Challenges and Opportunities for Sustainable Development in WTO Law
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Huaxia Lai
Assistant Professor, Peking University School of international studies
March
28,
2024
An
Expansive
Understanding
of
SDG
WTO rules were not originally drafted to
accommodate
the
broad
range
of
SDG
concerns.
Efforts
to
make
new
WTO
rules
with
SDG
in
mind
have
accomplished
only
limited
results.
MC13:
plastic
pollution,
fisheries
subsidies,
promoting
circular
economy,
phasing
out
fossil
fuels
Clean
Energy
Production
is
Highly
Concentrated.
Source:
WTO Committee on Trade and Environment
“New
Three”
China’s
globally
competitive
“New
Three”
export
are
all
in
clean
energy
sector.
•
solar cells, lithium-ion battery, and electric vehicles,
instead
of
•
furniture,
clothing,
and
household
appliance
as
“Old
Three”
•
The
rise
of
“New
Three”
allegedly
owes
much
to
government
subsidies.
•
The
“New
Three”
have
become
targets
of
tariffs
from
US
and
EU.
Clean
Energy
Disputes
at
WTO
On
March
26,
2024,
China
initiated dispute settlement proceedings
against the United States at the
WTO,
contesting
“discriminatory
subsidies” under the U.S. Inflation Reduction Act (IRA) that
may
exclude
EV
s
from China.
“
Under the disguise of responding to climate change, reducing carbon
emission and protecting environment, these subsidies are in fact
contingent upon the purchase and use of goods from the United States,
or imported from certain particular regions
.
"
WTO
AB
and
SDG
In
the
deadlock
of
WTO
rule
making,
t
he
WTO
Appellate Body
has
played a
critical
role in preserving
and
delineating
the
regulatory
space for non-trade
public policy goals
in
a
line
of
disputes
featuring
trade-environment
tension.
•
US-Reformulated Gasoline
:
“the General Agreement is not to be read in
clinical isolation from public international law.”
•
US-Shrimp/Turtle
:
“exhaustible natural resources” under GATT Article XX(g)
•
EC-Asbestos
:
“like
products”
•
US-Tuna(II):
read
regulatory
space
into
TBT
Agreement
in
the
absence
of
Art.XX
equivalent
•
Canada-Renewable
Energy
:
benefit
analysis
provides
some
shelter
to
the
SCM
Agreement
for
renewable
energy
subsidies
Looking
Ahead
•
Should
GATT
Art.
XX
be
applicable
to
the
SCM
Agreement?
•
An
effective
AB
is
more
likely
to
push
forward
reconciling
trade
and
SDG
goals
•
in
the
absence
of
binging
legal
framework
on
climate
change
and
clean
energy
•
when
geopolitical
competition
makes
any
efforts
to
conclude
new
agreements
nearly
futile
Efforts to align WTO rules with Sustainable Development Goals (SDGs) have met limited success, with key issues like plastic pollution and clean energy facing disputes and challenges. The rise of China's New Three exports in clean energy has sparked tariff disputes. The role of the WTO Appellate Body is crucial in balancing trade and environmental concerns amidst geopolitical tensions, with questions arising on the applicability of GATT Art. XX to the SCM Agreement.
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Presentation Transcript
WTO Law and Sustainable Development in WTO Law and Sustainable Development in the the Er Era of a of G Geopolitics eopolitics Huaxia Lai Assistant Professor, Peking University School of international studies March 28, 2024
An Expansive Understanding of SDG WTO rules were not originally drafted to accommodate the broad range of SDG concerns. Efforts to make new WTO rules with SDG in mind have accomplished only limited results. MC13: plastic pollution, fisheries subsidies, promoting circular economy, phasing out fossil fuels
Clean Energy Production is Highly Concentrated. Source: WTO Committee on Trade and Environment
New Three China s globally competitive New Three export are all in clean energy sector. solar cells, lithium-ion battery, and electric vehicles, instead of furniture, clothing, and household appliance as Old Three The rise of New Three allegedly owes much to government subsidies. The New Three have become targets of tariffs from US and EU.
Clean Energy Disputes at WTO On March 26, 2024, China initiated dispute settlement proceedings against the United States at the WTO, contesting discriminatory subsidies under the U.S. Inflation Reduction Act (IRA) that may exclude EVs from China. Under the disguise of responding to climate change, reducing carbon emission and protecting environment, these subsidies are in fact contingent upon the purchase and use of goods from the United States, or imported from certain particular regions."
WTO AB and SDG In the deadlock of WTO rule making, the WTO Appellate Body has played a critical role in preserving and delineating the regulatory space for non-trade public policy goals in a line of disputes featuring trade-environment tension. US-Reformulated Gasoline: the General Agreement is not to be read in clinical isolation from public international law. US-Shrimp/Turtle: exhaustible natural resources under GATT Article XX(g) EC-Asbestos: like products US-Tuna(II): read regulatory space into TBT Agreement in the absence of Art.XX equivalent Canada-Renewable Energy: benefit analysis provides some shelter to the SCM Agreement for renewable energy subsidies
Looking Ahead Should GATT Art. XX be applicable to the SCM Agreement? An effective AB is more likely to push forward reconciling trade and SDG goals in the absence of binging legal framework on climate change and clean energy when geopolitical competition makes any efforts to conclude new agreements nearly futile
