Delivery and Resources

Delivery and Resources
1-    Read the question carefully.
2-    There a sample answer for each question that it’s by other student.
3-    Read both question and answer again for better understanding.
4-     Make your own answer and avoid any mistake made as well as miss info that not provide by others.
5-     Should your answer based on your resources.
6-    Main point for provide the answer is to help you understand the topic and write very clear answer and high quality ARGUMENT.
7-    I will upload the slide that we take it to help you more.
8-    Show your understand clearly, support it by argument, example, depth answer, refer to article in each origination (ex.., WTO. MEA. GATT).
Delivery and Resources
The required text for this course is the IISD and UNEP, Environment and Trade: A Handbook – Second Edition. It is available online at

Shawkat Alam, Sustainable Development and Free Trade (Routledge,2008).

Q 1:
Discuss how NAFTA has reconciled trade and environmental interests in its Treaty framework. Evaluate NAFTA’s environmental provisions.
Q 2:
Discuss the trade and environment nexus in the EU.
Q 3:
What are the exceptions to the freedom of trade and competition to allow environmental protection in the treaty establishing the EC?
Q 4:
Examine the following trade and environment cases:
(a) Cassis de Dijion and
(b) Danish Bottles Case.
Discuss trade related provisions in the BASEL Convention, CITES, and Cartagena Protocol on Biosafety and their implications for trade and environment.

Sample answering from others:
Discuss how NAFTA has reconciled trade and environmental interests in its Treaty framework.

In 1993, the United States, Canada, and Mexico signed the NAFTA agreement, lowering trade barriers across the continent. During the negotiations for this agreement, environmental groups argued strongly that freer trade could lead to negative environmental consequences, pointing to the severe environmental problems already affecting the maquiladoras — tariff-free industrial zones along the Mexican border. As a result, a side agreement, the North American Agreement on Environmental Cooperation (NAAEC), set up the tripartite Commission for Environmental Cooperation (CEC), while another side agreement, the North American Agreement on Labor Cooperation (NAALC), dealt with labor issues.
This specific attention to social and environmental aspects of trade was remarkable and almost unprecedented in trade agreements. While this unusual aspect of NAFTA persuaded some environmental groups in the U.S. to support the agreement, the CEC has few powers. It may respond to a country’s failure to enforce existing environmental regulations, but its role is generally limited to producing a fact-finding report and recommendations to the government involved. In addition, promises of funding to clean up environmentally damaged areas along the Mexican/U.S. border have generally not been fulfilled, while border conditions have continued to deteriorate.

Evaluate NAFTA’s environmental provisions.

The opening of agricultural sector trade under NAFTA has both social and environmental effects, as small corn farmers in Mexico are able to compete with cheaper grain imported from the U.S. The migration of displaced farmers from rural to urban areas will intensify urban environmental pressures, as well as creating greater pressure for illegal migration across the U.S./Mexico border. In addition, the genetic diversity characteristic of small-scale farming may be threatened, which could result in the loss of a “living seed bank” of great importance to world agriculture.

In the area of industrial pollution, NAFTA has had both positive and negative impacts. Mexican environmental enforcement has improved, but increased industrial concentrations have led to worsened local environmental quality in some areas. A recent review of NAFTA’s environmental provisions concludes that have “fallen well short of the aspirations of the environmental community” and “should be strengthened in the next phase of NAFTA.”

Another R-Q 1-2:

While the environment and its protection is mentioned in the preamble to NAFTA there is no specific part of the agreement that sets out any explicit provisions. However, when NAFTA was created on the basis of the Canada-US Free Trade Agreement, incorporating Mexico, the North American Agreement on Environmental Cooperation (‘Environmental Side Agreement’) was also established.

Some criticisms of this attempt to reconcile trade and the environment stem from a ‘race to the bottom’ in an attempt to achieve harmonisation of environmental standards. That is, the high standards of the US and Canada would be compromised in order to create a level playing field with Mexico. Furthermore, Mexico could be used as a haven for ‘companies unwilling to comply with strict US/Canadian environmental regulations’.
Following on from this concern the North-South divide that exists between the US/Canada and Mexico could be exacerbated within NAFTA, leading to greater environmental degradation within Mexico.

Despite these concerns, NAFTA has also made large progress in terms of reconciling trade and the environment within its treaty provisions. Article 1(4) and Annex 1(4)(1) lists a series of international environmental agreements that, through explicit inclusion in NAFTA, have priority over the trade provisions. This means that any trade practice that comes into conflict with agreements such as CITES, the Montreal Protocol or US-Canada Agreement concerning the movement of hazardous waste, the MEA (providing it is the least inconsistent with NAFTA obligations) will take precedence over NAFTA. This tendency to favour MEAs over trade provisions has filtered down into many post-NAFTA bilateral agreements signed by the US.

Trade and Environment Handbook.
Sustainable Development and Free Trade (Alam).
NAFTA Agreement.

R-Q 2.1:
Increasing regionalism within international trade has lead to a need to harmonise environmental standards in order to maximise environmentally-conscious trade. Within the EU the need to reconcile ‘economy and ecology’ was brought to the fore after rapid economic growth as a result of regionalism.

An area of particular environmental concern for regional trade blocs is the transport and movement of hazardous waste as nations with contiguous borders are impacted by common environmental issues. This, along with the rising concern of environmental degradation across Europe lead to the need to harmonise standards. This was done through a series of ‘Environmental Action [Programmes]’, the first of which acknowledged the need to incorporate the environment into economic and trade related decisions. The second dealt the ‘clean-up measures’. Both of these represent soft law that was not particularly useful for changing patterns of behaviour but the third represents the biggest development in the  trade/environment nexus within the EU.

The third Environmental Action Programme incorporated the environment and its conservation as a legitimate path to sustainable development. It also highlighted the need to incorporate such decisions into ‘the policy and development of certain economic practices’, formally linking trade and the environment. After this the creation of the ‘Single European Act’ 1986 again gave legal weight to the trade/environment nexus by including environmental provisions into the pre-existing Treaty of Rome.

The Maastricht Treaty also developed the legal link between trade and the environment within the European community by setting out clear goals in Articles 2 and 3. Article 2 sets sustainable development via ‘non-inflationary growth respecting the environment’ as a communal goal for all EU member states.

Lastly the Trade Sustainability Impact Assessment (‘TSIA’) is used by the EU to gauge consequences for environmental and sustainability of various economic decisions. This method has been incorporated into trade negotiations between the EU and other states and regional trading blocs, signalling the commitment of the European community to pursuing the goal of environmental protection and sustainable development outside Europe.


Sustainable Development and Free Trade (Alam)
Another R-Q 2.2:
A mutually supportive relationship between trade and environment can occur but is in no way automatic. In fact, trade liberalisation and trade policy have positive and negative impacts on the environment. However, a number of conditions should be met to ensure that the net gains deriving from trade liberalisation would support and reinforce the protection of the environment.
The essential condition for making sure that trade and environment are mutually supportive is to ensure that the trade liberalisation process is paralleled with the development and strengthening of effective and non-protectionist environmental legislation, at national, regional and international levels. Environmental policies could, in turn, provide an incentive for technological innovations, promote economic efficiency and, consequently, improve productivity. Having recognised the need for such policies, one should also ensure that trade rules do not unnecessarily constrain but rather support and promote the ability of countries to develop and implement adequate and non-protectionist environmental measures, at both national and international levels.
The relationship between trade and the environment is increasingly important in international relations. There are three main aspects to the relationship:
– The environmental impact of trade and trade policies;
– The potential effects of environmental measures on trade flows and
– The use of trade measures to achieve environmental policy aims.

R-Q 3.1:
In 1957 the Treaty of Rome was established to promote economic growth and stability among member states via a single market in which goods, services, labour and capital could move freely without tariffs, import restrictions, quotas and all other non-tariff barriers. At its creation the Treaty of Rome did not include environmental provisions. However, after the three Environmental Action Programmes the Single European Act (1986) amended this by incorporating the environment into the Treaty of Rome.

Article 30, the free trade principle, can be restricted using the environmental exceptions set out in Article 36 (necessary to protect the ‘health and life of humans, animals or plants’).  Traditionally these were only for the protection of non-economic values such as ‘public morality, public security and the protection of human health, animals and plants’. However, the ECJ found in the Cassis de Dijon case that the linkages between the environment and trade were sufficient to warrant a restriction on the free movement of goods and services.
Another R-Q 3.2:
Article 9 of the treaty establishing the EC regulates that the Community shall be based upon a customs union covering the exchange of all goods and comprising both the prohibition, as between Member States, of customs duties on importation and exportation and all charges with equivalent effect and the adoption of a common customs tariff in their relations with third countries. That means there are trade freedom and competition freedom between different countries in EC. However, part six of the treaty establishing the EC, which is general and final
provision. There are some provisions that if the freedom of trade and competition undermines the environment, the protection of environment is the most important goal of EC. The Commission of EC can restrict the freedom of trade and competition. The objective of this exception is to protect the environment in Europe. The interests of every country in Europe is connected, it is prohibit to enhance trade transactions through damaging the environment. Article 93 of the treaty establishing the EC states that the Commission shall together with member states to examine whether the trade transactions are detrimental to environmental protection. If the trade activities are harmful to environment, the Commission has the right to prohibit them.

R-Q 4.1:
(a) Cassis de Dijion
The cassis de Dijon principle holds that manufacturers should only use bottles that are marked ‘returnable containers,’ which can be collected and refilled for re-use. Besides, the principle requires that the returnable containers to use must meet the formal approval outlined by the National Agency for purposes of protecting the environment. The Agency has the right to refute a manufacturer’s application for the formal approval if he or she does not re-use a larger percentage of the containers used. These rules were to be applied to all EU member states. However, courts have altered such decisions in their case ruling.
Non-Discrimination Rule and the cassis de Dijon Principle
The cassis de Dijon contains a non-discrimination rule, which demands that all EU nations must have limited degrees of discrimination for the rule of reason to apply in their context. Non-discrimination rule aims at protecting foreign goods and products from difficulties or disadvantages in international markets. The non-discrimination rule operates under the principles of domestic law. This rule necessitates member states to recognize that goods and products that are lawfully introduced or placed in the market with respect to the regulations of exporting countries, can also be lawfully marketed irrespective of whether there exist differences in the rules of importing countries or not.

Danish Bottles Case.
In several cases, the European Court of Justice has had to examine the level of protection chosen by member states. The so-called Case of Danish Bottles is probably the most important one in that field. In that case, there was the problem of whether environmental protection measures applied by Denmark were in accordance with the EC Treaty. Under Danish national law, soft drinks and beer could be sold only in reusable containers.

In the Case of Danish Bottles, there was a situation in which there were no harmonisation measures on the Community level, and Danish law had to be evaluated on the basis of article 30 of the EC Treaty, which provides for derogations from the restrictions on exports and imports laid down in articles 28 and 29. According to article 30, ‘the provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of the protection of health and life of humans, animals or plants. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States’.

Another R-Q 4.2:
(a) Cassis de Dijion and
The Cassis de Dijon case from The European Court of Justice (ECJ) (concerning the West Germany banning the importation of French liqueur on the grounds that was hazardous to some humans and could be abused by certain groups) is particularly important regarding the EU trade/environment nexus as it set a precedent for the use of environmental exceptions under Article 36 as a legitimate restriction on free trade. This case established the ‘rule of reason’ which set out measures that can justify limiting the application of free trade.  Therefore, states can use this rule to adopt non-discriminatory trade restrictive practices in order to preserve the environment as the linkages between Article 30 and Article 36 as they relate to protecting environmental and human health is sufficient for restricting trade.

However, although there were grounds for trade restrictions based on environmental concerns, namely human health, the court used a proportionality test to determine the severity of the danger and found that it was not sufficient to warrant a trade ban but rather the danger to certain groups of people within West Germany could have been mitigated by labelling standards or something less restrictive. The German ban was therefore illegal as it was arbitrary and out of proportion for the danger the traded good presented.

Nevertheless this case was important for determining different levels of trade restriction based on environmental concerns, codifying the linkages between Article 30 and 36 of the Treaty of Rome.

(b) Danish Bottles Case.

The concept of proportionality came about in the Danish Bottles case also. This case concerned a domestic Danish law that concerned the reuse of beverage bottles and whether or not this conflicted with the free trade article of the Treaty of Rome (Art 30). This domestic law restricted, prohibited or limited the use of certain materials and drink containers within Denmark as they had to adhere to deposit and return systems as well have approval form the Danish ‘National Agency for the Protection of the Environment’.

From the perspective of other states in the EU this went against the concept of harmonisation of environmental standards as it represented a barrier to trade regarding imports. The Danish law was amended to allow non-approved containers but the law still imposed a quotas of no more than 3000 hls per year and therefore was still deemed to be protectionist.

While the court found that the deposit and reuse system was proportional to the aim of environmental protection, the requirement of NAPE approval was disproportionate and therefore in breach of Article 30.

R-Q 5:
Under the Basel Convention, parties can exercise their right to prohibit the import of hazardous wastes or to disallow export of wastes where these would not be managed in an environmentally sound manner (art 4), states have a duty to re-import waste if it cannot be disposed of in an environmentally sound manner in the country of import (art 8), and also states are required to introduce domestic legislation to prevent and punish illegal trafficking in hazardous waste (art 9). The Convention’s objectives are to prevent the risk to human health and the environment posed by the transboundary movement of hazardous wastes and their inappropriate disposal or reuse. However, its provisions could be found to discriminate against states, particularly least developed countries, who are not parties to the Convention but who are nevertheless found, for instance under Articles 4 and 8, to not have the means to dispose of waste in an environmentally sound manner.
Under CITES, the import of specimens threatened with extinction (listed under Appendix 1) is prohibited for primarily commercial purposes (art 3) and permits for import/export will only be granted where this will not be detrimental to the species and where the specimen was not illegally obtained (among other conditions). Fewer conditions apply to those species not currently threatened with extinction, listed under Appendix II and III. Under Article 10, trade between parties and non-state parties may occur, if CITES requirements are met, with the hope that this will encourage greater membership to the Convention over time. However, the Convention does not limit trade between two or more non-State parties, which therefore means that threatened species can become even more prized and their trade more lucrative in non-member countries.
Under the Cartagena Protocol, parties of export need to notify parties of import of the transboundary movement of a living modified organism (arts 7 and 8) and various characteristics of it (as listed under Annex 1). The party of import has to follow a prescribed decision procedure set out under Article 10 and the basis of the decision as to be a risk assessment of the LMO, carried out in a scientifically sound manner, but lack of scientific certainty does not prevent parties from making a decision (art 11). LMO’s destined for food, feed or processing are treated more leniently (art 11). Article 24 does not prevent trade with non-parties, but requires that transportation be undertaken safely, taking into account possible adverse impacts on the environment and on human health. From these provisions, it seems clear that although the Convention attempts to ensure environmental protection, it requires for this purpose the capacity for parties to conduct sufficiently sound scientific risk assessment, thus potentially posing a barrier for developing countries who might be most in need of crops derived from LMOs and who lack the capacity to fulfil this requirement.
Source: UNEP, ‘Trade-related measures and multilateral environmental agreements’ (2007)

Another R-Q5:
The Basel Convention incorporates trade-related rules relating to importation and exportation of waste. The provision bars non-party states from importing or exporting waste from or to the member states. The provision helps enforce the convention by ensuring that trade in waste is restricted to states party to the MEA. The provision implicates negatively on trade by restricting trade in waste products by encouraging party states to discriminate against waste from non-party states. With regard to environment, the provision enhances conservation by discouraging non-party states from increasing their output of the restricted product for export to party states with controlled production.[1] CITES incorporates a trade provision that restricts “trade in endangered species” to licensed party states only. Consequently, WTO members that are not appropriately licensed to export or import goods considered as endangered species are barred by the agreement from participating in the trade. In terms of trade, the provision restricts free trade by introducing constraints. As regards environment, the provision helps prevent environmental degradation that results from uncontrolled trade in species that are considered endangered.[2] The Cartagena Protocol on Biosafety integrates trade-related provisions on trade in living modified organisms (LMOs). The provision controls cross-border movement of genetically modified organisms with a view to promote biosafety. As such, it allows party states to assess whether to accept or reject LMOs imports, a future that is deemed restrictive to international trade. However, in terms of environment, the provision helps guard against environmental risks associated with transfer and use of bio-hazardous genetically modified organisms.[3]

[1] UNEP/IISD, ‘Legal and policy linkages: MEAs and the WTO’, UNEP/IISD, Environment and Trade: A Handbook, 2005,
[2] Ibid.
[3] Eggers and Ruth Mackenzie, ‘The Cartagena Protocol on Biosafety’, Journal of International Economic Law vol. 3, no. 3, 2000, pp. 525-543.

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