Trade Measures in Multilateral Environmental Agreements and WTO Rules: Potential for Conflict, Scope for Reconciliation

Abstract

Trade measures play several important functions in multilateral environmental agreements (MEAs). However, because they restrict the free flow of goods between countries, these measures also potentially conflict with trade rules contained in the WTO Agreements. This paper demonstrates how the most important MEAs employ trade measures to further their objectives and how this might clash with WTO rules. It is shown that a potential for conflict clearly exists even though no country has ever challenged a measure purportedly undertaken in pursuance of a MEA before the WTO. Several policy options for reconciliation are examined and an amendment of GATT rules to introduce a MEA savings clause, possibly combined with a certification of specific measures by MEA secretariats, is found to be the preferred option.

Keywords: multilateral environmental agreements (MEAs), trade measures, savings clause, GATT, WTO

JEL Classification: F13, Q20, Q30