Unit 9 - Background & Issues

We shall cover three things in Unit 9, now in the specific area of the food safety agreement (SPS Agreement), playing again on the NTB idea that in the modern setting the chief practical restraints on trade are not high tariffs, but rather administrative measures, regulations, product standards, etc.

First, we shall look at the traditional problem of the Article XX general exceptions to GATT/WTO obligations.  Bear in mind that the structure of the GATT/WTO Agreement basically places obligations up front like MFN and national treatment, there are some specific outs like safeguard, anti-dumping and counter-veiling duties provisions we cover later in the course, but apart from the essential (national security) interest exception in GATT/WTO Agreement Article XXI, the biggest exceptions are to be found in Article XX (for example, regulation like health, safety and well-being under Article XX(b), which also figures into environmental exceptions together with Article XX(g)), subject to a general “evil intent” limitation in the preface to Article XX, generally referred to as the “chapeau” following the trade terminology.  So as a legal matter, the general “open trade” principles and undertakings located towards the front of the GATT/WTO Agreement  are subject to certain limitations typically as specific regulatory carve-outs under Article XX, but the chapeau makes clear that facially neutral regulations adopted arbitrarily or with an intent to discriminate against imports are not permitted.  Of course, the devil is in the details.

Second, we shall look at the specifics of the XX (b) exception, which is the broadest “police powers-style” regulatory exception in conjunction with the SPS Agreement as subsidiary agreement governing matters of food safety.   The distinctive aspect of the SPS Agreement, compared to the TBT Agreement, is that the SPS Agreement is premised upon a risk assessment and evidence following scientific principles.  Off course, the next question for lawyers would be what are “scientific principles”?  (US law students will recall the problem of so-called “junk science” and the Dauber case from torts or civil procedure.)

Third, we shall look at the specific problem of genetically modified organisms (GMOs), which has been through the WTO dispute resolution system in what is referred as the Beef Hormones case.  So looking beyond labels, what exactly is organic or GMO food, for purposes of whether science requires protection of consumers?  One step further, this raises questions about labeling versus import bans, depending upon whether GMOs are claimed to pose a positive danger to the environment, versus simply representing a matter of consumer protection like “fair trade” coffee shade-grown sustainably by small holding farmers (which arguably mixes social and environmental standards). GMOs will serve as our initial introduction to the practical overlap between international trade law and international environmental law.  We shall pursue the trade and environmental law overlap more directly in Unit 10, looking then at the trade law jurisprudence on trade law compliant environmental regulation (with climate change concerns naturally lurking in the background).  See if you can make the shift from reading about the abstract provisions, and applying them to a particular set of facts in our problems.