The Retreaded Tyres Case

As recognised in Brazil – Retreaded Tyres case, there is always a possibility of tensions between international trade and environmental concerns of states (Brazil – Measures Affecting Imports of Retreaded Tyres (WT/DS332), 2007). In this context, GATT, article XX (b) has the potential to protect the environment because it expressly mentions protection of human, animal or plant life or health. The incentive for the states to respect environment comes from the fact that there is a balance between trade and environment protection considerations (Schoenbaum, 1997).

There are three arguments in favour of the potential of article XX (b) to protect the environment, which are mentioned below. These arguments are also based on the WTO cases that have come before the WTO where members have tried to take restrictive measures to trade on ground of environment protection (Moran, 2017) .

First, article XX (b) empowers members to take regulatory measures for the protection of environment and ecology. Generally, this right is recognised under article XX (b) (United States- Measures Affecting The Production And Sale Of Clove Cigarettes (WT/DS406/AB/R), 2012).

Second, members can provide trade restrictions for protection of their environment, provided that these are not contrary to the GATT (United States — Standards for Reformulated and Conventional Gasoline, 1996) . Trade restrictions can also be put in form of requirement of labels, such as the one mandated by the US for ‘Dolphin safe’ fishing practices (United States - Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (WT/DS381/44) , 2012) .

Third, the members can bar certain products because of their impact on the environment. For instance, in Retreaded Tyres case, Brazil successfully argued that the accumulation of waste tyres (the banned product) was necessary for protecting environment (Brazil – Measures Affecting Imports of Retreaded Tyres (WT/DS332), 2007) .

The Safeguards Agreement provides measures pursuant to article XIX of GATT 1994, which allow members to emergency actions. These actions are taken when there are increased imports of certain products threatening to cause injury to the domestic industry of the importing country (McGovern, 2016) . One of the methods of such emergency actions is the levying of quantitative import restrictions (US – Line Pipe 1 (DS202) , 2002) .

In the present case, the Australian Government has restricted the number of VW cars that could be brought into Australia to 3400 on the ground that it is necessary to avoid serious harm and injury to an Australian icon in car manufacturing. This is acceptable under the Safeguards Agreement, provided that certain conditions that are applicable in such cases are followed by Australia.

First, safeguard measures must be commensurate with the perceived injury to the domestic industry (Matsushita, Schoenbaum, Mavroidi, & Hahn, 2015) . If the measure takes the form of a quantitative restriction, the level must not be below the actual import level of the most recent three representative years, unless there is clear justification for doing otherwise (Matsushita, Schoenbaum, Mavroidi, & Hahn, 2015) . The maximum duration of any safeguard measure is four years. In the present case, that limit is not crossed.

References

• Moran, N. (2017). The First Twenty Cases Under GATT Article XX: Tuna or Shrimp Dear? In G. Adinolfi, F. Baetens, J. Caiado, A. Lupone, & A. G. Micara, International Economic Law Contemporary Issues (pp. 3-21). New York: Springer International Publishing.
• Schoenbaum, T. J. (1997). International Trade and Protection of the Environment: the Continuing Search for Reconciliation. Am. J. Int'l L, 91, 276-278.
• Brazil – Measures Affecting Imports of Retreaded Tyres (WT/DS332) (2007).
• United States- Measures Affecting The Production And Sale Of Clove Cigarettes (WT/DS406/AB/R) (2012).
• United States — Standards for Reformulated and Conventional Gasoline (1996).
• United States - Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (WT/DS381/44) (2012).
• McGovern, E. (2016). International trade regulation (Vol. 2). Globefield Press.
• Matsushita, M., Schoenbaum, T. J., Mavroidi, P. C., & Hahn, M. (2015). The World Trade Organization: law, practice, and policy. Oxford: Oxford University Press.
• US – Line Pipe 1 (DS202) (2002).