33 ELR 10522 | Environmental Law Reporter | copyright © 2003 | All rights reserved

Environmental Labeling and Certification Schemes: A Modern Way to Green the World or GATT/WTO-Illegal Trade Barrier?

Matthias Vogt studied law at the University of Trier, Germany, from October 1997, until February 2002. Between February 2000, and September 2001, he worked for the Institute for Environmental and Technical Law at the University of Trier. Between October 2001, and September 2002, he studied law at the University of East Anglia, Norwich, England, and finished with an L.L.M. degree in European and International Commercial and Business Law. From August until October 2002, he worked for Baker & McKenzie in Frankfurt, Germany. Since November 2002, he has been an assistant at the Institute for German and European Administrative Law for Prof. Eberhard Schmidt-Assman, University of Heidelberg.

[33 ELR 10522]

The debate between free traders and environmentalists has increasingly been drawing global attention throughout the last decade. It centers, generally speaking, around the question of how best to resolve the often conflicting goals of international trade liberalization on the one hand, and an increasing need for global environmental protection on the other. Measures to protect the environment often affect trade between different states, while at the same time trade measures might affect environmental conditions. For example, a country may use trade-restrictive measures, such as tariffs, quotas, or taxes, to protect its own natural resources and environment. It may even go further and use similar measures to protect the global commons or strengthen another state's less efficient environmental controls. The growing recognition of the need to link international trade and environmental issues on a global scale is evidenced by the fact that, for the first time in the history of the General Agreement on Tariffs and Trade (GATT), Uruguay Round participants agreed to include sustainable environmental development as one of the objectives when establishing the World Trade Organization (WTO) in 1994.¹

The political awakening and increasing public concern over the state of our environment has led to a growing number of legal instruments on both national and international levels designed to limit the harm to the environment from human activity. Traditional measures concentrated mainly on end-of-pipe solutions, i.e., they tried to set emission standards and to reduce the amount of pollutants emanating from particular production plants. Many measures adopted in recent years have sought to take a holistic approach and to identify and arrest environmental problems before they actually occur. States started exploring various possibilities of creating economic incentives for specific industries to produce more environmentally friendly products rather than imposing the will of the state on manufacturers. Germany was the first country in the world to put forward the concept of eco-labels in its national environmental plan of 1971.² The so-called Blue Angel program, named after the label showing a blue angel spreading its wings, was finally launched in 1978 and has served as a model for all other efforts of similar character of other countries.³ Since then, eco-labeling programs, i.e., the idea of applying labels to products to inform consumers of their environmentally friendly or damaging character, has become increasingly popular. Their main objective can be described as being "to harness market forces and channel them towards promoting more environmentally friendly patterns of production."⁴ An easily recognizable label informs consumers that a credible board of experts has certified and assessed a certain product's characteristics. By helping the consumer to make an informed purchasing decision and mobilizing the so-called green consumer, manufacturers should be encouraged to change their entire product development process into a more environmentally friendly direction.

A decade after Germany launched its Blue Angel program, similar schemes began cropping up in other European countries, and on March 23, 1992, the Council of Ministers of the European Community (EC) formally adopted Regulation No. 880/92,⁵ which launched a simple and more effective unitary environmental evaluation tool for producers and consumers throughout Europe.

It has been accepted by the WTO Committee on Trade and Environment that well-designed programs for eco-labeling can be effective environmental policy instruments [33 ELR 10523] that may be used to foster environmental awareness amongst consumers. However, the committee noted that these schemes raise significant concerns about their possible trade effects.⁶ Although it seems to be clear that eco-labeling schemes as market incentives are less trade-restrictive measures than bans or outright production regulations, their legal status in relation to free trade remains uncertain.⁷ Much of the "free trade-environmental protection" debate concerning eco-labels has centered around the question whether one country can unilaterally determine the production and process methods (PPMs) that industries in other countries must use in order to obtain the eco-labels for their products. It may be argued that even if labeling schemes de jure do not limit the market access, they may function as de facto trade barriers, inconsistent with the GATT/WTO regime.⁸ On the other hand, some authors believe that eco-labeling, being profit-driven and market-generated as opposed to being required by "command-and-control" laws, has very little impact on the world trading system and, thus, presents an ideal international approach to environmental problems.⁹

This Article, in a first step, will describe the different types of eco-labeling schemes that can be found around the world at present time. It will concentrate on voluntary, multi-criteria schemes with a "cradle-to-grave" approach, as these seem to be the most efficient and innovative of all environmental certification schemes.¹⁰ A special emphasis will be put on the European Union's (EU's) eco-labeling program, as this is the most recent and at the same time most controversial of all existing eco-labeling initiatives, in part because of its wide geographic scope.¹¹ In a second step, the trade implications of these labeling schemes will be discussed in order to evaluate whether they would pass muster under both the GATT 1947 and the Agreement on Technical Barriers to Trade (TBT),¹² taking into account several WTO/GATT panel and WTO Appellate Body reports, as well as experiences of recent attempts to implement such regimes. The Article concludes with the most important observations and suggestions in an attempt to clarify the ongoing debate.

Description of Existing Labeling Schemes

There are a number of different labeling schemes extant in the global marketplace. However, all these schemes fall within one of two broad categories. They can be either mandatory—required for a certain type of product by the laws of a state—or they can be voluntary. A further subdivision is possible depending on the type of information that a certain label gives to a consumer. Thus, every existing eco-label can be classified according to one of four basic types:

(1) mandatory, "negative content" labeling;

(2) mandatory, "content neutral" labeling;

(3) voluntary, "single issue" labeling, or;

(4) voluntary, "multi-criteria" labeling.¹³

Mandatory, "Negative Content" Labeling Schemes

The first type of environmental labeling program comprises all government-mandated regimes, which legally require the labeling of certain products to reflect an attribute of these products, be it an attribute associated with their production, use, or disposal. Examples include rules requiring that products be labeled with respect to their contents, emissions, and chemical characteristics. The primary purpose of such programs is to warn consumers of the adverse health or environmental effects of a particular type of product. In addition, as a form of compulsory negative advertising, it may encourage producers to switch their production to more environmentally friendly product ingredients or processes through the consequent shift of consumption patterns.¹⁴

An important example for a mandatory, negative content labeling scheme can be seen in the laws of many countries requiring the labeling of any product that contains or was manufactured with certain chemical substances known to deplete the stratospheric ozone layer.¹⁵ In many cases, states have enacted such "ozone depletion warning" labeling laws to enforce their obligations under the Montreal Protocol concerning substances that deplete the ozone layer,¹⁶ which is widely regarded as one of the most innovative and effective international environmental agreements.¹⁷

Mandatory, "Content Neutral" Labeling Schemes

Where this type of labeling program is in force, certain products must be labeled in order to inform potential customers about features that the government has determined to be of importance. The information may or may not reveal negative facts concerning the product and could, for example, require the products to bear a label indicating the product's estimated respective energy efficiency ratings.¹⁸ The purpose of this type of labeling requirement is to provide to the customer reliable product information that might not otherwise be disclosed in order to allow an informed purchasing decision, while at the same time encourage manufacturers to improve their products so as to achieve higher environmental standards.

[33 ELR 10524]

Voluntary, Single Issue Labels and Certification Schemes

These labeling programs convey positive environmental information about one attribute of a product, e.g., that it is "biodegradable," "recyclable," or "ozone-friendly," but do not provide an overall view of a product's environmental characteristics. Single issue labels are often utilized by manufacturers who perceive them as offering a marketing advantage. From a consumer viewpoint, single attribute labels can permit consumers to identify products with a particular environmental trait that they deem important. The popularity of competing products with single issue labels may thus compel other producers to redesign their products with respect to a key environmental quality demanded by consumers. The result is that single issue labels can produce a certain degree of pressure on manufacturers to address specific environmental issues.

On the other hand, they also have major shortcomings. There is the potential for these labels to be abused by manufacturers and to confuse the consumer. Surveys demonstrated that the proliferation of manufacturer-sponsored labeling schemes has caused widespread consumer confusion and that a high percentage of consumers are very skeptical of such a private sector labeling system.¹⁹

The possibility of abuse and confusion has led to the advent of international certification schemes. These schemes rely on third parties to validate that specific single issue claims are in accordance with agreed criteria. An example is provided by the ongoing effort of the Forest Stewardship Council to implement its certification scheme for sustainably harvested timber.²⁰

Voluntary, Multi-Criteria Labeling Schemes

The award of an eco-label based on a so-called cradle-to-grave life-cycle analysis entails an examination of the environmental implications associated with all phases of a product's life, starting with its production and distribution and ending with its consumption and disposal. Theoretically, a life-cycle analysis provides a thorough study of the environmental ramifications associated with a decision to purchase a particular product. However, as consumers cannot derive any details of such analyses from the labels as such, the real value of a life-cycle label lies in the consumer's confidence that its award reflects a careful assessment of the appropriate environmental criteria.²¹

There are a number of different approaches toward multi-criteria eco-labeling. Generally speaking, however, it can be said that most life-cycle programs profess to use some kind of cradle-to-grave assessment, which, despite some variations in detail, always follows the same general process. The first step of a labeling procedure will be the selection of product categories to be certified.²² In the case of the EU labeling scheme, these different product groups are established in a formalized governmental procedure. The product categories, once defined by the EC Commission either on its own initiative or at the request of a Member state's competent body, define the conditions for awarding the eco-label.²³ It is important to note that this process includes the consultation of environmental, industry, and consumer groups within the EC,²⁴ but does not address the consultation of interest groups from non-Member states, for example, the industry from a particular developing country. The implications of these provisions will be discussed below.

The second step in a voluntary, multi-criteria labeling process will be some form of product life-cycle analysis with varying degrees of vigor, followed by the setting of criteria that manufacturers must meet in order to receive the seal of approval. In the EU labeling program, the EC Commission assigns a "lead country" to perform a life-cycle assessment and set appropriate criteria. This country's competent body is to evaluate the significant impacts of a certain product in at least seven areas: waste relevance; soil pollution; water contamination; air contamination; noise; energy consumption; and effects on the ecosystem. This evaluation must cover each stage of a product's life cycle, including pre-production, production itself, distribution, utilization, and disposal. The competent body then forwards its draft proposals to the EC Commission to review. Once again, the commission receives advice from interested groups within the EU and decides whether to accept or reject the draft criteria.²⁵

Once the product groups and their ecological criteria have been established, the final step is to test the products for which manufacturers have submitted applications and to award the seals of approval. In the case of the EU's scheme, the decision whether the specific requirements for the ecolabel have been fulfilled is to be made by the competent national body.²⁶

For a legal analysis it is important to note two key characteristics of this procedure for awarding the EU label. First, the EC Commission acts as a coordinating body for the ecolabel award. The final permission to use the label is granted by the Member states' competent bodies, which need not necessarily be governmental institutions, but may also be appointed private institutions. Second, any participation of product manufacturers or importers is entirely voluntary, which means that the EU regulation does not raise any de jure questions of market participation.

Legal Analysis of the Compatibility of Eco-Labeling Schemes With the WTO/GATT System

Having described the various kinds of eco-labeling programs, this Article will now address the question of these schemes' compatibility with the WTO/GATT legal system. On the one hand, the question of applicability and impact of substantive provisions of the TBT Agreement²⁷ will have to be discussed in some detail. On the other hand, GATT 1947,²⁸ with its more general requirements, also provides a [33 ELR 10525] number of legal criteria to determine whether eco-labeling programs violate world trade rules.

Whether an environmental labeling program constitutes an illegal trade-barrier, in violation of GATT general provisions or the TBT Agreement in particular, hinges on two factors: whether the scheme is voluntary or mandatory, and whether it governs a product characteristic or a nonproduct-related PPM.²⁹ Thus, the following legal discussion will adopt this systematization as far as possible and necessary.

Eco-Labeling Schemes and the TBT Agreement

Before discussing the substantive obligations that might arise from the TBT Agreement, it must be clarified whether this agreement is applicable to the different types of eco-labeling programs in the first place. This question has caused great debate among WTO Member states and interested parties. For example, environmental nongovernmental organizations vociferously argue that the WTO should not review eco-label programs, while many industries argue just the opposite.³⁰

Mandatory, Product-Related Eco-Labeling

Applicability of the TBT

The TBT Agreement covers two different types of possible technical barriers to trade: technical regulations and standards. A technical regulation is defined as "a document which lays down product characteristics or their related process and production methods, including the applicable administrative provisions, with which compliance is mandatory."³¹ A standard, on the other hand, means a "document approved by a recognised body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related process and production methods, with which compliance is not mandatory."³² In addition, both definitions explicitly include "labelling requirements as they apply to a product, process or production method."³³ It follows from these definitions that eco-labeling programs that are based on chemical, physical, or other characteristics of a product for which compliance is mandatory are subject to the TBT Agreement's substantive requirements for technical regulations outlined in Article 2.³⁴

Substantive Requirements of the TBT for Technical Regulations

[] TBT Article 2.1: Most-Favored Nation (MFN) and National Treatment. In order to comply with the TBT's substantive requirements, a mandatory, non-PPM-based eco-label must first satisfy the MFN and national treatment provisions specified in Article 2.1, which essentially reiterates the GATT's MFN and national treatment obligations.³⁵ That means that technical regulations cannot be used to favor domestic over foreign-like products (national treatment) or certain foreign-like products over other foreign-like products (MFN). Two points concerning Article 2.1 warrant discussion. The first question concerns what constitutes a "like product." The second question asks what constitutes "treatment no less favorable."

(1) The Question of "Like Products"

The concept of like products is used many times throughout the legal framework of GATT/WTO, but is nowhere defined. Several WTO panel reports have examined what constitutes a like product. Although these panels were mostly concerned with GATT 1947 Article III, which establishes the general national treatment principle that foreign products shall be accorded treatment no less favorable than that accorded to like national products, their reports help to elucidate the meaning of TBT Article 2.1.³⁶ Article XVI:1 of the Agreement Establishing the World Trade Organization states that unless otherwise provided, the WTO shall be guided by the decisions, procedures, and customary practices followed by the GATT. Therefore, the interpretative practices of the GATT are used to determine the scope of the TBT Agreement's clauses.³⁷ This is particularly important for interpreting the MFN and national treatment principles under Article 2.1 of the TBT Agreement.³⁸

It has been held in a number of cases that in determining what is a like product, no one approach will be appropriate for all cases.³⁹ Rather, an assessment utilizing "an unavoidable element of individual, discretionary judgement"⁴⁰ has to be made on a case-by-case basis. The GATT Working Party report Border Tax Adjustments⁴¹ outlined an approach for analyzing "likeness" that has been followed and further developed by several panels and the Appellate Body.⁴² This approach has, in the main, consisted of employing four general criteria in analyzing "likeness": (1) the properties, nature, and quality of the products; (2) the end-uses of the products; (3) consumers' tastes and habits—more comprehensively termed consumers' perceptions and behavior—in respect of the products; and (4) the tariff classification of the products. The most recent case, in which the likeness of products constituted one of the major issues, is the so-called Asbestos case.⁴³ In this case, the EC tried to ban the use, production, and import of asbestos materials that were known [33 ELR 10526] for their potentially health-damaging characteristics. The EC argued that because of their carcinogenic nature, asbestos fibers could not be considered to be "like" other substitute fibers that did not have the same chemical constitution.⁴⁴ However, after reviewing the first of the above criteria, "properties, nature, and quality of the products," the panel concluded that asbestos fibers are like other cellulose and glass fibers. In reaching this conclusion, the panel found that it was not decisive that the products "do not have the same structure or chemical composition," nor that asbestos is "unique." Instead, the panel focused on "market access" and whether the products have the "same applications" and can "replace" each other for some industrial uses.⁴⁵ The panel also declined to introduce a criterion on the risk of a product. Adopting such a purely economic approach, one might wonder whether a state could legitimately impose a duty to label certain products merely because of their environmentally harmful chemical composition. For example, it seems questionable whether a certain product containing chlorofluorocarbons (CFCs) or hydrochlorofluorocarbons (HCFCs) is really unlike other products not containing such substances, as long as they share the same applications and can replace each other for some industrial uses.

However, the Appellate Body in Asbestos made it clear that the panel had erred in its definition of what constitutes like products. The Appellate Body stated that it did not share the panel's conviction that when two products can be used for the same end-use, their properties are then equivalent, if not identical. It recognized the fact that products with quite different physical properties may, in some situations, be capable of performing similar or identical end-uses. Although the end-uses are "equivalent," the physical properties of the products remain different.⁴⁶ The Appellate Body concluded, therefore, that when evaluating the criterion of physical property, evidence relating to the health risks associated with a product may be pertinent in an examination of "likeness" under Article III:4 of the GATT 1947.⁴⁷ There is no reason why the same should not be true for environmental risks posed by a product.

Thus, there may well be legitimate grounds for a state to require the labeling of some products according to their environmentally damaging characteristics, while at the same time not requiring such labels for similar products lacking these characteristics. However, the line that has to be drawn to determine the likeness of products is not always clear. There will be many instances where likeness is a straightforward issue based on traits such as physical characteristics, end-uses, and tariff classifications. For example, the ozone depletion warning laws mentioned above would probably pass muster under TBT Article 2.1, as the product categories that are treated differently, i.e., articles containing CFCs or HCFCs and their substitutes not containing these substances, will not be considered to be like products. On the other hand, where the mandatory labeling requirement is not based on such clear traits of a product, likeness is becoming ever more a function of whether domestic measures are applied so as to afford protection to domestic production.⁴⁸

An example of such an ambiguous labeling law might be Austria's experience with its proposed labeling program for tropical timber. In 1992, the Austrian Parliament proposed legislation with the aim of stopping all imports of tropical timber and tropical timber products from areas that were not sustainably managed. The law required tropical timber and timber products being placed on the market to be labeled with a quality mark.⁴⁹ In order to carry that mark, the applicant had to prove that the tropical timber and the tropical timber products were harvested exclusively from sustainably managed forests.⁵⁰ First, it was clear that the proposed law fell within the TBT because it imposed a technical regulation concerning a product's characteristics.⁵¹ Second, commentators on the Austrian law share the view that timber and timber products from tropical regions are not only similar to, but like timber and timber products from temperate forest regions.⁵² For example, temperate softwood and tropical hardwood logs compete in the plywood, construction, and furniture industries and, thus, have the same end-use.⁵³ Furthermore, unlike ozone depletion warning laws, the labeling requirement was not based on chemical or physical traits of the product, but merely on the product's tropical origin.

In such cases, the question will be whether imported products from one country received treatment no less favorable than that accorded to domestic products or products from any other country, an issue taken up in the following section.

(2) "Treatment No Less Favorable"

Once it has been established that the products under scrutiny are like products, TBT Article 2.1 requires that products from a certain country are treated no less favorably than those from any other Member state. In addition, the national treatment provision asks for a treatment no less favorable than the one accorded to like products of national origin. Thus, in order to comply with TBT Article 2.1, a mandatory, product-related labeling scheme must differentiate between products without discriminating against imported like products, and must be applied in a nondiscriminatory fashion as applied to domestic and imported goods.⁵⁴

Coming back to our example from above, it seems more than likely that the proposed Austrian timber certification scheme would have violated both the MFN and the national treatment provisions of TBT Article 2.1. As noted earlier, nontropical timber products and tropical timber products would be considered like products. The Austrian law, however, only required labeling of tropical timber and its products, and not of like products imported from temperate forest [33 ELR 10527] countries. It failed to encompass all timber products from tropical, temperate, and boreal forests within its mandatory scheme. Therefore, the law would have granted products from tropical countries a treatment less favorable than those from other countries and, thus, would have been contrary to the MFN principle. In addition, the proposed law violated the national treatment provision laid down in Article 2.1 because it did not require the labeling of timber products from Austria's own forest sector. The key to a TBT-legal mandatory labeling program would probably have been a scheme that distinguished between timber products merely on the ground of whether they originated from sustainably managed forests or not. By failing to encompass all forest products within its mandatory scheme, Austria would have facially violated the TBT's commands concerning non-discrimination.

[] TBT Article 2.2: Unnecessary Obstacle to Trade. Provided that a mandatory, product-related labeling scheme complies with MFN and national treatment, Article 2.2 further requires Members to ensure that their technical regulations are "not prepared, adopted or applied with a view to or the effect of creating unnecessary obstacles to international trade."⁵⁵ This means that a technical regulation "shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create."⁵⁶ Since the protection of the environment is expressly recognized in Article 2 as a legitimate objective, the only remaining problem with mandatory labeling schemes is whether they satisfy the least trade-restrictive test. Under this test, a Member challenging the mandatory labeling scheme as being more trade-restrictive than necessary must show that there is another measure that is significantly less trade-restrictive and reasonably available to fulfill the objectives of the government.⁵⁷ On the one hand, it can surely be said that any labeling requirement, as being market-driven, will always be less trade-restrictive than command-and-control regulations and, thus, is likely to satisfy the test.⁵⁸ On the other hand, however, one might argue that compared to a mandatory labeling scheme, a voluntary program would always be less restrictive to trade. Therefore, a government that introduces a mandatory labeling program will always have to show that the legitimate objective addressed is so serious that voluntary programs would not suffice to correct the problem.

In this context, the Montreal Protocol⁵⁹ must be seen as an international standard that shows the seriousness of the threat posed by substances like CFCs and HCFCs. The 100-plus signatories to the Montreal Protocol are proof of the worldwide acceptance of these dangers.⁶⁰ If a GATT panel were to apply the "least trade-restrictive test" to the Protocol, it would have to consider the internationally recognized need to prevent environmental harms caused by these substances. It would also have to consider the fact that most western countries, recognizing the seriousness of the problem, came to the conclusion that voluntary certification schemes would not have been sufficiently effective to create an appropriate degree of consumer awareness. Voluntary measures might have led to a slow shift in consumer preferences, but surely not to a drastic change in production methods, which the scientific figures available at that time suggested. The 1991 report of an international scientific assessment panel indicated that ozone depletion in the global commons was more severe than the signatories of the Montreal Protocol had anticipated.⁶¹ This led to an acceleration of the agreed phaseout of dangerous substances.⁶² Given the seriousness of the problem, it can be argued that voluntary schemes would have been ineffective to achieve the intended result of decreasing sales of products containing ozone-depleting substances.⁶³

Therefore, a future WTO panel would probably conclude that mandatory environmental labeling laws that refer to product characteristics should pass muster under the TBT as long as they abide by the nondiscrimination commands in its MFN and national treatment principles.

[] Further Requirements Under the TBT. Even if a mandatory labeling law meets the requirements of Articles 2.1 and 2.2, it may still be vulnerable as an unnecessary obstacle to trade when challenged in conjunction with Article 2.4, which asks for conformity with international standards. Thus, if one Member state introduces a mandatory labeling scheme that is more stringent than an available international standard, another state could successfully challenge the scheme as an unnecessary obstacle to international trade unless the Member state introducing the label could show that the international standards are "ineffective" or an "inappropriate means for the fulfilment of the legitimate objectives pursued."⁶⁴ These legitimate objectives include the protection of the environment.⁶⁵ The most important example for such international standards will probably be the new eco-labeling standards under the International Organization for Standardization (ISO), a global, nongovernmental federation of national standardizing bodies responsible for the harmonization of international standards through the creation of voluntary measures.⁶⁶ Among the ISO standards that have been developed for a range of environmental criteria over the last few years is ISO 14020, which addresses the use of eco-labeling and sets out a number of principles for creating eco-labeling programs.⁶⁷

In addition, Article 2 of the TBT imposes several notice and transparency requirements on mandatory labeling schemes. Under Article 2.9, for example, if a Member adopts a technical regulation that conflicts with an international standard, or if no such standard exists, and the technical regulation may have a significant effect on trade of other [33 ELR 10528] Members, it must: provide published notice at an early appropriate stage; notify other Members of the products to be covered by the proposed regulation; provide copies of the proposals to other Members upon request; and allow Members to submit comments in writing that must be taken into account.⁶⁸

Again, taking the Austrian proposal for a timber certification scheme as an example, this law would likely not have met the TBT Agreement's "notice and transparency" provisions, as Austria should have notified at least the parties most likely to be affected by its law.⁶⁹

Concluding the discussion on mandatory, product-related eco-labeling programs and their compatibility with the TBT Agreement, it can be said that there is considerable room for such labeling requirements provided that they satisfy the above criteria.

Voluntary, Product-Related Eco-Labeling

Applicability of the TBT

Voluntary schemes that relate to product characteristics, unlike mandatory programs, are not legally binding. Because compliance with these schemes is not mandatory, they cannot be regarded as technical regulations under the TBT Agreement.⁷⁰ As noted above, however, the TBT Agreement also addresses "characteristics for products or related processes and production methods, with which compliance is not mandatory."⁷¹ Therefore, whether labeling requirements that refer to PPMs unrelated to product characteristics should fall within the TBT Agreement's scope seems questionable,⁷² it is universally accepted that product-related voluntary labeling schemes trigger the TBT Agreement's requirements concerning standards. Thus, they have to meet all the substantive provisions that are contained in TBT Article 4, which sets forth the general rules for standards.

Modern labeling schemes such as the EU eco-labeling program, however, consist of a number of labeling criteria that are based on very different aspects of the products. The applicability of the TBT is undisputed only insofar as the products themselves, i.e., their inherent characteristics, are concerned. But the same is not true for such labeling criteria that rely on PPMs. For example, some authors argue that water or air contamination that occurs during the production of a good is not covered by the TBT Agreement because it has no effect on the product characteristics.⁷³ For this reason, it is impossible to provide a clear-cut decision on whether the scheme is subject to the TBT Agreement. The question of the applicability of the TBT depends on the specific aspect that is under consideration in a given case under the "cradle-to-grave" approach. Nevertheless, it seems clear that those requirements that have an impact on the characteristics of the product, such as the waste relevance of a product with regard to the used raw materials, are covered by the agreement. Therefore, it is important that such aspects of the EU's voluntary program meet the TBT's provisions on standards.

Substantive Provisions

The TBT's general rule for standards is contained in Article 4 of the agreement. According to this provision, Members must ensure that their central government standardizing bodies accept and comply with the Code of Good Practice for the Preparation, Adoption, and Application of Standards (Code).⁷⁴ Furthermore, they must take all reasonable steps to ensure that their regional, local, and nongovernmental standardizing bodies accept and comply with the Code's requirements.⁷⁵

As perhaps the most important substantive provision, the Code imposes a national treatment and MFN obligation for standards.⁷⁶ Second, the Code requires each standardizing body to make sure "that standards are not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to international trade."⁷⁷ Both provisions will be examined in more detail in the next two sections.

It is worth reminding that in this section, only product-related voluntary labeling schemes are under scrutiny. It is far from clear whether nonproduct-related criteria can be seen as standards. Some legal scholars argue that this is not the case and that such aspects should not be subject to the TBT.⁷⁸ This discussion will be analyzed in more detail at a later point. For the present purpose, however, it must be emphasized that the certification criteria under scrutiny at this point must always have an impact on the physical or chemical characteristics of a certain product. Otherwise they would not be product-related labeling criteria.

[] TBT Article 2.1: National Treatment and MFN. The question of what constitutes unjustifiable discrimination under MFN or national treatment can be answered by referring to Article 2.1 of the TBT Agreement, analyzed above.⁷⁹ Product-related, voluntary labeling schemes must provide the same procedures and criteria to products from all Member states as they do to like domestic products. From this analysis, one could easily draw the conclusion that voluntary eco-labels should likely survive such a test for the same reasons outlined above for their mandatory cousins.⁸⁰ Nevertheless, there has been much criticism for government-sponsored eco-labeling schemes, especially from producers in developing nations.⁸¹ Most of the concern has focused on programs like the EU's that rely on some form of life-cycle analysis when setting criteria for a particular label.⁸² Notably, [33 ELR 10529] many of the criteria for the EU's labeling of paper products, for example, involves a complex product life-cycle analysis evaluating not only product characteristics, but also PPMs and their environmental impacts. Much of the criticism from southern states, especially from Brazil and other developing countries in the southern hemisphere trying to strengthen their industrial sectors, is clearly based on PPMs that have no direct impact on the characteristics of the product, i.e., nonproduct-related PPMs. These aspects of voluntary, life-cycle labels will be discussed later. Nevertheless, at this point it is worth repeating that the applicability of the TBT to nonproduct-related PPMs is far from clear. However, as far as the PPM criteria are still related to the product itself, like the required use of a certain percentage of recycled pulp, there can be no question that the TBT Agreement's Code applies to them. Product-related PPM criteria must be treated as standards under the TBT Agreement because they refer to "characteristics for products or related processes and production methods."⁸³

Spokespersons from the southern Member states have voiced concerns that, even though the EU's program is voluntary, it still results in de facto discrimination favoring producers in developed countries.⁸⁴ According to these critics, discrimination may occur at two different stages of the labeling scheme: first, at the early stage when criteria for the label are set; and second, at the criteria-implementation and label-awarding stage.⁸⁵ The developing countries' major argument alleges that the EU's scheme operates and is based on a developed nation perspective, thereby failing to consider the environmental needs, technological abilities, and general suitability of their labeling schemes when applied to less developed countries.⁸⁶ According to the criticisms, the EU program for paper products is strongly biased toward European manufacturers, who can meet the criteria with less expense and, therefore, with more ease. Thus, the critics argue, the voluntary labeling schemes protect the local industries of industrialized nations in violation of the TBT's nondiscrimination provision in Annex 3, Paragraph D.

Whether such an analysis of the Code's substantive provisions is well founded, however, seems more than questionable. In order to be correct, the developing countries criticizing the EU's voluntary labeling scheme would have to show that the certification program and its criteria afford unequal treatment to "like products."⁸⁷ Again, the first and decisive question that a panel dealing with that problem will have to ask is: what constitutes like products, and are we comparing like products when it comes to product-related, voluntary labeling?

As the EU's labeling scheme has the aim to reduce negative environmental impacts of a product, the products that are awarded the European label will always have some physical or chemical traits that make them environmentally less damaging than their substitutes that did not fulfill the labeling requirements. For example, the product-related PPM of the use of a certain percentage of recycled pulp will result in the final product containing less virgin pulp. Thus, it must be asked whether these different physical or chemical characteristics, which are the logical consequence of the PPMs that the EU labeling scheme requires, might make the competing products "unlike."

The latest GATT decision dealing with the question of likeness seems to support such an assumption. The Appellate Body in Asbestos⁸⁸ stated that when comparing products, it cannot only be asked whether the products have the "same applications" and can "replace" each other for some industrial uses.⁸⁹ The EC had argued that the health, safety, or other concerns that lead regulators to apply different treatment to products must be taken into account in the analysis under Article III:4 of the GATT 1947, not only in the analysis under Article XX, which pertains to the central provision for exceptions from GATT requirements.⁹⁰ Of course, the question of likeness is fundamentally a determination about the nature and extent of a competitive relationship between and among products. But in saying this, one has to be mindful that there is a spectrum of degrees of "competitiveness" or "substitutability" of products in the marketplace. It is difficult, if not impossible, in the abstract, to indicate precisely where on this spectrum the word "like" in the TBT's nondiscrimination provisions falls. The Appellate Body in Asbestos agreed with the EC's argument that not all products that are in some competitive relationship are "like products" under Article III:4.⁹¹ Moreover, the Appellate Body expressed its belief that physical properties deserve a separate examination that should not be confused with the examination of end-uses, and that the extent to which products share common physical properties may be a useful indicator of "likeness."⁹² The Appellate Body went on to stress that carcinogenicity, toxicity, or other risks to human health are a defining aspect of the physical properties of a product and that such "highly significant physical differences" must be part of a determination of likeness.⁹³

Of course, one might argue that the Appellate Body in Asbestos was only concerned with potentially health-damaging characteristics, and that one cannot easily attribute the same high significance to environmental properties of a product. On the other hand, there are some provisions in the WTO/GATT legal framework that suggest that the reasoning of the Appellate Body in Asbestos would be equally sound for the issue of product-related environmental labeling. Most importantly, the TBT itself does not distinguish between the protection of human health and the environment. TBT Article 2.2 recognizes both as legitimate objectives. This suggests that the arguments brought forward in support of the protection of human health should be equally valid for purposes of environmental conservation. Furthermore, and without making any differences as to their individual importance, Article XX of GATT 1947 names human life or health, animal or plant life or health,⁹⁴ and the conservation [33 ELR 10530] of exhaustible natural resources⁹⁵ as objects of possible justifying exceptions. Finally, for the first time in the history of the GATT, Uruguay Round participants agreed to include sustainable environmental development as one of the objectives when establishing the WTO in 1994.⁹⁶

These developments indicate that world trade law has moved away from the traditional, purely anthropocentric approach. Although the outcome of a possible future panel dispute is far from clear, it seems unlikely that certain products, having been produced with different product-related PPMs and showing varying degrees of environmentally damaging physical or chemical characteristics, will be treated as "like products" under the TBT.

This conclusion is further supported by another important factor that, according to Asbestos, has to be taken into account when deciding the question of likeness. According to the Appellate Body, evidence about the extent to which consumers are or would be willing to choose one product instead of another to perform certain end-uses is highly relevant evidence in assessing the likeness of products.⁹⁷ Different studies in recent years have shown that a high number of consumers favor purchasing a "green" product over an alternative one with more environmentally damaging characteristics. For example, according to one Canadian study in 1992, 21% of consumers polled recalled purchasing an eco-labeled product. Within just one year, this number had risen to 32%.⁹⁸ More recent studies point in the same direction and predict an increase in consumer awareness for the next several years.⁹⁹ The figures from these studies suggest that many consumers are not prepared to substitute certified products by other, environmentally less sound products.

For these reasons, it seems very likely that a panel, when asked about the legality of voluntary, product-related PPM-based labeling schemes, will not find them discriminatory for the simple reason that it will not consider the products under scrutiny to be like products.

[] TBT Article 2.2: Unnecessary Obstacle to International Trade. The TBT does not expressly define what constitutes an "unnecessary obstacle to international trade" when it comes to standards. The Code fails to repeat the "no more trade-restrictive than necessary" language it uses in TBT Article 2 when dealing with technical regulations. As no GATT/WTO panel has yet to interpret this phrase, a new definition will have to be developed. It seems very likely that the "unnecessary obstacle" test will be similar to the "necessary" test that GATT panels have adopted in relation to Article XX(b), which pertains to general exceptions from GATT requirements "necessary to protect human, animal or plant life or health."¹⁰⁰ The textual as well as teleological similarities of both provisions certainly suggest such an approach. Both Articles use the word "necessary" and both have the aim of limiting the applicability of trade-restrictive regulations. Therefore, if a future panel were to adopt that interpretation, it would require Members challenging the eco-label to show that there is a significantly less trade-restrictive measure that reasonably could be employed to achieve the same goals. From this analysis, one could easily draw the conclusion that voluntary eco-labeling programs related to product characteristics should survive muster under the TBT Agreement for the same reasons outlined above for their mandatory cousins such as the ozone depletion warning laws.¹⁰¹

However, at least one author doubts the correctness of that easy conclusion. Christian Tietje asserts that the EU's voluntary eco-labeling program may constitute an unnecessary obstacle to international trade.¹⁰² His argument is that the scheme constitutes an unnecessary obstacle because it does not fulfill a legitimate objective pursuant to the TBT Agreement. Tietje's position relating to voluntary eco-labeling programs is based on the fact that they are not only aimed at specific product-related environmental risks. Instead, they are designed to promote the broader objective of environmental protection. However, following Tietje, only specific risks can be viewed as legitimate objectives protected by TBT Article 2.2, and by analogy Paragraph E of the Code. Thus, because the nonfulfillment of certain product-related criteria present in the EU scheme might not create a concrete risk to the environment, the life-cycle scheme could create an unnecessary obstacle to world trade.¹⁰³

At first sight, Tietje's argument seems very logical and convincing. However, it is subject to criticism on several grounds. First, even if one agrees to graft the last two sentences of TBT Article 2.2 onto Paragraph E of the Code, Tietje seems to have overlooked the fact that the legitimate goals listed in Article 2.2 are not exhaustive, as demonstrated by the term "inter alia." It has been shown above that the broader objective of environmental protection is also a legitimate objective for either a technical regulation or a standard.¹⁰⁴

Second, Tietje acknowledges¹⁰⁵ but apparently undervalues the fact that most developed countries and a growing number of developing countries have voluntary eco-labeling schemes in place, and furthermore, most of these countries already had them in place prior to the conclusion of the WTO Agreement in 1994.¹⁰⁶ Both the widespread existence and the continuing growth in the number of environmental certification schemes suggest that the signatories of the WTO Agreement did not intend to prohibit voluntary labeling schemes when they ratified the agreement.

In sum, it seems doubtful that the standards that underlie voluntary eco-labeling programs constitute unnecessary obstacles [33 ELR 10531] to international trade in violation of the TBT Agreement or Paragraph E of the Code.

Mandatory and Voluntary, Nonproduct-Related

PPM-Based Labeling

Whereas it is clear that all product-related labeling schemes fall within the scope of the TBT Agreement, either as technical regulations or as standards, the applicability of the TBT to nonproduct-related PPM-based eco-labeling programs is debatable. While most commentators seem to agree on the nonapplicability of the TBT,¹⁰⁷ a more thorough analysis of the textual language and the negotiating history will show that the matter is far from clear.

Textual Language

At first sight the textual language of the TBT Agreement clearly seems to exclude all nonproduct-related PPM-based eco-labels from its applicability. Both technical regulations and standards are defined to include "measures relating to product characteristics and their related process and production methods."¹⁰⁸ It seems obvious that if that phrase includes eco-labeling schemes, it would encompass only those aspects of a PPM-based labeling program that are directly related to the product. This would include labeling requirements that address a product's quality, performance, or packaging, but would not, for example, include labeling that addresses whether a product has been cleaned with a solvent containing CFC during the production process. The reason is that the CFC-using PPM has not directly affected the product's characteristics.¹⁰⁹

However, both definitions in Annex 1 of the TBT Agreement go further, stating in a second sentence that technical regulations and standards "may also include or deal exclusively with marking or labelling requirements as they apply to a product, process or production method." This latter phrase creates some ambiguity relating to nonproduct-related PPMs, due to two different potential meanings. The first possibility is that the phrase "as they apply to a product, process or production method" refers only to related process and production methods, thereby incorporating only product-related PPMs.¹¹⁰ Following this argument, the sentence is merely illustrative and lists a number of items that are covered by the first sentence.

However, a second possible view is that the first sentence provides the "background rule" that both technical regulations and standards normally apply only to product-related PPMs, whereas the second part expands the scope of the TBT to cover nonproduct-related PPMs for certain types of regulations, including labeling requirements.¹¹¹ Notably, the word "also" has been included at the beginning of the second sentence. This could mean that the second sentence was meant to be additional to, rather than only illustrative of, the first.¹¹²

Therefore, the textual language of the TBT Agreement is far from clear and further considerations will have to be made to answer the coverage issue in question.

Negotiating History

At the beginning of the Uruguay Round, the Member states were not able to find a common understanding on whether the original draft of the TBT Agreement, the so-called Standards Code, covered PPMs at all. The original definition of "technical specifications," which included what we would today call technical regulations and standards, suggested that the Standards Code did not apply to PPMs, regardless of whether they were product-related or not.¹¹³ Nevertheless, it was another provision of the Standards Code that gave reason for some discussion. Article 14.25 of the Standards Code stated that a dispute settlement procedure could be invoked in cases where "a Party considers that obligations under this Agreement are being circumvented by the drafting of requirements in terms of process and production methods rather than in terms of characteristics of products." When the EC imposed a number of process and production requirements on the import of chicken and beef, European countries and the United States were unable to reach a consensus on the interaction between both provisions of the Standards Code. Due to uncertainty regarding the applicability of the Standards Code and therefore its jurisdiction, the Standards Committee failed to take strong action on the matter. To clarify the TBT Agreement's coverage in relation to PPMs and to ensure that the Standards Code's regulations could not be circumvented, several changes were finally made when the TBT Agreement was drafted.¹¹⁴ The results include the definitions of technical regulations and standards now incorporating PPMs and the deletion of former Article 14.25 as unnecessary.

Thus, it seems arguable that the Standards Code and the modern TBT Agreement can be seen as a means of disciplining and controlling the use of technical regulations and standards in order to limit the erection of trade barriers, and, therefore, the TBT should be interpreted to include all forms of PPM-based labeling schemes.¹¹⁵

However, such a conclusion does not take into account the most important stage of the negotiating process. The 1990 Draft Final Act, which already included new definitions of technical regulations and standards, still did not answer the question of applicability to nonproduct-related PPMs.¹¹⁶ In October 1991, Mexico made an effort to clarify the coverage of PPM-based measures and proposed to insert the words "or related" into the phrase "products, processes and production methods …." Mexico made it clear that the intent of its proposal was to expressly exclude nonproduct-related PPMs from the applicability of the TBT Agreement.¹¹⁷ [33 ELR 10532] Partly due to other controversial issues on the negotiating table, participants widely supported Mexico's proposals to clarify the issue at the final stage of the negotiations, and finally accepted the insertion of the important two words "or related."

Conclusion

In the light of this negotiating history, it appears that voluntary and mandatory eco-labeling schemes as "labelling requirements" are not covered by the TBT Agreement as far as they are based on nonproduct-related PPMs. The next question that must be asked, therefore, is whether such labeling requirements are subject to any other obligations under the GATT/WTO legal system.

Eco-Labeling Schemes Under the Scrutiny of GATT 1947

Relationship Between GATT 1947 and the TBT Agreement

As discussed above, the TBT Agreement covers environmental labeling schemes that are based on product characteristics or product-related PPMs. On the other hand, nonproduct-related PPM criteria cannot be regarded as either technical regulations or standards and will be subject to GATT 1947 scrutiny. However, this coverage does not answer the question as to the applicability of general GATT rules to those labeling programs that are already covered by the TBT. After having analyzed the legality of product-related certification measures under the TBT Agreement, one has to ask whether the same measures must also be compatible with the relevant provisions of GATT 1947.

The WTO establishes a legal hierarchy that is applicable in the event of a conflict between agreements. Article XVI:3 of the Agreement Establishing the World Trade Organization provides that "in the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict."¹¹⁸ Furthermore, a general interpretative note to Annex 1A provides that "in the event of a conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another Agreement in Annex 1A [which includes the TBT], the provision of the other Agreement shall prevail to the extent of the conflict."¹¹⁹ However, this provision is only applicable in cases of conflict and only to the extent of the conflict, and, thus, it is seemingly limited to situations in which two opposing provisions exist.

The question as to the scope and priority of different agreements cannot be clearly answered by reference to existing panel decisions. On the one hand, the panel in Australian Salmon¹²⁰ recognized that both the GATT and the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) applied to the measure in dispute, but examined the case under the SPS Agreement.¹²¹ The panel's reasoning in this case was that the SPS Agreement specifically addressed the type of measure in dispute. On the other hand, in Reformulated Gas,¹²² the panel declined to examine the applicability of the TBT Agreement—even though the issue was covered by the TBT—after having examined the case under the GATT. This is because the complaining party's primary complaint fell under the GATT and the TBT was merely a sub-claim.

The panel's reasoning in Australian Salmon can be applied to the TBT. The TBT Agreement was established to avoid further problems relating to nontariff barriers to international trade, which were an issue under the old GATT legal framework. Therefore, the TBT stipulates more specific requirements, whereas the GATT 1947 contains more general obligations. This suggests that the TBT Agreement should be preferred over the GATT as far as any trade measure covered by the TBT Agreement is concerned.¹²³

As noted earlier, however, the wording of the relevant WTO provisions stresses the fact that they only apply in cases of "conflict" between GATT and any other agreement. Thus, they seem to be limited to cases where two opposing provisions exist. From this wording, some authors have drawn the conclusion that the question of the precedence effect of the agreements should be interpreted narrowly, and that the application of GATT should only be excluded in cases in which an agreement explicitly regulates rights and obligations with regard to a specific trade measure, which are similar in scope to those regulated in GATT.¹²⁴ The consequence of this view is that the mere fact that the TBT applies to a certain measure would not necessarily mean that the same measure will be excluded from GATT scrutiny. This will only be the case where the TBT establishes rights and obligations similar to those regulated in the GATT.

When it comes to labeling programs, the conclusion that can be drawn from this analysis is that product-related certification measures can only be scrutinized under the TBT Agreement. At least with regard to MFN and national treatment, the TBT creates rights and obligations that are very similar to the corresponding provisions under GATT 1947 and, therefore, excludes the latters' applicability.

Substantive Provisions of GATT 1947 Concerning Nonproduct-Related PPM-Based Labeling Measures

Mandatory, Nonproduct-Related PPM-Based Labeling Laws

[] The Common View in the Literature. There are two primary GATT panels that challenged the GATT legality of mandatory labeling laws identifying goods produced or harvested by a PPM that does not affect the physical characteristics of that product. These two panels are the well-known Tuna/Dolphin I and II¹²⁵ decisions, which dealt with the [33 ELR 10533] U.S. embargo of tuna caught using purse seine netting, a method that kills or seriously injures ocean mammals and that is restricted under the U.S. Marine Mammal Protection Act (MMPA).¹²⁶ In Tuna/Dolphin I, the U.S. law banned all imports of tuna from the eastern tropical Pacific (ETP) that were harvested in such a dolphin-unfriendly manner and required other countries to adopt a protection regime similar to that of the MMPA.¹²⁷ In the second Tuna/Dolphin decision, the panel had to deal with the MMPA-authorized U.S. embargo against so-called intermediary countries, which imported tuna caught in the ETP from primary embargo states and exported it to the United States.¹²⁸

As far as the legality of nonproduct-related, mandatory labeling requirements is concerned, two important conclusions have been drawn by most commentators from the Tuna/Dolphin cases. First, the panels in both disputes agreed that Article III:4 of GATT only applied to internal regulations governing products as such, i.e., laws that have a direct impact on the physical characteristics of a product, and not to PPMs that failed to affect the product itself.¹²⁹ Thus, a state implementing such a labeling scheme cannot justify itself by arguing that the requirements are equally applicable to both foreign and domestic products, and that, therefore, it meets the national treatment obligations of Article III:4.¹³⁰ For example, as far as Article III is concerned, a product that has been cleaned with CFCs during the production process is no different than the same product not cleaned with such a substance. Since Article III:4 does not apply, the labeling law, however it is designed in detail, will constitute a prohibition or restriction other than a duty, tax, or other charge in violation of Article XI, which requires the general elimination of quantitative restrictions.¹³¹

The second important point made in the Tuna/Dolphin cases concerns a possible justification of mandatory labeling schemes under GATT Article XX. The only way to justify such a program is if it meets one of the Article XX exceptions. However, the panel in Tuna/Dolphin I held that, under both Article XX(b) and (g), a country could not protect "human, animal or plant life" or "exhaustible natural resources" in the global commons or in other countries, but only those occurring within its own jurisdiction.¹³² Under Article XX(b), a panel following the Tuna/Dolphin argumentation would probably hold that the labeling scheme is not "necessary," as the measure is taken to force other countries to change their policies, and would only be effective if these changes occurred. The extrajurisdictional application would make it difficult to argue that the scheme is really "necessary."¹³³ It can always be argued that national conservation goals can be achieved with less trade-restrictive measures such as voluntary labeling schemes or the negotiation of international cooperative arrangements. The only way that parts of the literature envision Article XX(b) as a viable exception for labeling schemes that violate substantive GATT provisions might be when a Member is obstructing the negotiation of a cooperative solution to an international environmental problem.¹³⁴

Similarly, the Tuna/Dolphin II panel, when analyzing the exceptional rule of Article XX(g) relating to the conservation of exhaustible natural resources, stated that the only way the primary or intermediary embargo could render effective the U.S. conservation laws was if other countries changed their policies and practices regarding dolphin-damaging tuna.¹³⁵ Importantly, the panel went on to say that

if Art. XX were interpreted to permit contracting parties to take trade measures so as to force other contracting parties to change their policies within their jurisdiction, including their conservation policies, the balance of rights and obligations among contracting parties, in particular the right of access to markets, would be seriously impaired.¹³⁶

The conclusion that most legal scholars draw from the analysis of the Tuna/Dolphin cases is that GATT will not allow the unilateral attempt by one country to impose its environmental nonproduct-related PPM laws on other states through the use of mandatory labeling programs.¹³⁷

[] Criticism of the Traditional Interpretation. If, however, one takes a closer look at relevant panel and Appellate Body decisions of recent years, one can at least doubt the simplicity of such a conclusion.

First, as far as the non-applicability of GATT Article III:4 and its national treatment requirement is concerned, the recent Asbestos¹³⁸ and Shrimp/Turtle¹³⁹ cases cast serious doubts on the conclusions drawn from the panels' statements in the Tuna/Dolphin disputes. As noted above, the conventional wisdom in traditional GATT/WTO circles is that regulations that treat products differently on the basis of their process of production, e.g., whether a given tuna has been fished with a dolphin-friendly or dolphin-deadly method, are per se violations of the GATT and can only be justified under Article XX. However, the Appellate Body in the 1998 Shrimp/Turtle case made some arguments that might lead to a contrary conclusion. In this case, the United States prohibited the importation of any shrimp harvested using commercial fishing technologies that might harm sea turtles, unless the exporting country was certified by the U.S. administration as having a regulatory program to prevent incidental turtle deaths comparable to that of the United States or was certified as having a fishing environment that does not pose risks to sea turtles from shrimping.¹⁴⁰ [33 ELR 10534] Similar to our problem, the crucial issue was whether Article XX allowed the United States to force other countries to adopt a conservation policy similar to its own. In that situation, the Appellate Body suggested that there is nothing in the overall structure of Article XX that would prevent a Member from conditioning imports on whether Members comply with or adopt a policy or policies unilaterally prescribed by the importing Member. Indeed, in that case the Appellate Body made the even stronger statement that if such policy-conditioned measures were excluded from the ambit of Article XX, this would render "most, if not all, of the specific exceptions of Article XX inutile …."¹⁴¹ This statement was later confirmed in the second Shrimp/Turtle case in 2001.¹⁴²

One must ask the question why the Appellate Body regarded most of Article XX as useless unless it allowed for market access to be conditioned on the policies of exporting Members. It might be helpful to consider the counterfactual situation that the U.S. measure was concerned only with shipment-by-shipment certification and did not in any way predicate market access on the government policies of other WTO Members. Following Robert Howse, the only plausible explanation for how Article XX could be considered useless in such a situation is that such process-based measures do not violate any operative provision of the GATT in the first place and, therefore, Article XX is not needed to justify them.¹⁴³ Thus, if the United States had implemented a law that required all shrimp, wherever they are caught, to be harvested in a turtle-friendly manner in order to enter the United States, such a measure could be regarded as consistent with the national treatment obligation in GATT Article III:4 because it provides "treatment no less favourable" to like imported products. Such a measure would arguably not be discriminatory because it would deal only with a characteristic of the product, namely its method of production, and not distinguish between different countries and their turtle-conservation policies.¹⁴⁴ Howse argues that, with its remark that Article XX would be useless unless it could justify measures based on other countries' environmental policies, the Appellate Body in the Shrimp/Turtle cases may have moved away from the conventional distinction between product characteristics on the one hand and PPMs on the other.¹⁴⁵

Another recent Appellate Body decision makes Howse's assumption even more likely. It seems that in the Asbestos¹⁴⁶ case, the Appellate Body left the door open for the possibility that nondiscriminatory process-based measures are consistent with Article III:4 of GATT 1947. Significantly, the Appellate Body argued that even where two products are deemed to be "like" for purposes of Article III:4, a complaining Member must still establish that the measure accords to the group of "like" imported products "less favourable treatment" than it accords to the group of "like" domestic products.¹⁴⁷ Thus, if a panel came to the conclusion that, for example, turtle-friendly and turtle-deadly shrimp were "like" products, it would still have to consider whether treating turtle-unfriendly shrimp differently would lead to less favorable treatment of imported shrimp as a group than domestic shrimp as a group. This would require a judgment as to whether, in singling out turtle-unfriendly shrimp, the regulatory scheme in its structure, design, and operation is systematically biased against imported shrimp as a group. A labeling scheme that is even-handed between imported and domestic shrimp and that focuses appropriately on conservation goals might well pass this test. However, neither the Asbestos case nor the Shrimp/Turtle cases make clear statements as to whether a distinction between products on the basis of their PPMs can pass muster under GATT's national treatment provision in Article III:4. Since there is no ruling where the Appellate Body has explicitly treated a process-based measure as consistent with national treatment, the issue remains open.

Another critical remark must be made on the conventional view in literature that GATT Article XX will not allow one country's mandatory labeling scheme to force another state to adopt a certain environmental or conservation policy. Again, it is the Shrimp/Turtle dispute that casts doubts on that conclusion. Here, the Appellate Body made it clear that it was an error of law to assume that unilateral measures that conditioned market access on the policies of the exporting countries are, as a matter of general principle, not justifiable under Article XX. It is worth quoting the most important passage of this decision:

In the present case, the Panel found that the [U.S.] measure at stake fell within that class of excluded measures because [§] 609 conditions access to the domestic shrimp market of the United States on the adoption by exporting countries of certain conservation policies prescribed by the United States. It appears to us, however, that conditioning access to a Member's domestic market on whether exporting Members comply with, or adopt, a policy or policies unilaterally prescribed by the importing Member may, to some degree, be a common aspect of measures falling within the scope of one or another of the exceptions (a) to (j) of Article XX…. It is not necessary to assume that requiring from exporting countries compliance with, or adoption of, certain policies (although covered in principle by one or another of the exceptions) prescribed by the importing country, renders a measure a priori incapable of justification under Art. XX. Such an interpretation renders most, if not all, of the specific exceptions of Article XX inutile, a result abhorrent to the principles of interpretation we are bound to apply.¹⁴⁸

Notably, both Tuna/Dolphin decisions have never been adopted: In both cases the Member states were not able to reach a consensus to accept the panel's finding, as required under the pre-1994 GATT system. The Appellate Body in Shrimp/Turtle, in rejecting the traditional approach to environmental trade measures in the GATT/WTO system, did [33 ELR 10535] not even consider it worth quoting these panel decisions. This shows clearly that authors in recent years have put too much emphasis on the Tuna/Dolphin rulings. The "extraterritoriality-doctrine" never had any basis in the textual language of GATT Article XX. On the contrary, Article XX(e), in dealing with restrictions on imports of products of prison labor, explicitly allows a country to make regulations conditional on another state's policy. Moreover, the Appellate Body in Asbestos took an approach to the necessity test in Article XX(b) that is more flexible and deferential to domestic policy choices than was the case with the older GATT jurisprudence. And following another recent ruling, the Appellate Body noted that "necessity" did not always require that a measure be "indispensable" to attain the government's policy objective (least-restrictive means). In some cases a more relaxed standard might be appropriate, especially if the measure seems well targeted or closely related to the objective in question.¹⁴⁹

Finally, a few words have to be said to the very common view in literature that Article XX requires the negotiation of international agreements as a more GATT-consistent alternative compared to unilateral regulations.¹⁵⁰ This interpretation is clearly not consistent with recent Appellate Body reports and is probably based on a misunderstanding of international environmental instruments themselves. All of these instruments require cooperation and the avoidance of unilateralism only "as far as possible."¹⁵¹ This includes the possibility that in some circumstances, a cooperative solution will not be possible. Therefore, the Appellate Body in the later Shrimp/Turtle case made it clear that

requiring that a multilateral agreement be concluded in order to avoid "arbitrary or unjustifiable discrimination" in applying a measure would mean that any country party to the negotiations, whether a WTO Member or not, would have, in effect, a veto over whether the implementing state could fulfil its WTO obligations. Such a requirement would not be reasonable.¹⁵²

Following the Appellate Body, the only thing that can be required is that a country that has entered into negotiations with one Member must offer the same negotiations to other interested countries.¹⁵³

Thus, concluding the discussion on the GATT legality of mandatory, nonproduct-related PPM-based eco-labeling schemes, it must be said that their inconsistency with GATT 1947 is by far not as clear as the literature on this subject suggests. Although many questions still remain unanswered, it seems possible that a panel, taking into account the Appellate Body rulings mentioned above, would hold such a scheme legal under GATT.

Voluntary, Nonproduct-Related PPM-Based Labeling Schemes and GATT 1947

The same will probably be true for voluntary labeling schemes relying on nonproduct-related PPMs. Nevertheless, labeling schemes like that of the EU might be under the scrutiny of a number of GATT provisions.

[] Article I:1 and the MFN Principle. The GATT legality of a voluntary, single issue labeling scheme based on nonproduct-related PPMs was one of the issues the panel had to decide in Tuna/Dolphin I. One of the matters that had to be decided was an allegation that the U.S. Dolphin Protection Consumer Information Act (DPCIA),¹⁵⁴ which prohibited tuna from being labeled "dolphin-safe" if harvested with drift nets or purse seine nets, was inconsistent with GATT's MFN obligation.¹⁵⁵ With respect to Mexico's complaint, the panel held that the labeling requirements of the DPCIA did not restrict the sale of tuna products, as they could be sold freely with or without the label.¹⁵⁶ Nor did the provisions of the U.S. law establish requirements that had to be met in order to obtain an advantage from the government. Any advantage possibly resulting from the label depended on the free choice by consumers. Therefore, the labeling laws did not make the right to sell tuna, nor the access to a government-conferred advantage, conditional upon the use of certain tuna harvesting methods.¹⁵⁷ Consequently, as the U.S. scheme applied to all countries fishing in the ETP and did not distinguish between Mexico and other countries, the panel ruled that the labeling requirement did not violate GATT Article I:1, the MFN treatment principle.¹⁵⁸

Nevertheless, Tietje asserts that labeling schemes like the EU eco-labeling program might violate MFN by establishing nonproduct-related criteria that can only be met by countries with sufficient technical and financial resources. He is of the opinion that these schemes may discriminate against developing countries lacking these resources, thereby depriving them of MFN treatment.¹⁵⁹ Similarly, countries like Brazil argue that the EU's eco-labeling program is strongly biased toward European and developed countries' manufacturers who could meet the criteria more easily and less expensively.¹⁶⁰ These criticisms represent much of the South's concern when it comes to environmental labeling schemes. They fear that any PPM-based measure purports to dictate to a developing country what its own environmental policy should look like. Because of the unique economic and environmental situation in each country, [33 ELR 10536] developed nations should not be allowed to export their environmental values around the globe.

While these arguments might have their own political justification, and although the South's concerns should be taken seriously, it is most unlikely that voluntary labeling schemes would ever amount to a violation of GATT's MFN principle. Voluntary labeling schemes, including the European program, are open to all Members and the labeling criteria are equally applicable. Therefore, it can be stated that there is no legal discrimination between voluntarily labeled and unlabeled products. This is clearly supported by the Tuna/Dolphin case, quoted above. It is only natural that a country willing to set up its own labeling scheme will choose such criteria that are most practicable for its own needs. As long as the country does truly choose them for valid environmental reasons, and not for clearly protectionist purposes, it does not violate the MFN obligation.

[] GATT Article III:4. Tietje also comes to the conclusion that the EU's voluntary labeling scheme might violate Article III:4 because it adversely modifies the conditions of competition and can be used to discriminate against states with fewer technical and financial capabilities.¹⁶¹

Although most commentators agree with Tietje that, with respect to voluntary labeling schemes, Article III rather than Article XI applies because they "do not affect the importation of products,"¹⁶² it is still questionable whether his final conclusion is correct. Much has already been said above about the interpretation of the "likeness" of products. Recent Appellate Body reports, analyzed above, show that it is far from clear whether Members should be allowed to differentiate between products based on nonproduct-related criteria. As already stated above, most legal experts have drawn the conclusion from the unadopted Tuna/Dolphin cases that nonproduct-related criteria do not affect likeness. Serious doubts concerning this statement can be drawn from the above analysis of recent Appellate Body reports.

However, even if one accepts such a doctrine, one must ask whether a voluntary life-cycle labeling scheme such as the European program affords treatment less favorable to imported products. Despite Tietje's assertion that labeling schemes alter the conditions of competition and may discriminate against less-developed countries, as long as the scheme is open to all products on equal terms, it is difficult to see how a future panel taking into account the rulings in the Tuna/Dolphin dispute might find in favor of a complainant. Again, the scheme does not restrict the sale of products in any way. It is the producers' choice whether to apply for the label or not. Furthermore, the only advantage that could possibly be accorded by a voluntary label is an advantage that results from the free choice of customers, not one conferred by the government itself. This strongly suggests that the mere provision of information to aid customers in making an informed purchasing decision does not modify the conditions of competition in the sense meant by GATT's legal provisions.

Conclusion

The growing number of environmental labeling schemes throughout the world is testimony to the fact that many countries recognize these programs as useful tools to achieve their environmental goals and to improve the state of the global commons at the same time. Most of the existing labeling schemes are consistent with the WTO/GATT legal framework. As far as the TBT Agreement applies, it does not render any labeling schemes illegal. As far as GATT 1947 and its general provisions are concerned, however, much confusion has been created by the early Tuna/Dolphin disputes, the conclusions commonly drawn from these panels, and more recent Appellate Body reports. In short, it can be said that GATT is more environment- and eco-labeling-friendly than most commentators generally assumed after the unadopted Tuna/Dolphin panel reports. It is by no means clear that a mandatory life-cycle labeling scheme based on nonproduct-related PPMs would be held to violate the GATT.

However, the political concerns of developing countries must be taken seriously. The "North" should try to cooperate with the "South" wherever and whenever possible so as to minimize any complaints that a labeling scheme might create a de facto discriminatory trade barrier. Labeling criteria should be as transparent as possible and should be elaborated upon in cooperation with interested industries in other countries. The TBT Agreement's coverage of all environmental labeling schemes could be helpful in such a development. Through its procedural provisions in Article 2 and the Code, the TBT Agreement would make the criteria-setting process more transparent and help to monitor the programs.

1. Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, pmbl., LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 1, 33 I.L.M. 1125 (1994) [hereinafter Final Act]. GATT 1947: General Agreement on Tariffs and Trade (GATT), Oct. 30, 1947, 61 Stat. A-11, T.I.A.S. 1700, 55 U.N.T.S. 194 [hereinafter GATT 1947]; GATT 1994; General Agreement on Tariffs and Trade, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND (1994) [hereinafter GATT 1994]. GATT 1947 is the original agreement on trade in goods and is now incorporated in GATT 1994. The latter is annexed to the Agreement Establishing the WTO, forming an integral part of the Final Act, supra. GATT 1994 does not repeat the GATT 1947 provisions, but only incorporates them in its Paragraph 1a.

2. ORGANIZATION FOR ECONOMIC COOPERATION & DEVELOPMENT (OECD), ENVIRONMENTAL LABELING IN OECD COUNTRIES 43 (1991).

3. Surya P. Subedi, Balancing International Trade With Environmental Protection: International Legal Aspects of Eco-Labels, 25 BROOK. J. INT'L L. 373, 375 (1999).

4. Id.

5. Community Eco-Label Award Scheme (Mar. 23, 1992), Council Regulation No. 880/92, 1992 O.J (L 99) i.e European Communities (EC), comprising the European Coal and Steel Community, the European Economic Community, and the European Atomic Energy Community (the three Communities) form one integral part of the European Union (EU). Thus, "The Community" still exists and has not changed its name. The EU was founded in 1992 in Maastricht, Netherlands. The Treaty on the European Union embraces three distinct spheres of competence: the European Communities already mentioned, a common foreign and security policy, and cooperation in the fields of justice and home affairs (the "three pillars" of the EU). Binding laws referred to in this Article emanate exclusively from the EC.

6. See WTO, CTE On: How Environmental Taxes and Other Requirements Fit In, at http://www.wto.org/english/tratop_e/envir_e/cte03_e.htm#eco-labelling (last visited Mar. 10, 2003).

7. Atsuko Okubo, Environmental Labelling Programs and the GATT/WTO Regime, 11 GEO. INT'L ENVTL. L. REV. 599, 600 (1999).

8. Id.

9. DANIEL C. ESTY, GREENING THE GATT—TRADE, ENVIRONMENT, AND THE FUTURE 14-17 (Institute for International Economics 1994).

10. Elliot B. Staffin, Trade Barrier or Trade Boon? A Critical Evaluation of Environmental Labelling and Its Role in the "Greening" of World Trade, 21 COLUM. J. ENVTL. L. 205, 219 (1996).

11. Okubo, supra note 7, at 638.

12. Agreement on Technical Barriers to Trade, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND, 33 I.L.M. 81 (1994) [hereinafter TBT Agreement].

13. See Staffin, supra note 10, at 211.

14. Okubo, supra note 7, at 603

15. See, e.g., Clean Air Act, 42 U.S.C. 7671j, ELR STAT. CAA § 611.

16. Montreal Protocol on Substances That Deplete the Ozone Layer, Sept. 16, 1987, 26 I.L.M. 1541 [hereinafter Montreal Protocol].

17. See ESTY, supra note 9, at 191.

18. An example is the U.S. "Energy Guide" system, based on the Energy Policy and Conservation Act and regulated jointly by the U.S. Federal Trade Commission and the U.S. Department of Energy. This system sets minimum efficiency requirements for a list of certain home appliances such as freezers and washing machines and requires them to bear a label indicating their respective energy efficiency ratings.

19. See Staffin, supra note 10, at 216.

20. See Teresa Hock, The Role of Eco-Labels in International Trade: Can Timber Certification Be Implemented as a Means to Slowing Deforestation?, 12 COLO. J. INT'L ENVTL. L. & POL'Y 347, 359-61 (2001).

21. ARTHUR EDMOND APPLETON, ENVIRONMENTAL LABELLING PROGRAMMES: INTERNATIONAL TRADE LAW IMPLICATIONS 5 (London/Den Haag/Boston 1997).

22. Staffin, supra note 10, at 224.

23. Regulation No. 880/92, supra note 5, art. 5.

24. Id. art. 6.

25. Id. art. 5(4).

26. Id. art. 10.

27. TBT Agreement, supra note 12.

28. GATT 1947, supra note 1.

29. Samuel N. Lind, Eco-Labels and International Trade Law: Avoiding Trade Violations While Regulating the Environment, 8 INT'L LEGAL PERSP. 113, 120 (1996); Staffin, supra note 10, at 235.

30. See Andrew Herrup, Eco-Labels: Benefits Uncertain, Impacts Unclear?, 8 EUR. ENVTL. L. REV. 144, 150 (1999).

31. TBT Agreement, supra note 12, Annex I, P1 (emphasis added).

32. Id. P2 (emphasis added).

33. Id.

34. Erik P. Bartenhagen, The Intersection of Trade and the Environment: An Examination of the Impact of the TBT Agreement on Eco-Labelling Programs, 17 VA. ENVTL. L.J. 51, 68 (1997).

35. Okubo, supra note 7, at 614.

36. APPLETON, supra note 21, at 96.

37. Christian Tietje, Voluntary Eco-Labelling Programmes and Questions of State Responsibility in the WTO/GATT Legal System, 29 J. WORLD TRADE 123, 137 (1995).

38. Okubo, supra note 7, at 617.

39. See, e.g., Panel Report, Japan—Customs Duties, Taxes, and Labelling Practices on Imported Wines and Alcoholic Beverages, Nov. 10, 1987, GATT B.I.S.D. 34S/83, at 11 (1988).

40. Id. at 113.

41. GATT, Working Party Report, Border Tax Adjustments, Dec. 2, 1970, GATT B.I.S.D. 18S/97 (1971).

42. See Report of the Appellate Body, Measures Affecting Asbestos and Asbestos-Containing Products, AB 2000-11, at 101 (Mar. 12, 2001) [hereinafter Appellate Body Asbestos Decision].

43. Id.

44. Id. at 30-35.

45. Panel Report in European Communities, Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/R, Sept. 18, 2000, PP8.123, 8.124, and 8.126.

46. Appellate Body Asbestos Decision, supra note 42, at 112.

47. Id. at 113.

48. APPLETON, supra note 21, at 103.

49. Subedi, supra note 3, at 391.

50. Id.

51. Hock, supra note 20, at 362.

52. See, e.g., Staffin, supra note 10, at 243-44; Hock, supra note 20, at 362.

53. Brian F. Chase, Tropical Forests and Trade Policy: The Legality of Unilateral Attempts to Promote Sustainable Development Under the GATT, 17 HASTINGS INT'L & COMP. L. REV. 349, 383 (1992).

54. Okubo, supra note 7, at 613.

55. TBT Agreement, supra note 12, art. 2.2.

56. Id.

57. Staffin, supra note 10, at 240.

58. Bartenhagen, supra note 34, at 69.

59. See Montreal Protocol, supra note 16.

60. Lind, supra note 29, at 129.

61. See Staffin, supra note 10, at 213.

62. United Nations Environment Program, Amendment to the Montreal Protocol on Substances That Deplete the Ozone Layer, at http://www.unep.ch/ozone/Copenhagen-Amendment.shtml (last visited Apr. 15, 2003).

63. Lind, supra note 29, at 129.

64. See TBT Agreement, supra note 12, art. 2.4.

65. Id. art. 2.2.

66. Bartenhagen, supra note 34, at 69.

67. See ISO Standard 14020, Environmental Labels and Declarations: General Principles, I.S.O. Doc. ISO/TC/207/SC3 (July 22, 1996).

68. TBT Agreement, supra note 12, art. 2.9.1-.4.

69. See Staffin, supra note 10, at 244.

70. Bartenhagen, supra note 34, at 71.

71. TBT Agreement, supra note 12, Annex 1, P2 (emphasis added).

72. See infra notes 107-17 and accompanying text.

73. Tietje, supra note 37, at 134.

74. TBT Agreement, supra note 12, art. 4.1. The Code is contained in Annex 3 of the TBT Agreement.

75. TBT Agreement, supra note 12, art. 4.1.

76. Id. Annex 3, PD.

77. Id. PE.

78. See the discussion on differentiation above, supra note 29 and accompanying text, and the nonproduct-related PPM discussion below, infra notes 107-17 and accompanying text.

79. See Bartenhagen, supra note 34, at 71.

80. See, e.g., id. at 72.

81. Lind, supra note 29, at 137.

82. Candice Stevens, Synthesis Report: Life-Cycle Management and Trade, in LIFE-CYCLE MANAGEMENT AND TRADE 10-11 (OECD 1994).

83. TBT Agreement, supra note 12, Annex 1, P1 (emphasis added).

84. Vena Jha & Simonetta Zarrilli, Eco-Labeling Initiatives as Potential Barriers to Trade, in LIFE-CYCLE MANAGEMENT AND TRADE, supra note 82, at 64-67.

85. Staffin, supra note 10, at 258.

86. Lind, supra note 29, at 137.

87. Id.

88. See Appellate Body Asbestos Decision, supra note 42.

89. That was what the panel had argued in Panel Report in European Communities, supra note 45.

90. See Appellate Body Asbestos Decision, supra note 42, P34.

91. Id. P99.

92. Id. P111.

93. Id. P114.

94. GATT 1994, supra note 1, art. XX(b).

95. Id. art. XX(g).

96. Final Act, supra note 1. See also Appleton and his conclusion that "there is no reason why the broader objective of environmental protection is not also a legitimate objective for either a technical regulation or a standard." APPLETON, supra note 21, at 128.

97. Appellate Body Asbestos Decision, supra note 42, at 117.

98. U.S. ENVIRONMENTAL PROTECTION AGENCY, DETERMINANTS OF EFFECTIVENESS FOR ENVIRONMENTAL CERTIFICATION AND LABELING PROGRAMS 22 (1994).

99. See, e.g., EUROPEAN COMMISSION, DG ENVIRONMENT, INVESTIGATION OF THE MARKET IMPACTS AND PENETRATION OF THE EUROPEAN ECO-LABEL OVER THE YEARS 1992-2000 AND 2001-2004, FINAL REPORT 74 (2001).

100. Bartenhagen, supra note 34, at 71.

101. Id.

102. Tietje, supra note 37, at 135-36.

103. Id.

104. See section discussing national treatment and MFN, infra. See also APPLETON, supra note 21, at 128.

105. Tietje, supra note 37, at 156.

106. APPLETON, supra note 21, at 129.

107. See, e.g., Lind, supra note 29, at 128; Tietje, supra note 37, at 134.

108. TBT Agreement, supra note 12, Annex 1, PP1 and 2 (emphasis added).

109. See Staffin, supra note 10, at 238.

110. This is argued by Vinod Rege, GATT Law and Environment-Related Issues Affecting the Trade of Developing Countries, 1994 J. WORLD TRADE 95, 131-32.

111. See Bartenhagen, supra note 34, at 74.

112. Seung Wha Chang, GATTing a Green Trade Barrier—Eco-Labelling and the WTO Agreement on Technical Barriers to Trade, 1997 J. WORLD TRADE 137, 142.

113. Bartenhagen, supra note 34, at 75.

114. Id.

115. Id. at 76.

116. See the definitions of technical regulations and standards reprinted at Chang, supra note 112, at 144.

117. Id.

118. GATT 1994, supra note 1, art. XVI:3.

119. Id. Annex 1A.

120. WTO Panel Report on Australia: Measures Affecting Importation of Salmon, WT/DS18/R (June 12, 1998).

121. Agreement on the Application of Sanitary and Phytosanitary Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, LEGAL INSTRUMENTS — RESULTS OF THE URUGUAY ROUND (1994).

122. WTO Panel Report on United States: Standards for Reformulated and Conventional Gasoline, WT/DS2/R, 35 I.L.M. 274 (Jan. 29, 1996).

123. Okubo, supra note 7, at 616.

124. Tietje, supra note 37, at 137.

125. GATT, United States—Restrictions on Imports of Tuna, DS21/R, Sept. 3, 1991, 30 I.L.M. 1598 [hereinafter Tuna/Dolphin I]; GATT, United States—Restrictions on Imports of Tuna From the EEC, DS29/R, June 16, 1994, 33 I.L.M. 839 [hereinafter Tuna/Dolphin II]. The decision was released to the litigants on May 20, 1994.

126. 16 U.S.C. §§ 1361-1421h, ELR STAT. MMPA §§ 2-409.

127. Tuna/Dolphin I, supra note 125, at 1623.

128. Tuna/Dolphin II, supra note 125, at 899.

129. Tuna/Dolphin I, supra note 125, at 1618; Tuna/Dolphin II, supra note 125, at 889-90.

130. See Staffin, supra note 10, at 251-52.

131. APPLETON, supra note 21, at 161.

132. Tuna/Dolphin I, supra note 125, at 1621.

133. Okubo, supra note 7, at 619.

134. See, e.g., APPLETON, supra note 21, at 165.

135. Tuna/Dolphin II, supra note 125, at 894.

136. Id.

137. Staffin, supra note 10, at 253.

138. Appellate Body Asbestos Decision, supra note 42.

139. WTO Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (Oct. 12, 1998), available at http://www.wto.org/english/tratop_e/dispu_e/distabase_e.htm (last visited Apr. 13, 2003) [hereinafter Shrimp/Turtle].

140. U.S. Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act of 1990, Pub. L. No. 101-162, § 609(b)(1), (2), 103 Stat. 988, 1037-38 (codified at 16 U.S.C. § 1537, ELR STAT. ESA § 8 (1994)).

141. Shrimp/Turtle, supra note 139, P121.

142. Report of the Appellate Body, United States—Import Prohibitions of Certain Shrimp and Shrimp Products; Recourse to Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding) by Malaysia, WT/DS58/AB/RW (Oct. 22, 2001).

143. Robert Howse, The Appellate Body Rulings in the Shrimp/Turtle Case: A New Legal Baseline for the Trade and Environment Debate, 27 COLUM. J. ENVTL. L. 491, 514 (2002).

144. Id.

145. Id.

146. Appellate Body Asbestos Decision, supra note 42.

147. Id. at 100.

148. Shrimp/Turtle, supra note 139, P121.

149. Report of the Appellate Body, Korea—Measures Affecting Import of Fresh, Chilled, and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, P 161 (Dec. 11, 2000).

150. Some authors see this requirement in the "necessary-test" of Article XX(b); see, e.g., Tietje, supra note 37, at 164. Others incorporate it into Article XX's chapeau. See, e.g., Gary Sampson who, when interpreting the Tuna/Dolphin rulings, stated:

The absence of an MEA [Multilateral Environmental Agreement] to deal with turtle protection proved critical…. On the facts of the case, it found that, among other things, the failure to have established an environmental agreement as an instrument of environmental protection policy had resulted in a unilateralism which was discriminatory and unjustifiable….

Gary P. Sampson, Effective Multilateral Environmental Agreements and Why the WTO Needs Them, 24 WORLD ECON. 1109, 1126 (2001).

151. See, e.g., Rio Declaration on Environment and Development, princ. 12, U.N. Doc. A/CONF.151/5/Rev. 1 (1992), reprinted in 31 I.L.M. 874, 878 (1992).

152. Report of the Appellate Body, supra note 142, at 123.

153. Id.

154. Dolphin Protection Consumer Information Act, Pub. L. No. 101-627, tit. IX, § 901(a)-(f), 104 Stat. 4465 (Nov. 28 1990).

155. Tuna/Dolphin I, supra note 125, P3.3.

156. Id. P5.42.

157. Id.

158. Id.

159. Tietje, supra note 37, at 143.

160. See Jha & Zarrilli, supra note 84, at 66-67.

161. Tietje, supra note 37, at 139-41.

162. APPLETON, supra note 21, at 153.

33 ELR 10522 | Environmental Law Reporter | copyright © 2003 | All rights reserved