Water Footprint Labelling and WTO Rules

Abstract

A water footprint is a concept that measures the total volume of freshwater used to produce a product, measured over the full supply chain. This article discusses one idea that has been mooted to ameliorate impending freshwater shortages - namely to encourage consumers to purchase products with a low water footprint by using a water footprint label. A label may provide sufficient incentive for consumers, and governments may impose measures such as taxes or import restrictions based on the water footprint. The article explores the international trade law implications of such measures and finds that, as with other areas of environmental regulation, international trade liberalization and the protection of sustainable freshwater resources are not incompatible goals. However, water footprint labelling, and other associated measures, could have inadvertent trade law implications, meaning that it will be important for governments to give careful thought to their design and application.