Emily Lydgate

Sustainable development in the WTO: from mutual supportiveness to balancing

The WTO Secretariat describes sustainable development as a central WTO principle. Relevant international law treaties have declared sustainable development’s mutual supportiveness with trade liberalization, and also emphasized the need to balance its ‘pillars’: economic development, often equated with trade liberalization, with environmental conservation and social welfare. While ‘mutual supportiveness’ suggests that sustainable development’s environmental and social goals are a side effect of trade liberalization, ‘balancing’ involves weighing these different goals, and prompts the difficult question of which are most important, and who is empowered to decide. This paper traces these two broad theoretical conceptions through WTO legal texts, negotiations and dispute settlement, arguing that they have important pragmatic implications. In particular, to create mutual supportiveness WTO Director-General, Pascal Lamy, has stated the need for adequate domestic policies, suggesting that the WTO should support these. Yet, if they have negative trade impacts, pure ‘sustainable development’ policies may be difficult to balance against the WTO obligation to liberalize trade.

Sorting out mixed messages under the WTO national treatment principle: a proposed approach

When establishing whether a disputed regulation is protectionist under the WTO National Treatment Principle, there are two key elements: its effect on the market for competitive products, and its intent or policy rationale. Yet the Appellate Body has formally rejected both elements, and in the surprising 2014 outcome of EC – Seal Products, under the key provision GATT Article III(4), the latter was simply denied. This obfuscation leads to implicit and explicit conflation of these elements. In some disputes, qualitative findings about the existence and nature of competitive relationships are presented using the language of quantitative market analysis. In others, compelling policy objectives shape the outcome of a supposedly market-based analysis. This article proposes an approach that synthesizes two strands of scholarship, advocating more rigorous use of market-based evidence and stronger analysis of policy rationale. Separating these elements will achieve the appropriate balance between them and lead to greater transparency in dispute outcomes.