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2017 | Supplement | Chapter

6. The Impact of Trade Subsidies on the Environment: A Problem for the WTO Trading System

Author : Gurwinder Singh

Published in: Subsidies in the Context of the WTO's Free Trade System

Publisher: Springer International Publishing

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Abstract

The primary function of the WTO as a multilateral organisation is to regulate trade among the Member States, and this also implies discussion on issues with different set of values, such as the affect of free trade on the environment. The discussion concerning the ‘impact of trade subsidies on the environment’ revolves around two planes, (1) the principal objective of the WTO i.e., the promotion of free trade among its Member Nations together with the complex values, compounded, (2) such as sustainable development, the pursuit of which obviously goes alongside. It is ironical that within the WTO trading system, there are several agreements promoting free trade, but no explicit wide-ranging agreement, supporting environment-related issues on a parallel basis. While the WTO tries to promote free trade along with sustainable development, however, what adds to the biased position are the competing interests of the Member States in practice. The contradiction in practice is further deepened whenever the occasion arises for the multinationals to make a choice between trade and environment standards. From the analysis, it can be observed that the legislative bodies and the judicial bodies of many of the Member States follow an unbalanced approach, thus leading to a dilemma over the preference between trade and environment. This further draws attention to a question of whether the lack of a clear basis to make choices between the two objectives, also obstructs the evolution of a general normative set up of environmental values on a global basis. The issue of free trade and the environment sustainability, taken together also touches the institutional character of the WTO, which within the parameters of this discussion is tested through, several theories on environmental law.

A key concern when studying, the effect of subsidies on the environment is to analyse how far the WTO is capable of fulfilling a proper institutional role, by promoting sustainable development along with free trade. In the light of these propositions, this study seeks to make a comparative analysis, between the business attempt for benefit as a consequence of free trade, but at the cost of environment. The comparison is made by quoting several instances of the trade practices among the Member States. In this context, the benefits obtained are compared with trade subsidies for the purpose of broadly applying fair trade concepts as regulatory measures. Further, this study also attempts to examine the institutional and normative basis of the organisation, for a better understanding and in order to make informal recommendations about the WTO reform. The chapter begins by tracing the basic WTO objectives & Members State’s relationships with issues related to trade protectionism and maintaining environment standards. Due to the lack of supportive agreements in the WTO and in order to protect environment, some authors have taken a critical perspective about the functioning of the WTO, however, it seems that the institutional balance between the objectives of free trade and sustainable development is the better option.

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previous chapter Unfolding the Intricacies of Trade Subsidies Through the WTO Rules of Origin

next chapter Remedies: The Procedural Measures

For protecting the environment.

Subsidies which is described as financial contribution providing benefit to a specific industry.

De Sombre (1999), p. 1.

For reference, see Article 1.1(a) (1) and Article 1.1 (b) of the SCM Agreement.

Biondi et al. (2004), p. 158.

Imperfect competition, discussed in detail in the second chapter.

Market factors mainly, “Demand and Supply.”

Pigou, Arthur Cecil, was an English economist. His famous work Wealth and Welfare, Macmillan and Co, London, 1912 brought welfare economics in to the scope of economic analysis.

A normative tax system would take into account the optimum structure of taxes required to achieve the government’s social objectives. “Subsidies in the Energy Sector: An overview,” July, 2010, p. 24. http://siteresources.worldbank.org/EXTESC/Resources/Subsidy_background_paper.pdf.

Although the November 1990, Subsidies Draft had contained such a provision (based on a 1989 EC proposal) it had been deleted from the December 1991 Dunkel Text. In particular, Mexico proposed that subsidies for the adaptation of existing facilities to new environmental requirements imposed by law and/or regulation be considered non-actionable if they, (1) were a one-time, non-recurring subsidy, (2) were limited to 20% of the cost of adaptation, (3) did not cover the cost of replacing and operating equipment, (4) were directly linked to pollution reduction, and (5) were available to all firms able to adopt the new equipment or production process. Mexico’s Proposal was finally accepted and incorporated into the Final Agreement. The obsolete Article 8 of the SCM Agreement, also termed as Green Light subsidy. For detail reference, see Stewart (1999), p. 224.

The two key testing elements for the trade practice of subsidies.

The WTO agreements contain special provisions which give Developing countries special rights and allow the Developed countries to treat Developing countries more favorably than over other WTO Members. Special and Differential treatment is related to the preferential provisions that apply to Developing and Less-Developed countries. The provisions are based to respond to the development needs of Developing countries. (Developing countries seek modifications to many provisions on the grounds that they need supportive policies for development needs).

Between 1971 and 1976, most OECD countries, including the United States and the EU/EC, implemented the GSP by adopting national legislation, authorizing tariff preferences for Developing countries. The GSP is meant to provide reduced tariffs for industrial production and agricultural policy.

Baja California is both the northernmost and westernmost state of Mexico.

The word “Maquiladora” comes from the past practices, where the millers charged a maquilla. A maquiladora is a Mexican Corporation which operates under a maquila program approved for it by the Mexican Secretariat of commerce and Industrial Development (SECOFI). A maquila program entitles the company, first to foreign investment participation in the capital and in management of up to 100% without need of any special authorization, second it entitles the company to special customs treatment, allowing duty free temporary import of machinery, equipment, parts and materials and administrative equipment such as computers and communications devices subject only to posting a bond guaranteeing that such goods will not remain in Mexico permanently.

Metales y Derivados is a subsidiary of the New Frontier Trading Company, based in San Diego.

Mayrand and Paquin (2003), p. 9. http://unisfera.org/IMG/pdf/Unisfera_-_NAFTA_effects.

Term Maquiladora is used to describe companies that process (assemble and/or transform in some way) components imported into Mexico which are, in turn, exported- usually to the United States.

Stromberg (2002), p. 5. www.eclac.org/publicaciones/.../lcmexl548eDocumento%20Completo.

Stromberg (2002), p. 15. www.eclac.org/publicaciones/.../lcmexl548eDocumento%20Completo.

Lang et al. (2005), p. 128.

For reference see Chap. 2.

Macrory et al. (2005), p. 692.

The Iron and Steel industry produces greenhouse gases such as, Carbon dioxide, Carbon monoxide, Organic compounds, Sulphur oxides Nitrogen oxides and several other organic compounds.

These economic advantages can be compared with financial contribution and benefit as described under the SCM Agreement.

For detail references, see EPA Fact Sheet (Environment protection agency) The Pulp and Paper Industry, the Pulping Process, and Pollutant Releases to the environment. EPA-821-F-97-011, November 1997.

The Kraft pulping process uses an alkaline cooking liquor of sodium hydroxide (NaOH) and sodium sulphide (Na₂S) to digest the wood. The cooking liquor in the sulphite pulping process is an acidic mixture of sulphurous acid (H₂SO₃). In preparing sulphite cooking liquors, cooled sulphur dioxide (SO₂) gas is absorbed in water containing one of four chemical bases, magnesium (Mg), ammonia (NH₃), sodium (Na), or calcium (Ca). The sulphite pulping process uses the acid solution in the cooking liquor to degrade the lignin bonds between wood fibres.

The sulphite process uses different chemicals to attack and remove lignin. The sulphite process is characterised by its high flexibility compared to the Kraft process, which is a very uniform method, which can be carried out only with highly alkaline cooking liquor. The main sulphite processes are Acid (bi) Sulphite, Bisulphite (Magnetite), and Neutral sulphite (NSSC) and Alkaline sulphite.

This is a public trading company registered in Helsinki and Stockholm. http://www.storaenso.com/About-Site/Pages/Stora-Enso-in-brief.aspx.

Aracruz cellulose is one of the largest paper and Pulp Company in Brazil. This company produces nearly half of the total pulp exports from Brazil and is the world’s largest producer of bleached eucalyptus pulp.

Andersson, Måns and Örjan Bartholdson. “Swedish Pulp in Brazil: The case of Veracel, p. 5. http://www.swedwatch.org/sites/default/files/swedwatch_-_the_case_of_veracel.pdf.

The Constitutional rights as quoted above should been seen here in the context of parameters quoted by Mattias Kumm such as, (1) Are rights trumps over competing considerations of policy? (2) Do they have priority over the good in some strong sense? (3) Are rights firewalls providing strong protections against demands made by the political community? Pavlakos (2007), p. 131.

Andersson, Måns and Örjan Bartholdson. “Swedish Pulp in Brazil: The case of Veracel, p. 6. http://www.swedwatch.org/sites/default/files/swedwatch_-_the_case_of_veracel.pdf.

Andersson, Måns and Örjan Bartholdson. “Swedish Pulp in Brazil: The case of Veracel, p. 24. http://www.swedwatch.org/sites/default/files/swedwatch_-_the_case_of_veracel.pdf.

The use of land for growing one type of crop continuously.

Michael Porter is professor at Harvard Business School.

De Sombre (1999), p. 3. www.gmu.edu/programs/icar/ijps/vol4_1/desombre.htm.

Srinivasan (2000), p. 67.

Free trade is distributing money but damaging the wealth of nature.

The Classical Economist such as Adam Smith, maintained that the free-market would tend towards economic equilibrium through the price mechanism. Any excess supply (market surplus or glut) would lead to price cuts, which decreases the quantity supplied (by reducing the incentive to produce and sell the product) and increase the quantity demanded (by offering consumers bargains), automatically abolishing the glut.

http://infochangeindia.org/kids/Peopletalk_clemenceau.php.

BBC News Asbestos ship ‘can sail to India’ Friday, 30 December 2005. http://news.bbc.co.uk/2/hi/europe/4570246.stm.

http://www.ban.org/pdfs/ban_clemenceau_summary_of_ violations.

The Basel Convention on the control of Trans-boundary Movements of Hazardous Wastes and their disposal was adopted on 22 March 1989 by the Conference of Plenipotentiaries in Basel, Switzerland, in response to a public outcry following the discovery, in the 1980s, in Africa and other parts of the developing world of deposits of toxic wastes imported from abroad.

For detail reference, see [Business Standard, Tuesday, August 07, 2012], www.business-standard.com/india/news/alang-yard.

Each party shall take appropriate measures to 2(e) Not to allow the export of hazardous wastes or other wastes to a state or group of states belonging to an economic and/or political integration organization that are parties, particularly Developing countries, which have prohibited by their legislation all imports, or if it has reason to believe that the wastes in question will be managed in an environmentally sound manner, according to the criteria to be decided on by the parties at their first meeting; (g) Prevent the import of hazardous wastes and other wastes if it has reason to believe that the wastes in question will not be managed in an environmentally sound manner.

Basel Action Network (BAN) is a non-governmental organization (NGO) whose mission is to prevent the globalisation of the toxic chemical crisis. BAN is based in Seattle, Washington, USA.

Orellana. “Insights Shipbreaking and Le Clemenceau Row,” American Society of International law, Volume 10, Feb, (2006). http://www.asil.org.

PCB is chemically stable/inert, heat resistant and non-flammable substance, which is used worldwide as a dielectric in electrical components (transformers and capacitors). Due to its low biodegradability in the environment and their tendency to bio-accumulation and bio-magnify, PCBs belong to the so called persistent organic pollutants (POPs).The Basel/Basle Convention strictly regulates the trans-boundary movements of hazardous wastes and their disposal.

Yang and Moser (2011). The use of environmental tort claims to compensate pollution victims or to protect the environment and human health is still in an early stage of development in China. Negligence is a tort theory that permits someone who is injured by another’s unreasonable conduct to recover money damages. The primary element of a successful negligence case is proof of the defendant’s wrongful conduct. Nuisance is a tort theory that protects someone’s right to use and enjoyment of their real property. The Michigan Supreme Court described nuisance as follows: There are countless ways to interfere with the use and enjoyment of land, including interference with the physical condition of the land itself, disturbance in the comfort or conveniences of the occupant including his peace of mind, and threat of future injury that is a present menace and interference with enjoyment.

Footer (2006), p. 6.

Some of the famous environmental groups are such as, (1) African Wildlife foundation, (2) Conservation International, (3) CREST (4) Green Peace (5) National Wildlife Federation…etc.

AB while making findings, on the issue of Article XX of GATT, in the case of United States-Standard for Reformulated and Conventional Gasoline WT/DS2/AB/R, added in the conclusion that “the provisions of Article XX were not changed as a result of the Uruguay Round of Multilateral Trade Negotiations. Indeed, in the preamble to the WTO Agreement and in the decision on Trade and Environment, (Adopted by Ministers at the Meeting of the Trade Negotiations Committee in Marrakesh on 14 April 1994.) there is specific acknowledgement to be found about the importance of coordinating policies on trade and environment. WTO Members have a large measure of autonomy to determine their own policies on environment (including its relationship with trade), their environmental objectives and the environmental legislation they enact and implement. Concerning the WTO, that autonomy is circumscribed only by the need to respect the requirements of General Agreement and the other covered agreements.”

WT/DS58/AB/R. The guidelines adopted by State Department of the US for implementing Section 609 required the shrimp-harvesting nation to show that it had regulatory programme comparable to that of United States approved by the US National Marine Fisheries Service. The dispute resolution Panel and the Appellate Body ruled that Section 609 and the Original Guidelines violated Article XI of the GATT because they barred the importation of goods. Article XI prohibits restrictions on the importation of goods. They also ruled that the Original Guidelines could not be justified by virtue of exceptions for environment under Article XX of the GATT.

Francioni (2001), p. 20.

Article XX General Exceptions: Subject to the requirement, that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:

(a) necessary to protect public morals;

(b) necessary to protect human, animal or plant life or health;

(d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trademarks and copyrights, and the prevention of deceptive practices;

(e) relating to the products of prison labour;

(f) imposed for the protection of national treasures of artistic, historic or archaeological value;

(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;

(h) undertaken in pursuance of obligations under any intergovernmental commodity agreement which conforms to criteria submitted to the CONTRACTING PARTIES and not disapproved by them or which is itself so submitted and not so disapproved;

(i) involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan; provided that such restrictions shall not operate to increase the exports of or the protection afforded to such domestic industry, and shall not depart from the provisions of this Agreement relating to non-discrimination;

(j) essential to the acquisition or distribution of products in general or local short supply; provided that any such measures shall be consistent with the principle that all contracting parties are entitled to an equitable share of the international supply of such products, and that any such measures, which are inconsistent with the other provisions of the Agreement shall be discontinued as soon as the conditions giving rise to them have ceased to exist. The CONTRACTING PARTIES shall review the need for this sub-paragraph not later than 30 June 1960.

The Parties to this Agreement, Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.

Kazim, and Klawitter. The value of Pakistani Worker. Spiegel Online, 23 October, 2012. www.spiegel.de/international/world/criticism-over-damages.

WT/DS58/AB/R, para 168 “…multilateral solutions based on international cooperation and consensus as the best and most effective way for the governments to tackle environmental problems of a trans-boundary or global nature. WTO Agreements and multilateral environmental agreements (MEAs) are representative of efforts of the international community to pursue shared goals, and in the development of a mutually supportive relationship between them, due respect must be afforded to both.”

The Industrial structure of the developing countries is quoted here as an example, as that structure is affecting environment in higher proportion.

Para 31 of the DOHA conference (2001) With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on: (1) the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEA). The negotiations shall be limited in scope to the applicability of such existing WTO rules as among parties to the MEA in question; (2) procedures for regular information exchange between MEA Secretariats and the relevant WTO committees, and the criteria for the granting of observer status; (3) The reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services. We note that fisheries subsidies form part of the negotiations provided for in paragraph 28.

Trade-related Measures and Multilateral Environmental Agreements, Economics and Trade Branch Division of Technology, Industry and Economics United Nations Environment Programme, 2007.

For detail references, see ‘Environment Negotiations’ The Doha mandate on Multilateral Environmental Agreements. Doha Development Agenda. http://www.wto.org/english/tratop_e/envir_e/envir_neg_mea_e.htm.

A distinction is often made between hard and soft international law. Hard international law generally refers to agreements or principles that are directly enforceable by a national or international body. Soft international law refers to agreements or principles that are meant to influence individual nations to respect certain norms or incorporate them into national law. Soft international law by itself is not enforceable. Also see Footer (2006), p. 244.

WT/DS412/R, WTDS426/R and WT/DS412/AB/R, WT/DS426/AB/R.

See WT/DS412/R, WTDS426/R, para 7.170, Japan submits that the challenged measures may be best characterized as “direct transfer of funds” because they involve payments on the part of the OPA that are analogous to a conditional grant.

See WT/DS412/R, WTDS426/R, para 7.176 and 7.177, the European Union submits that the challenged measures may each be legally characterized as “financial contribution “in the form of a “direct transfer of funds” within the meaning of Article 1.1(a) (1) (i) of the SCM Agreement, or as a form of income or price support under the terms of Article1.1 (a) (2) of the SCM Agreement.

WT/DS412/R, WTDS426/R, para 1.4 At its meetings on 20 July 2011 and 20 January 2012, the Dispute Settlement Body established two Panels respectively, Japan request in document WT/DS412/5, and European Union’s request in WT/DS426/5, in accordance with Article 6 of the DSU.

See para 1.6 of WT/DS412/AB/R●WT/DS426/AB/R.

FIT Programme as described under Para 7.64 and 7.65 of the WT/DS412/R, WTDS426/R The FIT Programme can be generally described as a scheme implemented by the Government of Ontario and its agencies through which generators of electricity, produced from certain forms of renewable energy, are paid a guaranteed price per kWh of electricity delivered into the Ontario electricity system under 20-year or 40 year contracts with the OPA. In the case of wind power projects having a capacity to produce electricity that is greater than 10 kW, and solar projects with a capacity of up to 10 MW, a “Minimum Required Domestic Content Level” must be satisfied in the development and construction of the qualifying electricity generation facility. The FIT Programme was formally launched by the OPA on 1 October 2009, pursuant to the direction of the Ontario, Minister of Energy and Infrastructure acting under the authority of the Electricity Act of 1978, as amended by the Green Energy Act of 2009. The FIT Programme is the third in a series of initiatives adopted by the Government of Ontario since 2004 to increase the supply of electricity produced from renewable source of energy into the Ontario electricity system in order to diversify its supply-mix and help replace coal-fired facilities.

Para 1.1 of the WT/DS412/R, WTDS426/R.

WT/DS412/R, WT/DS426/R, para 7.320. We have carefully reviewed the parties, legal and factual arguments in the light of the legal standard for determining the existence of benefit that has to date been applied in WTO dispute settlement. In the particular circumstances of these disputes, we have concluded that determining whether the challenged measure confer a benefit on the basis of a benchmark derived from a competitive wholesale electricity, would mean that FIT and micro FIT contracts could be legally characterized as subsidies by means of a comparison with a market standard that has not been demonstrated to actually exist nor one that could be reasonably achieved in Ontario, a market standard that the complainants have not contested will only rarely, if at all attract sufficient investment in the generation capacity, to secure a reliable system of electricity supply even outside Ontario. In our view, such an outcome would fail to reflect the reality of modern electricity systems, which by their very nature need to draw electricity from a range of diverse generation technologies that play different roles and have different costs of production and environmental impacts. As we have emphasized on a number of occasions, it is only in exceptional circumstances that the generation capacity needed from all such technologies will be attracted into a wholesale market operating under effective competition. Thus, the competitive wholesale electricity market that is at the center of the complainant’s main submission cannot be appropriate focus of the benefit analysis in these disputes.

WT/DS412/AB/R●WT/DS426/AB/R, para 5.222. We have reversed the Panel’s findings that the European Union and Japan failed to demonstrate that the challenged measures confer a benefit within the meaning of Article 1.1(b) of the SCM Agreement. Thus, the condition for us to consider the European Union’s and Japan’s alternative claims under Article 11 of the DSU is not met. Therefore, we do not address the alternative claims that the Panel failed to make an objective assessment of the matter according to Article 11 of the DSU.

GATT Article III(8) (a) The provisions of this Article shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale. (b) The provisions of this Article shall not prevent the payment of subsidies exclusively to domestic producers, including payments to domestic producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article and subsidies effected through governmental purchase of domestic products.

WT/DS412/AB/R●WT/DS426/AB/R, para 5.185. Nevertheless, while introducing legitimate policy considerations into the determination of benefit cannot be reconciled with Article 1.1 (b) of the SCM Agreement, we do not think that a market-based approach to benefit benchmarks excludes taking into account situations where governments intervene to create markets that would otherwise not exist. For example, governments create electricity markets with constant and reliable supply. By regulating the quantity and the type of electricity that is supplied through the network (base-load, immediate load, or peak-load) and the timing of such supply, governments ensure that there is a continuous supply-demand balance between generators and consumers, thus avoiding imbalances that would destabilize the network and cause interruptions of power supply. Although this type of intervention has an effect on market prices, as opposed to a situation where prices are determined by unconstrained forces of supply and demand, it does not exclude per se treating the resulting prices as market prices for the purposes of a benefit analysis under Article 1.1(b) of the SCM Agreement. In fact, in the absence of such government intervention, there could not be a market with a constant and reliable supply of electricity.

WT/DS412/AB/R● WT/DS426/AB/R, para 5.188.

WT/DS412/AB/R● WT/DS426/AB/R, para 5.189. We further note that a comparison between renewable energy electricity generators and conventional energy electricity generators requires consideration of the full costs associated with the generation of electricity. In this respect, if, on the one hand, higher prices for renewable electricity have certain positive externalities, such as guaranteeing long-term supply and addressing environmental concerns, on the other hand, lower prices for non-renewable electricity generation have certain negative externalities, such as the adverse impact on human health and the environment of fossil fuel energy emissions and nuclear waste disposal. Considerations related to these externalities will often underlie a government definition of the energy supply-mix and thus be the reason why governments intervene to create markets for renewable electricity generation.

WT/DS176/AB/R para 105.

WT/DS412/AB/R, WT/DS426/AB/R, para 5.127.

ISO standards: International Organization for Standardization.

WT/DS58/AB/R, para 177. “We have already observed that section 609, in its application, imposes a single, rigid and unbending requirement that countries applying for certification under Section 609 (b) (2) (A) and (B) adopt a comprehensive regulatory program that is essentially the same as the United States program, without inquiring into the appropriateness of that program for the conditions prevailing in the exporting countries. Furthermore, there is little or no flexibility in how officials make the determination for certification pursuant to these provisions. In our view, this rigidity and inflexibility also constitute ‘arbitrary’ discrimination.”

Francioni (2001), p. 13.

European Communities-Trade Description of Sardines. WT/DS231/AB/R. [E]uropean Communities raised the issue of legal interpretation, concerning the product description of Sardines. In 1978, the Codex Alimentarius Commission (the “Codex commission”), of the United Nations Food and Agriculture Organization and World Health Organization, adopted a worldwide standard for preserved Sardines and Sardine-type products, which regulate matters such as presentation, essential composition and quality factors, food additives, hygiene and handling, labelling, sampling, examination and analyses, defects and lot acceptance. This standard, CODEX STAN 94-1981, Rev.1-1995(“CODEX Stan 94”), covers preserved sardines or sardine-type products. This also included Section 6 of Codex Stan 94. Peru exports preserved products prepared from Sardinops sagax sagaax (Sardinops sagax), one of the species of fish covered by Codex Stan 94.This species is found mainly in the Eastern Pacific Ocean, along the costs of Peru and Chile. In appeal against the panel decision (para 35) The European Communities claims that the panel erred in concluding that Codex Stan 94 is a relevant international standard for purposes of Article 2.4 of the TBT agreement. The European Communities alleges further that the panel erred in law when interpreting the meaning of Codex Stan 94. According to the European Communities, the drafting history of Codex Stan 94 demonstrates that section 6.1.1(ii) of Codex stan 94 should be interpreted as allowing the common name for the species of fish to be a possible name for the preserved “sardine-type” product, and the word “sardine” does not have to be part of the name. Para 41, According to the European Communities, the EC regulation covers only Sardina pilchardus and does not regulate Sardinops sagax, nor fish of other species. The European Communities thus argues that the relevant part of Codex stan 94, for purpose of Article 2.4 of the TBT Agreement, is section 6.1.1(i), ‘which states that the name “Sardines” is to be used exclusively for Sardina pilchardus. According to the European Communities section 6.1.1(i) of Codex Stan 94 is used “as a basis for” the EC regulation.’ The European Communities contend that section 6.1.1(ii) is not a relevant part of the standard because it refers to products that are not regulated by the EC regulation. Therefore it need not be used “as a basis for” the EC regulation.

American Society of International Law. http://www.cites.org/eng/disc/E-Text.pdf.

Young (2010), p. 2. http://ssrn.com/abstract=1852904.

The CTE was set up by the 1994 Marrakesh Ministerial Decision on Trade and Environment, which essentially mandates the committee to (1) identify the relationship between trade measures and environmental measures in order to promote sustainable development. (2) make appropriate recommendations on whether any modifications of provisions of the multilateral trading system are required, compatible with the open, equitable and non-discriminatory nature of the system.

Young (2010), p. 14. http://ssrn.com/abstract=1852904.

Dugal and Walton (2011), p. 1.

Young (2010), p. 2. http://ssrn.com/abstract=1852904.

Preamble: Marrakesh agreement establishing the WTO “the parties to this agreement, recognizing that their relations in the field of trade and economic endeavor should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.”

Young (2010), p. 3. http://ssrn.com/abstract=1852904.

WTO fisheries subsidies negotiations and Pacific Island states. Dugal and Walton (2011), p. 1.

Porter (2001), p. 11.

Porter (2001), p. 11, 12–28.

For detail reference see, Ongoing WTO Negotiations on Fisheries Subsidies (http://www.asil.org/insights/volume/8/issue/12/ongoing-wto-negotiations-fisheries subsidies), p. 1. Published on ASIL.

WTO Doha Conference, (2001), para 28. Doha declarations “In the light of experience and of the increasing application of these instruments by members, we agree to negotiations aimed at clarifying and improving disciplines under the agreements on implementation of Article VI of the GATT 1994 and on Subsidies and Countervailing Measures, while preserving the basic concepts, principles and effectiveness of these agreements and their instruments and objectives, and taking into account the needs of Developing and Less-Developed participants. In the initial phase of the negotiations, participants will indicate the provisions, including disciplines on trade distorting practices, which they seek to clarify and improve in the subsequent phase. In the context of these negotiations, participants shall also aim to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to Developing countries.”

Sixth WTO Ministerial Conference, December (2005). “We ministers …recall our commitment at Doha to enhancing the mutual supportiveness of trade and environment. Note that there is broad agreement that the Group should strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and call on participants promptly to undertake further detailed work to, inter alia, establish the nature and extent of those disciplines including transparency and enforceability. Appropriate and effective special and differential treatment for Developing and Least-Developed Members should be an integral part of the fisheries subsidies negotiation, taking into account the importance of this sector to development priorities, poverty reduction, and livelihood for food security concern.”

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Title: The Impact of Trade Subsidies on the Environment: A Problem for the WTO Trading System
Author: Gurwinder Singh
Publisher: Springer International Publishing
Book: Subsidies in the Context of the WTO's Free Trade System
Print ISBN: 978-3-319-62421-1

Electronic ISBN: 978-3-319-62422-8

Copyright Year: 2017
DOI: https://doi.org/10.1007/978-3-319-62422-8_6