The potentially tumultuous relationship between Multilateral Environmental Agreements (MEAs) and World Trade Organization (WTO) Agreements has been an issue of special interest within the international trade and environmental debate for decades. Discussions often revolve around incompatibilities between MEAs and WTO Agreements since some MEAs contain trade measures, which may be inconsistent with obligations under WTO Agreements. Quality infrastructure (QI) could be the key to fulfilling obligations under both sets of agreements simultaneously and without conflict.
Since it was established in 1994, the WTO has been the sole multilateral international body overseeing international trade. Member governments run it, and all significant decisions are made by consensus (WTO, 2022b). The WTO governs the multilateral trading system by implementing agreements that have been negotiated and signed by its members. The agreements cover goods, services and intellectual property; and incorporate the WTO’s principles of open borders, transparency, and most-favoured-nation and non-discriminatory treatment by and among members (WTO, 2022b).
MEAs emerged from multilateral processes as a means of addressing transboundary environmental problems. Some of these environmental issues include loss of biological diversity, climate change, depletion of the ozone layer, hazardous waste, organic pollutants, marine pollution, trade in endangered species, destruction of wetlands, among a multitude of others. There are over 250 MEAs currently in force (WTO, 2022a), and they are governed by several international bodies (like UNEP and FAO), as opposed to being overseen by an umbrella organization (Mathur & Dang, 2009).
There is a lack of clarity concerning the relationship between MEAs and WTO Agreements, which has led to concerns about their compatibility when being implemented simultaneously. Both WTO Agreements and MEAs are subject to the 1969 Vienna Convention on the Law of Treaties (Goeteyn & Maes, 2011). These agreements are legally binding once they have been signed/ratified by States (Goeteyn & Maes, 2011). Approximately 30 MEAs contain trade measures that can affect free trade. Trade measures are policy instruments that attach requirements, conditions or restrictions on imported or exported products or services themselves; or the process of their importation or exportation (OECD, 1999). The main trade measures contained in MEAs include trade bans, export/import licenses, notification requirements, and packaging/labelling requirements (WTO, 2004). Therefore, if a member of the WTO enforces an MEA containing trade measures, the WTO’s non-discrimination principle could be violated. For instance, if an MEA allows a specific product to be traded among its parties but prohibits the trade of the same product with non-parties, the WTO members that have not signed/ratified the MEA will not receive “most favoured nation treatment” for the trade of this particular product (WTO, 2004).
In addition to breaching the non-discrimination principle, there is also a lack of clarity on how to resolve such an issue. While MEAs contain dispute settlement provisions for their parties, non-parties may not access these provisions. If both countries involved in this dispute are members of the WTO, the matter could be brought to the WTO’s dispute settlement system (WTO, 2004). This raises concerns since protecting the environment is not included in the central mandate of the WTO. While WTO bodies deal with environmental issues, like the Committee on Trade and Environment (CTE) and the Trade and Environment Division, the WTO’s capacity for policy coordination in this area remains limited (UNCTAD, 2001; Zelli, 2007). In addition, there are apprehensions about the extent to which the WTO will consider environmental problems concerning trade liberalization when settling disputes of this nature (Zelli, 2007).
QI can play an essential role in preventing conflict between MEAs and WTO Agreements when countries enforce them simultaneously. QI is “the system comprising the organizations (public and private) together with policies, relevant legal and regulatory framework, and practices needed to support and enhance the quality, safety and environmental soundness of goods, services and processes” (UNIDO, 2018). With all of its components in place – standardization, metrology, accreditation and conformity assessment, particularly testing, certification and inspection services – an advanced QI system can advance both trade-related and environmental interests (UNIDO, 2019).
The WTO has acknowledged the critical role of QI, particularly standards, in facilitating trade, and several MEAs make specific references to international standards and international standards development organizations (ECOS, 2021). International standards are designed to be compatible with WTO rules (ECOS, 2021) while supporting the efficient use of resources and protecting society and the environment. For instance, the International Standards Organisation (ISO) standard for sustainable procurement, ISO 20400, guides organizations of all types to make their procurement processes more sustainable (UNIDO, 2019). In addition, the ISO 14020 series of standards guides environmental labelling and self-declarations; and the ISO 20245 standard, which addresses cross-border trade of second-hand goods, defines minimum screening criteria for goods traded between countries (Schoen & Harmes-Liedtke, 2020). The other components of QI are necessary for proving compliance with standards. Therefore, if countries base national standards and technical regulations on international standards as much as possible, this reduces the chances of conflicts with WTO rules while ensuring the efficient use of resources and protecting society and the environment.
While there have been no formal legal disputes involving a WTO Agreement and an MEA, there have been cases where enforcing national environmental regulations led to violations of WTO rules. An infamous example is the US – Tuna II (Mexico) case. In this particular case, QI played an important role. Under the Dolphin Protection Consumer Information Act (DPCIA), the USA set standards for importing tuna and tuna products. Tuna and tuna products imported into the USA must have a “dolphin-safe” label. This label can only be obtained if specific conditions are complied with during tuna harvesting. In 2008 Mexico complained to the WTO that this requirement was trade-restrictive and unnecessary and violated GATT Article I, GATT Article III, TBT Article 2, TBT Article 5, TBT Article 6, and TBT Article 8 (WTO, n.d.). Of particular interest to this blog post is Mexico’s claim that the USA violated TBT Article 2.4, which requires “technical regulations to be based on relevant international standards where possible” (WTO, n.d.). The technical and complicated nature of this case and appeals by both Mexico and the USA of the WTO’s rulings on separate occasions resulted in the dispute spanning more than a decade. The latest ruling by the WTO’s Appellate Body, circulated in December 2018 and adopted in January 2019, found that the USA’s “dolphin-safe” labelling requirements were compliant and consistent with WTO rules (WTO, n.d.). All in all, this case highlights how QI can be used to fulfil environmental obligations without violating the rules of the WTO.
In conclusion, QI is a critical component that can enable countries to implement both WTO Agreements and MEAs simultaneously without conflict. MEAs and WTO Agreements play fundamental roles in global governance. The lack of clarity regarding their relationship and the fact that they both include provisions that may not be compatible make it challenging for countries to enforce MEAs without violating WTO rules. By developing their QI systems and ensuring that standards and technical regulations are updated regularly and based on international standards where possible, countries can reduce friction between MEAs and the MTS while enforcing them simultaneously.
During Mesopartner’s consultancy on the National Quality Policy for St. Kitts and Nevis, Mr Stuart Laplace, Director of the National Standards Office, asked us about Multilateral Environmental Agreements to National Quality Infrastructure. To answer this question, Mesopartner’s intern Ms Ann-Sara Ramkissoon summarized the relevant literature and international trade regulation expert Mr Ramón Madriñán Rivera provided his expertise.
ECOS. (2021). International standardization that works for the environment: Making change happen
Goeteyn, N., & Maes, F. (2011). Compliance Mechanisms in Multilateral Environmental Agreements: An Effective Way to Improve Compliance? Chinese Journal of International Law, 10(4), 791–826
Mathur, A., & Dang, S. (2009). Multilateral Environmental Agreements versus World Trade Organization System: A Comprehensive Study. American Journal of Economics and Business Administration, 1(3), 219–224
OECD. (1999). Trade Measures in Multilateral Environmental Agreements, Paris
Schoen, C., & Harmes-Liedtke, U. (2020). Quality Infrastructure enables the Sustainable Development Goals to be achieved (p. 5). Mesopartner. https://www.mesopartner.com/fileadmin/media_center/Other_Publications/QI_enables_SDGs.pdf
UNCTAD. (2001). Trade and Environment in the Multilateral Trading System. Geneva
UNIDO. (2018). Quality Policy: A Practical Tool, Vienna
UNIDO. (2019). Quality Infrastructure for Sustainable Development, Vienna
WTO. (n.d.). DS381: United States—Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products. Retrieved October 27, 2021, from https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm
WTO. (2004). Trade and Environment at the WTO: The Relationship between MEAs and the WTO (pp. 35–43), Geneva
WTO. (2022a). The Doha mandate on multilateral environmental agreements (MEAs). Geneva
WTO. (2022b). Understanding the WTO: Whose WTO is it anyway?, Geneva
Zelli, F. (2007). The World Trade Organization: Free Trade and its Environmental Impacts (pp. 177–216).