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Writer's pictureAbhay Manchala

When Climate Agendas Get Set Outside the UNFCCC: World Trade Organization (WTO)

This series has been a look at the many outside influences within the global environmental regime that influence climate policy. Until now, we’ve discussed how organizations like the WEF and the MEF project a sense of exclusivity and power, but we’ve explored that the actual reach that they have is limited.


In this post, we’ll be looking at the World Trade Organization, whose influence on environmental policy is far more powerful.



The WTO’s Goals


The WTO prides itself on being the only international organization to regulate trading between nations. Its goal is “to ensure that trade flows as smoothly, predictably and freely as possible” (1). A deeper exploration of these goals shows us that the WTO is committed to opening trade, fair competition, inclusion and, interestingly, protection of the environment. It affirms its goals to protect environmental health but cautions that “members must not use environmental protection measures as a means of introducing discriminatory trade barriers” (1).


Trade at What Cost?


That final point is extremely contentious in the global environmental sphere, and it brings us to the crux of our discussion: free trade versus environmental regulation.



The prevailing belief in the trade regime is that environmental regulations are a detriment to economic growth. It is demonstrably true that environmental policies ranging from decarbonization to trade tariffs harm competitiveness and productivity (2).


If economic growth is the prerogative, then environmental regulations are the enemy. This narrative is particularly relevant to the Global South, which is given special status by the WTO. They are ‘countries of preference,’ which allows them more trade opportunities, greater leeway to adopt new technologies and systems, and access to general support from the WTO.


While the Global South and Least Developed Countries undoubtedly have the right to develop, the narrative of ‘growth at all costs’ has been used to justify rampant environmental destruction in the Global South by — some experts would argue — their neo-colonizers (3).


A prominent example of this injustice can be seen in the global waste trade. The Global South has historically been used as a dumping ground by the North for its purported ‘economic efficiency.’ This strategy was so pervasive that the chief economist of the World Bank himself, Lawrence Summers, issued a memorandum about how it was economically justifiable (and right) to dump waste in poorer countries due to reduced costs and a ‘decreased demand for a clean environment … in poor countries with higher mortality’ (3). You can read the memorandum in its entirety here.

The truth is this; free trade is detrimental to the environment and the people that live within it. The same patterns hold for agriculture, mining and logging, with the brunt of these activities occurring in the Global South (3). The horrors of last year’s Amazon rainforest fires, for example, were caused almost entirely by rampant deforestation.


The South’s plight is by design. The WTO’s prioritization of expanded global trade creates a system of inequity with winners and losers. It is no surprise that the Global North largely consumes the most resources per capita, and it begs the question of whether streamlining Southern development mainly serves to expand Northern extractivism. Who truly benefits from the WTO’s lack of ‘discriminatory trade barriers’?


Barriers to Free Trade - Where Are They?


The WTO’s guarantee of nondiscrimination in trade has also prevented meaningful environmental legislation from taking hold. This phenomenon, though not overt, has been described as a ‘big chill’ on the formation of Multilateral Environmental Agreements (MEA) (4).


These MEAs usually necessitate bans on certain exports. Hypothetically, an environmentally conscious country may want to boycott the import of environmentally unsustainable aquaculture from an exporting nation. This action brings environmental regulation and free trade into direct conflict.


The battle between the WTO and MEAs has been addressed since the inception of the Organization. The WTO is cognizant of the friction between MEAs and free trade but remains confident in its stance that its goal is to protect free trade above all else.


A well-known example of the conflict is the ‘shrimp-turtle case,’ where the US banned imports of shrimp sourced from methods that would also kill turtles. India, Pakistan, Malaysia and Thailand argued that they were being unfairly discriminated against.


The US used justification from the GATT, or General Agreement on Tariffs and Trade, which is the backbone of free trade law internationally. The GATT’s Article XX argues that exemptions to free trade policy can be made for environmental reasons as long as they are non-discriminatory (4). The WTO ruled against the United States., which had admittedly legislated some gaps in the consistency of who it would accept imports from.


The shrimp-turtle case exemplifies the idea that the WTO, and not the provisions of MEAs, is the true arbiter of environmental disputes (as they pertain to trade). The WTO has some of the most powerful enforcement mechanisms in the world, and countries would rather err on the side of caution by agreeing to lax environmental measures instead of being caught in a lengthy trade dispute (4).


The WTO Now



In a system that wholly prioritizes free trade, meaningful environmental regulation will never see light. At the same time, though, the WTO champions itself as an active participant in environmental protection and stewardship. In the WTO’s ‘Trade and Climate Change Information Brief,’ the Organization concedes that unregulated trade contributes to pollution and increased resource use (5).


This true (yet weak) conclusion is then supported by the idea that the WTO’s member states have submitted an increasing number of environmental regulations over the last decade. While a good step, these goals primarily focus on alternative energy uses and energy conservation; that is, they prioritize the streamlining of business without changing the systems responsible for far more than just pollution and resource extractivism (5).


The WTO is firm in its stance on environmental policy. It admits that it is not an environmental organization and that it will step in to regulate any environmental policy that stands in the way of free trade. And why shouldn’t it? After all, business is booming.


*****


  1. World Trade Organization. “What Is the WTO?” WTO, www.wto.org/english/thewto_e/thewto_e.htm.

  2. Dechezleprêtre, Antoine, and Misato Sato. “The Impacts of Environmental Regulations on Competitiveness.” Review of Environmental Economics and Policy, vol. 11, no. 2, 2017, pp. 183–206, www.journals.uchicago.edu/doi/10.1093/reep/rex013, https://doi.org/10.1093/reep/rex013.

  3. Carmen G. Gonzalez, Beyond Eco-Imperialism: An Environmental Justice Critique of Free Trade, 78 Denv. U. L. Rev. 979 (2001).

  4. Eckersley, Robyn. “The Big Chill: The WTO and Multilateral Environmental Agreements.” Global Environmental Politics, vol. 4, no. 2, 1 May 2004, pp. 24–50, https://doi.org/10.1162/152638004323074183. Accessed 31 Aug. 2020.

  5. TRADE and CLIMATE CHANGE INFORMATION BRIEF N°1.

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