Trading Away Public Health
The World Trade Organization Obstacles To Effective Toxics Controls
Earthjustice Legal Defense Fund
November 1999
Earthjustice Legal Defense Fund
Earthjustice Legal Defense Fund is a non-profit public interest environmental law firm that
provides services to citizens' groups seeking greater protection for our natural environment. Since
its inception in 1971, the Legal Defense Fund has been involved in many of the nation's most
important environmental battles. Through its active and diverse litigation practice, the Legal
Defense Fund has established valuable precedents in cases involving air and water quality,
endangered species, forestry, public lands use, toxins, international environmental law, and
environmental justice.
Copyright © 1999 by Earthjustice Legal Defense Fund
Cover illustration: Copyright © 1999 by Shannon Brooke Atkinson
You can find Trading Away Public Health: World Trade Organization Obstacles to
Effective Controls of Toxic Substances at the web site www.earthjustice.org
With gratitude for financial assistance from
C.S. Mott Foundation and C.S. Fund
Contents
Introduction
The WTO’s Anti-Environmental Track Record
The Call to Review and Repair Existing Rules Before Further WTO Expansion
The WTO’s Power to Affect Regulations of Toxic Substances
The WTO’s Potent Remedy: Authorized Trade Sanctions
Secrecy and Lack of Public Participation in the WTO
The WTO Threat to Bans and Other Restrictions on Toxic Substances
The WTO Seeks to Move Toxics Standards to the Lowest Common Denominator
The WTO Jettisons the Precautionary Principle and
Instead Requires Definitive Proof of Harm Before a Government May Act
The WTO Often Forecloses the Most Effective Means of Protecting Public
Health
The Asbestos Case
The WTO Prohibits Restrictions Designed to Prevent Toxic Effects of
Production
WTO-Based Attack on European Union Electronics Initiative
Consumer Purchasing Power and the Consumer’s Right to Know
WTO Obstacles to Eco-Labeling
Government Purchasing at Risk
Foreign Investor Rights Threaten Protections Against Toxic Substances
The NAFTA Precedent
NAFTA Investor Challenges to Toxics Regulations
The Threat to Toxics Regulations Posed by Global Investor Rights
Conclusion
Notes
Authors
Patti Goldman
Earthjustice Legal Defense Fund
203 Hoge Building
705 Second Avenue
Seattle, WA 98104
Phone: 206-343-7340
Fax: 206-343-1526
pgoldman@earthjustice.org
Martin Wagner
Earthjustice Legal Defense Fund
180 Montgomery Street, Suite 1725
San Francisco, CA 94104
Phone: 415-627-6725
Fax: 415-627-6749
mwagner@earthjustice.org
Contributors and Sources for More Information
Washington Toxics Coalition
4649 Sunnyside Avenue N, Suite 540
Seattle, WA 98105
Phone: 206-632-1545
Fax: 206-632-8661
www. watoxics.org
Contacts: Carol Dansereau, Executive Director (cdansereau@watoxics.org) or
Laurie Valeriano, Policy Analyst (lvaleriano@watoxics.org)
Clean Computer Campaign
c/o Silicon Valley Toxics Coalition (SVTC)
760 North First Street
San Jose, CA 95112
Phone: 408-287-6707
Fax: 408-287-6771
www.svtc.org/cleancc/cccpage.htm
Contacts: Ted Smith, SVTC Executive Director (tsmith@igc.org) or Leslie Byster, SVTC
Program Director (svtc@igc.org)
Introduction
The World Trade Organization (WTO) has one over-arching goal—removing barriers to trade. Despite
having no environmental or public health expertise or mandate, the WTO has reached out to establish rules
and issue decisions declaring environmental and health measures to be unfair trade barriers. More and
more, the WTO is emerging as the entity with the greatest power to determine whether we can maintain
effective standards that promote food safety and protect public health and the environment.
In ferreting out what it considers unjustifiable standards, the WTO does not develop solutions to health and
environmental problems. Nor does it defer to governments or international institutions that are developing
or endorsing strategies for reducing the proliferation of harmful chemicals.
Nonetheless, the WTO second guesses the solutions governments have adopted for regulating toxins and
declares them impermissible if, in the view of three trade bureaucrats operating in secret, they are not
sufficiently justified or they interfere too much with international trade. And when the WTO passes
judgment, the stakes are high. If the country that loses in the WTO does not change the offending law, the
WTO authorizes imposition of trade sanctions until the law is changed. This has proven to be a potent
device for weakening or eliminating the underlying law.
The WTO’s Anti-Environmental Track Record
In less than five years, the WTO has repeatedly collided with environmental protection, and each
time, the environment has lost:
3
A WTO dispute panel found regulations intended to reduce air pollution in the United States
to violate the WTO Agreements. After an appellate panel upheld this ruling, the
Environmental Protection Agency changed its regulations to allow Venezuelan gasoline with
higher concentrations of certain pollutants into the United States.
3
A WTO dispute panel found a European Union (EU) ban on hormone-treated beef to violate
the WTO Agreements because the EU had not definitively demonstrated that the beef would
cause harm to consumers. While the EU argued that it had the right to protect its citizens
against health risks from hormones known to cause cancer in animals, the panel concluded
that the WTO rules require more unequivocal proof of harm to humans before trade can be
restricted. The WTO authorized a penalty against Europe of $120 million each year until
Europe removes the ban.
3
A trade panel found WTO violations in a prohibition under the U.S. Endangered Species Act
on imports of shrimp from countries that do not require sufficient protections to prevent the
killing of endangered sea turtles in shrimp nets. All the countries involved acknowledged the
sea turtles are endangered, that it is a legitimate goal to protect the turtles, and that turtle
excluder devices are effective and inexpensive. Nonetheless, the United States could not
prohibit imports of shrimp from countries that did not require turtle excluder devices unless
the other countries agreed to such a requirement.
In its one-sided rush to promote trade whatever the cost, the WTO erects numerous obstacles
to effective regulation of toxic substances. The WTO’s rules stand in the way of strong health and
safety standards:
l
The WTO rules encourage countries to abide by the weakest protective standards accepted
anywhere in the world. Any standards that provide greater health protection than the
international status quo are suspect and must satisfy a battery of cumbersome tests.
l
The WTO prohibits restrictions that seek to remove all risk from exposure to toxic substances
or that ban or restrict chemicals suspected of causing harm. Instead, the WTO requires a
country to conduct a risk assessment and prove that there is conclusive scientific evidence of
harm before it may ban or restrict toxic chemicals.
l
The WTO limits the goals that may be pursued in regulations of toxic substances. It does not
allow products to be regulated based on the toxic harm caused by their production or
disposal.
l
The WTO creates obstacles to eco-labeling that discloses how a product is produced to enable
consumers to identify and purchase environmentally friendly products.
l
The WTO specifies the means that may be used to protect the public from toxic substances,
barring all but the least trade-restrictive regulations.
l
The WTO’s rules and prohibitions extend to state and local laws, erecting obstacles to local
initiatives to safeguard communities against exposure to toxic chemicals.
Through its enforcement of these rules, the WTO is shifting health and environmental
decisions away from national, state, and local officials to international trade bureaucrats operating
behind closed doors in Geneva, Switzerland. This shift makes it difficult for citizens to affect the
safety of the food they eat, limit their children’s exposure to toxic chemicals, and prevent toxic
contamination of their communities.
In just five years, the WTO has clashed directly and repeatedly with national and state toxics
initiatives. While some of these clashes have led to formal trade disputes, others have not yet
moved beyond diplomatic objections and threats of a formal challenge. The mere threat of taking
the matter to the WTO often results in a weakening of the health standards to avoid such a highlevel diplomatic confrontation and a possible trade war. Under the WTO’s guiding principles,
l
The United States has allowed the importation of foods with cancer-causing pesticide
residues, even though the residues are inconsistent with U.S. health standards.
l
The WTO has declared a ban on beef treated with cancer-causing hormones to be an unfair
trade barrier and authorized over $120 million in trade sanctions annually until the ban is
repealed.
l
Canada has challenged a French ban on asbestos, arguing that requiring protective clothing
and other measures that limit exposure is less burdensome on trade than a ban.
l
The United States is attacking European Union proposals to ban toxic heavy metals in
electronic equipment and batteries on the ground that the ban is unnecessary and too
restrictive of trade. The United States position is contrary to that of some U.S. states, which
have launched initiatives to ban the same toxic pollutants.
l
A proposal that computer and other electronic equipment manufacturers be responsible for
disposal of the products at the end of their useful life has been under attack for being too
restrictive of trade and too burdensome on the manufacturers.
l
Fuel economy standards that require reductions in car emissions have come under attack as
having a disproportionate impact on luxury car manufacturers and being too restrictive of
trade.
l
At the behest of the chemicals, plastics, electronics, and food processing industries, the
United States has led the charge to deny consumers the right to know whether the goods they
purchase cause toxic pollution. Apart from this general assault on eco-labeling, the United
States has tried to weaken eco-labeling programs that disclose the harmful by-products of
paper production, including toxic water and air pollution.
l
A California phase-out of a chemical that pollutes drinking water is under attack for harming
a foreign company’s stock values and sales under trade rules that may soon be added to the
WTO.
The impetus for each of these measures was protecting people and the earth from toxic
chemicals. In each instance, the scientific evidence and public demands for safeguards spurred
the governments to take precautionary action to prevent health risks or toxic contamination.
The WTO has turned its skeptical eye to three key tools for preventing toxic pollution:
precaution in the face of scientific uncertainty, bans, and eco-labeling. This report chronicles the
WTO’s entry into the field of health and environmental protections and its outright hostility to the
types of precautionary and preventive measures that are so desperately needed to protect people
and the environment.
The Call to Review and Repair Existing Rules Before Further
WTO Expansion
Because of great dissatisfaction with the WTO’s rules and operations, environmental
organizations are advocating for the WTO to assess its impact on people and the environment,
rather than blindly expanding its rules in another round of negotiations. It is time to slow down
and take stock of the threat posed by the WTO before this institution expands.
The Clinton Administration must insist that the WTO not jeopardize strong environmental
protections at the local, state, national, and international levels. To ensure that strong
environmental standards will not be at risk, the WTO must be reformed to protect the following
five rights:
1. The right to have strong environmental standards that protect citizen health and the
environment based on the precautionary principle.
2. The government’s right to limit the harmful effects of production, such as pesticide poisoning
of workers, and toxic air and water pollution from factories.
3. The consumer right to know which products are environmentally friendly.
4. The right to use the government’s purchasing power to protect the environment.
5. The public right to access information about and participate in disputes, negotiations and
other WTO proceedings that affect public health and the environment.
The Clinton Administration must insist that the WTO review its rules to assess the extent to
which they threaten food safety, public health, and environmental protections. The WTO should
then repair the damage threatened by its unbalanced rules and processes before expanding
further. To ensure that no further damage is done during this review and repair process, a
moratorium should be imposed on WTO challenges to health and environmental protections.
Countries must have the right to adopt and retain strong health and environmental protections.
The WTO’s Power to Affect Regulation of
Toxic Substances
The WTO has initiated a major expansion of trade rules into the realm of public health
protection—a matter traditionally within the purview of national and local governments. As this report
demonstrates, the new WTO rules collide with the type of restrictions that are necessary to protect public
health and the environment and dictate the extent to which a country or state may ban or restrict the use of
toxic chemicals to protect public health.
The WTO is the international institution, established in 1995, that develops, implements, and
enforces binding rules that govern over 80% of international trade. The WTO is controlled by its
member governments; there are currently 134 member countries. The WTO rules define virtually
all obstacles to trade as unfair trade barriers, even if the measures are designed to protect food
safety, public health, or the environment. While the WTO rules include exceptions for conserving
natural resources and protecting human health, the exceptions have so many conditions that it is
extremely difficult for domestic laws to pass muster.
While the federal government negotiates trade agreements and represents the United States in
trade disputes, the reach of the WTO Agreements is not limited to federal law. The WTO rules
apply fully to state and local laws. Countries, like the United States, have an obligation to bring
state and local laws and regulations into compliance with the WTO, which could call for federal
rules preempting state laws or withholding federal funds to coerce a state into changing its law.
Clean Air Act Weakened to Allow Imports of
Dirtier Venezuelan Gasoline
The 1990 Clean Air Act Amendments require the use of reformulated gasoline in certain
polluted areas in order to reduce toxic motor vehicle emissions. In late 1993, the Environmental
Protection Agency (EPA) issued a rule spelling out how refineries would comply with the
reformulated gasoline requirements. Because of the difficulties in ensuring compliance by
overseas refineries, EPA decided it needed to treat foreign refiners differently than domestic ones.
Venezuela challenged the regulation before the WTO. A WTO panel and subsequently the
WTO Appellate Body found the regulation to violate the WTO rules because it treated foreign
and domestic refineries differently, without addressing the enforcement and air quality
consequences of that ruling.
To comply with the WTO decision, EPA changed its regulations to allow foreign refineries to
use alternative methods of calculating their compliance with the gasoline requirements. The new
rule will allow dirtier Venezuelan gasoline into the northeastern United States. Venezuelan
gasoline has very high concentrations of olefins and other pollution-forming substances. State
pollution control regulators from the northeastern United States told EPA that the Venezuelan
gasoline will make it difficult to meet air quality standards in that region.1
In rejecting a U.S. court challenge to the new regulation by environmental groups, a U.S.
appellate court held that U.S. statutes, like the Clean Air Act, must be construed “wherever
possible . . . to avoid an interpretation that would put a law of the United States into conflict with
a treaty obligation of the United States,” such as a decision of the WTO.2 This decision essentially
gives rulings of unelected WTO trade officials the status of law in the United States.
The WTO’s Potent Remedy: Authorized Trade Sanctions
If a dispute panel finds a law to be in violation of the WTO rules, it recommends that the law
be changed. Generally, countries abide by this recommendation. However, if they do not, the
WTO can, and generally does, authorize imposition of trade sanctions against the offending
country. This has proven to be a potent device for forcing a change in the underlying law. The
United States recently imposed such trade sanctions against the European Union in excess of
$120 million because the EU has not repealed its ban on imports of beef treated with cancercausing hormones.
Often the mere threat of a challenge succeeds in derailing passage of an environmental law or
weakening its domestic implementation. If it does not, a WTO ruling that the measure violates the
trade rules—the first prerequisite for obtaining WTO permission to impose trade sanctions—can
be enough to convince a government to remove the offending law.
Secrecy and Lack of Public Participation in the WTO
Unlike international environmental institutions, the WTO does not allow participation in its
proceedings by nongovernmental organizations. This secrecy extends to trade disputes as well.
Trade challenges are decided in secret by dispute settlement panels comprised of three
individuals who must have experience in trade matters and who generally are former trade
officials. Few have any training or experience in health or environmental disciplines. Only WTO
countries have a right to submit briefs and attend the panel proceedings. The public is entirely
shut out of the process.
In contrast, industry tends to have ready access to the process through the participating
governments. In the United States, for example, the United States Trade Representative consults
regularly with its industry advisory committees to keep them fully informed and obtain their input
concerning negotiating positions, trade disputes, and trade developments. The chemicals advisory
committee consists of executives of chemical companies and has no public health or
environmental representation.
The Shrimp-Turtle Dispute
The shrimp-turtle dispute provides a stark example of the inequities in the WTO dispute
process. That dispute involved a U.S. embargo imposed on imports of shrimp from countries that
do not require turtle excluder devices—highly effective and inexpensive devices to minimize
turtle fatalities from entanglements in shrimp nets. The United States imposed the embargo only
after being forced to do so by a lawsuit brought by Earth Island Institute, the Sierra Club, and the
Humane Society of the United States. These groups asked to be part of the U.S. defense team so
that they could assist in defending the law before the WTO, but the United States refused that
request. In a classic case of the fox guarding the chicken coop, the U.S. government continued to
resist full enforcement of the embargo in the domestic lawsuit at the same time it was acting as
the embargo’s sole defender before the WTO panel.
The WTO Threat to Bans and Other
Restrictions on Toxic Substances
Any ban or restriction on toxic chemicals is vulnerable to assault at the WTO. For example, in August
1998, the Washington State Department of Ecology launched an initiative to eliminate persistent
bioaccumulating pollution. Few would argue that the chemicals the Department of Ecology has targeted
should continue to be dumped into our water and air. They are chemicals like dioxins and mercury which
are known to be very dangerous in minute concentrations, which do not biodegrade readily or at all, and
which are passed to the young before birth and in breast milk. Failure to ban these pollutants years ago has
already resulted in extensive contamination of human beings and wildlife. But efforts like the Department
of Ecology’s and similar efforts of other state agencies are on a collision course with the rules of the WTO.
Even as the Department of Ecology announced that it would finally end persistent pollution from these
chemicals, similar bans were under attack in the WTO. To make matters worse, the U.S. Trade
Representative has joined forces with the electronics industry to lead the attack against comparable
European initiatives. This report explains why government bans and restrictions on toxic chemicals are at
risk.
The WTO erects obstacles to government restrictions on exposure to toxic chemicals by: (1)
seeking to move toxics standards to the lowest common denominator throughout the world; (2)
throwing out the precautionary principle and instead requiring definitive proof of harm before a
government may act; (3) foreclosing the most effective means of protecting public health and the
environment; and (4) prohibiting restrictions designed to prevent toxic effects of production. The
WTO currently and under proposed expansions may increasingly stand in the way of: (1) the
consumer right to know which products are environmentally friendly; (2) the government right to
restrict its purchases of environmentally harmful products; and (3) government regulation of
foreign investors to protect public health and the environment.
The WTO Seeks to Move Toxics Standards to the Lowest
Common Denominator
Many initiatives to protect people and the environment from toxic pollution have been the
result of citizen initiatives at the local level, which have, in turn, prodded higher levels of
government to take action. International bodies tend to move more slowly and lag behind cutting
edge initiatives to protect health and the environment.
The WTO threatens to block these grass-roots initiatives. It promotes “downward
harmonization” of health and environmental standards, meaning that countries are encouraged to
abide by the weakest standards in place worldwide. Under the WTO, countries must base their
standards on relevant international ones. If a country adopts a food safety or product standard that
is more protective of public health than the international norm, its standard must satisfy a battery
of cumbersome WTO tests.3
Existing international standards, however, are generally established with extensive industry
input and without the scientific rigor and public participation that characterize U.S. standardsetting. Not surprisingly, the preferred food safety standard-setting body—the Codex
Alimentarius Commission—has standards that tend to lag behind U.S. standards. For example, in
the early 1990s, Codex allowed residues of DDT on numerous foods, in sharp contrast to the U.S.
ban on DDT imposed in the early 1970s.
In August 1999, the U.S. Environmental Protection Agency announced a ban on numerous
uses of the pesticide methyl parathion because it “pose[s] unacceptable dietary risks to children”
and to reduce extreme hazards to workers.4 According to EPA, methyl parathion is “one of the
most toxic and most widely used organophosphate pesticides.” It is acutely toxic and causes brain
and central nervous system damage. Because scant residues of the pesticide on fruit could poison
children under the age of six, EPA canceled food uses that comprise 90% of the dietary risk to
children. The use cancellation will soon be followed by a prohibition on residues of this pesticide
on these foods.
Just two months prior to EPA’s cancellations, Codex concluded its review of methyl
parathion and continued to allow residues on many of the foods subject to the EPA cancellations,
including cherries, plums, and carrots. The United States participated in the Codex meeting that
adopted the methyl parathion standard, but did not object, even though it was gearing up to ban
most food uses in the United States. The existence of the Codex authorization will make it harder
for the United States to prevail in a challenge to its bans.
The WTO’s foray into public health and environmental standard-setting shifts
decisionmaking power away from local, state, and national governments to international trade
bureaucrats resolving WTO disputes in secret in Geneva, Switzerland, and to an obscure
international standard-setting organization in Rome, Italy.
Reducing Protection by Requiring International
Consensus:
The Shrimp-Turtle Dispute
One of the primary threats to endangered sea turtles is shrimp nets. To protect these ancient
animals, the United States requires the use of turtle excluder devices, which allow the turtles to
escape from the nets. The United States banned the import of shrimp from countries that do not
require these safety devices. In a WTO challenge to these restrictions on shrimp imports, the
WTO Appellate Body faulted the United States for not reaching a negotiated solution, and on that
basis concluded that the U.S. ban violated the WTO rules.5 Under this analysis, the WTO would
permit restrictions on the use of toxins only when all affected countries agree—holding all
nations hostage to the country with the least restrictive standards. The WTO is thus fueling the
downward harmonization of international environmental and human health standards.
The WTO Jettisons the Precautionary Principle and Instead
Requires Definitive Proof of Harm Before a Government May
Act
Caution is essential in public health and environmental regulation. Science is inexact, rarely
able to prove that harm will follow from exposures to particular populations. Countless people
and resources can be harmed before the scientific evidence of harm is collected.
To prevent such harm, the precautionary principle allows countries to protect their citizens
based on scientific evidence of risk, but before the scientific proof of harm is conclusive. For
example, studies showing that a chemical causes cancer in animals should be sufficient evidence
to allow governments to prevent human exposure to it. As a matter of public policy, it is more
prudent and generally more cost-effective to prevent toxic contamination and exposure rather
than try to clean up the mess or treat the injured people after the fact.
The WTO precludes use of the precautionary principle. Instead, the WTO requires conclusive
scientific evidence of a risk before trade in food products may be restricted.6 As one panel put it, a
country must have identified a probability, not simply a possibility of harm before it can regulate
in a way that restricts trade.7
l
European Union Ban on Hormone-Treated Beef
The United States challenged a European Union ban on beef treated with growth-inducing
hormones that have been scientifically linked to cancer and other serious diseases. Although
the EU asserted that the ban was necessary to achieve its chosen degree of protection—zero
risk to consumers from exposure to hormone-treated meat—the WTO dispute resolution and
appellate panels rejected an absolute right to prohibit all such risk. While the panels
recognized that scientific studies demonstrated a risk from exposure to the hormones in
question, they considered those studies insufficient because they did not specifically evaluate
the potential risks when the hormones are used to promote growth in meat. In other words,
the fact that the hormones caused cancer in laboratory animals—a scientific as well as
common sense basis for suspecting a risk in humans—was not a sufficient basis for a ban on
their use in human food.
By requiring definitive proof of harm, the WTO removed the ability of governments to take
precautionary action to protect against risks strongly suggested, but not conclusively proven,
by scientific evidence. Moreover, by prohibiting governments from acting on the basis of
such evidence, the WTO eviscerated the right of countries to establish their own level of
protection against risks, because often a high level of protection can only be attained by
taking precautionary measures based on scientifically suggested, but not yet unequivocally
proven, risks. The WTO panels held the EU ban in violation of the WTO rules. When the EU
refused to remove the ban, the WTO granted the United States permission to impose
retaliatory trade sanctions until the EU rescinds the ban. The United States recently imposed
more than $120 million in trade sanctions for this year.8
Often the mere threat of a trade challenge causes a country to change its laws. Apart from
formal trade disputes, trade rules have led to the weakening of public health protection from toxic
substances.
l
Pesticides Allowed in Imported Wines Before They Are Shown to be Safe
In 1990, residues of the pesticide procymidone were discovered in wine imported from
Europe. Scientific studies suggested that procymidone is a carcinogen and a reproductive
toxin, but the data were inadequate to permit the full analysis normally required for
authorization of this pesticide on food.9 The European Union complained that restricting the
wine imports constituted an unfair trade barrier.10 To avert a trade crisis, EPA established a
four-year tolerance on an emergency basis.11 In doing so, it decided “that because of the
overwhelming trade issues, it would deviate from its usual administrative practice and review
studies which did not meet all guideline requirements . . . .”12
l
Health-Based Restrictions on Cigarettes Weakened
In the 1980s and early 1990s, the United States mounted trade challenges to restrictions on
the importation of cigarettes into several Asian countries. Many of these restrictions, such as
those on advertising and promotional activities, were designed to reduce cigarette
consumption because of adverse health effects.
To avoid unilateral trade sanctions or formal trade challenges, Japan, South Korea and
Taiwan weakened their limitations on advertising and promotional activities. The rate of
cigarette consumption in those countries has since increased, particularly among women.
In 1990, the United States brought a formal trade challenge to Thailand’s cigarette import ban
imposed to thwart a flurry of cigarette advertising and increased tobacco use. The trade panel
ruled that the import ban restrictions violated trade rules.
In 1992, the United States threatened trade sanctions if Taiwan did not water down a
proposed law that would ban cigarette sales through vending machines, prohibit direct
advertising and promotion of cigarettes, require disclosure of tar and nicotine content, and put
into place a public education program on the health effect of tobacco use.13
l
Health-Based Restrictions
on Snuff Weakened
The United States threatened a trade challenge when the United Kingdom (U.K.) banned the
sale of moist snuff. At the behest of the U.S. Tobacco Company, which produces moist snuff,
the United Stated argued that while moist snuff leads to serious health problems, other types
of snuff, which cause similar problems, were not banned. The U.K. succumbed to U.S.
pressure and entered into a voluntary agreement allowing U.S. companies to continue
marketing moist snuff with a health warning, and even to advertise the snuff and engage in
promotional activities, such as sponsoring sporting events and distributing free samples.14
In each of these instances, a measure that sought to prevent harmful exposures was
weakened. In the pesticide example, EPA required less scientific evidence of safety than its
regulations demand. Ironically, the cigarette and snuff lobbying efforts thwarted health
safeguards comparable to those being put in place in the United States.
The WTO’s hostility to the precautionary principle puts numerous public health protections at
risk:
l
Pesticide Safeguards for Children
In 1996, Congress unanimously passed the Food Quality Protection Act, which requires that
extra protection be built into U.S. pesticide standards where the scientific evidence is
incomplete and to account for risks to children. A National Academy of Sciences study
showing that children are more susceptible to adverse impacts from pesticides because of
their size, metabolism, age, and rate of growth precipitated the added protection for children.
This extra protection is not based on definitive scientific evidence of harm from the particular
pesticide, but rather on the lack of studies deemed necessary to decide whether the pesticide
residues will be harmful to children. The Act also calls for extra protection for other gaps in
the scientific evidence of harmful effects from particular pesticides.
l
Bans on Carcinogens in Food
The U.S. Delaney Clause prohibits food additives that cause cancer in animals. The ban
extends to artificial sweeteners, preservatives, chemical processing aids, animal drug
residues, and packaging materials that leach into food.15 The zero-risk Delaney Clause
standard is based on a policy decision in the face of uncertainties about cancer risks from the
consumption of carcinogens even in small amounts. The Delaney Clause constitutes a
political determination made by Congress about whether carcinogens should be introduced
into our nation’s food supply. The European Union has threatened to challenge the Delaney
Clause as an unfair trade barrier.
l
Proposition 65
California’s Proposition 65, an initiative adopted in 1986 by a nearly two-to-one majority of
California voters, requires a clear warning before exposing anyone to chemicals that cause
cancer or reproductive toxic effects.16 A limited exception to Proposition 65’s warning
requirement is provided if the one responsible for the exposure can demonstrate that it results
in “no significant risk” of cancer and or reproductive harm. Because of Proposition 65, many
products, including cigars, household pest strips, lead-glazed ceramic tableware, and paint
strippers, now contain health warnings. Other products, such as typewriter correction fluids
containing a reproductive toxin and a spot remover containing a carcinogen, have been
reformulated to remove the listed substances. Proposition 65 precipitated fetal alcohol
syndrome labels on alcoholic beverages, which, in turn, spurred the federal government to
establish such labeling requirements.17
The European Union has identified Proposition 65 as a trade barrier. Because Proposition 65
places the burden of proof on industry to demonstrate the safety of known carcinogens or
reproductive toxins in their products, including foods with pesticide residues, it could be
challenged for violating the WTO’s rules against instituting precautionary measures.
Moreover, because Proposition 65 was adopted as a popular referendum, it might be
challenged as not based on sufficient science.
Whenever a health protection restricts imports, it could be challenged under the WTO.
Because the above measures instill caution and prohibit exposures without conclusive proof that
harm will result, they could be vulnerable under the WTO. The WTO’s approach threatens to
make citizens guinea pigs, exposing them to risks until the harm is conclusively proven. It also
flies in the face of recent initiatives to provide greater protection against risks to children from
pesticides in food and to all consumers, adults and children alike, from new risks that have not yet
been fully studied.
The WTO Often Forecloses the Most Effective Means of
Protecting Public Health
The effects of toxic contamination and exposure are so pernicious that public health officials
have embraced prevention as the best strategy. Rather than impose lead poisoning upon our
children, we have decided to phase out many uses of lead. Instead of contributing to future toxic
waste sites, many governments are instituting bans on persistent toxic chemicals, and EPA has
instituted source reduction to prevent toxic waste in the first place. To avert poisoning of birds,
like that precipitated by DDT, governments have severely restricted or banned pesticides that kill
birds.
The WTO superimposes a rule on toxics measures that may preclude many bans and phaseouts. Under the WTO, a country must use the least trade-restrictive means of achieving its public
health or environmental protection goals. When a country decides that the best way to protect its
citizens is to ban a chemical completely, that decision may be called into question, since bans are
the most trade-restrictive measures available. For example, other countries might lodge
challenges to bans on residues of harmful pesticides on the grounds that labeling, washing, or
limiting the residues permitted on foods for consumption would be less restrictive ways to protect
public health. While a ban is absolute, such “less restrictive” measures may be ineffectual due to
the failure to read labels or follow safety procedures. They would not prevent all exposure and
are, therefore, not as effective as a ban in protecting public health.
Disclosure requirements could also be challenged, particularly where they are mandatory.
Indeed, both Japan and the European Union have already made claims that the U.S. mandatory
nutritional labeling requirements are an unfair trade barrier. They have argued that voluntary
labeling, as provided for in Codex guidelines, would suffice or that not all foods need to be
covered by mandatory requirements.18
State standards that go further than the national requirements would be vulnerable under the
least trade-restrictive test. In fact, a trade dispute panel concluded that a tax law in place in only
five states was not “necessary” because other states had found “alternative, and possibly less
trade restrictive . . . ways of enforcing their tax laws.”19 This rationale could be devastating if it
were applied to the federal pesticide regulatory scheme, which permits, but does not require,
states to provide greater health or environmental protection than the federal government.
The least trade-restrictive test has been featured prominently in trade challenges:
l
In the dispute that found the U.S. ban on imports of tuna from countries that do not require
dolphin protections by their tuna fleets, the trade panel favored voluntary labeling over the
ban on tuna imports.
l
In a recent WTO challenge to U.S. restrictions on imports of shrimp to protect turtles
entrapped in the shrimp nets, the WTO panel required the United States to pursue
international cooperative approaches as a less trade-restrictive solution than the import ban.
l
The United States has objected to a proposed European Union ban on heavy metals in
electronics products, arguing that other less trade-restrictive alternatives are available. The
industry has suggested landfill restrictions and eco-taxes as a viable alternative to bans on
toxic chemicals and government subsidies for recycling and purchasing policies as
alternatives to manufacturer responsibility for the waste from these products.
The Asbestos Case
The carcinogenic effects of asbestos are well known.20 Many countries, including the United
States, have banned or severely restricted the use of asbestos.21 In 1997, on the basis of a study
indicating the likelihood of an increasing number of asbestos-related diseases and deaths in
coming years, France banned the import and sale of all types of asbestos and products containing
asbestos.22 Canada, the world leader in asbestos exports,23 has challenged the French ban at the
WTO.
Canada’s primary argument is that a less trade-restrictive alternative was available to France,
namely, to ban only the most harmful type of asbestos and to require the “controlled use”—the
wearing of protective clothing and other safeguards—of other types.24 However, because the
French studies demonstrate that such “controlled use” would leave large segments of the public
unprotected,25 Canada is essentially arguing that France (and any other government) should be
required to expose its population to some level of risk if avoiding that risk completely would
place too great a restriction on trade.
Canada also argued that the asbestos ban could not be considered the least restrictive
alternative until France had determined that the substances that would replace asbestos posed no
health risks themselves.26 Canada thus took the position that a government cannot regulate a
substance that poses a known health risk until it has scientifically ruled out any hypothetical risks
of potential substitute substances.
Canada’s challenge is still pending at the WTO. If the WTO accepts Canada’s interpretation
of the trade rules, the ability of government to regulate toxic substances and encourage the
development of non-toxic technologies could be severely restricted. The U.S. government
sometimes forces the development of safer technologies by banning those known to present a
health or environmental risk. For example, U.S. law prohibits the use of lead pipes in drinking
water systems, but does not specify an alternate pipe material, thus forcing manufacturers to
develop non-lead alternatives.27 Canada’s interpretation of the international trade rules would
remove the ability of governments to create such strong incentives for the development of nontoxic technologies by requiring them to prove the safety of all potential alternatives before
banning toxic substances.
Canadian Challenge to U.S. Asbestos Ban
In a 1991 court challenge to the Environmental Protection Agency’s phase-out of asbestos,
the Government of Canada filed a friend of the court brief arguing that the asbestos phase-out
violated international trade agreements. Canada argued that the United States could have banned
only the most harmful type of asbestos, while still permitting the use with restrictions of less
harmful types of asbestos, which are produced principally in Canada. The court decided the case
on domestic law grounds without reaching the trade issues.28 After the court ruling, EPA imposed
a more limited ban on asbestos-containing products, including a ban on any new uses of asbestos.
The WTO Prohibits Restrictions Designed to Prevent Toxic
Effects of Production
Many toxic chemicals are used in the production process or become toxic waste that needs
disposal after production or use of a product. To reduce exposure to such chemicals, it is
necessary to curb the harmful effects of the production process and to limit the creation of toxic
waste.
The WTO prohibits discrimination between products based on how they are produced. If the
physical attributes of two products are the same, the one produced in a manner that depletes
natural resources or pollutes the air and water must be treated the same as the one that does not
cause such pollution. By extension, many have argued that the WTO prohibits “cradle-to-grave”
eco-labeling because the label is based on how a product is produced.
Some restrictions on toxic substances are put in place to protect the environment or workers
during the production process. For example, in the United States, bans have been imposed on
pesticide use to protect farm workers and water quality. If the United States restricted imports of
food produced using these pesticides, it could run afoul of WTO rules because the restrictions
would not be based on some tainted characteristic of the food, but rather would be designed to
protect workers or the environment where the food was grown.
The Challenge to U.S. Dolphin Protections
In 1990, environmental groups successfully sued to compel the U.S. government to impose
an embargo on Mexican tuna because it violated provisions of the U.S. Marine Mammal
Protection Act, which prohibited the sale of tuna caught using fishing methods that kill excessive
numbers of dolphins.29
Mexico filed a trade challenge, and a dispute panel found that these restrictions violate trade
rules (now embodied in the WTO Agreements) because: (1) they bar tuna imports based not on
some product characteristic, but on the process by which the tuna was caught; (2) the United
States had not pursued less trade-restrictive measures, including cooperative international
arrangements; and (3) the restrictions are designed to protect a species outside the territorial
United States.30 In a related dispute brought by the European Union, a second trade panel
concluded that the United States could not make access to its markets conditional on whether
another country had effective policies protecting dolphins from tuna fishing.31
Spurred by the trade panel decision, the United States, Mexico, and several other countries
adopted a program that allows tuna fishing methods that continue to harm dolphins, but provides
for observers on fishing vessels. Congress amended the law to implement this new program, and
the U.S. Commerce Department has agreed that tuna caught using harmful fishing nets may come
into the United States and may carry the dolphin-safe label as long as the tuna comes from a
country that requires observers.32
WTO-Based Attack on European Union Electronics Initiative
Over the past four years, the European Union has been developing a program to minimize
environmental risks from toxic chemicals in electronic and electrical equipment, such as
computers, stereos, fax machines, televisions, and video recorders. The initiative seeks to reduce
the amount of wastes, promote reuse and recycling, and minimize environmental impacts and
risks from disposal of toxic electronics components.
The current proposal has three key features:
1. The proposal would reduce the use of toxic substances by banning certain dangerous
substances and by requiring improved recycling programs. Specifically, the directive would
phase out the use of certain toxic chemicals, including certain specified flame retardants and
heavy metals including lead, mercury, and cadmium, by 2004.
2. The proposal mandates that 70 percent of computer material by weight must be recycled or
reused (incineration cannot be considered recycling).
3. The directive would require electronic equipment producers to take back their products and
be responsible for the costs of recycling and disposal of the waste at the end of the product’s
useful life. Such collections would be required by 2006 free of charge to the consumer.33
The American Electronics Association—the largest trade association of electronics
companies—has mounted an aggressive campaign against the EU directive, condemning it
because, as a ban, it is the heaviest weapon available to the EU and should therefore be used only
as a last resort. At the behest of the electronics industry, the United States Trade Representative
has raised concerns about the directive before a WTO committee and at a U.S.-European trade
forum designed to serve as an early warning system for trade disputes. Lodging a formal
objection that the EU directive violates WTO rules, the United States argued:
1. There is insufficient evidence of consumer harm from use of the banned chemicals in
electronics products; the risk arises out of improper disposal of the equipment at the end of its
life cycle.
2. The collection and disposal requirements are unnecessarily burdensome to foreign companies
that do not have significant European operations.
3. The EU should have used less trade-restrictive means than substance bans and take-back-thewaste mandates to achieve its goals. Selective landfill bans and eco-taxes are less restrictive
than bans. Subsidies for recycling and government purchasing policies are less restrictive
than the recycling and take-back-the-waste provisions.
4. The EU could not ban the toxic substances unless it had first identified and conducted
scientific studies about workable alternatives.
As a result of extensive lobbying by the U.S. Trade Representative, the proposed EU
directive has been weakened. The provisions in the second draft mandating the use of recycled
plastics have been dropped and those concerning the use of particular chemicals have been
weakened in the current third draft.
In addition to the electronics directive, the U.S. Trade Representative argued that a proposal
that would ban nickel-cadmium batteries by 2008 violated the WTO. The International Cadmium
Association led the fight against the battery ban, claiming that it would be too expensive to shift
to alternatives. Instead, the United States urged the EU to accept a voluntary industry agreement
to increase recycling levels. In the United States’ view, the voluntary agreement would “improve
environmental protection without causing the unnecessary disruption that would result from a ban
on nickel-cadmium batteries.”34
The WTO has erected obstacles to toxics bans and standards and thereby threatens to stymie
pollution prevention and public health protection strategies. No country should be forced to
abandon strong toxics standards because they are ahead of the international status quo. Nor
should a government be forced to subject its citizens to risks from toxic chemicals or to forgo the
most effective regulations because they are too restrictive of trade. Countries must also remain
free to impose restrictions to curtail toxic effects of production or disposal of toxic materials.
CONSUMER PURCHASING POWER AND
THE CONSUMER’S RIGHT TO KNOW
Consumer purchasing power can be a powerful tool to compel changes in corporate and government
behavior. The movement to divest investments in South Africa is a case in point.
WTO Obstacles to Eco-Labeling
Consumers are increasingly choosing to use their purchasing power to promote environmentally
sound practices. Twenty-eight countries have national eco-labeling programs to encourage
market-driven environmental changes within industry.35
Eco-labeling distinguishes between products based on their relative impact on the
environment in an attempt to influence consumer purchasing decisions in favor of
“environmentally friendly” products. Eco-labels are based on the environmental effects of
production, distribution, end use, and disposal. Eco-labels disclose whether a product is produced
in an unsustainable or environmentally harmful manner. For example, the U.S. Department of
Agriculture is developing an organic labeling scheme, which will reflect the use of pesticides in
the field, even where the pesticide use does not leave residues on the food ultimately sold and
consumed.
The WTO’s rules extend to government-sponsored labeling, as well as to labeling standards
established by nongovernmental bodies if they have some regulatory impact. In 1996, various
industries, including the chemical, plastics, food processing, and electronics industries, unleashed
a feverish lobbying campaign to make voluntary labels subject to WTO rules. The United States
embraced the industry position and urged the WTO to establish a series of constraints on
voluntary as well as mandatory eco-labels. The WTO has studied the issue but has not yet
decided whether voluntary labels are subject to its rules. Regardless of how the issue of voluntary
labels is resolved, the WTO’s rules apply by their terms to eco-labels sponsored or used by
governments.
Under the WTO, an eco-label that reflects how a product is produced would be vulnerable to
challenge. Similarly, an eco-label could be contested based on its scientific underpinnings, its
effect on imports, and its stringency.
l
The European Union has threatened to challenge U.S. nutritional labeling requirements,
which are among the most advanced in the world, as well as California’s Proposition 65.
Because organic labeling reflects how the food is produced and Proposition 65 goes further
than national Standards and shifts the burden of proof, these labeling requirements may be
vulnerable to a WTO challenge.
l
At the behest of the U.S. paper industry, the United States objected on WTO-grounds to a
proposed EU eco-label for paper. The industry argued that the EU could not base the label on
the environmental effects of the production process.36 The U.S. government claimed the ecolabel would unfairly disadvantage U.S. paper products because it favored recycling, while
U.S. producers use virgin timber for pulp and paper production, and it was based on EU
pollution standards that were stronger than those in the United States.37
l
More recently, the United States has objected to initiatives to require labels on foods
produced with genetic engineering. According to the United States, “providing information
regarding the method of production on the food label would be highly impractical and
inequitable.”38 The United States would require that the food undergo some change in
nutritional value or its use before a label could be required.
Government Purchasing at Risk
Green government purchasing is a mechanism for reducing consumption and its harmful
environmental effects. Its effectiveness stems from the collective purchasing power of the federal,
state, and local governments, which amounts to 18% of the gross national product of the United
States.39
In recent years, government procurement has increasingly been used to reduce production of
paper, which is the third largest industrial consumer of energy and a large contributor to both air
and water pollution.40 A 1993 Executive Order requires federal agencies to have 20% recycled
content in their paper purchases by 1994 and 30% by 1998.41 Many states and many local
governments have extensive recycled paper requirements. For example, California and Oregon
prescribe the percentages of government paper purchases that must be recycled, while
Washington and the City of Seattle set goals for their paper purchases.42 Oregon has gone even
further and imposed recycled content requirements for all newsprint consumption in the state, not
simply government purchases.43 Some cities and states direct that some government paper
purchases must consist of paper that has not been bleached with chlorine.
These government procurement laws are at risk from current WTO rules and any expansion
of them. The WTO is also a threat to burgeoning initiatives, such as procurement rules creating
preferences for chlorine-free paper. The trade threat to government procurement preferences is
not merely hypothetical.
l
l
In 1996, Massachusetts adopted the “Burma Law” to protest human rights violations in
Burma (now called Myanmar).44 The law prohibits Massachusetts from buying goods or
services from companies that engage in business in Burma unless their bid is ten percent
lower than all other bids. The European Union and Japan mounted a WTO challenge to the
law because it effectively excludes companies dealing with Burma from the Massachusetts
public procurement market.45 That challenge is currently on hold during pendency of a
parallel challenge in U.S. court, which has led to a declaration that the Burma Law is
unconstitutional on the ground that it intrudes into the balance struck by Congress under the
federal foreign affairs power.46
A trade threat also surfaced in connection with recycled paper requirements. In the early
1990s, Canada threatened a trade challenge to Minnesota’s requirement for recycled paper
content in state paper procurement bids. Canada claimed that the requirement had a
discriminatory effect on Canadian suppliers because Canada relies on virgin timber and has a
smaller supply of recycled paper. To avert a trade challenge, Minnesota allowed
nonconforming bids from Canadian suppliers.
The WTO erects obstacles to using consumer and government purchases to promote
environmentally sound products and behavior. The consumer right to know and the right to use
government purchases to protect the environment could be undermined by the WTO.
Foreign Investor Rights Threaten Protections
Against Toxic Substances
Those who have a financial interest in marketing toxic substances are likely to oppose measures banning or
restricting the use of those substances. A growing trend in international trade is to grant foreign investors
unprecedented power to bring legal challenges against trade restrictions that affect the value of their
investments. In the past two years alone, foreign investors have used rights granted them in the North
American Free Trade Agreement (NAFTA) to force Canada to remove a ban on a toxic gasoline additive
and to threaten a similar measure in California by demanding that the United States pay nearly $1 billion if
the state does not remove the ban. Such threats are a major obstacle to protecting people and the
environment from toxic substances.
While NAFTA provides the strongest and most far-reaching investor protections of the many
international investment agreements finalized in recent years, the United States and other
industrialized countries have been pushing to extend these rights even further. A recent proposed
global investment agreement triggered vociferous opposition. Nonetheless, some countries have
called for inclusion of a global investment agreement on the agenda for a new round of WTO
negotiations.
The NAFTA Precedent
Under NAFTA, which applies only to the United States, Canada, and Mexico, foreign investors
must be treated no less favorably than domestic investors, or investors from another country.47
NAFTA also prohibits any measure that is “tantamount to expropriation” —meaning measures
that take away the property of a foreign investor—unless it is nondiscriminatory, for a public
purpose, carried out in accordance with due process, and accompanied by compensation paid to
the investor.48
NAFTA gives foreign investors the extraordinary power to sue governments for money
damages for property lost to expropriation.49 Some foreign investors have used this power to sue
for investment losses resulting from what they believe to be unjustified environmental or health
regulations. The investor can force the government into binding arbitration to obtain such
compensation. The arbitration proceedings are held in secret, without any avenue for public
participation. These NAFTA rules lend themselves to extortion-type claims by regulated
industries seeking to avoid or weaken governmental health and environmental regulations.
NAFTA Investor Challenges to Toxics Regulations
The NAFTA track record illustrates the threat that a globalized investment agreement would pose
to protections from toxic chemicals.
l
In the most recently threatened NAFTA investor claim, Methanex of Canada is challenging
California’s ban on a toxic gasoline additive. Studies indicate that ingesting or breathing
MTBE (methyl tertiary butyl ether) may cause cancer.50 MTBE, a reformulated gasoline
component made from methanol, has been found in ground water supplies, resulting in
human exposure through water used for drinking, cooking and bathing.51 As a result of these
concerns, in March 1999, the Governor of California issued an order banning the use of
MTBE by the end of 2002.52
On June 15, 1999, the Canada-based Methanex Corporation, which supplies methanol to U.S.
gasoline refiners, filed a NAFTA suit seeking $970 million from the United States for losses,
including a decline in stock prices, it attributes to California’s ban. Methanex claims that the
ban would expropriate its business interests, is not based on definitive proof that MTBE is a
human carcinogen, and is too restrictive of trade because California should be required to
take other, less trade-restrictive actions to try to prevent gasoline from leaking into
groundwater.53
l
l
l
In 1997, U.S.-based Ethyl Corporation filed a claim seeking $250 million for Canada’s ban
on the fuel additive MMT (methylcyclopentadienyl manganese tricarbonyl), which is
designed to prevent automobile engine knocking. Canada based its ban on studies showing
that MMT could harm automobile on-board diagnostic systems, which in turn could lead to a
failure to detect high levels of pollutant emissions, and that exposure to manganese
compounds can cause neurological problems. Ethyl Corp., the sole manufacturer and
distributor of MMT in Canada, argued that the ban discriminated against it because other fuel
additives were not banned, lacked sufficient proof of health or environmental harm, and was
excessively restrictive of trade. It sought compensation for lost sales and profits, damage to
its reputation and good will including from public statements made by government officials,
future earnings, lobbying costs, and attorneys’ fees. Canada eventually settled with Ethyl,
rescinding the ban and paying Ethyl $13 million, including approximately $4.5 million in
legal fees.54
In 1997, the U.S.-based Metalclad Corporation filed a claim against the Mexican government
pertaining to a toxic waste facility with a history of contaminating groundwater that
Metalclad had taken over two years earlier. The local government had decided that Metalclad
could not operate the facility because a geological audit revealed that it was located on an
underground alluvial stream and could therefore contaminate the local water supply. The
local Governor rezoned the area as an ecological zone in which the landfill could not operate.
Metalclad filed an investor claim under NAFTA charging that the rezoning and the denial of
permission to operate the facility constituted an indirect or creeping expropriation of its
property. Metalclad sought $65 million in compensation from the Mexican government.
Arbitration of this claim is ongoing.55
In July 1998, U.S.-based SD Myers, Inc. sought $10 million for Canada’s 15-month ban on
the export of PCBs. Canada imposed the ban after the United States loosened its own
restrictions on transboundary trade in PCB waste, which would have permitted SD Myers to
import Canadian PCBs for disposal at its Ohio facility. Canada based its ban in part on the
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and
their Disposal, which it has ratified. The Basel Convention prohibits countries from exporting
hazardous wastes, including PCBs, to nonparties like the United States without ensuring that
they will be managed in an environmentally sound manner. Canada expressed concern that
U.S. regulations would not require the PCBs to be disposed of in a manner that would avoid
risk to health and the environment. After the United States issued more stringent PCB
regulations in response to domestic litigation, Canada lifted the ban.56 SD Myers’ NAFTA
challenge is still pending.
The Threat to Toxics Regulations Posed by Global Investor
Rights
If some WTO members have their way, the WTO will grant foreign investors worldwide the
powers they are given under NAFTA, which would have a profoundly negative effect on a
country’s ability to ban or restrict the use of toxic chemicals. Already, investors have taken the
broadest reading of the concepts of expropriation and other investor rights to seek compensation
for delays in obtaining governmental action, for a ban on a chemical that is costing taxpayers
millions of dollars to eliminate from their drinking water, and for damage to a company’s
reputation from a legislative debate.
Given that foreign investments are generally long-term interests, the investor rights
provisions raise the specter of requiring compensation whenever new environmental regulations
are imposed over the life span of an investment. In other words, environmental regulation could
be frozen to coincide with investor expectations despite accumulating scientific knowledge,
growing environmental problems, and changing public values.
Investor rights provisions give foreign investors what might charitably be called a bargaining
chip or, less charitably dubbed, a device for extortion. If global investor rights are adopted, the
mere threat of a costly investor claim could derail a much-needed regulatory initiative. Such a
powerful tool for forcing governments to defend toxics regulationsand possibly to pay huge fees
to maintain themcould discourage governments from even attempting to implement
environmental measures that may affect foreign investment.
Conclusion
Food safety, health, and environmental standards should not be sacrificed in the name of free trade. These
standards are not trade barriers, they afford much-needed protection to the public and the planet and they
instill confidence in the marketplace. By the time a chemical standard is adopted, citizens have fought
against heavily financed industry opponents to have the problem addressed. Bans and phase-outs typically
come only after the devastating consequences of a toxic chemical have become tragically evident. The
WTO has no expertise and no right to second-guess the wisdom or need for such restrictions. It exceeds its
competency and legitimacy when it rules on propriety of such measures.
The WTO’s existing rules erect huge obstacles to much-needed regulation of toxic chemicals.
The WTO has entered the fray of public health protection, which historically has been the
prerogative of local and national governments. Its entry onto this stage has been a source of great
controversy worldwide.
The Clinton Administration must insist that the WTO not jeopardize strong environmental
protections at the local, state, national, and international level. To ensure that strong
environmental standards are not at risk, the WTO must be reformed to protect the following five
rights:
1. The right to have strong environmental standards that use the precautionary principle
and protect citizen health and the environment.
2. The government’s right to limit the harmful effects of production, such as pesticide
poisoning of workers, and toxic air and water pollution from factories.
3. The consumer right to know which products are environmentally friendly.
4. The right to use the government’s purchasing power to protect the environment.
5. The public right to access information about and to participate in disputes, negotiations,
and other proceedings that affect public health and the environment.
Before any further expansion of the WTO, the Clinton Administration should call for a
complete assessment of the impacts of the WTO on effective health and environmental
regulations. This review should invite the participation and defer to the expertise of international
and national bodies with pertinent health, environmental, and scientific expertise and jurisdiction.
The WTO should then repair the damage by reforming its rules and closed processes to promote
health and environmental protection and citizen participation before embarking on any further
expansion. To ensure that no further damage is done during this review and repair process, a
moratorium should be imposed on WTO challenges to food safety, health, and environmental
protections.
Notes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Letter to EPA from Northeast States for Coordinated Air Use Management (Oct. 22, 1993); Letter to
EPA from Mid-Atlantic Regional Air Management Ass’n (Nov. 15, 1993).
George E. Warren Corp. v. EPA, 159 F.3d 616, 624 (D.C. Cir. 1998).
WTO Agreement on Sanitary Phytosanitary Standards, Article 3; WTO Agreement on Technical
Barriers to Trade, Articles 2 and 3.
EPA Office of Pesticide Programs, Methyl Parathion Risk Management Decision (August 2, 1999).
WTO Appellate Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products
(WTO, Oct. 12, 1998).
WTO Agreement on Sanitary and Phytosanitary Standards, Articles 2 and 5.
WTO Panel Report, Australia—Measures Affecting Importation of Salmon, (WTO, June 12, 1998);
WTO Appellate Panel Report, Australia—Measures Affecting Importation of Salmon (WTO, Nov. 6,
1998).
WTO Panel Report, European Communities Measures Concerning Meat and Meat Products
(Hormones) (WTO, Aug. 18, 1997); WTO Appellate Body Report, European Communities—Measures
Concerning Meat and Meat Products (Hormones) (WTO, Jan. 15, 1998).
55 Fed. Reg. 39,171-77 (Sept. 25, 1990).
Services of the European Union Commission, Report on U.S. Trade and Investment Barriers, at 5.
(1993)
56 Fed. Reg. 19,518 (April 26, 1991).
55 Fed. Reg. 39,178 (Sept. 25, 1990).
Mintz, “Tobacco Roads: Delivering Death to the Third World,” The Progressive at 24 (May 1991);
Council on Scientific Affairs, “The Worldwide Smoking Epidemic: Tobacco Trade, Use & Control,”
263 JAMA 3312 (June 27, 1990); GATT Panel Report, Thailand Restrictions on Importation of &
Internal Taxes on Cigarettes, Basic Instruments and Selected Documents (BISD), 37 th Supp. (adopted
Nov. 7, 1990).
Letters from U.S. Ambassador Re: U.K. Moist Snuff Ban (1990 & 1991); U.K.-U.S. Tobacco Co.
Agreement Re: Moist Snuff (1991).
21 U.S.C. § 376(b)(2)(B).
Safe Drinking Water & Toxic Enforcement Act, Cal. Health & Safety Code, §§ 25249.5 et seq.
California Department of Justice, Proposition 65 Litigation (1993).
See 56 Fed. Reg. 60,366 (Nov. 27, 1991); Crane, Behlen, Yetley & Vanderveen, “Nutrition Labeling
of Foods: A Global Perspective,” Nutrition Today (July/Aug. 1990).
GATT Panel Report, United States—Measures Affecting Alcoholic and Malt Beverages ¶ 5.52 (1992).
See, e.g., Environmental Health Criteria 203—Chrysotile Asbestos, World Health Organization
International Programme on Chemical Safety at 144 (1998) (“Exposure to chrysotile asbestos poses
increased risks for asbestosis, lung cancer and mesothelioma in a dose-dependent manner.”).
See, e.g., 40 C.F.R. §§ 763.165-763.169 (banning several asbestos-containing products and all new
uses of asbestos).
Decree No. 96-1133, Dec. 24, 1996, Relating to the Ban on Asbestos.
Bridges, Weekly Trade News Digest, Vol. 2, No. 20 (June 1, 1998)
<http://www.ictsd.org/digests/digest2-20.txt>; Press Release, Natural Resources Canada and Foreign
Affairs and International Trade, “Government of Canada Stepping up Action to Fight French Asbestos
Ban, McLellan and Eggleton Say,” Oct. 8, 1996,
<http://www.nrcan.gc.ca/css/imb/hqlib/96102.htm>.ZZ
European Communities—Measures Concerning Asbestos and Asbestos-Containing Products, First
Written Submission of Canada, Apr. 26, 1999, ¶¶ 230-37; Agreement on Technical Barriers to Trade,
Art. 2.2. See also Agreement on Sanitary and Phytosanitary Measures, Art. 5.
European Communities—Measures Concerning Asbestos and Asbestos-Containing Products, First
Written Submission of the European Communities, May 21, 1999, ¶¶ 21-22, 108-120.
Canada’s First Written Submission, ¶¶ 213-17.
42 U.S.C. § 300g-6.
Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir. 1991).
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
Earth Island Institute v. Mosbacher, 746 F. Supp. 964 (N.D. Calif. 1990), aff’d, 929 F.2d 1449 (9th Cir.
1991).
GATT Panel Report, United States—Restrictions on Imports of Tuna, GATT Doc. DS21/R (Sept. 3,
1991).
GATT Panel Report, United States—Restrictions on Imports of Tuna, 33 I.L.M. 839 (1994).
Pub. L. No. 105-42.
Second Draft Proposal for a Directive on Waste from Electrical and Electronic Equipment (EU DG XI
July 1998).
U.S. Department of State Demarche Request on E.U. Waste Directive and Battery Accumulator
Directive (Jan. 1999); 22 Int’l Envtl. Rptr. (BNA) 680 (Aug. 18, 1999).
Comment, The Role of Ecolabeling in Sustainable Forest Management, 11 J. Envtl. L. & Litig. 165
(1996).
Letter from Robert Morris, Senior V.P., U.S. Council for International Business Roundtable to David
Stark, Deputy Assistant USTR, Attachment at 1 (Mar. 21, 1995).
The Role of Eco-Labeling in Sustainable Forest Management, 11 J. Envt’l. L. & Litig. at 185.
Codex Alimentarius Commission, Proposed Draft Recommendations for the Labeling of Foods
Obtained through Biotechnology (Alinorm 99/22, App. VII), U.S. Government Comments (June
1999).
Lewis & Weltman, Ten Ways to Make Government Purchasing Green (1992).
B. Hall & M. Kerr, 1991-1992 Green Index at 101 (1991).
Exec. Order No. 12,873, 58 Fed. Reg. 54,911 (1993).
Cal. Pub. Resources Code § 42211 (35% after January 1, 1997 and 40% after January 1, 2000); id. §
12162 (setting a goal of 50% recycled of all paper products purchased and 25% of fine writing and
printing paper purchases); id. § 12310 (50% of total legislature paper product purchases must be
recycled and 25% of fine writing and printing paper purchases); id. § 10860(d) (goal of 50% of total
dollar amount of paper purchases); Oreg. Rev. Stat. §§ 279.555, 459A.010 (goals for recycled product
procurement); id. § 279.621(4) (35% of state agency paper purchases shall be from recycled paper
products); Wash. Rev. Code § 43.19A.050 (goal of 80% of total dollar amount of paper purchases);
Seattle Municipal Ordinance § 3.18.904 (goal of 60% of total dollar amount of paper purchases).
Oreg. Rev. Stat. § 459A.505.
Mass. Gen. Laws ch. 7, §§ 22G-M, 40F ½ (West Supp. 1998).
United States—Measures Affecting Government Procurement, Request for Consultations by Japan,
WT/DS95/1 (circulated July 21, 1997); United States—Measures Affecting Government Procurement,
Request for Consultations by the European Communities, WT/DS88/1 (circulated June 26, 1997);
United States—Measures Affecting Government Procurement, Request for the Establishment of a
Panel by Japan, WT/DS95/3 (Sept. 9, 1998); United States—Measures Affecting Government
Procurement, Request for Establishment of a Panel by the European Communities (Sept. 9, 1998);
Bridges, ICTSD, Sept. 1998, at 5 & Oct. 1998, at 6.
National Foreign Trade Council v. Baker, 26 F. Supp.2d 287 (D. Mass. 1998), aff’d, No. 98-2304,
1999 WL 398414 (1st Cir. June 22, 1999).
NAFTA, Articles 1102-1103.
NAFTA, Article 1110. See generally, Wagner, International Investment, Expropriation and
Environmental Protection, 29 Golden Gate U. Law Review 465, 474-80 (Spring 1999).
NAFTA Chapters 1116-1117. See Wagner, supra, at 475-77.
The World Health Organization has stated that “MTBE should be considered a rodent carcinogen.”
Environmental Health Criteria 206: Methyl Tertiary-Butyl Ether, p. 159 (WHO 1998). See also Health
& Environmental Assessment of MTBE: Report to the Governor and Legislature of the State of
California as Sponsored by SB 521, Arturo Keller, et al., Nov. 1998.
Impacts of MTBE on California Groundwater, Graham E. Fogg, Mary E. Meays, James C. Trask,
Christopher T. Green, Eric M. LaBolle, Timothy W. Shenk, and Dennis E. Rolston, Hydrologic
Sciences, Department of Land, Air and Water Resources, University of California, Davis, § 5.0; Health
& Environmental Assessment of MTBE: Report to the Governor and Legislature of the State of
California as Sponsored by SB 521, Volume I, Summary & Recommendations § 39, November 1998,
Arturo Keller, Ph.D., UCSB, John Froines, Ph.D., UCLA, Catherine Koshland, Ph.D., UCB, John
Reuter, Ph.D., UCD, Irwin (Mel) Suffet, Ph.D., UCLA, Jerold Last, Ph.D., UC TSR&TP Director, at
31.
52
53
54
55
56
Executive Order D-5-99, ¶ 4. The governor’s order was codified in a law requiring that MTBE use end
by “the earliest possible date.” Calif. Senate Bill 989, signed by Governor, Oct. 8, 1999, ch. 812,
Statutes of 1999.
Methanex Notice of Intent to Submit a Claim to Arbitration Under Article 1119, Section B, Chapter 11
of NAFTA, June 15, 1999; ICTSD, 5 Bridges 12 (June 1999).
Wagner, supra, at 490.
Wagner, supra, at 488.
Wagner, supra, at 496; Sierra Club v. Environmental Protection Agency, 118 F.3d 1324 (9th Cir. 1997)
(overturning EPA’s 1996 regulations allowing import of PCBs).