provisions_montreal_trade_jan1992-19cfc6b9bee4da2a.pdf

This briefing by the Center for International Environmental Law analyzes the trade provisions of the Montreal Protocol on Substances That Deplete the Ozone Layer. It details the different obligations for ordinary Parties, developing country Parties (Article 5), and non-Parties, specifically focusing on restrictions on the import and export of controlled substances and products containing them. The document also examines the financial mechanisms for developing countries, such as the Multilateral Fund, and discusses potential legal conflicts between the Protocol's trade restrictions and the General Agreement on Tariffs and Trade (GATT).

• The Montreal Protocol establishes three distinct classes of countries with varying trade obligations: ordinary Parties, developing country Parties operating under Article 5, and non-Parties. Ordinary Parties must phase out most ozone-depleting substances by 2000. Article 5 Parties may defer their phase-out for ten years if their annual consumption of controlled substances remains at or below 0.3 kilograms per capita.
• Trade with non-Parties is strictly limited to prevent companies from shifting operations to non-member states. Parties are prohibited from importing controlled substances from non-Parties. By June 1992, Parties were required to ban the import of specific products containing controlled substances from non-Parties, including automobile and truck air-conditioning units, certain refrigeration equipment, and portable fire extinguishers. As of 1 January 1993, Article 5 Parties are prohibited from exporting any controlled substance to non-Parties.
• The Protocol's trade restrictions with non-Parties may conflict with GATT principles, specifically Article XI:1 (quantitative restrictions), Article I:1 (Most-Favored-Nation principle), and Article III:4 (national treatment). While some negotiators believed these were covered by Article XX(b) and XX(g) exceptions, the 'tuna/dolphin' decision created uncertainty regarding whether protections for life or health must be taken within the importing country's jurisdiction and whether the ozone layer, as an exhaustible natural resource, falls under Article XX(g).
• Trade among Parties is governed by production and consumption allowances. While Parties can trade substances within the same group (adjusted for 'ozone depleting potential'), consumption allowances cannot be transferred. The 1990 London Amendment aimed to relax production allowance transfer restrictions, removing the requirement that transfers be for 'industrial rationalization' and eliminating previous production level limits for transferors and transferees.
• To support developing countries, the 1990 London Amendment established a Multilateral Fund to finance the 'incremental costs' of compliance, such as converting production facilities. An Interim Multilateral Fund of $200 million was created to operate for three years or until the permanent fund became operational. Financing is provided via grants or in-kind support, with highly concessional loans permitted only for short payback periods (1-2 years).
• Developing countries face significant challenges in implementing the Protocol, including the high cost of retooling facilities and training workers. There is also a reluctance among companies to license substitute technologies due to intellectual property concerns and a perceived smaller market for CFC substitutes. Furthermore, industries cannot apply to the Multilateral Fund directly and must go through national governments.

APA

Center for International Environmental Law (n.d.). provisions_montreal_trade_jan1992-19cfc6b9bee4da2a.pdf. https://www.ciel.org/wp-content/uploads/2015/04/Provisions_Montreal_Trade_Jan1992.pdf

Chicago

Center for International Environmental Law. provisions_montreal_trade_jan1992-19cfc6b9bee4da2a.pdf. n.d. https://www.ciel.org/wp-content/uploads/2015/04/Provisions_Montreal_Trade_Jan1992.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=provisions_montreal_trade_jan1992-19cfc6b9bee4da2a.pdf |url=https://www.ciel.org/wp-content/uploads/2015/04/Provisions_Montreal_Trade_Jan1992.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallawndprovisionsmontrealtradejan199219cfc6b9bee4da2apdf, author = {{Center for International Environmental Law}}, title = {{provisions\_montreal\_trade\_jan1992-19cfc6b9bee4da2a.pdf}}, institution = {Center for International Environmental Law}, url = {https://www.ciel.org/wp-content/uploads/2015/04/Provisions_Montreal_Trade_Jan1992.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }