GATT, trade, and the environment.

• Author: Smith, Michael B.
• Position: Trade and the Environment

The author discusses recent conflicts between environmentalists and traders. He warns the reader of the dangers of environmental barriers to trade which are not based on sound scientific evidence. After detailing potential future conflicts between trade and the environment, the author recognizes that compromises will have to be made, and finishes with a plea for traders and environmentalists to discuss their differences and find common ground.

To most Americans, GATT(1) is an acronym of anonymity. Few even know what GATT stands for, let alone where it is located, who its members are, or what it does.(2) Considering that the GATT oversees the annual functioning of some five trillion dollars in international trade, such anonymity may or may not be welcome, For too many environmentalists, the GATT is known as the enemy. Some recently named it "GATTzilla," as if this quiet United Nations institution on the shores of Lake Geneva could wreak environmental havoc.

Environmentalists "discovered" the GATT and trade only recently. Even more recently, during the 1991 congressional debate on giving the Bush Administration "fast-track" negotiating authority(3) for the North American Free Trade Agreement (NAFTA), the traders(4) discovered the environmentalists. In that debate, environmentalists tried to impose environmental conditions on the granting of fast-track authority. Although the environmentalists did not totally succeed, they did persuade Congress to require the Administration to submit an "environmental plan" when it submitted the text of the draft trade agreement to Congress.

The Administration's trade officials were surprised and displeased by the environmentalists' limited success. They viewed the "environmental plan" as an unnecessary muddying of the trade waters. At that time, the administration was not only trying to negotiate NAFTA, it was endeavoring to complete the Uruguay Round.(5) The Administration likened the environmentalists' insistence on establishing environmental criteria for trade policy to the mixing of apples and oranges. Only reluctantly, when it appeared the fast-track authority would not otherwise be granted, did the Administration agree to submit the separate "environmental plan."

Environmentalists, on the other hand, especially the more radical and uninformed elements, viewed the Administration's efforts to liberalize international trade as inherently prejudicial to the environment. They feared that NAFTA would further degrade the environment along the U.S.-Mexico border, already heavily populated by the maquiladora or "807" industries.(6) The environmentalists also took an early stance that the GATT and the environment were fundamentally opposed to one another. The GATT advocates the most efficient allocation of resources regardless of origin, and environmentalists believe that such efficient resource allocation almost automatically leads to environmental damage and ignores other, less quantifiable mores.

The "tuna-dolphin" case(7) subsequently heated up the conflict between the traders and the environmentalists. This case was ironically brought to the GATT by Mexico and, equally ironically, put the United States and the Bush Administration on the defensive for enforcing the Marine Mammal Protection Act of 1972 (MMPA).(8) The MMPA bars the import of canned tuna if the tuna are caught in a manner which injures or kills more dolphins than U.S. fishing boats are allowed to injure or kill.(9) The Mexicans used a fishing process which netted dolphins with the tuna, a clear violation of the MMPA. The United States reluctantly enforced the MMPA's provisions, and Mexico took the United States to the GATT on grounds that the MMPA and its enforcement discriminated against foreign exporters. On very narrow grounds, the GATT panel(10) upheld Mexico's claim.(11)

American environmentalists were outraged, saying that the Bush Administration had allowed the GATT to weaken a key environmental law, and that the United States would hereafter be forced to adopt less stringent national environmental standards to satisfy its international GATT obligations. Cooker heads prevailed when environmentalists realized, to their chagrin, that secondary boycotts of non-tuna-fishing countries could also be mandated under the MMPA. The Administration and environmentalists have since moved jointly with Congress in an attempt to clarify certain aspects of the MMPA.

However, the damage was done to the GATT's image. Environmental radicals painted pictures of Geneva trade bureaucrats killing Flipper the dolphin, and plastered Washington, D.C. lamp-posts and the United States Trade Representative's (USTR) building with posters depicting "GATTzilla" destroying the Capitol, spewing the pesticide DDT in its path, and shouting "What You Don't Know Will Hurt You."(12)

As a senior trade official in the Carter and Reagan Administrations, both in Geneva and Washington, I had become increasingly concerned about the linkages between trade and the environment, and the lack of a forum within the federal government for discussing these linkages. The first concrete case where the two disciplines were linked, however indirectly, was perhaps the famous beef hormone case involving the European Community (EC) and the United States.

The beef hormone case dealt with an EC-wide limitation, and ultimately, ban on the sale of beef for human consumption which contained certain beef hormones. Such hormones had been used regularly for a number of years in the United States with full Food and Drug Administration approval. Without any scientific basis, European environmentalists ("greens") persuaded members of the European Parliament to enact legislation limiting sales of beef containing these hormones. Large quantities of such beef just happened to come from the United States ($145 million worth per year); hence, American trading interests would be immediately and...