International Trade Law and the Environment

Abstract

The global society has experienced an extensive process of economic integration over the last decade. This process was reflected both in an unprecedented increase in cross-border economic and financial transactions, and in a parallel empowerment of global economic institutions, such as the World Trade Organisation (‘WTO’), the International Monetary Fund (IMF), the World Bank and the International Chamber of Commerce (ICC). The possible adverse effects of this far-reaching process of economic integration - in the environmental and other domains - have been the subject of wide-ranging and highly intense public debate, evident both in street protests in major economic and in the popular media and scholarly journals. This paper carefully assesses this conflict, decoding the social frictions underlying it, and exploring the impact of trade and its regulation on the prospects for sustainable development. It explores these themes in one critical institutional domain: the WTO.

The paper is organised as follows. Section B provides a brief introduction to the multiple legal systems and transnational institutions that together constitute the field of ‘international trade law’ - itself part of the broader realm of international economic law. The process of global economic integration is driven and facilitated by this complex legal network; the tendency of some of the observers of this process to associate it solely with the WTO is, I will argue, wrong. Section C explores the various frictions which together constitute the ‘trade and environment’ conflict. It will also discuss the place of the concept of sustainable development within this debate. Section D starts with a general question: what role can the law play in resolving this conflict? It focuses on the potential synergies between the trade and environment realms, and on the possible role of law in enabling their actual realisation. The section explains this idea, setting it against the various frictions discussed in the previous section. The next four sections focus on a concrete institution - the WTO. They analyse the legal manifestations of this conflict within the boundaries of the WTO, exploring how the frictions and synergies between the trade and environment realms are reflected in the law of the WTO (highlighting the role of the idea of sustainable development in the WTO jurisprudence). Sections F and G draw some general conclusions and make some tentative proposals for reform. The paper concludes with a brief analysis of the Doha negotiations framework on the ‘trade and environment’ question.

Keywords: Trade and environment, WTO, GATT, sustainable development

JEL Classification: K32, K33