Speakers:

David Balton
Director of the Office of Marine Conservation,
United States Department of State 

Steve Charnovitz
Director, Global Environment & Trade Study,
Yale University

Philippe Sands
Reader in International Law, London University and
Global Professor of Law, New York University School of Law 

T.N. Srinivasan
Samuel C. Park, Jr. Professor of Economics and
Chairman, Department of Economics,
Yale University 

Moderator:

Sydney M. Cone, III
C.V. Starr Professor of Law and Director,
Center for International Law 

MR. CONE: From your left to your right are the following panelists, and also the order in which they will speak. Each speaker will speak for approximately 15 to 20 minutes. After the four of them have completed their talks, we will have a general discussion in which I hope all of you will feel free to participate. We have C-SPAN with us tonight, so we do request that when you participate you come forward and use the microphones, as Bhali pointed out.

The first speaker is Mr. David Balton, who has come to us from Washington, D.C., today. He is the Director of the Office of Marine Conservation for the U.S. Department of State, and prior to that he worked at the State Department’s Office of the Legal Advisor, where he functioned as a lawyer. David has been promoted from the status of lawyer to the status of client and there are many of us in this room who know the significance of that.

Next is Mr. Steve Charnovitz, Director of the Global Environment and Trade Study at Yale University. I am particularly happy that Steve is here, so that I am not the only person speaking with something of a southern accent. Steve is a lawyer, as well as director of the Study at Yale University.

Next, we have Mr. Philippe Sands. I am personally delighted to finally meet Philippe face-to-face. He and I have talked over the phone over a long period of time about having an event such as this one. If one were to go back to the origins of this event, one would really go back to when Philippe called me up one day and suggested this event. That day has some time past, and finally we are here. Philippe is a Reader in International Law at London University, and he also participates in New York University’s Global Law School.

Finally, we have the privilege to have with us the chairman of the Department of Economics at Yale University, Professor T.N. Srinivasan. He is well known in the area of trade, and we do not often have the privilege of having him come to us from New Haven. He is also a chaired Professor of Economics at Yale.

I hope that this is an adequate introduction of such a distinguished panel. I will now ask Mr. Balton to start. He will attempt to give us the background and the foreground of the substance of the current debate over world trade and the environment. Mr. Balton.

MR. BALTON: Thank you very much, Professor. Let me say at the outset that I am not an expert on the subject of trade and the environment. My job at the State Department is to care about critters that swim in the ocean. I have recently found myself called before the U.S. Court of International Trade and the World Trade Organization. These pesky trade issues won’t let me go. I have concluded that I must have done something truly terrible in a previous life that this would be my punishment. For tonight, I am going to leave the large conceptualization of these issues to the other panelists, who I assure you have spent much more time thinking about the big picture than I have.

I will, instead, attempt to present a ground level view of two of the trade and environment cases, which have become cause celebre in recent years – tunas and dolphins, and more recently, sea turtles and shrimp.

Starting with tunas and dolphins, yellow-fin tuna and dolphins swim together in the eastern tropical Pacific Ocean. Fisherman realized long ago that it was possible to catch tuna very efficiently by putting a net around the dolphins and then catching the tuna that are swimming underneath.

There is only one problem with this approach - it leads to the deaths of hundreds of thousands of dolphins a year. This dates back to the 1960s and, when it came to light, it provoked quite a reaction, particularly in the United States. Congress began by imposing restrictions on the way U.S. fishermen could fish, which resulted in U.S. vessels leaving the fishery. Congress then decided that other countries that wanted to sell their yellow-fin tuna in the United States would have to abide by comparable protections for the dolphins. This lead to trade embargoes on a number of countries, particularly in Latin America.

As many of you may know, this led to two different GATT cases. Mexico led the first in 1991, and the European union led the second in 1993. In both cases, GATT panels determined that these embargoes under the Marine Protection Act were in violation of our international obligation under GATT.

But neither of those decisions was ever brought to fruition for a variety of reasons. The tuna and dolphin situation had proceeded down a different path, not currently before the WTO. Instead, a multilateral effort was begun in 1992 to solve this problem. An original agreement, affectionately called the Lavoya Agreement, stated that the countries whose vessels fished for tuna in the eastern tropical Pacific Ocean agreed to take a number of measures to reduce dolphin deaths there. They succeeded, probably in hopes that the US embargoes on the tuna would be lifted. The embargoes were not lifted.

The situation appeared to be headed for a long-term stalemate until 1995, when the countries in question, including the United States, and several US environmental groups, came together in Panama City. They adopted what we now call the Declaration of Panama. A deal said that if the United States would lift the embargoes, as well as do a number of other things, the countries whose vessels fish in the eastern tropical Pacific Ocean for tuna would take additional measures to protect dolphins. This deal turned the 1992 agreement, which had been a voluntary agreement, into a legally binding one.

With the adoption of the Declaration of Panama, the scene shifted to Congress. After a couple of difficult years and long debates, in the summer of 1997, legislation was passed to give effect to both the Declaration of Panama and negotiations that began on the international plane to finalize and bring to fruition the international agreement to protect dolphins in the eastern tropical Pacific Ocean. The agreement is not yet in force, but it will provide for a very stringent requirement to protect dolphins in the course of the tuna fishery.

I will add that today about 3,000 dolphins are killed in this fishery which may still seem like a lot to you. But it represents only 1% of former dolphin mortality rates and only a fraction of 1% of all the dolphins in that region. This is, in fact, a stricter standard than in most fisheries that occur inside US waters.

Now let’s take a look at sea turtles and shrimp case. Sea turtle species are endangered. They’ve been on the US endangered species list for a long time and, for some time, on a number of international endangered species lists, including the Convention on International Trade and Endangered Species Annex, Appendix 1.

One of the principle causes of sea turtle mortality, at least in US waters, is that they get caught in trawl nets that shrimpers use. Dragging a net along the bottom of the sea floor catches shrimp, and only about 10% of what is caught in the net is actually shrimp. All sorts of other things get caught as well, including sea turtles. Sea turtles need to breathe air and when they get caught in the nets, they drown. Fortunately, for the turtles, a piece of technology was developed in the 1980s called turtle excluder devices or TEDs. If any of you have old-style barbecue grills dating back to the 1950s, you will know more or less what a TED looks like. It is a round piece of metal with slits in it which if it were put on top of your charcoal grill, you could grill your steaks. But if it’s put in the back-end of a shrimp trawl net, it will allow the shrimp to pass through as the net is moved forward in the water, while large objects like sea turtles hit the grid and are directed out a trap door. A TED costs a few hundred dollars. It is a remarkably effective piece of technology and quite cheap – I think you’d agree. Starting in the 1980s, the U.S. began to institute requirements for US vessels that fish for shrimp in areas where sea turtles were found to use TEDs. Finally by 1990, it was a requirement on all of them.

In 1989, Congress also passed a law as a rider to an appropriations act, which prohibits the importation of shrimp that is harvested in ways harmful to sea turtles. The Department of State was given responsibility to implement this law. In the first few years of implementation, we decided that Congress had really intended its application to be limited to an area from the Caribbean region all the way down to Brazil. I wouldn’t go into the long rationality of that, but I will say that the rationale was challenged in court. At the end of 1995, the US Court of International Trade (CIT) decided that we were wrong and that Congress had, from the start, intended the law to apply on a worldwide basis.

When the first CIT case was handed down, we were wrapping up negotiations with our Latin American friends to try to multilateralize this issue as much as the tuna-dolphin issue was becoming unilateral. We were negotiating what has become, and is currently before the Senate for advice and consent, the Inter-American Convention for the Protection and Conservation of Sea Turtles. One of the things it requires is that shrimp trawl vessels use TEDs, along with a number of other things as well.

We then were confronted with the situation, because of the CIT decision, that we were not only dealing with Latin American countries but also all countries that wanted to sell their shrimp to the United States. Some of the largest exporters of shrimp to the United States are in the Indian Ocean region- Thailand, in particular. Thailand was not amused when it found itself subject to this law and, with three other countries, filed a case at the World Trade Organization, about which we will hear more later. There is, as well, ongoing litigation in the US Court of International Trade about the Department of State’s implementation of this law restricting shrimp imports.

For all the controversy that these two laws have given rise to, I think most who look at the situation soberly would say that the trade restrictions seem to have caused progress on the environmental front. In fact, dolphin mortalities in the eastern tropical Pacific Ocean are much lower than they were before. One could quibble about the cause and effect but as someone who works on the issue day-to-day, it really did matter that these countries were prohibited from selling their tuna in the United States if they did not protect dolphins better. Today 18 countries, in addition to the United States, require the use of turtle excluder devices on all their shrimp trawl vessels operating in areas where sea turtles are found. Those 18 countries are developing countries, and I am quite sure that many of them would not have had those requirements in place but for the US restrictions on imports.

That said, these laws have entailed certain costs as well. They have engendered some political resentment by the countries that feel that we are imposing our environmental standards on them. I would say, as a personal matter, that I have noted a palpable lack of cooperation from the affected countries on related issues due to this resentment. It is also my sense that the trade embargoes have had diminishing effectiveness over time as countries figure out ways to find other markets for their products. And, of course, there is the matter of potential conflict with international trading rules.

From the point of view of the Department of State, the obvious solution would be to have multilateral standards for environmental protection and multilateral agreements to promote adherence to those standards, including the use of trade measures. We have had success in the tuna-dolphin situation, although that success has not yet nailed down the tuna-dolphin agreement that was negotiated and has yet to be put into force. The Inter-American Turtle Convention that I mentioned earlier is not yet in force either. We would like to negotiate a comparable one for the Indian Ocean region but it takes two or, in this case, more like 30, to tango. Those countries need to demonstrate a willingness to do so as well.

In short, multilateral solutions are easy to call for but hard to achieve. I’ll end my comments here and pass the microphone on to the next speaker. Thank you.

MR. CONE: The next speaker, as I mentioned, is Mr. Charnovitz from the Global Environment and Trade Study at Yale. I am intervening just to say that I want to throw out a term that has been used by some commentators on the United States’ approach in these two cases David just told us about. That term has been called "creative unilateralism." There are those on the panel who will, I think, dispute that term and say that unilateralism by the United States is to be condemned but there are commentators, and it’s possible that Mr. Balton would agree, and think that the United States’ unilateralism has been creative. Sorry for the interruption.

MR. CHARNOVITZ: Thank you. Trade in the environment is, I think, a vast and expanding set of issues far more than anyone could cover in one talk. I thought tonight I would try to focus on maybe what’s most important for lawyers which is what does emerging international trade law dictate regarding the environment and health. I’ll start with domestic environment and health and then discuss some global issues.

The official line from the World Trade Organization was contained in a speech given by Mr. Ruggiero, the Director General of the WTO, several months ago when he said the following: "Subject to the basic requirement of non-discrimination, WTO rules place no constraint on the policy choices available to a country to protect its own environment or health standards." That’s the official line coming from the WTO. The question I want to pose to you is whether we can reconcile that official line with the actual decisions that have been coming out of the WTO adjudication. I think the answer is no, we can’t.

I want to discuss briefly a few cases - the gasoline case (which was a case against the United States Environmental Protection Agency’s standard on gasoline); the hormone case against the European Commission (which concerned the EC’s ban on meat produced with growth hormones); and a more recent salmon case. I wrote about this case in an op-ed which was handed out this evening. Those are three cases on domestic environment and health and in all three of those cases the defendant government lost. I think that’s significant. There’s another decision that I’ll mention briefly- the Japan alcohol case. It’s not an environmental case. But the way in which the panel interpreted the GATT law has significance for environmental regulation, I think.

Let me start with the interpretations of Article XX head note of the GATT. Now, the General Agreement on Tariffs and Trade (the GATT) is a set of rules about when and how governments can use trade restrictions. There is an Article XX in the GATT which sets out general exceptions to the rest of the GATT. Article XX is known as sort of public policy exceptions. And Article XX begins with a head note that lays out the qualifying conditions for using the exceptions. The interpretations of this head note first arose in this gasoline case. If you’re not familiar with them, let me just briefly say it was the US Environmental Protection Agency’s regulation that applied a different standard to foreign origin gasoline then to domestic gasoline. Now, I’m not at all defending the US regulation. I wrote at the time that I thought it was GATT illegal but in holding it to be GATT illegal, I think the WTO appellate authority went way too far and sharply constricted the already narrow window available for the environment in GATT Article XX.

Now, I don’t have time to go over all the new ground broken in that gasoline case but let me mention three points which I think are most significant. First, the GATT panel assigned the burden of persuasion onto the defendant government. Second, it held that Environmental Protection Agency failed to meet this burden because it did not show how it had factored into its decision making the higher cost being imposed on foreign gasoline producers. Third, the Environmental Protection Agency did not show that it had sought a joint administrative solution with regulatory agencies in Venezuela and or Colombia, which were the two complaining countries. What I want to say is that there is some dissidence between what the Director General says (where there is no constraint) and what the WTO case law says which deepens the constraint, because all three of those interpretations I just outlined are brand new interpretations in the WTO and all are new constraints on what national decision-making can do.

Now, as far as the WTO appellate body’s advice from a public policy perspective may be, one could agree with it. Maybe EPA should get better at weighing the cost of its regulations on foreigners. Now, for that matter, maybe EPA should get better at weighing the cost of its regulations on domestic companies. But I think in imposing these requirements, the WTO is clearly imposing new constraints, and I think the Director General in his speech that I quoted really was whitewashing that fact.

Let me now move to another trade rule. This involves the hormone and salmon cases. These are cases under the new WTO agreement on sanitary and phytosanitary measures. This is an agreement that supervises national regulations on products for reasons of public health and food safety. The hormone case is probably familiar to you - it has gotten a lot of publicity. Basically, the European Commission was banning, and is still banning, meat produced with hormones. The panel found that there was really no evidence that meat grown with hormones was less safe than other meat, and the EU lost that case.

The salmon case, a fairly recent one, is, I think, a different case and an interesting one because here Australia was banning the importation of untreated salmon- salmon that had not been heat treated- on the grounds that this salmon could contain pathogens that would be very harmful to Australia because they didn’t exist in Australia. Australia, being an island nation, is vulnerable to these exotic pathogens. Nevertheless, the panel ruled against Australia. They said, yes, there was evidence that these pathogens could be harmful but they felt that Australia’s exact regulations was not adequately based on a risk assessment. I think, in that regard, the panel was probably right. Australia hadn’t procedurally done as much as it should have but the panel went farther than that. They said that Australia also violated the WTO because it was being inconsistent in its regulations. They compared the way Australia regulated salmon and the way it regulated other fish such as eel and said that they were being tougher on salmon that on eel and, therefore, violated the WTO because they were inconsistent. Third, the panel said that Australia violated the WTO because it hadn’t used the most least-trade restrictive regulation. The panel said that there are other methods that could have been used instead of heat treatment. Australia hadn’t done it and therefore that was a violation.

Again, I think these are entirely new constraints on national decision-making that have arose under the Uruguay round when, really, these are first tentative steps toward the development of international administrative law. Perhaps that’s a good development. It probably is, but nevertheless I think we need to be honest with ourselves and say that yes, the WTO does impose constraints on national decision-making.

Another issue I will just touch on briefly is the so-called "aim and effect" test in GATT Article III, the national treatment provision. The aim and effect test was designed in the early 90’s to enable panels to distinguish between two products as to whether or not they were like products. The GATT National Treatment Rule applies only to like products, and you have to really determine whether two products being complained about are like or unlike. This came up in the Japan alcohol case where Japan was being challenged on the grounds that it was taxing foreign produced alcohol higher than domestically-produced alcohol. Japan said that they were different products because they were chemically different.

The panel really disagreed and tossed out the aim and effect test. Without an aim and effect test, the national treatment requirement takes on very sharp edges. It makes it very difficult for governments to use tax or regulatory policy to try to distinguish products based on policy distinction. Let me give you a couple of examples. Suppose a government wanted to impose a motor vehicle tax based on fuel economy. With an aim and effect test, the panel could say that high and low fuel economy vehicles are not like products. In 1994 a GATT panel did just that and allowed a US law that distinguished between high and low fuel economy vehicles. But without this aim and effect test, a panel would say that all automobiles are like all other automobiles and therefore a tax based on fuel economy could be viewed as a GATT violation. So I think that is a serious issue, which has not yet come up in the environment. With the alcohol tax decision, it was only a matter of time before regulations or taxes with environmental distinctions would come under the same rule.

So now let me now move from the domestic environment and health to global issues. Mr. Balton has talked about the shrimp-turtle case and I think that is an example of where a very difficult case is now before the appellate body and we will have to see what they do with it. Here the Director General in his speech does not claim that GATT rules are innocuous. He says that a country cannot, under WTO rules, apply trade restrictions to attempt to change the process and production methods of other policies or of the policies of its trading partners. So here the WTO Director General, I think, is being honest in what the WTO constrains. The question is should the WTO be constraining that.

As was indicated, the panel said that the US should have tried to negotiate a multilateral agreement. But I think that’s somewhat of a one-sided inquiry just to ask the United States why you didn’t negotiate. It takes two to negotiate and I think it’s just as relevant to ask, say, Malaysia or Thailand, why it doesn’t protect sea turtles. The recognition that sea turtles are endangered goes back at least as early as 1924 when international action was first sought and, I think, if you have a WTO mechanism to just ask the question why using a trade measurement doesn’t look at the environmental side, it’s a rather unbalanced mechanism. That appellate body decision is due out in about a month and I can assure you if it rules against the sea turtles, there are going to be a lot of environmental groups that are going to be very unhappy with the WTO. Just last week, I got this new booklet "Slain by Trade" with a picture of a little sea turtle on the cover put out by the Sea Turtle Restoration Project attacking the WTO, and that’s even before the decision comes out.

So finally, let me just offer a few observations. I think the WTO is clearly having an impact on environment and health law but it’s not happening the other way around- international environmental institutions are not yet having much effect on trade law. We are not inculcating environmental principles into trade policy making. Indeed, the WTO has been resisting closer ties to environmental institutions. I think there is a real agenda here for using environmental principles to strengthen the trade regime. Environmentalists know that subsidies are bad - fishery subsidies, agriculture subsidies, or energy subsidies. And yet the WTO has not moved to stop those subsidies. Environmentalists know that protectionism in agriculture or textiles is bad for developing countries- it keeps them poor- and yet the WTO is moving very slowly to deal with that kind of protectionism. Environmentalists favor market mechanisms like labels to inform consumers and the public how products are produced and yet environmentalists fear that the WTO will try to outlaw labels about products in the name of freer trade. For instance, labels that say whether or not timber has been sustainably produced.

So this points, I think, to a deeper agenda. We have to do more than just defend environmental laws against trade rules. We need to infuse the best of environmental policy into trade policy. Typically, I think, trade and environmental policy diverge. Environmental policy, I think, aspires to transcend nationalism and it utilizes a holistic approach whereas trade policy often reflects autarchy and nationalism and doesn’t recognize the cybernetic connections in our world economy. So I think, the challenge in the years ahead will be to improve both the trade and environmental regime by encouraging cooperation between those regimes and by encouraging each of those regimes to learn the best practices from each other. Thank you.

MR. CONE: Thank you very much. Well, you certainly put a challenge before the next two speakers as well as before the whole world. So let us move to the next two speakers right away. Mr. Sands.

MR. SANDS: Thank you very much, Sydney. I greatly enjoyed listening to the first two contributions. I think it’s worth stepping even one notch in the genesis behind this event. It actually was triggered by a letter written in the Financial Times from the summer of 1997 by Professor Jagdish Bhagwati, who is a very distinguished economist at Columbia University. I, and I know various other people, read that letter. The thesis that Professor Bhagwati was running, was that it would be very dangerous to integrate into the WTO system objectives which were not directly related to the promotion of trade, namely environmental protection and labor standards by which, I think, he also indicated human rights standards. I, as I occasionally do when I read letters in the Financial Times or elsewhere, wrote a response to that letter which indicated that there was another way of looking at this and that it was time to look at the international legal order in a rather more holistic manner.

Today we are at the point where we are dealing with issues in a very fragmentary way in the international legal order. We have a law of trade, we have a law of human rights, we have a law relating to the activities of multilateral development banks, we have a law of the sea, we have a law of the environment, and numerous laws too expansive to mention. Somehow, the textbooks treat this order as though they are disconnected. It is as though the international legal order somehow is a fragmentary structure, in which there is no contact or communication and that each of these systems lives in a state of hermetic encapsulation where it does not reach out. And the basic thesis of Professor Bhagwati was that if we talk about environmental and labor and human rights standards in the trade context, we will unravel the trade regime. That was the concern. The response that I put in my letter, which was also published by the Financial Times, was that in fact, over the long term, the sustainability of the trade regime or, for that matter, the environmental regime or the human rights regime, depends upon their ability to integrate each other’s concerns, that none of the societal objectives had a particular primacy over another. 

There was then a further letter in which I was accused of being anti-economic growth, anti-development, anti-this, anti-that. I then received, and I think Professor Bhagwati had the same thing, a number of letters from people who had read this exchange of correspondence. Professor Cone suggested in our first conversation that perhaps we could invite the various authors to talk about these issues at this meeting. And I believe that was the genesis of this symposium. It’s one of the great things you learn if you take the time to write a letter to a newspaper. You will get 30 or 40 letters from all over the world. Unknown people attack you critically, inviting you to do this, that and the other. It does in fact produce a response, so I want to thank you very much to responding to that letter in a personal way, which led to this.

The simple point that I make by way of this introduction is that there is a broader issue at stake here. We’re not only concerned with trade and the environment. We are also concerned with human rights and trade, human rights and the environment, the law of the sea and trade, the law of the sea and the environment. The bigger issue is, how do we- living in a single planet divided among some 190 nations with about 20 major international legal orders sometimes in conflict- meld the whole thing together in the absence of a central legislative or judicial system? In a nutshell, that is the problem that we face. It is the problem of globalization. It is in this context that issues opposed by the United States, firstly, the tuna-dolphin case and, secondly, the shrimp-turtle case, really fail to be addressed. Do we believe in a system which encourages unilateralism or do we want to move towards a system which encourages multilateralism? And clearly, the two are not mutually irreconcilable.

Those of us who look closely at the development in international law know that there tends to be a system going way back. Last week, I looked at an 1893 arbitration between the United Kingdom and the United States with some students in my course at New York University. The United States intervened beyond its territory to stop UK-registered fishing vessels from exploiting to extinction fur seals located in the Bering Sea. It’s a very wonderful arbitration that I recommend people read. The pleadings are about 125 pages but extremely entertaining. And in fact, the case is identical to the tuna-dolphin case a hundred years later. The judgment was, in effect, the same. The tribunal said you cannot do that. It’s an extra territorial application of your laws. And according to freedom of high seas, if the United Kingdom wants in its wisdom to exploit fur seals to extinction, there is no reason in law why it cannot do that. However, since we have been encouraged to do so by the two states, we hereby adopt regulations governing the taking of fur seals. And those regulations, in fact, became amongst the earliest bilateral treaty-based regulations.

And you can fast forward and you’ll find exactly the same thing seventy years later. During the negotiations on the law of the sea convention, Iceland wanted to unilaterally extend its exclusive fishery zone by fifty miles and exclude the United Kingdom from fishing for cod in those waters. Lo and behold, what happens? Eight years later, the UN convention on the law of the sea allows coastal states to extend to two hundred miles their exclusive fishery zone. So there is a link between unilateralism and multilateralism. Even more recently, in 1995, many of you will remember, Canada went beyond its two hundred miles to stop a Spanish registered vessel from fishing for Greenland halibut, which is a species which migrates between the high seas and Canada’s exclusive economic zone. Canada argued in part that the Spanish vessel was flouting Spain’s quota under a relevant regional fisheries agreement by using nets, which were illegal. And, lo and behold, a few weeks later, the United Nations adopted the agreement on straddling stocks. For the first time ever in international law it established the basis for stopping high seas freedom and required states who wish to fish in areas regulated by regional agreement to first become parties to those regional agreements. So there is an inexorable link between unilateralism and subsequent multilateral action.

The difficulty moving on from those two contextual elements is to deal with the situation that we face today in the trade and environment context. Steve has given an excellent exposition of a range of cases that clearly have implications to the trade and environment nexus, and David has set some of the background in terms of the tuna and shrimp cases.

I spend a lot of my time advising developing countries on issues, so my perspective is slightly different. We’ve been presented today with a rather compelling portrait of why the United States is, or should be, entitled to take measures to control the activity of foreigners outside US territory, in areas beyond anyone’s national jurisdiction. And I don’t say for a moment that I’m not in some way sympathetic to the desire. I genuinely believe, given the judicial and litigation histories in which those cases were brought, that these really were not cases in which the United States was seeking competitive economic advantage.

But the cases are problematic for another reason. The reason the tuna case is problematic, and it’s a point that I think that David did not, I am sure not intentionally, wish to address, is that these dolphins are not in any way endangered. These dolphins are not subject to endangerment and really what was happening here, the argument was put, was that the United States was imposing upon third persons its own system of values. For various reasons, American people have a high degree of empathy towards dolphins, which even British people don’t have. And that requires and entitles the United States to take measures. This was, from an international legal perspective, fatal to the sympathies of a lot of people in relation to that case. If the dolphin had been endangered or if there had been an international agreement seeking to protect them from further endangerment and if there had been evidence compelling that the United States had in fact sought to enter into an agreement with other states that might be affected, then I think, plausibly, the United States’ actions were or might be justifiable. And I think that people like me find themselves in the position with both the tuna-dolphin panel decisions of saying right result, wrong reasoning.

The reasoning is very problematic for a large number of reasons and both previous speakers have alluded to some of those reasons. I don’t want to go into any great detail about what those reasons are, but the reasoning shuts the door in a way that is perhaps more permanent and more tight and more fixed than was necessary. The reasoning does not adopt an approach, which I think would be from an international legal perspective, more plausible and more certain, although it alludes to the whole question of the desirability of one state applying its laws extraterritorially. The second tuna panel decision in particular touches upon that issue and the reason. It touches upon that issue because amongst the three panelists was at least one international lawyer who had a high degree of knowledge on environmental law.

One thing that I think is absolutely critical to understand, and I am less critical than Steve about the performance of the appellate body, is that the GATT and WTO panels tend to be comprised of people who are trade diplomats. It’s 100% understandable that their interest in life is maintaining the trade regime. Why should they promote human rights, why should they promote environment? They have been trade diplomats for years, they have been put there by their government to protect that system.

In the WTO appellate body system, we now have a number of individuals who come from a far more general background such as Claus Dieter Aileman, a formal legal adviser to the European Commission, and Judge Feliciano, from the Philippine Supreme Court. These are people who come with a general international law background. And we begin now to see that the excessive trade focus in the GATT is being replaced in the appellate body context.

The shrimp-turtle case is perhaps not quite as problematic, but it, nevertheless, is problematic. As we all know, the turtles are listed on an endangered species treaty. The problem with the treaty is that it doesn’t regulate trade in shrimp. It regulates trade in the turtles themselves, which are listed on the convention. And the question for the WTO was the fact that regulated trade in turtles allowed the United States to rely upon the provisions of the treaty to seek, if you like, incidental protection through other trade measures.

The panel did not accept the request of the United States to interpret and construe the convention on international trade and endangered species broadly. And that problem is compounded by the fact that the United States most regrettably is not a party to other multilateral agreements, which could conceivably be invoked in support of its argument. Most specifically, the convention on biological diversity contains a provision, which quite clearly could be construed to allow measures to be taken extraterritorially where there is a serious threat to bio-diversity. So one has to look at the picture in a slightly broader context and imagine that there are other ways of legally construing the situation. The United States, I suspect, will also lose the shrimp-turtle case in large part because while their arguments are plausible in terms of the background of the rules of international law which exist and upon which they can rely, they are not persuasive. I’ll comment a little bit more about that in relation to the nature of international environmental law and how one approaches it.

Now, that takes us to the key question because what you ought to be hearing me say is clearly the WTO institutions need and must be able to accommodate and integrate environmental standards, labor standards, human rights standards. The debate that we’re having now is not just about the environment. Just today, we are reading about a new case, which the European Union and Japan are about to lodge next week against the United States. It concerns a law in Massachusetts prohibiting purchasing by Massachusetts from companies that engage in activities in Burma on the grounds of Burma’s atrocious human rights record and labor standards. So the same principles apply, and what you ought to be hearing me say is there is a need to accommodate these other standards and that the GATT system will not be able to sustain itself if it cannot do so. The question is how do we do that? That’s what I want to turn to very briefly.

Well, there are basically two ways of doing it. The first way of doing it is the legislative route. I am focusing more on trade measures in relation to global commons areas rather than trade measures relating to domestic activities and am focusing on the distinction which Steve drew between products on the one hand, and production processes and methods on the other hand. The legislative way is and has been under way for about four years. The WTO has established a committee on trade and environment to examine all manner of issues including the relationship between the WTO rules and the multilateral environmental agreement which now regulate a whole range of issues. That committee has made absolutely no progress. To my mind, it might as well just be disbanded. It is a complete waste of time. The views of the committee are utterly and totally polarized, and it’s quite clear that states do not have it in them to reach an agreement through the legislative process.

The only alternative that we have then is through some judicial initiative. That places us now in the situation in which, unlike international law of twenty years ago, we now have an international legal order in which there are a range of judicial mechanisms available for states and other actors as a result of these disputes. One of those mechanisms is the WTO dispute settlement body and my instinct is that in a couple of years when the right case comes along, and the right case I think has not yet come along, the appellate body will have reached a sufficient degree of maturity and authority to be able on the right case to indicate what the way forward is. It can’t, I think, quite do that- it’s too young to do that. The means exist in international law in order to do that and let me explain a little more.

The process of treaty interpretation is governed by Articles XXXI and XXXII of the Vienna Convention on the Law of Treaties. It provides for the interpreter of the treaty to take into account a variety of sources in going through the process of interpreting a treaty, and it is established in both the GATT and WTO systems that it is appropriate to take into account the Vienna Convention rules in interpreting the treaty that is being applied and to go through that process. The WTO appellate body has now said something that was never said in any GATT panel previously - that the rules of the WTO have to be interpreted in a manner which is not in clinical isolation from general public international law. That opens the door for the appellate body on the right case to proceed by way of reference to Article XXXI, paragraph 3, subparagraph c of the Vienna Convention on the Law of Treaties ("31.3.c"). If you read the second tuna panel case you will see that they refer to the entirety of the text of Article XXXI and Article XXXII. 31.3.c is not mentioned. What does 31.3.c say that would indicate that it ought to be avoided? 31.3.c says that in interpreting the text of the treaty, it’s appropriate to take into account other relevant rules of international law. I’m told that in the second tuna panel decision, one of the panelists wanted to invoke 31.3.c in order to reach a different conclusion through a different form of reasoning. He was the sole international lawyer on the panel. The two trade diplomats said absolutely no way, because that’s going to open a Pandora’s box and a can of worms and there is no way we are going down that route. If we accept, we have to take into account other rules of international law. The GATT system will unravel and that, in effect, is what the shrimp-turtle panel said in relation to its approach to the interpretation of the chapeau to Article XX.

So 31.3.c, amazingly, has never been referred to in a GATT panel decision or in a WTO panel decision or in the appellate body decision. And it’s most interesting and I don’t know whether the United States did it in its own submissions. But I know that two of the amicus briefs, which I understand from David were filed to the appellate body as an attachment to the US submissions without making any reference to whether they agreed with the contents, specifically refer to 31.3.c as a way forward. The difficulty on this case is whether or not one could construe the endangerment of turtles in the convention on international trade and species as reaching a customary international law status. In my view, the better argument is that it does and that, if it wanted to, the appellate body could go down that route, but the case is not sufficient to allow it to go down that route.

So in conclusion, the message I am trying to say loud and clear is, first, we need to think about these issues of trade and environment in their broader context. Secondly, it is in the interest of the trade system to accommodate other societal interest if it is not to unravel at a later date. And in the European Union context, we have clear experience that interpreting the Treaty of Rome, Articles XXX to XXXVI to accommodate environmental standards has not lead to an unraveling of the trade regime. And, third, we cannot necessarily be unsupportive of unilateral measures if they are subsequently followed by a multilateral approach which is I think what has happened certainly in the tuna-dolphin cases. Fourth and finally, we cannot allow the international legal order to continue with these sort of self-contained regimes, self-referential, not reaching out to meld a set of broader societal interests, which are not necessarily irreconcilable.

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