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Sub-theme II: Addressing 21st Century Issues

Session 13

Listen to the session here.

Governments increasingly turn to product labels and standards as a means of regulating consumer information and addressing undesired product characteristics. Biofuel standards, flavoured cigarette bans and origin labels witness this trend. As consumer preferences become more nuanced, awareness of production methods is increasing, and production processes themselves threaten common interests such as the climate, this trend is likely to continue.

 
 

 

 

 

 

But finding the appropriate balance between regulation and permissible trade barriers can be difficult at times, especially where the regulation addresses arguably subjective preferences. Recent WTO disputes over ‘dolphin safe’ labels for tuna products (“United States-Tuna II”), country of origin labels for meat (“United States-COOL”) and tobacco bans and regulations (“United States-Clove Cigarettes”) are likely to be only the first of a series of conflicts on technical barriers to trade.

 

Ruling on the three disputes this year, the WTO Appellate Body, for the first time, established case law on various key TBT issues. The approach(es) deployed will critically inform future policy making on related areas – be it on biofuels, animal welfare or climate-related standards.

It is against this background that the session explored the current technical regulation and standard landscape and the outlook for selected policy areas. Speakers representing a variety of angles addressed, among others, the value of international standards, the future of labelling and the outlook for regulation in areas such as biofuels, tobacco, animal products and meat.
 

Moderator:

Hannes Schloemann, Director, WTI Advisors, and Partner, MSBH Bernzen Sonntag Rechtsanwälte

Speakers:

Erik Wijkström, Counsellor, Secretary of the WTO Committee on Technical Barriers to Trade (TBT Committee), Trade and Environment Division, World Trade Organization (WTO):
"TBT – where do we stand? An introduction to recent case law and negotiations"

H.E. Ambassador Fernando de Mateo, Ambassador of Mexico to the WTO:
"TBT after the 2012 Appellate Body Rulings - The Mexican perspective"

A. Bipin Menon, First Secretary at the Permanent Mission of India to the WTO:
"TBT after the 2012 Appellate Body Rulings - The Indian perspective"

Géraldine Kutas, Head of International Affairs and Senior international adviser to the president of UNICA (Brazilian Sugarcane Industry Association):
"What TBT regime do we want? An industry perspective on standards, technical regulations and the ‘Greening of Value Chains’”

Hadelin Feront, Campaign Officer/Trade Policy, IFAW (International Fund for Animal Welfare):
“Labelling, Consumer Information and ‘public interest’ causes under TBT Rules – An NGO perspective”

ALL IMAGES COURTESY OF THE WORLD TRADE ORGANISATION

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Rue de Lausanne 154, 1202 Geneva, Switzerland
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TRADE LAW
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Monday, 24 September 2012 - 6:00am

Trade remedies are one of the most highly specialized and often contentious areas where legal capacity is crucial for developing countries. Under WTO law, countries are allowed to impose anti-dumping or countervailing measures where unfairly traded imports cause injury to domestic industries, provided that they satisfy the substantive and procedural requirements of the WTO Agreement.
Although trade remedies were used almost exclusively by developed members, developing members have increasingly resorted to them as they have opened their markets to international competition. Between 1995 and 2012, among the total 4230 antidumping measures from all the WTO members, 1867 antidumping measures were from developing members. Some developing members acquired substantial experience and technical expertise to effectively make use of trade remedy measures.
Legal capacity building is very important for most developing members. It will help developing members to make use of trade remedy measures with a view to levelling the trade playing field while keeping consistent with relevant WTO rules. Legal capacity means solid institutional structures that allow for effective inter-governmental and multi-stakeholder coordination, processes that support and regulate the involvement of industry, trade law expertise, and national legislation that allows for effective implementation.
Against this background, the workshop, as part of the tripartite programme of the Secretariat of the World Trade Organization (WTO), the Advisory Centre on WTO Law (ACWL) and the International Centre on Trade and Sustainable Development (ICTSD), aims to draw upon the experiences of developing countries that have successfully built up capacity in the field of trade remedies and to invite participants from developing countries with different level of experiences in the use of trade remedies to share their national experiences.

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Beijing, China
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Monday, 18 November 2013 - 12:00am to Tuesday, 19 November 2013 - 12:00am

Organized by ICTSD and WTI Advisors, this event aims to introduce the recent WTO appellate decision on Chinese export restrictions applied to raw materials (DS cases 394, 395, 398). The Appellate Body rejected Beijing's claim of resource conservation grounds as a justification for an export quota on raw materials under GATT Article XI. This begs the question under what circumstances resource conservation can actually serve as grounds for the restriction of exports of finite natural resources. The report also confirmed that China's violation of export duty commitments made in Article 11.3 of its Accession Protocol cannot be justified by GATT Article XX because Article 11.3 lacks an explicit reference to this GATT provision. This is a significant development in the applicability of the GATT chapeau to accession commitments, with significant consequences for current and future WTO members.
This event marks the fourth in a new series. 'Talking Disputes' is designed to allow for the discussion of WTO DS cases, one at a time, in a round of interested experts, delegates and others in Geneva.

Agenda

12:30 Welcoming lunch and introductory remarks

13:00 Panel discussion

    • Moderator, Christophe Bellmann (ICTSD)

    • Key issues, overview, and comments, Hannes Schloemann (WTI Advisors)

    • The availability of Article XX to non-GATT claims, Cherise Valles (ACWL)

    • Implications for resource conservation in the mining sector, Gilles Carbonnier (HEID)

    • Implications beyond extractive resources; an outlook for future disciplines, Baris Karapinar (WTI)

13:45 Open Discussion

Registration required. Please register by Monday, 6 February with Matt Fleszar at mfleszar@ictsd.ch

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Rue de Lausanne 154, 1202 Genève
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Wednesday, 8 February 2012 - 6:00am

In a long awaited decision, this Thursday a WTO panel ruled the US 'dolphin safe' label for tuna products illegal. The three-member panel found the label 'unnecessary' to protect dophins and to ensuring that consumers are not misled. However, the panel disagreed with the complaining party Mexico that the US had to comply with a label established by the Agreement on the International Dolphin Conservation Program, AIDCP. By tackling a number of issues at the core of WTO rules on standards and labels, the decision could have far-reaching implications beyond the dispute in question.

After providing an introduction to the new ruling, commentators will raise the most relevant issues of the decision, opening the floor for a broader expert discussion. The aim is to initiate needed discussion on this highly relevant but slightly neglected ruling that was released only this week.

Agenda

12:45 Sandwiches and welcoming remarks
13:15 Panel Discussion

Introduction to panel ruling

Marie Wilke, ICTSD

Systemic implications
Hannes Schloemann, WTI Advisors

Policy implications
Hadelin Feront, International Fund for Animal Welfare

Policy implications
David Schorr, WWF

14:00     Open discussion
14:45     Close

Talking Disputes

This event marks the third in a new series. 'Talking Disputes' is designed to allow for the discussion of WTO DS cases, one at a time, in a round of interested experts, delegates and others in Geneva. One or two experts will present key aspects of the case, setting the stage for a targeted discussion, usually with a designated commentator breaking the ice.

For registration please contact Thao Nguyen at tnguyen@ictsd.ch.

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Centre William Rappard, World Trade Organization - Room A
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Wednesday, 21 September 2011 - 6:00am

Organized by ICTSD and WTI Advisors, this event aims to introduce the recent WTO panel decision on Chinese export restrictions applied to raw materials (DS cases 394, 395, 398). As the panel refuted Beijing’s claim that these restrictions were justified on environmental grounds, the case could have major implications for future disputes involving the GATT Article XX exceptions on, for instance, public health and natural resource conservation. Two experts will introduce key aspects of the case, setting the stage for a targeted discussion, with a designated commentator breaking the ice.

The event marks the second in a new series. ‘Talking Disputes,’ which is designed to allow for the discussion of WTO dispute settlement cases, one at a time, among interested experts, delegates, and others in Geneva.

Agenda

17:30 Welcoming apéro and introductory remarks

18:00 Panel discussion

Moderator, Miguel Rodriguez-Mendoza, ICTSD

The recent panel decision in China-Raw Materials, Hannes Schloemann, WTI Advisors

Raw Materials revisited: Export taxes under WTO law, Jorge Miranda, King & Spalding LLP

Discussant, Joost Pauwelyn, IHEID/The Graduate Institute (tbc)

19:00 Open discussion

Registration required. Please contact Alejandra Maruri at amaruri@ictsd.ch.

Background
WTO Panel Rules against China’s Export Restrictions on Raw Materials
(published in ICTSD Bridges Weekly, 6 July 2011)

In a high profile dispute over access to Chinese natural resources, a WTO panel on Tuesday 5 July found that China violated international trade rules by restricting the exportation of nine raw materials, refuting Beijing’s claim that these restrictions were based on environmental grounds. The panel sided in all key points with the EU, Mexico, and the US, which jointly initiated the case (DS394, 395, 398) in 2009.

China maintains a system of export duties and quotas for a number of raw materials, including coke, zinc, and bauxite. These are essential for the global production of everyday items such as medicine, CDs, automobiles, and batteries as well as high technology products, such as computers and mobile phones. China greatly reduced its quotas in 2009 and 2010; the high global market prices that followed have been harshly criticised by important trading partners and their industries.

“China’s extensive use of export restraints for protectionist economic gain is deeply troubling. China’s policies provide substantial competitive advantages for downstream Chinese industries at the expense of non-Chinese users of the materials,” US Trade Representative (USTR) Ron Kirk announced in a statement. “They have also caused massive distortions and harmful disruptions in supply chains throughout the global market place.”

Western chemical, steel, and non-ferrous metal industries and their downstream clients rely heavily on imports from China, as several of the raw materials can only be sourced there.

When China joined the global trade body, it committed itself to disciplining its export duties for most natural resources, including the materials cited in the dispute; they also agreed to eliminate all quantitative restrictions including quotas.

The panel’s decision was thus welcomed as a great victory by the EU, the US and other trading partners that have found themselves increasingly dependent on Chinese natural resources and face growing competition in the manufacturing sector.

“This is a clear verdict for open trade and fair access to raw materials. It sends a strong signal to refrain from imposing unfair restrictions to trade and takes us one step closer to a level playing field for raw materials,” EU Trade Commissioner Karel De Gucht said in a statement issued on Tuesday.
Kirk joined this appraisal. “Today’s panel report represents a significant victory … The panel’s findings are also an important confirmation of fundamental principles underlying the global trading system. All WTO Members - whether developed or developing - need non-discriminatory access to raw material supplies in order to grow and thrive,” he commented.

Export restrictions cannot be justified on environmental grounds, panel finds
In an email statement sent to Bridges, Beijing expressed “regret that the panel finds that China’s relevant measures regarding export duties and export quotas are inconsistent with China’s obligations under its Accession Protocol and the WTO covered agreements.”

China had argued in its defence that its export restriction policy was justified under WTO law, more precisely the general exception clause ofArticle XX of the WTO’s General Agreement on Tariffs and Trade, for reasons of natural resource conservation and the protection of public health. “At the 2009 rate of extraction, only four and a half years of China’s reserves remain,” China noted in one of its submissions to the panel.

Moreover, the extraction of certain materials is harmful for the environment and health, Beijing had argued during the course of litigation. “The control of the export of high-energy-consumption, high pollution and resource-based products was utterly necessary for the [...] reduction of environmental pollution, freeing the economic development from the limitation by resource and alleviating the tense relations among coal, electricity, and oil,” China submitted.

The panel disagreed with this position in their ruling. “Neither the measures implementing the export restrictions, nor the contemporaneous laws and regulations, convey in their texts that the export restrictions are contributing to, or form part of a comprehensive programme for the fulfilment of the stated environmental objective.”

Furthermore, the panel found “no clear link between the way the duty and the quota are set and any conservation objective.”

The panellists also criticised China for lacking corresponding restrictions on domestic production and consumption of these materials, which is a requirement under WTO law when claiming a GATT Article XX exemption.

In this regard, it noted that “export restrictions are not an efficient policy to address environmental externalities, when these derive from domestic production rather than exports or imports … The pollution generated by the production of goods consumed domestically is not less than that of the goods consumed abroad.”

The EU, which has traditionally supported the GATT’s environmental protection clause, welcomed this position. “The EU believes that export restrictions cannot and do not contribute to the aim [of promoting a cleaner and more sustainable production of raw materials]. There are much more effective environmental protection measures that do not discriminate against foreign industry.”

Raw materials report might give support to EU position on rare earths
The environmental twist might have ramifications for another looming conflict between China and the EU over seventeen rare earth minerals that are vital for the high-tech industry. China maintains a quasi monopoly for these materials, but has introduced a number of export restrictions in recent years that have been seen as threatening the EU’s position.

Though panel and Appellate Body decisions have no precedence effect at the WTO, the panel’s ruling on the raw materials dispute is an important indicator of how WTO rules could be applied to such cases.

Importantly, the panel did not only reject China’s conservation defence on the basis of insufficient evidence, but it found that “WTO Members cannot rely on Article XX (g)’s [conservation exception] to excuse export restrictions …  if they operate to increase protection of the domestic industry.” It noted that this would violate another provision of Article XX (paragraph (i)) and that “‘conservation’ cannot be interpreted in such a way as to … allow a Member, with respect to raw materials, to do indirectly what paragraph (i) prohibits directly.”

Finally, the panel stressed export restrictions’ potential long-term negative effects on conservation efforts. “By reducing the domestic price, [an export restriction] works in effect as a subsidy to the downstream sector, with the likely result that the downstream sector will demand over time more of these resources than it would have absent the export restriction.”

China now has sixty days to decide whether it will appeal or implement the decision. Otherwise it could face retaliatory actions from the EU, Mexico, and the US.

Organised by ICTSD and WTI Advisors, this event aims to introduce the recent WTO panel decision on Chinese export restrictions applied to raw materials (DS cases 394, 395, 398). As the panel refuted Beijing’s claim that these restrictions were justified on environmental grounds, the case could have major implications for future disputes involving the GATT Article XX exceptions on, for instance, public health and resource conservation. Two experts will introduce key aspects of the case, setting the stage for a targeted discussion, with a designated commentator breaking the ice.

The event marks the second in a new series. ‘Talking Disputes,’ which is designed to allow for the discussion of WTO dispute settlement cases, one at a time, among interested experts, delegates, and others in Geneva.

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29 Quai du Mont-Blanc, 3rd floor
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Wednesday, 20 July 2011 - 6:00am

In March 2011, in an unexpected reversal, the WTO Appellate Body handed China a victory over the US in a case dealing with trade remedies that has set important precedents. The decision limits the practice used by the US of imposing both anti-dumping and countervailing duties on so-called “non-market economies” like China because of the potential to “double count”. The case has also drawn great interest because of its treatment of “public body” under WTO subsidy law. The Appellate Body developed a new understanding of what constitutes a public body which could mean the difference between a countries action staying inside or falling outside that law.

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114, Rue de Lausanne
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Tuesday, 10 May 2011 - 6:00am