A WTO ruling raps the US for its
unfair trade practices and the
failure to stick to environmental
rules on clean fuel standard
HELL bath no fury like the US scorned!
Venezuela and Brazil have touched on
the raw the Big Brother of the First
World, by evoking an anti-US ruling
from the one-year old World Trade
Organization'(WTO). The organisation
came into existence on January 1, 1995,
as a successor to GATT (the General
Agreement on Tariffs and Trade).
Making a judgement for the Very first
time since its inception, the WTO ruled
on January 17 that the US violated its
environmental laws on petrol.
Brazil and Venezuela lodged a complaint with the WTO, maintaining that
the US was practising unfair trade tactics. While US petrol producers got away
scot-free without observing the environmental laws, foreign concerns were
forced to stick by them.
Although facing flak, the US is seriously considering an appeal against the
WTO dispute panel judgement, which
several critics - supporters of global
free-trading - label as a "gross attack
on the sovereignty of the US".
The WTO panel found out that some
of the US Environmental Protection
Agency (EPA) regulations were violating
global trade rules by setting higher
environmental standards for imported
gasoline, as against those applicable
to domestic gasoline. These EPA
rules (Clean Air Act), introduced on
January 1, 1995 - uncannily coinciding
with the birth of the Geneva-based WTO
- required that petrol sold in urban
areas should contain "reduced toxic and
Although the rules were meant to
affect all the refiners, foreign firms were
under pressure from the US to observe
them. Meanwhile, US gasoline producers stuck to the 1990 standard quality
level. In this context, one may point out
that Venezuela is the largest exporter of
gasoline to the US, and it is estimated to
lose about US $150 million due to the
Speculation was rife following the
mandate. The most stringent critics of
the ruling were Patrick J Buchanan, a
conservative candidate for the
Republican presidential elections, and
Public Citizen, a public welfare group.
Both opposed the US' on membership to
Economic observers in the US and
elsewhere, watching the developments
keenly, commented that the ruling
might generate intense "protectionist
and isolationist sentiment", whereas
others stressed that the ruling is "honest", "a welcome decision" and "beneficial" for the US.
Observers state that if the godfather
of the world's trading bodies does not
force the US to change its fuel law,
nations like Venezuela and Brazil might
"retaliate" with higher tariff rates
against US exports. The 'discriminatory
provision' expires anyway in 1998.
But on the whole, the first judicial
panel ruling of the WTO is regarded as a
very crucial test case for the organisation and its ability to safeguard and
enforce global trade rules. Procedures
for the settlement of trade disputes
sometimes never reached GATT before.
But under current norms, nations cannot block the WTO's rulings or ward off
rule implementation. If the US does not
appeal, the ruling would be adopted
within 60 days (in exceptional cases, 90
days), which is more or less binding.
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