World Trade Organization (WTO)

The world trade organization (wto) is an international body responsible for the negotiation, implementation, and enforcement of trade rules. Established in 1995, it presides over a multilateral trading system of which the core international treaty is the General Agreement on Tariffs and Trade (GATT), as legally consolidated in 1994. GATT obligations are informed by a political and ideological commitment to free trade: At the heart of the GATT treaty are the so-called nondiscrimination principles of most-favored-nation status (Article 1) and national treatment (Article 3). Their combined effect is legally to prescribe equality of treatment for imports and exports, such that WTO contracting states subscribe to open, predictable rules of trade.

There are 149 members in the WTO, accounting for over 97 percent of world trade. Meeting at least once every two years, the Ministerial Conference is the governing body of the WTO: conferences have taken place in Singapore (1996), Geneva (1998), Seattle (1999), Doha (2001), Cancun (2003), and Hong Kong (2005). Between ministerial sessions, the WTO General Council—located in Geneva, Switzerland—undertakes key executive functions, including meeting as the organization's Trade Policy Review Body and Dispute Settlement Body. Reporting to the General Council is a council triumvirate addressing goods, services, and intellectual property. There are also numerous specialist committees and working groups dealing individual agreements and thematic areas. One of these is the Committee on Trade and Environment (CTE), which serves as a forum for member states to examine the relationship between trade and environmental protection, with a view to determining whether changes are required in trade rules to enhance their positive interaction. As with all WTO bodies, decision making within the CTE is consensus-based.

The protection and preservation of the environment is embraced as an objective in the Marrakesh Agreement Establishing the World Trade Organization. However, its most important manifestation in international trade rules is still the “general exceptions” clause of GATT first articulated in 1947: under Article 20, trade-restrictive measures may be undertaken for reasons including the protection of human, animal, or plant health and the conservation of exhaustible natural resources. Similar environmental exceptions are also found in specialist WTO agreements, such as those on food safety and [Page 1991]product standards. Not until a 2000 ruling on asbestos products did the WTO Dispute Settlement Body uphold a trade restriction under Article 20 on environment-related grounds. A more significant precedent was set in 2001 when, in its ruling on a U.S. ban of Asian shrimp imports, the Dispute Settlement Body stated that there were circumstances in which WTO members could employ trade restrictive measures under Article 20 in order to prevent serious environmental harm outside their national jurisdiction.

Under the Doha Development Agenda of trade negotiations, launched at the 2001 WTO Ministerial Conference, the CTE was charged with clarifying the relationship between WTO rules and international environmental agreements containing trade measures. There remain legal uncertainties over the rule compatibilities between WTO law and specific trade obligations in international environmental agreements, including those within the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, the 1989 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, the 2000 Cartagena Protocol on Biosafety, and the 2001 Stockholm Convention of Persistent Organic Pollutants. While there has not yet been a conflict, the CTE has struggled to improve coordination in this area. It has been suggested by some academic commentators that the robustness of international environmental agreements with specific trade obligations would be strengthened by an amendment to GATT exempting them from WTO rules.

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