WTO to the TPP: Evolution of Environmental Provisions in Trade Agreements

Abstract

This paper traces the evolution of “environment” from an “exception” to trade obligations under the GATT and WTO Agreements, to an obligation under trade agreements. The TPP’s chapter on Environment deals with several aspects relating to a country’s internal environmental regulations- an aspect which has traditionally been addressed in multilateral environmental agreements (MEAs). The main difference between MEAs and trade agreements is that the latter potentially makes available the tool of trade sanctions for enforcement of environment-related obligations as set forth in the agreement. This could become problematic since the driving force behind trade agreements is mercantile interests, rather than environmental interests. This paper examines the approaches to trade and environment that have emerged in free trade agreements other than the TPP Agreement as well. The paper highlights that while empirical evidence on using environmental provisions in trade agreements has been limited, there could be a potential risk of use of such provisions as protectionist measures in the garb of environmental activism. It also contrasts TPP’s approach with that of EU’s approach in some of its FTAs, which have addressed environmental issues under the overall concept of ‘Sustainable Development’. EU’s FTAs also keep such aspects outside the scope of the dispute settlement chapter of the FTA, which means that the tool of trade sanctions are not available in the context of such obligations. This article asks whether such an approach presents a more balanced view to addressing environmental issues in trade agreements.