WTO and NAFO Coalescence: A Pareto Improvement for Both Free Trade and Fish Conservation
By Taunya L. McLarty
INTRODUCTION
As fishing stocks in the territorial seas continue to decline and national regulation increases, fishing fleets are turning to the high seas for their catch, intending to sell in the domestic and international markets. The high seas may prove to be fishing havens because under international law, the seas are global commons providing freedom of entry and use to states and individuals.
The current trading regime permits fishermen to market their catch internationally with minimal trade barriers, thus providing fishing fleets with the economic incentive to fish the high seas. However, as the number of high seas fishermen increases, resources will inevitably deplete or the freedom to exploit them will diminish. Both have already occurred in the high seas. Now that fish stocks face possible exhaustion, countries are responding with international conservation agreements. As a result, fishing fleets' rights of entry and use under international law increasingly conflict with limits imposed through fish conservation concessions.
What is to come from such conflicts? There are many problems with the conservation agreements and other international standards. The agreements lack strict enforcement measures because their concessions are more laudatory than mandatory. Also some states--but not all states--will not agree to them. Finally, enforcement discourages economic enterprise and trade in fish products.
One possible solution to this conflict is to foster free trade in fish and fish products through agreements while responsibly replenishing our global resources under conservation agreements. This resolution increases conservation benefits for all and trade benefits for some, while avoiding trade benefit decreases. Such an outcome approaches the ‘Pareto optimum.‘
However, using measures to accomplish conservation ends raises significant and complex considerations--Parts II through V of this article address some of these issues. Part II also sets out a hypothetical addressing the free trade and conservation conflict. Part II addresses several related issues: the trade measures an importing country could use to enforce a high seas fish conservation agreement against an exporting country; the three substantive obligations of an importing party under the General Agreement on Tariffs and Trade 1994 (GATT 1994); the procedure for dispute settlement if the exporting country takes the matter before a dispute settlement panel in the World Trade Organization (WTO); and possible defenses for the importing country. Most likely, the WTO panel will find that the importing party's trade measures violate at least one of the GATT 1994 obligations and cannot raise an adequate defense. The importing country must then show that an exception applies to the conservation-minded trade measures. Part III outlines and suggests some expansions for the five commonly invoked GATT exceptions to conservation or environmental trade measures by Contracting Parties: the general exception, the animal health exception, the enforcing other laws exception, the exhaustible natural resource exception, and the quantitative exception. However, Part III ultimately concludes that the five GATT exceptions should not apply. Part IV proposes that three non-conservation exceptions to GATT obligations could apply to conservation measures: a free trade area, a waiver, and a plurilateral arrangement. Finally, Part IV concludes that of these three, the plurilateral arrangement is the superior conservational and economical Pareto improvement.
As fishing stocks in the territorial seas continue to decline and national regulation increases, fishing fleets are turning to the high seas for their catch, intending to sell in the domestic and international markets. The high seas may prove to be fishing havens because under international law, the seas are global commons providing freedom of entry and use to states and individuals.
The current trading regime permits fishermen to market their catch internationally with minimal trade barriers, thus providing fishing fleets with the economic incentive to fish the high seas. However, as the number of high seas fishermen increases, resources will inevitably deplete or the freedom to exploit them will diminish. Both have already occurred in the high seas. Now that fish stocks face possible exhaustion, countries are responding with international conservation agreements. As a result, fishing fleets' rights of entry and use under international law increasingly conflict with limits imposed through fish conservation concessions.
What is to come from such conflicts? There are many problems with the conservation agreements and other international standards. The agreements lack strict enforcement measures because their concessions are more laudatory than mandatory. Also some states--but not all states--will not agree to them. Finally, enforcement discourages economic enterprise and trade in fish products.
One possible solution to this conflict is to foster free trade in fish and fish products through agreements while responsibly replenishing our global resources under conservation agreements. This resolution increases conservation benefits for all and trade benefits for some, while avoiding trade benefit decreases. Such an outcome approaches the ‘Pareto optimum.‘
However, using measures to accomplish conservation ends raises significant and complex considerations--Parts II through V of this article address some of these issues. Part II also sets out a hypothetical addressing the free trade and conservation conflict. Part II addresses several related issues: the trade measures an importing country could use to enforce a high seas fish conservation agreement against an exporting country; the three substantive obligations of an importing party under the General Agreement on Tariffs and Trade 1994 (GATT 1994); the procedure for dispute settlement if the exporting country takes the matter before a dispute settlement panel in the World Trade Organization (WTO); and possible defenses for the importing country. Most likely, the WTO panel will find that the importing party's trade measures violate at least one of the GATT 1994 obligations and cannot raise an adequate defense. The importing country must then show that an exception applies to the conservation-minded trade measures. Part III outlines and suggests some expansions for the five commonly invoked GATT exceptions to conservation or environmental trade measures by Contracting Parties: the general exception, the animal health exception, the enforcing other laws exception, the exhaustible natural resource exception, and the quantitative exception. However, Part III ultimately concludes that the five GATT exceptions should not apply. Part IV proposes that three non-conservation exceptions to GATT obligations could apply to conservation measures: a free trade area, a waiver, and a plurilateral arrangement. Finally, Part IV concludes that of these three, the plurilateral arrangement is the superior conservational and economical Pareto improvement.