Making Coffee Good to the Last Drop: Laying the Foundation for Sustainability in the International Coffee Trade

Georgetown International Environmental Law Review, Winter 2004 by Brown, Grace H

Labels have raised legal concerns under WTO rules over the potential kinds of distorting effects they have on the market. Nevertheless, as long as a label meets the requirements of being a "voluntary standard" under the Agreement on Technical Barriers to Trade (TBT Agreement), the label is not considered trade discrimination or free market distortion for the purposes of the WTO. The TBT Agreement addresses both mandatory "technical regulations" and voluntary product "standards" that create technical barriers to trade. A voluntary standard is defined in the Agreement as:

A document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method.101

As expressed in this definition, a voluntary standard includes labels insofar as they apply to a product, process, or production method, where compliance is not mandatory.

More specifically, the TBT Agreement sets forth the requirements for voluntary labeling programs under Annex 3 of the Agreement, which is designated as the Code of Good Practice for the Presentation, Adoption and Application of Standards (Code of Good Practice).102 If a labeling initiative meets the requirements of the TBT Agreement and the corresponding Code of Good Practice, then the labeling scheme is presumed to be WTO-compliant for several reasons. First, the Code of Good Practice incorporates the most favored nation and national treatment principles. second, it incorporates the "unnecessary obstacles to international trade" test. The "no more trade restrictive" test, which technical regulations or mandatory labeling schemes must meet, is not required for standards or voluntary labeling schemes. In this respect, the Code of Good Practice requires less stringent standards for voluntary programs than for mandatory ones. Third, the Code of Good Practice requires Member States to use international standards when they exist, unless such standards are ineffective or inappropriate. Fourth, Member States are required to provide a very high degree of transparency through prior notification, affording opportunity for comment and consultation.103

The most significant feature of the TBT Agreement is its scope, which includes coverage of the activities of non-governmental bodies.104 The Agreement covers voluntary standards implemented by non-governmental bodies and local governments as well as those established by central governments under Article 4 and Annex 3.105 The Agreement creates different levels of obligation depending on whether the body responsible for the administration and implementation is a central government, local or non-governmental body. The first level of obligation mandates that central government bodies accept and comply with the Code of Good Practice, which is binding. The second level of obligation leads local and non-governmental bodies to accept and comply with the Code of Good Practice, which is less obligatory. Governments are required to monitor labeling programs implemented by private groups, so that such programs comply with the Code of Good Practice. Article 4(1) obligates Members to take "reasonable measures as may be available" to ensure that privately sponsored labeling programs are in compliance with the provisions of the TBT Agreement.106 If the programs do not comply with the provisions of the TBT Agreement, and fail to provide treatment "no less favorable than that accorded to like products" or to "not . . . create unnecessary obstacles to international trade," the government must take "reasonable measures as may be available" to correct the situation.l<>7 Thus, in the case of coffee, the U.S. government would need to ensure that any such coffee label does not create an unnecessary obstacle to international trade, and it must take reasonable measures to correct any obstacles if they do occur.