Citation: This article was published as Sharon Beder, 'Downside of world trade', Engineers Australia, January 2000, p. 52.

This is a final version submitted for publication. Minor editorial changes may have subsequently been made.

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When the World Trade Organisation (WTO) met in Seattle last month, talks had to be postponed because of massive protests. A major concern of protesters was the extent to which freerade is being given priority over other social, equity and environmental concerns.

The WTO is perceived by opponents as an organisation that facilitates the dominance of corporate interests over democratically decided national interests. And with good reason. WTO rules on free trade can override national laws and regulations aimed at fostering social and environmental protection.

Attempts by national governments to ban environmentally damaging or unhealthy products have been successfully challenged under WTO rules. The European Union (EU) attempted to prevent US meat being imported into Europe which contained hormones fed to the animals to increase their growth rate. However, the WTO ruled that the EU should lift the ban. When it refused the US gained WTO permission to impose sanctions including 100% import duties on selected European imports into the US.

In another case, the US had to change its Clean Air Act because the WTO ruled that cleaning up its air pollution by requiring cleaner petrol discriminated against imports of oil from countries like Venezuela. France's attempts to ban asbestos have been challenged by Canada. Danish attempts to ban lead compounds have been challenged by the US as have attempts by the EU to ban lead, mercury and cadmium in electronic devices.

Countries such as Indonesia and the Philippines limit log exports to control the rate of logging and thereby protect their local forests and industry. Such bans have been opposed by Japan as being contrary to free trade rules. Bans on products which contain heavy metals such as batteries and bans on throw-away packaging could also be challenged. Bans on aluminium cans or the imposition of deposit systems affect foreign producers, and are therefore considered to be trade-distorting and unnecessary since packaging can otherwise be dealt with through a waste disposal system.

Countries may also wish to ban imports of hazardous materials and wastes. However, the WTO only allows this if local production or disposal of the same material is also banned. Belgium has been taken before the European Court of Justice because it banned some hazardous waste imports. This means that if Australia builds a facility for disposing of radioactive wastes, it might not be able to limit imports of these types of wastes from other countries for disposal.

The WTO also prohibits the restriction of imports on the basis of production processes and methods used in producing a product. A US law to protect sea turtles has been overturned by the WTO on these grounds as a result of opposition from the shrimp industry. US legislation prohibited the import of shrimp caught using methods that did not exclude turtles from being drowned in shrimp nets. In 1998 the WTO ruled against this legislation and the US is currently dismantling this legislation so as to comply.

Similarly import restrictions to prevent other production methods, including the use of slave or child labour, could also be challenged. This has implications for environmental legislation also, since production methods are an important target for environmental policy. For example regulations that restrict imports of forest products to those that have been sustainably produced would be contrary to WTO rules.

Even labelling products such as sustainably harvested wood would be against WTO rules because it discriminates between products on the basis of how they were produced. The US government has argued that an EU law requiring genetically modified food to be labelled breaches WTO rules because there is no difference in the end product from normally produced food.

The WTO was set up in 1995 but despite its power, its legal standing and its ability to impose sanctions on nations it is not democratically accountable to voters in any country. It meets in secret, there is no appeal outside the organisation and there is no participation by environmental, consumer or health groups. Such groups are unable to submit documents for consideration or even observe proceedings. All they are able to do to have their voices heard is to protest outside, as occurred in Seattle.

A translation of this page into Czech by Sandra Knudsen is available here.