RESTRICTED
PREPARATORY COMMITTEE PC/SCTE/W/7
FOR THE 22December 1994
WORLD TRADE ORGANIZATION
(94-2917)
SUB-COMMITTEE ONTRADE AND ENVIRONMENT
EXPORTS OFDOMESTICALLY PROHIBITED GOODS
Background Note bytheSecretariat
1. Thisnoteresponds totherequest bytheSub-Committee fortheSecretariat toprovide
information onthebackground andhistory ofthissubject inGATT andrecent developments both
within andoutside ofGATT. Italsocovers developments inother related international
instruments andthework intheGroup onEnvironmental Measures andInternational Trade which
mayhaveimplications foranyfurther work inthisarea.
History oftheissue ofexports ofdomestically prohibited goods inGATT1
2. Thesubject of"exports ofdomestically prohibited goods" wasfirstraised byNigeria and
SriLanka during thepreparatory work forthe1982 Ministerial meeting (document
PREP.COM/W/16). Itwasincluded inGATT 'swork programme atthe1982 Ministerial meeting
asaresult oftheconcern expressed bysome developing countries attheincreasing trend onthe
partofindustries andfirms toexport products, thedomestic saleofwhich waseither prohibited or
severely restricted inorder toprotect human health orsafety ortheenvironment. TheMinisterial
Declaration adopted atthe38thSession oftheCONTRACTING PARTIES heldatMinisterial
Level stated onthissubject:
"The CONTRACTING PARTIES decide thatcontracting parties shall, tothemaximum
extent feasible, notify GATT ofanygoods produced andexported bythem butbanned by
theirnational authorities forsaleintheirdomestic markets ongrounds ofhuman health
andsafety. Attheir1984 Session, theCONTRACTING PARTIES willconsider inthe
lightofexperience gained withthisnotification procedure, theneedforstudy ofproblems
relevant totheGATT inrelation toexports ofdomestically prohibited goods andofany
action thatmaybeappropriate todealwithsuchproblems."2
3. Thisinformation wassupplied inaccordance withanotification format proposed bythe
Secretariat.3By1984, 23notifications hadbeenreceived andcirculated inthedocument series
DPG/NOTIF.83.1 -DPG/NOTIF.84.5. Itwasrecognized thatthenotifications received didnot
provide asufficient databasetoassess howproblems relevant totheGATT might bestudied.
Consequently, asecond request fornotifications wasissued in1984 atthe40thSession ofthe
CONTRACTING PARTIES inaDecision onExport ofDomestically Prohibited Goods
(L/5759/Rev.1). ThisDecision called forcirculation ofadraftairgram4which clarified and
extended thetypes ofmeasures which were tobenotified. Itstated:
1Much ofthisinformation isbased onGATT document L/6467, 2February 1989 andL/5907, 22November 1985.
2Ministerial Declaration, adopted 28November 1982, BISD 29S/9.
3Theformat wasproposed inGATT/AIR/1885.
4GATT/AIR/2087, 4December 1984.PC/SCTE/W/7
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"Whereas thenotification format intended tocover allcases ofbanned goods being
produced andexported from contracting parties, thenotifications made onlyreferred tothe
non-existence ofsuchpractices. Accordingly, theinformation supplied sofardoesnot
appear toprovide asufficient databaseforcontracting parties toconsider theneedfor
study ofproblems relevant totheGATT inrelation toexports ofdomestically prohibited
goods.
Inorder toimprove thedatabase, allcontracting parties arerequested torespond
assoonaspossible totheinvitation extended tothem inGATT/AIR/1885 tonotify tothe
maximum extent feasible anygoods produced andexported bythem thatarebanned by
theirnational authorities forsaleintheirdomestic markets ongrounds ofhuman health
andsafety. Inthisconnection, itissuggested thattothemaximum extent feasible
contracting parties make available totheSecretariat anyrelevant information which would
enable ittoprepare, bymid-1985, basic documentation designed tofacilitate discussion of
thematter. Such documentation would alsocover work being doneinother
organizations."5
4. Bymid-1985, fivemore notifications hadbeenreceived. Inaddition, theGATT
Secretariat prepared abackground noteonactivities ofother organizations inrelated fields6.This
notewasthefirstattempt topresent apicture oftheinformation exchange activities concerning
trade indomestically prohibited goods ofother international organizations. Thenotewasupdated
onseveral occasions throughout theperiod ofdiscussion ofthissubject.7Consultations were held
withinterested delegations inJuly1985 onthebasis oftheinformation provided inthese
documents. Afurther airgram wasissued inwhich itwassuggested thattheprovision ofsimilar
information byallcontracting parties would facilitate understanding ofthequestions involved.
Seven more notifications were received andafurther consultation withinterested delegations was
heldinNovember 1985.
5. Atthattime, itappeared totheSecretariat thattheconsultations showed general
recognition thattheexport ofgoods which were notpermitted tobesoldinaparticular domestic
market forhealth orsafety reasons wasanareawhich wasofconcern tocontracting parties. A
Secretariat document summarizing theconsultations stated:
"...The discussions havethrown lightondefining "domestically prohibited" goods
inthelightofpractices followed byparticular contracting parties, which mayinvolve
positive certification rather thanprohibition orrestriction. Thematerial notified...on
legislative provisions hasprovided auseful clarification ofthepractices followed inthese
countries concerning production andexports ofsuchgoods, which varied considerably
from casetocase. Thequestion oftheextent towhich exporting orimporting country
governments should beresponsible fortaking measures torestrict trade insuchproducts
hasalsobeenraised. Inthatcontext, questions oftheprovision ofadequate information
toimporting countries andtheability ofimporting countries toformulate orenforce
adequate criteria forpermitting orprohibiting thesaleofsuchimported goods, were
5Id.
6DPG/W/1, 6May1985.
7Seedocuments L/6459, 30January 1989; L/6459/Rev.1, 24November 1989 andL/6459/Rev.1/Corr.1, 30March 1990;
DPG/W/4, 11October 1989; DPG/W/4/Rev.1,
24November 1989 andDPG/W/4/Rev.1/Corr.1, 30March 1990.PC/SCTE/W/7
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brought tolight. Anumber ofdelegations havepointed tothecomplexity oftheissues
involved andthepractical problems ofmanagement ofsuchtrade.
...Some delegations referred totheprovisions ofArticle XX(b) oftheGeneral
Agreement. Ithasbeensuggested thatthenotification procedures oftheAgreement on
Technical Barriers toTrade mayprovide abasis forabetter flowofinformation and
guidance foractions tobetaken byexporting orimporting countries. Thequestion ofthe
extraterritoriality ofstandards hasbeenraised inthisconnection. Thepossibility ofexport
prohibitions bycountries withstringent product standards leading totrade diversion in
favour ofexporting countries withlessstrict standards hasalsobeenraised.8
6. In1986 withthecommencement ofthetalksforlaunching theUruguay Round, theSenior
Officials Group andlaterthePreparatory Committee discussed thepossible inclusion ofthe
subject intheprogramme fornegotiations. While several developing countries were infavour,
others considered thatwork inthisareashould becarried outunder theregular GATT activities.
Thelatter viewprevailed. AttheendoftheSpecial Session oftheCONTRACTING PARTIES at
Punta delEste, theChairman oftheMinisterial meeting, inrecommending adoption ofthe
Ministerial Declaration ontheUruguay Round, noted that"there were certain issues raised by
delegations onwhich aconsensus tonegotiate could notbereached atthistime. These issues
included theexport ofhazardous substances..."9
7. Subsequently, inNovember 1986, attheForty-Second Session oftheCONTRACTING
PARTIES, itwasformally agreed thatwork inthisareashould becarried outunder thenormal
work programme. TheAgreement called oncontracting parties to
"..undertake consultations withaviewtoestablishing guidelines foraction relating to
trade indomestically prohibited goods, taking intoaccount thefollowing elements:
(a) notification ofrelevant lawsandregulations;
(b) information onspecific measures restricting orprohibiting domestic sale,
exports orimports ofgoods ongrounds ofhuman health andsafety;
(c) theneedtomaintain close contact withother relevant international
organizations operating inthisarea, andtoavoid, sofaraspossible,
duplication ofinformation provided inthecontext ofother organizations;
(d) procedures forconsultation among interested contracting parties regarding
anyproblem thatmayariseasaresult ofsuchmeasures;
(e) provisions forperiodic review ofdevelopments.
2. Thatareport onsuchconsultations besubmitted totheCONTRACTING
PARTIES attheirForty-Third Session."10
8L/5907, 22November 1985.
9Ministerial Declaration ontheUruguay Round, Declaration of20September 1986, BISD 33S/30.
10BISD 33S/54.PC/SCTE/W/7
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8. Asbackground material fortheconsultations, theSecretariat circulated anotewhich
compiled theinformation derived from 13notifications submitted bycontracting parties relating to
legalprovisions andmeasures applied todomestically prohibited goods. Thenotecontained alist
ofdomestically prohibited goods, theexport ofwhich wasalsoprohibited, which wasdrawn from
more detailed information contained inthenoteonthelawsorregulations concerning production
andtrade indomestically prohibited goods. Thenotealsolisted allnotifications received bythe
Secretariat onexports ofdomestically prohibited goods. Theproducts which were citedincluded
certain chemicals suchashighly toxic liquids, benzene, some chlorides, PCTandasbestos;
certain pharmaceutical products forbothhuman andanimal use,quasi-drugs andcarcinogenic
substances; fertilizers, pesticides, andother plant protection products; certain substances usedin
foodstuffs andfeedstuffs, suchasadditives; cleansing agents, cosmetics andperfumery; certain
substances usedintoysandcaraccessories; certain substances usedfortreating products, suchas
lead; specific dangerous products suchasauto-ignition candles, certain toyplanes, unstable
watershoes, flammable substances, gunpowder, explosives andmilitary equipment; radioactive
substances; andpoisonous anddeleterious substances.11
9. Ininformal consultations prior tothe1987 Session oftheCONTRACTING PARTIES,
delegations noted thattheUnited Nations Environment Programme (UNEP) hadrecently adopted
guidelines relating tobanned orseverely restricted chemicals entering international trade. Itwas
noted thatthese, aswellasthework thatwasbeing donebyother organizations, would havetobe
carefully studied inorder todetermine thenature andtypeofaction thatcould betaken inGATT.
Therefore, attheForty-third Session, theCONTRACTING PARTIES agreed thatmore timewas
required forconsultations andthatareport onfurther consultations bepresented attheForty-
Fourth Session.
10. During 1988, tworounds ofconsultations were held. AttheForty-Fourth Session ofthe
CONTRACTING PARTIES, thethenDeputy Director-General, Mr.C.Carlisle, reported onthe
progress ofthese consultations. Heexplained that,asabasis fordiscussion, thedelegation of
Nigeria hadcirculated atechnical noteexplaining thetypeofaction thatitproposed betaken in
thisareatocontrol trade insuchproducts.12Headded that:
"...During theconsultations, delegations hadbeenrequested toaddress thefollowing
points intheirremarks: (1)whatprevents developing countries from taking action to
prohibit imports ofdomestically prohibited goods orofhazardous waste? (2)What are
thecountries exporting suchproducts doing tocontrol those exports? (3)How wellare
thearrangements working inother international organizations? Bothdeveloping and
developed countries hadbeenasked toaddress thelatter question.
Onthefirstpoint, some developing countries hadexplained thatinmost cases they
were unable toprohibit imports ofhazardous products because theirgovernments didnot
know thattheproducts were prohibited orrestricted forsaleinthedomestic markets of
theexporting countries. Itwasalsocommon, theysaid,particularly inthecaseof
hazardous substances andwastes, forexporters tomake falsedeclarations. Further, the
customs authorities inalarge number ofdeveloping countries didnothaveadequate
testing facilities tocheck thetruthfulness ofdeclarations made byexporters. According to
developing country representatives, theabsence ofconsumer protection regulations in
many developing countries alsoenable other countries tomarket inthose developing
11DPG/W/3, 23December 1986.
12Thisdocument waslatercirculated asMTN.GNG/W/18, 17November 1988.PC/SCTE/W/7
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countries pharmaceutical, foodandother products, beyond thedates specified onthe
manufacturers 'labels.
Regarding themeasures taken bydeveloped countries tocontrol trade insuch
products, most delegations hadreplied thattheirgovernments considered theproblem to
beserious, andhadreferred tomeasures requiring firms tonotify theauthorities ifany
product prohibited forsalewasbeing exported toother countries. Some developed
countries stated thatfurther measures were under consideration tomake information
exchange systems more effective.
Onthethirdpoint, bothdeveloped anddeveloping countries, hadconsidered that
international organizations likeWHO, FAO andUNEP, aswellasregional organizations
liketheOECD, haddeveloped useful guidelines andprocedures fornotification and
exchange ofinformation. Some delegations, however, hadconsidered thatitwould be
necessary toexamine theoperation ofthese arrangements more closely inorder todecide
whether further complementary action inGATT would benecessary andeffective. These
delegations hadalsonoted thattheissues inthisareawere ofahighly technical nature,
andhadexpressed doubt whether itwould bepossible forthetrade policy experts...to deal
withthese subjects effectively. Some ofthese delegations, however, hadthought that
GATT could...play auseful roleinmonitoring thework being doneinother
organizations. Other delegations, mainly from developing countries, hadexplained that
onereason thearrangements developed byother international organizations were notfully
effective wasthatthese arrangements were ofavoluntary nature anddidnotimpose any
binding obligations. These delegations believed thattheexperience withthese
arrangements hadbeensomewhat mixed. They felt,therefore, thatitwasnecessary touse
GATT toimpose binding obligations onbothexporting andimporting countries. They
saidthattheaimofanyaction inGATT would notbetoduplicate notification and
information exchange procedures developed elsewhere, butrather todevelop rules which
would reinforce theimplementation ofthese schemes."13
11. TheCONTRACTING PARTIES agreed toasktheSecretariat toholdfurther informal
consultations withaviewtoenabling theCouncil tomake, ifnecessary, appropriate arrangements
forpursuing thework further. Following thismeeting, thedelegations ofCameroon,
Côted'Ivoire, Nigeria, SriLanka andZaire circulated acommunication totheTrade Negotiations
Committee inaneffort tohavethisissue included ontheagenda oftheMontreal Ministerial
meeting. Thecommunication, building ontheprevious technical note, proposed howapossible
mechanism oragreement inthisareamight evolve.14Itdescribed thescope oftheproblem, why
present efforts attheinternational levelwere inadequate, andthemain priorities forapossible
agreement inGATT inthisarea. Inparticular, thenotesuggested:
"One form ofaction inGATT might betoelaborate anAgreement oraCode of
Conduct, onthelinesoftheAgreement onTechnical Barriers toTrade...
Themain objective ofsuchanAgreement might betolaydown theprinciple that
governments, informulating regulations, should payadequate attention totheprotection of
environment andofhealth andlifenotonlyofitsowncountry orpopulation butalsoof
those inother countries andpopulations. Itmight, interalia,apply to:
13SR.44/2, 30November 1988, pp.2-3.
14MTN.TNC/W/14, 30November 1988.PC/SCTE/W/7
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(i) allproducts which inthedomestic market ofacountry:
(a) areprohibited from being sold
(b) canbesoldonlyunder severely restricted or
controlled conditions; or
(c) arewithdrawn from sale
(ii) industrial, toxic andother wastes whose disposal inthedomestic market is
severely restricted orcontrolled
onthegrounds thattheyaredangerous tohuman health orsafety, animal orplant lifeor
health orother reasons ofenvironmental protection.
Inrelation toindustrial andtoxic wastes andofother substances (e.g.those falling
under item(ii)above) which areconsidered tobeinherently hazardous, rules ofthe
Agreement should provide forthetotalbanonexports. Such abanwould beinkeeping
withtheprinciple thatthewastes created inaproduction process should bere-cycled,
further treated ordisposed of,inthecountry ofmanufacture asinmost cases itisnot
possible fortheexporting country tomeaningfully evaluate whether thefacilities for
storage, re-cycling orotherwise disposing waste areadequate intheimporting country,
particularly inthecaseofdeveloping countries.
Asregards other products (e.g.those falling under item(i)above) governments
should, informulating regulations, giveadequate consideration towhether exports thereof
shallbeprohibited orrestricted. Incases where prohibition ofexports isnotconsidered
desirable andappropriate, given factors suchasenvironmental andclimatic differences
among countries, anddifferences indietary habits, regulations should permit onlyexports
onthebasis ofexport licences andlaydown conditions fortheirissuance. Such
conditions could include anundertaking thatinthecaseofproducts falling inthis
grouping (e.g.hazardous chemicals, pesticides, radioactive materials andtoxic waste),
export licences willbeissued onlyafter"prior informed consent" totheimportation of
suchproduct hasbeenreceived from therelevant control authority intheimporting
country.
Inaddition tolaying down rules governing measures tobetaken byexporting
countries, theAgreement should aimatreinforcing actions thatarebeing taken by
organizations liketheUN,FAO, WHO andUNEP byurging itsmember countries to
participate effectively intheschemes fornotification andexchange ofinformation andin
relevant technical work ofthese organizations.
Finally, theinstitutional machinery tobeestablished under suchanAgreement
should, byproviding mechanisms forconsultation andforsettlement ofdisputes, enable
theinternational community tomonitor andcontrol trade insuchproducts inaneffective
way."15
12. AttheMontreal Ministerial inDecember 1988, theissue wasraised. TheChairman, in
hisconcluding remarks, noted that:
15Idatpp3-4.PC/SCTE/W/7
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"some delegations had,intheirstatements, emphasized theneedforearly action inGATT
tobring under control trade indomestically prohibited goods andother hazardous
substances. Heunderstood thatthesubject wascovered byGATT 'sregular work
programme andtherefore suggested thattheGATT Council berequested totakeanearly,
appropriate decision fortheexamination ofthecomplementary action thatmight be
necessary inGATT, having regard tothework thatwasbeing donebyother international
organizations"16
TheWorking Group ontheExport ofDomestically Prohibited Goods andOther Hazardous
Substances
13. Atthefollowing meeting oftheGATT Council on20December 1988, itwasagreed to
include thesubject ofExports ofDomestically Prohibited Goods intheagenda fortheFebruary
meeting oftheGATT Council forfurther examination. During thefirsthalfof1989, informal
consultations todetermine further action continued. Ultimately inJuly1989, theGATT Council
agreed toestablish aWorking Group toexamine theissue atatechnical level. Theterms of
reference ofthisWorking Group read:
"...theCouncil agrees toestablish aWorking Group ontheExport ofDomestically
Prohibited Goods andOther Hazardous Substances which, inthelightofGATT
obligations andprinciples andhaving regard tothework ofother international
organizations onthese goods andsubstances, willexamine trade-related aspects thatmay
notbeadequately addressed, andreport totheCouncil.
TheWorking Group should takeintoaccount thespecific characteristics ofdomestically
prohibited goods andthose ofother hazardous substances, andtheneedtoavoid
duplicating thework ofother international organizations.
TheWorking Group should complete itswork by30September 1990, andsubmit a
progress report totheForty-Fifth Session oftheCONTRACTING PARTIES in1989.17
14. TheWorking Group metfifteen times between September 1989 andJune1991. Atthe
firstmeeting, theWorking Group, noting itsmandate toaddress trade-related aspects having
regard tothework ofother international organizations, agreed toinvite, asobservers, toits
meetings representatives from UNEP, FAO, WHO, theUNSecretariat, theILO, theUNCentre
forTransnational Corporations, theOECD, theITC, andtheInternational Atomic Energy
Agency. Throughout thework oftheWorking Group, these representatives provided technical
expertise andadvice todelegations, totheChairman andtotheSecretariat. Their contributions to
themeetings were often included asAnnexes totheminutes ofthemeetings.18
15. Atthesecond meeting thedelegation ofNigeria submitted apaper which contained
specific information ondomestically prohibited goods andother hazardous substances thathad
beenexported toNigeria. Itpresented ideas foranagreement orlegalinstrument within GATT
based ontheelements andproduct coverage thathadbeendescribed initsprevious proposal,
16MTN.TNC/8(MIN), 17January 1988, pp11-12.
17C/W/605/Rev.1, 19July1989.
18TheMinutes ofthemeetings oftheWorking Group arecontained indocuments Spec(89)48 and52;Spec(90)3, 12,20,27,36,
and39;andSpec(91)3, 4,23,60,and62.PC/SCTE/W/7
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(MTN.GNG/W/18, submitted withthedelegations ofCameroon, Côted'Ivoire, SriLanka and
Zaire). Thepaper emphasized thatthree points hadtobeincluded inanysuchagreement:
- international trade ofproducts which hadbeenbanned orseverely restricted for
sale,distribution, orconsumption inthecountry ofproduction must bebanned
and/or regulated;
- products directed towards re-export must alsobecontrolled;
- theburden ofdecision, astowhether toimport aproduct ornot,must beequally
shared byboththeimporter andtheexporter.19
16. Forthefourth meeting, theSecretariat presented apaper entitled "Background noteon
relevant provisions intheGATT, MTN Agreements, andonrelevant Uruguay Round
proposals".20Thisnote, which stimulated discussion intheWorking Group, addressed
Articles I,III,XI,XIII, andXXinthecontext ofthiswork, aswellastheAgreement on
Technical Barriers toTrade andtheAgreement onImport Licensing Procedures. AnAnnex tothe
notediscussed Preshipment Inspection Systems. Thedelegation ofCameroon circulated a
response tothenoteindocument DPG/W/7.
17. Atthefifthmeeting, inMay1990, thedelegations ofCameroon andNigeria presented a
proposal foranagreement inthisarea.21Thisproposal contained objectives, principles, andscope
ofanagreement inthisarea. Elements which should beincluded inanagreement included:
- binding obligations oncontracting parties tocontrol theexport ofproducts which
were domestically prohibited from being soldorwhose salewasseverely restricted
onthebasis ofbeing dangerous tohuman, animal orplant lifeandthe
environment;
- publication obligations contained inArticle XoftheGeneral Agreement;
- abinding obligation oncontracting parties toparticipate intheschemes ofother
international organizations working inthisfield;
- mechanisms fordispute settlement thatcontained provisions forinterim action to
limitdamages andprovisions forpayment ofdamages asapossible outcome tothe
dispute settlement procedures.
18. Asecond proposal waspresented bytheEuropean Communities.22Atthemeeting the
representative from theECnoted thatthere were common elements inthetwoproposals, among
them theobjective ofensuring further GATT involvement inthisarea. However, significant
differences existed. Hisdelegation 'sproposal wasbuiltaround several principles including:
- therecognition oftheimportance ofaction toprotect notonlyone'sown
environment, butthatofothers aswell, andofthevalue ofthework ofother
international organizations inthisarea, whose legalcapacities andtechnical
expertise should notbeencroached upon;
19DPG/W/5, 8November 1989.
20DPG/W/6, 2February 1990.
21DPG/W/8, 30March 1990.
22DPG/W/9, 17April 1990.PC/SCTE/W/7
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- theprinciple thatwhere international agreements destined tofurther theobjectives
outlined intheproposal already existed, GATT contracting parties undertake to
accept andapply them;
- theneedtoavoid creating unnecessary obstacles totrade;
- theneedfortransparency andpublication inaccordance withtheprovisions of
Article XoftheGeneral Agreement; and
- thenecessity ofaforum forreview oftheoperations oftheinstrument adopted in
GATT inthelightofdevelopments withregard totheprovisions adopted byother
international organizations.
19. Fordiscussion attheseventh meeting, theChairman presented aworking paper containing
aDraft Decision onTrade inBanned orSeverely Restricted Products andOther Hazardous
Substances, which wasbased onthetwoproposals presented byCameroon andNigeria onone
hand, andbytheEContheother, andtookintoaccount theclarifications given bytheirsponsors
andthecomments byother delegations. ThisDraft Decision wasthesubject ofdiscussion, both
atthetechnical anddrafting level, atthismeeting, atthefollowing fourmeetings andatadditional
informal meetings. Thetextwasrevised numerous times tomeettherequirements andadvice of
delegations andtechnical experts. BySeptember 1990, when theWorking Group wasexpected to
complete itswork, itwasclear thatmore timewasneeded. Therefore, attheCouncil meeting in
September 1990, theChairman requested anextension oftheGroup 'smandate untiltheendof
December 1990. ByDecember, theGroup hadmade significant progress onthedraftDecision.
Thedelegations ofCameroon, Côted'Ivoire, Nigeria, Senegal andZaire communicated thetext,
through theGroup ofNegotiations onGoods, totheBrussels Ministerial meeting oftheTrade
Negotiations Committee inDecember 1990 inorder toinform themeeting ofthesubstantive
progress made.23TheChairman oftheWorking Group alsosubmitted areport containing the
draftDecision totheForty-Sixth Session oftheCONTRACTING PARTIES inDecember
1990,24inwhich heexplained thattheGroup hadbeenunable toreach consensus onthepresent
textbutthat,given thesignificant progress made, herequested another extension oftheGroup 's
mandate untiltheendofMarch 1991 inorder tocomplete thework.
20. Atameeting oftheWorking Group inMarch, itwasclear thatasolution toresolving the
problems withthetextcould notbefound andtheWorking Group agreed torequest theCouncil
forafurther extension ofthemandate until30June1991. During thistime, itwasagreed that
thedelegation which hadproblems withthetexttheUnited States, would attempt toelaborate a
proposal foritsrevision andwould consult withdelegations. These proposed revisions were
circulated inDPG/W/10 andwere thesubject ofdiscussion atafollowing meeting inMay. The
textwassubsequently revised toincorporate some oftheproposals, butothers could notbeagreed
upon. Hence, another proposal wassubmitted bytheUnited States (DPG/W/11) which wasthe
subject ofthefinalmeeting oftheWorking Group inJune1991. Despite efforts, afinalversion
ofthetextcould notbeagreed.
21. AttheJuly1991 meeting oftheCouncil, theChairman oftheWorking Group reported on
theresults oftheGroup 'sefforts. Hesubmitted areport withthetextofthedraftDecision
attached andexplained that:
"Atpresent, although theattached texthasbeengenerally agreed bydelegations,
thecountry making thereservation remains unable toaccept itwithout amendments. It
23Thiscommunication iscontained inMTN.TNC/W/39/Rev.1, 29November 1990.
24L/6769, 12December 1990.PC/SCTE/W/7
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should alsobenoted thatsome delegations alsomade proposals forchanges ofadrafting
nature which arereflected intheminutes ofthemeetings (Spec(91)60 andSpec(91)62).
TheWorking Group has,therefore, beenunable tocomplete itswork within thetime
allocated toit.
TheWorking Group nonetheless considers thattheneedtointroduce anotification
scheme fordomestically prohibited goods remains urgent. TheGroup, therefore,
recommends thattheCouncil should make arrangements fordiscussion ofthedraft
Decision tocontinue, whether byanextension ofthemandate oftheGroup orbysome
other appropriate means.25
TheCouncil agreed toextend themandate oftheWorking Group foraperiod ofthree months
which would begin from thedateoftheGroup 'snextmeeting, andauthorized theCouncil
Chairman toholdconsultations onthetiming forconvening thismeeting. TheWorking Group
never metagain. Itwasagreed intheMarrakesh Ministerial Decision onTrade andEnvironment
toincorporate thisissue intothework programme oftheWTO Committee onTrade and
Environment.26
TheDraft Decision onProducts Banned orSeverely Restricted intheDomestic Market
22. ThetextofthedraftDecision ofJuly1991 creates anotification system forallproducts,
substances orwastes thatacontracting party hasdetermined present a"serious anddirect danger
tohuman, animal orplant lifeorhealth ortheenvironment initsterritory, andwhich forthat
reason arebanned orseverely restricted inthedomestic market ofthatcontracting party by
governmental regulatory action, except: fissionable andradioactive materials; andarms,
ammunition andimplements ofwarsupplied directly ofindirectly toamilitary establishment".
Thenotification system would alsocover products, substances orwastes thatacontracting party
hasdetermined to"behazardous andwhich forthatreason arerequired tobedisposed ofin
accordance withgovernmental regulatory action, except: suchwastes which, asaresult ofbeing
fissionable orradioactive, aresubject tointernational control systems, including international
instruments, applying specifically tofissionable orradioactive materials; andsuchwastes which
derive from thenormal operations ofaship, thedischarge ofwhich iscovered byanother
international instrument."27
23. There areessentially three obligations under thisdraftDecision whenever aproduct is
banned orseverely restricted inadomestic market. First, thecontracting party should consider
whether theexport ofsuchaproduct should besubject toequivalent measures. Second, ifsuch
measures arenotapplied toexports, thecontracting party shallpromptly notify theGATT
Secretariat ofthemeasures taken, aswellasthereasons forwhich theywere adopted. TheGATT
Secretariat shallthenforward allnotifications received totheenquiry points thatcontracting party
shallestablish inaccordance withtheprovisions oftheDecision. Third, thecontracting party
shallprovide additional information ontheproduct ifasked todoso.28
25L/6872, 2July1991.
26MTN.TNC/W/141, 29March 1994. Seetheseventh itemofthework programme, pg.3.
27L/6872, Article 1.
28L/6872, Article 3.PC/SCTE/W/7
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24. Finally, thedraftDecision would provide thatcontracting parties publish alllaws,
regulations andadministrative rulings insofarastheyrelate tointernational trade inthese
products, would establish aCommittee forconsultations ontheoperation andimplementation of
theDecision, would provide fortechnical assistance onmutually agreed terms, andwould provide
forcontracting parties toconsult ontheoperation oftheDecision tofindmutually satisfactory
solutions toanyproblems, without prejudice toArticles XXII andXXIII oftheGeneral
Agreement.
25. Theparticipation oftechnical experts from relevant inter-governmental organizations who
were present inthemeetings andinmany oftheinformal meetings wasused, inparticular, to
elaborate appropriate definitions fortheterms "banned" or"severely restricted" based onthe
expertise andrelated work ofother international organizations,29todefine exceptions tothe
coverage andunderstand precisely thecoverage, functioning, enforcement anddispute settlement
procedures ofother related international agreements. Thecoverage ofthedraftDecision isbased
onthiswork asaretheprovisions regarding coordination withtheother related international
instruments.
26. Animportant issue which isstated intheWorking Group 'sterms ofreference, wasthe
needtoavoid duplication ofactivities inthisarea. Inthisregard, extensive work wascarried out
bytheSecretariat inorder tolearn whatother international schemes existed which dealtwiththese
types ofproducts andtounderstand theirprovisions andobligations. Thisrevealed eleven such
international instruments, which were included inanAnnex IofthedraftDecision. Thetext
seeks togivepriority totheobligations ofthese instruments bystating thattheobligation tonotify
would notapply iftheproduct concerned wascovered byoneoftheinstruments listed inthe
Annex andiftheexporting contracting party wasasignatory oraparticipant ofthatinstrument.
ThedraftDecision alsostates thatitsprovisions shallnotaffect therights andobligations of
signatories orparticipants ofthese instruments, andthatthequestion ofwhether acontracting
party, which isasignatory orparticipant ofaninternational instrument contained intheAnnex,
wasapplying theprocedures therein, shallbedetermined bythecompetent body ofthat
instrument. TheDecision alsoencourages contracting parties involved inother international
schemes toparticipate fullyinthem andtoextend them toadditional products asappropriate.
Contracting parties notsoinvolved areencouraged tojoinsuchschemes.
27. During thenegotiation ofthedraftDecision, thequestion ofitscoverage wasinfluenced
bytheresults oftheanalysis oftheother existing international instruments related tothisarea. In
particular, theanalysis revealed thatsystems forexchange ofinformation seem tohavebeen
relatively welldeveloped inrelation tothree important product groups (chemicals, pesticides and
pharmaceuticals). Forother product groups, particularly forconsumer products, thework wasat
apreliminary stage, ifitexisted atall.Although theUnited Nations Consolidated Listof
Products Whose Consumption and/or SaleHave Been Banned, Severely Restricted and/or Not
Approved byGovernments contains some information onconsumer products, thisListismainly a
reference document. Inaddition, itincludes information ononlythose consumer products which
arehazardous because oftheirchemical composition. TheOECD Recommendation Concerning
theSafety ofConsumer Products andRecall Procedures, while relevant tothesubject matter,
contains recommendations fortheexchange ofinformation among OECD countries only.
29These definitions ultimately were based onthedefinitions forbanned orseverely restricted chemicals, pesticides, fertilizers, and
pharmaceuticals which hadalready beenelaborated andinuseinthefollowing international agreements, respectively: theUNEP
London Guidelines fortheExchange ofInformation onChemicals inInternational Trade, theFAO International Code ofConduct on
TheDistribution andUseofPesticides, theWHO Certification Scheme ontheQuality ofPharmaceutical Products Moving in
International Trade, andintheUnited Nations Consolidated ListofProducts Whose Consumption and/or SaleHave Been Banned,
Severely Restricted and/or NotApproved byGovernments.PC/SCTE/W/7
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28. Further, thisanalysis revealed thatmost ofthework ofother international instruments
emphasized thedevelopment andimprovement ofsystems forexchange ofinformation onproducts
banned, severely restricted orwithdrawn from saleinthemarkets oftheexporting countries for
reasons ofdanger topublic health, safety andtheenvironment. Allthese systems, while
admitting thatitisuptotheimporting country toadopt measures aimed atprotection ofhuman
health andtheenvironment, seektoensure theprovision ofinformation from authorities orfirms
intheexporting countries inorder toenable importing countries tomake informed judgements on
these products.
29. Theanalysis further showed thatefforts hadalsobeenmade bysome ofthese
organizations toelaborate principles andguidelines which bothexporting andimporting countries
might wishtoadopt tobring trade insuchproducts under control. These include prior
notification tothedesignated authorities intheimporting countries thatchemicals, pesticides or
pharmaceutical which aretobeexported arebanned orseverely restricted intheexporting country
inorder toenable them todecide whether theproducts should beimported ornot;theelaboration
oftheconcept of"prior informed consent" (PIC) under which anexporting country would permit
exports ofcertain banned orseverely restricted chemicals, pesticides orfertilizers, onlyifthe
importing country consents inwriting tothisimportation; andtheprohibition, where feasible and
appropriate, ofexports ofgoods which areconsidered tobeinherently sohazardous thatthey
present asevere anddirect danger tohuman lifeorhealth andsafety ofconsumers.30
Recent Developments Related tothisSubject
Relevant developments intheinternational instruments contained inAnnex IoftheDecision
30. Annex IofthedraftDecision liststhenineinternational instruments which arerecognized
asrelated tothesubject matter ofthisDecision. These aretheMontreal Protocol onSubstances
thatDeplete theOzone Layer, theBasel Convention ontheControl ofTransboundary Movement
ofHazardous Wastes andTheir Disposal, theLondon Guidelines fortheExchange ofInformation
onChemicals inInternational Trade, Amended 1989 (alladministered byUNEP); the
International Code ofConduct ontheDistribution andUseofPesticides (administered byFAO);
theCertification Scheme ontheQuality ofPharmaceutical Products Moving inInternational Trade
(WHO); the1971 Convention onPsychotropic Substances andtheSingle Convention on
Narcotics, 1961, asAmended by1972 Protocol (UN); andtheConvention Concerning Safety in
theUseofChemicals atWork (ILO). Twoadditional instruments referred toarethe
United Nations Consolidated ListofProducts Whose Consumption and/or SaleHave Been
Banned, Severely Restricted and/or NotApproved byGovernments (UN) which isareference
document containing information relating tosuchproducts, andtheRecommendation Concerning
theSafety ofConsumer Products andRecall Procedures forUnsafe Products SoldtothePublic
(OECD) which alsocontains information onsuchconsumer products forOECD countries.
31. Recent developments inrelation totheMontreal Protocol, theBasel Convention, andthe
London Guidelines arecontained indocument PC/SCTE/W/3 of13October 1994. Several
developments noted inthisdocument areofparticular importance totheissue ofdomestically
prohibited goods. First, inthecontext oftheMontreal Protocol ,theCopenhagen Amendments
accelerated thetimetable forthephase-out ofcontrolled substances listed inAnnex A(theoriginal
CFCs andthree halons) andinAnnex BoftheProtocol (thechemicals added intheLondon
Amendments: other fullyhalogenated CFCs, carbon tetrachloride, andmethyl chloroform).
30L/6459/Rev.1, p.21.PC/SCTE/W/7
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Halon production andconsumption indeveloped countries wasphased outon1January 1994 and
production andconsumption ofCFCs inbothAnnexes aretobephased outinindustrialized
countries by1January 1996. Inaddition, theCopenhagen Amendments added anAnnex Cof
controlled substances which included hydrobromoflourocarbons (HBFCs),
hydrochlorofluorocarbons (HCFCs) andmethyl bromide. Consumption andproduction ofHBFCs
aretobephased outby1996 andHCFCs by2030. Theconsumption ofmethyl bromide istobe
frozen by1995 andfurther control measures willbedecided thereafter based onfurther study.
32. Furthermore, inthecontext oftheMontreal Protocol, attheFifth Meeting oftheParties
inNovember 1993, itwasdecided thatitwasnottechnically feasible toimpose abanor
restriction ontheimport ofproducts produced with, butnotcontaining, controlled substances in
Annex A.AttheSixth Meeting oftheParties inOctober 1994, itwasdecided thatitwasneither
feasible nornecessary toelaborate alistofproducts containing controlled substances from
Annex Binorder tobantheimport ofproducts containing those substances from non-Parties.
ThishadbeendoneforAnnex Abutwasconsidered unnecessary forAnnex Bgiven thatthe
phase outschedule forAnnex Bsubstances wasaccelerated atCopenhagen.
33. Inthecontext oftheBasel Convention ,twodevelopments related totheissue of
domestically prohibited goods areworth noting. ThefirstistheDecision adopted attheSecond
Meeting oftheConference oftheParties inMarch 1994 tobanallexports ofhazardous wastes
which aredestined forfinaldisposal from OECD tonon-OECD countries andphase outby31
December 1997 alltransboundary movements ofhazardous wastes which aredestined for
recycling orrecovery operations from OECD tonon-OECD countries. Intra-OECD and
intra-non-OECD transboundary movements ofhazardous wastes willcontinue pursuant tothe
Convention 'sprocedures ofprior informed consent (PIC). Atthemost recent meeting ofthe
AdHocCommittee fortheImplementation oftheBasel Convention (12-16 December 1994), a
Decision wasadopted which urged Parties toprovide theSecretariat withinformation ontheir
related national legislation byFebruary 1995 sothatafullreport could besubmitted tothe
Third meeting oftheConference oftheParties (tobeheld18-22 September 1995).
34. TheSecond meeting oftheConference oftheParties alsoadopted adecision toconvene
anAdHocWorking Group ofLegal andTechnical Experts toConsider andDevelop aDraft
Protocol onLiability andCompensation forDamage Resulting from Transboundary Movements of
Hazardous Wastes andtheirDisposal. ThisGroup metforthesecond timeon10-14 October
1994. Theobjective oftheProtocol istoprovide foracomprehensive regime forliability andfor
adequate andprompt compensation, including reinstatement oftheenvironment, fordamage
resulting form thetransboundary movement ofhazardous wastes andother wastes andtheir
disposal. Draft Articles ofaProtocol havebeenelaborated, although withmuch bracketed text,
andwillbethesubject offurther discussion atthenextmeeting oftheGroup on3-7April 1995.
Article 4,Liability, contains three alternative textswhich puttheliability fordamage onthe
generator ortheexporter and/or anyperson, including thedisposer, broker, and/or importer who
either isincontrol ofthehazardous wastes orisinvolved inthetransboundary movement or
disposal ofthehazardous wastes, oranyperson whoatthetimeoftheincident hasoperational
control ofthewastes. Certain exceptions areprovided forintheArticle. Regarding illegal
traffic, allpersons involved intheillegality shallbeheldliable. Further, withrespect to
compensation forlossordamage, theclaimant mayinvoke theforms ormodalities of
compensation provided forbytheapplicable law. With respect tocompensation forthe
impairment oftheenvironment, theArticle saysthatiftheenvironment canbereinstated,
compensation shallbelimited to:thecosts ofmeasures ofreinstatement actually undertaken orto
beundertaken, thecosts ofreturning theenvironment toacomparable state. Iftheenvironment
cannot bereinstated, twoalternatives were presented tocalculate compensation. Article 7statesPC/SCTE/W/7
Page14
thatParties which arestates ofexport, stateoftransit orstateofimport shallensure thatliability
under thisProtocol shallbecovered byinsurance, bonds orother financial guarantees. Article 8
willestablish aninternational fundforimmediate response measures inanemergency situation and
forcompensation totheextent thatcompensation fordamage under thecivilliability regime is
inadequate ornotavailable.
35. Article 13,ontherelationship withother bilateral, multilateral andregional agreements,
contains fouralternatives incaseofaconflict between theprovisions ofthisProtocol andthe
provisions onliability andcompensation inanother international agreement orarrangement:
- theprovisions ofthisProtocol shalltakeprecedence totheextent thattheyare
more favourable totheclaimant [,inparticular taking intoaccount theinterests of
developing countries].
- except where allParties concerned aremembers ofaseparate international
agreement onliability andcompensation withregard toinland, airormaritime transport,
theprovisions ofthisProtocol shalltakeprecedence totheextent thattheyaremore
favourable totheclaimant [inparticular taking intoaccount theinterests ofdeveloping
countries].
- theprovisions ofthisProtocol shalltakeprecedence, unless thedamage isrelated
towastes which arespecifically covered byinternational orregional instruments on
liability andcompensation withregard toinland, airormaritime transport.
- except where allParties concerned aremembers ofaseparate international
agreement onliability andcompensation withregard toinland, airormaritime transport,
theclaimant shallhavetherighttochoose which regime shallapply forcompensation.
36. Finally, itisworth noting thattheAdHocCommittee requested theSecretariat toprepare
anevaluation oftheeffectiveness oftheConvention fortheThird Meeting oftheConference of
theParties in1995. Thisstudy shall, interalia,takeintofullconsideration theexisting
institutional mechanism oftheBasel Convention aswellasdevelopments which havetaken place
inthecontext oftheConvention anddraw upon theexperiences gained within other multilateral
environmental agreements.
37. Inthecontext oftheLondon Guidelines ,document PC/SCTE/W/3 provides anoverview
ofthepresent situation withregard totheirimplementation. Ofparticular interest arethe
discussions leading toward thedevelopment ofalegally binding instrument fortheapplication of
thePrior Informed Consent (PIC) Procedure. ATask Force toconsider modalities forsuchan
instrument wasestablished andmettwice withtheparticipation ofexperts from governments and
representatives ofrelevant organizations. Thetaskforce reviewed thefirstyear'sexperience in
thefulloperation ofthePICprocedure andelaborated asetofelements forthelegally binding
instrument. These elements cover theobjectives, thescope, exemptions, definitions andgeneral
obligations which maybenegotiated intotheultimate instrument. Aninformal consultative
meeting toconsider issues related tothese elements wasconvened on1-2December 1994.
Participants atthismeeting provided theirviews andmade recommendations onthese issues, with
aviewtoprepare foraninitial negotiating textofaPICconvention. Atthismeeting, the
following timeframe forthedevelopment ofsuchaconvention wasproposed, subject torelevant
decisions bytheUNEP Governing Council inMay1995:PC/SCTE/W/7
Page15
September/October 1995: anorganizational government-designated experts meeting;
December 1995/January 1996: thefirstsession ofanintergovernmental negotiating
meeting withthemandate todevelop aPICconvention;
April/May 1996: thesecond session oftheintergovernmental negotiating meeting;
October/November 1996: thethirdsession oftheintergovernmental negotiating meeting
andaconference ofplenipotentiaries toadopt theconvention.
Itwasagreed thattheUNEP Executive Director would seekamandate tostartnegotiations forthe
development ofalegally binding instrument fortheapplication ofthePICprocedure from the
nextGovernment Council inMay1995, withaviewtotheconclusion ofsuchaninstrument
possibly by1997, having noted agreement attheFAO Council onthedevelopment ofsuchan
instrument.
38. Theobjective oftheinstrument would betomake legally binding thePICprocedure,
including itsoperation, based ontheprocedure contained intheLondon Guidelines andinthe
FAO International Code ofConduct (alsolisted inAnnex IoftheGATT Decision L/6872). At
therecent December meeting, several participants indicated thatproduct andusecontrol should
alsobeaddressed intheconvention, although some others considered thatthisshould bethe
responsibilities ofeachgovernment. Itwasalsonoted thattherespective responsibilities of
importing andexporting countries should beclearly defined intheobjectives. With regard to
scope, theconvention maycover "chemicals banned andseverely restricted forhealth and
environmental reasons andhazardous pesticide formulations which maybecausing health [and/or
environmental] problems under conditions ofuseincountries thatdonothaveadequate
infrastructure"31.Atpresent thePICprocedures regarding hazardous pesticides donottakeinto
account environmental damage. There wasalsoasuggestion toinclude hazardous chemicals and
chemical wastes intothescope. However others didnotwanttooverload thePICprocedure by
adding suchalarge number ofchemicals. Theprocedure should betargeted onspecific chemicals
which arecausing health and/or environmental problems under conditions ofuseindeveloping
countries. Further chemical wastes arealready covered bytheBasel Convention. Atthe
December meeting, itwasagreed thattheSecretariat would prepare apaper reviewing thecriteria
forselection andinclusion ofchemicals intothePICprocedure. Itwassuggested thattheexport
ofhazardous chemicals notincluded inthePICprocedure could bedealtwithbyappropriate
classification, packaging andlabelling requirements.
39. With regard toobligations, Parties would exchange information onthese chemicals in
international trade, strengthen existing national infrastructures andinstitutions inorder to
implement thePICprocedure, including import decisions, andprevent exports thatcontravene
prior informed consent decisions, byimporting countries, cooperate withother Parties, and
employ good management practices inthesaleandpurchase ofpesticides. Intheelements,
specific procedures forthese obligations were elaborated. AttheDecember meeting, itwas
pointed outthat,inaddition toregulatory measures, non-regulatory measures should besought for
achieving thegoals ofregulatory measures suchaseconomic incentives andmemoranda of
understanding.
40. Inaddition, attheDecember meeting, several participants expressed theviewthatthere
wasaneedtobantheexport ofdomestically prohibited chemicals. Thisproposal appeared tobe
aparallel initiative tothebanagreed upon intheBasel Convention withrespect tohazardous
wastes. Asother representatives disagreed withthisapproach, itwasagreed thattheSecretariat
31UNEP/PIC/WG.1/4/5, 15April 1994, p.17.PC/SCTE/W/7
Page16
would prepare astudy onactual situations ofexport ofdomestically prohibited chemicals to
provide abasis forfurther discussion. Thestudy would alsoconsider theimplications ofsuchan
export ban. Thesponsoring government saidithoped thatthisstudy would becompleted by1
April 1995 inorder toconsider thissubject atthenextsession oftheUNEP Governing Council in
May1995.
41. Theelements alsoincluded thepossibility oftrade-related provisions, "taking intoaccount
progress made since adoption oftheLondon Guidelines inaddressing linkages between
environmental andtrade policies, andensuring thattheability totakemeasures toprotect human
health andtheenvironment isfullymaintained."32Thefollowing elements areincluded:
"(a) Ensure thatgovernmental control measures oraction taken withregard toan
imported chemical forwhich information hasbeenreceived inimplementation ofthe
instrument arenotmore restrictive thanthose applied tothesame chemical produced for
domestic useorimported from aState other thantheonethatsupplied theinformation,
recognizing thatgovernment authorities havetherighttotakeactions thatmight
[discriminate][restrict trade] insome circumstances andcertain conditions toprotect health
andtheenvironment (reference: amended London Guidelines, guideline 2(d); GATT,
Article XX(b)(g)...;
(b) Theprovisions should alsorecognize therightofgovernment authorities totake
action more stringently protective ofhealth andtheenvironment thanthatcalled forinthis
instrument.
Note: Exact wording isunder review withregard to"discriminate" and"restrict trade"...
above."
42. Inaddition, theelements include possible provisions forcontrol oftrade withnon-Parties.
These include:
"Measures concerning thecontrol oftrade ofchemicals subject tothePICprocedure with
non-Parties maybesetout(reference: Montreal Protocol, Article 4).
Note: There isaproposal toprohibit trade ofchemicals subject tothePICprocedure
between Parties andnon-Parties. Themeeting noted thatitwould benecessary toaddress
thisissue onthebasis ofcareful study."33
AttheDecember meeting, itwasagreed thatthisissue should bestudied forconsideration inthe
negotiation oftheconvention, including itstrade aspects. TheGATT representative present atthis
meeting informed delegations oftheongoing work ontherelationship between trade provisions in
multilateral environmental agreements andthose ofGATT andoftherelevant GATT rules related
tothisissue. Government representatives agreed thatastudy should beprepared onthisissue
which should takeintoaccount theongoing work ontrade andenvironment atGATT/WTO.
There wasasuggestion totakeintoaccount provisions ofrelevant conventions andprotocols for
consideration oftheissue andthattheroleofunilateral trade measures, suchasanimport banby
acountry, should bestudied, inaddition tomultilateral trade measures.
32Id,p.26.
33Id,p.27.PC/SCTE/W/7
Page17
43. Finally, itisworth noting thattheelements contain provisions related totherelationship
withother international conventions. These provide that:
"theprovisions oftheinstrument shallnotaffect therights andobligations ofanyParty
deriving from anyexisting international agreement, except where theexercise ofthose
rights andobligations would beincontravention tothepurpose ofthisinstrument
(reference: Convention onBiological Diversity, Article 22,paragraph 1).Itisnecessary
totakeintoaccount theexisting conventions which might berelevant tothisinstrument,
suchastheBasel Convention.
Note: Itwasfeltthatitwould benecessary toexamine therelationship withother
relevant conventions withrespect toobligations andother legalimplications..."34
44. TheGATT Secretariat willcontinue tomonitor developments inthese international
instruments, aswellasintheother instruments enumerated inAnnex I.Itwillprepare addenda
tothisdocument asappropriate inorder tokeepdelegations informed.
Relevant developments within GATT
45. Since July1991, when themandate oftheWorking Group onDomestically Prohibited
Goods expired, work ongeneral trade andenvironment issues hasbeenundertaken intheGroup
onEnvironmental Measures andInternational Trade. ThisGroup metfrom November 1991 to
January 1994. Inparticular, theanalysis anddiscussion related tothefirstitemofthisGroup 's
agenda -trade provisions contained inexisting multilateral environmental agreement vis-à-vis
GATT principles andprovisions -mayshedlightonsome oftheconcerns thatarose inthe
context of,andmight continue tobeassociated with, thework ondomestically prohibited goods,
particularly withregard totherelationship between GATT provisions andthose ofother
international agreements andtoextraterritorial andextrajurisdictional application. During the
course ofthework ondomestically prohibited goods, some ofthese issues didariseandsome
initial discussion onthem tookplace. Asummary ofthose discussions iscontained inAnnex Iof
thisnotetogivedelegations anindication oftheconcerns thatarose withrespect tothedraft
Decision inL/6872 andtoprovide abasis forcomparing theevolution ofthinking onthese issues.
46. Itisnottheintention ofthisnotetoexplain indetail thediscussions oftheEMIT Group
withrespect tothese issues. Adetailed overview oftheanalysis andreflection which emerged
from theEMIT Group ispresented intheReport byAmbassador Ukawa, Chairman oftheGroup
onEnvironmental Measures andInternational Trade, tothe49thSession oftheCONTRACTING
PARTIES (L/7402). Furthermore, these issues, aswellastheissue ofdispute settlement inthe
context ofobligations ofmultilateral environmental agreements, willcontinue tooccupy theWTO
Committee onTrade andEnvironment. There islikely tobeconsiderable overlap among these
areas ofanalysis astheCommittee takes uprespective items ofitswork programme.
47. Inrequesting thisnotefrom theSecretariat, onedelegation considered thatitmight alsobe
useful tocover developments intheAgreement onTechnical Barriers toTrade andthe
establishment oftheAgreement onSanitary andPhytosanitary Measures emerging from the
Uruguay Round results. While anyrelationship between theobligations ofthese newAgreements
andthework ondomestically prohibited goods willbeforgovernments todetermine aswork
progresses, itmaybeuseful tonotethatinthework oftheWorking Group onDomestically
Prohibited Goods, aneffort wasmade indrafting thedefinitions andcoverage tofindlanguage
34Id.PC/SCTE/W/7
Page18
thatwould precisely define theparameters ofthecoverage toonlythose limited number of
products which were subject tobansorsevere restrictions because theyconstituted a"severe and
direct danger" tohuman, animal orplant lifeorhealth. Inthisregard, aneffort wasmade to
distinguish these control actions from those product standards andtechnical regulations more
familiar tocontracting parties through theTBTAgreement. Since theSPSAgreement didnot
existduring thelifeoftheWorking Group onDomestically Prohibited Goods, there wasno
discussion ofhowitmight relate tothisspecific group ofproducts. However, ifthecoverage of
future work ondomestically prohibited goods extends toagricultural products, suchasplants and
animals, orfooditems, suchasfoodadditives, itwould likely benecessary toreview the
relationship oftheSPSAgreement tothiswork.PC/SCTE/W/7
Page19
ANNEX I
Summary ofDiscussions intheWorking Group onDomestically Prohibited Goods on
therelationship between GATT provisions andthose ofother international agreements
andonmeasures applied extraterritorially andextrajurisdictionally
1. Atthethirdmeeting oftheWorking Group there wassome discussion oftheinterpretation
ofArticle XXwhich wasstimulated bytheSecretariat paper DPG/W/6, although there waslittle
follow-up tothisdiscussion ortothepaper. Thepaper stated, withrespect toArticle XX,after
explaining theconditions contained inthechapeau:
"(i) Under sub-paragraph (b)ofArticle XX,measures which areconsidered necessary
toprotect 'human, animal orplant lifeorhealth 'canbetaken bycountries tobanimports
orexports ofcertain products ofsubstances. Theprovisions ofthissub-paragraph may
alsoberelevant if,inorder toprotect thehealth ofitsconsumers, animporting country
applied higher standards (such asthose thatmaybeapplied intheexporting country for
domestic sales) thanthose thatareapplied tosimilar domestically produced hazardous
products orsubstances, regarding packaging andlabelling ofcertain imported products
thatareconsidered tobeinherently hazardous. Even ifsuchrequirements maybe
considered inconsistent withthenational treatment principle ofArticle III,theycould be
justified under Article XXiftheydonotconstitute adisguised restriction oninternational
trade, norareapplied inamanner astocause arbitrary orunjustifiable discrimination"
(ii) Provisions ofsub-paragraph (d)which, interalia,permit countries totake
measures bothinrelation toimports andexports forthe'prevention ofdeceptive practices '
mayprovide justification forcertain provisions oftheestablished conventions andlegal
instruments:
(i) which require thatexport ofproducts which aresubject toasystem of
prior approval andregistration intheexporting country should beaccompanied by
certificates which giveinformation concerning whytheproduct isnotregistered or
allowed tobedomestically sold; or
(ii) which require inthecaseofexports ofhazardous andinherently dangerous
products andsubstances thatinformation should begiven concerning the
conditions applying totheirsaleinthedomestic market andoftheirharmful
effects onhealth andtheenvironment.
(iii) Sub-paragraph (g)which relates toconservation ofnatural resources, maybe
relevant tothetrade related provisions intheMontreal Protocol which provide legal
guidelines forthereduction ofconsumption, production, imports andexports ofspecified
substances thatdeplete theozone layer.
Thepermissive nature oftheprovisions under Article XXisnoted. Itallows
countries totakecertain domestic actions which mayotherwise beinconsistent withthe
General Agreement. However, itisimportant tonoteinthiscontext thatsub-paragraph
(h)oftheArticle recognizes that,inthecaseofaninternationally negotiated commodity
agreement, countries mayagree toabide bybinding obligations, (either tocontrol
production and/or impose restrictions onimports andexports) some ofwhich maynotbePC/SCTE/W/7
Page20
consistent withthebasic provisions oftheGeneral Agreement butareconsidered
necessary toachieve theobjectives ofsuchanagreement...
2. Atthethirdmeeting oftheWorking Group, onedelegation, inreferring toDPG/W/6,
noted thatArticle XX(b) and(d)"...were permissive; itwould betherefore necessary toimpose
more binding obligations toprohibit orrestrict theirexport. Inthecaseofhazardous andtoxic
wastes, thisprinciple could becarried further toimpose anobligation todispose ofsuchwastes
within theterritory ofthecountry where thewastes hadbeengenerated. Itwasrecognized that
rigidinsistence thatexports insuchcases bebanned could create animbalance, butinreality such
cases were likely tobefew."35Another delegation stated thatDPG/W/6 appeared toindicate that
thenormal GATT provisions andexceptions provided considerable scope formeasures inthefield
ofexport controls forhealth andenvironmental reasons andcalled foraneedtoreinforce the
disciplines oftheexisting arrangements. Another haddifficulty withthenotion thatdomestic
standards should necessarily apply toexported goods. Inthisscenario, itenvisaged anunfair
trade situation inwhich anexporter withthelowest domestic standards would haveanadvantage
overother suppliers, allofwhom satisfied therequirements oftheimporting country. However,
another delegation stated thatthestandards thatwere good foronenation were alsogood for
another. Itadded thatinasituation where sub-standard products were exported toother
countries, knowing thatthese products would havehazardous effects onhealth ortheenvironment,
wasnotonlymorally wrong butwaswrong inallother aspects.36Onedelegation noted thatit
might notbeabletoagree withtheinterpretation described inthepaper thatArticle XXmaybe
usedtojustify more stringent standards onimports thanareimposed ondomestically produced
goods. Another saidthatinitsview, Article XXwould permit restrictions andother measures as
wellastotalbans. Headded thatsub-paragraph (b)ofArticle XXpermitted restrictions on
imports andexports onlyifthese were accompanied bysimilar restrictions ongoods sold
domestically.
3. Atthesixth meeting, there wasfurther discussion onthese issues inresponse tothe
proposed textofaDecision bytheEC(DPG/W/9, seepara. 17):
"Regarding international measures, some delegations, while generally supportive
oftheproposal contained inDPG/W/9, noted thepotentially complex legalissue involved
inimposing binding obligations onGATT contracting parties withrespect toother
international agreements. Three delegations expressed theirviewthatanyagreement
negotiated inGATT would havetobeformulated asabest-endeavour approach because
GATT could notimpose obligations onitscontracting parties toaccept andapply the
instruments adopted under other international organizations. Thedelegate oftheEEC
explained thathisproposal wasexhortatory innature withregard tothesubstantive
obligations established intheinstruments oftheother organizations."37
TheECrepresentative, withregard toitsproposal, noted theprecedent oftheTBTAgreement.
Hesaidthatunder thisAgreement, contracting parties areencouraged toapply international
standards adopted bytheISOorbyother international organizations where theyexist. Thiswas
themodel thathehadinmind.
35Spec (90)12, p.2.
36Id.
37Spec(90)27, p.2.PC/SCTE/W/7
Page21
4. Atthismeeting, there wasalsodiscussion ontheissue ofdispute settlement inreference to
theproposed textofaDecision byNigeria andCameroon (DPG/W/8, seepara. 17): :
"...Another delegation understood thatanydispute arising within thecontext ofan
agreement inthisareawould beadispute withrespect toGATT obligations andnotwith
respect toobligations under theother international agreements. However since GATT
imposed noobligations torestrict trade butonlypermitted restrictions under Article XX,it
wasasked howafailure torestrict trade oftheproducts concerned would giverisetoany
dispute under theGATT. Thedelegate ofNigeria explained thatthese dispute settlement
provisions were introduced because hisdelegation considered thattheoffending party ina
dispute should beobligated topayfordamages. Theconcept ofinterim measures was
introduced because theproduct atissue were dangerous andifmeasures toprohibit trade
insuchhazardous products were leftuntilthedispute wasresolved, dangerous health and
environmental riskscould arise."38
5. Attheseventh meeting, withregard totheobligation intheDecision foracontracting
party which domestically bansorseverely restricts aproduct toexamine whether theexport of
suchaproduct should besubject toequivalent measures (Article 3.1ofL/6872):
"[One] delegation questioned therightofonecountry toinclude anextraterritorial
aspect initsnational legislation asArticle 3.1[oftheDecision] implied. Another
delegation stated thatinterdependence wasareality intheworld andthatArticle 3.1
represented afundamental principle ofglobal responsibility thathadtobeaccepted by
nations. Itadded thatprofit should notbetheonlymotive governing trade, butconcern
forworld health andprotection oftheenvironment hadalsotobeconsidered, particularly
forthose countries which didnothavethemeans toadequately address these concerns
withregard totheirimports. Thisdelegation alsosuggested using stronger language in
paragraph 3.2tounderline whathebelieved should beacommon objective ofcontrolling
andsupervising trade inthese products. Another delegation noted that,asabest-
endeavour obligation, Article 3posed noproblems. Itadded thatsince legislation could
varyagreat dealamong countries which could allow significant room fordiscrimination,
thesecond sentence ofArticle 3.1,dealing withnon-discrimination, wasimportant."39
6. Alsoatthismeeting, ondispute settlement:
"...one delegation stressed thatGATT dispute settlement mechanisms could notbeusedto
decide whether obligations under other international agreements hadorhadnotbeenmet
andthatthere could benocross-enforcement ofother international obligations through
GATT. Twodelegations noted thenecessity offollowing thediscussions intheUruguay
Round Negotiating Group dealing withdispute settlement procedures. Another delegation
believed thattheconcepts ofinterim action during thedispute settlement procedures and
compensation fordamages should beincluded."40
7. Attheeighth meeting there wasdiscussion onArticle 3andondispute settlement
provisions:
38Id.
39Spec(90)36, p.2.
40Id,p.3.PC/SCTE/W/7
Page22
"Two delegations were concerned thattheprovisions inArticle 3.1would have
far-reaching consequences fortheGATT system ofrules. Oneofthese delegations
suggested language which would substitute theportion ofthisArticle which urged
delegations toconsider theconditions outside theirownterritories, withtheideaof
specifying situations where there wasaperceived serious riskorserious danger tohuman,
animal orplant lifeorhealth. Itsuggested accompanying thisnewlanguage witha
paragraph inthePreamble toprovide amore general formulation oftheconcept ofshared
extra-territorial responsibility. However, another delegation believed thatspecifying
situations would create inappropriate limitations because danger totheenvironment was
often aslowprocess, notalways direct andeasily specified. Onedelegation noted that
Article 3.1didnotexplain howacountry would goabout taking intoaccount theneedto
payfullest attention totheprotection ofhuman, animal andplant lifeandhealth within the
territory ofother countries. Itbelieved thattheconsultation process between theexporter
andimporter, which would ensure anelement ofshared responsibility inpreventing trade
ofdangerous products, waslacking. Thisdelegation believed itwould bemore
appropriate tocreate mechanisms along thelinesoftheprior informed consent procedures
which would allow importing countries toformerly record anddisseminate theirdecisions
regarding theimportation anduseofproducts which hadbeenbanned orseverely
restricted inother countries. Twoother delegations, however, stressed theimportance of
thisArticle 3.1asitpresented oneofthekeyconcepts intheDecision. Oneofthese
delegations noted thatthisArticle didnotintend tourgeexporters tobecome involved in
thedomestic affairs ofother countries, buttoensure acertain responsibility concerning
products which hadbeendeemed tobedangerous andwhose usecould haveconsequences
onthese other countries. Theother delegation stressed thatthisArticle should contain
three basic elements: theadoption ofdomestic rules andregulations toban,orrestrict
certain products intheexporting country; theconsideration ofbanning orrestricting the
export ofthese products; andtheconsideration oftheeffects ofthese products onthird
countries. Itsuggested atextual revision ofArticle 3.1toincorporate these ideas andto
ensure thatcontracting parties would commit themselves tostrengthening co-operation in
thisregard."41
"Several delegations expressed concern regarding apossible linkbetween the
dispute settlement provisions ofthisDecision, contained inArticle 9,andtheprovisions
oftheother international instruments listed inAnnex II.They agreed thatGATT dispute
settlement provisions could notbeusedtoenforce GATT contracting parties tofulfil their
obligations under theother international instruments listed inAnnex II.Oneofthese
delegations questioned thenecessity ofthisArticle since thisDecision, onceadopted,
would bepartoftheGeneral Agreement andtherefore subject toitsdispute settlement
provisions. Another ofthese delegations suggested thisproblem could beresolved by
limiting thedispute settlement provisions totrade-related aspects ofthisDecision. It
added that,atpresent, totheextent thatthese other instruments hadtrade-related
provisions, theycould beaffected byGATT dispute settlement procedures. However,
another delegation didnotagree thatthisArticle should beconfined totrade-related
matters because itwould beimpossible andillogical todivide thisDecision intowhatwas
trade-related andwhatwasnot.Itraised theissue ofwhowould decide whatwastrade-
related andwhatwasnot.Twodelegations expressed thedesire fortheinclusion of
provisions toensure compensation fordamages andinterim action intheevent ofan
unauthorized shipment ofhazardous ordangerous products. Itwasnoted thattheconcept
41Spec (90)39, p.2.PC/SCTE/W/7
Page23
ofarbitration, included intheDecision of12April 1989 onImprovements tothe
GATT Dispute Settlement Rules andProcedures, could beanoption inthisregard.
However, onedelegation believed thatitwould bedifficult toincorporate aprovision for
financial compensation because thiswould amount toanagreement between governments
and,apart from statetrading companies, governments were notdirectly responsible for
actions byprivate companies."42
8. Attheninth meeting, thediscussion concentrated ondrafting thetext:
"...Onedelegation suggested including intheDecision theideathatanexport ban
could berevoked atalatertimeintheevent thatacontracting party indicated thatit
wished toimport theproduct. Several delegations alsorequested theretention ofthe
phrase inthefourth alternative 'recognizing theprerogative ofindividual importing
countries todetermine whether toallow theimport anduseoftheproducts concerned in
theirspecific situations, 'butwere uncertain astoitsappropriate place. Twodelegations,
however, believed itwasunnecessary because itweakened theArticle.."43
9. Atthetenth meeting, there wasdiscussion ontherelationship between GATT andthe
other international instruments:
"Alldelegations agreed thattheDecision should notduplicate thework ofother
relevant international instruments, butabroad coverage which included allproducts that
were banned orseverely restricted onthegrounds thattheywere dangerous orharmful,
wasessential tothepurpose ofthiswork. They were particularly concerned thatthe
proposal would notinclude consumer andfoodproducts. Onedelegation noted thatsince
theobligations inthepresent textwere notverysevere, anopendefinition oncoverage
should beperfectly acceptable, particularly since, intheend,national governments would
decide whatwastobeseverely restricted orprohibited. Theobserver from UNEP
explained recent developments related tothedefinition ofbanned orseverely restricted
chemicals... [One delegation] could notaccept thatprior informed consent procedures be
regarded asequivalent toadomestic banorsevere restriction. Another delegation agreed
thatPICprocedures could beregarded asequivalent, however onlyforthose categories of
products towhich aninternationally established system applied."44
Thisstatement bytheUNEP representative isreproduced asAnnex IItothisnoteasitcontains an
example ofthetypeoftechnical issues which arose inthediscussions ofcoverage anddefinitions.
42Id,p.3.
43Spec (91)3, p.2.
44Spec (91)60, p.2.PC/SCTE/W/7
Page24
ANNEX II
Statement bytheRepresentative oftheUnited Nations Environment Programme
atthemeeting oftheWorking Group onDomestically Prohibited Goods of16May1991
Thank youMr.Chairman. Iwould liketomake abriefremark inrelation tosome ofthe
statements thathavebeenmade inthefirstplace bythedistinguished delegation from theUnited
States and,lateron,bycertain other delegations withregard tocoverage ofconsumer products by
theLondon Guidelines, forexample. When theLondon Guidelines were adopted, we,asthe
Secretariat, withtheFAO, hadtostartinterpreting thewayinwhich governments report toour
organizations oncontrol actions toprohibit alluses-thatisaban-ortoprohibit most uses-that
isasevere restriction -onproducts covered bytheCode ofConduct andtheLondon Guidelines,
butinparticular theLondon Guidelines. Analysing agreat number ofsuchnotifications ashave
beenmade available tousoveratleastfiveyears, wehadagreat dealofdifficulty in
understanding from thenotifications inwhich usecategory orwhatcertain typeofuseswasmeant
bygovernments when reporting tousonregulatory actions thatwould fallbroadly inthis
category. Wetherefore made acomparative analysis ofmany suchnotifications orcontrol action
andsubmitted thistoajointFAO/UNEP expert group, which wehaveestablished toprovide
advice tothetwoSecretariats oninterpretation ofdefinitions andnotifications ofcontrol action
received. Wewere advised toconsider andtopropose togovernments thatnotifications ofcontrol
action should clearly indicate inwhich broad usecategory abanorsevere restriction wasplaced
bythegovernment andthebroad usecategories thatwere advised touswere: agricultural
chemicals, including pesticides foralltypes ofuse,industrial chemicals andconsumer chemicals.
Theexpert group recommended thatincaseachemical would havebeenbanned forusein
oneofthese broad usecategories, thedefinition ofabanwould apply. Thatmeans thatcertain
chemicals -andthishappens notinfrequently -which canbeplaced inmore thanoneofthese
broad usecategories, when itwould onlybeabaninoneoftheusecategories, itwould stillbea
banthatwould havetobeobserved andtheprior informed consent procedure would apply. There
arequite anumber ofchemicals which arebeing usedaspesticides, forexample, butarealso
usedasindustrial chemicals. There arealsoindustrial chemicals which arenotinfrequently
components ofconsumer chemicals. Theonlywayforward thattheexpert group advised tousto
beclear oninterpretation ofbansandsevere restrictions reported tous,wastorecommend
governments thatwhen notifying under theLondon Guidelines, prohibitions ofallusesor
prohibitions ofmost uses, bansandsevere restrictions, theywould havetoclearly indicate
whether itwasinoneusecategory -agricultural orindustrial orconsumer chemicals -orifitwas
inmore thanoneusecategory. However, oneusecategory would besufficient. There area
number ofsuchbansorsevere restrictions presently inourdatabase which hadbeenreported by
governments, where, forexample, chemicals arebanned from consumer products. Lead inpaint
ofchildren 'stoysisoneexample, butthere aremore.
Wehaverecently submitted thisrecommendation ofthejointFAO/UNEP group of
experts toaWorking Group ofgovernment experts which theUNEP Governing Council has
requested should beconvened toreport onimplementation oftheLondon Guidelines and
difficulties faced bygovernments inimplementation andwehavesubmitted therecommendation to
theAdhocgroup ofgovernment experts anditwasaccepted. Wehavetheintention toissue this,
verysoon, toalldesignated national authorities under theLondon Guidelines. There arenowPC/SCTE/W/7
Page25
almost 100countries which haveindicated toparticipate inanoperations guidance manual in
which wewould request governments toclearly indicate when notifying chemicals under the
London Guidelines whether thebanorsevere restriction wasinone,twoorallthree use
categories, butoneusecategory would suffice. Mr.Chairman, Ithought thiswasanimportant
piece ofinformation which should beconsidered bythedelegations. Thank you.45
45Spec (91)60, p.3.