EUROPE
Representing the global electronics, software and information technology
industries
AEA
Legality under International Trade Law of
Draft Directive on Waste from Electrical and Electronic Equipment (see
the full directive)
March 1999
Prepared by
Rod Hunter and Marta Lopez
Hunton & Wiliiams, Brussels
Mid-1998 the European Commission's DG IX circulated a draft proposal for a Council Directive on Waste from Electrical and Electronic Equipment (WEEE) that would apply to virtually all electronic products placed on the Community market. That proposal, if adopted in its current form, would cause the Community to violate its international trade law obligations.
Draft directive's substance restrictions would be illegal. The proposal's ban on electronic products containing lead, mercury, cadmium, hexavalent chromium and halogenated flame retardants would infringe GATT's prohibition of quantitative restrictions and the TBT Agreement. First, the bans are not designed to achieve a legitimate environmental protection purpose as would be necessary to justify such quantitative restrictions. Secondly, the substance restrictions are not "necessary," in that there are other less trade-restrictive alternatives to achieve the proffered policy objectives (e.g. selective landfill bans, eco-taxes).
Draft directive's recycled content rule would be illegal. The proposal's recycled content rule, which would ban import of electronic products made of less than 5% recycled plastic, would also infringe the GATT's prohibition of quantitative restrictions and the TBT Agreement. Even if the recycled content rule is intended for environmental protection, the environment protected would be that in third countries. The recycled content rule would hence be a unilateral trade restrictive measure affecting countries outside the Community's jurisdiction, in violation of GATT obligations.
These provisions in articles 4 and 7 of the draft WEEE Directive should accordingly be removed from the proposal.
'This memorandum explains the trade law concerns arising from the proposal. Part I reviews the draft directive's major elements. Part II recapitulates, by way of background, relevant international trade law. Part III examines how the draft directive would cause the Community to violate its trade law undertakings
1. Draft WEEE Directive
In July 1998, DG XI issued a second draft for a Proposal for a Directive
on Waste from Electrical and Electronic Equipment. The draft legislation
aims at "the prevention of waste from electrical and electronic equipment"
and "minimizing the risks and impacts to the environment associated
with the treatment and disposal of end-of-life electrical and electronic
equipment." 1 The basic provisions of the draft directive, which
is to apply to virtually all electronics products, may he described as
follows.
(2) Recycled content-- article 7 would require 5% of plastics in new products to be made of recycled plastics as of January 2004; national officials are encouraged to demand higher recycled content levels through public procurement.
(4) Collection obligations: articles 5 and 8 would require producers
to collect, at their expense, used equipment from households. Articles
7 and 8 would oblige producers to recover and dispose of, at their expense,
collected used
equipment from households. Article 8 specifies that producers of new
products must pay costs associated with old products, on the basis of current
market shares.
Two World Trade Organization (WTO) agreements are particularly relevant
to the analysis of the draft WEEE Directive under international trade law
- the General Agreement on Tariffs and Trade (GATT), and the Technical
Barrier to Trade (TBT)
Agreement.
A. GATTOf particular importance to the draft WEEE Directive, the GATT prohibits quantitative restrictions, including import and export bans (article XI), and forbids discrimination against imported products (the so-called "national treatment"' principle, article III). GATT panel reports have interpreted these GATT provisions broadly as applying to all measures affecting imports. Measures need not have an effect on the volume of trade or impair the trade benefits of other contracting parties to fall subject to article XI(1)'s ban on trade restrictions and to article III's national treatment clause.2I . Quantitative Restrictions and National Treatment
Trade restrictions contravening article XI and article III may nonetheless be permissible where justified pursuant to article XX, which lists the general exceptions to GATT principles. Article XX provides only a limited and conditional exception from GATT obligations. Panels have interpreted article XX narrowly, "in a manner that preserves the basic objectives and principles of the GATT."3 A contracting party invoking an article XX exception bears the burden of proof in demonstrating that; (1) the contested measure falls under one of the ten categories of exceptions listed in the article, and (2) the measure satisfies the requirements of the preamble of the article (the so-called "chapeau").4 In accordance with the chapeau, article XX exceptions apply under the following conditions.
(1) Measures complying with the requirements of article XX may not be applied in a way that would constitute "a disguised restriction on international trade."(2) Measures justified under article XX may not be applied "in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail."
Article XX does not contain a general environmental clause. However,
the article XX list of ten legitimate justifications for trade restrictions
does include two relevant grounds. First, article XX(b) countenances exceptions
for measures "necessary to protect human, animal or plant life or
health." Secondly, article XX(g) foresees exceptions for measures "relating
to the conservation of exhaustible natural resources if such measures are
made effective in conjunction with restrictions on domestic production
or consumption."
Under article XX(b) (protection of health) the party bearing the burden of proof must demonstrate: (1) that the policy in respect of the measures for which the provision was invoked falls within the range of policies designed to protect human, animal or plant life or health, (2) that the inconsistent measures for which the exception is being invoked are "necessary" to fulfil the policy objective, and (3) that the measures are applied in conformity with the requirements of the chapeau of article XX. 5
Under the exception of article XX(g) (conservation of exhaustible resources),
the party invoking the exception must demonstrate that: (1) the policy
in respect of the measures for which the provision was invoked fell within
the range of policies related to the conservation of exhaustible natural
resources, (2) the measures for which the exception is invoked are related
to the conservation of exhaustible natural resources, (3) the inconsistent
measures are made effective in conjunction with restriction on domestic
production or consumption, and (4) the measures are applied in conformity
with the requirements of the chapeau of article XX.6
2. Nullification and Impairment
The GATT, Article XXIII.1(b) , creates a remedy for situations in
which parties to the Agreement undermine the value of a tariff, trade concession,
or any other trade benefit through the application of legislative measures,
whether they violate GATT obligations or not. This "nullification
or impairment" of accrued trade benefits entitles a GATT party to bring
the measures before a WTO panel. Under Article XXIII.1(b), a country may
not implement measures impairing other party's benefits that could not
have been reasonably expected when trade concessions where negotiated.7
B. TBT AgreementThe TBT Agreement is meant to ensure that technical regulations and standards be applied equally to imported and domestic products, and not create unnecessary obstacles to international trade. The substantive rule of the TBT Agreement is article 2.2 which requires that "technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfillment would create." Among such legitimate objectives, article 2.2 lists the "protection of human health or safety, animal or plant life or health or the environment."
Article 2.2 seeks to minimize the trade-restrictive effects arising form Members' pursuit of legitimate objectives. For a technical regulation imposing trade restrictions to be justified under article 2.2, three conditions must be met.
(1) The policy in respect of the measure must correspond to a legitimate policy objectives.
(2) Technical regulations must not be more trade-restrictive than "necessary" to fulfil the legitimate objective.
(3) Trade-restrictive technical regulations must be proportional to the objectives pursued by a legitimate policy by taking account of the risks that non-fulfillment would create. Article 2.2 cites as relevant considerations for assessing such risks "available scientific and technical information, related processing technology or intended end-uses of products."Mirroring the equivalent provision in the GATT, article XX, the preamble to the TBT Agreement establishes that measures necessary for the protection of human, animal, plant life or health, or of the environment are "subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade."
The TBT Agreement further provides for instruments to ensure monitoring
of compliance of technical regulations with the Agreement's provisions
including notification procedures, and the requirement that Members preparing
or adopting technical
regulations explain "upon request of another Member, ... the
justification for that technical regulation in terms of the provisions
of (article 2)."8
In short, under the TBT Agreement, technical regulations must
be developed in accordance with the principles outlined in the agreement
(particularly non-discrimination), not be more trade restrictive than necessary,
monitored and reviewed as necessary, reflect international standards where
appropriate, be performance based, its development must be transparent
and consultative, and the compliance procedures adopted must not create
unnecessary obstacles to trade.
III.. Trade Legality of Draft WEEE Directive
The WEEE draft directive's material bans and recycled content rule would infringe the GATT and TBT Agreement. Also, while it will not become clear until national implementation, the draft directive's provisions inviting member states to promulgate their own product standards could result in further violations.
A. Substance BansBy banning the use of a number of substances, the draft directive, article 4, in fact imposes an import ban on all products containing the disfavored materials. An import ban constitutes a quantitative restriction prohibited by GATT', article XI(l). The draft directive's bans would not be justifiable under the GATT's article XX exceptions from the prohibition on such quantitative restrictions.
1. GATT
DG XI has not been forthcoming with explanations of the precise purpose
of the substance restrictions. However, the draft directive does set the
somewhat vague objective for the entire piece of legislation as minimizing
"the risks and impacts to the environment associated with the treatment
and disposal of end-of-life electrical and electronic equipment." The question
would
then be whether the bans are justified under article XX(b) as a measure
"necessary to protect human, animal or plant life or health."
As noted above, panel practice has determined that a party invoking the exception of article XX(b) must prove that (1) the policy in respect of the measures falls within the range of policies designed to protect human, animal or plant life or health, (2) the inconsistent measures are necessary to fulfill the policy objective, and (3) the measure fulfills the requirements of the chapeau of Article XX. The substance ban in the draft WEEE Directive fails to fulfill the requirements for the application of the article XX(b) exception for the following reasons.
The policy in respect to the measures does not protect human, animal
or plant health. DG XI has provided no evidence that the use
of these substances in electronic and chemical products poses a threat
to human health or the environment, or that alternatives (if available)
could eliminate such risks. Furthermore, even if one assumed that the use
of these substances were
damaging to the environment, there is no evidence showing that their
use in the electronics industry gives rise to higher or different risks
that in other industries. If scientific risk assessments carried out under
Community chemical legislation showed that significant health and environmental
risks were posed by the banned substances, the Community should impose
restrictions on the materials as they appear in all consumer and industrial
products. As it is, the ban of their use exclusively in electronic products,
without the backing of a scientific risk assessment, does not appear to
be part of a policy designed to protect health and the environment.
The measures are not "necessary" to fulfill the policy objective. Even if the policy goal were deemed legitimate, a trade restriction on all products containing the banned substances is not "necessary" to fulfill the environmental protection objectives. The "necessity test" has become the crucial step in panel practice when examining the application of article XX(b). Panels have interpreted the "necessity" requirement strictly. So far, no panel called to apply article XX(b) has accepted the necessity of a measure otherwise inconsistent with other GATT provisions.
The requirement of article XX(b) that exceptions to free trade rules are "necessary" has been interpreted as an obligation to choose the "least restrictive alternative." Thus, a contracting party may not justify a measure under article XX(b) "if an alternative measure which it could reasonably be expected to employ and which is not inconsistent with other GATT provisions is available to it."9 Thus, the invoking party must prove that it has "exhausted all the options reasonably available ... through measures consistent with the General Agreement."10 When a measure consistent with other GATT provisions is not available, a country is bound to use "among the measures reasonably available, that which entails the least degree of inconsistency with other GATT provisions." In particular, panel practice has given special relevance to the existence of efforts to encourage international cooperative arrangements.
In this context, "it is relevant to observe that an import prohibition
is, ordinarily, the heaviest 'weapon' in a Member's armory of trade measures."11
Other less restrictive measures are conceivable as means to reduce the
risks that might he posed by the banned materials: selective landfill bans,
eco-taxes, etc. DG XI has provided no evidence that it has exhausted all
alternatives available to it, before resorting to a total import ban --arguably,
the most restrictive measure. Furthermore, there is no evidence of efforts
to encourage international cooperation on the matter. Therefore, the substance
bans do not appear to be "necessary" in relation to the policy goals and
do not satisfy the requirements for the application of the article XX(b)
exception.
2. TBT AgreementThe TBT Agreement, art. 2.2, requires that technical regulations, such as the draft directive's bans, are not adopted or applied with the effect of creating unnecessary obstacles to international trade. Under the 'TBT' Agreement, a trade restrictive technical regulation would be justified if it: (1) fulfils a legitimate objective such as "the protection of human health or safety, animal
The substance bans do not fulfil a legitimate objective. As noted above, DG XI has provided no evidence that use of these substances in electronic and electrical products poses a threat to human health or the environment. Furthermore, even if one assumes that use of these substances is damaging to the environment, there is no evidence showing that their use in the electronics industry gives rise to higher or different risks that in other industries. DG XI has thus failed to demonstrate that the measures fulfill a legitimate objective such as the protection of human health or the environment.
The bans are more restrictive than necessary to fulfill the legitimate
objective. Even if the policy goal were deemed legitimate, a trade
restriction on all products containing the banned substances is not "necessary"
to fulfill the environmental protection objectives. The concept of
"necessity" in article 2.2 of the TBT Agreement must be interpreted in
the same way as in the GATT, article XX(b), as a requirement to chose the
"least restrictive alternative. " Consequently, the arguments advanced
in respect to legality of the measure under the GATT are equally valid
to the assessment of its legality under the TBT Agreement, article 2.2.
A technical regulation is more restrictive than necessary when the objective
aimed at can be achieved
with alternative measures that would cause less disruption to trade.
The Commission's DG XI has not demonstrated that it has exhausted
all alternatives available, before imposing an import ban -- the most restrictive
measure possible. Furthermore, it has not encouraged international negotiations
on the issue. Therefore, the substance bans appear to be more trade
restrictive
than necessary to achieve the policy goals.
The substance bans are not proportional to the objectives pursued
by the policy. Article 2.2 of the TBT Agreement requires that account
is taken of "the risks nonfulfillment would create," when adopting
a technical regulation that affects trade. Under this provision,
even if there are no alternative measures available, a measure could still
be considered more restrictive than necessary when its effects on trade
are disproportionate to the risks in question. To assess these risks, one
has to take into consideration all available scientific evidence and technical
information, related processing technology and the intended end-uses
of the products. DG XI has not provided evidence on how the absence of
the ban would risk the fulfillment of its policy to prevent waste
and minimize the risks to the environment associated with the disposal
of electrical and electronic equipment. The substance bans therefore appear
disproportionate in relation to the objectives of the draft WEEE
Directive.
B. Recycled ContentThe draft WEEE Directive, article 7, effectively bans the import of all electronic products containing less than 5% recycled plastics. This recycled content rule would constitute a quantitative restriction in violation of GATT, article XI(1). The measure would not be justified under the GATT, article XX exceptions.
1 . GATT
The recycled content rule has an extraterritorial effect. Many electronics
sold in Europe are produced elsewhere, or, even if produced in Europe,
are produced from components and materials from elsewhere. Imposing a recycled
content rule would not "protect" life of health in the Community,
but rather life and health where the virgin natural resources would have
been
extracted, and resources conserved would in most cases be outside the
Community. Furthermore, by requiring the use of recycled plastics,
the legislation would discriminate against imports from countries where
recycled plastic may not be available.
The draft WEEE Directive does not state the precise purpose of the recycled content rule. Article I of the directive lays down that one of the objectives of the legislation is "the prevention of waste from electrical and electronic equipment." In this context, the question would be whether the bans are justified under article XX(b) as a measure "necessary to protect human, animal or plant life or health." DG XI might also justify the rule under article XX(g) as a measure "relating to the conservation of exhaustible natural resources," such as oil, because the use of recycled plastic would reduce the production of new plastics, and fewer the consumption of oil. The analysis of article XX shows that the import restriction imposed by the recycled content rule is not justified under either exception.
a. Article XX(b)A party invoking the exception of article XX(b) must prove that (1) the policy in respect of the measures falls within the range of policies designed to protect human, animal or plant life or health, (2) the inconsistent measures are necessary to fulfill the policy objective, and (3) the measure fulfils the requirements of the chapeau of article XX. The recycled content rule of the draft WEEE Directive fails to fulfill the requirements for the application of the Article XX(b) exception for the following reasons.
The measure does not fall within the range of measures covered by
Article XX(b). As noted above, imposition of an import ban on
products containing less than 5% recycled plastic would result in effect
result in a measure that regulates environmental protection
in a country outside the EC. Measures allowed under the article XX(b) exception
may not have extraterritorial (or more precisely extra-jurisdictional)
reach. The GATT Panel report on U.S. restrictions on imports
of tuna noted that article XX(b) allows each contracting party to set
its own human, animal or plant life health standards.12
However, the panel declared that a country may not unilaterally determine
the life or health protection policies from which other contracting parties
may not deviate without jeopardizing their GATT rights. Thus, as
the draft directive's recycled content rule is designed to influence environmental
protection beyond the EC's jurisdiction, the rule would not be justified
under GATT. 13
The policy in respect of the measure is not designed to protect human health. DG XI has provided no evidence that the use of new plastics in electronic and electrical products pose a threat to human health or the environment. As it is, the recycled content rule, without the backing of a scientific risk assessment, does not appear to be part of a policy calculated to protect human, animal or plant health.
The measures are not "necessary" to fulfill the policy objective. Even if the policy goal were deemed legitimate, a trade restriction on all products containing more than 5% recycled plastic is not "necessary" to fulfill the environmental protection objectives. Other less restrictive measures are conceivable as means to encourage the use of recycled plastic: subsidies for collection or recycling, public procurement policies, eco-taxes, etc. DG XI has provided no evidence that it has exhausted all alternatives available to it, before resorting to the import ban. Furthermore, there is no evidence of efforts to encourage international cooperation on the matter. Therefore, the recycled content rule is not "necessary" in relation to the policy goals and does not satisfy the requirements for the application of the article XX(b) exception.
The recycled content rule does not satisfy the requirements of article XX's chapeau as it causes unjustifiable discrimination. The article XX chapeau requires that measures covered by the exceptions are "not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail." The requirements of the chapeau are, according to panel practice, to be read jointly and interpreted in the light of GATT principles and in the light of their object and purpose.14 The Shrimp-Turtle Appellate Body report states that a unilateral measure, "heightens the disruptive and discriminatory influence of the import prohibition and underscores its unjustifiability."15 The Shrimp-Turtle report also confirmed that a key consideration in determining the existence of unjustifiable discrimination under article XX was whether cooperative multilateral approaches had been pursued to address an environmental problem."16
The availability of recycled plastics is dependant on various factors,
including local collection and recycling infrastructure. As a densely
populated region, Europe is more likely than many other regions to have
the ability to recycle plastic. Furthermore, policies requiring the use
of recycled materials, such as the recycled content rule, would encourage
local production of recycled plastics. Producers located in other parts
of the world might not have access to the quality recycled plastics necessary
to
comply with the requirements of the directive. Countries who
do not adopt equivalent policies to that pursued by DG XI with the draft
WEEE- Directive, will see their access to the Community market impaired.
The effect of this requirement would be to favor producers located in the
European market and discriminate among exporters in favor of those implementing
particular
policies. The rule would also in fact disproportionately affect developing
countries. Moreover, DG XI U has not shown that international cooperation
on the matter was pursued before retorting a unilateral measure. It therefore
seems that the recycled content rule will result on unjustifiable discrimination
discrimination among third countries and further favor European producers.
b. Article XX(g)A party invoking article XX(g) must demonstrate that: (1) the policy in respect of the measures for which the provision was invoked fell within the range of policies related to the conservation of exhaustible natural resources, (2) the measures for which the exception is invoked are related to the conservation of exhaustible natural resources, (3) the inconsistent measures are made effective in conjunction with restriction on domestic production or consumption, and (4) the measures applied in conformity with the requirement of the chapeau of article XX.17 The recycled content rule of the draft WEEE Directive fails to fulfil the requirements for the application of the Article XX(g) exception for the following reasons.
The measure does not fall within the range of measures covered by Article XX(g). The Appellate Body Report in the Shrimp Turtle case did state that measures justified under the provision may affect jurisdictions outside that of the invoking, country."18 However, it also went on to state that "it is not acceptable, in international trade relations. for one WTO Member to use an economic embargo to require other Members to adopt essentially the same comprehensive regulatory program, to achieve a certain policy goal, as that in force within the Member's territory. 19 The extraterritoriality of a measure covered by article XX(G) may be justified only under exceptional circumstances. It is understood that for a transboundary measure to be justified under article XX(g), four conditions must be met:
b. the measure must be justified under exceptional circumstances (e.g. because the protected resources are migratory animals moving across jurisdictions),
b. the measure must not be more trade restrictive than required to protect the globally shared environmental resource,
b. the measure must be directly connected to the environmental objective, and
b. the member must have made genuine efforts to enter into cooperative environmental agreements with other members. 20The draft WEEE Directive's recycled content rule does not meet these requirements: (1) there are no exceptional circumstances that could justify the transboundary impact of measures encouraging plastic recycling; (2) an import ban is the most restrictive trade measure and DG XI has not showed that other less restrictive measures were not available, (3) it is not clear how the measure relates to the conservation of natural resources, and (4) there is no evidence to date of attempts to cooperate on this matter with third countries before retorting to unilateral measures. Thus, the extraterritorial affect of the recycled content rule would not be justifiable under article XX(g).
The recycled content rule is not related to the conservation of exhaustible
natural resources. Panel practice has determined that for
a trade-restrictive measure to be justified under article XX(g). it has
to be "primarily aimed" at the conservation of an exhaustible natural resource.21
According to the draft WEEE Directive, its objectives are the prevention
of waste, and minimizing the risks associated with the treatment and disposal
of waste. The recycled content rule is contained in article 7 of
the draft directive entitle "recovery" and forms part of a group of provision
encouraging EC member states to promote the recovery and recycling of electronic
"waste" in order to meet the objectives laid down in this Directive.22
The draft legislation does not suggest that one of its objectives may be
the conservation of exhaustible natural resources such as oil.
The recycled content rule is perceived as a measure contributing to
the prevention of waste. It is not "primarily aimed" at the conservation
of exhaustible natural resources, as required by article XX(g).
The recycled content rule does not satisfy the requirements of article
XX's chapeau as it causes unjustifiable discrimination. For the
reasons outlined in the analysis of article XX(b), above, the recycled
content rule infringes the
requirements of article XX chapeau, as it will result on unjustifiable
discrimination among third countries, and favor European producers.
2. TBT AgreementThe recycled content rule infringes the provisions of Article 2.2 of the TBT Agreement. The TBT Agreement, article 2.2, requires that technical regulations, such as the recycled content rule, are not adopted or applied with the effect of creating unnecessary obstacles to international trade. The WEEE draft directive recycled content rule does not meet the requirements of the TBT Agreement:
The recycled content rule does fulfill a legitimate objective. As noted above, DG XI has provided no evidence that the use of plastics in electronic and electrical products pose a threat to human health or the environment. DG XI has thus failed to demonstrate that the measures fulfill a legitimate objective such as protection of human health or the environment. Furthermore, taking into account the interpretation of equivalent provisions in the GATT, it is doubtful that a measure with extraterritorial effects may bc considered a legitimate purpose under the TBT Agreement.
The recycled content rule is more restrictive than necessary to fulfill a legitimate objective. The recycled content rule is not "necessary" to fulfill the environmental protection objectives. The concept of "necessity" in article 2.2 of the TBT Agreement must be interpreted in the same way as in the GATT, article XX(b), as a requirement to choose the "least restrictive alternative." Consequently, the same arguments advanced before in respect to the legality of the measure under the GATT are equally valid in assessing legality under article 2.2. The Commission's DG XI has not demonstrated that it has exhausted all alternatives available. Therefore, the recycled content rule appears to be more trade restrictive than necessary to achieve the policy goals.
The substance bans are not proportional to the objectives pursued by the policy. Even if there are not alternative means available, a measure may still be considered more restrictive than necessary when its effects on trade are disproportionate to the risks in issue. DG XI has not provided evidence on how the absence of a requirement to use recycled plastic would jeopardize the fulfillment of its policy to prevent waste or minimize the risks to the environment associated with the disposal of electrical and electronic equipment. The recycled content rule is therefore a disproportionate measure in relation to the objective of the draft WEEE Directive.
The recycled content rule would adversely affect developing countries.
The TBT Agreement imposes obligations on developed countries in respect
to developing countries. Article 12.2 requires that members "take
into account the special development, financial and trade needs of developing
country Members in the implementation of this agreement." Article
12.3 provides that Member must "in the preparation and application of technical
regulations,...take account of the special development, financial and trade
needs of developing country Members, with a view to ensuring that such
technical regulations, do not create unnecessary obstacles to exports form
(sic) developing country Members. . As noted above, the application
of the recycled content rule would have a negative impact on trade with
developing countries that lack the necessary infrastructure to ensure the
availability of recycled plastic. Furthermore, the measure creates "unnecessary"
obstacles to developing country exports, as other less trade-restrictive
measures could have been adopted to achieve the policy goals. In
drafting the recycled content rule, DG XI has not taken account of the
special needs of developing countries and thus infringed the TBT Agreement,
article 12.
C. National Design and Material Choice RulesThe draft WEEE Directive's provisions concerning national design and material choice measures may not be illegal, for they are merely instructions to member states to take their own product standards measures. However, these provisions are an invitation to further trade disputes, for any such national product standards will run the risk of trade law violations.
D. Nullification and ImpairmentThe provisions of the draft WEEE Directive would nullify or impair trade benefits accruing to other contracting parties in the sense of Article XXIII.1(b) of the GATT
The European Community has made concessions over the past fifty years on most products covered by he draft directive. Furthermore, under the Information Technology Agreement, negotiated in the context of the Uruguay Round, the European Community committed to the elimination of trade barriers on a number of products that would be affected by the draft WEEE Directive, such as computers and semi-conductors.
These tariff concessions have been agreed in successive tariff negotiations.
The measures that would be introduced by the draft WEEE Directive affecting
these products would not be anticipated by other GATT contracting
parties at the time when tariff concessions were made: the first
draft proposal had not yet been produced when the Uruguay Round negotiations
ended. Any provisions of the draft WEEE Directive that affect the
import of products on which tariffs and other GATT concessions have been
agreed would impair the benefits of other GATT contracting parties.
The substance bans, the recycled content rule, and the national design
and material choice rules would substantially alter conditions of competition
in the Community so that third countries' trade benefits are nullified
or impaired.
1. Draft WEEE Directive, art 1.
2. 1984 Panel Report on "Japan-Measures on Imports of Leather, "
L/5623, adopted on May 15/16, 1994, 3 1 S/94.
3 1994 Panel Report on "United States-Restrictions on Imports of
Tuna," DS29/R, not adopted, at par. 5.26
4. See GATT/WTO Dispute Settlement Practice Relating to Article XX,
Paragraphs (b), (d) and (g) of GATT,
Note by the Secretariat, WT/CTE/W/53/Rev.1, Oct. 26, 1998, at
par. 5.
5. 1996 Panel Report on "United States-Standards for Reformulated
and Conventional Gasoline" WT/S2/9, adopted on May 1996, at par.
6.20 and 1994 Panel Report on "United States-Restrictions on Imports
Tuna," DS29/R, not adopted, at par. 5.29,
6. 1996 Panel Report on "United States-Standards for Reformulated
and Conventional Gasoline," WT/S2/9, adopted on May 1996, at par. 6.35.
7. 1998 Panel Report on "Japan-Measures Affecting Consumer Photographic
Film and Paper," WT/DS44/R, adopted on 1998, at par. 10.76.
8. TBT Agreement, art. 2.5.
9. 1990 Panel Report on "Thailand - Restrictions on Importation
of and Internal Taxes on Cigarettes," DS10/R, adopted on Nov. 7, 1990,
37S/200.
10. 1991 Panel Report on "United States-Restrictions on Imports
of Tuna," 39S/155, not adopted, at par.
5.27.
11. 1998 Appellate Body Report on "United States-Import Prohibition
of Certain Shrimp and Shrimp Products," WT/DS58/AB/R, circulated on
October 12,1998, at par. 171.
12. 1994 Panel Report on, "United States--Restrictions on
Imports of Tuna" DS29/R, not adopted.
13. The Tuna 11 panel report considered that Article XX(b) did
not preclude the possibility of environmental policies having an extraterritorial
reach. However, the panel reasoned that measures that force third countries
to change their environmental policies in order to be able to export their
products could not possibly be considered "necessary" within the meaning
of Article XX(b). (1991 Panel Report on "United States-Restrictions on
Imports of Tuna," 39S/155, not adopted).
14. 1996 Appellate Body Report on "United States-Standards
for Reformulated and Conventional Gasoline," WT/S2/9, adopted on May
1996, at par. 25.
15. 1998 Appellate Body Report on "United States-Import Prohibition
of Certain Shrimp and Shrimp Products," WT/DS58/AB/R, circulated
on Oct. 12,1998, at par. 166.
16. This approach has been received as a guiding principle for resolving
free trade and environment conflicts. See WTO Committee on Trade
and Environment Bulletin No. 27, WT/CTE/W/97. October 26,1998, PRESS/TE/27
(Dec. 9,1998).
17 1996 Panel Report on "United States-Standards for Reformulated
and Conventional Gasoline", WT/S2/9, adopted on May 1996, at
par. 6.35.
18. In reaching this conclusion, however, the Appellate
Body focused on the fact that the protected turtles were migratory species
found and moved across jurisdictions, which could justify a rule having
an extraterritorial dimension.
19. 1998 Appellate Body Report on "United States-Import Prohibition
of Certain Shrimp and Shrimp Products," WT/DS58/AB/R, circulated on
October 12, 1998, at par. 164.
20. European Communities' submission to the Shrimp-Turtle Appellate
Body Report, 1998 Appellate Body Report on "United States-Import Prohibition
of Certain Shrimp and Shrimp Products," WT/DS58/AB/R, circulated on
October 12, 1998, at par. 68.
21. 1998 Panel Report on "Canada-Measures Affecting Exports of Unprocessed
Herring and Salmon", 35S/98, adopted on March 22, 1998, at p. 4.6
22. Draft WEEE Directive art. 7.
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