Index

Expert Opinion: Policy Should be Made through Negotiation, Not Litigation

By Sabrina Shaw

Will the Doha mandate bring us closer to policy coordination and coherence between trade and environmental policy? Or will these issues continue to be thrashed out by dispute settlement rulings? And, if so, why should we worry?

Despite all the fanfare, the fact remains that the Doha Round negotiating agenda directly focuses on only three aspects of the complex trade and environment linkage: information exchange between the WTO and multilateral environmental agreements (MEAs); the relationship between WTO rules and MEA trade obligations between parties; and liberalization of environmental goods and services. This represents only a small subset of the myriad issues being debated in the Committee on Trade and Environment (CTE).

Yet, there is a rather misleading impression that trade and environment has finally “made it” into mainstream WTO negotiations. It has, but only minimally. Indeed, some would suggest that by defining a narrow negotiating agenda, the Doha mandate has sidelined a number of controversial issues. For example, clarifying the relationship between WTO rules and MEA trade-related provisions between MEA parties, is of much less concern than measures taken by MEA non-parties; an issue that has been long debated but remains outside the Doha agenda.

Notwithstanding the Doha Round negotiations, the WTO dispute settlement mechanism has been—at least until now—the forum of choice for clarifying trade and environment uncertainties. When economic interests are sufficiently strong, disputes gravitate towards the WTO dispute system, regardless of whether there exists an appropriate regional or multilateral forum to deal with such issues.

This is so primarily because, unlike the International Court of Justice (ICJ) and MEA dispute resolution systems, the WTO has an automatic and compulsory enforcement mechanism as well as a relatively quick turnaround for resolving disputes.

A growing list of cases—Gasoline, Shrimp- Turtle, Asbestos and Hormones—is evidence of this reality. The nuanced decisions in these cases illustrate the ability of the WTO Appellate Body to respond in a measured manner to “non-trade” concerns. Yet, it is also a fact that jurisprudence has become de facto trade and environment policy.

Doha had raised the hope that we might now move from trade and environment policy-making by jurisprudence to consensus-based negotiations. However, the CTE Special Session is mired in a vortex of definitional debates, and one is left to wonder whether the WTO Appellate Body will remain the real arbiter of the trade and environment relationship.

To be fair, WTO jurisprudence has made considerable progress in recent years towards clarifying that WTO rules provide sufficient flexibility to accommodate legitimate environmental measures. The Appellate Body has shown reasoned restraint by focusing only on the specifics of the environment-related cases that have come before it, and avoiding generalized or generalizable verdicts on politically charged issues such as genetically modified organisms (GMOs) or the precautionary principle.

However, too many of the most controversial trade and environment issues remain unresolved, and are likely to remain unresolved even after the Doha Round concludes. These include such perennial challenges as discrimination based on non-product-related process and production methods (PPMs), trade in GMOs and MEA trade measures against nonparties.

While the WTO judiciary is forging ahead in interpreting the rights and obligations of WTO Members, continuing to do so in the absence of a negotiated consensus of the WTO membership runs the risk of undermining the political legitimacy of the trade and environment policy process as well as of the dispute settlement system. Insofar as the “creative ambiguities” in the WTO agreements are the result of compromises and negotiated outcomes, the question is whether it will be left to the dispute settlement system to clarify these ambiguities or whether Members can garner the political will to provide guidance on how to interpret WTO rules.

The temptation to resort to the dispute settlement process is clear. It is easier to initiate a dispute than to forge consensus among 150 Member states to deal with controversial issues. However, sustainable outcomes in the WTO must be built on trade-offs and compromises that can only emerge from negotiations among the broader membership, especially including developing countries.

Policy-making through litigation creates unpredictability. It also takes decision-making power away from Member states. No matter how accurate the judicial interpretations may be from a technical and legal perspective, the legitimacy of the WTO stems from its Member states and trade and environment policy should also emanate from this constituency.

The trade and environment issues contained in the Doha negotiating agenda are a good start, but many more issues—and more controversial issues—still need to be resolved. The WTO should look towards consensus-based negotiation rather than litigation and jurisprudence as the preferred means of resolving them.

Sabrina Shaw, from Canada, is an Associate at the International Institute for Sustainable Development (IISD), currently on leave from the World Trade Organization (WTO) Secretariat, where she served as Secretary to the Committee on Trade and Environment (CTE).