Free Trade and the Environment under the GATT/WTO: Negative or Compatible Relationship?

Abstract

How has the WTO handled global environmental issues? Does it favor the values of free trade or environmental protection? This paper provides a descriptive assessment on the two competing arguments about free trade and the environment under the GATT/WTO. One view sees free trade as harming the environment, whereas the other perspective sees it as contributing to environmental protection. To assess the efforts of the GATT/WTO for environmental protection, we examine environmental dispute cases and environmental notifications by member countries under the GATT/ WTO. We find that in earlier times, the WTO decisions in the dispute cases were prone to the first argument viewing free trade as harmful for the environmental protection. However, an increasing number of environmental-related notifications under the WTO by its member countries may indicate an improvement in the WTOs efforts to protect the environment, suggesting more recent support for the California effect.