DR. RAM MANOHAR LOHIYA

NATIONAL LAW UNIVERSITY, LUCKNOW

International Trade Law

Final Draft

Conservation of natural resources under GATT

Under Supervision of Submitted by

Ms.Kirti Singh Nipun Sirohi

Assistant Professor Roll No.-83

Dr.RMLNLU Section- B

Sem.-VII

B.A.LL.B(Hons.)

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ACKNOWLEDGEMENT

Apart from the efforts taken by me , the successful completion of this project depends largely

on the encouragement and guidance of many other people.I take this opportunity to express

my thanks to people who have been instrumental in the successful completion of this project.

My deepest thanks to our teacher Ms. Kirti Singh without whose guidance this project would

have been a distant reality. I would also like to thanks the library staff for being the provider

of books referred in the preparation of this project.I extend my deepest regard to the

institution and faculty members.

I also extend my heartfelt thanks to my family members and well wishers.

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INDEX

Content Page No.

1. Introduction 5

2.Article XX and conservation of natural resources 6

3. Analysis of Article XX 7

4. Conclusion 11

5. Bibliography 12

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RESEARCH METHODOLOGY

1. OBJECTIVE OF STUDY:

The object is to study the provisions contained under GATT dealing with the conservation of

natural resources.

2. SOURCES OF DATA:

Secondary sources of data are used for preparing this project.

3. METHOD:

Descriptive method is used for preparing this project.

4. HYPOTHESIS:

The General Agreement on Tariffs and Trade is primarily concerned with the promotion of trade

across the globe.It aims at expansion of international trade.Though it provides that the countries

should not impose such restrictions which hinder the trade between two or more countries but if

certain measures are adopted for the conservation of natural resources then they cannot be

challenged only on the ground that they are incompatible with various provisions of the GATT.

5. RESEARCH QUESTIONS:

a) Whether GATT contains any provision for conservation of natural resources ?

b) Under what circumstances the restrictions imposed in the name of conservation of natural

resources can be challenged?

6. SCOPE:

The present project deals with the provisions relating to conservation of natural resources contained

in GATT in the light of relevant case laws.

7.METHOD OF CITATION:

Uniform mode of citation is adopted in preparing this project.

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INTRODUCTION

In order to promote international trade,the General Agreement on Tariff and Trade came into

existence. GATT aims at expansion of international trade by means of reducing tariff barriers and

eliminating discrimination in international trade. GATT aims at ensuring that trade should be

carried out in non-discriminatory manner and use of quantitative restrictions should be discouraged

so that the international trade flourishes among various countries. Thus it is primarily concerned

with the promotion of trade among various countries. It contains principles like national treatment

principle which provides that the countries are obliged to treat the foreign products in the same

manner as they treat the domestic products and that the imported goods should not be subjected to

unnecessary tariffs which deny them the same treatment as provided to domestic goods. However ,

under Article XX of GATT certain exceptions are contained. Under Article XX it is provided that if

any of the exceptional situation as mentioned in this article exists then the countries can take

measures to deal with the problem and while taking measures to deal with the problem, the

measures undertaken will not be challenged on the ground that they violate some other provision of

the GATT. One such exception contained under Article XX of GATT is related to conservation of

natural resources. If any measure is adopted for the conservation of natural resources then such

measure cannot be challenged only on the ground that it restricts or imposes barriers in relation to

international trade. The countries are free to adopt suitable measures in order to conserve natural

resources and the mere adoption of such measures is not prohibited and is covered as one of the

exceptions to other provisions of GATT under Article XX.

The present project seeks to cover various aspects related to conservation of natural resources

under GATT in the light of related provisions and decided cases.

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Article XX and conservation of natural resources :

A policy of free trade will inevitably involve some conflict with international environmental

agreements or environmental protection requirements in national law which have the effect of

restricting trade in certain commodities.The rules of multilateral trading system may pose

difficulties for the implementation of multilateral environmental agreements that use trade

restrictions to protect the environment such as 1973 Convention on Trade in Endangered Species,

the 1987 Protocol for the Protection of the Ozone Layer,etc1.Therefore there is a need to maintain

balance between promotion of international trade and conservation of natural resources.

The preamble to the Marrakesh Agreement establishing the World Trade Organisation

acknowledges that expansion of production and trade must allow for the optimal use of the world’s

resources in accordance with the objective of sustainable development seeking both to protect and

preserve the environment and to enhance the means for doing so in a manner consistent with their

respective needs and concerns at different levels of economic development2.

Article XX(b) and XX(g) deal with the protection of animal, plant and human life as well the

conservation of other exhaustible natural resources. Article XX provides certain exceptions to the

provisions contained in rest of the agreement. The opening paragraph of Article XX along with

clause (b) and (g) reads as:

“Subject to the requirement that such measures are not applied in a manner which would constitute

a means of arbitrary or unjustifiable discrimination between countries where the same conditions

prevail, or a disguised restriction on international trade, nothing in this Agreement shall be

construed to prevent the adoption or enforcement by any contracting party of measures:

(b) necessary to protect human, animal or plant life or health

(g)relating to the conservation of exhaustible natural resources if such measures are made effective

in conjunction with restrictions on domestic production or consumption”.

Under above mentioned provision, the contracting parties are free to adopt measures for

protection of natural resources and such measures will not be prevented from being enforced on the

ground that the measures taken for conservation of natural resources violate the provisions

contained in other article of the agreement. However, any measure sought to be enforced for the

1 Birnie, Patrica, “International Law and the Environment” , Oxford University Press,New Delhi,second edition,2004,p-6972 Ibid,698

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protection of natural resources will be open to challenge if the measure in question is applied in

such manner that it results in putting disguised restriction on international trade or if the measure

adopted by the country in the name of protecting natural resources is applied in such a manner that

it causes discrimination among the countries where the same conditions exist and due to existence

of such conditions the party adopting the measure is unable to justify its position as to why the

measure adopted was not uniformly applied by the party to all similarly situated countries.

Thus it becomes clear that though under Article XX countries are free to adopt such measures as

are necessary for protecting the natural and that such measures will not be called in question only

on the ground that the measures adopted are not in consonance with other provisions of the

agreement but if such measures are not applied in a non-discriminatory manner to the countries

similarly placed then such measures can be challenged on the basis of being discriminatory in

nature.

Analysis of Article XX:

In the case of India etc v. U.S3, the applicability of exceptions related to conservation of natural

resources has been discussed. In early 1997, India, Malaysia, Pakistan and Thailand brought a joint

complaint against a ban imposed by the US on the importation of certain shrimp and shrimp

products. The protection of sea turtles was given as the basis of imposing the ban. The US

Endangered Species Act of 1973 listed as endangered or threatened the five species of sea turtles

that occur in US waters, and prohibited their take within the US, in its territorial sea and the high

seas. Under the act, the US required that US shrimp trawlers use “turtle excluder devices” (TEDs)

in their nets when fishing in areas where there is a significant likelihood of encountering sea turtles.

Countries that had any of the five species of sea turtles within their jurisdiction,and harvested

shrimp with mechanical means, had to impose on their fishermen requirements comparable to those

borne by US shrimpers if they wanted to be certified to export shrimp products to the US.

Essentially this meant the use of TEDs at all time.It was argued by complaining countries that the

measure adopted was in violation of Article XI(1) of GATT.Article XI(1) reads as:

“No prohibitions or restrictions other than duties, taxes or other charges, whether made effective

through quotas, import or export licences or other measures, shall be instituted or maintained by

any contracting party on the importation of any product of the territory of any other contracting

3 WTO case no.-58

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party or on the exportation or sale for export of any product destined for the territory of any other

contracting party”.

It was argued on behalf of U.S that the ban imposed was for the protection of endangered species of

sea turtles and therefore covered under Article XX of GATT dealing with exceptions to other

provisions of the agreement.

While deciding the matter , the appellate body observed that the measure at stake did qualify for

provisional justification under Article XX(g) but failed to meet the requirements of introductory

part of Article XX. The US lost the case, not because it sought to protect the environment but

because it discriminated between WTO members. It provided countries in the western hemisphere

mainly in the Caribbean technical and financial assistance and longer transition periods for their

fishermen to start using turtle-excluder devices. It did not give the same advantages, however, to

the four Asian countries (India, Malaysia, Pakistan and Thailand) that filed the complaint with the

WTO. The US implementation of the rule favoured some trade partners over others which is clearly

forbidden by the plain language of the most favoured nation clause as well covered under Article I

of the GATT.

Most Favoured Nation rule requires that members maintain a single set of trade tariffs and rules for

their trade with all other WTO members. Members should not treat different WTO members

differently4.

In the light of the above discussed case it becomes clear that even though the measure may be

adopted for protecting the natural resources and animal life, it cannot be protected under Article

XX (b) or XX (g) if the measure so adopted is applied in a discriminatory manner in relation to the

countries similarly situated.

Venezuela, Brazil v. U.S 5is another case dealing with the applicability of exception contained in

Article XX in relation to conservation of natural resources. In this case, Venezuela complained to

the Dispute Settlement Body that the United States was applying rules that discriminated against

gasoline imports. The case arose because the United States applied stricter rules on the chemical

characteristics of imported gasoline than it did for domestically refined gasoline. Following a 1990

amendment to the Clean Air Act, the U.S Environment Protection Agency promulgated the

gasoline rule on composition and emission effects of gasoline in order to reduce the air pollution in

the U.S. It was argued by Venezuela that the different standards adopted for imported gasoline

4 Hurd,Ian, “International Organisations; Politics,Law,Practice” , Cambridge University Press,2011 edition,p-455 WTO case no. 2

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violated the principle of national treatment contained in Article III of the GATT. Since national

treatment principle requires that the imported products should not be subjected to different set of

regulations, therefore it was argued that adopting different standards for domestic gasoline and

imported gasoline was in violation of the national treatment principle. The U.S argued that the

regulations imposed were protected under Article XX clause(b) and (g).It was held by the appellate

body while deciding the matter that the regulations adopted by the U.S cannot be protected under

clause(b) and (g) as in addition to satisfying the requirements laid down under these clauses, there

is also need to satisfy the requirement contained in the opening paragraph of Article XX of the

GATT. Since it is mentioned in the opening paragraph that the measure adopted should not put a

disguised restriction on international trade and in the present since the regulation in dispute was

applicable only on the imported products, it could not satisfy the requirement contained in the

opening paragraph of Article XX.

This case also makes it amply clear that protection contained in various clauses of Article XX will

be applicable only if in addition to satisfying the conditions contained in the concerned clauses, the

conditions contained in opening paragraph of Article XX are also satisfied. Therefore any measure

adopted must be non-discriminatory as far as the similarly placed countries are concerned and at

the same time the measure adopted should not be a disguised restriction on international trade.

In European Communities-asbestos6 case, the case was brought by Canada against the ban imposed

by France in relation to import of asbestos and asbestos containing products. Chrysotile asbestos is

generally considered to be a highly toxic material, exposure to which poses significant threats to

human health such lung cancer. However, due to certain qualities such as resistance to very high

temperature, chrysotile asbestos has been widely used in various industrial sectors. To control the

health risks associated with asbestos, the French Government, which had previously been an

importer of large quantities of chrysotile asbestos, imposed a ban on the substance as well as on

products that contained it. The European Communities justified its prohibition on the grounds of

human health protection, arguing that asbestos was hazardous not only to the health of construction

workers subject to prolonged exposure, but also to population subject to occasional exposure.

While Canada did not challenge the hazards associated with asbestos, it argued that a distinction

should be made between chrysotile fibres and chrysotile encapsulated in a cement matrix. The

latter, it argued, prevented release of fibres and did not endanger human health. It also argued that

the substances which France was using as substitutes for asbestos had not been sufficiently studied

and could themselves be harmful to human health. It was argued that the ban was in violation of

6 WTO case no. 135

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Article III and Article XI of the GATT. It was held that the French ban could be justified under

Article XX(b).The measure could be regarded as one which was necessary to protect animal,

human, plant life or health. It also met the conditions of the chapeau of Article XX. It therefore

ruled in favour of the European Communities.

Thus this case makes it clear that the ban imposed will not be considered to be in violation of any

of the provisions of the GATT if the measure adopted for the protection animal,plant or human life

or for the conservation of any other natural resource satisfies not only the any of the clauses of

Article XX but also the introductory paragraph of Article XX. If the requirements mentioned in the

opening paragraph as well in any of the concerned clauses are satisfied then the measure adopted

even though may relate to imposing a ban on import of any product will be protected under Article

XX.

Conclusion

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After perusal of the relevant provisions of GATT in the light of decided cases, it becomes clear that

thought the GATT aims to promote international trade and various provisions of the agreement

have incorporated keeping in view the promotion of international trade but at the same time the

agreement also takes into consideration such situations where the parties are free to adopt such

measures which may not be in sync with the main objective and other provisions of the agreement

but still such measures will not be called into question. One of such exception as incorporated

under Article XX is the conservation of natural resources. If the party has adopted any measure

which deals with protection of life of animals, plants or human beings or is related to the

preservation of some other natural resource then any of the other party cannot simply challenge

such measure from being enforced only on the basis of it being in violation of any other provision

of the agreement. However there are certain additional requirements to be satisfied before the

measure can be put beyond under Article XX. The additional requirements are contained in the

opening paragraph of Article XX wherein it is required that the measure adopted should be

uniformly applied in relation to all the countries which are in a same position and secondly the

measure should not be such that it puts a disguised restriction on international trade. If these two

additional requirements are also met then the steps taken to conserve natural resources will not be

called in question on the ground of being in violation of some other provision. Thus it can be said

that when the matter is related to the conservation of natural resources then the steps taken for

conservation of natural resources will prevail over other provisions of GATT dealing with

promotion of international trade.

Bibliography

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1. Birnie, Patrica, “International Law and the Environment” , Oxford University Press,New

Delhi,second edition,2004

2. Hurd,Ian, “International Organisations; Politics,Law,Practice” , Cambridge University

Press,2011 edition

3. www.wto.org

 

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