Legal Analysis of the Environment and Trade

Author Name YAMASHITA Kazuhito  (Senior Fellow, RIETI)
Creation Date/NO. October 2009 09-J-027
Download / Links


Until the General Agreement on Tariffs and Trade (GATT) ended in 1994, the allowance of exceptions for the environment was rigorously judged from the stand point of promoting free trade. However, this type of strict interpretation was relaxed after the formation of the WTO. This was partly due to the belief that the WTO would be unable to gain the support of organizations such as environmental NGOs unless non-trade concerns such as the environment were also considered. Setting down a provision for the environment in the preamble to the agreement for the establishment of the WTO contributed significantly to such an interpretation. The provisions of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and the Agreement on Technical Barriers to Trade (TBT Agreement), which carefully consider the environment, also appear to have an impact on the interpretation of Article 20 of GATT.

This discussion explains how the interpretation of the provisions of GATT and the WTO has been changing and analyzes other WTO-related agreements, which included the following: the necessity of Article 20 (b) in the GATT (the fact that the requirements of "a less trade restrictive alternative," taking into consideration the interest of exporting countries, are "reasonably available" for importing countries, and will work in the opposite direction; the impact on the interpretation of the necessity stipulated in Article 5, Paragraph 6 of the SPS Agreement; the balancing test presented by the Appellate Body on the beef distribution regulation incident in South Korea; etc.), the interpretation of measures "relating to" the conservation of exhaustible natural resources in Article 20 (g) of GATT (the fact that non-product-related processes and production methods [PPMs] in foreign countries are admitted), the interpretation of the chapeau of Article 20 of the GATT (the fact that this Article provides discrimination, etc., "between countries under similar conditions," instead of discrimination between "products," as stipulated in Article 3 of the GATT, and the fact that the SPS Agreement clarifies this point, etc.), and the TBT Agreement.