In a landmark verdict, the WTO’s Appellate Body (AB) ruled on Monday 12 March that France was justified in banning imports of goods containing white asbestos, rejecting a Canadian request to have a September 2000 WTO panel finding overturned (see BRIDGES Weekly, 19 September 2000). The AB upheld the panel’s key finding that the French ban was justified under Article XX(b) of the 1994 General Agreement on Tariffs and Trade (GATT) — which provides a general exception to WTO rules for measures considered necessary to protect human health. Most significantly, the AB reversed the panel’s conclusion that asbestos and other, less dangerous alternative fibres are “like” products as defined by Article III:4 of GATT and should in principle be accorded the same treatment on the French market. The panel — which issued its ruling last September — came to the above-mentioned conclusion while it considered that it was “not appropriate” to take into account the health risks associated with white, or chrysotile, asbestos when examining the “likeness” of the product with alternatives such as polyvinyl alcohol, cellulose and glass (PCG) fibres (for more details, see the panel’s report, WT/DS135/R, available on the WTO website).
By contrast, the Appellate Body report stated, “We are very much of the view that evidence related to the health risks associated with a product may be pertinent in an examination of the ‘likeness’ under Article III:4 of the GATT 1994.” (Report of the Appellate Body, WT/DS135/AB/R, §113). The “carcinogenicity, or toxicity, constitutes, as we see it, a defining aspect of the physical properties of chrysotile asbestos fibres. The evidence indicates that PCG fibres, in contrast, do not share these properties, at least to the same extent. We do not see how this highly significant physical difference cannot be a consideration in examining the physical properties of a product as part of a determination of ‘likeness’ under Article III:4 of the GATT 1994. ” (Ibid. §114).
The AB’s findings were welcomed as a “landmark” ruling by the European Commission, which defended the French ban before the WTO. ” This ruling shows that the WTO is responsive to our citizens’ concerns, ” said EU Trade Commissioner Pascal Lamy. Environmental and consumer organisations are expected to widely welcome the ruling; while the initial panel ruling represented the first time a WTO panel upheld arguments put forward by a defending party to safeguard public health, the “like product” aspect had spurred environmental groups to decry the WTO decision as ‘doing the right thing for the wrong reasons’ and setting a dangerous precedent for failing to distinguish between toxic and non- toxic products.
The Appellate Body did uphold a Canadian challenge to the panel’s finding that the French ban did not constitute a ” technical regulation ” and therefore was not covered by the WTO Agreement on Technical Barriers to Trade (TBT Agreement). Legal experts said the Appellate Body’s finding was important as it closes a potential loophole allowing any government to declare a measure exempt from the TBT Agreement’s disciplines on the grounds that the measure is deemed necessary for the protection of human health.
The case had a strong political dimension in
Canada, the world’s third largest producer of asbestos, because the troubled industry is centred in Quebec where separatist sentiments remain strong — a fact that some analysts say had led the government in to take a high-profile stance in the asbestos manufacturers’ defence. Ottawa
Canadian asbestos producers also warned that the ruling could have significant negative repercussions for developing countries. The ruling gave more weight to arguments of affluent countries that asbestos is dangerous, to the detriment of developing countries, where products made of asbestos-cement help to reduce mortality rates, Denis Hamel, Director of the Asbestos Institute, said on 12 March.
A coalition of non-governmental groups including Greenpeace International, World Wide Fund for Nature International, BAN Asbestos Network, International Ban Asbestos Secretariat, and the Foundation for International Environmental Law and Development (FIELD) will shortly release a statement on the Asbestos decision that will be posted at:http://www.field.org.uk.
“WTO Appellate Body Upholds French Ban on Asbestos Imports,” BNA, 13 March 2001; “WTO upholds France’s ban on asbestos,” PLANET ARK, 13 March 2001; “Landmark ruling backs French ban on asbestos,” FINACIAL TIMES, 12 March 2001; “WTO upholds France’s ban on asbestos,” REUTERS, 12 March 2001; ICTSD Internal Files.
Source: International Centre for Trade and Sustainable Development (ICTSD). 13 March 2001