A recent decision by the World Trade Organisation (WTO) in a case concerning imports of re-treaded tyres in Brazil can “become a milestone in WTO jurisprudence on trade and the environment”, according to Julia Qin of the American Society of International Law (ASIL).
The issue at stake is Brazil’s decision to ban imports of re-treaded tyres, a move which was challenged by the European Commission as a “violation of WTO rules”. Meanwhile, Brazil claimed that the ban was “necessary to protect health and the environment”.
Despite agreeing that the ban was necessary for those reasons, the panel ruled that “it was applied in a WTO-inconsistent manner because Brazil failed to enforce a similar ban on used tyre imports”, outlines the September 5 paper.
For Qin, the ruling is significant because the WTO is instructing Brazil to “impose further trade restrictions so as to advance its environmental objective”, adding that “previous WTO decisions have not gone this far in safeguarding environmental values”.
Brazil accepted the decision and agreed to extend the ban, though the Commission has appealed against it – as exporting re-treaded tyres is a lucrative source of income in the EU.
Re-treaded tyres are produced by reconditioning used tyres, and are thus cheaper. However, Brazil claims that their shorter lifespan creates more waste, spreading mosquito-borne diseases including dengue fever, yellow fever and malaria, explains Qin.
Moreover, Brazil complains that the vast size of the country means that waste tyres are expensive to collect and difficult to dispose of without “negative environmental consequences”. Tyre fires are another problem as they are difficult to control.
Import bans violate the General Agreement on Tariffs and Trade (GATT), though are permitted if deemed “necessary to protect human, animal or plant life or health”.
ASIL explain that the WTO upheld Brazil’s justification of the tyres ban on such grounds – dismissing the Commission’s counter-argument that the ban would lead to other such import bans on low-quality products on the grounds that they have “a shorter life than competing domestic products”.
The Commission also claimed that Brazil’s ban contravenes GATT rules because it is “arbitrary”, on the basis that it does not apply to Mercosur countries, says Qin. The WTO panel dismissed the claim because Brazil took this decision in order to comply with Mercosur rules rather than to further its own interests, she explains.
Qin concludes by outlining the implications of the ruling:
- Trade in recycled or waste products will require the establishment a different set of norms to those invoked by the WTO for trade in new products.
- It shows that the WTO will make environmentally-friendly decisions wherever possible – in this case, favouring the minimisation of waste generation and encouraging local waste disposal.