2. Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.

7. In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from sanitary or phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time.

--> Control of pests and diseases, harmful substances

• Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.

•

--> Safety certificates, product labelling etc. 

WTO Members agree that countries are within their rights under WTO rules to set criteria for the way products are produced, if the production method leaves a trace in the final product, for example cotton grown using pesticides leaving pesticide residue in the cotton itself.

However, they disagree about discriminatory measures based on “unincorporated PPMs” (or “non-product related PPMs”), i.e. process and production methods which leave no trace in the final product. For example you cannot tell whether a table has been produced from sustainably managed wood by simply looking at it.

•Article XX – General Exceptions

•Sanitary and Phytosanitary measures (SPS Agreement)

•Technical Barriers to Trade (TBT Agreement)

- Follow WTO principles: National Treatment, Most-Favored-Nation (MFN) --> non-discrimination (like products have to be treated alike) principles.

•Only if domestic producers also have to produce organically and if the rule is applied to all trading partners.

•Only if the product is different --> you can regulate maximum residue limits, but not how it is produced

•Most-favored-nation

•‘Like’ products are treated alike

•Burden of proof lies with party taking measures

•Environmental measures permissible...

•If not discriminatory (not arbitrary or unjustified; applicable to domestic and foreign products)

•If necessary (proportional, least trade-distorting)

--> Preventing disguised trade protectionism!

Environmental regime:
•Precautionary principle

•Process and production methods

Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development,

•An important element of the WTO’s contribution to sustainable development and protection of the environment comes in the form of furthering trade opening in goods and services to promote economic development, and by providing stable and predictable conditions that enhance the possibility of innovation. This promotes the efficient allocation of resources, economic growth and increased income levels that in turn provide additional possibilities for protecting the environment.

https://www.wto.org/english/tratop_e/envir_e/envt_intro_e.htm

•Under the agreements: Expropriation requires compensation from government

•Broad understanding of expropriation, including policies made for common good that reduce future income of investors (Philip Morris – plain packaging)

The US industry challenged in 2008 Canadian environmental requirements affecting their plans to open a basalt quarry and a marine terminal in Nova Scotia. The investors planned to blast, extract and ship out large quantities of basalt from the proposed 152-hectare project, located in a key habitat for several endangered species, including one of the world’s most endangered large whale species. A government-convened expert review panel concluded that the project would threaten the local communities. On these recommendations, the government of Canada rejected the project. In 2015 the ISDS tribunal decided that the government’s decision hindered the investors’ expectations. Bilcon won and received US$7 million in damages, plus interest (NAFTA invoked).

In April 1997, Ethyl, a US chemical company, launched an ISDS dispute over the Canadian ban of MMT, a toxic gasoline additive containing a known human neurotoxin. Canadian legislators banned MMT over public health and environmental concerns. The additive was already banned in the US at the time. The case was settled in June 1998 for US$13 million paid to Ethyl. The settlement also required Canada to lift the ban and post advertising saying MMT was safe (NAFTA invoked).

•Lobbying of state representatives, at home and in international negotiations

•Strong organizational and financial resources

•Established channels of access and influence (policy networks, corporatism)

•Provision of policy relevant information and knowledge

•Structural importance of business for economic growth, innovation and employment

•Based on implicit or explicit threat of disinvestment, capital flight

•Technological knowledge shaping regulatory options

•Indirect influence over agenda-setting and political outcomes: ‘non-decision making’ 
 (Bachrach and Baratz) 

•Communication strategies to shape public and elite perceptions 

•Framing of environmental issues that require business involvement and solutions

•Minimize compliance costs à propose self-regulation or market based solutions

•Leveling compliance costs à internationalize national environmental policies 

•Competitive advantage for products with lower compliance costs

•Creating demand for products necessary for compliance

•Banning of products can create a market for its substitutes
(Meckling)