WORLD TRADE
ORGANIZATIONWT/CTE/W/139
8 June 2000
(00-2258)
Committee on Trade and Environment Original:  English
THE RELATIONSHIP BETWEEN THE PROVISIONS OF THE MULTILATERAL
TRADING SYSTEM AND MULTILATERAL ENVIRONMENTAL
AGREEMENTS (MEAs)
Submission by Switzerland
I. POTENTIAL OF CONFLICT BETWEEN THE WTO AND MEAs
1. The first international treaties concerning environmental issues were adopted already in the
nineteenth century.  Since that time, the protection of the environment has been a subject of
continuous government attention.  Whereas early international environmental treaties were limited as
to the subject matters they addressed, the regions they covered, and the measures they provided for,
the subsequent trend has been to broaden the rang e of international environmental treaty law and to
make provision for new tools and measures.  The development of international environmental law
has, in particular, involved a move from traditional rules of "command and control" towards the
increasing use of economic instruments and trade measures.  In fact, it must be acknowledged that
trade-related measures can play an important role in promoting the objectives of a Multilateral
Environmental Agreement (MEA).  The use of trade-related measures within the framework of MEAsmay even in certain circumstances be the most eff ective way to ensure that environmental objectives
are achieved.  Therefore, adopting measures that affect trade within the environmental framework is
not only understandable, but sometimes also desirable.
2. Until now, no MEA-related conflict has arisen within the WTO.  According to Switzerland’s
understanding of the rules and principles governing the relationship between the WTO and MEAs,
such a conflict should not arise.  Namely, the existing WTO rules as they stand and as the Panels and
Appellate Body interpret them permit the adoptio n and implementation of trade-related measures
prescribed by MEAs.  However, though there should in principle be no conflict between the WTO and
MEAs, the WTO-compatibility of the implementation of a trade-related measure prescribed by an
MEA may, nevertheless, be challenged in a WTO dispute settlement proceeding and a panel could
conclude that such a measure conflicts with obligations pursuant to WTO law.  In order to avoid such
conflicts, we think the general approach of mutual supportiveness and deference should apply.
II. GENERAL APPROACH :  MUTUAL SUPPORTIVENESS AND DEFERENCE
3. The overall objective of both environmental and trade regimes is the same, namely the
promotion of wellbeing.  For example, the Marrakesh Agreement establishing the WTO explicitly
refers in its preamble to the objectives of allowing the optimal use of the world’s resources,
sustainable development and the protection and preservation of the environment.  However, whilst theWTO and MEAs pursue the same overall goals, they are concerned with different areas of policy,
focus on different issues and have different competencies.  The WTO promotes overall welfare by
establishing rules and principles for an open and non-discriminatory international trade regime.
MEAs, on the other hand, contribute to general wellbeing by establishing rules, principles, institutions
and mechanisms for the protection of the environment.  In focusing on their own tasks andcompetencies, the trade and environmental regimes ar e mutually supportive.  In order to maintain this
mutual supportiveness, each framework should re main responsible and competent for the issues
falling within its primary area of competence.WT/CTE/W/139
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4. Thus the WTO should focus its activities on trade-related issues and not engage in setting its
own environmental standards.  By the same token, the WTO should not try to decide whether an
environmental goal pursued by an MEA is legitimate or whether a measure taken in order to
implement an MEA is necessary.  Under the ap proach suggested in this submission, however,
determining whether specific measures constitute a means of arbitrary or unjustifiable discriminationbetween countries where the same conditions prevail, or a disguised restriction on international trade
should clearly fall within the competence of the WTO.  On the other hand, MEAs should have sole
responsibility for determining environmental obje ctives and for choosing the means, instruments,
mechanisms and measures necessary to achieve these objectives.  Moreover, whereas disputes
concerning the trade regime should be solved w ithin the WTO, environmental disputes concerning
MEAs should be resolved within MEAs.
5. The fact that the WTO and MEAs should each focus on their primary competence does not
mean, however, that the WTO cannot adopt principles and rules that affect the environment.  At the
same time, MEAs are not, and should not, be prevented from adopting rules and principles that affect
trade.  Rules and principles on international trade may indeed affect the environment;  similarly,
environmental regulations may have an impact on trade.  Therefore, whilst each regime should focus
on its primary competence, it is not prevented from adopting measures which affect the other regime.The concerns and interests of the other regime should be taken into account in the course of this and
deference should be paid to the competence of the other regime.  This, in our view, is the essence of
the mutual supportiveness of both regimes.
III. THE EXISTING PRINCIPLE GOVERNING THE RELATIONSHIP BETWEEN THE
WTO AND MEAs
6. Switzerland takes the view that the mutual  supportiveness approach as outlined in
paragraphs 3-5 above governs the relationship between the WTO and MEAs.  The Appellate Body
decision in the Shrimp/Turtle case confirms this understanding by indicating that the words of
Article XX of GATT 1994 "must be read by a treaty interpreter in the light of contemporary concerns
of the community of nations about the protection and conservation of the environment" [seeUnited States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R,
para. 129].  Thus, if the international community indicates in an MEA by adopting a trade-related
measure that the implementation of this measure is necessary in order to achieve an environmental
goal, such a measure must also be deemed to be "necessary" within the WTO context.
7. However, the decisions of the WTO Panels and the Appellate Body are not able to establish a
definite clarification of the relationship between the WTO and MEAs.  That is to say, the decisions of
the WTO Panels and the Appellate Body merely determine the legal situation of a specific case inrelation to two WTO Members;  they do not constitute a general rule on the relationship between the
WTO and MEAs.  Therefore, it cannot be certain that the WTO Panels and the Appellate Body will
always follow previous decisions.  Moreover, the previous decisions do not deal with national
measures implementing an obligation established by  an MEA.  Until now, they have been merely
concerned with national measures adopted by a single state pursuant to its national policy.  Finally,the clarification of the relationship between the WTO and MEAs is so very fundamental that, in our
view, WTO Members should decide on this question and not delegate its resolution to the judiciary
body.  Therefore, and in order to increase the predictability and the legal certainty of the WTO regime
and its relationship with MEAs, and in order to avoid unnecessary conflicts, Switzerland takes the
view that further clarification of the relationship between WTO and MEAs by WTO Member Stateswould be desirable.
IV. PROPOSAL FOR FURTHER CLARIFICATION
8. Different possibilities exist and can be put into effect to clarify the relationship between
potentially conflicting rules and provisions of the WTO regime, on the one hand, and rules andWT/CTE/W/139
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provisions of MEAs, on the other.  Within the WTO, the amendment of Article XX of GATT 1994,
the amendment of the Marrakesh Agreement, or the adoption of an interpretative decision might be
appropriate ways to clarify the relationship between the WTO and MEAs.
A. PROCEDURE :  A MENDMENT OF ARTICLE XX OF GATT 1994, A MENDMENT OF THE
MARRAKESH  AGREEMENT AND INTERPRETATIVE DECISION
9. There have been several proposals to amend Article XX of GATT 1994 in order to clarify the
relationship between the WTO and MEAs.  However,  the amendment of Article XX of GATT 1994
would reopen the debate on this provision and entail the risk that the whole article, which is the
balanced result of long and complicated negotiations, would have to be reconsidered.  Moreover, it is
not only the relationship between the GATT and ME As, but the relationship between the whole WTO
regime and MEAs that should be clarified.  Another solution might be to amend the Marrakesh
Agreement establishing the World Trade Organization, e.g. by introducing a new Article V bis
dealing with the relationship between the WTO and MEAs.  However, the existing WTO rules as they
stand seem to be open and flexible enough to accommodate the mutual supportiveness approach as
outlined above.  Thus, the amendment of WTO rules is not necessary to prevent misunderstandings or
misinterpretations creating conflicts with MEAs, clar ification will suffice.  For example, the adoption
of an interpretative decision by WTO Members would provide a simple and effective means ofpreventing unnecessary conflicts with trade-related measures of MEAs, thereby creating more
predictability and legal certainty.  Moreover, it would also underline the WTO’s commitment to
respecting environmental concerns and to cooperating constructively in the protection of the
environment.
B. S
UBSTANTIVE PRINCIPLE :  M UTUAL SUPPORTIVENESS AND DEFERENCE
10. An interpretative decision of this kind pursuing the mutual supportiveness approach described
above could outline the principles governing the relationship between the WTO and MEA provisions.
It would have to make clear that the WTO and ME As should focus on their primary competence and
pay deference towards the competence of the other.  Thus, while it is the task of the WTO to adopt
rules and principles for the establishment of an open, transparent and non-discriminatory tradingsystem, MEAs must establish the rules and mechanisms necessary for the protection of the
environment, and whilst assessing whether a specific measure is arbitrarily discriminatory or
protectionist falls fully within the competence of the WTO, determining the legitimacy of an
environmental goal and the necessity and proportionality of a measure to achieve this goal must
remain the competence of MEAs.  Moreover, such an interpretative decision could also provide
objective criteria for determining towards which MEAs such deference should be paid.  Such criteria
might, for example, be that an MEA must be open to all countries, that it must reflect broad-basedinternational support via its actual membership, and that its provisions requiring or authorizing trade-
related measures must be drafted precisely.
V. CONCLUDING REMARKS
11. According to Switzerland’s understanding of the WTO agreements, the relationship between
the WTO and MEAs is governed by the mutual sup portiveness approach.  This implies that while the
WTO should not assess the necessity of trade-related measures provided for by MEAs, it should be
competent to assess whether specific measures constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions prevail, or a disguised restriction on
international trade.  By formulating such an ap proach towards the relationship between the WTO and
MEAs, this submission is intended to provide a basis for fruitful discussion within the CTE.
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