Reconciling regulatory space with external accountability through WTO adjudication trade, environment and development

This article argues in favour of broadening the trade and environment debate in the World Trade Organization (WTO) to include a developmental perspective. WTO litigation involving environmental regulation touches upon the issue of global justice and the power asymmetries structurally embedded in the global economy. The recognition of the WTO as a legitimate global institution, therefore, depends on its ability to reconcile the respect for the right to regulate with the need to give due regard to the interests and concerns of foreign constituencies affected by domestic regulation. By imposing other-regarding obligations, WTO law can act as a mechanism of external accountability of powerful states vis-à-vis affected foreigners, especially where asymmetric relations and different stages of economic development are involved. The article applies this framework to analyze the legal reasoning of the Appellate Body in the US-Tuna II dispute between the US and Mexico – a dispute illustrating the complex intertwinement between economic, environmental and developmental issues. It concludes that the use of the concepts of ‘even-handedness’ and ‘calibration’ under Article 2.1 of the Technical Barriers to Trade Agreement and Article XX of the General Agreement on Tariffs and Trade did not enable the Appellate Body to strike an adequate balance between the right to regulate and external accountability. While in the original report the Appellate Body used ‘even-handedness’ to impose only a minimal level of external accountability on the US, in the compliance report, the Appellate Body has gone too far by failing to defer to the US risk assessment amidst scientific controversy and uncertainty.