Chapman Law Review
International Law Symposium
ENVIRONMENTAL TRADE MEASURES, THE SHRIMP-TURTLE RULINGS, AND THE ORDINARY MEANING OF THE TEXT OF THE GATT
Copyright (c) 2005 Chapman Law Review; Howard F. Chang
The World Trade Organization (WTO) Appellate Body issued the most important rulings to date on the status of environmental trade measures under the General Agreement on Tariffs and Trade (GATT) in its 1998 report and 2001 report in the “shrimp-turtle” dispute. At issue in this case was section 609 of Public Law 101-162, a U.S. statute that the U.S. Court of International Trade had interpreted as a ban on shrimp imports from countries not certified by the United States as having adopted “a regulatory program governing the incidental taking of . . . sea turtles . . . that is comparable to that of the United States.” The United States adopted such a program to promote the conservation of sea turtles, which are endangered species. This program includes a requirement that U.S. trawlers use turtle excluder devices (TEDs) to protect sea turtles from incidental capture and drowning in shrimping nets. India, Malaysia, Pakistan, and Thailand complained that the U.S. ban on shrimp imports violated GATT Article XI, which prohibits quantitative restrictions on imports, and requested that a WTO panel settle their dispute with the United States.
Given the hostile attitude toward environmental trade measures reflected in past panel decisions under the GATT, the WTO Appellate Body’s 1998 ruling in the shrimp-turtle case represented a significant step toward more liberal treatment of these measures under the GATT. In stark contrast to the consistent pattern in those past decisions, the Appellate Body upheld the statute in dispute and objected only to very specific aspects of its implementation. The Appellate Body endorsed the general type of case-by-case review that I had proposed in my writings and thereby brought GATT case law much closer to a reasonable balance between environmental and trade interests. The 1998 Appellate Body decision, as I have noted in prior writing about that ruling, suggests that countries can defend unilateral import bans as permissible environmental measures under the GATT as long as they avoid unfair discrimination. The result was a decision much more sensitive to environmental interests than observers had expected.
To comply with the Appellate Body’s decision, the U.S. State Department issued new guidelines in 1999 that addressed the problems identified by the Appellate Body in its 1998 report. Malaysia nevertheless complained that the United States had not brought its policies into conformity with the 1998 ruling. Malaysia brought this complaint before the WTO, and in 2001, the Appellate Body held that the United States had complied with the 1998 Appellate Body decision, confirming that the U.S. import ban was consistent with the GATT despite the ban’s reliance on environmental standards unilaterally prescribed by the United States.
The Appellate Body’s rulings in this dispute, however, have generated some confusion regarding the standard that WTO panels should apply to environmental trade measures in the future. In this article, I will suggest that the 2001 ruling by the Appellate Body confirms an interpretation of the 1998 shrimp-turtle decision that preserves broad leeway for the use of environmental trade measures. I will argue that a more restrictive interpretation of the shrimp-turtle rulings would be inconsistent with the Appellate Body’s close attention to the “ordinary meaning” of the text of the GATT in its legal reasoning.
First, in Part I of this article, I will review the Appellate Body’s decisions in the shrimp-turtle cases, summarizing the Appellate Body’s rulings in both its 1998 and 2001 reports. Unlike prior dispute-settlement reports addressing environmental trade measures under the GATT, the Appellate Body in the shrimp-turtle cases emphasized the “ordinary meaning” of the text of the GATT. This explicit focus on the treaty text implies better legal reasoning and more liberal treatment for environmental trade measures than we have seen in the past. Second, in Part II, I consider three questions of interpretation that have generated disagreements among readers of the Appellate Body reports. With respect to each issue, I argue that fidelity to the “ordinary meaning” of the text of the GATT requires the interpretation of those reports that gives WTO members greater freedom to use environmental trade measures.
I. The Shrimp-Turtle Rulings
The United States defended its ban on shrimp imports as a measure falling within GATT Article XX, which sets forth general exceptions from the obligations set forth elsewhere in the GATT. In particular, Article XX states:
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 the 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:
. . . .
(b) necessary to protect human, animal or plant life or health;
. . . .
. . . .
When the United States lost before the WTO panel in the shrimp-turtle case, it was the third time in a row that a dispute-settlement panel had held that the United States had violated the GATT by banning imports harvested in a manner harmful to marine life. Pursuant to the Marine Mammal Protection Act (MMPA), the United States has banned imports of tuna from countries that have not adopted programs to protect dolphins comparable to the U.S. program. In 1991, and again in 1994, dispute-settlement panels held that the MMPA violated the GATT. Both those GATT panels, like the WTO panel in the shrimp-turtle case, ruled against the United States on grounds so general and sweeping that they left little scope for trade measures to protect the global environment. The GATT Council, however, adopted neither of the “tuna-dolphin” panel reports, which therefore never became legally binding.
A. The 1998 Appellate Body Ruling
In the shrimp-turtle case, the United States appealed the panel’s ruling to the WTO Appellate Body, which in October 1998 also ruled against the United States, but on much narrower grounds than the panel below. In its ruling, the Appellate Body used much better legal reasoning than we have seen in past panel decisions, with much closer attention to the ordinary meaning of the language in GATT Article XX. For example, in the shrimp-turtle case the panel below required that any measure allowed under Article XX must not be “a type of measure” that would “undermine the WTO multilateral trading system” if adopted by others, a requirement that echoes a concern expressed by both the 1991 and 1994 tuna-dolphin panels. In a striking departure from the pattern established by those past decisions, the Appellate Body explicitly rejects this requirement as “a test that finds no basis . . . in the text” of Article XX. The Appellate Body criticized the panel below for failing to examine “the ordinary meaning of the words of Article XX.” The Appellate Body stressed that “[a] treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted,” looking beyond that text only “[w]here the meaning imparted by the text itself is equivocal or inconclusive, or where confirmation of the correctness of the reading of the text itself is desired.” Thus, as John Knox has observed, the Appellate Body “decided that its starting point would always be the ordinary meaning of the text” and that it would “follow the ordinary meaning of the text before it as far as possible.” This emphasis on the “ordinary meaning” of the treaty text is itself significant, because each of the prior panel decisions ruled against the United States based on requirements that the panels invented without any support in the text of Article XX. Critics of those past decisions, including this author, have urged a more literal reading of Article XX, which implies a broader reading of the Article XX exceptions.
Turning to the question of whether section 609 is a measure “relating to” conservation within the meaning of Article XX(g), the Appellate Body in the shrimp-turtle case found the “general design and structure” of section 609 to be “reasonably related” to a “legitimate policy” of conservation. The Appellate Body noted that section 609 “is not disproportionately wide in its scope and reach in relation to the policy objective of protection and conservation of sea turtle species.” The requirement that “a country adopt a regulatory program requiring the use of TEDs,” according to the Appellate Body, “is . . . directly connected with the policy of conservation of sea turtles.” Thus, the Appellate Body concluded that section 609 “is a measure ‘relating to’ the conservation of an exhaustible natural resource within the meaning of Article XX(g).”
The Appellate Body carefully identified problems only in the way in which the executive branch applied this law to countries exporting shrimp. In particular, the Appellate Body held that the executive branch applied section 609 “in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries,” which violates the requirements set forth in the preamble, or “chapeau,” of Article XX. Thus, the Appellate Body avoided the use of any general per se rules against environmental trade measures like the sweeping rules announced by panels in the past. Instead, the Appellate Body endorsed a case-by-case analysis that relies on the requirements explicit in the chapeau of Article XX to guard against the abuse of the Article XX exceptions, much as critics of past panel decisions, including this author, have proposed. Given its case-specific approach, the opinion is explicit regarding precisely which particular features of the application of the trade measure in question were “a means of arbitrary or unjustifiable discrimination.” Furthermore, each objection pertains to a discriminatory aspect of the U.S. policy and is thus tied to the actual text of Article XX:
(1) First, although section 609 permits some flexibility in determining whether an exporting country’s regulatory program is “comparable” to the U.S. program, in practice U.S. officials only looked at whether the country’s policies are “essentially the same” as U.S. policies. Officials did not take into account other policies and measures that the country may have adopted, nor did they consider different conditions that may exist in that other country. Because this rigid approach to certification could result in a ban on imports from a country with a different yet comparable program, the Appellate Body held that this inflexibility amounted to “arbitrary discrimination” among countries with comparable programs in violation of the chapeau of Article XX.
(2) Second, the United States failed to engage in “serious” negotiations with all affected countries before imposing its import ban. The United States did negotiate with some countries to produce the Inter-American Convention for the Protection and Conservation of Sea Turtles, concluded in 1996, but not with other countries. The result was “unjustifiable” discrimination.
(3) Third, the United States gave fourteen countries a three-year phase-in period (1991-1994). The United States did not impose an import ban on others until 1996, when it did so with only four-months notice. The shorter phase-in period was not only more burdensome but also accompanied by less effort by the United States to transfer TED technology to the exporting countries.
The Appellate Body held that the foregoing problems in the application of the statute “considered in their cumulative effect” were “unjustifiable discrimination” in violation of Article XX. The phrase “in their cumulative effect” indicates that one of these defects standing alone would not necessarily render the U.S. policy inconsistent with the GATT. Thus, had the United States discriminated among exporting countries only in terms of phase-in periods or efforts to transfer technology, those discriminatory practices standing alone might not amount to “unjustifiable discrimination” within the meaning of Article XX.
(4) Finally, the Appellate Body complained that the U.S. certification process was not “transparent”: that is, there is “no formal opportunity for an applicant country to be heard, or to respond to arguments . . . made against it,” “no formal written, reasoned decision” with reasons for a denial of certification, and “no procedure for review of, or appeal from, a denial.” Thus, the United States denied certification without a process to ensure that the statute is “applied in a fair and just manner.” The Appellate Body concluded that denials under this procedure amount to “arbitrary discrimination” against those countries denied certification.
B. The 2001 Appellate Body Ruling
To comply with the 1998 Appellate Body ruling in the shrimp-turtle case, the United States began efforts to negotiate with the four complainants in the case, seeking an agreement on the conservation of sea turtles in the Indian Ocean region, as well as efforts to provide technical assistance to those countries to assist in the development of TED programs. The U.S. State Department also issued new guidelines in 1999 to ensure consideration of evidence that an exporting country’s program for protecting sea turtles is comparable to the U.S. program in light of different conditions or the use of methods other than TED requirements and also to provide greater transparency and due process for nations seeking certification under section 609. Malaysia nevertheless brought a complaint to the WTO claiming that section 609 violated the GATT despite these U.S. efforts to comply with the 1998 Appellate Body ruling. The WTO panel reviewing U.S. implementation of that 1998 decision ruled in favor of the United States in 2001, and Malaysia appealed to the Appellate Body.
First, Malaysia argued that to avoid unjustifiable discrimination, the United States had to conclude an international agreement before imposing an import ban. The Appellate Body rejected this suggestion, holding instead that the United States must show “good faith efforts to reach international agreements that are comparable from one forum of negotiation to the other.” These “negotiations need not be identical” or “lead to identical results.” Instead, “the negotiations must be comparable in the sense that comparable efforts are made, comparable resources are invested, and comparable energies are devoted to securing an international agreement.” The Appellate Body looked to the Inter-American Convention for comparison and found the United States had made comparable efforts in the Indian Ocean region.
Second, Malaysia argued that the U.S. import ban still violated the GATT because it still required exporting countries to meet standards “unilaterally” prescribed by the United States. The Appellate Body, however, found no problem with the United States “conditioning market access on the adoption of a programme comparable in effectiveness” to that adopted unilaterally by the United States. To require “a programme comparable in effectiveness” rather than “essentially the same programme” allows “sufficient flexibility . . . so as to avoid ‘arbitrary or unjustifiable discrimination.”’ By finally placing its stamp of approval on a unilateral import ban, the Appellate Body underscored how thoroughly it had rejected the reasoning advanced in the past by the tuna-dolphin panels.
II. The Interpretation of the Appellate Body Rulings
Given the ease with which the United States brought its unilateral import ban into compliance with the 1998 Appellate Body ruling, without even amending section 609, one might expect environmentalist critics of the tuna-dolphin decisions to celebrate the dramatic changes in the interpretation of GATT Article XX evident in the Appellate Body’s analysis. Some critics, however, perceive little improvement in the prospects for environmental trade measures under the GATT. Sanford Gaines, for example, argues that the 1998 Appellate Body ruling “continues the tradition of trade jurisprudence that has almost completely closed off the policy space Article XX should leave open for national trade measures designed to protect the environment.” The Appellate Body, he maintains, “gave little ground for hope that the WTO will tolerate any real-world unilateral use of trade leverage in furtherance of environmental protection objectives reaching beyond national boundaries.” Gaines even claims that his “pessimistic assessment is confirmed by the 2001 report of the WTO panel in the follow-on proceeding,” despite the fact that the 2001 panel upheld the section 609 import ban, an example of the type of “real-world unilateral use of trade leverage” about which he worries. Even the 2001 Appellate Body ruling, which “takes some of the hard edges off the panel’s conclusions and . . . limits some of the damage,” according to Gaines, “imposes extraordinary preconditions on member governments before they resort to Article XX for environmental measures.”
While the shrimp-turtle rulings may well have imposed some unwarranted “preconditions” on the use of environmental trade measures, I will suggest that at least some of the concerns of environmentalist critics derive from an unduly broad interpretation of the “preconditions” set forth by the Appellate Body. Ambiguities in the 1998 and 2001 Appellate Body reports have generated disagreements among observers regarding the correct interpretation of those decisions. In particular, I will address three questions left open by those decisions and argue that in each case, fidelity to the “ordinary meaning” of the text of Article XX militates decisively in favor of the interpretation that leaves greater scope for the use of environmental trade measures.
A. The Jurisdiction of the Importing Country
The Appellate Body agreed that section 609 was a measure “relating to the conservation of exhaustible natural resources.” Therefore, the Appellate Body concluded that the statute came within the exception in Article XX(g) despite the fact that section 609 called for a unilateral ban on imports based on the process by which they were made or harvested outside the United States. These types of attempts to influence production and process methods (PPMs) outside the jurisdiction of the importing country have been anathema to many in the GATT community, and some have since expressed alarm that the Appellate Body decision apparently allows the use of these process standards. Thailand, for example, complained that the decision “will result in an explosive growth in the number of environmental . . . measures applied to PPMs and justified pursuant to Article XX.”
Expressing similar concerns, the 1991 tuna-dolphin panel ruled that the MMPA could not come within the Article XX exceptions because it sought to protect dolphins from fishing fleets outside the jurisdiction of the United States. The Appellate Body holding in the shrimp-turtle case rejects that particular jurisdictional requirement, so it does not rule against the U.S. import ban because it seeks to protect sea turtles from activities outside U.S. jurisdiction. The opinion, however, leaves open the question of whether there may be some jurisdictional limitation implicit in Article XX(g):
We do not pass upon the question of whether there is an implied jurisdictional limitation in Article XX(g), and if so, the nature or extent of that limitation. We note only that in the specific circumstances of the case before us, there is a sufficient nexus between the migratory and endangered marine populations involved and the United States for purposes of Article XX(g). The opinion hints that it might be relevant that sea turtles migrate through U.S. territory, and consequently several commentators have suggested that such a nexus may be necessary to justify an environmental trade measure under Article XX(g).
The Appellate Body, however, expressly declines to rule on whether such a nexus is actually required, and the reasoning in the opinion militates against any such jurisdictional requirement. Such a requirement would be inconsistent with the Appellate Body’s emphasis on the ordinary meaning of the text of Article XX. In fact, the 1994 tuna-dolphin panel explicitly rejected any limitation on the scope of the Article XX(g) exception based on the location of the natural resources protected by the trade measure in question, because the panel found no such limitation in the text of Article XX(g). In the future, WTO dispute settlement panels and the Appellate Body should similarly reject any such jurisdictional requirement as a test with absolutely no basis in the text of Article XX.
As I have argued elsewhere, restrictions on imports produced by environmentally harmful processes may protect important resources wholly outside the jurisdiction of the importing country. Some countries may regulate their own fishing fleets to ensure that they provide optimal protection for marine resources, but as long as these regulations raise costs for the regulated producers and reduce their output, then these countries must also support these regulations with trade measures against imports harvested using harmful practices. Otherwise, these imports would displace sales of domestic products harvested subject to environmental regulation. Furthermore, fishing operations may move to unregulated countries in order to avoid these environmental regulations. In the extreme, if imports displace sales by domestic producers entirely, then countries that regulate succeed only in destroying their domestic fishing industry without protecting the environment.
By not only regulating the domestic fishing industry but also shielding it against those foreign competitors that use practices that harm the environment, a country can ensure that its efforts to change the practices of its own producers will not be in vain. Moreover, these trade measures protect the environment by inducing foreign fishing fleets to reform their practices in order to gain access to regulated markets. Through these effects on both domestic and foreign fishing fleets, the application of a process standard to imports contributes to the protection of the global environment.
B. The Environmental Policies of the Exporting Country
In the shrimp-turtle case, however, the United States banned shrimp imports based not only on the processes used to harvest the particular shipment of shrimp in question but also on the environmental policies of the exporting country. Therefore, the panel below ruled against the United States because it was “conditioning access to its market . . . upon the adoption . . . of certain policies” by the exporting country’s government. The Appellate Body, however, explicitly and emphatically rejected this rationale as an “error in legal interpretation” with “no basis . . . in the text” of Article XX. Indeed, in paragraph 121 of its report, the Appellate Body even went so far as to declare that import bans based on whether the governments of exporting countries have adopted policies “unilaterally prescribed” by the importing country will be “a common aspect” of Article XX measures. In the same remarkable paragraph, the Appellate Body concluded that to consider such unilateral import bans “a priori incapable of justification” under Article XX would be “abhorrent to the principles of interpretation we are bound to apply,” because it would render “most, if not all, of the specific exceptions of Article XX inutile.”
Thus, the Appellate Body held that countries may unilaterally ban imports based not only on the process used in producing the particular units in question but also on the environmental policies of the targeted countries. In support of its 2001 complaint, Malaysia argued that paragraph 121 of the 1998 Appellate Body ruling was mere dicta, but the Appellate Body firmly and emphatically rejected this suggestion in its 2001 ruling. In case there remained any doubt regarding the significance of paragraph 121 of the 1998 ruling, the Appellate Body quotes that paragraph at length and proclaims that it “expresses a principle that was central to our ruling” in the shrimp-turtle case. Thus, the Appellate Body leaves no doubt that GATT Article XX allows countries to impose a unilateral import ban broader than a mere process standard.
The 1994 tuna-dolphin panel cited the country-wide breadth of the import ban imposed by the MMPA as the reason that it ruled against the United States. The 1994 panel inferred that the United States banned tuna imports “so as to force other countries to change their policies” and held explicitly that those import bans therefore fell outside Article XX. The Appellate Body made a similar inference regarding the purpose of the U.S. ban on shrimp imports, but did not hold that the U.S. measure therefore falls outside Article XX. On the contrary, the Appellate Body instead declared that “a requirement that a country adopt a regulatory program requiring the use of TEDs” is “directly connected with the policy of conservation of sea turtles.” Thus, consistent with the ordinary meaning of the text of Article XX, the Appellate Body’s opinion permits import bans designed to change the policies of other governments. In fact, the Appellate Body does not rule out the possibility that even trade sanctions imposed with respect to products completely unrelated to the marine resource in question may fall within Article XX if they are intended to induce other countries to improve their efforts at conservation of that resource.
Importing countries can promote important environmental objectives by requiring exporting countries to improve their conservation efforts as a condition for access to domestic market of the importing country. When process standards alone are not effective in promoting more environmentally sound practices or policies, broader import bans are often useful in inducing other countries to join multilateral agreements and to comply with them. Other countries who harm the environment must have some reason to come to the negotiating table and to sign an agreement, especially given the powerful economic incentives for them to “free ride” on the restraint exercised by the countries that do agree to regulate. The types of trade measures condemned by past panels can create the incentives necessary for countries to join a multilateral agreement that imposes environmental regulations on them.
Despite the Appellate Body’s endorsement of country-based import bans in paragraph 121 of its 1998 ruling, the shrimp-turtle litigation has left some doubts regarding the permissible scope of these import bans. The 1998 Appellate Body opinion acknowledges explicitly that while the dispute was before the panel and the Appellate Body, the United States excluded even shrimp caught using TEDs if the shrimp came from countries not certified by the United States, and the Appellate Body expresses some concern about this ban in paragraph 165 of its opinion, suggesting that “[t]he resulting situation is difficult to reconcile with the declared policy objective of protecting and conserving sea turtles.” Some observers have concluded that the U.S. import ban violated the GATT because it applied even to imports that themselves were harvested by environmentally friendly processes.
The question has been moot since 1998, when the U.S. State Department adopted a policy allowing shrimp imports if the individual shipment was caught with the use of TEDs, after the U.S. Court of Appeals for the Federal Circuit vacated on procedural grounds an earlier decision by the U.S. Court of International Trade that had prohibited such imports. The State Department issued final guidelines in 1999 that affirmed this “shipment-by-shipment exception.” Environmentalists continued to advocate a “country-by-country” import ban, however, arguing that a “shipment-by-shipment” approach would be ineffective in protecting sea turtles, and the U.S. Court of International Trade ruled in favor of environmentalist plaintiffs again in 2000, holding that section 609 permits the importation of wild shrimp only from certified nations. Malaysia claimed in its 2001 complaint that this ruling put the United States out of compliance with the GATT as interpreted by the 1998 Appellate Body decision, but both the panel and the Appellate Body rejected Malaysia’s claim because the Court of International Trade did not issue an injunction pending appeal, so that the shipment-by-shipment exception continued to allow imports caught using TEDs. Thus, Malaysia did not prevail with this claim, but the Appellate Body’s basis for rejecting this claim in 2001 leaves open the substantive question of whether a country-based import ban would violate the GATT in the absence of a shipment-by-shipment exception.
Some commentators agree with Malaysia’s reading of the 1998 Appellate Body ruling on this issue. Eric Richards and Martin McCrory, for example, claimed that by ruling against the shipment-by-shipment exception, the Court of International Trade could “sabotage United States compliance efforts.” They interpret the shrimp-turtle ruling to imply that the use of “trade leverage to force similar regulations on . . . trading partners” would “run afoul of GATT rules.” To support this claim, they quote passages in paragraph 161 of the 1998 ruling stating that “[p]erhaps the most conspicuous flaw” in the “application” of section 609 “relates to its intended and actual coercive effect on the specific policy decisions made by foreign governments.” Adopting a similar view of this language from the 1998 ruling, Sanford Gaines complains that “[b]y disqualifying . . . any measure that has the result of applying the economic pressure of a trade restriction on other governments unless they change their resource conservation policies, the Appellate Body effectively nullified Article XX(g).” Sydney Cone also infers that the Appellate Body deemed a country-by-country import ban to be a violation of the GATT. Therefore, Cone criticizes the Appellate Body, which he believes “seems to have lost sight of its own statement . . . that there is a reasonable relationship between the US rules . . . ‘and the legitimate policy of conserving an . . . endangered species.”’
If we read the Appellate Body’s 1998 decision as criticizing the United States for imposing a country-by-country ban, then this criticism would indeed be inconsistent with earlier passages in the same opinion, including paragraph 121, which the Appellate Body would later emphasize so forcefully in 2001. If we read each of the Appellate Body’s critical sentences carefully in context, however, we find that each sentence is followed immediately by an explanation that makes clear that the 1998 ruling did not object to a country-by-country import ban per se. Instead, the Appellate Body’s specific complaint in paragraph 165 is that the United States applies this import ban to induce other countries to adopt “essentially the same comprehensive regulatory regime as that applied by the United States to its domestic shrimp trawlers” even though many of these countries “may be differently situated,” and the Appellate Body objects to the import ban on these narrower grounds instead. Similarly, this inflexibility is the particular aspect of the “coercive effect” of the section 609 import ban that disturbs the Appellate Body in paragraph 161.
Thus, at most, the absence of a shipment-by-shipment exception is merely an aggravating circumstance that contributes to the “arbitrary and unjustifiable” nature of the discrimination that may result from an inflexible certification process. That is, the absence of such an exception is not itself a violation of any requirement in Article XX. Observers have drawn a contrary conclusion only by taking isolated statements from the 1998 Appellate Body ruling out of context.
The Appellate Body has never claimed that Article XX requires a shipment-by-shipment exception. The Appellate Body made no such claim, for the simple reason that such a claim would have no plausible basis in the ordinary meaning of the text of Article XX. The Appellate Body could not derive such a claim from its analysis of the Article XX chapeau, for example, without distorting the ordinary meaning of the phrase “arbitrary or unjustifiable discrimination between countries where the same conditions prevail.” While a country-by-country import ban without a shipment-by-shipment exception might discriminate between producers harvesting shrimp using similar processes, this discrimination does not entail any discrimination between countries “where the same conditions prevail.”
The only aspect of the substantive criteria used by the United States to ban imports that the Appellate Body could plausibly describe as “a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail” was the inflexibility of the U.S. certification criteria, which raised the possibility of discrimination between countries with comparably effective conservation policies. Once the United States eliminated this inflexibility, those criteria were no longer a means of any discrimination that the WTO could condemn under the Article XX chapeau. Therefore, the United States can apply a country-by-country import ban as long as it allows an exporting country to argue that it is “differently situated” so that its program for the protection of sea turtles may be certified as “comparable” to that of the United States. Thus, the United States would be in compliance with the GATT even if it were to return to a country-by-country import ban under section 609, because it has already revised its guidelines to allow for this more flexible approach to certification.
C. Unilateral Measures Without Multilateral Negotiations
The Appellate Body’s critique of the U.S. implementation of section 609 has also generated some commentary suggesting that “it is generally not acceptable for one WTO Member to restrict trade based on the failure of other Members to conform their natural resource conservation . . . policies to the unilateral dictates of that WTO Member.” Richards and McCrory, for example, assert that it is “permissible for a country to adopt unilateral measures” only “in rare circumstances.” They cite the discussion in the 1998 Appellate Body report of the general preference for multilateral solutions to international environmental problems over unilateral actions. In paragraph 171 of that report, for example, the Appellate Body points to the Inter-American Convention as evidence that “an alternative course of action” featuring “cooperative efforts” rather than “the unilateral and non-consensual procedures of the import prohibition” under section 609 “was reasonably open to the United States.”
On the other hand, the Appellate Body’s 1998 opinion carefully avoids the suggestion that unilateral measures generally fall outside Article XX. Such a claim would be inconsistent with passages in paragraph 121 of the same opinion implying that such a rule would render “most, if not all, of the specific exceptions of Article XX inutile” and thus would be “abhorrent.” Such a claim would also be inconsistent with the use of the singular noun in Article XX, which permits “any contracting party” to adopt the measures in question, and with GATT case law, which has often found unilateral measures to fall within Article XX. Nothing in the language of Article XX suggests that unilateral measures are illegal if they are directed at resources outside the jurisdiction of the importing country.
Opposing views of the Appellate Body’s 1998 ruling have produced opposing views of the Appellate Body’s 2001 ruling, which required the United States “to make good faith efforts to reach international agreements that are comparable from one forum of negotiation to the other.” Robert Howse reads this statement to require the United States only “to negotiate seriously with the complainants exactly to the extent it had already negotiated with the western hemisphere countries, no more and no less.” That is, the Appellate Body does not impose “a self-standing duty to negotiate” independent of the duty not to discriminate in these efforts. “The ‘unjustified discrimination’ was not the failure to negotiate as such, but the failure to treat the complainants as well as . . . the western hemisphere countries.” Thus, had the United States “negotiated with no one, it would not have run afoul of the chapeau.”
John Knox, however, reads the same statement from the 2001 ruling to express two separate requirements: “(1) to make good faith efforts to negotiate international agreements; and (2) to make sure that the efforts are comparable across the board.” That is, the Article XX chapeau required the United States to negotiate with the 1998 complainants not only to avoid discrimination against them but also to pursue the “multilateral ‘alternative course of action”’ urged in paragraph 171 of the 1998 Appellate Body ruling. Based on a similar reading of the Appellate Body rulings, Gaines worries that “unilateral measures affecting transnational or global resources outside the context of any systematic effort to promote a multilateral solution will, ipso facto, not qualify under Article XX.”
Furthermore, Gaines complains, the Appellate Body has left open the “problematic” question of what “efforts, resources, and energies” would “satisfy the implicit . . . general requirement . . . that there must always be a good faith effort at negotiations before invoking Article XX rights.” What standard would a WTO panel apply in the absence of any discrimination among exporting countries? If the Appellate Body has indeed imposed a duty to negotiate on WTO members invoking Article XX(g), then it has also saddled WTO panels with the difficult task of developing an appropriate standard with little guidance on the question: How much of a diplomatic effort must the importing country make before resorting to unilateral import restrictions? Howse infers from the Appellate Body’s silence on this question that there is no such independent duty to negotiate before invoking Article XX, arguing that had the Appellate Body “intended to read into the chapeau a self-standing duty to negotiate seriously, it would have given some guidance as to the extent of the duty.”
Most important, once we recall the Appellate Body’s focus on the ordinary meaning of the text of Article XX, we cannot reasonably read the Appellate Body’s rulings to impose a duty to negotiate in the absence of any “discrimination between countries where the same conditions prevail.” There is simply no basis in the text of Article XX for any such duty. As Gaines observes, “the text of Article XX makes no explicit reference to unilateral or multilateral action.” Indeed, “[n]othing in the lettered paragraphs or the chapeau constrains a member government’s choice among multilateral, regional, bilateral, or unilateral approaches.”
The only provision in Article XX that the Appellate Body ever identifies as imposing a duty to negotiate on the United States is the chapeau language against “discrimination,” and as Gaines notes, “[t]here is no inherent connection between unilateralism and discrimination.” He complains that the Appellate Body “articulates no historical foundation or legal basis for the conclusion that failure to make bona fide efforts to negotiate a treaty comes within the chapeau’s concept of ‘unjustifiable’ discrimination.” Thus, Gaines takes the Appellate Body to task for imposing the “condition that unilateral measures under Article XX can only be taken after serious efforts at multilateral negotiations.”
The ordinary meaning of the text of Article XX, however, is not a reason to criticize the Appellate Body for imposing this condition as much as it is a reason to reject the notion that the Appellate Body ever imposed this condition at all. After all, as Howse notes, the Appellate Body “never held that the requirements of the chapeau, in and of themselves, impose a sui generis duty to negotiate.” Given the lack of any textual basis for such a duty, and in the absence of any explicit statement by the Appellate Body imposing such a duty, we should not readily infer such a duty from the Appellate Body’s rulings. This supposed duty to negotiate is implausible as an interpretation of the Appellate Body rulings precisely because it is implausible as an interpretation of Article XX.
Knox points to paragraph 171 of the 1998 ruling, in which the Appellate Body contrasts the multilateral “alternative course of action” with “the unilateral and non-consensual procedures of the import prohibition,” as support for a duty to negotiate before imposing a unilateral import ban. If we read paragraph 171 as a whole, however, and especially if we view it in context rather than in isolation, we find that the Appellate Body points to this multilateral alternative to underscore the feasibility of serious negotiations with all affected parties rather than only some and to demonstrate that this discrimination in diplomatic efforts was “unjustifiable.” That is, the Appellate Body points to the Inter-American Convention and this “cooperative” alternative only to criticize the failure of the United States “to negotiate similar agreements with any other country or group of countries.”
Knox concedes that the text of Article XX “provides no apparent link” to “the principle of multilateralism.” Thus, he can derive an independent duty to negotiate from the Appellate Body opinions only by claiming that the Appellate Body “read the chapeau as giving it broad powers to strike a balance, or find a ‘line of equilibrium,’ between trade and environmental interests.” In support of this claim, he quotes paragraph 159 of the 1998 Appellate Body ruling. This paragraph describes “[t]he task of interpreting and applying the chapeau” as “essentially the delicate one of locating and marking out a line of equilibrium between the right of a [WTO] Member to invoke an exception under Article XX and the rights of the other Members.”
This paragraph, however, does not suggest that the Appellate Body has given itself broad powers to distort the ordinary meaning of the text of the chapeau or to replace treaty language with a balancing test. After all, the Appellate Body describes itself as locating “a line of equilibrium” only in the course of “interpreting and applying the chapeau.” Thus, the quoted passage merely acknowledges that when the Appellate Body interprets certain words in the chapeau, such as “arbitrary” and “unjustifiable,” and applies them to specific facts, their precise meaning will invariably be subject to dispute, because reasonable minds can differ on the precise meaning of such words. In choosing among different plausible interpretations of those words, the Appellate Body will inevitably have to balance the opposing interests at stake in deciding which interpretation to adopt in resolving the dispute. The Appellate Body did not, however, give itself license to invent requirements without any basis in the text of the chapeau. Such an extraordinary reading of paragraph 159 would be inconsistent with the Appellate Body’s explicit focus on the ordinary meaning of the text of Article XX. Thus, this paragraph does not support the duty to negotiate that Knox seeks to derive from the shrimp-turtle rulings, and we are left with the conclusion that neither the ordinary meaning of the text of the chapeau nor the Appellate Body’s interpretation of the chapeau imposes any such duty.
The Appellate Body’s rulings in the shrimp-turtle case indicates that importing countries can defend environmental trade measures, even unilateral import bans, under GATT Article XX as long as they avoid unfair discrimination. These unilateral trade measures may justifiably discriminate against imports produced by processes that harm natural resources located outside the jurisdiction of the importing countries or against imports from countries that have environmental policies deemed inadequate by the importing country. The 2001 Appellate Body ruling, by emphasizing paragraph 121 from the 1998 Appellate Body ruling so forcefully, confirmed that WTO members enjoy a right to restrict imports based on environmental standards unilaterally prescribed by the importing country and applied to the conservation policies of exporting countries.
The case-by-case approach endorsed by the Appellate Body should provide much broader leeway for the use of environmental trade measures than suggested by past panel decisions. Under the Article XX chapeau, an exporting country can challenge such measures if they are applied in a manner that amounts to “a means of arbitrary or unjustifiable discrimination between countries” or “a disguised restriction on international trade.” In particular, the Appellate Body held that to avoid “arbitrary or unjustifiable discrimination,” the country imposing a ban on imports from an exporting country must provide a formal hearing that allows the exporting country to argue that it has comparable environmental policies even if they are not precisely the same as the policies in the importing country, make the same efforts to negotiate with all exporting countries, make the same efforts to transfer technology to all exporting countries, and provide a formal notice of the reasons for adverse decisions and some procedure for review of or appeal from these denials. By basing its scrutiny of environmental trade measures only on requirements that are explicit in the text of Article XX of the GATT, the Appellate Body strikes a more reasonable balance between environmental and trade interests than panels in prior decisions have struck.
The Appellate Body can continue this progress by making good on its promise to remain faithful to the ordinary meaning of the text of GATT Article XX. By focusing on that text, we can resolve many of the disagreements that have arisen regarding the proper interpretation of the Appellate Body’s rulings in the shrimp-turtle case. In particular, the ordinary meaning of that text militates against any jurisdictional limitation on the conservation exception in Article XX, against a requirement that import bans based on the conservation policies of exporting countries include shipment-by-shipment exceptions, and against an independent duty for importing countries to open negotiations with exporting countries before imposing an import ban.
Closer attention to the text of the GATT would not only make for better legal reasoning but also give greater legitimacy to WTO rulings. To impose restrictions on environmental trade measures without a basis in the text of Article XX erodes respect for the WTO in particular and undermines the political support for free trade in general. In this sense, WTO rulings that are more sensitive to environmental interests will also do a better job of serving our interest in free trade as well.