The GATT: menace or ally?

• Author: French, Hilary F.
• Position: General Agreement of Tariffs and Trade may pose a threat to environment

The world's free-trade interests seem bent on expanding their commercial powers even if that means jeopardizing any conflicting environmental laws. Can these powers be turned to the Earth's advantage?

From Embassy Row to Capitol Hill in Washingon, D.C., it suddenly seemed as though they were everywhere: in the fall of 1991, posters began popping up around the city showing a "GATTzilla" monster with a dolphin in one hand and a can of pesticides in the other, crushing the U.S. Capitol under its foot. The caption: "What you don't know can hurt you." The posters were soon followed by a series of full-page advertisements in major newspapers around the country signed by a coalition of environmental and consumer groups warning that the General Agreement on Tariffs and Trade (GATT), the international agreement that stipulates world trade rules and arbitrates disputes over its terms, posed little-known but grave environmental threats. The ads called for a grassroots campaign to turn back efforts to expand GATT's powers through the Uruguay Round of negotiations, which had been underway since 1986 and was thought at the time to be nearing completion. (More than two years later, the Uruguay Round is still going around, though predictions are once again rife that a deal is near.)

How could an arcane international agreement to reduce trade barriers among more than 100 countries harm the environment? In a number of ways, according to the advertisements. Most fundamentally, the anti-GATT activists worried that environmental laws would be found to violate world trade rules - and would be overturned. The fear was aroused by a GATT dispute panel ruling that provisions of the U.S. Marine Mammal Protection Act violated the GATT, and it has been further excited by a rash of recent environmental trade disputes. For instance, Austria was recently forced to abandon plans to introduce a 70 percent tax on tropical timber, as well as a requirement that tropical timber be labeled as such, when the Association of Southeast Asian Nations (ASEAN) complained that the law violated GATT. In two ongoing disputes, the United States is charging that a levy imposed by the Canadian province of Ontario on non-refillable alcoholic beverage containers is a disguised trade barrier, and the European Community has formally challenged two U.S. automobile taxes intended to promote fuel efficiency - the Corporate Average Fuel Economy Law and the gas-guzzler tax.

The GATT-alarm ads painted a global conspiracy theory, according to which opponents of U.S. laws on environmental, health, and consumer safety legislation who had tried and failed to roll back decades of progress through the democratic process were now aiming to achieve their goals through the back door of the secretive, corporate-controlled GATT proceedings.

The international trade community was taken aback by this "demonization" of the GATT, which many viewed as a key to the relative prosperity enjoyed by nations in the post-war era - a triumph of efforts to protect the collectivc good over the selfish goals of "protectionist" special interests. Since its creation in 1947, the GATT has indeed been remarkably successful on its own terms. Over the course of seven different negotiating rounds, tariffs have been cut in industrial countries from an average of 40 percent in 1947 to 5 percent in 1990.

The characterization of GATT as an imposing monster bore a certain irony, since many countries look to the multilateral trading system embodied by GATT as a means of protecting their interests against efforts by economic powerhouses, especially the United States, to unilaterally impose their will on the world. Developing countries viewed the environmental campaign against the GATT with particular alarm, both as part of what they saw as an unfortunate tendency on the part of Northern Greens to care more about whales and dolphins than about people, and as a cover for more sinister efforts to keep Third World goods out of northern markets.

In the intervening years, some progress has been made in merging these clashing views. Governments have committed themselves to making trade and the environment "mutually supportive," though they have a long way to go before determining exactly how. The GATT itself, however, remains very much a product of its times. When the original agreement was forged in 1947, protecting the environment was not yet on most national agendas, let alone a pressing international concern. The General Agreement on Tariffs and Trade urgently needs updating and clarification if it is to become an instrument for furthering, rather than undermining, the goal to which governments pledged themselves at the June 1992 Rio "Earth Summit." That goal, the environmentalists like to remind the GATT, is to find a path to development that does not deplete the resource base upon which future economic well-being depends.

The Tuna-Dolphin Challenge

What brought the issue to a head in late 1991 was the outrage over a GATT panel's ruling that Mexico had a valid case in arguing that it should be allowed to import tuna to the United States regardless of how it was caught. Mexican fishers use dolphins as markers for tuna swimming below, before setting out purse-seine nets which then ensnare the dolphins as well as the targeted tuna. Though this practice was once also prevalent among U.S. fishers, the 1972 Marine Mammal Protection Act effectively outlawed it by mandating tight dolphin mortality quotas for domestic and imported tuna alike (see "The Tuna Test," World Watch, March-April 1992). The panel ruling sent shockwaves through the environmental community, as it called into question the GATT-compatibility of a gamut of trade measures used to achieve environmental ends.

Though there had been cases in the past in which health and safety laws had been challenged as trade barriers, the tuna-dolphin ruling provoked a far greater backlash. That Mexico had won its case meant that a U.S. law had been not only questioned but struck down - and that could have led to the law's repeal, as bucking GATT's authority would not stand the United States in good stead when its turn came to charge another country with being out of step with world trade rules. As it happened, the U.S. law remains in place because Mexico decided not to press the point, not wanting to antagonize the United States in the midst of negotiations over a North American Free Trade Agreement (NAFTA). Most fundamentally, however, the ruling provoked cries of alarm not because of any nationalistic pride on the part of environmentalists, but because of the reasoning employed by the GATT panelists. If similar logic were applied in future cases, provisions of a large number of national...