Document Type

Article

Publication Title

American University International Law Review

Abstract

The World Trade Organization's Appellate Body rulings in United States-Import Prohibition of Certain Shrimp and Shrimp Products ("Shrimp/Turtle")' created a new baseline for the labor and environment debate at the World Trade Organization ("WTO"). These landmark decisions effectively rejected (without citing!) the previous General Agreement on Tariffs and Trade ("GATT") holding in United States-Restrictions on Imports of Tuna Case ("Tuna/Dolphin"), where the panel ruled that Article XX limits exporting countries from using market access measures on policy grounds. The basic logic of the Appellate Body's ruling applies to, inter alia, Article XX(a). Before Shrimp/Turtle, conventional wisdom had it that the framework of Article XX could not justify the trade embargoes targeted at other countries' environmental and labor policies. On the other hand, it was also conventional wisdom that conditions relating to environmental and labor policies could be placed on voluntary and non-binding preferences granted to developing countries under the Generalized System of Preferences ("GSP") without violating GATT provisions. Initially a waiver and later on a Tokyo Round decision, called the "Enabling Clause," exempted GSP treatment from the Most Favored Nation ("MFN") requirement in Article 1. The issues India proposed to bring before the WTO dispute settlement process are: (1) how broad or narrow this exemption is, and (2) to what extent dispute settlement could police this exemption, based on scrutiny of whether the "conditions" of the Enabling Clause are met. After Shrimp/Turtle, there were many who thought that the focus on the environmental and social agenda had shifted to political and diplomatic negotiations within the WTO and other international organizations. In late 2002, however, India brought its complaint before the Appellate Body to challenge the European Union's ("EU") use of market access measures on policy grounds in its GSP. India's claim tested conventional wisdom that such measures fell outside WTO's legal scrutiny. The claim specifically addressed market access measures justified by labor, environmental, and drug enforcement concerns. India dropped any arguments concerning the labor and environmental incentives in its first submission to the panel. Nevertheless, the general jurisprudential approach that the panel and Appellate Body adopted in this case would likely impact future litigation concerning labor and environmental conditionality in GSP schemes, as well as other kinds of differential treatment. This essay examines India's original legal claim as far as it concerns environmental and labor incentives, and how the Appellate Body interprets its strengths and weaknesses under WTO law today. The conclusion presents various possible outcomes of a challenge to such preferences.

First Page

1333

Volume

18

Publication Date

2003

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