Reconciling Regulatory Space with External Accountability through WTO Adjudication – Trade, Environment and Development

This paper argues in favor of broadening the trade and environment debate in the WTO to include a developmental perspective. It takes the US-Tuna II dispute between the United Sates and Mexico as an example to show the complex intertwinement between economic, environmental and developmental issues. WTO litigation involving environmental regulation also touches upon the issue of global justice and the power asymmetries structurally embedded in the global economy. The recognition of the WTO as a legitimate global institution depends on its ability to reconcile respect for the right to regulate with the need to give due regard to the interests and concerns of foreign constituencies affected by domestic regulation, thereby ensuring external accountability. The paper applies this framework by analyzing the legal reasoning of the Appellate Body in US-Tuna II (in both the original and the compliance report). It shows that the Appellate Body deferred to a stringent and unilateral standard of the United States while imposing only minimal accountability vis-à-vis Mexico by requiring that the US standard be applied ‘even-handedly.’ The paper criticizes that ‘even-handedness’ does not necessarily improve regard for affected foreigners. A comparison with the Appellate Body’s reasoning in US-Shrimp shows that reflexivity-inducing other-regarding obligations require a higher burden of justification from the regulating state, especially in disputes between developed and less developed states.