Chapter 1 Introduction

In: From Exception to Promotion
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Elena Cima
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Tampico, Mexico

October 2015

The cargo ship Yacu Kallpa was scheduled to arrive in Houston from Iquitos, Peru, after riding nearly 2,300 miles down the Amazon River and another 4,000 miles north to Tampico, with lumber harvested from the Amazon rain forest. It was a route that the captain and crew of the Yacu Kallpa, just as its predecessors, had run hundreds of times for more than 40 years. This time, however, something was different. Before reaching the United States (US) port, Homeland Security investigators, acting on intelligence from their Peruvian counterparts, seized the entire cargo: 1,770 metric tons of Amazon rainforest wood, almost the entirety of which was found to have been harvested illegally. Most of the shipment belonged to the Peruvian company Inversiones La Oroza srl (Oroza) and, a few months after these events unfolded, the United States asked Peru to ensure that a particular shipment from that particular company complied with Peru’s laws and regulations governing the harvest and trade in timber products. The timber verification process, initiated shortly thereafter, found that significant portions of the wood had been illegally harvested. On October 19, 2017, US Trade Representative Robert Lighthizer directed the US Customs and Border Protection to block all shipments from Oroza for three years or until compliance with Peru’s environmental laws was restored. The sanction, just like the US request that Peru verify the company’s compliance with Peru’s environmental and timber laws, represented a significant step forward in the battle to preserve tropical forests. Yet, they were not triggered or motivated by an environmental treaty, as one might imagine. Rather, they had been adopted within the framework created by the ptpa, the free trade agreement between the United States and Peru.

Buenos Aires, Argentina

13 December 2017

When Susana Malcorra, Argentina’s Foreign Minister at the time, took the floor to deliver her statement as Chair of the 11th Ministerial Conference of the World Trade Organization (wto), she looked back at the three long days that had just passed. Much had been accomplished in those three days, as nearly 4000 ministers, senior trade officials and other delegates had engaged intensively in trying to move forward in numerous areas of the negotiations. With a sense of gratification, she emphasized that, for the first time, negotiators had finally taken a significant step forward with the decision on fisheries subsidies: “Buenos Aires will no doubt be remembered as the Conference at which the fisheries negotiation was launched in earnest.”1 Indeed, on December 13, 2017, wto Members wrapped up their 11th Ministerial Conference with a commitment to secure a deal on fisheries subsidies by the end of 2019. The plan was to agree on comprehensive disciplines prohibiting certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminating subsidies that contribute to illegal, unreported, and unregulated fishing. In February 2019, at a meeting of the full wto Membership in Geneva, former wto Director-General Roberto Azevêdo observed progress in the negotiations and called on all the Members to be ready to engage in discussions at the political level to reach the final agreement by the foreseen 2019 deadline. The importance of such an agreement should not be underestimated, as it reflects the growing consensus within the international community on the need to conserve and sustainably use the ocean’s resources, within the framework provided by the United Nations (UN) 2030 Agenda to achieve the targets set out in Sustainable Development Goal 14.

Strasbourg, France

2 July 2018

Arne Lietz opened the European Parliament debate on the role of climate diplomacy in the context of the Union’s External Action, emphasizing the importance that trade agreements can play in achieving the 2030 Sustainable Development Goals and in addressing the negative impacts of climate change. After the votes were cast, the Resolution on Climate Diplomacy was adopted with 448 votes in favor. The Resolution, among other things, called on the Commission “to integrate the climate change dimension into international trade and investment agreements and to make ratification and implementation of the Paris Agreement a condition for future trade agreements,” while recommending the “development and systematic inclusion of a mandatory fundamental climate change clause in international agreements, including trade and investment agreements.”2 In other words, any new comprehensive trade agreement negotiated by the European Union in the future would have to respect these (environmental) conditions. This Resolution seems to be in line with an Opinion rendered by the European Court of Justice just a few months before, where the Court had declared that the European Union has the “obligation” to integrate sustainable development objectives into the conduct of its commercial policy.

Geneva, Switzerland

2 October 2018

More than 2000 people—national delegates, leaders of non-governmental organizations (ngos) and businesses, as well as students—gathered at the wto headquarters in Geneva for three days of intense discussions on a challenging topic: ‘Trade 2030’. The title and theme of the 2018 wto Public Forum clearly echoed the 2030 Agenda for Sustainable Development launched in September 2015 in New York. Indeed, former wto Director-General Roberto Azevêdo emphasized, in his opening speech, that “trade can make a vital contribution to meeting the Sustainable Development Goals.”3 On the very first day of the Public Forum, Azevêdo, joined by then UN Environment Executive Director Erik Solheim, presented the audience with a new publication, which represented the outcome of an almost year-long cooperation between the two organizations. The publication, entitled Making Trade Work for the Environment, Prosperity, and Resilience, addressed the thorny question of how to best use trade policies and design trade rules that are conducive to, among others, environmental protection. Some of the findings of this study found their way into another publication presented by Azevêdo on the very same day, entitled Mainstreaming Trade to Attain the Sustainable Development Goals. The argument developed in the book—that trade can be used as an instrument to achieve the sustainable development goals—stems from the 2030 Agenda itself, which describes trade as a ‘means of implementations’ to attain its 17 goals.

Geneva, Switzerland

17 December 2020

On 17 December 2020, the United States circulated a draft Ministerial Conference Decision aimed at addressing the imbalance in the existence and enforcement of fundamental environmental protection standards among the Members of the wto.4 The proposal, entitled Advancing Sustainability Goals through Trade Rules to Level the Playing Field, would address the imbalance by making the enactment and enforcement of environmental standards below a certain level of environmental protection an ‘actionable subsidy’ under the wto Agreement on Subsidies and Countervailing Measures and allowing other Members to impose duties to offset the benefits received by the subsidized industry. The proposal was presented as part of the Structured Discussions on Trade and Environmental Sustainability launched on 20 November 2020 by a group of Members including, among others, the European Union, Australia, Canada, Japan, Mexico, Costa Rica and Senegal. The Discussions are of particular importance in that they seem to convey the idea that the wto would be the place to deliver progress on issues related to trade and sustainability. The implications of the US proposal, if adopted, could be far-reaching. On the one hand, such a decision could serve as a vehicle to integrate the environmental principle of non-regression in the corpus of wto law—a principle that has found its way into many recent bilateral and regional trade agreements to avoid regressing in relation to existing levels of environmental protection. On the other, it would introduce the observance of an ‘acceptable’ standard of environmental protection as a condition for compliance with wto rules.

1 Vantage Points

These five accounts, although they occurred in different places at different times, and involved different characters, have something in common: they all paint a certain picture of the relationship between trade and the environment, a picture where the environment is portrayed as a value that should be protected, and trade policies, agreements, and institutions as the means to ensure such protection. In other words, these five accounts present the reader with the very same story, seen from five different vantage points:

vp 1. A free trade agreement which led to the creation of an institutional framework devoted to forest and wildlife protection, committed a country to modify and update its environmental laws, and formed the legal basis to block the entry into the US market of illegally-harvested timber when, in the past, these kinds of provisions could only be found in environmental agreements and their consistency with trade rules was often highly contested.

vp 2. A group of wto negotiators who have made significant efforts to modify trade rules so that they would make sense from an environmental point of view and so that one of the Sustainable Development Goals could be more easily attained, in contrast with decades of discussions on whether environmental policies lined up with the trade agenda.

vp 3. An international institution, the European Parliament, which sees the inclusion of environmental provisions in the text of free trade agreements and being party to certain environmental treaties as a necessary condition to enter into trade negotiations with the European Union while, in the past, the criteria to select partners in trade agreements and to negotiate them were purely economic and not even remotely connected to environmental protection.

vp 4. The heads of the two main international trade and environmental institutions who are shaping their relationship, and that of the underlying international regimes, in terms of mutual coordination and cooperation, in order to design a trade system that is conducive to environmental protection and the realization of the Sustainable Development Goals, after years of reciprocal isolation and reversing once and for all the terms of their relationship.

vp 5. Finally, a proposal to amend wto rules not simply to carve out some space for the environment but to transform a trade agreement into an instrument that would allow countries to address another country’s lack of environmental regulation by equating such a situation to a subsidy, and therefore actively using a trade instrument to advance sustainability goals.

2 The Untold Story of the Trade/Environment Nexus

These five accounts do not certainly represent and exhaust all the current manifestations of the trade/environment nexus. One can surely think of other examples where trade rules are drafted or implemented without the environment in mind, or where trade agreements are negotiated to attain purely economic goals. At the same time, these same five accounts may come as a surprise to all those among us who are well acquainted with the international trade and environmental regimes and with their intricate relationship.5 They may come as a surprise because they do not depict environmental protection as antithetical to the overarching purpose of international trade law—interfering with trade and undermining countries’ efforts to further liberalize trade and pursue economic growth. Nor do they portray it as a ‘non-trade’ issue, to be added or accommodated within the trade regime, translated into its economic jargon and subjected to its hard-driving logic. The picture they draw is instead one where environmental protection and sustainable development are part of the very nature and purpose of trade law, and where trade norms and institutions are instrumental to their fulfillment.

2.1 Transcending the ‘Trade and …’ Debate

These five accounts may come as a surprise because the story we have all been told about the so called ‘trade/environment nexus’ is one of conflicts.6 In this context, the term ‘conflict’ is defined rather broadly, to refer not only to situations where two or more norms are intrinsically mutually exclusive (normative incompatibilities),7 but rather situations where “one norm interferes with the intended functioning of another or pursues an objective which is hostile to that of another.”8 The international trade and environmental regimes have been mostly perceived as being in conflict considering that the former is generally regarded as a regime aimed at liberalizing trade and the economy, while the latter as one that seeks to regulate them.9 As a result, the environmentalists’ arguments seem to “sharply challenge the trade regime’s raison d’être, [which] is to limit the ability of national governments to interfere with trade.”10

In addition to revolving around conflicts, the story we have been told has been largely approached from the perspective of the trade regime and is therefore one where, whenever the objectives of the two regimes seem to clash, free trade always prevails over protection and market forces always prevail over government intervention;11 where environmental protection, because it cannot be realized through trade liberalization and market mechanisms alone, but requires some form of government intervention, is regarded with suspicion and even hostility, as it may hide protectionist intents. All efforts to reconcile what appears to be an irreconcilable conflict and to ensure the peaceful coexistence of trade and environmental rules at an international level have been anchored to a trade-centred perspective. In fact, the focus has been on mapping the objectives, values, and rules of the international environmental regime, comparing them with those of the international trade regime, identifying conflicts and incompatibilities, and then coming up with solutions to aid in the resolution or prevention of those conflicts.12 And, in designing these solutions, trade norms have served as the relevant framework against which any environmental measure or policy needs to be evaluated and assessed, and have provided the language needed to describe them and the parameters used to assess their trade restrictiveness.

Despite internal differences,13 these efforts share one important common denominator, as they all tend to frame the relationship between the trade and environmental regimes as part of the broader ‘trade and …’ debate.14 The latter addresses the question of how the trade regime should best deal with a variety of ‘non-trade’ objectives, including environmental protection, and therefore presupposes a certain perspective on the issue. Constructing certain values as ‘trade values’ and others as ‘non-trade values’ necessarily favours the former over the latter when it comes to defining their relationship.15 Moreover, this approach assumes that the purpose and raison d’être of the two regimes are inherently antithetical, so that their relationship can only be framed as a conflict to be more or less successfully reconciled. As long as the trading system is understood as a system aimed solely at liberalizing trade and limiting national governments’ interference with it, environmental protection will always be labelled as a ‘non-trade’ issue, to be translated in economic terms, and the relationship between the two legal regimes will always be framed as in conflict. And even those who argue that the trade regime should be ‘greened’ do not seem to question these assumptions, and rather continue to operate within this traditional framework.

This is the traditional story of the relationship between trade and the environment: a conflicting relationship between what is and what is not—technically—trade; a relationship addressed from a free trade perspective, where trade liberalization is portrayed as the overarching goal of the trade regime and non-discrimination represents the rule, while environmental protection is nothing more than an exception. The result is that even when states are allowed to discriminate or otherwise restrict trade to pursue legitimate (environmental) policy goals, strict requirements are imposed.

This book tells a different story of the relationship between international trade and environmental law, one where the five accounts described at the beginning of this chapter do not come as a surprise but rather as the natural culmination of a long and intricate story. A story where the keyword is no longer conflict; where the international trade and environmental regimes were never meant to be pitted against one another; and the environment was never intended to be simply a footnote in the history of international trade cooperation, cornered in a narrow exception, but rather an integral part of its evolving purpose.

The perception of the relationship between the two regimes as a conflicting one rests on the assumption that they pursue very different—nearly diametrically opposite—objectives and their norms end up interfering with their reciprocal intended functioning. The assumption, in other words, is that trade norms are designed to liberalize trade, while environmental norms are designed to regulate it. It is a perception that is equally based on the assumption that trade and the environment belong to two separate issue areas, and whenever attempts are made to ‘link’ the environment to the trade regime, a hierarchy is almost instantaneously established between what is and what is not, technically, ‘trade’. To the contrary, this book intends to challenge the architecture on which the existing debate rests, questioning the very meaning given to its different terms and challenging the idea of trade liberalization as the sole raison d’être of the trade regime.

In doing so, the following chapters will argue that the trade regime was always meant for something greater than simply trade liberalization. In the first half of the twentieth century, this ‘something greater’ was international peace and stability, to avoid the horrors of the two world wars. Over time, as the spectre of war became just a long-distant memory, the trade regime was retooled for other ultimate goals, as part of different grand visions. Today, environmental degradation, lack of access to clean and affordable water, and spreading hunger and poverty have become as pressing as ensuring peaceful inter-state relations was in the 1940s. As a result, environmental protection and sustainable development, rather than antithetical to the overarching purpose of the trading system or simply labeled as ‘non-trade’ issues to be accommodated within the hard-driving logic of trade, should be seen as part of the very nature and purpose of the trade regime.

2.2 The Importance of Historical Inquiry

To tell this story adequately and convincingly, it will be necessary to unpack the historical evolution of the trade and environmental regimes and dig deep into the motivations of their respective founders: to closely follow the development of certain ideas within the two regimes, and see them draw near, get tangled, and grow together as the respective communities begin interacting and the two regimes begin intersecting. Above all, it will be necessary to stop wearing the lenses provided by the international trade law framework and start questioning and challenging the very meaning of ‘trade liberalization’ and the raison d’être of the international trade regime.

Tracing the chronological unfolding of the two regimes forces us to look at history, and it is precisely this newly-acquired historical awareness that will allow the reader to recognize that the meaning of both ‘free trade’ and ‘trade liberalization’ is far from fixed, and the motivations and rationales underlying the trade regime itself are anything but timeless. It is only by tracing the historical evolution of the two regimes that one can fully appreciate and properly understand the nature of their relationship. Overlooking history, on the other hand, can contribute to a distorted vision of the trading system, and of the relationship between the two regimes, which, nevertheless, has become dominant over the years. This vision seems to forget the instrumental role of trade liberalization and to ignore the evolving nature of the underlying rationale and purpose of the trade regime, focusing instead on the potential for conflict between international trade and environmental law.

Moreover, it is a vision that seems to forget that environmental protection has been limited to an exception for many years simply as a result of a series of ‘concurring circumstances’, and not as part of some grand scheme of the founders of the General Agreement on Tariffs and Trade (gatt). The subsequent appearance of the ‘environment issue’ on the international agenda forced the latter to fit within the already existing (economic) legal framework. Efficiency considerations motivated the preference for relying on existing instruments, provisions, and institutions rather than creating new ones to accommodate the environment. Added to this was the profound transformation of the trading system after the 1970s, which became more formalized and ‘technicalized’, as well as motivated by economic and ideological concerns rather than the political ones that had inspired the founders of the regime. By the time the environment had become an issue worthy of international cooperation, embedded liberalism, which depicted the market as ‘embedded’ in a broader social fabric, and multilateralism, as predicated upon domestic interventionism, had given way to neoliberal thought. The latter upheld the indisputable superiority of free trade over protection and of market forces over government intervention, and had subtly become the prevailing normative narrative underlying the trade regime.

Only by unpacking the historical evolution of the trade and environmental regimes, digging deep into the motivations of their respective founders, and following closely the development of certain ideas, one can truly part from this traditional narrative and tell the story of a trade regime that was always meant to be for something greater than simply trade liberalization, and where environmental protection was never truly in irreconcilable conflict with the purposes of the trading system, but rather an integral part of those purposes. The complete isolation in which the trade and environmental communities had been working for years, together with these communities’ deep cultural differences, undermined any attempt of communication or interaction, contributing to an environment entirely non-conducive to normative development and change. In fact, to develop and disseminate, ideas require a process of learning, which can only take place under certain conditions and in the context of policy-making environments conducive to change.16 As aptly explained by Ruggie, “actors not only reproduce normative structures, they also change them … as underlying conditions change, as new constraints or possibilities emerge, or as new claimants make their presence felt.”17 After years of reciprocal isolation, conditions have changed and new actors have come along, encouraging new discourses and disseminating new ideas. This book tells the story of these ideas, of these changed conditions and new actors. It tells the story of a trading system where it is precisely certain changes in conditions (i.e. the gradual openness of trade institutions) and the presence of new claimants (i.e. the growing environmental community) that have facilitated the development of certain ideas and allowed the inherently complementary and synergetic nature of the trade and environmental regimes to come to the surface, giving rise to trade norms and institutions that are increasingly working for the protection of the environment and the promotion of sustainable development goals.

By telling this ‘untold’ story, this book intends to raise historical awareness, stimulate questions regarding the relationship and the purpose of the trade and environmental regimes, as well as explore the future of international economic law governance. It is also meant to part ways from the prevailing—neoliberal—narrative of the trading system. A narrative that, oblivious to the historical, economic, and political changes that have occurred over the years, remains deeply rooted in the belief of the timelessness of the international trade regime. One should not forget that learning can influence a given regime at different levels:18 at a first, shallower level, learning can influence the prevailing view about the best technical means to achieve certain policy goals—in other words, the rules and procedures of the regime;19 at a deeper level, it can influence the way in which the nature of the regimes’ goals is perceived, requiring a re-evaluation of the normative narrative underlying and justifying the regime itself.20 And this narrative, just as any other, is not eternal: “over time, other stories have been told about trade’s purpose, producing different policies and encouraging different politics”21 and the time may be ripe to tell a new story.

What follows is an invitation to suspend the mainstream discourse on the relationship between trade and the environment in terms of conflicts and to call the notion of trade liberalization as the raison d’être of the trade regime into question. This means questioning the use of trade liberalization as an undisputed assumption, showing that it is not self-evident and can—or should—instead be challenged.

3 The Hidden Thread

This untold story relies on three simple ideas. First, trade is a means to an end rather than an end in itself. Second, the trade regime and its underlying rationales are historically contingent. And third, individuals and communities contribute to the development of new ideas and learning. Trite as this may sound, these three ideas have significant implications for the way we think about the relationship between international trade and environmental law and, more broadly, about the international trading system as a whole.

3.1 Trade Is a Means to an End

The starting point of this inquiry is the acknowledgement that trade is a means to an end, rather than an end in itself. In other words, it is necessary to move away from the temptation of attaching normative significance to trade itself.22 When the idea of free trade first gained ground in the 1850s, liberalized trade among sovereign nations was praised because it was believed to increase the wealth of the nations that took part in it. A century later, the preamble of the gatt emphasized that trade was useful only insofar as it served broader goals, namely “raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods.”23 Although this may appear to some readers as a truism, it is often forgotten. Trade officials, in particular, can sometimes “lose sight of these goals by narrowing the operational goal of trade agreements to that of trade liberalization.”24 This narrow understanding of the trade regime can be explained with the strong influence of the ‘bicycle theory’ of trade liberalization on the trade community. The theory, generally attributed to Fred Bergsten, of the ‘neo-liberal-oriented’ Institute for International Economics,25 states that an open trading system will be maintained only if forward momentum for trade liberalization continues, so to avoid that the bicycle might fall over. Despite lacking any rigorous explanation or justification,26 this theory has been guiding the trade community for decades, explaining the frequent unidirectional focus of trade negotiations.

Similar to the gatt, the preamble to the Agreement establishing the World Trade Organization—generally known as wto Agreement—lists all the goals that multilateral trade liberalization should serve. If one were to compare the two preambles, as many have done over the years,27 a corollary of the idea that “trade is a means to an end” would immediately stand out, namely that these ends tend to change over time. In 1947, trade was instrumental to economic growth—in the narrow sense of increasing per capita income and raising standards of living and employment opportunities—and indirectly to ensuring more peaceful relations among states as a result of each country being better off economically. In 1995, instead, trade was seen as serving much broader social and developmental goals, as evidenced by the new addition to the preamble of the wto Agreement:

Recognizing that their relations in the field of trade and economic endeavor should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.28

In the 1995 preamble, the notion of ‘sustainable development’ replaced that of ‘economic growth’, pure and simple. Development, on the one hand, refers to a process of transformation, which is not limited to economic growth but rather combines it with broader social and cultural changes, to enable individuals to achieve a certain ‘quality of life’ and realize their full potential.29 Sustainability, on the other, brings the recognition that growth and development “must … adhere to the physical constraints imposed by ecosystems, so that environmental considerations have to be embedded in all sectors and policy areas.”30 This dynamic nature of the goals trade is asked to serve points to the historical contingency of the meaning of ‘free trade’ and of the purpose of the international trade regime itself.

3.2 The International Trade Regime Is Historically Contingent

As clearly stated by Andrew Lang, “different epochs in the history of international trade are characterized by differences in the prevailing meaning of free trade”31 and in the prevailing understanding of what the trade regime is for. The socio-economic and political environment of a specific time period influences the rationales and the motivations behind the regime’s existence, as they are themselves historically contingent. Were the motivations behind trade liberalization and international cooperation on trade matters in 1850 the same as in 1947, in 1994, or today? There is hardly any doubt that this question should be answered in the negative. In turn, these different motivations, just as the different meanings given to free trade, influence the principles, norms, rules, and procedures of the regime.32 As noted by Robert Baldwin, while economists tend to judge the rules of agreements such as the gatt “on the basis of whether they promote economic efficiency, growth and stability,”33 their primary purpose is rather to protect certain political goals of nation states. Economic factors, although important, simply influence such political goals. It follows that the prevailing meanings of free trade did not change over time because of different economic considerations alone, but most importantly because they responded to certain ideologies and were embedded in certain political and historical environments.

3.2.1 The Emergence of Free Trade thought—The 1850s

Free trade, defined as the “absence of protectionist trade policies that discriminated against foreign goods,”34 emerged in Europe in the 1850s, in several ways in reaction to the mercantilist doctrine. The latter had been shaped by the international economic environment of the time—in particular by the vast expansion of world trade overseas and the rise of nation-states as political entities—and proposed government regulation of foreign trade to achieve various objectives.35 Starting from the assumption that the private interests of the merchants could differ from the broader interest of the nation, “state oversight, guidance, and intervention” was seen as necessary to ensure “that trade was carried on for the enrichment of the country rather than for the merchants alone.”36 In the 1850s, a new idea gained ground, generally associated with the earlier work of Adam Smith and David Ricardo, which argued that “a policy of liberalizing restrictions on imports would maximize the wealth of the sovereign.”37 This new idea emerged in reaction to the mercantilist view that wealth was reduced by free trade and, at the same time, cast doubt “on the ability of government to administer regulations in a way that would improve national welfare.”38 In fact, Smith’s theory was based on a strong separation between the public and the private sphere: “the market, domestic or international, is an independent category of activity that should be insulated from governmental interference, even to further other values.”39 This private/public separation and the rigid independence of markets from governments were seen in those years as fundamental to remove economic rivalries and conflicts that may derive from the coexistence of sovereign states.40 Another reaction to the mercantilist doctrine was the unilateral nature of free trade, which can also be explained by the leading role played by Great Britain in that epoch, as British classical economists were skeptical of multilateralism. Commercial treaties were seen as diverting “trade into channels where it would not naturally flow,”41 and as producing “international tension and suspicion.”42

3.2.2 Post-War Economic Reconstruction and the gatt

The political reality of the post-war period contributed to the creation of a notion of free trade which differed in many ways from the one embraced by Europe in the nineteenth century, as well as of a precise understanding of what post-war trade cooperation should look like. As has been pointed out, “the collective historical memory of the resurgence of protectionism in the interwar years, and the subsequent descent into world war, were at the heart of the reconstitution of free trade in the aftermath of World War ii.”43 In those years, the paramount goal was the avoidance of a protectionist summum malum,44 embodied in the Smoot-Hawley Tariff Act of 1930 and soon associated in the public eye with the Great Depression and World War ii. Multilateral cooperation to reduce tariffs, on the other hand, was identified with expanding trade and increasing peaceful relations among nations. As a result, the case for protectionism was significantly weakened and free trade principles slowly gained ground once again.45

However, it was a different kind of ‘free trade’ than the one that had emerged in Great Britain in the 1850s. First, there had been a shift in political power, and it was the United States, rather than Britain, who provided international economic leadership during the 1940s, and for at least two decades. The extraordinary power and perseverance of the United States contributed greatly to the particular shape taken by post-war economic reconstruction and trade cooperation. It was for instance the United States who pushed for a multilateral trade order,46 in contrast to the traditional British preference for unilateral trade liberalization.47 Despite its leading role, however, the United States proved to be prepared to make economic concessions and accommodate both British and developing countries’ demands, precisely because non-economic concerns underlay post-war trade negotiations, and international cooperation on economic matters was seen as fundamental to facilitate the abandonment of dangerous unilateral policies and to increase the chances for world peace:

The hegemon’s willingness to accept asymmetric trade agreements is not a function of economic interests alone. Both trade agreements and trade disputes have inherently international political underpinnings; their foundations are not solely economic: Great Britain and the United States had important political objectives for which they were prepared to make economic concessions.48

Second, during the inter-war period, state-society relations had undergone a profound transformation.49 As a result of industrialization, democratization, and World War i, society had become more politically active and empowered, and had begun demanding greater economic protection from the government, together with greater control over the market forces, in the face of extreme adversity.50 And the post-war international economic order reflected these changes: the world economy had outgrown the classical ‘liberal’ economic order and, to avoid the inter-war economic and political calamities, “any future international economic order would have to strike a better balance between the demands of international economy and those of domestic social groups.”51 The gatt founders, as explained by Ruggie, saw the market, as ‘embedded’ in a broader social fabric, and multilateralism would be predicated upon domestic interventionism.52 History had demonstrated that, whenever domestic needs clashed with the requirements of the global economy, the former generally prevailed, and the drafters of the gatt “realized that it was better to accept this and build safety valves into the system than to ignore it and risk total collapse.”53 As a result, on the list of Anglo-American postwar economic objectives, multilateralism was joined by collaboration to assure domestic economic growth and social security. This ‘compromise’ explains many provisions of the gatt: while “the principles of multilateralism and tariff reductions were affirmed” so were safeguards and exceptions, “designed to protect the balance of payments and a variety of social policies.”54

3.2.3 The 1980s and the wto Project

In the 1980s, trade cooperation was moved by yet other factors. The political landscape had changed once again: by then, the specter of the war was a long-distant memory and the need to guarantee social stability and cohesion was no longer such a pressing concern. At the same time, global recessions and stagflation revealed the inadequacy of the postwar accommodation of trade and social welfare policies.55 The collapse of the gold standard combined with the economic pressures of the 1970s led to new kinds of interventions and trade restrictions. The 1980s were the decade of the Reagan-Thatcher revolutions, of the Washington Consensus, of market fundamentalism and neoliberalism.56 The trade community saw all industrial policies as a “beggar-thy-neighbor approach to declining industries or declining demand”57 and governments, rather than complementary and indispensable for the correct functioning of the market, were suddenly regarded as a cumbersome presence standing in the way. The definition of ‘free trade’ changed as well, as it started being defined more broadly than ‘trade free from discrimination’, but rather as ‘trade free of burdens’, in other words, a broad laissez-faire principle.58 The result was the abandonment of the Bretton Woods system for a far more ambitious agenda of trade liberalization and deep integration, perfectly embodied by the Uruguay Round of negotiations, which resulted in the creation of a legal framework with much broader coverage than anything else ever accomplished under the gatt.59 The same foreseeable outcome that got the US Congress worried in 1947 and pushed it to vote against the establishment of the International Trade Organization (ito)—that it would encroach too much on domestic prerogatives—suddenly became the very goal of the Uruguay Round.

At the same time, the changed economic and political circumstances determined a change in membership: while the 1947 gatt was dominated by the United States, the United Kingdom, and their post-war partners, as decolonization increased, developing countries began to join the gatt. To effectively remove all governmental interferences, the system needed to not only expand in scope but become universal as well. And it did, by gathering 123 countries in the Uruguay Round negotiations, as opposed to the 23 founding members of the gatt.

Finally, the political concerns that had originally motivated the drafting of the gatt, as well as the very first years of multilateral trade cooperation and negotiations, had been replaced by concerns of a rather economic and ideological nature, aptly embodied by the neoliberal economic thought.

3.2.4 A New Rationale?

This brief historical excursus has exemplified how different epochs in recent history, because of their specific economic and political circumstances, have contributed to the development of differences in the prevailing rationales underlying the international trade regime and its features. The five stories introduced at the beginning of this chapter, however, present us with yet a different picture. The rationales and motivations behind the liberal trade project in nineteenth century Britain, in the 1947 gatt negotiations, or even in the context of the Uruguay Round, cannot possibly be the sole reasons underlying these more recent developments. Can the reasons behind trade cooperation after World War ii or in the 1980s explain the European Parliament’s decision to subordinate the negotiation of any comprehensive trade agreement to the condition that all the parties be signatories of the Paris Agreement or that strong climate change provisions be included in the text of the agreement? Can they explain why states are negotiating an agreement within the wto where the ultimate goal is the conservation and sustainable use of the oceans, seas and marine resources, or why recent free trade agreements (ftas) contain environmental rules and not just exceptions? To the contrary, as the next chapters will describe, new rationales are hiding beneath the surface.

3.3 Individuals and Communities Contribute to Changes in Collective Ideas

This brief sketch shows that the historical contingency of the notion of free trade and of the raison d’être of the international trading system is closely linked to the emergence and gaining ground of certain ideas.60 The actual contribution of new ideas to the design of a given rule or even to the prevailing understanding of the purpose and goal of a given regime requires a process of learning, which Adler defines as

the adoption by policy-makers of new interpretations of reality, as they are created and introduced to the political system by individuals and institutions. This implies that national policy-makers are subject to absorbing new meanings and interpretations of reality, as generated in intellectual, bureaucratic, and political circles, and therefore are subject to changing their interests and ability and/or willingness to consider new courses of action.61

Moreover, ideational and normative change can only occur under certain conditions and in the context of certain policy-making environments.

3.3.1 Right Conditions, Right Environment

Often, it can take a long time for an idea to have any concrete influence on policy-making, because the right conditions do not materialize, or the environment is not conducive to learning. For instance, although Adam Smith wrote his seminal book The Wealth of Nations in 1776, it was only after the 1850s that his ideas finally got some traction. Until then, mercantilism reigned supreme. This change of economic narrative has been ascribed by economic historians to a number of factors, including the development of new technologies, such as the steamship, railroads, and the telegraph, which revolutionized international transport and communication and reduced trade costs greatly, and the widespread adoption of the gold standard, which allowed capital to move internationally more easily.62 This example illustrates the importance of a certain environment for ideas to be able to develop and disseminate.

At the same time, if it is true that normative changes are the result of a wide variety of external factors, they also have an indispensable ideational basis, and individuals and communities play a crucial role in creating environments that are more or less conducive to ideational change. As stated by Jacob Bronoski and Bruce Mazlish in their seminal work The Western Intellectual Tradition, “the history of … ideas … is necessarily a history of movement. The movement is created by that which gives life to ideas: by the interplay of all the interests of the mind, by the pressure of events, and by the expression of personalities.”63 The history of the trade and environmental regimes, just as any intellectual history, needs to be read as the history of the relevant movements (free trade, environment, and development), and of the communities and individuals behind them.

As a matter of fact, technological developments and the widespread adoption of the gold standard were not the only reasons why free trade principles gained traction after the 1850s. Another important factor that enabled the change of narrative was a “convergence in belief systems” among the key economic decision-makers of that period.64 Similarly, it was not just the adoption of the Smoot-Hawley Tariff Act, the beginning of the Great Depression, or the outbreak of the two World Wars that fueled multilateral trade cooperation in the 1940s. It was the impact that these events had on certain individuals, such as Cordell Hull and James Meade, who learnt from them and managed to bring a change in collective ideas.65 Again, the diversity of the membership of the trade regime, the globalization of the economy, and the increasing commercial significance of domestic regulations explain only in part the expansion of the scope of the trade regime as well as its normative content, which began with the Tokyo Round of trade negotiations in 1973. The redefinition of the trade regime as a ‘marketplace’—and the idea that ‘free trade’ equals a trade free from burdens and the consequent convergence of the idea of trade barriers and that of trade distortions—have also contributed to creating the conceptual framework underlying this expansion.66

Precisely because learning implies “actors’ improved understanding of alternative ideas,”67 the interaction between two or more communities is here seen as conducive to change.68 Accordingly, the following chapters will explore the developments and interactions of the trade and environmental communities over the years.69 In order to do so, this book employs a narrative form of explanation, which links diverse events along a temporal dimension, organizing them into an “interpretive coherence structure.”70 Polkinghorne uses the literary term “emplotment” to describe this process, which is a “dialectic process” that takes place between a series of events, that would otherwise appear as discontinuous and separate, and a theme, or plot, “which discloses their significance and allows them to be grasped together as part of one story.”71 Because causalities per se are unobservable72 and it is “generally accepted that the social world is inherently indeterminate,”73 this book does not claim to provide definitive answers as to the reasons underlying the development and dissemination of certain ideas and the subsequent evolution of the two regimes. Rather, as aptly put by Peirce, this “method of interrogative reasoning” necessarily involves “a certain element of guess work,”74 whose aim is to produce results that are “verisimilar and believable.”75

3.3.2 The Trade Policy Elite: The Creation of an Environment Un-Conducive to Learning and Change

The years after World War ii represent a time when trade policies were deeply entangled in much broader political contexts, and when a few political figures had a strong influence on political developments, which meant on economic policy as well.76 In the years after the adoption of the gatt, on the contrary, trade policy became insulated from national politics and became the province of a technocracy, and the same was reproduced at the international level, within the gatt Secretariat. What had developed in those years has been defined as a trade policy elite, which encompassed a large group of ‘experts’ who, although formally outside of the gatt/wto system, were, for all purposes, insiders.77 Despite their differences in terms of national or personal interests, these insiders formed a network that tended to understand the system in terms of “the policy science of economics [rather than] a grand normative political vision.”78

This network can be understood as an epistemic community, a concept borrowed from international relations theory and used to refer to “a network of professionals with recognized expertise and competence in a particular domain and an authoritative claim to policy-relevant knowledge within that domain or issue-area.”79 Although they may belong to different disciplines and work in different institutions, all members of a given community share what Ruggie calls an episteme, meaning a “dominant way of looking at social reality, a set of shared symbols and references, mutual expectations and a mutual predictability of intention.”80

In constructivist terms, this model of multilateral cooperation is referred to as a ‘club model’.81 Under this model, each club is responsible for a specific ‘issue-area’ and is able to keep outsiders out by excluding from the negotiations officials in other government bureaucracies and international organizations working on other issue-areas (for instance environmental protection). As a result, the newly formed environmental community was kept at bay and was not able to influence the prevailing discourse in any meaningful way.

3.3.3 Making Learning Possible

As time passed, conditions began to change, paving the way for the development of new ideas and allowing the inherently complementary nature of the two regimes to emerge. Gradually, the conditions that had allowed the trade community to remain an exclusive club, which included the “relatively restricted and homogenous membership of gatt” and the “supposedly technical and professional nature of the subject matter and the consequent media indifference,”82 began to vanish. Three factors, in particular, can be seen as having played a central role in creating conditions more suitable to change: the creation of the Appellate Body, as detached from the trade elite; the greater openness of the trade community towards external constituencies and values; and the convergence, in certain contexts, of the environment and development agendas.

First, the creation of a dispute settlement mechanism—and of the Appellate Body in particular—as a result of the Uruguay Round, allowed for the adoption of decisions independent of the trade elite and therefore detached from the prevailing narrative. While there was essentially no distance or independence of the gatt ad-hoc panels—and of wto panels later—from the insider community, precisely because their members belonged to that community, Appellate Members were largely disconnected from the trade elite, at least at the beginning.83 The different composition of gatt and wto panels on the one hand, and the Appellate Body on the other, can partially explain the ‘greener’ evolution of the wto jurisprudence.84

Second, the trade community has increasingly been opening its doors to outside constituencies, in particular to (environmental) non-state actors. This process of ‘institutional integration’ has occurred both at the domestic and international level. Domestically, it has allowed certain ideas to develop and ultimately shape the positions adopted by certain countries in regional and multilateral discussions and negotiations. At the international level, it has taken several different forms. On the one hand, the Appellate Body has allowed the submission of amicus briefs from non-governmental actors, including environmental ngos.85 On the other, environmental international organizations have been allowed to take part in the meetings of several wto committees, and environmental ngos and experts have been actively contributing to trade negotiations, both at the multilateral and the regional/bilateral level.86 The increasing engagement of environmental law voices and actors in trade debates has provided an impetus for the evolution of ideas regarding rational and desirable trade policies. By addressing the relationship between trade and the environment from an environmental standpoint, the environmental community has prompted reflection on the broader goals and values that the trading system is designed to achieve, opening discussions on the very meaning of the ideas of ‘free trade’ and ‘trade liberalization’.

Third, the mainstreaming of the notion of a “green economy” as a fundamental component of sustainable development has led to a gradual convergence of the environmental and development agendas. Going ‘green’ has become a necessary step to development, reclassifying the whole idea of environmental protection in the eyes of the strenuous promoters of the development agenda. The drafters of the 2030 Agenda made sure to emphasize that all 17 goals are of equal importance and should be accorded equal priority. At the same time, the need to assist developing and least-developed countries underlies all the Goals and has to be necessarily factored in the design of the means of implementation thereof. In other words, as long as development is factored into the equation, discussions can move forward.

4 What Lies Ahead

4.1 Choices

These three ideas—trade as a means to an end, historical contingency of the regimes, and the role played by individuals and communities in inducing learning and changes in collective ideas—underlie the main arguments developed in the next chapters. As the goal of this book is to show the evolution of the trade/environment nexus, to explore the reasons behind it, and to call into question the traditional and prevailing way of approaching the nexus itself, specific aspects of the nexus have been selected to serve the three prongs of the argument. Inevitably, in telling this controversial story, choices had to be made in selecting the aspects of the trade/environment nexus to be included in this volume. The reader will not find here an exhaustive account of all the intersections between international trade and environmental law. Instead, omissions will certainly be noticed. There is no chapter on trips and biodiversity or on environmental services, for instance. Nor are there chapters providing a systematic analysis of all the wto provisions and case law on the subject. The literature on all these issues is already extremely rich and the present monograph has greatly benefitted from it. Ultimately, the aspects of the nexus, the rules, and the cases that the reader will find in the following pages have been selected because, in the opinion of the author, they are particularly important and exemplary.

Moreover, it is important to clarify that this is not a book on international relations, although it does rely on certain theories and methodologies borrowed from this discipline when investigating the reasons behind the evolution of the two regimes. Finally, it should be kept in mind that this is not solely an international story. Throughout the book, it will appear clear to the reader the relevance of domestic politics in the evolution of the two regimes, as many of the key drivers of transformation and normative change are found in domestic systems, with significant implications that are felt both at the national and international level. It is in fact impossible to fully understand the origins of international cooperation on trade matters without first considering the characteristics and evolution of US and British trade policy in the crucial years before and after the World Wars, just as it would be difficult to entirely comprehend the way in which international environmental law emerged without taking into due account the role of domestic environmental movements as well as the development of environmental law as a legal discipline within individual countries.

4.2 A Cartography

To help the reader navigate the complex evolution of the relationship between international trade and environmental law over time, the book presents it as the evolution from an exception-based to a promotion-based model, intended to describe the two main stages of the evolution itself. The exception-based model reflects the traditional approach to the relationship between trade and the environment, which was in many ways shaped by the history of the two regimes. It is an approach that looks at environmental concerns with mistrust and skepticism, as they could always hide protectionist motives, and ends up relegating the environment to narrow exceptions to the free trade rule. As a result, even when trade agreements allow states to discriminate to pursue legitimate (environmental) policy goals, strict requirements are imposed: in other words, non-discrimination remains the rule, and environmental protection merely the exception. Throughout the years, the trading system has proven to be increasingly open to environmental concerns. New provisions have been introduced in the text of free trade agreements and existing wto exception clauses have been given increasingly expansive interpretations. Yet, the underlying rule-exception scheme has not changed: no matter how broadly we draft or interpret Article xx of the gatt, it remains a mere exception, just like protecting the environment remains an exception to the general non-discrimination rule. In other words, these developments continued to be perfectly captured by the exception-based model. Only more recent examples—just like the five stories at the outset of this chapter—are beginning to show a more radical change in the relationship between the trade and environmental regimes. A relationship which can no longer be described solely in terms of rule v. exception, as it is framed in the exception-based model. And yet, the underlying narrative which justifies this model seems hard to shake off: the reality is changing but the language used to describe it is not. To better capture these new developments, a new model, called promotion-based model, is used. This model explains a new phase where rather than assessing environmental measures based on their compatibility with the international trade law framework, trade rules and institutions are designed to forward and, precisely, promote sustainable development and environmental goals.

4.3 Structure of the Book

With these clarifications in mind, the next chapters will tell the untold story of the emergence, development, and interaction of the international trade and environmental regimes. They will attempt to weave together a complex series of events to make a single story, taking into account the historical context in which these events took place. The three ideas laid out in the first part of this chapter constitute the thread, the fil rouge underlying all subsequent chapters and supporting the arguments this book puts forth. Chapter after chapter, it will unveil the evolution of two regimes, explore the reasons behind this evolution, and attempt to show the inadequacy of the prevailing narrative to account for new developments. What follows is a succinct overview of the content of the book, which can be used as a roadmap to navigate the pages that follow.

Chapter 2 provides an historical account of the origin of the two regimes. The purpose of this chapter is threefold. First, to remind the reader of the chronological order in which events unfolded, with the environmental regime surfacing once the trade regime had already been in place for several decades, thus constraining countries’ efforts to protect the environment at the international level within the boundaries set by the already existing international (economic) law framework. This chronological sequence and the different maturity of the two regimes will help the reader understand the trade-centered approach that has characterized the debate since its inception, as Chapter 3 will show in greater detail. The second purpose of the chapter is to emphasize the historical contingency of the international trade regime: the post-war economic reconstruction which ultimately led to the adoption of the gatt took place against the backdrop of a very specific socio-economic and political environment, different from the one that had witnessed the emergence of free trade in the late nineteenth-century Europe, and from the one characterizing the world today. Third, to show the role that ideas and individuals can play in defining a certain understanding of the trade regime, at a certain moment in time.

Chapter 3 takes the reader to the years that followed the Stockholm Conference and the emergence of the ‘environment’ as an international law issue. If one looks at the gatt through the lenses of the ‘embedded liberalism theory’ pioneered by Ruggie, governments’ efforts to protect the environment and international regulation of trade should be able to peacefully coexist, as the gatt founders, seeing the market, as ‘embedded’ in a broader social fabric, reached a compromise between multilateralism and domestic interventionism. This would explain why, next to the principles of multilateralism and tariff reductions, the agreement contained exceptions designed to protect a variety of social policies. However, the embedded liberalism theory coexisted for many years with the neoliberal view of the trading system which, once the first trade/environment questions presented themselves, seemed to be prevailing: as a consequence, any government intervention to protect the environment was portrayed as a potential ‘interference’ in the market, as a barrier to trade, and therefore has been constrained into narrow exceptions, interpreted restrictively by men with no environmental expertise. There goes the choice to call this very first approach to the trade/environment nexus exception-based model. The complete isolation of the communities and their different cultures are here portrayed as important factors contributing to maintaining the centrality of such model.

Chapter 4 opens with two milestones for both the trade and environmental regimes: the establishment of the wto and the convening of the Rio Conference, which introduced the world to the notion of sustainable development. This notion has begun to affect both regimes: on the one hand, ‘sustainable development’ replaced ‘economic growth’ as the stated purpose of the trading system, while, on the other, it triggered a paradigm shift from traditional environmentalism with its primary focus on environmental protection to the notion of sustainability “which requires a much more complex process of trading off social, economic, and environmental priorities.”87 Starting from these premises, the chapter describes how the greater openness of the trade community and its growing interactions with the environmental community have allowed the exception-based model to evolve, an evolution that has been constantly characterized by the tension between this new stated purpose of the trade regime and the still prevailing neoliberal thought. While this tension allowed for an expanded interpretation and application of the well-known exceptions, it prevented the trade regime from being genuinely true to its preamble and to pursue sustainable development as its ultimate objective.

Chapter 5 further develops the five stories told at the outset of this introductory chapter, portraying trade rules, agreements, and institutions as positively contributing to the achievement of sustainable development goals, including environmental protection, thus fitting under what the author has labeled a promotion-based model. These stories are framed against the backdrop of the 2030 Agenda and the emergence of new notions, such as that of ‘green economy’, which have allowed the sustainable development principle to finally penetrate the trade regime, thus beginning to change its instruments. At the same time, it has changed the terms of the discussion for the environment as well, now nothing more than one component of the sustainable development goals. That is to say that, when pursuing sustainable development goals, environmental protection is only one of its dimensions, which can be limited by the others. These visible changes, which can be detected in trade rules when dealing with sustainable development, seem hard to frame within the prevailing narrative, which sees trade and environment as mostly conflicting, and still looks at environmental measures with suspicion, as evidenced by the treatment of process and production methods. The prevailing narrative of the trade regime is still centered around the neoliberal thought, oblivious of the historical, economic, and political changes that have occurred throughout the years. These new developments, on the other hand, question the accuracy and appropriateness of the dominant narrative and of its underlying assumptions, opening the door to a question that has been addressed by many trade scholars over the years: whether the prevailing narrative is still viable or should be ‘rethought’.

Chapter 6 concludes briefly by picking up on this invitation to rethink the nature and purpose of trade law, advancing some ideas in terms of the way forward. In fact, although the prevailing narrative has come to be seen, over the past few decades, almost as a truism, it has not remained uncontested. Since the 1990s, scholars and commentators have shown the flaws and shortcomings of this narrative, its inability to keep up with new issues, and address the current criticisms of the wto and the overall international trade regime. Several alternative theories and approaches have been proposed, in an attempt to compensate for these shortcomings. While an exhaustive treatment of all these new issues, criticisms, and proposals is far beyond the scope of this research, this book intends to contribute to the discussion by relying on the evolution of the trade/environment nexus to propose an alternative narrative. Relying on the recent developments described in Chapter 5, which show trade rules that do not simply allow domestic (environmental) policies but rather facilitate them, trade liberalization and cooperation is seen neither conflicting with nor embedded in domestic policy-making but rather instrumental to the achievement of certain legitimate policy goals: the question becomes how trade instruments can serve broader social and environmental goals, rather than how those goals might be simply accommodated within the hard-driving logic of trade. And in calling into question the purpose of trade law, the arguments made in this book are relevant beyond the confines of the trade and environment debate.

1

Closing Statement of the Chairperson, Eleventh Ministerial Conference, wt/min(17)/67 (Dec. 13, 2017).

2

European Parliament Resolution on Climate Diplomacy, July 3, 2018, 2017/2272(ini) [hereinafter Climate Diplomacy Resolution].

3

Roberto Azevêdo, Address at the 2018 wto Public Forum.

4

Draft Ministerial Decision, Advancing Sustainability Goals through Trade Rules to Level the Playing Field, wt/gc/w/814, 17 December 2020.

5

Regimes are intended in this book as governing arrangements agreed upon by governments to coordinate their expectations and organize aspects of their behavior in various issue-areas. See Stephen Krasner (ed.), International Regimes (Cornell University Press, 1983) [defining ‘international regimes’ as “implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge in a given area of international relations”]. Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton University Press, 1984) and International Institutions and State Power: Essays in International Relations Theory (Westview Press, 1989) [defining ‘regimes’ as “institutions with explicit rules, agreed upon by governments, that pertain to particular sets of issues in international relations” and ‘institutions’ as “persistent and connected sets of rules (formal and informal) that prescribe behavioral roles, constrain activity, and shape expectations”]. See also Andreas Hasenclever, Peter Mayer and Volker Rittberger, Theories of International Regimes (Cambridge University Press, 1997).

6

The literature on norm conflicts in international law is vast. See e.g. Wilfred Jenks, ‘The Conflict of Law-Making Treaties’ (1953) 30 British Yearbook of International Law 400; Hamner Hill, ‘A Functional Taxonomy of Normative Conflict’ (1987) 6 Law and Philosophy 227; Joseph Weiler and Andreas L. Paulus, ‘The Structure of Change in International Law or Is There a Hierarchy of Norms in International Law?’(1997) 8 European Journal of International Law 545; Joost Pauwelyn, Conflict of Norms in Public International Law (Cambridge University Press, 2003); Christopher Borgen, ‘Resolving Treaty Conflicts’ (2005) 37 George Washington International Law Review 573; Erich Vranes, ‘The Definition of “Norm Conflict” in International Law and Legal Theory’ (2006) 17 European Journal of International Law 395.

7

According to Jenks, for instance, a conflict “arises only where a party to two treaties cannot simultaneously comply with its obligations under both treaties.” Jenks, ‘The Conflict of Law-Making Treaties’ (n 6) 426.

8

Mario Prost, The Concept of Unity in Public International Law (Hart Publishing, 2012), p. 63. See also Hill, ‘A Functional Taxonomy of Normative Conflict’ (n 6) 227; Hans Kelsen, General Theory of Norms (Clarendon Press, 1991), p. 125.

9

Borgen, ‘Resolving Treaty Conflicts’ (n 6) 575.

10

Jeffrey L. Dunoff, ‘Rethinking International Trade’ (1998) 19 University of Pennsylvania Journal of International Economic Law 347, 383.

11

While in the 1940s, when the multilateral trading system was first created, neoliberal ideas coexisted with the theory of embedded liberalism, in the 1970s, neoliberalism emerged as a salient political force and began to provide the shared normative narrative supporting the trading system ever since. See e.g. John G. Ruggie, ‘International Regimes, Transactions and Change: Embedded Liberalism in the Postwar Economic Order’ (1982) 36 International Organization 379; Robert Howse, ‘From Politics to Technocracy—And Back Again: The Fate of the Multilateral Trading Regime’ (2002) 96 American Journal of International Law 94; Andrew Lang, World Trade Law After Neoliberalism. Re-Imagining the Global Economic Order (Oxford University Press, 2013); Harlan Grant Cohen, ‘What is International Trade Law For?’ (2019) 113(2) American Journal of International Law 326.

12

This has been the approach vis-à-vis other non-trade concerns as well, such as human rights or labor issues. See Andrew Lang, ‘The Role of the Human Rights Movement in Trade Policy-Making: Human Rights as a Trigger for Policy Learning’ (2007) 5 New Zealand Journal of Public International Law 77, 91.

13

Scholars have been rather divided as to how to achieve convergence between trade liberalization and environmental protection. Some have argued that existing trade rules do not require any amendment, as they already allow countries to adopt environmental measures, as long as they are not discriminatory, while others have been holding that improvement would be necessary. And many different views exist with regards to what form these improvements should take.

14

See e.g. the 2002 ajil Symposium on The Boundaries of the wto.

15

Dunoff, ‘Rethinking International Trade’ (n 10) 383.

16

The role of ideas and learning as conducive to normative change has been studied far and wide by international relations theorists. See e.g. Bo Hedberg, ‘How Organizations Learn and Unlearn’, in Paul C. Nystrom and William H. Starbuck (eds.), Handbook of Organizational Design (Oxford University Press, 1981); Judith Goldstein, ‘Ideas, Institutions and American Trade Policy’(1988) 42(1) International Organization 179; William J. Drake and Kalypso Nicolaïdis, ‘Ideas, Interests, and Institutionalization: “Trade in Services” and the Uruguay Round’ (1992) 46(1) International Organization 37; Judith Goldstein and Robert O. Keohane (eds.), Ideas and Foreign Policy, Ideas, Institutions, and Political Change (Cornell University Press, 1993); Kathryn Sikkink, ‘Transnational Advocacy Networks and the Social Construction of Legal Rules’, in Yves Dezalay and Bryant G. Garth (eds.), Global Prescriptions: The Production, Exportation, and Importation of a New Legal Orthodoxy (Ann Arbor, 2002), p. 37; Mark Blyth, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (Cambridge University Press, 2002); Diana Tussie (ed.), The Politics of Trade: The Role of Research in Trade Policy and Negotiation (Brill Academic Publishers, 2009); Lang, World Trade Law After Neoliberalism (n 11) and ‘The Role of the Human Rights Movement’ (n 12).

17

John G. Ruggie, ‘Epistemology, Ontology, and the Study of International Regimes’, in John G. Ruggie (ed.), Constructing the World Polity: Essays on International Institutionalization (Routledge, 1998), p. 85. Sociologists call this process “structuration.” See Anthony Giddens, A Contemporary Critique of Historical Materialism (University of California Press, 1981).

18

Andrew Lang discusses this process of ideational change, which he refers to as ‘policy learning’ in the context of trade and human rights. See Lang, ‘The Role of the Human Rights Movement’ (n 12).

19

As explained by Krasner, regimes are a composite of four analytical components: principles (“beliefs of fact, causation, and rectitude”), norms (“standards of behavior defined in terms of rights and obligations”), rules (“specific prescriptions and proscriptions for action”), and decision-making procedures (“prevailing practices for making and implementing collective choice”). Krasner (ed.), International Regimes (n 5). Ruggie and Kratochwil apply these four analytical components to the gatt, as an example: “The principle that liberalized trade is good for global welfare and international peace was readily translated by states into such norms as nondiscrimination, which in turn suggested the most-favored-nation rule, all of which led to negotiated tariff reductions based on reciprocal concessions.” John G. Ruggie and Friederich Kratochwil, ‘International Organization: A State of the Art on an Art of the State’ (1986) 40(4) International Organization 753, 769. Moreover, these four components are not always necessarily coherent, and changes can take place in some components and not in others. Ruggie argues that “only under extremely unusual circumstances could we imagine parallel and simultaneous changes having taken place in each of the four component parts of regimes such that they remained coherent.” Ruggie, ‘Epistemology’ (n 17) 99.

20

Lang, ‘The Role of the Human Rights Movement’ (n 12).

21

Cohen, ‘What is International Trade Law For?’ (n 11) 327.

22

See e.g. Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions, and Economic Growth (Princeton University Press, 2008), p. 227.

23

General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 u.n.t.s. 194 [hereinafter gatt], Preamble.

24

Gregory Shaffer, ‘Retooling Trade Agreements for Social Inclusion’ (2019) 1 University of Illinois Law Review 1, 5.

25

Fred Bergsten, Toward a New International Economic Order (Lexington Books, 1975). See also Jagdish Bhagwati, Protectionism (mit Press, 1988). The description of the Institute for International Economics as “neo-liberal-oriented” is borrowed from Robert Howse, ‘The World Trade Organization 20 Years On: Global Governance by Judiciary’ (2016) 27(1) European Journal of International Law 9, 22.

26

See e.g. Dani Rodrik, ‘Trade Policy as Riding Bicycles’ (July 20, 2007).

27

See e.g. Steve Charnovitz, ‘The WTO’s Environmental Progress’ (2007) 10(3) Journal of International Economic Law 685.

28

Marrakesh Agreement Establishing the World Trade Organization, April 15, 1994, 1867 u.n.t.s. 154 [hereinafter wto Agreement], Preamble (emphasis added).

29

Neil Carter, The Politics of the Environment: Ideas, Activism, Policy (Cambridge University Press, 2018), p. 211.

30

Ibid., p. 212.

31

Andrew Lang, ‘Reflecting on “Linkage:” Cognitive and Institutional Change in the International Trading System’ (2007) 70(4) Modern Law Review 523, 529. The lack of one single definition of free trade is addressed extensively by David Driesen, who argues that, because the term has never been defined, ever since it emerged in the works of Smith and Ricardo, it is characterized by a certain ambiguity. The same agreement, as Driesen explains, can contain provisions that reflect different meanings of ‘free trade’. Article iii of the gatt, for instance, reflects a definition of ‘free trade’ as “trade free from discrimination against foreign goods as a tool of economic policy.” Article xi, on the other hand, defines ‘free trade’ more broadly than trade free from discrimination, as trade free of burdens. David M. Driesen, ‘What is Free Trade? The Real Issue Lurking Behind the Trade and Environment Debate’ (2001) 41 Virginia Journal of International Law 279.

32

Lang, ‘Reflecting on “Linkage”’ (n 31) 529.

33

Robert E. Baldwin, ‘The Economics of the GATT’, in Peter Oppenheimer (ed.), Issues in International Economics (Oriel Press, 1978), p. 83.

34

Douglas A. Irwin, Against The Tide (Princeton University Press, 1996), p. 48. ‘Free trade’, in its original meaning, referred to “a commercial activity in which entry was unrestricted, where the liberty of the merchant to participate in trade was unhindered by exclusionary guild regulations or government grants of monopoly rights and privileges.” In other words, it had nothing to do with the abolition of import tariffs and the like. See p. 46.

35

Ibid., p. 28.

36

Ibid., p. 32. The point of state regulation of trade was to promote so-called ‘good channels’ and discourage ‘bad channels’, keeping in mind a twofold objective: to achieve a favorable balance of trade and to promote economic development and employment in manufacturing. To this end, imports were highly regulated, while exports were favored.

37

Howse, ‘From Politics to Technocracy’ (n 11) 94.

38

Irwin, Against The Tide (n 34) 50.

39

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776). On the other hand, Smith did not deny that governments could have an important role, but in his visions this role was restricted to national defense, protection of property rights, and administration of justice. See Dani Rodrik, The Globalization Paradox (Norton & Company Inc., 2011), p. 9. Kenneth W. Abbott, ‘“Economic” issues and Political Participation: The Evolving Boundaries of International Federalism’ (1996) 18 Cardozo Law Review 971, 977. As explained by Ruggie, “the image of the market became an increasingly captivating social metaphor and served to focus diverse responses on the outcome of free trade … The role of the state became to institute and safeguard the self-regulating market.” Ruggie, ‘International Regimes’ (n 11) 386.

40

Wilhelm Röpke, ‘Economic Order and International Law’, in Collected Courses of the Hague Academy of International Law (The Hague Academy of International Law, 1954), p. 224.

41

Denis O’Brien, ‘Customs Unions: Trade Creation and Trade Diversion in Historical Perspective’ (1976) 8(4) History of Political Economy 540, 547. See Smith, The Wealth of Nations (n 39).

42

O’Brien, ‘Customs Unions’ (n 41) 554. See Speech Delivered by Lord Overstone in the House of Lords 1.5 March 1860 on the Address on the Treaty of Commerce with France; with an Appendix (London, 1860), p. 9.

43

Lang, ‘Reflecting on “Linkage”’ (n 31) 528.

44

Howse, ‘From Politics to Technocracy’ (n 11) 94–5.

45

Douglas A. Irwin, Clashing Over Commerce (The University of Chicago Press, 2017), p. 26.

46

Ruggie, ‘International Regimes’ (n 11) 397.

47

The leading role played by Great Britain in the late xix century and the United States after World War ii, has fueled the hegemonic stability theory, which argues, as explained by Charles Kindleberger, that “only a single, strong and dominant actor in international politics can provide and maintain a stable international economic order.” Douglas A. Irwin, Petros C. Mavroidis, and Alan O. Sykes, The Genesis of the GATT (Cambridge University Press, 2008), p. 189. As explained by Kindleberger, “[f]or the world economy to be stable, it needs a stabilizer.” Charles P. Kindleberger, ‘Dominance and Leadership in the International Economy’ (1981) 25(2) International Studies Quarterly 242, 247. He argues that “Britain, with frequent assistance from France, furnished coherence to the world economy along these lines during the nineteenth century and through the ‘belle epoque.’ The United States did so from 1945 (or perhaps 1936) to 1968 (or 1963 or 1971). From 1919 to 1939, Britain could not, and the United States would not, act in the capacity of world leader.” See also Röpke, ‘Economic Order and International Law’ (n 40) 223: “every workable international order seems to require the guiding and controlling hand of a dominant power which, by its political force, economic weight, diplomatic experience and firmness of principles, is able to set the tone, to give the example and to assume responsibilities of the first order … Great Britain lost this position after two world wars [and] the United States … step[ped] into her place” (emphasis added).

48

Arthur A. Stein, ‘The Hegemon’s Dilemma: Great Britain, the United States, and the International Economic Order’ (1984) 38 International Organization 355, 395.

49

Ruggie, ‘International Regimes’ (n 11) 387.

50

Ibid., 387; Rodrik, The Globalization Paradox (n 39) 45.

51

Rodrik, The Globalization Paradox (n 39) 46.

52

See Ruggie, ‘International Regimes’ (n 11) and Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Amereon Limited, 1996).

53

Rodrik, The Globalization Paradox (n 39) 68.

54

Ruggie, ‘International Regimes’ (n 11) 396.

55

Cohen, ‘What is International Trade Law For?’ (n 11) 336.

56

Rodrik, The Globalization Paradox (n 39) 77.

57

Howse, ‘The World Trade Organization 20 Years On’ (n 25) 16.

58

Driesen argues that this broader definition of ‘free trade’ was already present in the text of the gatt at Article xi. Driesen, ‘What is Free Trade?’ (n 31) 293.

59

Dani Rodrik introduced the expression ‘deep integration’ as opposed to the ‘shallow integration’ of the gatt years.

60

In this context, the definition of ‘collective ideas’ provided by Legro can be used as a point of reference: “‘Collective ideas’ refers to concepts or beliefs held by groups (i.e. states). These ideas are social and holistic—they are not simply individual conceptions that are shared or added together. Collective ideas have an intersubjective existence that stands above individual minds and is typically embodied in symbols, discourse, and institutions. Individuals and their interaction naturally influence collective ideas, but they also must confront them as ‘fact’.” Jeffrey W. Legro, ‘The Transformation of Policy Ideas’ (2000) 44 American Journal of Political Science 419, 420.

61

Emanuel Adler, ‘Cognitive Evolution: A Dynamic Approach for the Study of International Relations and their Progress’, in Emanuel Adler and Beverly Crawford (eds.), Progress in Postwar International Relations (Columbia University Press, 1991), p. 54.

62

See e.g. Rodrik, The Globalization Paradox (n 39) 9.

63

Jacob Bronowski and Bruce Mazlish, The Western Intellectual Tradition (Harper Collins, 1962), p. xiii.

64

Rodrik, The Globalization Paradox (n 39) 25. And these new ideas found a vehicle to spread and reach the most extreme corners of the population. The opponents of Napoleonic Wars-era tariffs on imports of grain—the so-called ‘Corn Laws’—which Britain abolished in 1846, founded the well-known magazine The Economist, which began to popularize and spread free trade views across the country and beyond.

65

Describing the role that Cordell Hull played in the process of post-war economic reconstruction, Douglas Irwin makes the point that “[h]is success demonstrates that individuals, not just impersonal economic and political forces acting through Congress, can shape policy at critical moments.” Irwin, Clashing Over Commerce (n 45) 420. Describing instead the role played by James Meade, Ernest Penrose wrote that “if any one person can be described as the originator of the movement for an International Trade Organization it is James Meade.” Ernest F. Penrose, Economic Planning for the Peace (Princeton University Press, 1953), pp. 89–90.

66

Lang, World Trade Law After Neoliberalism (n 11) 238.

67

See Donald A. Schon and Martin Rein, Frame Reflection: Toward the Resolution of Intractable Policy Controversies (Basic Books, 1994); Alexander Wendt, Social Theory of International Politics (Cambridge University Press, 1999).

68

It should be noted that learning can also occur within a single policy community.

69

This analysis is based on the study of the record of interactions between the two communities (paying particular attention to the activities of the wto Committee on Trade and Environment) and on a body of international relations literature that has been exploring and studying these interactions.

70

Donald Polkinghorne calls this interpretive coherence structure “gestalt.” See Donald Polkinghorne, Narrative Knowing and the Human Sciences (State University of New York Press, 1988), p. 18. See also Ruggie, ‘Epistemology’ (n 17) 86.

71

Polkinghorne, Narrative Knowing (n 70) 19–20.

72

Richard A. Berk, ‘Causal Inference for Sociological Data’, in Neil J. Smelser (ed.), Handbook of Sociology (Sage, 1988).

73

Ruggie, ‘Epistemology’ (n 17) 92.

74

C.S. Peirce, Philosophical Writings (Justus Buchler ed., 1955), pp. 151–52.

75

Ruggie, ‘Epistemology’ (n 17) 94.

76

While in xix-century Britain, “the fight over the Corn Laws illustrates that because trade policies have important consequences for income distribution, they get entangled in much broader political contests,” in the United States, “trade policies fed directly into the most important social and political cleavage in the country, between South and North.” Rodrik, The Globalization Paradox (n 39) 28–9.

77

They included, among others, “former or current governmental trade officials, gatt-friendly academics who often sat on gatt/wto dispute settlement panels and were invited to various conferences and meetings of the gatt/wto, international civil servants in other organizations preoccupied with trade matters, and a few private attorneys, consultants, and former politicians.” Howse, ‘From Politics to Technocracy’ (n 11) 98.

78

Ibid.

79

Peter M. Haas, ‘Introduction: Epistemic Communities and International Policy Coordination’ (1992) 46 International Organization 1, 3; Emanuel Adler, ‘The Emergence of Cooperation: National Epistemic Communities and the International Evolution of the Idea of Nuclear Arms Control’ (1992) 46 International Organization 101; Emanuel Adler and Peter M. Haas, ‘Conclusion: Epistemic Communities, World Order, and the Creation of a Reflective Research Program’ (1992) 46 International Organization 367.

80

John G. Ruggie, ‘The New Institutionalism in International Relations’, in Constructing the World Polity: Essays on International Institutionalization (Routledge, 1998), pp. 45, 55. As explained by Adler, epistemic communities “can play an important role in the process of intellectual innovation and political selection of ideas and understandings … can provide decision-makers with new answers to old questions and can help them redefine and reconceptualize problems.” See Adler, ‘Cognitive Evolution’ (n 61) 64.

81

See Robert O. Keohane and Joseph S. Nye Jr., ‘The Club Model of Multilateral Cooperation and Problems of Democratic Legitimacy’, in Roger B. Porter et al. (eds.), Efficiency, Equity, and Legitimacy: The Multilateral Trading System at the Millennium (Brookings Institution Press, 2001), pp. 264–291. See also Robert E. Hudec, ‘The GATT Legal System: A Diplomat’s Jurisprudence’ (1970) 4 Journal of World Trade Law 615, 635 (1970); Gerard Curzon, Multilateral Commercial Diplomacy: the General Agreement on Tariffs and Trade and its Impact on National Commercial Policies and Techniques (Praeger, 1965); Gerard Curzon and Victoria Curzon, ‘GATT: Traders’ Club’, in Robert W. Cox and Harold K. Jacobson (eds.), The Anatomy of Influence: Decision Making in International Organizations (Yale University Press, 1973); John H. Jackson, ‘The WTO “Constitution” and Proposed Reforms: Seven “Mantras” Revisited’ (2001) 4(1) Journal of International Economic Law 67.

82

Joseph Weiler, ‘The Rule of Lawyers and the Ethos of Diplomats: Reflections on the Internal and External Legitimacy of Dispute Settlement’, in Porter et al. (eds.), Efficiency, Equity, and Legitimacy (n 81) 337.

83

While panels, were “made up of various members of the insider network … closely associated with the gatt ‘community’[and] supported by the gatt bureaucracy,” Appellate Body Members are chosen among “distinguished generalist jurists, not eminent experts in gatt/wto law.” Howse, ‘The World Trade Organization 20 Years On’ (n 25) 15, 27. Howse underlines that only “one insider, the late Julio Lacarte-Muro, was appointed to the founding membership of the Appellate Body.”

84

Howse, in particular, makes the case that the independence of the Appellate Body from the trade elite allowed this judicial body to deviate from some of the basic tenets of the trade insiders in what he calls a Declaration of Independence, which in turns formed the basis of its effectiveness and legitimacy. Pauwelyn, on the other hand, argues that the effectiveness and legitimacy of the system cannot be ascribed to the Appellate Body distancing itself from the trade elite, but rather to its ability to respond to the underlying wto member preferences. See Howse, ‘The World Trade Organization 20 Years On’ (n 25), Joost Pauwelyn, ‘The WTO 20 Years On: “Global Governance by Judiciary” or, Rather, Member-Driven Settlement of (Some) Trade Disputes between (Some) WTO Members?’ (2016) 27(4) European Journal of International Law 1119. In Pauwelyn’s view, in particular, the composition of the Appellate Body is not so far from that of the panels, and only the founding membership reflected the description provided by Howse. See also Joost Pauwelyn, ‘The Rule of Law Without the Rule of Lawyers? Why Investment Arbitrators Are from Mars, Trade Adjudicators from Venus’ (2015) 109 American Journal of International Law 761, 799–800. For an overall assessment of the Appellate Body approach to the trade/environment nexus, see Joel P. Trachtman, ‘WTO Trade and Environment Jurisprudence: Avoiding Environmental Catastrophe’ (2017) 58(2) Harvard Journal of International Law 273.

85

Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products, wt/ds58/ab/r (Oct. 12, 1998); United States—Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, wt/ds213/ab/r (Dec. 19, 2002); European Communities—Measures Affecting Asbestos and Products Containing Asbestos, wt/ds135/ab/r (Mar. 12, 2001).

86

This greater openness is not unique to the environmental field, but has a much broader spectrum, as evidenced by the manner in which the declaration on Trade-Related Aspects of Intellectual Property Rights (trips) and access to medicines came about in Doha, the way in which ngos are intervening in the ongoing services negotiations, as well as the outcome of the negotiations for a Trade Facilitation Agreement.

87

Carter, The Politics of the Environment (n 29) 215.

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