INTERNATIONAL LAW (Free movement of goods {WTO LAWS AND EU LAWS})

INTERNATIONAL LAW (Free movement of goods {WTO LAWS AND EU LAWS})

• Introduction

International trade principles in World Trade Organizations and European Union are based on laws that support free movement of any form of goods and services without discrimination (Beyon, 2003). However, with rapid increase of genetically engineered crops, trade disputes emerged among member countries of World Trade Organization and European Union. Regulatory measures were established to ensure that only quality commodities that are not harmful to human and animal health and life are traded in by all European Union members. Agreement on Sanitary and Phytosanitary Measures (SPS), Agreement on Technical Barriers to Trade (TBT), Preamble of the Cartagena Protocol on Biosafety to the Convention on Biodiversity, and Codex Alimentarius are measures and laws upon which international trade and disputes are based in European Union and World Trade Organization (Craig & Burca, 2002).

These laws and measures strike to balance free trade and other economical values, constitutionalism, national regulation autonomy, competitiveness, and protectionism. The main balance issue sets in between free trade and protectionism with Agreement on Technical Barriers to Trade mainly addressing it to ensure that national barriers by a country are set out to protect citizens from harmful genetically engineered commodities rather than for unfair protectionism. Agreement on Technical Barriers to Trade seeks to ensure that mandatory and voluntary product standards as well as conformity assessment procedures do not become unwarranted obstacles to international trade through balancing prevention of protectionism and right of members to enact product regulations policies.

Agreement on the Application of Sanitary and Phytosanitary Measures lays out basic rules for food safety and plant and animal health standards. Under this agreement World Trade Organization member countries are allowed to set trade regulations based on scientific evidence and harmonize international standards, guidelines, and recommendations. According to Article 2 of Biosafety Protocol, parties are required to take necessary legal and administrative measures in implementing obligations under the Protocol and the Parties in ensuring development, handling, transfer, and release of genetically modified organisms in a way that prevents to biological diversity.  Under this protocol, countries have to clearly label any genetically modified products.

International trade through World Trade Organization and European Union is important since partner countries get the opportunity for job creation, growth, and open markets. Sustainable development is ensured leading to curbing of unemployment and poverty related social evils and crimes like robbery, prostitution, and drug trafficking in partner countries. European Union trade has also created a universal system of open and fair trade that enhances good relations among member countries.

 

2.1 World Trade Organization

The Convention on Biological Diversity has a protocol goal of reaffirming precautionary approach in Principle 15 of the Rio Declaration. This principles says “In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious irreversible damage, lack of scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation” (United Nations Environment Program, 1992). This interpretation of precaution supports the view of attaining sustainable development through supporting trade and environment agreements. Therefore, it advocates that it is not necessary for countries to depend on scientific evidence in cases where irreversible damage may be caused by a commodity. This argument validates actions of countries that prevent import of certain commodities with the argument and conviction that they would be very harmful to citizens.  Agreement on Sanitary and Phytosanitary Measures aims at ensuring food safety, animal health, and plant health. Technical complexity of this measure can also be used by governments in protecting internal industries from unfair competition from developed external competition which to some extent is good for a country. SPS Agreement requires countries to base their decisions of barriers to genetically modified trade on acceptable risk assessment factors. Transparency aspect of the agreement is necessary in ensuring notification on changes on sanitary and phytosanitary requirements between countries, communication among WTO member countries, and open criticism on application of animal and plant health rules.

2. 2. 1 Cars

Article XIX that deals with emergency actions on imports by member countries of World Trade Organization validates the action of Country B in increasing customs duty by 30% to bar importation of cars from Country A. Part 1 (a) of the article clearly stipulates that a contracting party has the right to prevent importation of a commodity that is deemed to threaten competitive domestic products within its territory through any kind of tariff concessions. This article is based on any unforeseen developments and effects of a particular trade obligation. Country B under this article has freedom to suspend this obligation, withdraw it or modify tariff concessions if it feels that increased car quantities from Country A seriously threatens domestic car manufacturers. Therefore, Country A should be aware that this decision by B in increasing customs duty tax to 30% is modification of tariff concession which is legal since it bases its arguments unforeseen developments and negative effects of that trade obligation to domestic car manufacturing businesses.

Part 1 (b) of Article XIX stipulates that an importing contracting country has the right to suspend or withdraw obligation or modify a concession on the imported product to protect domestic producers in the event that a product is subject to a concession under part 1 (a) circumstances. In this case if Country A was still subjected to a tariff concession in form of customs duty, Country B has the right to modify this concession mostly through increasing it or applying it for the first time to protect internal car manufacturers from unfair competition. Therefore this part of the article also validates the 30% customs duty on A by B.

Part 2 of Article XIX requires the contracting country to a notice regarding its actions far in advance so as to allow time for consultations with respect to proposed action. If an action is with respect to a concession on trade, the notice is required to state the trading country that requested for it. In this particular case, Country B in applying a 30% customs duty on cars from A requires that a notice be written by B stipulating its proposed action. This article shows that the country’s B is legal and writing a notice to A is necessary so that consultations between the countries take place. This ensures that an agreed decision is reached by A and B basing on the World Trade Organization laws stipulated in Article XIX.

Part 3 of the article considers implementation of proposed action depending on whether an agreement is attained or not. Part 3 (a) authorizes the contracting company that proposes to take action on particular trade to do so despite the fact that an agreement is not achieved by both parties. Part 3 (b) also authorizes taking of proposed action by contracting company since an agreement is reached by member countries. Therefore this final clause of the article fully supports the action of B in imposing 30% customs duty on cars from A whether or not an agreement in attained by the two countries. Therefore, there is not much Country A can do to change the decision on Country B concerning this case of protecting domestic car manufacturers in its territory.

2. 2. 2 Cucumber

Country A should realize that Country C is completely valid when it refuses to accept any genetically modified cucumbers due to strong chemicals harmful to human consumption. According to Biosafety Protocol, importing countries have the right to evaluate potential harm of GMOs on human health and life through precautionary approach. If a country deems a product harmful, then it informs Biosafety Clearing House to prevent that product from entering the country. Biosafety Protocol as also has labeling requirements for genetically engineered products like cucumbers intended for direct introduction into the environment. They should be marked as “living modified organisms” with specific traits, handling, storage, and usage requirements and a declaration of conformity to Protocol requirements. Due to this, Country C is valid in inhibiting A from exporting commodities because finally cucumber exports cannot be accepted in C if it has not granted permission for that consignment to get into its territory. Therefore, this Advanced Informed Agreement (AIA) procedure validates country’s C actions on limiting import of cucumbers. The precautionary approach also validates the same since it allows ban on particular imports even without scientific certainty.

SPS Agreement measures are applied for the purpose of protecting human and or animal life from toxins, addictives, disease-causing organisms, pests, or animal-carried diseases. Adoption of this measure should ensure it minimizes barriers on international trade, be based on scientific principles, and avoid unjustifiable treatment of some countries during trade.  Since SPS Agreement is based on risk assessment and transparency, then C is valid in hindering cucumbers from A from entering the country if scientifically, evidence shows that they harmful to human health. It is the duty of every government to protect its citizens through all means possible therefore hindering genetically modified cucumbers is doing so.

In the European Union case on Approval and Marketing of Biotech Products by Argentina, United States, and Canada with European Union being the respondent, the special panel ruled in favor of complainants. According to the panel, the EU had applied de facto moratorium which was inconsistent with SPS Agreement obligations. The inconsistency of de facto moratorium to all safeguard measures was because it was not based on risk assessment hence not satisfying the definition of SPS Agreement assumed to maintain enough scientific evidence. From this country C is valid if it upholds scientific evidence in hindering cucumber imports from A.

 

2.2 European Union

            In the light of free movement of goods, the European Union operates on the principle that makes it possible for the free trading of goods across the member Countries, the principle is contained in the European Court (EC) treaty (EC, 2002). In the light of this treaty, Articles that are considered to be important are Art. 28 to 30, 95(4) to 95(9), 296 to 298 (Dillon, 2002). Because of harmonized regulatory measures, the member Countries of EU have been able to succeed in free trade. These harmonized regulatory frameworks must be adhered to by the entire member Countries (Craig & de Búrca, 2002).

2.2.1 Cars

            As far as Article 30 is concerned, the effect of the charge should be considered as opposed to the its purpose. In the light of the case study where Country A is facing difficulty of heavy import duty (30%) by exporting passenger cars to Country B which has put forth the said measure as a way of protecting the domestic production, there are a number of options that Country A can consider. In the light of Article 28 EC (Maduro, 2002), Country A can considered exploiting the dual burden criterion which is also referred to as the indirect discrimination. The market access criterion may also be very vital in arguing their case. The imposition of heavy import duty by Country B can be viewed as an obstacle to free trade or gaining access to market and thus contravening the Treaty. In the light of Article 28 EC, there is a prohibition of the restriction of imports and any measure which is construed to be a restriction. The measure taken by Country B is a discriminatory national measure which is covered by Article 28. There must be a sense in which the taxation regime is applicable to domestic products and foreign products in the like manner. Anything short of this will be termed discriminatory hence against the Treaty. This kind of measure taken by Country B is only permissible in the case where the aim is the protection of the consumers from health related hazards and the protection of the environment. This is because they do not have protectionist regulatory purpose or effect. As noted, there is a close relationship between WTO laws on the free movement of goods and that of the European Union (EU).

2.2.2 Cucumber 

            In this regard, a case worth citing is that of the Beef Hormone. The Appellate Body found that ban on the products of cattle treated with the six growth hormones that were in question not to be in line with Article 5.5 SPSA (Dillon, 2002). However, in our case, the priority must be given to the EU sanitary levels and standards since it is the jurisdiction upon which our discussion is based. If the action of Country C is not inconsistent with the obligations enshrined Article 5.1, 5.5, 5.6, 2.2 or 2.3 of the SPS Agreement (EC, 2002), then the Country A will be forced to oblige to the conditions with regards to the importation of cucumber. Country A bear the burden of proof as to whether their cucumbers meet the requirements of the safeguard measures of EU. Product specific measures would also play a great role in determining whether Country C is justified in their import restriction on cucumbers from Country A. The case of tarrif barriers is sensitive as far as the cucumbers are concerned.

Conclusion

According to car and cucumber dispute, with reference to World Trade Organization and European Union laws, the role of science in public risks management with consequences extending beyond biotechnology are an emerging issue worldwide.  Social perception of risks is based on gross information gaps that affect scientific basis of regulatory policies impacting on international trade.  Regulatory barriers not based on scientific evidence not only affect trade but also strains social and economic development in partner countries. Agreement on Sanitary and Phytosanitary Measures should be followed with an inclusion of all articles and considerations of risk assessment in barring international trade to ensure fairness and prevent protectionism. World Trade Organization measures and European Union principles are important for countries like B and C which want to protect human and animal health and life as well as domestic businesses for fair business competition. According to this, a country has the right to bar trade on certain products to ensure safety of its citizens. Therefore, Country A should consider adhering to all laws of European Union and World Trade Organization to stand a chance at free trade with B and C. Close relation between the two bodies at ensuring free trade should be observed to maintenance of member countries sovereignty and protection of internal markets from unfair external trade as in the car case. Harmonization of international guidelines and standards with national ones is necessary in ensuring successful free and fair trade among partner countries.

 

 

References

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