The International Business Transactions Blog

WTO Dispute Settlement and Pandemic Responses

By Professor Alexandra Harrington
University of Albany School of Law

Since it was established, the World Trade Organization (WTO) Dispute Settlement Body (DSB) has functioned as a site of dispute resolution between Member States. As a general matter, the DSB has jurisdiction to hear complaints arising under the WTO’s treaty instruments alone, and generally the legal tenets and terms which can be used by the DSB’s panels and appellate panels are bounded by these treaty instruments. However, a line of complaints beginning with the Shrimp-Turtle dispute has steadily introduced outside environmental and health concerns into the ambit of the DSB. Often, this has been done in the context of claims regarding public health and safety, such as those allowed under GATT article XX, and expanded from a narrow focus to take in a broader range of environmental and environmental health issues.

More recently, in China—Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum, the European Union, Japan and the United States challenged restrictions on the exportation of rare earths minerals from China. China asserted that these restrictions fell under the GATT article XX exceptions, because they were claimed to serve the purpose of protecting the environment and natural resources. While the Panel Report stressed that environmental concerns could fall within the legitimate framework of an article XX exception, these circumstances must be thoroughly articulated and connected to the purposes and implementation of the contested legislation. In this context, the Panel Report found that the measures were not the least restrictive and failed the legal test, noting “what was missing was an established, articulable nexus between the export restrictions put in place by the Chinese government and the environmental and health damage it was purportedly seeking to rectify and prevent.”

In Korea—Import Bans, and Testing and Certification Requirements for Radionuclides, Japan challenged restrictions on and certification requirements for fish and agricultural products which had been placed on its goods by the Republic of Korea in the wake of nuclear contamination from the Fukushima disaster. Recognizing the inherent need to balance trade law with the protection of short and long-term health concerns, the Panel noted that national decisions such as those made by Korea must be reviewed using information available at the time and can be viewed on a sliding scale of impact duration. With this in mind, the Panel noted that responsive measures in this context should be adjusted based on available information and that overly broad protective measures could not be sustained despite the potential for health impacts.

This background has the potential to become increasingly important in the future, when issues of COVID-19-related import/export restrictions and post-pandemic recovery measures have a significant potential to generate international trade disputes. At the beginning of the pandemic, some WTO member states (including the United States) restricted or banned exports of personal protective equipment (PPE), foodstuffs, and other vital supplies.  At the same time, some states imposed higher thresholds, and often bans, on imports from China. Some measures have been rescinded; however, it is possible that such measures will increase during the predicted second wave of the pandemic. At the same time, many WTO member states have adopted pandemic and post-pandemic economic measures intended to stimulate the national economy and, in some instances, incorporate international and national environmental commitments in recovery planning. What is unclear is the level to which these measures could be claimed to violate WTO treaty law, for example regarding competition and subsidies.

Under a strict reading of international trade law, these measures could be seen as violative of essential terms and requirements. However, in light of the extraordinary occurrence of a pandemic and set against the progressive application of GATT article XX exception construction in the context of environment and public health concerns, it is possible to envision a situation in which the WTO DSB’s findings incorporate far more than strict treaty law analysis.