Disciplining Voluntary Environmental Standards At The WTO – An Indian Legal Viewpoint

Samir R. Gandhi
JEL codes: 
Indian Council For Research On International Economic Relations Working Paper No. 181

This paper looks into the proliferation of privately-formulated environmental product standards and analyses whether Indian industry has a legal recourse under the WTO dispute settlement mechanism if such standards are used as disguised restrictions on trade. The paper highlights some of the issues faced by Indian manufacturers when confronted with voluntary product requirements such as eco-labeling, packaging and recycling requirements in markets of key export interest to them and highlights the role of non-state actors in the formulation of such environmental product standards. Since some of these product standards are capable of being misused as protectionist devices, the paper examines whether the WTO dispute settlement mechanism can be used to resolve an issue which cannot be directly attributed to governmental action (or inaction). In doing so the paper studies the representations made by India and other developing countries at meetings of various WTO Committees; and past decisions of WTO Panels and the Appellate Body to establish the magnitude of the problem and look for possible legal solutions. The paper looks at the issue from a developing country perspective- the assumption being that developing countries are standard-takers, not standard-setters; and are unable to afford the costs of compliance associated with voluntary environmental standards. The analysis focuses predominantly on the use and interpretation of the GATT Agreement and the Agreement on Technical Barriers to Trade and discusses a possible legal strategy that may be adopted in any future dispute.