Legal Issues on Climate Change and International Trade Law

In the present day scenario, national and international policies are being developed to tackle the issue of climate change. This chapter discusses the relevant WTO rules and their interaction with different type of trade related Greenhouse Gas policies and regulations adopted nationally and internationally to mitigate climate change.

As there is an overwhelming global consensus that greenhouse gas emissions must be reduced to mitigate global warming, many countries have established eco-labeling or other similar schemes at regional, national and international levels. And the incentive to use eco-labeling to products for the purpose of providing information pertaining to environmental friendliness continues to rise. Although eco-labeling scheme is considered a means to protect and conserve the environment while promoting sustainable production and consumption, it may constitute a protectionist measure and operate as a trade barrier in international trading system. For instance, eco-labeling schemes that countries establish and develop as part of their commitment to taking action on climate change have tendency to influence international trading system. As eco-labeling informs consumers about the environmental friendliness of products, including their environmental characteristics and the environmental impact of their performance, they may influence preference and behavior of consumers. Consequently, this may significantly affect the trading system as market is likely to shift in response to change in consumer demand in products.

To date, border carbon adjustment measures in the form of emissions allowance requirements (EAR) under the U.S. proposed cap-and-trade regime are the most concrete unilateral trade measure put forward to level the carbon playing field, and the U.S. EAR clearly targets major emerging economies, such as China. If improperly implemented, such measures could disturb the world trade order and trigger a trade war. Because of these potentially far-reaching impacts, this paper analyzes trade policy implications of the proposed EAR, and China’s responses. Scrutinizing the U.S. EAR against WTO provisions and case laws, the paper recommends what is to be done on the side of the U.S. to minimize the potential conflicts with WTO provisions in designing its BCA measures, and provides suggestions for China on how to effectively deal them to its advantage while being targeted by such proposed measures. The paper has argued that there is a clear need within a climate regime to define comparable efforts towards climate mitigation and adaptation to discipline the use of unilateral trade measures at the international level, and shows that defining the comparability of climate efforts can be to China’s advantage, and questions China’s same stance on this issue as India’s.

The legal system in Japan on environmental protection consists of laws and regulations on (a) the framework of regulation, (b) specific regulatory laws, (c) conservation laws, (d) laws of subsidies on and promotion for good environment and (e) laws on dispute settlement in environmental issues and indemnification of damages.

Taiwan makes no small contribution to the increasing global greenhouse gases emissions due to its industrial and economic structure. According to the statistics published by the International Energy Agency, Taiwan ranks 21st world-wide and 12th in Asia in terms of CO₂ emissions per capita in 2011. On the other hand, as an island state that is prone to natural disasters such as typhoons and earthquakes, Taiwan is particularly vulnerable to the impact of climate change. Taiwan has adopted, and is proposing to adopt a variety of policies and laws for climate change mitigation and adaptation. This paper will present a brief overview on Taiwan's climate change and related energy policies and laws, focusing on the types of economic incentive measures. In addition to consider the effectiveness and efficiency of these policy tools on Taiwan’s response to climate change mitigation and adaptation, the government also needs to pay attention to her international obligations as a Member to the WTO. After identifying the adopted and proposed climate change and related energy policies and laws, this article will then offer a preliminary analysis on whether these policies fall within the WTO rules and, if they do, the compatibility with the relevant WTO rules.

On December 2, 2014, the National Assembly of the Republic of Korea passed the two ratification bills for Korea-Australia and Korea-Canada free trade agreements (FTAs) containing investor-State dispute settlement (ISDS) provisions soon after the end of trade negotiations with the two Pacific Rim partners, regardless of an on-going multi-billion dollar ISDS claim initiated by the Lone Star Funds—an American private equity firm—against the Korean government (LSF-KEB Holdings SCA and others 2012), invoking similar ISDS provisions provided in another investment treaty with the Belgium-Luxembourg Economic Union (Korea-Belgium/Luxembourg BIT 2006). In fact, this claim placed Korea for the first time as a respondent State in known ISDS cases (UNCTAD 2013). Such a bipartisan support to the proposed bills resembles that of the National Assembly in May 2012 when its members passed the Emissions Trading Scheme (ETS) bill almost unanimously with only 3 abstentions and placed Korea as the first Asian country to initiate an ETS (International Emissions Trading Association 2013), despite the fact that the ETS of the European Union (EU), the largest carbon trading market, revealed its serious loopholes in its trial period. Interestingly enough, the two FTAs and the Korean Emissions Trading Scheme (KETS) came into effect concurrently from January 2015.

This article is about methodology in legal analysis. In particular, it is about the importance of integrity and coherence in legal methodology.

The WTO’s Agreement on Subsidies and Countervailing Measures (“SCM Agreement”) plays an important role in ensuring a level playing field in international trade. The agreement captures illegal subsidization practices that have distorting effects on global trade. The number of disputes involving subsidy has been in steady increase, and at the same time subsidy disputes are becoming ever more complex in many respects. In the meantime, the fact that the agreement turns a blind eye to the legitimacy of governmental policies, as it currently stands, has also drawn increasing criticism as well. For instance, the agreement does not contain a general exceptions clause as found in Article XX of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”). Nor does Article XX of GATT 1994 apply to this agreement either.