3. The International Context Canada is heavily trade dependant and our trade is heavily resource dependant due to the close linkages between resource development and environmental issues, what occurs internationally in the global environmental rules is significant examples include developments in climate change policy, fisheries, biotechnology and endangered species

4. our trade dependency also leaves us subject to market influences in the international system, so that developments in international trade are very significant in brief, international developments in both trade and environment can constrain or restrict the domestic choices that we can make, due to Canadas participation in international treaties Canada favours multilateral arrangements to try to avoid too much interdependence with the U.S. (e.g. GATT/WTO) but has of necessity also engaged in bilateral and trilateral agreements (e.g. NAFTA)

5. The WTO and Free Trade globally in the past few decades there has been an increased emphasis on free trade or the elimination of various types of trade barriers while originally countries like Canada had a lot of tariffs (customs duties) on imported goods to try to encourage and protect the development of domestic value added industry, by the mid-1930s the elimination of tariffs was underway the idea of reducing free market barriers was gradually broadened to try to eliminate non-tariff barriers (e.g. taxes)

6. The WTO was created in 1994 to administer a number of trade agreements: 1.General Agreement on Tariffs and Trade (GATT) 2.Technical barriers to Trade (TBT) 3.Sanitary and Phyto-Sanitary Measures (SPS) 4.Agriculture 5.Trade-Related Aspects of Intellectual Property Rights (TRIPS) 6. General Agreement on Trade in Services (GATS) it also established a dispute resolution panel, an appellate body, and an advisory Committee on Trade and Environment

7. under GATT/WTO trade rules there are several key trade principles that states must follow: 1.most favoured nation (MFN): all like foreign products must be treated equally 2.national treatment: all domestic and foreign like products must be treated the same 3.no quantitative restrictions (embargos or quotas) can be used as non-tariff barriers there is a concern that environmental or resource regulations could create non-tariff barriers to trade and thus be illegal

8. GATT Article XX does allow key trade principles to be broken by the environmental protection measures in two limited circumstances: Art XX(b) trade restrictions that are necessary to protect human, animal or plant life or health Art XX(g) trade restrictions relating to the conservation of exhaustible natural resources made in conjunction with domestic restrictions

9. the measures must not be a disguised restraint on trade must be non-discriminatory or trade neutral or the least restrictive or burdensome measure possible a number of important cases have been heard by the dispute resolution panel and appellate body

10. legitimate regulations to protect the environment, even in the form of an import restriction, can survive a GATT challenge where there is no less inconsistent means to achieve the goal (e.g. Asbestos case, 2000) first determine if the measure legitimately falls within Article xx then see if the measure prima facie or as applied had protectionist objectives (arbitrary discrimination, or disguised restraint on trade)

11. GATS has similar rules designed to liberalize access to foreign service sector operators, including in areas such as energy, waste management and water supply GATS has two sets of rules, general market access rules and sector-specific liberalization in specific sectors, where trade liberalization is agreed to, GATS requires national treatment and no quantitative restrictions

12. limits on land use or rates of resource extraction could be struck down if they create commercial disadvantage to foreign service providers there is a human/animal health exception but not an exception related to resource exhaustion recent discussion of expanding the least burdensome rule to all sectors has raised a concern over potential loss of flexibility in resource regulation

13. Various types of trade, resource and environment measure create potential areas of conflict 1.export bans on natural resources (e.g. water) 2.eco-labelling schemes (e.g. forest certification) 3.packaging rules (e.g. GMO labelling) 4.import restrictions (e.g. fuel additives) 5.PPM rules (process and production methods) (e.g. dolphin-safe tuna) 6.environmental taxes

14. Export Bans can be justified under Art XX(g) for exhaustible resources must be primarily for conservation, in conjunction with domestic restrictions, non-discriminatory (MFN, NT) e.g. relieving a temporary critical shortage Eco-labels and Packaging Rules must comply with TBT (technical requirements of product characteristics) least burdensome, nondiscriminatory (MFN, NT)

15. Import Restrictions need GATT compliance or must fall into an Art XX exception must also be compliant with SPS (food and feed additives, contaminants) or TBT (product standards) SPS & TBT requires both least burdensome impact (as adopted or applied), based on scientific evidence, non-discriminatory, not arbitrary, no disguised restraint on trade Environmental Taxes agreed tariffs or must follow national treatment rules and have internal taxes too

16. PPM Measures trying to restrict imports not because of the product itself (e.g. an ozone depleting substance) but rather because of its production method (e.g. produced using ozone-depleting substances in the process) is problematic a PPM that affects the product itself (e.g. feeding hormones to beef) is generally covered by SPS and TBT other PPMs cannot be controlled; where the product is like other products you cannot distinguish between them based on the production process (e.g. tuna vs dolphin-safe tuna); unless done with similar domestic restrictions and non-arbitrary

17. if a production process is objectionable this needs to be dealt with in a separate treaty. modern treaties try to develop rules in a trade- neutral manner (e.g. need for PIC to import toxics) older treaties are of uncertain status where they may not be trade neutral and no determination has yet been made as to Art XX applicability (e.g. CITES)

18. NAFTA the trilateral Canada/USA/Mexico FTA and its side agreements on environmental and labour protection have similar rules regarding non-tariff barriers to trade NAFTA and the NAAEC (environmental side- agreement) have made specific allowances for environmental protection, which inter alia provide paramountcy for environmental treaties and incorporate Art XX of GATT the NAAEC also establishes the Commission for Environmental Cooperation (CEC) as an important scientific, technical and dispute resolution body

19. NAFTA ch.11 has been controversial originally designed to protect foreign investors from expropriation (nationalization) of their operations without compensation has been used to try to undermine environmental rules especially bans on imports or use of dangerous products, where companies sought compensation recent decisions (e.g. Methanex 2005) have upheld genuine, non discriminatory (NT) rules that are science-based, developed with due process and transparency, and done for a public purpose If no transfer of assets to government, theres no expropriation