Unilateral Trade Measures to Combat Climate Change: A Biofuels Case Study
This paper examines compatibility between international trade rules and unilateral trade measures taken to mitigate climate change. This is conducted by way of a case study looking at whether a country such as New Zealand would be able to unilaterally ban the importation or use of unsustainably produced biofuels. The paper begins by briefly discussing the scope and nature of the issues surrounding unsustainably produced biofuels and why a country like New Zealand would want to take measures to restrict the access of such biofuels to its markets. The paper then outlines how a ban on the importation or use of unsustainably produced biofuels is likely to be a violation of New Zealand’s obligations under Articles III or XI of the General Agreement on Tariffs and Trade (GATT). The remainder of the paper consists of a detailed analysis of how trade measures taken to mitigate climate change could be justified under the Article XX exceptions to the GATT, specifically XX(b) “necessary to protect human, animal or plant life or health” and XX(g) “relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.” The paper concludes by suggesting that the issue of sustainability in biofuel production would be best resolved through a multilateral agreement, as it is unlikely that a unilateral trade restriction on biofuels based on their methods of production would be justifiable under the GATT. However, it is likely that trade measures taken in accordance with a multilateral agreement could be justified under the GATT’s Article XX exceptions.
Keywords: Climate Change, International Trade Law, Biofuels
Kerry David Puddle
Postgraduate Research Student, Faculty of Law, University of Otago