 59. Those who are cynical about the use of environmental objectives as a veil for protectionist trade barriers will find support for their views in a 1992 report by the European Parliament. See Spencer, Report of the Committee on External Economic Relations on Environment and Trade (Nov. 3, 1992) [hereinafter SPENCER'S REPORT]. The report notes that among the most vigorous promoters of the welfare of dolphins were U.S. textile lobbies opposed to both the North American Free Trade Agreement and the Uruguay round of GATT. As for the intervention of the European Community in the Tuna/Dolphin case, the report states: The commission only began to show an interest in the animal welfare aspects of the case when it seemed that the impending Moratorium might lead to the emergence on the European tuna market of the one million tons of canned tuna currently lodged in Mexican warehouses. Community fishermen rapidly declared their distaste for purse seine netting on dolphins. Id. at 10; see also Trade Must Not Take Precedence Over Environment, Eur. Env't, no. 404 (Feb. 16, 1993). 60. GATT Secretariat, Trade and the Environment, in INT'L TRADE 1990-1991, 23 (1992) [hereinafter GATT SECRETARIAT]. 61. Id. at 27. 62. See supra note 45 and accompanying text. 63. See, e.g., Commission v. Denmark, Case 302/86, 1988 E.C.R. 4607, 4619 (opinion of advocate general Sir Gordon Slynn). 64. Cf. note 33, supra. 65. Denmark, Case 302/86, 1988 E.C.R. 4607, 4626. 66. Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA §§ 101-405. 67. See S. 984, 102d Cong., 1st Sess. (1991). The bill, entitled "International Pollution Deterrence Act," was introduced by Sen. David Boren (D-Okla.). 68. European Parliament Resolution A3-0329/92 on Environment and Trade, 1993 O.J. (C 42), 250. 69. SPENCER'S REPORT supra note 58, at 24; see also GATT, supra note 4, art. VI. An amendment such as this would provide a powerful protectionist device against imports from former East Block and lesser developed countries where production costs are lower. 70. SPENCER'S REPORT, supra note 58, at 24; see also GATT, supra note 4, art. XI. 71. SPENCER'S REPORT, supra note 58, at 25. 72. GATT SECRETARIAT, supra note 59, at 28. 73. Id. at 29. Such direct comparisons between different policies are much more complex than the argument implies. 24 ELR 10109 | Environmental Law Reporter | copyright © 1994 | All rights reserved |