7. Japan

4.48. Japan noted there had been a rising global awareness of the importance of conservation of endangered species and exhaustible natural resources. When addressing transboundary or global environmental problems, Japan believed the solution should be sought in a multilateral framework and attached great importance to Principle 12 of the Rio Declaration that called for actions based on international consensus and stipulated the avoidance of unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country. Based on this conviction, Japan had been implementing appropriate domestic policy and measures and participating actively in international cooperative actions to tackle transboundary or global environmental problems. Japan shared the recognition that sea turtles were endangered species included in Appendix I of CITES and were in serious need for international conservation actions. Numerous measures had been taken by Japan to protect them, including the restriction on capture of sea turtles, the conservation of nesting grounds and a programme for the enhancement of reproduction. Japan also expected that other countries would take appropriate actions to ensure the international effort for conservation of sea turtles.

4.49. Japan noted that it had no commercial shrimp trawl vessels or any other type of trawl vessels to catch shrimps, and a very small amount of shrimps were taken incidentally by vessels operating for other fish. Consequently, any occurrence of incidental killing or serious injury of sea turtles had not been recognized in Japanese fishing activities. Given this situation, the Government of Japan had requested on several occasions that its shrimp export to the United States should be categorized separately from those subject to the US legislation. Nonetheless, the United States had gone ahead and imposed a ban covering fishing activities of Japanese vessels. Japan argued that the import ban on shrimp and shrimp products - the species not subject to protection - pursuant to Section 609 had been imposed as trade sanctions for countries whose vessels did not use TEDs, and was inconsistent with the basic principles of the WTO and obligations of the United States under Articles I:1, XI:1 and XIII:1 of GATT 1994, and could not be justified under Article XX of GATT 1994. The US measures in dispute were also unacceptable extraterritorial applications of domestic conservation policies.

4.50. Japan submitted that the US import prohibition on shrimp and shrimp products pursuant to Section 609 violated Article XI:1, which stipulated a general elimination of quantitative restrictions. The measure was also inconsistent with Articles I:1 and XIII:1. The United States imposed the import ban on shrimp and shrimp products only from the countries whose vessels did not use TEDs. However, based on the finding of the Tuna II, the difference in practices, policies and methods of harvesting shrimp did not have any impact on the inherent character of shrimp and shrimp products as products. Thus, the import ban on shrimp and shrimp products under Section 609 accorded a different treatment to "like products". However, in view of the increased awareness of the importance of policy objectives of environmental protection and resource conservation, it should be noted that certain cases required differential treatment according to process and production methods (PPMs) to tackle global and transboundary environmental problems. Japan believed that the international community should further address the issue of PPM in order to avoid conflict between WTO rules and multilateral efforts to tackle global and transboundary environmental issues.

4.51. Noting that Article XX had to be interpreted on a case-by-case basis, as stated by the Appellate Body in the Gasoline case, Japan was not convinced that the US import ban under Section 609 was "necessary" within the meaning of Article XX(b). Japan did not contest the US argument that the installation of TEDs might be an effective method for conservation of sea turtles and that the US intention to implement the measure pursuant to Section 609 was to achieve that goal. However, Japan doubted that it was necessary to impose an import ban on shrimp or shrimp products from countries whose vessels did not use TEDs. As in the Tuna cases, the import ban could not possibly, by itself, further the United States objective of protecting the life of sea turtles. This point was vividly illustrated when the ban applied to non-certified countries regardless of whether the shrimps were caught in waters inhabited by sea turtles or of whether or not TEDs were actually installed and used. Secondly, Japan did not believe that there was no other alternatives which could contribute to the same objective but were consistent or less inconsistent with WTO provisions. Considering that the United States itself acknowledged that the US efforts to promote technology transfer had successfully facilitated the international situation where the use of TEDs had become a multilateral standard, the United States claim that there was no alternative available other than the import ban was difficult to accept. While accepting that Article XX(b) might not oblige Members to take specific measures such as negotiations of international cooperation arrangements with the countries concerned, this did not mean that the US import ban was the only alternative and justified as such under that provision.

4.52. As to the US argument that the measures under Section 609 met the requirements of Article XX(g), Japan did not challenge the US view that sea turtles were "exhaustible natural resources" within the meaning of that provision, but considered that the extraterritorial application of the US measure in the form of an import ban seriously impaired the right of Members under GATT 1994. In Japan's view, the control over the fishing activities of foreign vessels in the exclusive economic zones of a country did not constitute extraterritorial application of domestic measures; this was supported by the general principle that an individual nation should bear responsibility for conservation and management of fisheries resources in its exclusive economic zone pursuant to the United Nations Convention on the Law of the Sea. However, imposing an import ban designed to force other countries to change their policies concerning the conservation of sea turtles under the jurisdiction of those countries was clearly beyond the scope envisaged by Article XX(g), for the reasons explained in the two Tuna cases. In this regard, Japan supported the remark of Appellate Body in the Gasoline case that WTO Members' autonomy to determine their own policies on the environment, including its relationship with trade, was circumscribed by the need to respect the requirements of the General Agreement and the other covered agreements. Moreover, though not clearly stated, the United States appeared to rely its claim on CITES. In this regard, Japan argued that CITES prohibited the international trade of sea turtles, but did not regulate their capture. Therefore, the United States could not rely on CITES for justifying the requirement that other countries used TEDs.

8. Nigeria

4.53. Nigeria stated that it shared the unanimous concern for the conservation and protection of sea turtles. However this dispute did not relate to the desirability of protecting and conserving sea turtles but rather to the methods and measures for doing so. In this regard, Nigeria's position was defined by and would remain committed to paragraphs 169 and 171 of the 1996 Report of the Committee on Trade and Environment to the Singapore Ministerial Conference.³⁹²

9. Philippines

4.54. The Philippines submitted that it exported shrimp and shrimp products in quantities and values which it deemed substantial. Undue interference with market forces resulted in distortion and adversely affected the Philippines. This dispute likewise had systemic implications. Therefore, as exporter and as a WTO Member, the Philippines had a substantial interest in the matter before the Panel. In line with "judicial economy", an approach ratified by the Appellate Body, the Philippines' arguments focused on specific issues the resolution of which was sufficient, in the Philippines' view, to resolve this dispute without the necessity of delving into other issues.

4.55. The Philippines argued that proper resolution of this dispute would be expedited by prior inquiry into the legal characterization of Section 609, as enacted, interpreted, and implemented. If it was a "point of importation" measure (see Note Ad Article III of GATT 1994), its consistency with GATT 1994 was appropriately assessed basically in light of the national treatment obligation specified in Article III. Otherwise, such consistency was appropriately assessed primarily in light of other provisions of GATT 1994, including, but not limited to, the obligations specified under the provisions of Article XI and Article I.

4.56. The products subject to regulation under Section 609 were "shrimp or products from shrimp which have been harvested with commercial fishing technology which may affect adversely" the species of sea turtles "the conservation of which is the subject of regulations promulgated by the Secretary of Commerce on June 29, 1987". The Philippines noted that, for purposes of this dispute, the United States had no relevant internal "law, regulation or requirement of any kind" affecting shrimp or products from shrimp as products. There was no relevant US law, regulation or requirement affecting the "internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions" (Article III:1). As products, there was no distinction whatsoever between shrimp and shrimp products harvested or processed elsewhere and the "like domestic product" (shrimp and shrimp products harvested and processed in the United States by vessels or nationals subject to the jurisdiction of the United States). Thus, Section 609 was not a "point of importation" measure within the context of Note Ad Article III of GATT 1994. In determining whether certain regulations would qualify as "point of importation measures" under Article III, two as yet unadopted GATT panel decisions (Tuna I & II) ruled that measures must in some way have an effect on the regulated product. Based on this distinction, these panels found that an attempt at the point of importation to regulate a product based on the manner in which it was produced, a so-called process and production method, would not have a sufficient effect on the product to be considered an internal measure enforced at the point of importation. The Philippines further argued that the relevant US internal "law, regulation or requirement" was a regulatory programme governing the incidental taking of sea turtles by US vessels in the course of such harvesting. While there could be a difference in the incidental taking rate of sea turtles in the course of harvesting shrimp based on the technology used, there was no distinction, as such, between shrimp harvested using a particular technology and shrimp harvested using another technology. For purposes of the resolution of this dispute, Section 609 was not a "point of importation" measure.

4.57. The Philippines submitted that Section 609, by subjecting the importation of shrimp and shrimp products into the United States to a certification requirement, was a restriction "on the importation of any product of the territory of any other contracting party" in violation of Article XI:1 of GATT 1994. At the same time, Section 609 discriminated in favour of Members which had been so certified by allowing the importation of "like product". If at all discrimination was permissible under an otherwise authorized quantitative restriction regime, the basis of such discrimination had to have in some way an effect on the regulated product as product. The Philippines further argued that, since there was no distinction between the meaning of "like product" in Article XIII, and "like product" in Article III, Section 609 was likewise administered in a discriminatory manner, in a manner contrary to Article XIII:1.

4.58. The Philippines further argued that Section 609 accorded in favour of Members which had been certified the opportunity to export shrimp and shrimp products to the United States, while at the same time withholding the same opportunity from Members not so certified, in violation of the basic obligation of WTO Members to "immediately and unconditionally" accord the same "advantage, favour, privilege" to the "like product originating in or destined for the territories" of all other Members (Article I). Again, if at all discrimination was permissible, the basis of such discrimination had to have in some way have an effect on the regulated product as products. Since there was no distinction between products of Members which had not been certified and the like products of Members so certified, Section 609 was in violation of the MFN treatment obligations contained in Article I.

4.59. The Philippines submitted that the SPS Agreement was the authoritative and definitive interpretation by WTO Members for the coverage of Article XX(b) of GATT 1994. The SPS Agreement provided, in particular, that "the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX (b)" (Preamble) and that "sanitary or phytosanitary measures which conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX (b)" (Article 2.4). In clear and unequivocal terms therefore, the SPS Agreement categorically declared that Article XX(b) of GATT should be interpreted in light of the "use of sanitary or phytosanitary measures". The Philippines argued that it needed no elaboration to establish that Section 609, which sought to regulate the entry into the United States of shrimp and shrimp products based on the incidental taking of sea turtles in the course shrimp trawl operations, was not a sanitary or phytosanitary measure, as defined in Annex A of the SPS Agreement. Therefore, Article XX(b) of GATT 1994 was not applicable to this dispute and could not be invoked as a defense by the United States.

4.60. Referring to arguments made by India, Pakistan and Thailand, the Philippines argued that Article XX(g) of GATT 1994 was not applicable. In the Philippines' view, all animals were "renewable" natural resources in that they were capable of reproduction. At the same time, all animals were subject to extinction. Animals were thus "renewable" natural resources subject to extinction. Inanimate natural resources, which were not capable of reproduction, were "non-renewable" and were "exhaustible". For purposes of interpreting Article XX(g), a distinction had to be made between (a) the state of being renewable and subject to extinction, and (b) the state of being non-renewable and therefore "exhaustible". Otherwise, if no such distinction were made, and both renewable and non-renewable natural resources were intended to be covered by Article XX(g), the word "exhaustible" qualifying "natural resources" would be unnecessary. The word "exhaustible" could then very well be deleted without changing the meaning of Article XX(g). It was a basic rule of legal interpretation that every word had to be accorded its reasonable meaning, and to assume that no word was unnecessary. The Philippines further observed that, while some species of sea turtles were indeed endangered species, this was not relevant for purposes of interpreting and applying Article XX(g). The state of being an endangered specie was not an inherent state; rather, it was a circumstance brought about by several factors, and was therefore a dynamic factual concept. On the other hand, being "exhaustible" was an inherent state, a static legal concept. While a legal text might seek to cover a potentially infinite number of circumstances, its meaning did not change depending on the circumstances. Therefore, animals were not "exhaustible natural resources" within the context of Article XX(g). Even assuming that animals were "exhaustible" natural resources (which would mean that Article XX(g) was interpreted so as to include both renewable and non-renewable natural resources), Article XX(g) could not be invoked in this dispute because there was a specific rule applicable to animals, i.e. Article XX(b). Under the principle of lex specialis, rules applicable to a specific category forming part of a general category prevailed over the rules applicable to the general category as far as the specific category was concerned. And as earlier stated, Article XX(b) was applicable only in the context of sanitary and phytosanitary measures. Therefore, Article XX(g) was likewise not applicable to this dispute and could not be used by the United States as a defense.

10. Singapore

4.61. Being equally concerned with the continued survivability of endangered sea turtles and as a party to CITES, Singapore was sympathetic to the US efforts to conserve sea turtles. As part of its overall conservation efforts, Singapore prohibited the operation of trawl-nets in its territorial waters, as well as the taking, netting, keeping or killing of local wildlife, which included sea turtles. Whilst applauding the US policy to conserve sea turtles, Singapore was of the view that the imposition of the embargo under Section 609 was over-reaching. It was a barrier to legitimate trade and disregarded the expectations of WTO Members under the General Agreement as to the competitive relationship between their products and those of other Members. Singapore, therefore, requested the Panel to find that the US embargo on the importation of certain shrimp and shrimp products pursuant to Section 609 was inconsistent with the US obligations under GATT Articles XI:1, XIII:1 and I:1 and was not justified under GATT Article XX(b) and (g). Singapore urged the US to bring it to conformity with their obligations under the GATT. Besides having substantial trade interest, Singapore was also concerned with the systemic implications of the US extra-territorial application of domestic conservation policy on the multilateral trading system.

4.62. Although Singapore was not a shrimp harvesting nation, it had substantial trade interests in this dispute. In 1996, exports of shrimp and shrimp products to the United States amounted to S$13.5 million. The United States was Singapore's single largest market for shrimp and shrimp products accounting for almost 10 per cent of its world-wide exports of shrimp and shrimp products of S$161 million. Most of these exports were re-exports. Singapore observed that its exports of shrimp and shrimp products had been adversely affected by the embargo. From the effective date of the embargo on 1 May 1996 to 30 April 1997, exports had fallen by 66 per cent to S$8.2 million from an export value of S$24.2 million during the comparable preceding twelve months from May 1995 to April 1996.

4.63. Singapore argued that, since Section 609 banned the importation of shrimp and shrimp products from countries that harvested shrimp with commercial fishing technology which could affect sea turtles, the embargo, which was not a duty, tax nor charge, was inconsistent with Article XI:1. There was no difference between shrimp harvested in aquaculture facilities and those that were harvested in the open seas: they were like products. There was also no difference between shrimp harvested using TED technology and shrimp harvested in the open seas by other means: they, too, were like products. By imposing a ban on the importation of shrimp and shrimp products from certain Members but allowing the importation of like products from other Members, Section 609 discriminated between like products, in a manner contrary to the requirements of Article XIII:1. Finally, Section 609 contravened Article I:1 because it allowed the importation of shrimp and shrimp products from certain Members but prohibited such importation from other Members. It did not grant the same advantage, favour, privilege or immunity to like products originating from different Members.

4.64. Turning to Article XX of GATT 1994, Singapore observed that the long-standing practice of panels had been to interpret this provision in a manner that preserved the basic objectives and principles of the GATT. If Article XX were interpreted to permit Members to deviate from obligations under the GATT by taking trade measures so as to force other Members to change their policies within their jurisdiction, including their conservation policies, the balance of rights and obligations among Members, in particular the right of market access, would be seriously impaired. Under such an interpretation, the GATT could no longer serve as a multilateral framework for trade (see Tuna II). Singapore asked the Panel to bear this in mind when considering whether the embargo under Section 609 fell within the permitted exceptions of Article XX(b) and (g). Singapore could not agree with the United States that the embargo was justified under GATT Article XX(b) and (g).

4.65. As to Article XX(b), Singapore submitted that the measure for which the exception was being invoked was not necessary and did not conform to the requirements of the introductury clause of Article XX. Singapore noted that previous panels had concluded that a Member could not justify a measure inconsistent with another GATT provision as "necessary" if an alternative measure which it could reasonably be expected to employ and which was not inconsistent with other GATT provisions was available to it. In cases where a measure consistent with other GATT provisions was not readily available, a Member was bound to use, among the measures reasonably available to it, that which entailed the least degree of inconsistency with other GATT provisions.³⁹³ Singapore observed that the United States applied the Appellate Body's reasoning in the Gasoline case to argue that whether a measure was "necessary" under Article XX(b) must be determined "on a case-by-case basis, by careful scrutiny of the factual and legal context in the given dispute". According to the United States, Article XX(b) was not a "least inconsistent measure" test. Singapore was of the view that the rationale behind the Appellate Body's reasoning was to avoid any subversion of affirmative GATT obligations through an overly expansive reading of Article XX exceptions or conversely, emasculation of Article XX exceptions through an overly broad reach of GATT obligations. Bearing this in mind, the decision of earlier panels on the necessity test was consistent with the Appellate Body's reasoning. Otherwise, Members could easily circumvent their GATT obligations even if there were measures that were less inconsistent with their GATT obligations. Under such circumstances, the GATT could not effectively serve as a multilateral framework for trade among contracting parties. The United States had not discharged its burden of proving that the embargo under Section 609 was necessary. It had not demonstrated that it had exhausted all other options available to it to pursue its turtle protection objectives through measures consistent with the GATT. In any event, the panel in the Tuna II case had concluded that measures taken so as to force other countries to change their policies, and that were effective only if such changes occurred, could not be considered necessary for the protection of animal life of health in the sense of Article XX(b). The embargo under Section 609 clearly fell within this category of measures.

4.66. Singapore observed that the introductory clause of Article XX set out further restrictions on the use of GATT-inconsistent measures. The fundamental theme was to be found in the purpose and object of avoiding abuse or illegitimate use of the exceptions to substantive rules.³⁹⁴ Measures should not be a means of arbitrary or unjustifiable discrimination, nor a disguised restriction on international trade. For Singapore, the measure contained in Section 609 was an arbitrary or unjustifiable discrimination. There was arbitrary or unjustifiable discrimination in respect of the period of notice given to different countries to employ TED technology. In the case of the wider Caribbean region, a three-year phase-in period had been given. However, other countries had been allowed only a four-month period to institute comparable programmes. The United States contended that the difference in notice period was directly related to improvements in TED technology, lowering of costs and greater availability of TEDs. However, this assumed that all countries were able to implement comparable turtle conservation programmes within four months. This also assumed that all governments were able to inform and train their shrimp harvesters within four months. For these reasons, the embargo did not meet the requirements of Article XX(b).

4.67. Regarding Article XX(g), Singapore submitted that the measure for which the exception was being invoked did not relate to the conservation of exhaustible natural resources and/or was not made effective in conjunction with restrictions on domestic production or consumption. Furthermore, the measure did not conform to the requirements of the introductory clause of Article XX. Previous panels had concluded that the term "relating to" should be taken to mean "primarily aimed at".³⁹⁵ This interpretation was also accepted by the United States in the Gasoline case. Though not treaty language nor a simple litmus test, as clarified by the Appellate Body in that case, the terms nonetheless provided valuable guidance when considering the balance of rights under the GATT. In the context of this dispute, it meant that the embargo was to be primarily aimed at the conservation of natural resources. Section 609 was clearly an attempt by the United States to force other countries to change their policies. Therefore, it could not be said to be primarily aimed at the conservation of exhaustible natural resources. A similar conclusion had been reached by the Tuna II Panel.

4.68. Applying the reasoning of the Tuna II Panel Report to this case, Singapore considered that the embargo could not be regarded as primarily aimed at rendering effective restrictions on domestic production or consumption since it was clearly directed at the conservation policies of other countries and could not be effective unless such policy changes occurred. Singapore observed that a US official had submitted that the current imposition of the embargo under Section 609 could jeopardise efforts for the world-wide protection of sea turtles. It had also been pointed out by other US officials that proficiency in the use of TEDs would generally take time because of the need for significant training and practice. This was the case in the United States during the mid-1980s, and it was the case in the Wider Caribbean Area in the early 1990s, and would likely be the case in the other countries now. In other words, the embargo as it was now being enforced world-wide would not be effective. Singapore noted that in the Gasoline case, the Appellate Body had felt that the phrase "if made effective in conjunction with restrictions on domestic production or consumption" was not intended to establish an empirical "effects test". However, it also clarified that it was not suggesting that consideration of the predictable effects of a measure could never be relevant. It concluded that the phrase was a requirement of even-handedness in the imposition of restrictions, in the name of conservation upon the production or consumption of exhaustible natural resources. Applying this reasoning, the embargo at issue also failed to meet the requirements of the exception. It was not implemented even-handedly. The embargo was targeted at the entire shrimp imports from a foreign country rather than at particular shipments. Domestically, the United States only imposed the prohibition on the harvests of individual vessels that did not employ TEDs during harvesting. This strongly suggested that the interests of foreign harvesters were given lesser consideration than those of domestic harvesters. In Singapore's opinion, this was clearly not even-handed.

4.69. With respect to the chapeau of Article XX, Singapore submitted that, for the same reasons highlighted under in paragraph 4.66, the embargo was an arbitrary or unjustifiable discrimination. Therefore, it did not meet the requirements of Article XX(g).

4.70. Singapore observed that the US government had admitted before the CIT that Section 609 might be inconsistent with the GATT. It had acknowledged that there were very serious questions relating to the consistency of Section 609 with United States' GATT obligations and that a GATT challenge would likely lead to the conclusion that the embargo provisions were violating GATT principles. Indeed, by objecting to the US court decision requiring the application of Section 609 to TED-caught shrimp, the United States appeared to recognise that the embargo did not comply with Article XX provisions. Singapore submitted that the issues raised in the present controversy were identical in all material respects to the Tuna II dispute. The United States did not attempt to distinguish such proceedings or contend that its shrimp embargo complied with Article XX(b) and (g) exceptions as interpreted by that Panel. Instead, the United States urged this panel to reject the interpretation, analysis and findings of the prior Panel. However, the United States did not contest the validity of the prior panel's central finding that Article XX requirements were violated by measures that embargoed imports without regard to whether particular products had been harvested in a manner that could harm the species intended to be protected.

4.71. Singapore subscribed to Principle 12 of the Rio Declaration and Section B of Agenda 21, which clearly stated that unilateral action should be avoided and that environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on international consensus. This principle found consensus in the WTO Committee on Trade and Environment.

11. Venezuela

4.72. Venezuela submitted that Section 609 was inconsistent with GATT 1994 and not covered by its general exceptions. Venezuela considered this case to be particularly important because the United States argued that the provisions of Article XX, paragraphs (g) and (b), did not impose jurisdictional limitations on the measures covered by these paragraphs. Venezuela disagreed with that interpretation and had already expressed it on previous occasions (in particular as a third party in the two Tuna disputes). In Venezuela's opinion, the fact that the text of the provisions of Article XX did not refer expressly to the territorial jurisdiction of the measures covered by these exceptions did not imply that they could be invoked without any limitations. Furthermore, although a Member could adopt measures affecting common natural resources, such as migratory species, or measures affecting the activities of its nationals outside its own territory, this was not to be interpreted as entitling them to legislate on the activities of nationals of other Members. To claim otherwise would be to accept that a Member could apply trade restrictions to other Members simply because they maintained different domestic policies. This needed not be confined to environmental policies but could also extend to other policies in which states exercised their sovereign right to legislate in accordance with their own specific circumstances, as happened in the fields of health, education and other social policies. Moreover, the measure under consideration by this Panel was based on the way in which shrimp were fished and not on shrimp as a product. In Venezuela's view, the WTO provisions did not cover measures based on production processes and methods when these were not incorporated in the product itself. Venezuela believed that the Panel should maintain this approach, because otherwise there would be a risk that Members could discriminate in their treatment of similar products that were basically distinguished by the production processes used in manufacturing or obtaining them. Venezuela considered, therefore, that the Panel should weigh very carefully the implications of this case for the multilateral trading system.

4.73. Venezuela was not directly affected by the challenged measure. Venezuela required the use of TEDs by its shrimp fishing fleet as a part of a national and regional policy for protecting sea turtles. It was also the depository country of the Inter-American Convention for the Protection of Sea Turtles. However, in this respect it was worth pointing out that the Convention had a provision stipulating that parties should act in accordance with the WTO Agreement, particularly the TBT Agreement and Article XI of the GATT 1994. Venezuela's interest in this case was thus a systemic one, because it considered the unilateral, extra-jurisdictional application of measures based on production processes and methods not incorporated in products, aimed at imposing a country's own domestic policies on other Members, to be unacceptable and incompatible with WTO rules. There were better, compatible alternatives that should be used to attain the objectives of environmental protection: fundamentally, multilateral cooperation among states and technical assistance.

To Continue With Section 5

³⁹² Report (1996) of the Committee on Trade and Environment, WT/CTE/1, 12 November 1996. Paragraph 169 of the Report states: "WTO Member governments are committed not to introduce WTO-inconsistent or protectionist trade restrictions or countervailing measures in an attempt to offset any real or perceived adverse domestic economic or competitiveness effects of applying environmental policies; not only would this undermine the open, equitable and non-discriminatory nature of the multilateral trading system, it would also prove counterproductive to meeting environmental objectives and promoting sustainable development. Equally, and bearing in mind the fact that governments have the right to establish their national environmental standards in accordance with their respective environmental and developmental conditions, needs and priorities, WTO Members note that it would be inappropriate for them to relax their existing national environmental standards or their enforcement in order to promote their trade. The CTE notes the statement in the 1995 Report on Trade and Environment to the OECD Council at Ministerial Level that there has been no evidence of a systematic relationship between existing environmental policies and competitiveness impacts, nor of countries deliberately resorting to low environmental standards to gain competitive advantages. The CTE welcomes similar policy statements made in other inter-governmental fora."   Paragraph 171 of the Report states: "The CTE notes that governments have endorsed in the results of the 1992 U.N. Conference on Environment and Development their commitment to Principle 12 of the Rio Declaration that "Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global problems should, as far as possible, be based on an international consensus." There is a clear complementarity between this approach and the work of the WTO in seeking cooperative multilateral solutions to trade concerns. The CTE endorses and supports multilateral solutions based on international cooperation and consensus as the best and most effective way for governments to tackle environmental problems of a transboundary or global nature. WTO Agreements and multilateral environmental agreements (MEAs) are representative of efforts of the international community to pursue shared goals, and in the development of a mutually supportive relationship between them due respect must be afforded to both."

³⁹³ Panel Report on United States - Section 337 of the Tariff Act of 1930, adopted 7 November 1989, BISD 36S/345, paragraph 5.26; Panel Report on Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes, adopted 7 November 1990, BISD 37S/200; Panel Report on United States - Restrictions on Imports of Tuna, not adopted, DS29/R, circulated 16 June 1994; Panel Report on United States - Standards for Reformulated and Conventional Gasoline, adopted 20 May 1996, WT/DS2/R.

³⁹⁴ Appellate Body Report on United States - Standards for Reformulated and Conventional Gasoline, adopted 20 May 1996, WT/DS2/9.

³⁹⁵ Panel Report on Canada - Measures Affecting the Exports of Unprocessed Herring and Salmon, adopted 22 March 1988, BISD 35S/98, paragraph 4.6; Panel Report on United States - Restrictions on Imports of Tuna, not adopted, DS29/R, circulated 16 June 1994.