The interplay between international trade and environment

The interplay between international trade and environment

Introduction

The interplay between environment and international trade is a long political and legal debate, which has led to the creation of the World Trade Organization (WTO). While the agreements and policies on international trade seek to increase trade through the removal of barriers, environmental policies are seen as a strategy to restrict it. In most cases, the developing countries are against environmental agreements because they cannot adopt environmentally friendly methods of production and transportation. WTO has been on the front line to liberalize trade and therefore, against the environmental agreements. However, the environmental agreements and policies do not only restrict trade but also accelerate it in some situations. Also, trade liberalization does not only harm the environment but in some instances it supports conservation. For several years, countries have therefore feared environmental restrictions with fear that they will reduce trade and thus prevent the interplay between the two. This paper analyzes the Tuna-Dolphin case to see how it has changed the restricted interplay between Trade and environment and how the interaction will and takes place.

Introduction to the Tuna-Dolphin Case

The case is a dispute between the US and Mexico brought before the WHO involving the method of fishing used by Mexican stakeholders. According to America, the method of fishing where dolphins were dying was destroying the environment, and therefore, Mexico and other countries were not supposed to supply it with Yellowfin and related products.[1] Purse-seine fishing method is what the US did not want those fishing from Pacific to use.[2] The method is the most preferred way of fishing in most parts of the world where two vessels are used to encircle a school of fish with a net once located. A school of tuna is located through observation to identify where the dolphins are because they tend to swim above the small fish in the Eastern Tropical Pacific (ETP).[3] The anglers, therefore, drown the encircled dolphins intentionally to catch the tuna. The purpose of the importation ban was to make Mexico design another fishing strategy that would get tuna fish without intentionally taking the lives of dolphin from the Pacific.

The dispute between those two countries started in 1990 when America decided to apply the Marine Mammal Protection Act of 1972 to protect the dolphin and therefore banned Mexico from supplying it with Tuna fish obtained through the Purse-seine fishing method.[4] [5] The court prohibited the importation of such fish until one proves and produces a Yellowfin Tuna Certificate of origin to show that the method used was friendly to the other marine animals. The Federal Trade Commission Act 15 U.S.C 45 also stresses the ban by pointing out that the imported tuna and related products must have the label “dolphin-safe” to allow confirmation of a safe method use that does not kill the dolphins.[6] Mexico was not satisfied with the ban, arguing that the US went against some acts on the General Agreement on Tariffs and Trade(GATT) before WTO.[7] The issue, which comes out from the dispute, is that of the methods and processes used in production about trade restriction. Mexico claims in the first case that the product remained the same despite the process. In the first case, Mexico wins with the claims that such restrictions are not applicable outside the US.

In the second Dolphin case saga, Netherlands together with the European Economic Community (EEC) was on the view that it was against the GATT acts for the US to prohibit intermediary countries from supplying Yellowfin and related products.[8] According to the WTO dispute committee, the method the US uses to conserve dolphins is not necessary, and that change of policies and practices from intermediary nations is the way to go.[9] The US again lost in the case. However, the latest case gives US victory. The WTO, which for several years has been claiming that the restrictions by the US on tuna importation are not in line with its rules now finds the labeling “dolphin-safe” to comply.[10] The released report also points out that Mexico should withdraw any countermeasures on US products because the Dolphin-safe requirements are in line with America-WTO duties.[11]

Impact of Tuna Case Decision on Trade and Environment

The case is a reconciliation of the environment and trade, which the WTO and other countries have separated for a long time minimizing their interplay. The WTO has for a long time coming up with laws, which restricts measures on the environment with the fear that they will reduce trade, which it is supposed to liberalize. Although there is an idea of the continuation of restriction on the measures, the case has brought about some developments on the laws to enable the interplay between trade and environment. Both Trade and environment can now impact each other positively contrary to how it was before.

Effect of International Trade Agreement to the Environment

Before the case, most people have been assuming that trade can only lead to environmental pollution and degradation.[12] However, the case proves and changes the interplay to make trade contribute to environmental conservation. From the final decision on the case, WTO allows the US to restrict importation of tuna until Mexico and other countries change their methods of production to ensure that dolphins are safe web.[13] WTO is the governing body where any trade agreement between countries is settled. [14] Similar to courts where a previous case can inform other cases or leads to the legislation of some laws, the case on tuna will apply in other international trades. Traded products, therefore, will require meeting environment conservation standards in the production process and not on the final product or the method of transport. Engagement in trade, therefore, means that a country or company is engaging in environmental conservation process because they will require averting the old production methods and coming up with new ones that are friendly to the environment.

Trade countries were only keen on the effect of the product and transportation method to the environment before the dispute between Mexico and America.[15] The method of production has not been a concern. Trade, as a result, has not been able to affect much on environmental conservation but doing more harm because most countries would use any method to increase production even though it pollutes the environment. There has been no law governing the process of production to ensure that it observes the environment conservation guidelines.[16] The decision of the case creates a precedent law, which will control the method of production meaning that it has widened the scope of the interplay between trade and the environment. There is no more fear that environmental control measures will inhibit trade because countries will take the new direction to adjust and therefore have quality trade.[17]

The case has opened the idea of harmonized trade standards to conserve the environment. Countries, therefore, will use trade to improve and conserve the environment. Both parties in the case, US and Mexico together with the other intermediary countries emerge to be winners.  Mexico argued that the embargo placed by the US was discriminatory on its products where the US maintained that it was only trying to conserve dolphin.[18] WTO had the same view that the US was discriminatory and therefore it was not necessary to impose a burn on Mexico and other intermediary countries. Mexico’s stand is what WHO and other many countries use to prevent the environment from influencing trade and therefore making the interplay to remain heavier on one side.

The cause of disagreement between the two parties was article XX b of the GATT, which points out that a measure taken by any party to protect lives must be necessary and that there should be similar measures imposed in the domestic country.[19] Meaning of the word “necessary” in the article has attracted divergent views for several years. According to Mexico and WTO, the word represents a state where there are no alternatives, and therefore countries must stick to such measures. However, the US interpreted the term to suggest that the action is needed.[20] The other misunderstanding and Mexico argument was that the US had not imposed similar measure in its country and therefore, the restrictions were not legitimate. In a similar incidence on U.S.—Gambling, United States prohibited gambling in Antigua and Barbuda, but it did not do the same in domestic.[21] WHO restricted the prohibition because of violation of the chapter.  The two issues are hindrances to impose environmental policies that will, in turn, affect international trade.

Through a continuers argument on the issue, the parties and WTO agrees on the issue that to avoid the connotation of discrimination on Mexico tuna products, the US to emphasize on a dolphin-safe label.[22] WTO and the US, therefore, do not ban Mexico and the other countries from exporting, only that they must prove that their products are observing environmental conservation strategies. Trade of tuna fish has led to the death of many dolphins without control. Prevention of the interplay between the environment and trade has seen the destruction to the environment while us the environmental policies have had to effect on trade. The direction of impact, in that case, has been on one side. However, WTO has opened a new association where trade is taking care of the environment unlike before where trade has been harming the environment.[23]

Impact of Trade Harmonization on the Environment

The tuna case saga has brought a new trend where parties can bring together their trade agreements and align them with environmental issues and policies. Trade harmonization is now an environmental goal and not a strategy used by other countries to harass others or reject their products. Countries have had their internal ways through which they approach environmental conservation similar to that of the US where it bans Mexico tuna products importation.

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