International trade rules and environmental protection measures

The report examines the compatibility of environmental import restrictions with WTO rules, specifically the General Agreement on Tariffs and Trade (GATT). It argues that restrictions based on process and production methods (PPMs) are not prohibited per se and can be justified through the concept of 'likeness' or by invoking general exceptions under Article XX of GATT. The document also provides guidance on using Free Trade Agreements (FTAs) to modernise trade rules, suggesting the inclusion of hierarchy clauses and the recognition of domestic regulatory discretion to ensure environmental obligations prevail over trade commitments.

• Import restrictions based on process and production methods (PPMs) are not prohibited by WTO rules provided they are non-discriminatory and properly designed. The report notes that it is "simply not the case that they are prohibited per se."
• The WTO concept of 'likeness' can be used to distinguish products based on PPMs. Factors such as physical properties, end-uses, and consumer preferences are considered, and "heavily corroborated scientific research on potential health or environmental risks" can help characterize products as unlike their counterparts.
• Article XX of GATT provides general exceptions that allow members to adopt measures that would otherwise violate trade rules, such as those "necessary to protect human, animal or plant life or health" (Article XX(b)) or those "relating to the conservation of exhaustible natural resources" (Article XX(g)).
• To qualify for a general exception, a measure must satisfy the 'chapeau' of Article XX, meaning it must not be applied in a way that constitutes "arbitrary or unjustifiable discrimination" or a "disguised restriction on international trade."
• Border tax adjustments, such as the EU's proposed carbon border adjustment (CBA) mechanism, may be permissible under Article II:2(a) of GATT, which allows charges on an "article from which the imported product has been manufactured or produced in whole or in part."
• Free Trade Agreements (FTAs) can be used to enhance environmental ambition by including hierarchy clauses that ensure environmental obligations prevail over trade provisions, as seen in the United States-Mexico-Canada Agreement (USMCA).
• FTAs should be designed to protect domestic regulatory sovereignty, providing a "margin of appreciation" for states to introduce public policy measures they deem necessary to respond to climate and ecological crises.

APA

ClientEarth (2020). International trade rules and environmental protection measures. https://www.clientearth.org/media/axymwawk/2020-10-15-international-trade-rules-and-environmental-protection-measures-ce-en.pdf

Chicago

ClientEarth. International trade rules and environmental protection measures. 2020. https://www.clientearth.org/media/axymwawk/2020-10-15-international-trade-rules-and-environmental-protection-measures-ce-en.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=International trade rules and environmental protection measures |date=October 2020 |url=https://www.clientearth.org/media/axymwawk/2020-10-15-international-trade-rules-and-environmental-protection-measures-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearth2020international, author = {{ClientEarth}}, title = {{International trade rules and environmental protection measures}}, institution = {ClientEarth}, year = {2020}, month = oct, url = {https://www.clientearth.org/media/axymwawk/2020-10-15-international-trade-rules-and-environmental-protection-measures-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }