Thai shrimp, sea turtles, mangrove forests and the WTO: Innovative environmental protection under the international trade regime

Georgetown International Environmental Law Review, Summer 2003 by Ramangkura, Varamon

2. The U.S. Perspective

The shrimp industry in the United States was concerned that domestic TED regulations without enforcement of equivalent requirements abroad would result in significant loss of profits.54 American environmentalists claimed that the measure fell under the General Exceptions under Article XX of the GATT. Because of the highly migratory nature of sea turtles, the only way to effectively protect them was to ignore arbitrary national boundaries and protect turtles regardless of their location.55 For them, the issue was not unilateralism; countries should be able to place trade restrictions on imports on the basis of their production processes for environmental protection. Therefore, in the U.S. view, governments should be able to restrict imports that are produced by unsustainable production processes and methods (PPMs).

C. THE PANEL'S DECISION

The WTO Panel56 found, without the U.S. argument, that Section 609 violated Article XI of the GATT.57 Accordingly, the main issue in the case was whether Section 609, though incompatible with Article XI, was justified under Article XX(b) and (g), which permit measures necessary to protect human, animal, and plant life or health and measures that relate to the conservation of exhaustible resources.

The Panel deemed it necessary to first determine whether the measure at issue satisfied the Chapeau (Preamble) of Article XX.58 The Panel noted that the U.S. certification was only bestowed if a comprehensive TED program was in place or if the shrimp trawling operations took place exclusively in waters free of sea turtles.59 The application of Section 609, therefore, constituted unjustifiable discrimination between countries where the same conditions prevailed and thus was not in compliance with Article XX.60 Having said that, the Panel deemed it unnecessary to consider the provisions of Article XX. The Panel reported that the Section 609 import ban on shrimp, as applied by the United States, was inconsistent with GATT article XI and was not justified by the Chapeau of Article XX.61

D. THE APPELLATE BODY'S DECISION

On July 3, 1998, the United States notified the WTO that it would appeal the Panel's decision.62 The Appellate Body affirmed that, although the measure fit within Article XX(g), Section 609 was inconsistent with the Chapeau of Article XX because its application constituted unjustifiable and arbitrary discrimination. However, the Appellate Body took great pains to acknowledge the existence and validity of environmental values,63 recognizing for the first time that the use of trade sanctions as a means to protect the environment could be consistent with the GATT.64 The Appellate Body found that the Chapeau existed as a safeguard to prevent abuse of its exceptions, not as an absolute barrier to their invocation.65 The Appellate Body set a two-step analytical framework for Article XX, reversing the Panel's earlier analysis. First, the Appellate Body assessed whether the measure fell within one of the exceptions referred to as "provisional justifications" found in paragraphs (a)-(j) of Article XX, and then determined whether the measure satisfied the requirements of the Chapeau.