May 1996. The United States government bans the entry of shrimp which fishing process endangers the marine turtles that live in the same marine ecosystems. The affected countries –India, Malaysia, Pakistan and Thailand- immediately filed a claim before the World Trade Organization (WTO).
September 2009. The European Union bans the import of products made from seals hunted in Canada. It was a measure based not only on moral aspects, but also on the principles of animal welfare existing in the EU. Four years later, the measure was considered legitimate by a WTO panel.
But perhaps one of the most prominent cases was the trade dispute between the US and Mexico, which dates back to 1991, when the former stopped imports of yellowfin tuna fished using purse-seine methods, which killed dolphins. The measure was found to be inconsistent under the General Agreement on Tariffs and Trade (GATT).
These are just a few examples of the growing concern of governments over the environment and, above all, the Sustainable Production Processes and Methods (SPPMs) of the final products reaching consumers.
This issue is still in a legal limbo and was analyzed by the professor Maria Alejandra Calle as part of her PhD in law at the National University of Ireland (University College Cork).
In her thesis Sustainable Production Processes and Methods: A Look from the World Trade Organization Law and Global Environmental Governance, the EAFIT professor reviewed the legislation in force, the cases and trade disputes related to SPPMs, the approach of the WTO’s Committees of Technical and Environmental Barriers, as well as its importance in the Rio Declaration, the Global Compact and the Doha Round.
“Although an issue yet to be legally clarified, the WTO adjudication bodies and appellate bodies have not shown much concern over the question of whether or not it is legitimate to establish a barrier to products that do not comply with production standards but the way in which these measures are applied”, explains the professor, adding that in some of these cases the enforcement is incompatible with international economic law.
Certifications and Labels
The assertion of the researcher has greater validity when analyzing the trade dispute between the US and Mexico again, this time in the 2000s and in the light of the WTO’s regulation.
On that occasion, the US government did not ban imports of yellowfin tuna from the neighboring country but made a voluntary certification available to its trading partners.
With the label known as Dolphin Safe, the consumer could identify in the final product whether or not the fishing process involved purse-seine methods. “It was indeed a measure of voluntary use, but the final decision fell on large buyers, who ultimately would prefer certified tuna because of the demands made by their costumers”, says Maria.
For this reason, while the WTO’s Appellate Body considered that it was legitimate for the US to pursue an environmental goal even though the dolphins were not within its territory in establishing this requirement the measures could not be more restrictive for some countries than for others. This breached the Agreement on Trade Barriers and the US lost the case again.
In this global context of Sustainable Production Processes and Methods, a new phenomenon is beginning to gain momentum: sustainability certifying private agencies, NGOs that design and endorse the standards.
“These measures do not always come from the government but are a reality of the markets. Large buyers now demand labels like Dolphin Safe, Rainforest or Fair Trade, which, although private, gradually turn into new nontariff barriers”, explains Maria.
These new standards and their involvement were also analyzed by the professor, who explains that although in principle these are not regulated by the WTO, they have a great significance in the SPPM debate.
This is due to the fact that, while on the one hand they give importance to the social and environmental conditions of production, on the other hand they promote the implementation of the principles of transparency, participation and accountability promoted by global administrative law.
Global Governance
As part of her diagnosis, the EAFIT professor took global legal governance into account in her legal analysis, especially from initiatives such as the UN Conference in Rio de Janeiro in 2012 and the Global Compact.
“At the Rio+20 conference, one of the central aspects was the transition towards a green economy and the importance of production and consumption patterns to achieve sustainable development. This can be validly interpreted as a recognition of the importance of what the jargon used by the WTO calls SPPMs”, she states.
The researcher also mentions that the EU, for example, has a series of guidelines on sustainability that must be complied with by biofuel producers (locals and exporters).
And these certifications, although based on the EU criteria, are not exclusively granted by governmental bodies since exporters can prove compliance with European sustainability criteria through privately issued certificates.
The Global Compact, on the other hand, promotes SPPMs through the idea of corporate sustainability and takes into account factors such as carbon footprint measurement, product life cycle assessment, and clean production.
This shows that the myth of the legitimacy of SPPMs could be overcome. However, the researcher points out that “their implementation requires a detailed analysis of procedural aspects that can have negative effects on the competitive conditions of imported products, compared to those produced locally.”
In other words, the legality of a commercial measure built on the sustainability of the methods of production of a good is today especially based on aspects related to the architecture and application of the measure. For example, with transparency, due process, and participation of affected countries in the decision-making procedure giving rise to the measure.
This, taking into account that countries have very different production methods, productive sectors and control mechanisms. In this regard, Maria states: “When the production method used by the exporter tends to and achieves the same environmental goal the importing country is concerned about, the technical, financial and production capacities of the exporting country must be taken into account when implementing restrictive trading practices based on SPPMs”.
Because of all of the above, the researcher concludes, “the legal concern is not what, but how the measure is implemented. Transparency, inclusiveness and participation of all affected countries should be ensured without arbitrarily discriminating against trading partners.”
Her Field is International Trade
Bio-trade, animal welfare and international trade, voluntary environmental certifications and eco-labeling, global administrative law and procedural requirements for the standardization and resolution of trade disputes at the World Trade Organization are some of the issues Maria Alejandra Calle Saldarriaga has focused on for most of her research journey.
The trade dispute between the European Union and Canada, as a result of the products derived from seal hunting, was another of her research topics while pursuing a master’s degree in International Economic Law and International Trade Policy at the University of Barcelona.
She majored in law at the University of Medellin, specialized in Commercial Law at the Los Andes University and holds a master’s in Administration at EAFIT University. She also has advanced degrees in Business Diplomacy at the Center for Trade Policy and Law, Carleton University (Canada), and in International Senior Management at EAFIT University.
In 2015, after completing her Doctorate in Law at the National University of Ireland (University College Cork), she returned to the Department of International Business at EAFIT University where she will continue her research on sustainable production methods as a requirement to access international markets.
Further information for journalists:
Alejandro Gómez Valencia
EAFIT Information and Press Area
Telephone: 574 2619500 ext. 9931
E-mail: jgomez97@eafit.edu.co