NEW STUDY QUESTIONS US CONNECTION TO KYOTO IN THE WTO
On 15 November, the US Council for International Business (USCIB), a US industry group, released a study questioning the compatibility of WTO rules with the Kyoto protocol on reducing greenhouse gas emissions. Based on statements by the EU, Greenpeace and Friends of the Earth, the study discusses the possibility that US exports could face sanctions under WTO rules if the US were to experience "unfairly" low energy costs in light of Kyoto non-compliance. Timothy E. Deal, USCIB senior vice president, believes that there is an urgent need for the WTO to create an understanding between the institution and multilateral environmental agreements (MEAs) and that this particular issue regarding Kyoto could "cause an absolute train wreck in the rules-based international trading system." The study looks at past WTO disputes, such as that on the 1998 Shrimp-Turtle case (see BRIDGES Weekly, 1 February 2000) to argue that the door may have been opened for the use of trade measures to promote environmental objectives based on the way a product is made. The USCIB notes other interpretations that open the possibility of using countervailing duties in the correction of "imbalances" during the manufacturing process, and suggests that under the Vienna Convention on the Law of Treaties, the US may in fact be bound by Kyoto — even if it does not ratify. Under the Doha mandate, the WTO is currently addressing the relationship between WTO rules and specific trade obligations in MEAs (see BRIDGES Weekly, 14 November 2002).
For further information, see: http://www.uscib.org.
"Can the WTO and the Kyoto Protocol Co-Exist?" UNITED STATES COUNCIL FOR INTERNATIONAL BUSINESS, 15 November 2002.
CANADA-US DISPUTE PANEL ESTABLISHED
On 8 November, the WTO established a panel to rule on a dispute brought forward by Canada concerning countervailing duties (CVDs) imposed on softwood lumber from Canada into the US (see WT/DS257/4, available at http://docsonline.wto.org). The panel will be composed of Chairman: Elbio O. Rosselli, and Members: Wieslaw Karsz and Remo Moretta. The European Communities, India, and Japan have reserved their rights as third parties in the dispute. Canada is arguing that the final determination of CVDs imposed last year by the US on Canadian softwood lumber imports are inconsistent with WTO rules. The series of softwood lumber disputes involves a US contention that Canada’s system of charging lower fees to lumber producers who harvest wood from government-owned land amounts to subsidies for the industry, while Canada accuses the US lumber industry of seeking unfair duties to compensate for its lack of competitiveness (see BRIDGES Weekly, 6 November 2001).
"United States-Final Countervailing Duty Determination With Respect to Certain Softwood Lumber from Canada," WTO, 12 November 2002.