Young, M --- "Trade Measures to Address Climate Change: Territory and Extraterritoriality" [2016] UMelbLRS 8

Last Updated: 22 May 2019

TRADE MEASURES TO ADDRESS CLIMATE CHANGE: TERRITORY AND EXTRATERRITORIALITY

Margaret A. Young ^[∗]

[States can reduce global greenhouse gas emissions through trade measures such as energy subsidies, labelling or certification requirements or tax adjustments. These measures modify production or consumption behaviour without regard to territorial borders. Yet territory is a significant concept for international efforts at climate change mitigation: the UNFCCC Paris Agreement, for example, relies on nationally determined contributions in the context of common but differentiated responsibilities. Moreover, public international law doctrine on extraterritorial jurisdiction may be said to require a ‘territorial nexus’ between the object of the trade measure and the state imposing the measure. Should the state concentrate on activities within its borders rather than shifting the burden of climate change mitigation to other countries through trade measures? The issue of historical responsibilities for climate change becomes even more fraught if the adverse effects of trade measures are felt disproportionately by indigenous peoples and other marginalised communities within states. This chapter reviews trade law and other jurisprudence and argues that trade measures addressing climate change are unlikely to enliven – let alone violate – public international law rules on extraterritorial jurisdiction. In the alternative, it argues that if a nexus is required, it is relatively easy to satisfy. Neither of these findings, however, dispose of the issue of the lack of parity between and within states with respect to historic contributions to the cause of climate change and vulnerabilities to its impacts. This chapter thus demonstrates the importance of an understanding of how territory—and jurisdiction—operate in the context of trade measures to address climate change, and how this understanding points to a need to be aware of the status and conditions of people within the territory of affected trading partners.]

[Key words: trade law, climate change, extraterritoriality, territorial nexus, indigenous peoples]

1. INTRODUCTION

Climate change mitigation has a distinctly territorial aspect. Although greenhouse gas emissions (GHGs) mix in the atmosphere without regard to territorial boundaries, most of the emissions come from states with particularly carbon-intensive patterns of production and consumption within their borders. The effects of climate change are not necessarily felt on those same states: instead, changing weather patterns, increased vulnerability to extreme events and the loss of land due to rising sea waters is felt within some territories more than others.

To address climate change occurring both within and outside their territory, states are currently seeking to implement a series of trade measures. These measures will modify production or consumption behaviour, either within or outside the territory of the relevant states. For this reason, any legal assessment of trade measures addressing climate change must include an analysis of the rules on jurisdiction and extraterritoriality that have been developed in public international law. While such rules are relevant and even similar to the requirements that trade measures be non-discriminatory, origin neutral and least trade-restrictive (as discussed in the current volume) they demand separate and sustained analysis. This is the aim of the current chapter.

Proposed trade measures to address climate change follow precedents that have demonstrated that import bans, labelling or certification requirements and subsidies can be used effectively to address environmental problems. We know that such measures need to be carefully designed and implemented so as to be consistent with World Trade Organization (WTO) obligations. This task becomes especially complex if the relevant environmental problem occurs outside of the territory of the state imposing the trade measure. Questions may arise about ‘extraterritoriality’ or the exercise of ‘extraterritorial jurisdiction’. For example, if the United States (US) imposes a ban on shrimp in order to protect sea turtles, does a connection between the turtles and the US territory need to be established? Does it matter in legal terms if a ban by the European Union on seal products impacts on the economic livelihoods of indigenous groups recognized as having special rights within the territory of another country? Can a WTO member regulate the way in which information about a product’s production method outside of its territory appears on a label when the product is sold within its borders? While the General Agreement on Tariffs and Trade (GATT) is silent on the issue of jurisdiction,^[1] the Appellate Body has variously responded with a ‘probably’, ‘perhaps’, and ‘yes’—to each of these scenarios, which I discuss in more detail below.

As a category of environmental problems that is immediately more complex and diffuse than specific issues of biodiversity protection or animal welfare, climate change poses particularly difficult questions relating to territory. The United Nations Framework Convention on Climate Change (UNFCCC^[2]) has apportioned GHG emission reductions on a territorial basis, and also notes that historic contributions and capacities to mitigate are vastly divergent as between states—as articulated most clearly in the concept of ‘common but differentiated responsibilities’ (CBDR).^[3] Yet trade measures may alter behaviour and livelihoods in ways that pay little heed to these principles. Indeed, trade measures may even seek to alter the behaviour of people outside the territory of the measure-imposing state who are not only historically relatively uninvolved in the causes of climate change but are marginalized within their own states, such as indigenous peoples. (This scenario is not unknown in the broader climate change mitigation context, as demonstrated by recent efforts within the UNFCCC to reduce emissions from deforestation and forest degradation (REDD+), which have led to concern and complaints by indigenous peoples and other forest-dwelling communities.^[4]) Just where the climate change mitigation occurs, and whose behaviour it targets, is extremely important in an assessment of trade measures addressing climate change.

Drawing on earlier work relating to trade measures addressing environmental concerns in faraway places,^[5] this chapter considers and rejects the idea that trade measures addressing climate change can a priori be classified as an exercise of ‘extraterritorial jurisdiction’. Section 2 offers a brief taxonomy of the types of trade measures that might be adopted by states to address climate change. It asks whether trade measures are classified as internal or external to the state taking the measure, and compares other measures seeking to regulate carbon, or GHG emissions, including measures taken in the aviation and coal mining sectors. Section 3 then provides an analysis of public international law and trade law jurisprudence on extraterritoriality. It considers the (contested) need for a ‘nexus’ between trade measures and climate change mitigation, drawing particularly on the Appellate Body decision in US−Shrimp^[6] as well as associated jurisprudence. The chapter goes on, in section 4, to examine the situation of trade measures addressing climate change that impact upon indigenous peoples, or other historically marginalized groups, in areas outside the territory of the relevant state. It offers an explanation of how indigenous issues may arise in trade contexts, drawing in particular on WTO case law, including the EC−Seals dispute.^[7] Finally, in section 5, and in line with the ambitions of this volume, the chapter concludes with implications for the design and implementation of trade measures to address climate change.

2. MEASURES TO ADDRESS CLIMATE CHANGE THROUGH TRADE

Mitigating climate change can involve a range of measures that seek to change production or consumption behaviour over a long period of time, as has been acknowledged in obiter of the Appellate Body.^[8] The location of the behaviour that such measures are seeking to address could be said to be within a state’s territory or abroad. Where the latter is the focus, the measures might be classified as ‘extraterritorial’ in that they are focused on conduct outside of the territory of the importing state, with associated legal questions relating to jurisdictional limits and the impact on communities outside of the state’s territory. As well as the need to conform to trade law (with the GATT Article XX often the most relevant provision^[9]) the measures may be required to satisfy express or implied jurisdictional limitations. The latter leads to complex legal questions involving public international law rules of prescriptive jurisdiction, including the need to establish a ‘territorial nexus’ between the objective of the trade measure and the importing state. This section discusses the relevance of the idea of extraterritoriality by providing a brief set of examples of the types of measures at issue, before moving to demonstrate the complexity of the notion of ‘territory’ in the climate change context and the status of the law.

2.1 Carbon-related Trade Measures

Trade measures have been used—very successfully—to reduce the prevalence of some substances that are hazardous to the atmosphere: the effective reduction of ozone-depleting substances by the Montreal Protocol is a case in point.^[10] More recently, measures to mitigate climate change through trade have been addressed at the energy sector, with a focus on carbon as one of the main components of the UNFCCC’s list of sources of GHG emissions.^[11] Measures that are most sensitive in terms of trade effects are border carbon adjustments and renewable energy subsidies. The latter have been subject to challenge at the WTO, including disputes brought against Canada’s feed-in-tariff (FIT) program for renewable energy generation in Ontario^[12] and India’s program for solar cell production.^[13] Fossil fuel subsidies, which are currently provided by states for consumption and production, have so far escaped WTO challenge, but increasingly policy reform is directed at this issue.^[14] Other carbon-related trade measures include certification, labelling or traceability for a range of products: a prominent example is labelling for ‘food miles’ to alert consumers to the distances travelled (and thus transport-related GHG emissions) by particular food products.^[15] Such measures continue to emerge and adapt on the basis of changing scientific understandings; the growing awareness that forests and the oceans are operating as ‘carbon sinks’, for example, may mean that trade measures on illegally harvested timber or fish will include climate change mitigation as one of many regulatory goals.

Alongside these measures to mitigate climate change are the market-based mechanisms that create tradeable permits for GHG emissions, such as the EU’s emissions trading scheme (ETS) as well as financial incentives for carbon sequestration such as REDD+. Moreover, the need to keep carbon ‘in the ground’ has led to proposals for investment divestments by universities and public pension funds^[16] and the cessation of new federal mining leases.^[17] The impact on trade of these measures is less direct.

2.2 Carbon Measures: at Home or Abroad?

Measures to mitigate climate change are difficult to classify in terms of geographical scope. On the one hand, effects of global warming are felt worldwide, and so importing states could legitimately claim to be addressing their own environmental problems (as well as others) by using trade measures. On the other hand, the cause of climate change is historically associated with the very countries who are proposing to use such trade measures, and it could be argued that these countries should use domestic regulation to address this problem rather than impose the costs on other countries through trade measures. This is similar to environmental regulation that displaces costs onto foreign trading partners.^[18] Whether climate change mitigation is classified as addressing an environmental challenge arising inside the territory of the importing state, or outside its territory, is inherently controversial and political, involving complex questions of justice and distribution.

It is helpful to consider measures that have been historically devised to mitigate climate change that do not prima facie involve trade. Predominant among these is, of course, the UNFCCC, which has adopted a specific territorially-bounded notion of GHG emissions. Under the UNFCCC, parties provide national inventories of their anthropogenic emissions as part of their general commitments to reduce GHG emissions.^[19] Subject to limited exceptions, the GHG emissions are ‘production-based’ in that they account for emissions in the territory, rather than for consumption of products that embody emissions.^[20] This concept has implications when seeking to identify national contributors to climate change: from the perspective of production-based emissions, the contribution to climate change of developed countries appears to have stabilized, while consumption-based contributions suggest a rise in GHG emissions at an annual rate of approximately 10 per cent.^[21]

The UNFCCC’s territorially-bounded notion of GHG emissions is reproduced in the Kyoto Protocol.^[22] In the first commitment period of the Kyoto Protocol, certain developed states parties assumed legal obligations for specific GHG emission reductions. These targets are expected to be continued in the next iteration of the commitment period.^[23] Importantly, the Kyoto Protocol has recognized that the reduction of GHG emissions is worthwhile, regardless of where the reduction occurs. This is achieved through the process of offsetting, in which those countries that assume legally binding targets can purchase offsets of GHG reductions occurring in other territories.^[24] The Kyoto Protocol thus reinforces the notion of territorially-bounded GHG reductions that can be augmented, but only if the relevant country pays for it in some way. A similar rationale accompanies REDD+: tropical forested nations are asked to ensure that they keep their forests standing (and their carbon sequestered) but only through the provision of financial incentives—either market-based carbon credits or direct funds.^[25]

The UNFCCC’s model of territorially-bounded GHG emissions is replicated in the Paris Agreement negotiated at the Conference of the Parties (COP21) in Paris in December 2015.^[26] The Paris Agreement relies on a concept of ‘nationally determined contributions’, according to which states parties submit national plans that detail their mitigation methods and objectives. The agreed global aim is to collectively achieve mitigation that ensures global temperature rises do not increase beyond 2 degrees Celsuis above pre-industrial levels, with a limit of 1.5 degrees Celsius temperature increase the stated aim. While countries may pursue offset arrangements on a voluntary basis,^[27] the modalities of this form of carbon trading were not set out in the Paris Agreement and will instead be established in the meetings of the parties now that the Agreement has entered into force.

A similar conception of territoriality in the climate change context has arisen in domestic environmental cases, with different implications that depend on the context in which the claim arises. For example, the recent Dutch case of Urgenda relating to the responsibility of the Netherlands in climate change mitigation can be contrasted to a series of domestic challenges to coal mines in Australia and New Zealand. In Urgenda, a Dutch non-governmental organization (NGO) submitted that the Netherlands was acting contrary to its duty of care towards its members and the greater Dutch society due to its failure to place further limits on GHG emissions.^[28] A second argument was that the state was wrongly exposing the international community to the risk of dangerous climate change. The Hague District Court accepted the first argument, and concluded that the state had a duty of care to take mitigation measures.^[29] The government’s duty of care ‘extends across Dutch territory’.^[30] The Court found that no conclusion needed to be made about whether Urgenda’s reduction claim could also be successful in that it promoted ‘the rights and interests of current and future generations from other countries’.^[31]

The focus on the responsibility for territorially-bounded emissions has been advanced in a similar way, but with different consequences, in domestic coal mine challenges. For example, environmental groups in Australia and New Zealand have submitted that the GHG emissions from the burning of coal in overseas territories should be taken into account in the domestic mine approval process.^[32] One recent decision rejected this formulation on the basis that it would require the domestic decision-maker (the authority approving the mine) to regulate activities extraterritorially. Rather than drawing on a notion of UNFCCC-driven apportionment, the lower-court New Zealand judge noted the bureaucratic difficulties of incorporating ‘overseas discharges’ into domestic decision-making, stating:

One leviathan of environmental law (i.e. the RMA [Resource Management Act]) is more than enough for lawyers, experts, environmental managers, planners, the local authorities and the Courts of this country. The prospect of a district council assessing whether an end use of coal (or other greenhouse gas emitting resources) is subject to sustainable environmental policy, regulatory control, mitigation or compensation in Cambodia or a province in China, in Japan or Brazil, Zimbabwe or Kenya, or other foreign jurisdictions is palpably unattractive. I do not think it is a matter that is properly justiciable under the RMA in accordance with acceptable judicial method.^[33]

These examples of international and domestic efforts to mitigate climate change through a reduction in GHG emissions are clear in asserting territorial boundaries for relevant action. This can be contrasted to the EU’s attempt to incorporate aviation emissions within the EU regulatory framework. Against the anomaly of GHG emissions within the aviation sector not being adequately addressed in the UNFCCC framework, the EU’s Aviation Directive sought to include emissions from aviation in the EU ETS.^[34] This included ‘extraterritorial’ GHG emissions, in the sense that the emissions were not simply generated over the EU airspace, but rather by flights occuring over any other airspace so long as they were generated by a flight departing from, or arriving to, an EU airport. The EU’s measure was seen by many as potentially disrupting the agreed territorial demarcation (and cost allocation) of climate change mitigation, and led to challenge at the Court of Justice of the European Union.^[35] The challenge included arguments that the Directive was an exercise of extraterritorial jurisdiction, but these arguments were rejected by the Court, which emphasised the territorial nexus created when the flights arrived to or departed from the EU.^[36] The EU’s aviation measure is akin to trade measures, which by their very nature involve modification of production and consumption behaviour in different territories through supply and demand. The next section considers whether the concept of extraterritorial jurisdiction is appropriate in these contexts.

3. TRADE AS AN EXERCISE OF JURISDICTION?

The policies and cases reviewed in section 2 show that the concept of territory has been emphasized in the climate change context in order to allocate responsibilities between states and create effective carbon accounting. Does this mean that measures addressing climate change through trade ought to be classified as ‘extraterritorial’? On the one hand, a body of work would point to the fact that trade measures are applied ‘at the border’ (such as customs duties or bans) or ‘behind the border’ (such as labelling requirements) thus creating an explicit link to territory that could be said to be the basis for jurisdiction.^[37] Applied to the climate context, trade measures would be unlikely to be extraterritorial. This position would be even more indisputable if there was a demonstrable link to the moral and economic intentions of citizens and consumers within the territory imposing the relevant trade measure.

On the other hand, this broad-brush attitude to trade measures fails to recognize their impact on external sovereigns (and people). As I have written elsewhere, the core issue animating the debate on jurisdictional limits is the wish to avoid states interfering with the domestic affairs of other states.^[38] The economic dimensions of this situation are set out in Principle 12 of the Rio Declaration:

States should cooperate to promote a supportive and open international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation. Trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus.^[39]

This formulation of Principle 12 of the Rio Declaration was reportedly influenced by the complainant states in the GATT-era dispute over tuna import restrictions to combat the mortality of dolphins.^[40] The Panel in that dispute famously brought into question the extra-jurisdictional application of measures necessary for the protection of life and health.^[41] Although the US had denied that the trade measures were extraterritorial, instead arguing that they ‘simply specified the products that could be marketed in the territory of the United States’,^[42] and a second Panel subsequently retracted the first Panel’s position on territory and jurisdiction,^[43]the seeds were sown that trade measures could be seen to involve extraterritorial jurisdiction.

3.1 Public International Law and Prescriptive Jurisdiction

Within public international law, the general position is that jurisdiction is territorially-based, and that for an exercise of extraterritorial jurisdiction to be lawful, it must have a specific basis.^[44] The notion of ‘prescriptive jurisdiction’—also termed ‘legislative jurisdiction’^[45]—refers to the geographical reach of a state’s law,^[46] while ‘enforcement’ jurisdiction refers to the exercise of power in a foreign country. In the SS Lotus case, the Permanent Court of International Justice (PCIJ) recognized that states enjoy a broad discretion as to the territorial reach of their laws,^[47] although that position has been gradually narrowed so as to require a permissive ground.^[48] Permissive grounds relate to the nationality principle (permitting the exercise of jurisdiction over a state’s national for certain acts committed abroad), the ‘passive personality’ principle (permitting jurisdiction over acts that occurred abroad but which harmed a national), the ‘protective’ or ‘security’ principle (jurisdiction over aliens for acts carried out abroad which affect the security or key interests of the state) and the ‘effects doctrine’ (allowing jurisdiction to be exercised over offences outside the territory of the state that caused a harmful effect). If a trade measure prescribes laws that cover foreign conduct or involves the enforcement of domestic laws abroad, and is not accompanied by a justifying ground, it may be said to violate international law principles of extraterritoriality. On this basis, some scholars, such as Bartels, consider unilateral trade measures to involve an exercise of extraterritorial prescriptive jurisdiction.^[49] Others disagree, and point to the absence of legal effect of unilateral trade measures on foreign jurisdictions: while there may be a new-found inability to export due to trade measures addressing climate change, there is not an exercise of jurisdiction over those countries.^[50] On the latter view, ‘as long as the importing country regulates directly only behaviour within (or at) its borders, then it is not regulating extraterritorially even if its goal is to avoid encouraging behaviour beyond its borders’.^[51]

3.2 The Need for a Nexus in WTO Cases

The difference in views on this question has lingered. In US−Shrimp, the newly formed Appellate Body had occasion to rule on the question in the context of another challenge to a US measure addressing a transboundary or global environmental concern: the protection of sea turtles.^[52] As is well-known, the US imposed a domestic regulation which required the domestic shrimp fishing industry to adopt technology known as ‘turtle excluder devices’ in their fishing practices, and the US thereafter effectively conditioned access to its lucrative market on the use of these devices outside of its coastal jurisdiction. Malaysia, India, Pakistan and Thailand challenged this as a GATT violation. The European Community (EC) appeared as a third participant and submitted that WTO members should be able to act unilaterally to protect a global environmental resource, but that this should be a last resort and ‘would only be justified ... if consistent with general principles of public international law on “prescriptive jurisdiction”’.^[53]

In contrast to the complainants’ view, the Appellate Body found that ‘[c]onditioning access to a Member’s domestic market on whether exporting Members comply with, or adopt, a policy or policies unilaterally prescribed by the importing Member may, to some degree, be a common aspect of measures falling within the scope of one or another of the exceptions (a) to (j) of Article XX’.^[54] The sea turtle species that the US measure was designed to protect occurred in waters over which the US had jurisdiction as well as other waters – both coastal and high seas – given their recurrent migrations. The Appellate Body noted that there was no claim of any rights of exclusive ownership over the turtles, and commented that ‘[w]e do not pass upon the question of whether there is an implied jurisdictional limitation in Article XX(g), and if so, the nature or extent of that limitation’.^[55] Instead, it held there was a sufficient nexus between the endangered marine populations and the US for the purposes of Article XX(g).^[56]

Such a nexus accords with the principle of prescriptive jurisdiction in public international law that requires a ‘genuine connection between the subject-matter of jurisdiction and the territorial base or reasonable interests of the state in question’.^[57] It is separate in character to the requirements of GATT Article XX, and particularly the chapeau.^[58] In US-Shrimp, the Appellate Body found that the US had failed to satisfy the chapeau requirements. It noted that apart from a regional agreement on turtle conservation, no agreements with the broader group of countries affected by the embargo were reached ‘or seriously attempted’ by the US.^[59] The Appellate Body emphasized that ‘concerted and cooperative efforts on the part of the many countries whose waters are traversed in the course of recurrent sea turtle migrations’^[60] was necessary for the protection and conservation of sea turtles.^[61] The US’s failures in this regard amounted to ‘unjustifiable discrimination’, while its conditioning of market access on the adoption by trading partners of the same regulatory techniques (rather than a regulatory programme ‘comparable in effectiveness’) was considered to be rigid and inflexible and as a consequence amounted to ‘arbitrary discrimination’.^[62]

The need for a nexus to satisfy jurisdictional requirements has not been articulated by subsequent Appellate Body decisions. In 2012, the ‘dolphin-safe’ labelling dispute of US-Tuna II was an opportunity for the Appellate Body to apply the notion of nexus but, tellingly, it chose not to do so. The Appellate Body did not accept Mexico’s complaint that the US measure ‘unilaterally and extraterritorially impose[d] US fishing method requirements’ as a condition for market access.^[63] Although Mexico succeeded in establishing a violation of the TBT Agreement, this was based on the impugned measure’s scope of application (which set stricter labelling conditions for tuna caught in the Eastern Tropical Pacific Ocean),^[64] rather than its targeting of the production and process methods of the tuna catch. Rather than extraterritorial jurisdiction, the problem for the US was in failing to act in a non-discriminatory way. No nexus was required between the aim of the measure (i.e. reducing dolphin mortality) and the US’ jurisdiction (or, if it was required, it was established so easily as to pass without comment). This accords with analysis such as that of Cassimatis, Howse and Regan, as identified above.^[65]

Similarly, the EC−Seals^[66] case was not argued on the basis of jurisdictional limits. The dispute arose because of an EU ban on the import of seal products due to the ‘deep indignation and revulsion’^[67] of EU citizens and consumers towards the trade in products hunted in inhumane conditions within and outside EU territory. Norway and Canada challenged the ban, particularly because of concerns that the exemptions to the ban—which applied inter alia to Inuit and other indigenous communities^[68]—were being applied in a way that was discriminatory.

Canada and Norway did not frame their complaint in EC−Seals in jurisdictional terms. Arguably, there was no need to deal with the issue, given the link between the seal ban and the EU’s territory; so much could be said from US−Tuna II. However, the public morals dimension adds a further element to the question of jurisdiction: the ban was motivated by the non-physical public morality of EU citizens and consumers. Cases falling within GATT Article XX(a) are arguably different from those that fall within GATT Article XX(b) or (g).^[69] In response to questioning from the Appellate Body during the oral hearing, the participants agreed ‘that there is a sufficient nexus between the public moral concerns and activities addressed by the measure, on the one hand, and the European Union, on the other hand’.^[70] The Appellate Body held that: ‘while recognizing the systemic importance of the question of whether there is an implied jurisdictional limitation in Article XX(a), and, if so, the nature or extent of that limitation, we have decided in this case not to examine this question further’.^[71]

In sum, the WTO cases do not give a clear position on whether there is a need for a jurisdictional nexus (beyond the fact of the border) in the types of scenarios where respondents rely on GATT Article XX(a)−(b) or (g). In the most recent case of EC−Seals, the absence of litigant submissions on jurisdictional limitations supports the view that there is no textual or implied jurisdictional limitation in the measures listed in the enumerated paragraphs of GATT Article XX–or at the very least not for public morals in Article XX(a).^[72] The next section considers why this might be so, a reflection that is particularly pertinent in the context of trade measures addressing climate change.

3.3 The Underlying Aims of Territorial Connection

The previous section reviewed the key cases of US−Shrimp, US−Tuna II and EC−Seals to assess whether there are jurisdictional limits within trade law. In US−Shrimp, the Appellate Body entertained the idea of a ‘nexus’ requirement, but this was not applied in US−Tuna II or EC−Seals. Yet in the latter case, the Appellate Body felt compelled to comment on jurisdictional limitations—indeed, note the ‘systemic importance’ of the question—without any instigation from the disputing parties. This intervention is perhaps an indication of a sense of foreboding about the potential breadth of the public morals exception. The ability of public morals to ground within a territory many non-trade values—well beyond environmental challenges—gives rise to the apprehension that keeping WTO members true to their GATT commitments will become increasingly difficult. Maintaining the need for a ‘nexus’ (and not simply relying on the GATT Article XX chapeau tests) ensures a central role for a WTO dispute settlement body in adjudicating upon the sufficiency of any connection between the state imposing the trade measure and its subject matter.

But would a ‘nexus’ requirement confine the scope of trade measures addressing climate change? Containment is unlikely, and increasingly so. In the context of climate change, any nexus between a trade measure and the object of climate change mitigation seems ever easier to demonstrate. Certainly, the historic and emerging effort of states to agree upon obligations at the UNFCCC is significant. Even apart from UNFCCC obligations, there are a range of legal obligations for governments to avert the harmful effects of climate change, based on existing international human rights law, environmental law and tort law.^[73] For example, the Dutch case Urgenda mentioned above,^[74] found that the Netherlands had a duty of care to take mitigation measures, which was informed by, but not necessarily based on, constitutional law and international and European climate policy. This finding was made notwithstanding that ‘the Dutch contribution to climate change is currently small’.^[75] In the context of the legal challenge to the EU’s Aviation Directive, the Court of Justice of the European Union (CJEU) did not rely on the UNFCCC context but instead ruled that there was no incompatibility between the EU’s Aviation Directive and the territorial principle of jurisdiction in customary international law because of the territorial nexus between the EU and its object of regulation (the flights departing from or arriving into the EU).^[76]

Apart from law, there is emerging evidence from a range of disciplines that contribute to an understanding of the interconnected nature of climate change. For example, the science of climate change is constantly evolving in new areas, such as recent research that shows how overfishing leads to climate change.^[77] In the behavioural sciences, recent research shows that humans have evolved to develop ethical frameworks for the protection of other humans outside of their tribes or territory.^[78] The interconnected nature of the problem of climate change allows—and even arguably requires—states to act in ways that modify behaviour both within and outside of their territories.

The ease with which a finding of nexus can be made in the context of trade measures addressing climate change is not, however, the end of the matter. As Scott demonstrates, the requirement of ‘nexus’ does not answer the broader philosophical, ethical and legal issues of climate change mitigation. She shows that the CJEU judgment failed to incorporate the principle of CBDR.^[79] By imposing costs in the aviation sector, the EU was forcing behavioural change in other states but also distributing a burden that it would otherwise have to meet. A similar problem arises in the context of border carbon adjustments, which may displace the costs of climate change mitigation in manifestly unfair ways.^[80]

There is, therefore, a need for a framework that allows entities such as the EU to use their market power in an effort to induce other countries to mitigate climate change, but also respects the fair and ethical apportionment of costs that the CBDR principle encapsulates. Such a framework is not currently contained in jurisdictional rules. The key question for trade lawyers is whether there are trade law rules—such as the GATT Article XX test—that can address these inequities and difficulties. Arguably, trade law’s requirement that the relevant measure be designed and applied flexibly and with an ex ante attempt to resolve the moral concern through multilateral negotiations is a step in this direction.^[81] Moreover, the Appellate Body’s finesse in incorporating international law principles in US−Shrimp could be undertaken again with respect to key UNFCCC concepts such as territorially-assigned emissions targets and CBDR. The concepts become even more complex when placed alongside contested sovereignties within foreign territories, a topic taken up in the next section.

4. CLIMATE CHANGE, INDIGENOUS PEOPLES AND TRADE

Trade measures to address climate change and the question of territoriality become even more ethically and philosophically fraught when viewed from the perspective of indigenous peoples and other groups that have been historically marginalized by their respective states. The problem of climate change may be considered to be conceived, created and imposed entirely outside of the social norms and practices of the relevant communities. In the case of REDD+, for example, indigenous peoples have complained that they may be disadvantaged or displaced by proposed interventions to reduce emissions from deforestation.^[82] Yet indigenous peoples might support a trade intervention, as was demonstrated in the softwood lumber dispute between the US and Canada, when indigenous groups in Canada supported countervailing duties imposed by the US, on the basis that non-recognition of aboriginal land and resource rights constituted a subsidy.^[83] This section attempts to provide a brief explanation of how indigenous issues may arise in trade contexts and a discussion of how similar issues were raised in the EC−Seals dispute, in order to demonstrate the relevance of this issue for trade measures addressing climate change.

4.1 Trade Liberalization and Indigenous Peoples

The situation of indigenous peoples is special in part because their status depends on recognized or contested property, tenure, or other legal arrangements with settler states. The impact of trade liberalization on this special situation has been recognized within trade law. Although the GATT does not explicitly provide for differential treatment for indigenous peoples, a number of subsequent preferential or regional trade agreements have set out affirmative action measures. For example, New Zealand’s trade agreements with Thailand and Trans−Pacific partners includes a general exceptions clause that recognizes New Zealand’s right to adopt measures ‘it deems necessary to accord more favourable treatment to Maori in respect of matters covered by this Agreement including in fulfilment of its obligations under the Treaty of Waitangi’.^[84] Other regional trade agreements contain exemptions for aboriginal peoples from trade commitments relating to cross-border services, investment and government procurement.^[85] The Energy Charter Treaty (ECT) contains an exception for measures ‘designed to benefit Investors who are aboriginal people or socially or economically disadvantaged individuals or groups or their Investments and notified to the Secretariat as such’ in certain circumstances.^[86]

Aside from trade agreements, the need to protect the economic and social interests of indigenous communities has been recognized in a number of international agreements. Two important examples are the United Nations Declaration on the Rights of Indigenous Peoples and the ILO Convention concerning Indigenous and Tribal Peoples in Independent Countries (ILO Convention 169).^[87] The United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) is a declaration supported by a majority of the states voting within the UN General Assembly.^[88] ILO Convention 169 is a binding treaty with 22 ratifications, mainly of Latin American parties.^[89] In addition, the Convention on Biological Diversity (CBD) recognizes the need for indigenous peoples to have access to the benefits arising from the utilization of their knowledge, innovations and practices.^[90] A range of other bilateral and unilateral instruments grant exemptions from prohibitions on hunting for particular indigenous practices if they are done for non-commercial purposes.^[91]

4.2 Exceptions and Exemptions

Questions of jurisdiction are more complex when one acknowledges that trade measures seeking to address climate change may impact upon indigenous peoples and other groups such as artisanal and subsistence fishers, forest dwellers or Inuit seal hunters. Irrespective of legal status, these people may have a continuous connection to the land or natural resources that predates formal settlement, and may be forced to alter income-generating activities due to the policies of states other than the ones in which they live.

A similar scenario emerged with the EU’s ban on seal products. In an attempt to reconcile the problems that would have been faced by indigenous peoples, the EU exempted trade from Inuit and other indigenous communities from the ban. The challenge to the EU’s ban by Canada and Norway forced the Appellate Body to address this issue for the first time.^[92]

As already mentioned, the EU’s ban on seal products was imposed due to the concerns of citizens and consumers about the welfare of seals. The ban contained three exceptions, one of which was designed to allow trade from Inuit and other indigenous communities. The need for this exception was identified during the legislative process, given the adverse or significant impact of a seal product ban on the Inuit and other indigenous communities,^[93] who were expressly included in the resulting Regulation.^[94] The conduct of the hunt of those peoples was considered to have special characteristics, particularly relating to the identification of the hunter within a local seal hunting tradition, the relevant community’s continuing use or consumption of at least some of the products of seal hunting, and a contribution of the hunt to the subsistence of that community.^[95]

Part of the grievance of Norway and Canada was that the exceptions were in practice only available to the Greenlandic Inuit and they argued that this amounted to de facto discrimination. In adjudicating this claim, the Appellate Body drew on its interpretation of the chapeau of GATT Article XX in US−Shrimp. It found that the application of the measure was overly casual and informal, and that the EU had not made ‘comparable efforts’ to facilitate access to the exception for the Canadian Inuit as it did for the Greenlandic Inuit.^[96] It cited the finding in US−Shrimp of likely arbitrary or unjustifiable discrimination ‘when the application of the measure at issue does not allow for any inquiry into the appropriateness of the regulatory program for the conditions prevailing in those exporting countries’.^[97] The implication was that the EU should have responded to the conditions that prevailed in exporting countries by informing itself particularly about the relevant issues pertaining to the special group of the Inuit and other indigenous communities within those countries.

There were additional aspects of the EC−Seals decision that gave rise to expectations for importing countries dealing with indigenous communities. For example, the Appellate Body had some difficulty with the fact that the exception for seal products from Inuit and other indigenous communities, though partly aimed at ‘subsistence’ activities (where ‘subsistence’ was undefined in the relevant regulations), could nonetheless enter the market on a commercial basis. Also viewed as ambiguous was the condition that indigenous seal hunts continue their tradition of at least ‘partial use’ by the community of products of the hunt. For the Appellate Body, it was not clear how indigenous hunters would fulfil this requirement. Although the measure envisaged the accreditation by designated bodies of the hunts, the Appellate Body considered this process to be insufficiently fair and just when viewed in the context of providing transparent and clear market opportunities for indigenous communities from outside the EU.^[98] These aspects were additional grounds on which the Appellate Body found that the exception did not meet the requirements of the chapeau.

4.3 Guidance from International Law

The difficulties in classifying commercial activities, traditional use and other issues relating to indigenous and special groups, as encountered by the Appellate Body, are fairly common quandaries within other international regimes. The EU cited the UNDRIP and ILO Convention 169 to support its formulation of the exception, and the two instruments were referred to by the Panel.^[99] During the appeal, Ecuador, as one of the third participants, supported the Panel’s inference of ‘subsistence as including income-generating activities necessary to support traditional forms of life for indigenous communities, and its reference to international instruments to inform its analysis’.^[100] Use may also have been made of CITES, whose parties have attempted to deal with the definition of commercial activity, albeit in a non-indigenous context.^[101]

The Panel took account of international laws with conscious self-restraint. They were considered as factual evidence rather than law. Referring to the UNDRIP and ILO Convention 169, the Panel noted that ‘these instruments are not WTO instruments and they do not set out WTO obligations per se’,^[102] thus appearing to align itself with the oft-expressed view that the applicable law of WTO dispute settlement bodies is restricted to the WTO covered agreements.^[103] This is a restrictive view, and one that is disputed by Pauwelyn, who notes that ‘nothing in the [Dispute Settlement Understanding] or any other WTO rule precludes panels from addressing and, as the case may be, applying other rules of international law in order to decide the WTO claims before them’.^[104] Aside from the issue of applicable law, the Panel might have drawn upon these international instruments as tools of treaty interpretation, in the same mode in which the Appellate Body drew upon CITES and other treaties in US−Shrimp.^[105] Although expressly envisaged in the Dispute Settlement Understanding (DSU), interpreting WTO law using other international instruments has been rather restricted since US−Shrimp. For example, a panel in EC-Biotech^[106] required that to be relevant rules of international law, other international instruments must be binding on all WTO members^[107] (a need that is readily met by customary international law but could be impossible to meet for smaller treaties like ILO Convention 169 or UN General Assembly Declarations like the UNDRIP). The EC−Seals Panel avoided this issue and the international instruments, although mentioned, did not have any normative effect in the dispute.

The Appellate Body in EC−Seals did not refer to the two international instruments. This may well have been because the parties did not make submissions on them (although, as we have seen in the context of extraterritorial jurisdiction in the EC−Seals case, the absence of submissions on a legal point will not necessarily go unremarked). Even the amicus briefs—which can be conduits for international laws and even indigenous issues^[108]—do not appear to have relied on them.^[109] Nor was there any consultation between the WTO and other international organizations.^[110] Instead of seeking guidance from established international instruments, the difficult jurisdictional issues endemic to indigenous peoples and sovereignty—such as the identification of indigenous peoples,^[111] the nature of indigenous land and resource rights, the relative empowerment of indigenous peoples and the characterization of subsistence or artisanal practices—were left to the importing states.

The impacts on indigenous peoples confronted by the importing state in the EC−Seals dispute may have been considered to be relatively straightforward in territorial terms. As we have seen, the impacts were identified during the legislative process creating the ban; this contrasts with a generally acknowledged deficiency of representation and participation for indigenous communities in government and political processes.^[112] The relevant communities were also relatively confined: although the definition of indigenous communities in the EC regulation was broad (and taken directly from ILO Convention 169) the application of the law was restricted to communities with a very specific cultural heritage relating to seal hunting. As such, the Appellate Body may have been more comfortable in placing the onus on importing states—with the necessary guidance for outreach and flexibility as required by the chapeau of GATT Article XX—to identify, engage with and act justly towards indigenous peoples in other states, rather than relying directly on obligations contained in the UNDRIP, ILO Convention 169 and other instruments.

Other scenarios will be less straightforward. For example, as ILO Convention 169 reminds us, indigenous and tribal peoples should be identified and accorded rights-protections due to social, economic, cultural and political factors that are ‘irrespective of legal status’.^[113] One implication of this is that it may not always be sufficient or appropriate for importing states to defer to the domestic law of the exporting state in these matters, given that those states may be withholding legal status due to an underlying unwillingness to protect certain rights. In addition, any special or differential treatment of indigenous peoples within the countries they inhabit may be based on reparative property-based measures, cultural reasons or other negotiated arrangements. These relational practices may be impossible to accommodate multilaterally within the trade regime.^[114] The Appellate Body will find that dealing with such complexities in climate change and other contexts requires guidance from international law.

5. CONCLUSION

Trade measures to address climate change are available to states wishing to modify production or consumption behaviour. This is to address a problem—global warming—that is manifest worldwide with no differentiation as to territorial boundaries, notwithstanding the particular vulnerability to rising sea levels of low-lying island states. The intended change in behaviour brought about by such measures is the reduction of GHGs emissions, especially through the promotion of a low-carbon economy, or the sequestration of carbon within, or outside of, the territory of the relevant state. Unilateral measures have recently emerged or are proposed which include energy subsidies, mooted border tax adjustments, certification, labelling and traceability requirements and import bans.

Territory is a significant concept for international, regional and domestic efforts at climate change mitigation. In the UNFCCC, for example, the integrity of international obligations is secured through carbon accounting models that rely on national inventories and targets, including the nationally determined contributions submitted as part of the newly formed Paris Agreement. In the EU aviation context and in domestic coal mining legal challenges, legal arguments have focused on the need to contain the territorial aspects of regulation. An understanding of how territory—and jurisdiction—operates in the context of trade measures to address climate change is, unsurprisingly, just as important.

This chapter has sought to consider the relevance of territorial jurisdiction to trade measures addressing climate change. It incorporates the perspective, already understood within the UNFCCC, that while the effects of global warming are manifested worldwide, the historic and current major contributors come from a more limited number of countries. This places into sharp relief the potential that trade measures may be unilaterally adopted by the very states that are historically associated with the causes of climate change (the western, industrialized, developed states), with adverse trade effects for developing countries. Even more ethically fraught is the potential that adverse effects will be felt disproportionately by indigenous peoples and other marginalized communities within states.

The chapter’s primary finding is that trade measures addressing climate change are unlikely to enliven—let alone violate—public international law rules on territorial jurisdiction. This is because the importing country is regulating behaviour within (or at) its borders, and therefore has a territorial basis for jurisdiction. Though not an uncontested view, this position is strengthened still by the increasing public interest—even public morality—in issues of climate change mitigation, which provides a territorial basis for the (psychological or ethical) position of citizens and consumers. In the face of increasing public moral and ethical concern about climate change, it is possible that trade measures to address climate change will be defended by states on the basis of the GATT Article XX(a), rather than Article XX(b) or (g) or the more rarely used Article XX(d) or (j).

While the Appellate Body has reserved a (so far latent) role for dispute settlement bodies to require that trade measures to protect public morals demonstrate a jurisdictional nexus, it seems that such a nexus would be relatively easily satisfied in the context of climate change due to the interconnected nature of the problem and its causes. The nexus could flow, for example, from a connection to the effects of climate change within the relevant state’s territory, or from public concern about the effects of climate change more broadly.

The key question for trade lawyers, however, is whether the shifting of mitigation burdens through trade measures is justifiable. The underlying issue surrounding extraterritoriality is similar to the WTO rules on non-discrimination—namely, the protection of sovereigns from outside interference with their domestic affairs. Efforts to seek international collaboration to address climate change will be key for both, as will principles that have apportioned international responsibility based on historic practices and equity. Oft-used tests within the chapeau might serve as a basis for this inquiry. For example, in US−Shrimp an assessment of discrimination was inherently tied to the conduct of sovereigns in negotiating multilateral solutions within other international legal regimes.^[115] This methodology supports the incorporation of concepts such as the UNFCCC’s principle of CBDR.

The concept of ‘territory’, like ‘climate change’ itself, is of historical and ethical complexity. There are many marginalized communities, including indigenous peoples, who have inadequate recognition and protection by states. Notions of legal responsibility and historical reparations, though developing some degree of consensus, are often disputed. Trade measures addressing climate change must operate within this context. This will require the state exercising the relevant trade measure to engage not only with trading partners but with marginalized communities (as the Appellate Body called for in EC−Seals), which is an onerous and difficult task—more onerous that any ‘nexus’ requirement in jurisdictional terms. In all likelihood, WTO Panels and the Appellate Body will require guidance from international law on these questions.

---

^[∗] PhD, LLM (Cambridge); BA, LLB(Hons) (Melbourne); Associate Professor, Melbourne Law School, University of Melbourne, Australia. The author is grateful for comments from the editor, research assistance from Kathleen Auld, and the support of the Australian Research Council (ARC) for the project ‘Climate Change Law and Mitigation’ (ARC DP110100259). Contact: [e-mail].

^[1] Key provisions of GATT Art XX provide that countries should not be prevented from adopting or enforcing certain trade measures where the measures are ‘necessary to protect public morals’, ‘necessary to protect human, animal or plant life or health’ or relate ‘to the conservation of exhaustible natural resources’, with no express jurisdictional limit: General Agreement on Tariffs and Trade 1994 (Marrakesh, 15 April 1994; in force 1 January 1995) (GATT), Art XX(a)−(b) and (g).

^[2] Rio de Janeiro, 9 May 1992; in force 21 March 1994.

^[3] UNFCCC, Art 3(1). See also Paris Agreement (Paris, 12 December 2015; in force 4 November 2016), Art 2(2).

^[4] Some indigenous communities have disputed that they should alter their forest practices to sequester carbon for the international community: See further M Tehan, L Godden, MA Young and K Gover, Climate Change Responses and Indigenous and Forest Communities: International, National and Local Law Perspectives on REDD+ (Cambridge University Press, forthcoming).

^[5] MA Young, ‘Trade Measures to Address Environmental Concerns in Faraway Places: Jurisdictional Issues’ (2014) 23 Review of European, Comparative and International Environmental Law 302.

^[6] AB Report, US–Shrimp (India, Malaysia, Pakistan, Thailand) (WT/DS58/AB/R) (1998).

^[7] AB Report, EC−Seals (Canada, Norway) (WT/DS400/AB/R) (2014).

^[8] AB Report, Brazil–Tyres (EC) (WT/DS332/AB/R) (2007), para 151:

certain complex public health or environmental problems may be tackled only with a comprehensive policy comprising a multiplicity of interacting measures.... Moreover, the results obtained from certain actions—for instance, measures adopted in order to attenuate global warming and climate change, or certain preventive actions to reduce the incidence of diseases that may manifest themselves only after a certain period of time—can only be evaluated with the benefit of time.

^[9] GATT, above n 1, especially Art XX(a)−(b) and (g), but note also the relevance of key agreements such as the Agreement on Technical Barriers to Trade (Marrakesh, 15 April 1994; in force 1 January 1995) and the Agreement on Sanitary and Phytosanitary Measures (Marrakesh, 15 April 1994; in force 1 January 1995) as discussed further in this volume.

^[10] Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal, 16 September 1987; in force 1 January 1989).

^[11] The original Kyoto Protocol Annex A comprised six GHGs: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs) and sulphur hexafluoride (SF6) (Kyoto, 11 December 1997; in force 16 February 2005). Nitrogen trifluoride (NF₃) was added as a seventh GHG in the Doha amendment that also establishes the second commitment period: ‘Doha Amendment to the Kyoto Protocol’, Doha, 8 December 2012; not yet in force, Art 1:B.

^[12] AB Report, Canada–Renewable Energy (WT/DS412/AB/R) (2013).

^[13] AB Report, India–Certain Measures Relating to Solar Cells and Solar Modules (WT/DS456/AB/R) (2016). Although the Appellate Body’s decision was handed down after the completion of the manuscript for the current chapter, its rejection of India’s reliance on GATT Art XX(d) and Art XX(j) to justify domestic content requirements in the solar sector contain important perspectives on territory that warrant future analysis. For a different approach justifying domestic content requirements for renewable energy, see T Meyer, ‘How Local Discrimination Can Promote Global Public Goods’ (2015) 95 Boston University Law Review 1937.

^[14] T Meyer, ‘Energy Subsidies and the World Trade Organization’ (2013) 17:22 ASIL Insights; see also T Meyer, ‘Explaining Energy Disputes at the World Trade Organization’ in International Environment Agreements (forthcoming) and other submissions in that symposium.

^[15] M Kolsky Lewis and AD Mitchell, ‘Food Miles: Environmental Protection or Veiled Protectionism’ (2014) 35 Michigan Journal of International Law 579.

^[16] See, e.g. S Alexander, K Nicholson and J Wiseman ‘Fossil Free: The Development and Significance of the Fossil Fuel Divestment Movement’ (2014) MSSI Issues Paper No 3, Melbourne Sustainable Society Institute, The University of Melbourne; see also N Schneider, ‘Revising Divestments’ (2015) 66 Hastings Law Journal 589 (considering the fiduciary duties arising from decisions of public pension funds to divest their holdings in fossil fuels).

^[17] See, e.g. the letter to President Obama to request cessation of new public leasing of fossil fuels by groups including Geenpeace and the Sierra Club (21 September 2015). Available at: http://www.keepitintheground.org/ accessed 6 August 2016.

^[18] R Revesz, ‘Federalism and Environmental Regulation: Lessons for the European Union and the International Community’ (1997) 83:7 Virginia Law Review 1331; see further Young, above n 5, 305.

^[19] UNFCCC, Article 4.

^[20] J Scott, ‘The Geographical Scope of the EU’s Climate Responsibilities’ (2015) 17 Cambridge Yearbook of European Legal Studies 1-29.

^[21] Ibid, and sources cited therein.

^[22] Kyoto Protocol, above n 11.

^[23] It is noted that the Kyoto Protocol second commitment period, which is not yet entered into force, applies to a smaller number of states parties; see further Doha Amendment to the Kyoto Protocol, above n 11.

^[24] These market-mechanisms are achieved primarily through the Clean Development Mechanism (CDM).

^[25] The REDD+ funding mechanism is still to be agreed upon: see further Christina Voigt (ed) Research Handbook on REDD+ and International Law (Edward Elgar, 2016).

^[26] Paris Agreement, Paris, 12 December 2015; in force 4 November 2016.

^[27] Ibid, Article 6.

^[28] ‘Urgenda’, a contraction of the words ‘urgent agenda’ was established as a Dutch NGO in 2008. See the Hague District Court (the Netherlands), Urgenda Foundation v The State of the Netherlands, C/09/456689 / HA ZA 13-1396 (24 June 2015) (English translation). The decision is currently on appeal.

^[29] Ibid, para 4.83.

^[30] Ibid, para 4.91.

^[31] Ibid, para 4.92.

^[32] Wildlife Preservation Society of Queensland Proserpine/Whitsunday Branch Inc v Minister for the Environment and Heritage [2006] FCA 736; (2006) 232 ALR 510 (Dowsett J, declining to consider that the legal responsibility for the adverse impacts caused by the mine extended to the subsequent burning of coal); Anvil Hill Watch Association Inc v Minister for the Environment and Water Resources [2007] FCA 1480 (Stone J, declining to distinguish the approach of Dowsett J on account of an estimate of GHG emissions being recorded by the decisionmaker) as confirmed by the Full Federal Court; see also Australian Conservation Foundation v Minister for the Environment [2016] FCA 1042 (currently on appeal).

^[33] New Zealand High Court case Royal Forest and Bird Protection Society of New Zealand Inc v Buller Coal Limited [2012] NZHC 2156 (Whata J). This High Court decision was affirmed on appeal in the Supreme Court.

^[34] Directive 2008/101 [2009] OJ L8/3.

^[35] Case C-366/10, Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, 21 December 2011.

^[36] For criticisms that the Court’s decision unsufficiently accounts for the apportionment of territorially-bounded concepts of GHG emissions furthered by the IPCC, see Scott, above n 20.

^[37] J Crawford, Brownlie’s Principles of Public International Law (Oxford University Press, 2012), 8th edn, 479. Indeed, such territorial jurisdiction is argued to be an inherent part of sovereignty: see HF Chang, ‘An Economic Analysis of Trade Measures to Protect the Global Environment’ (1993) 83 Georgetown Law Journal 2131, 2194.

^[38] Young, above n 5, 307.

^[39] Rio Declaration on Environment and Development, in: Report of the UN Conference on Environment and Development (UN Doc. A/CONF.151/26/Rev.1 (Vol. I), 14 June 1992), Annex, Principle 12. The wording of the ‘Cartagena Commitment’ of the United Nations Conference on Trade and Development (UNCTAD) is near-identical; the difference is that its reference is to ‘transborder or global environmental problems’ and its incorporation of a range of GATT principles is more express: see UNCTAD, ‘A New Partnership for Development: The Cartagena Commitment, United Nations Conference on Trade and Development, 8th Session (1992). Available at: http://unctad.org/en/Docs/tdviiimisc4_en.pdf accessed 6 August 2016, para 152. See further MA Young, ‘Principle 12: The Environment and Trade’, in: J.E. Viñuales (ed.), The Rio Declaration on Environment and Development. A Commentary (Oxford University Press, 2015), 325.

^[40] See further G Handl, ‘Declaration of the United Nations Conference on the Human Environment (Stockholm Declaration), 1972 and the Rio Declaration on Environment and Development 1992’. United Nations Audiovisual Library of International Law (2012); available at: http://legal.un.org/avl/pdf/ha/dunche/dunche_e.pdf, 7, accessed 6 August 2016.

^[41] GATT Panel Report, US−Tuna I (Mexico) (DS21/R) (1991).

^[42] Ibid, para 3.49.

^[43] GATT Panel Report, US−Tuna I (EU) (DS29/R) (1994), para 5.20 (‘the Panel could see no valid reason supporting the conclusion that the provisions of Art XX(g) apply only to policies related to the conservation of exhaustible natural resources located within the territory of the contracting party invoking the provision’).

^[44] See, e.g. Crawford, above n 37, 456; C Ryngaert, Jurisdiction in International Law (Oxford University Press, 2008) 21.

^[45] L Bartels, ‘Article XX of GATT and the Problem of Extraterritorial Jurisdiction: The Case of Trade Measures for the Protection of Human Rights’ (2002) 36:2 Journal of World Trade 353, 365.

^[46] See, e.g. Ryngaert, above n44, 9–10.

^[47] SS ‘Lotus’ (France v Turkey) (Judgment) [1927] PCIJ (ser A) No 10, 21.

^[48] Ryngaert, above n 44, 21–2.

^[49] Bartels, above n 45, 381.

^[50] A Cassimatis, Human Rights Related Trade Measures under International Law: The Legality of Trade Measures Imposed in Response to Violations of Human Rights Obligations under General International Law (Martinus Nijhoff, 2007) 364.

^[51] R Howse and D Regan ‘The Product/Process Distinction: An Illusory Basis for Disciplining “Unilateralism” in Trade Policy’ (2000) 11:2 European Journal of International Law 249, at 278; also at 274 (‘Process-based restrictions do not directly regulate any behaviour occurring outside the border’).

^[52] The following discussion of the US−Shrimp case draws from Young, above n 5, 308−10.

^[53] AB Report, US−Shrimp, para 73. The need to justify measures in this way is in line with academic commentary calling for public international law rules to be ‘default’ rules: see H Horn and P Mavroidis, ‘The Permissible Reach of National Environmental Policies’ (2008) 42:6 Journal of World Trade 1107, at 1145. However, the EC’s assumption that the trade measure at issue was an exercise of extraterritorial jurisdiction has been criticized by Scott as incorrect: see J Scott, ‘Extraterritoriality and Territorial Extension in EU Law’ (2014) 62:1 American Journal of Comparative Law 87, at 121.

^[54] AB Report, US−Shrimp, para 121.

^[55] Ibid, para 133.

^[56] Ibid.

^[57] Such a connection is argued by Crawford to be emerging as a ‘cardinal principle’ on matters of prescriptive jurisdiction: see J Crawford, above n 37, 457.

^[58] GATT, above n 1, Art XX, chapeau (requiring that measures are ‘not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade’).

^[59] AB Report, US−Shrimp, para 167.

^[60] Ibid, para 168.

^[61] Ibid.

^[62] Ibid, paras 177−84. See also AB Report, US–Shrimp (Malaysia) (Art 21.5) (WT/DS58/AB/RW) (2001), para 144.

^[63] AB Report, US−Tuna II (Mexico) (WT/DS381/AB/R) (2012), para 339.

^[64] Ibid, especially at paras 298−9.

^[65] See above n 50 and 51.

^[66] The following discussion of the EC−Seals case is drawn from Young, above n 5, 311. Note also the almost parallel proceedings at the Court of Justice of the EU: Inuit Tapiriit Kanatami, established in Ottawa (Canada), et al v European Commission, Case T526/10 (25 April 2013).

^[67] As described by the EC: see Panel Report, EC−Seals (Canada, Norway), para 7.395.

^[68] The exemption applied: (i) for Inuit and other indigenous communities, whose hunting had contributed to their subsistence (the ‘IC exception’); (ii) for people selling (on a non-profit basis) the bycatch of hunting conducted for the sole purpose of the sustainable management of marine resources (the ‘marine resource management exception’); and (iii) for people travelling in the EU, who brought in seal products for personal, non-commercial use (the ‘traveller exception’): see AB Report, EC−Seals (Canada, Norway), para 5.161.

^[69] Indeed the Appellate Body noted that the EU’s arguments that the measure also protected the health of seals were too limited to establish a prima facie case for a defence under GATT Art XX(b): ibid, para 5.183.

^[70] Ibid, para 5.173 (fn 1191).

^[71] Ibid, para 5.173.

^[72] This is the implication of Howse and Langille’s early analysis of the dispute. They consider that the traveller exception to the ban was designed to ensure that the ban itself could be reconciled with the territorial principle of jurisdiction, and any importation of seal products purchased abroad by travellers was outside of any regulatory or trade remit: R Howse and J Langille, ‘Permitting Pluralism: The Seal Products Dispute and Why the WTO Should Accept Trade Restrictions Justified by Noninstrumental Moral Values’ (2012) 37:2 Yale Journal of International Law 367, at 385. In contrast to this analysis, an inclusion of travellers in the ban might have been justified by their ‘transient presence’ in the EU. For further discussion of ‘transient presence’ as a jurisdictional basis for a number of EU measures: including with respect to aircraft and fishing vessels, see J Scott, ‘The New EU “Extraterritoriality”’ (2014) 51 Common Market Law Review 1343.

^[73] See, especially, the ‘Oslo Principles on Global Obligations to Reduce Climate Change’, developed in response to the threat climate change poses to humankind, other life, and global security and well-being (1 March 2015). Available at: www.osloprinciples.org accessed 6 August 2016.

^[74] See above n 28.

^[75] Ibid, para 4.83.

^[76] See above n 35 and surrounding text.

^[77] See, e.g. TB Atwood et al., ‘Predators help protect carbon stocks in blue carbon ecosystems’ Nature Climate Change (2015). Available at: doi:10.1038/nclimate2763 / http://www.nature.com/nclimate/journal/v5/n12/full/nclimate2763.html (published online 28 September 2015).

^[78] See, e.g. K Jensen, A Vaish and M F H Schmidt, ‘The emergence of human prosociality: aligning with others through feelings, concerns, and norms’ (2014) 5 Frontiers in Psychology 822.

^[79] Scott, above n 20, 40.

^[80] R Eckersley, ‘The Politics of Carbon Leakage and the Fairness of Border Measures’ (2010) 24:4 Ethics and International Affairs 367.

^[81] For similar requirements of flexibility and multilateralism for EU measures involving ‘territorial extension’, see Scott, above n 53, 87.

^[82] See, e.g. Report of the Indigenous Peoples’ Global Summit on Climate Change, 20−24 April 2009. Available at: http://www.un.org/ga/president/63/letters/globalsummitoncc.pdf, para 5, accessed 6 August 2016.

^[83] A group called the Interior Alliance submitted an amicus brief, as reported in Panel Report, US−Softwood Lumber (WT/DS236/R) (2002), para 7.2. See further M Davis, ‘International Trade Law and Indigenous Peoples: A New Direction in Human Rights Advocacy?’ (2005) 8:2 Australian Indigenous Law Reporter 16.

^[84] New Zealand−Thailand Closer Economic Partnership Agreement (Bangkok, 19 April 2005; in force 1 July 2005) Art 15.8; Trans−Pacific Strategic Economic Partnership Agreement (Brunei, Chile, New Zealand and Singapore) (Wellington, 3 June 2005; in force 28 May 2006 (New Zealand and Singapore), 12 July 2006 (Brunei), 8 November 2006 (Chile)), Art 19.5. The recently concluded negotiations of the 12-member Trans−Pacific Partnership (TPP) sought similar protections (negotiations concluded 6 October 2015; not yet signed or entered into force).

^[85] See, e.g. the North American Free Trade Agreement (NAFTA), the Canada−Chile Free Trade Agreement, the Australia−US Free Trade Agreement, and other examples cited by L Bartels, ‘Social Issues: Labour, Environment and Human Rights’ in S Lester and B Mercurio (eds), Bilateral and Regional Trade Agreements: Commentary and Analysis (Cambridge University Press, 2014) 342, at 351.

^[86] ECT (Lisbon, 17 December 1994; in force 16 April 1998), Art 24.2(iii).

^[87] International Labour Organization (ILO) Convention Concerning Indigenous and Tribal Peoples in Independent Countries (Geneva, 27 June 1989; in force 5 September 1991) (ILO Convention 169).

^[88] Declaration on the Rights of Indigenous Peoples (UN General Assembly Resolution A/RES/61/295, 13 September 2007) (UNDRIP).

^[89] There are currently 22 parties to ILO Convention 169: see http://www.ilo.org accessed 6 August 2016.

^[90] CBD (Rio de Janeiro, 5 June 1992; in force 29 December 1993), Art 8(j). See also the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity (Nagoya, 29 October 2010; in force 12 October 2014).

^[91] See, e.g. Convention on the Regulation of Whaling (Washington DC, 2 December 1946; in force 10 November 1948), Art 4; 1911 Convention for the Preservation and Protection of Fur Seals (Washington DC, 7 July 1911; in force 15 December 1911), Art IV.

^[92] My discussion of the case draws on Young, above n 5, 313−5. See also G Marceau, ‘A Comment on the Appellate Body Report in EC – Seal Products in the Context of the Trade and Environment Debate’ (2014) 23 Review of European, Comparative and International Environmental Law 318.

^[93] EC Regulation 1007/2009 on trade in seal products [2009] OJ L286/36, preambular para 14: ‘The fundamental economic and social interests of Inuit communities engaged in the hunting of seals as a means to ensure their subsistence should not be adversely affected. The hunt is an integral part of the culture and identity of the members of the Inuit society, and as such is recognised by the United Nations Declaration on the Rights of Indigenous Peoples’. See also Panel Report, EC−Seals, para 7.401.

^[94] The Inuit are defined as ‘indigenous members of the Inuit homeland, namely those arctic and subarctic areas where, presently or traditionally, Inuit have aboriginal rights and interests, recognised by Inuit as being members of their people and includes Inupiat, Yupik (Alaska), Inuit, Inuvialuit (Canada), Kalaallit (Greenland) and Yupik (Russia)’: EC Regulation 1007/2009, above n 93, Art 2.3. ‘Other indigenous communities’ is defined as ‘[c]ommunities in independent countries who are regarded as indigenous on account of their descent from the populations which inhabited the country, or a geographical region to which the country belongs, at the time of conquest or colonisation or the establishment of present State boundaries and who, irrespective of their legal status, retain some or all of their own social, economic, cultural and political institutions’: EU Regulation 737/2010 laying down detailed rules for the implementation of regulation, EC No. 1007/2009 of the European Parliament and of the Council on trade in seal products [2010] OJ L216/1, Art 2.1. This latter definition follows ILO Convention 169, above n 87, Art 1.1(b).

^[95] Regulation 1007/2009, above n 93, Art 3.1, as cited in AB Report, EC−Seals, paras 4.9 and 5.323.

^[96] AB Report, EC−Seals, paras 5.325−.328 and 5.337.

^[97] Ibid, para 5.337 (citing AB Report, US−Shrimp, para 165).

^[98] Ibid, para 5.3.3.3.

^[99] Panel Report, EC−Seals, para 7.292.

^[100] AB Report, EC−Seals, para 2.259.

^[101] CITES Resolution Conf. 5.10 (Rev. CoP15), ‘Definition of ‘Primarily Commercial Purposes’ (2010).

^[102] Panel Report, EC−Seals, para 7.295.

^[103] See, e.g. J Trachtman, ‘The Domain of WTO Dispute Resolution’ (1999) 40:2 Harvard International Law Journal 342.

^[104] J Pauwelyn, Conflict of Norms in Public International Law: How WTO Law Relates to other Rules of International Law (Cambridge University Press, 2003) 466 (citation omitted).

^[105] See further MA Young, Trading Fish, Saving Fish: The Interaction between Regimes in International Law (Cambridge University Press, 2011) 197−204.

^[106] Panel Report, EC−Biotech (Argentina, Canada, United States) (WT/DS291/R) (2006).

^[107] See MA Young, ‘The WTO’s Use of Relevant Rules of International Law: An Analysis of the Biotech Case’ (2007) 56 International and Comparative Law Quarterly 907. See also Peru-Agricultural Products (Guatemala) (WT/DS457/AB/R) (2015), where the Appellate Body focussed on the lack of ‘relevance’ of two non-WTO instruments, namely a FTA (not yet in force) and articles of the International Law Commission (ILC).

^[108] As was the case in Panel Report, US−Softwood Lumber.

^[109] The amicus curiae briefs seemed to have concentrated on the animal welfare and fur trade issues; see Panel Report, EC−Seals, paras 1.17−.19; AB Report, EC−Seals, para 1.15.

^[110] This is a further avenue for international law to be considered by a WTO dispute settlement body: see Young, above n 107, 925−8.

^[111] Tribal self-constitution is a notoriously difficult problem in the field: see generally K Gover, Tribal Constitutionalism (Oxford University Press, 2010).

^[112] Such participation is particularly important for sustainable development; The Future We Want (UN Doc. A/RES/66/288, 11 September 2012) (‘Rio+20 Outcome Document’), paras 43 and 49.

^[113] ILO Convention 169, above n 87, Art 1.1(b), which informed the EU’s definition of indigenous communities.

^[114] One way to address this may be through the public morals exception of GATT Art XX(a). I note that protection of public morals was found by the EC−Seals Panel not to apply to the policy’s differentiation for indigenous peoples, given the policy was aimed at reducing the pain and suffering of seals, and the impact on seal welfare was the same regardless of whether general or Inuit and indigenous practices were used: Panel Report, EC−Seals, para 7.275. The EU appealed this finding, but the Appellate Body found it did not need to consider it: AB Report, EC−Seals, para 5.314.

^[115] AB Report, US−Shrimp, especially paras 163, 177. See also AB Report, US−Shrimp (Art 21.5), paras 119−25.