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On the other hand, the implementation of environmental laws may be the reason behind the impossibility of coexistence between big projects and environmental laws, when the latter is applied on imported products in order to restrict importing to the country that implements those laws to give advantages and protect domestic products. This attitude can be available in the WTO. The next section discusses how the WTO members can exploit the ineffective NCM of the WTO to restrict importing specific goods through applying environmental laws on those goods even the latter cannot compete like domestic products in national markets.
The World Trade Organization (WTO)
The development in international commerce leads to establish the WTO that covers several sections of global trade to liberalize commerce through creating equal competitive opportunities and prohibiting discrimination. The WTO considers environmental issues through allowing members to restrict flows of trade through enforcing environmental laws on products. However, these restrictions shall not aim to bring discriminatory measures against imported products by a way that impact on competitive opportunities or the ‘effective equality of opportunities.’ Moreover, the WTO requires member to comply with the principle of Most Favorable Nation (MFN) that stipulates giving the same given advantages to one member’s product to the like product of all other parties.’ It stipulates also the Principle of National treatment that rejects enforcing any sort of measures, such as tax or laws, to protect domestic products. Nonetheless, the WTO considers some situations to release members from complying with its provisions. For instance,to counter the risks and challenges of liberalization trade, the WTO allow a member topartly or wholly suspends, withdraws or modifies its obligations,when imported competitive/like products cause injuries or a serious threat to its domestic producers.
In contrast, the WTO role in enhancing the coexistence between the big projects and the environmental law is theoretical. Although those environmental laws shall not aim to bring discriminatory measures against other parties’ products, and this creates sounds of justice and fairness through applying the same laws on both imported and domestic products, the real situation proves other results because of the inefficiency of the WTO NCM. The ineffective NCM of the WOT is clear in its limitation to acts that are covered by the WTO, its ineffective sanctions, and the inconsistency between stages of litigation in the WTO.
NCM of the WTO
The Dispute Settlement Understanding (DSU) entered into force on 1 January 1995 to settle disputes that are brought under the WTO agreements (Article 1 of the DSU). The latter obliges members to comply with the WTO provisions since its solutions shall be compatible with the WTO (Article 3 DSU) andparties cannot deny either the compulsory jurisdiction of the WTO Courts or the latter binding decisions that are built on the existence of violation under the DSU provisions (Article 23.1 of the DSU). The compliance with the WTO has been asserted through giving any member the right to bring a dispute against other non-complying member, even if there is neither injuries nor actual trade flow between disputant parties; because the WTO seeks to protectlegitimate expectations of competitive relationship between domestic and imported products, not only the expectations that are related to export volumes, andpotential interests for exportation.
• Limitations and ineffective sanctions
However, the DSU is limited to the provisions of the WTO, therefore, it cannot protect imported products of big projects from discriminatory measures through the conduct of importing party to enforce environmental laws on imported products in order to protect similar domestic products of big projects that are established on its territory. The WTO tribunals have the authority to interpretthe WTO provisions without either revising them (Article 3.2 of DSU) or exceeding their text. Islam stated ‘…[The DSU] rullings and recommendations cannot create new rights or impose new obligations, but can clarify and enforce those already agreed pursuant to customary rules of interpretation of public international law…’. Moreover, the WTO has ineffective sanctions that cannot stop the desire of members to apply environmental laws on imported products of big projects to protect its big projets’ like products fro the comeptetion of the former’ products, particualrly when mambers find non-compliance is more benfitial than complying. The WTO adopts reparation system that is not mandatory;non-complying parties can reject compensating injured members for damages that are caused because of their inconsistent acts. This mechanism also is not proportional to damages since it has no retroactive action and it can be invoked when non-complying members has not withdrawn its invalid measures within a reasonable period of time (Article 22.2 of the DSU).
• Inconsistency between provisions and litigation
The inconsistency between the WTO provisions and its litigation system can be exploited by members to enforce some environmental restrictions on imported products to protect domestic projects. Thiscan impact on the possibility of coexistence between big projects of imported products and environmental laws because the latter limit the capacity of the former to reach foreign markets. In other words, parties can breach their obligations without carrying any sort of responsibility because of the vague litigation system of the WTO.
The WTO litigation has two different stages; firstly, resorting to the WTO tribunals to prove the existence of violations under Art 3.8 of the DSU without calculating the level of compensation. During this stage, liability is established once the violation is proved, and then tribunals requires non-complying party to withdraw its inconsistent measures within reasonable period of time.
The second stage is the arbitration under Art 22 of the DSU; arbitrator in this stage has to determine the volume of compensation or the level of suspension and the level of nullification or impairment under Article 22 paragraphs 4 and 7 of the DSU. In arbitration proceedings breaching obligations without causing damages has no legal value. The liability in this stage is limited to the level of compensation or suspension that is limited to direct trade flows. For instance, the arbitrator, in EC – Bananas III (US) (Article 22.6 – EC), decided that calculating the level of nullification or impairment of the US trade was limited to the US looses of exports or services that were related to the trade flows between the US and the EC. Consequently, the arbitrator decided that regarding the issues that were brought under the GATT the US was entitled only for the calculation of impairment or nullification that included neither ‘…goods or service inputs in banana cultivation…[nor]… services that add value to bananas after harvesting up to the f.o.b. stage…’. Therefore, under the GATT the scope of nullified or impaired benefits excluded trade effects of the US’s two Fruit Companies in Latin America.
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