In her writings, Gabrielle Marceau discusses the conflicts of norms and jurisdictions that arise when World Trade Organization (WTO) agreements intersect with multilateral environmental agreements (MEAs) and other international treaties. She argues for a more coherent approach to international law, where the rules governing trade do not undermine the commitments made under environmental treaties. This call for coherence is rooted in the belief that effective international governance requires a balance between trade obligations and trade liberalization on the one hand, and the need to address global challenges including especially sustainable development challenges, on the other hand.

In the latter part of the 20<sup>th</sup> Century, collisions between trade and sustainable development, and needs for synergetic policymaking engaging both, were modest and could often be handled by diplomacy. In the 21<sup>st</sup> Century, these collisions and potential synergies are both much more frequent and much more consequential. Moreover, the trade system has an unexploited, and essential, capacity to support sustainable development.<fnref n="1" /> This article explores the mechanisms available to manage these collisions and realize these synergies. It finds that WTO dispute settlement has only an interstitial interpretative authorization and is generally under-equipped to do so and concludes that it will be necessary to enhance international legal legislative processes to manage the complex inter-functional interactions presented by globalization.

One of the pressing challenges in modern global governance, and in international law, is that of coherence—of defragmentation. This challenge is evident, inter alia, in the relationship between trade and sustainable development. Trade is a tool that is used to increase human welfare. It is not an end in itself. Sustainable development, on the other hand, in the sense used herein, is a broad term that includes both tools to increase human welfare and several other values that are ends in themselves, such as planetary preservation and reduction of poverty. Even the goal of increasing human welfare is qualified by a need to distribute human welfare in an appropriate (and politically sustainable) way. Appropriate distribution is both a desideratum and a necessity for political stability and support.

When the conflict between trade and sustainability became evident in the *Tuna-Dolphin*<fnref n="2" /> cases of the pre-WTO period, and in the *Shrimp-Turtle*<fnref n="3" /> and the *Tuna Labeling*<fnref n="4" /> cases of the WTO period, the first call was for WTO dispute settlement to manage this conflict. A debate ensued as to whether the applicable law in adjudication in the WTO included either MEAs or customary international law relating to environmental protection.

This article briefly recounts this debate, explaining why neither MEAs nor customary international law relating to environmental protection are generally applicable directly as law in WTO dispute settlement. It then makes two related normative arguments: first, that adjudication is not the appropriate mechanism to manage the problem of integration of trade and sustainable development, and second, that the relevant international legislative system—treaty-making and decision-making within the WTO system—must be reformed to provide effective management of this interface

<footnote n="1">See, e.g. Dan Esty, Jan Yves Remy, Joel P Trachtman and Trevor Sutton, *Villars Framework for a Sustainable Global Trade System, Version 2.0* (Remaking Trade for a Sustainable Future, 2024).</footnote>

<footnote n="2">GATT, *United States—Restrictions on Imports of Tuna (Mexico)*, GATT Doc DS21/R (1991), online: <wto.org> [perma.cc/RU7N-CQG2].</footnote>

<footnote n="3">WTO, *United States—Import Prohibition of Certain Shrimp and Shrimp Products*, online: <wto.org> [perma.cc/EQJ4-JQ3K] [*US—Shrimp*].</footnote>

<footnote n="4">WTO, *United States—Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products*, online: <wto.org> [perma.cc/HH4E-BGY4].</footnote>
# I. Applicable Law in WTO Dispute Settlement

The WTO treaty is reasonably clear that the mandate to WTO dispute*settlement panels*and the Appellate Body is to apply as substantive law only WTO law: the covered agreements. It is also clear that other international law may in appropriate circumstances be used by panels and the Appellate Body in interpretation, where specifically incorporated, and as fact. Furthermore, other international law may be used in order to complete the procedural structure of the *Dispute Settlement Understanding*<fnref n="5" /> (*DSU*) itself; for example, to provide rules regarding burdens of proof. Any argument that the WTO is a self-contained system, hermetically sealed off from the rest of international law, is demonstrably false. However, when the Appellate Body said in *US*—*Gasoline* that WTO dispute settlement is not clinically separate from general international law,<fnref n="6" /> it did not mean that general international law is fully integrated into WTO dispute settlement.

Of course, outside the WTO dispute settlement system, all general international law has the range and effect that it was intended to have. None of it was written with the expectation or intent that it would be applicable law within the WTO. It would be absurd to confound states’ intent and expectations to force general international law into the WTO dispute settlement system. It is clear that for the WTO, general international law as applicable law would be an unwelcome guest, and for many exponents of environmental protection and human rights, the WTO dispute settlement system would be a procrustean bed indeed.

Many negotiators of the WTO treaties assumed a separation between WTO law and other international law. It is also clear that in the *General Agreement on Tariffs and Trade* (*GATT*) period from 1947 to 1994, other international law was not considered applicable in *GATT* dispute settlement.<fnref n="7" /> And in Article 3.1 of the *Dispute Settlement Understanding* (*DSU*), and Article XVI:1 of the *WTO Charter*,<fnref n="8" /> the Member States confirmed that they wished continuity with the *GATT* period. It therefore seems contrary to the intent of the parties to suggest that other law is applicable in WTO dispute settlement.<fnref n="9" />

And there is much evidence within the *DSU* text itself that the only law intended to be applied as substantive law (as distinguished from used in interpretation) is WTO law.

Article 3.2 of the *DSU* specifies that the dispute settlement system serves to preserve the rights and obligations of Members under the covered agreements. If it was intended to extend jurisdiction to qualify these rights and obligations by application of rights and obligations derived from other law, the draftsmen were negligent. The draftsmen would have been negligent a second time in Article 3.2, where they specify that the vocation of dispute settlement is to “*clarify the existing provisions*” of the covered agreements “in accordance with customary rules of interpretation of public international law. (emphasis added).”

The limitation to rules of interpretation must be given effect. The interpretative principle of *effet utile* includes the requirement that clauses not be reduced to redundancy. This was stated in the Appellate Body’s first report in *Gasoline* and has been repeated in scores of WTO panel and Appellate Body Reports: “An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.”<fnref n="10" />

Article 3.2 adds that “Recommendations and rulings of the Dispute Settlement Body cannot add to or diminish the rights and obligations provided in the covered agreements.”<fnref n="11" /> The references to respect for the covered agreements, and consistency with the covered agreements, and their objectives, in Articles 3.4, 3.5, 3.7, 3.8, 19.1, 22.2 and 22.9 would be absurd if other international law were applicable. For example, consider Articles 3.7 and 3.8. Article 3.7 says that the first objective is to secure withdrawal of measures inconsistent with the covered agreements. It leaves no room for defenses based on other law. Article 3.8 establishes a *prima facie* case of nullification or impairment based on infringement of obligations assumed under a covered agreement. Again, it leaves no room for defenses based on other law.

But the most important provision here is the mandate to panels in Article 7.1. This mandate is to examine the matter in light of the relevant provisions of the covered agreements. That is, the mandate to panels is limited to the covered agreements. International tribunals are courts of limited jurisdiction: they have no power to apply law beyond their mandate. The understanding of Article 7.1 that I have suggested is confirmed by Article 7.2, which requires panels to address relevant provisions of covered agreements cited by the parties. Again, if other international law could be cited for purposes of application, why would panels not be required to address also the other international law? The interpretation of Article 7.1 that I have suggested is further confirmed by Article 11. The second sentence of Article 11 is worth quoting in full:

> Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements.<fnref n="12" />

Thus, an objective assessment of the matter before the panel consists of two things: first, an objective assessment of the facts, and second, an assessment of the applicability of and conformity with the relevant covered agreements. The reference to other findings is to assist the Dispute Settlement Body but is not part of the objective assessment of the matter before the panel. Thus, again, other international law is excluded.

There is much textual and contextual evidence of the intent of the members that only WTO law would be applicable in WTO dispute settlement. Lest there be any doubt, the international community knows how to provide broad jurisdiction to tribunals to apply a wide variety of law. For example, Article 293(1) of the *United Nations Convention on the Law of the Sea* requires the International Tribunal on the Law of the Sea to apply “other rules of international law not incompatible with this convention.”<fnref n="13" />

This is a modest point. It is that only WTO law, and not general international law, constitutes substantive applicable law capable of application in WTO dispute settlement. General international law remains available and applicable outside WTO dispute settlement, and it can affect WTO dispute settlement through interpretation in accordance with the customary rules of interpretation of international law in accordance with Article 3.2 of the *DSU*.<fnref n="14" />

> In a multilateral context such as the WTO, when recourse is had to a non-WTO rule for the purposes of interpreting provisions of the WTO agreements, a delicate balance must be struck between, on the one hand, taking due account of an individual WTO Member’s international obligations and, on the other hand, ensuring a consistent and harmonious approach to the interpretation of WTO law among all WTO Members.<fnref n="15" />

Non-WTO international law can also be incorporated by reference in WTO law and can constitute facts that are relevant under WTO law. Under Shrimp,<fnref n="16" /> we can expect multilateral environmental agreements to form the basis for an exception to other WTO law requirements pursuant to Article XX of *GATT* or similar provisions.

In summary, it is clear that the Appellate Body views its mandate, and that of panels, to be limited to the covered agreements as applicable law.<fnref n="17" /> This was clear in the *EC*—*Poultry* decision,<fnref n="18" /> and it was implicit in the *EC—Hormones* decision.<fnref n="19" /> In *EC*—*Poultry,* the Appellate Body simply refused to apply the bilateral *Oilseeds Agreement*,<fnref n="20" /> as it was not a covered agreement.

In fact, the only possible remaining argument would be that the “covered agreements” themselves are modified by pre-existing or subsequent international law. If this were true, the amended covered agreements would indeed be applicable, as amended, in WTO dispute settlement. However, this argument is also untenable. And its rebuttal supports the view, expressed above, that other international law was not intended to be applicable in WTO dispute settlement.

Article IX and X of the *WTO Charter* contain provisions for waiver and amendment, respectively. Generally, they require formal notice and procedure, including majority voting—in practical terms, they require consensus. They do not authorize bilateral or plurilateral waivers and amendments, although it is theoretically possible that an amendment approved by two-thirds could come into effect only for those that have accepted it. But the point is that these provisions seem intended to be exclusive—it is difficult to read them and to think that bilateral amendment or waiver was contemplated. In fact, it is obvious that they were not. So, again, the negotiators did not specify that this is the only way that the WTO agreements may be waived or amended, but their assumption and the implications seem rather clear. Indeed, the procedural provisions of Articles IX and X would lack *effet utile* if these provisions were non-exclusive.

Therefore, for an amendment to be understood as part of a “covered agreement” within the meaning of the *DSU*, it must follow the procedures of the *WTO Charter*. Consequently, even if other international law were to modify WTO law under international law generally, these modifications would not be applicable law in WTO dispute settlement.

<footnote n="5">*Understanding on Rules and Procedures Governing the Settlement of Disputes*, 15 April 1994, 1869 UNTS 401, Annex 2 of *Marrakech Agreement Establishing the World Trade Organization*, 15 April 1994, 1867 UNTS 154 [*Dispute Settlement Understanding*].</footnote>

<footnote n="6">WTO, *United States—Standards for Reformulated and Conventional Gasoline*, WTO Doc WT/DS2/AB/R (1996) (Appellate Body Report) at 17, online: <docs.wto.org> [perma.cc/PY22-4NPV] [*US—Gasoline*].</footnote>

<footnote n="7">GATT, *Canada—Measures Affecting Exports of Unprocessed Herring and Salmon*, GATT Doc L/6268 (1988) (Panel Report) at 98, online: <wto.org> [perma.cc/2LJ5-FAK5].</footnote>

<footnote n="8">*Marrakech Agreement Establishing the World Trade Organization*, 15 April 1994, 1867 UNTS 154, art XVI:1.</footnote>

<footnote n="9">See Petros C Mavroidis & Sunayana Sasmal, “Trade Integration and Environmental Protection within the WTO Regime: What is the Place of Public International Law?” in Chin Leng Lim & Joel P Trachtman, eds, *Cambridge Companion to World Trade Law* (Cambridge: Cambridge University Press, 2025); see also *Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law*, UNGA, Report of the Study Group of the International Law Commission, 58<sup>th</sup> session, UN Doc A/CN.4/L.682 (2006).</footnote>

<footnote n="10">*US—Gasoline*, *supra* note 6 at 23.</footnote>

<footnote n="11">*Dispute Settlement Understanding*, *supra* note 5, art. 3.2.</footnote>

<footnote n="12">*Ibid*, art 11, second sentence.</footnote>

<footnote n="13">*United Nations Convention on the Law of the Sea*, 10 December 1982, 1833 UNTS 3, art 293(1) [*Montego Bay*].</footnote>

<footnote n="14">*US—Gasoline*, *supra* note 6 at 18.</footnote>

<footnote n="15">WTO, *European Communities and Certain Member States—Measures Affecting Trade in Large Civil Aircraft*, WTO Doc WT/DS316/AB/R (2011) (Appellate Body Report) at paras 844—45, online: <wto.org> [perma.cc/248A-R2WC].</footnote>

<footnote n="16">*US—Shrimp*, *supra* note 3.</footnote>

<footnote n="17">Graham Cook, *A Digest of WTO Jurisprudence on Public International Law Concepts and Principles* (Cambridge: Cambridge University Press, 2015); Petros C Mavroidis, “No Outsourcing of Law? WTO Law as Practiced by WTO Courts” (1998) 102 AJIL 421.</footnote>

<footnote n="18">WTO, *European Communities—Measures Affecting the Importation of Certain Poultry Products*, WT/DS69/AB/R (1998) (Appellate Body Report), online: <wto.org> [perma.cc/QFA9-2M3R] [*EC—Poultry*].</footnote>

<footnote n="19">WTO, *European Communities—Measures Concerning Meat and Meat Products (Hormones)*, WT/DS26/AB/R (1998) (Appellate Body Report), online: <wto.org> [perma.cc/E9UE-TMAJ].</footnote>

<footnote n="20">*EC—Poultry*, *supra* note 18 at paras 71—85.</footnote>
# II. The Inherent Limits of Adjudication to Integrate Diverse Policies in the Global
        Setting

Section I made the positive law argument that the applicable law in WTO dispute settlement is limited to WTO law: the covered agreements. But were the negotiators of the WTO correct to exclude other international law from application in WTO adjudication? For the following reasons, I believe that they were.

First, the kinds of issues that require treatment to address nuanced interactions with non-trade fields such as sustainable development require detailed legislative action.<fnref n="21" /> They have not been addressed in detail in the WTO treaties, in MEAs, or in customary international law. In Part III, I discuss the inadequacy of existing mechanisms for detailed legislative action.

Second, most international law in the world today was not written with formal adjudication in mind. Therefore, states would need to review the existing body of international law in order to determine which rules are suitable for adjudication. Alternatively, states could institute an adjudicated doctrine something like the European Community doctrine of direct effect, where some rules would be understood to be suitable for adjudication, while others would not.

Third, a rule of judicial decision-making could chill future law-making. States must retain the right to determine the type of interpretation and enforceability—political or judicial—that they wish to apply to specific rules. It would not be difficult simply to say in connection with any particular new norm whether it is desired to have this norm subject to WTO dispute settlement. This could be accomplished by amendment of the WTO treaties.

Fourth, the WTO might not be the best place to determine inter-functional conflicts. This duty could be assigned to a new judicial institution, or to the World Court. However, we still need coherent inter-functional choice of law rules, and rules addressing conflict across legal rules.

Fifth, the WTO does have the advantage of inter-sectoral negotiations and cross-retaliation. This may be useful in terms of both the ability to craft “package deals,” and the enforceability of law, and these advantages may be increased the more subjects that are addressed at the WTO.

<footnote n="21">For a detailed analysis of the issues required to be addressed in order to manage the relationship between international trade law and sustainable development, see *Dan Esty* et al, *supra*note 1.</footnote>
# III. The Lack of International Legislative Capacity to Address Urgent Issues

While trade law may constrain some environmental or social regulatory measures, the more urgent problem, as suggested above, is failure to act positively to address these sustainable development issues. WTO and preferential trade agreements (PTAs) contain very few significant positive environmental requirements or other sustainability obligations. Some PTAs contain obligations to adhere to and comply with certain international environmental agreements or even other obligations, but the overall additionality in environmental protection is not impressive and generally does not address climate change.<fnref n="22" /> For example, there are no requirements to reduce greenhouse gas emissions beyond existing requirements under international environmental law.

It may be unfair to criticize trade treaties for their negligence of sustainable development, because regulation has not been viewed as their task. Certainly, subsidiarity today argues for much greater action at the international level: the international level is the appropriate level at which to address important aspects of climate change, biodiversity, and many other issues. However, the international system is fragmented, resulting in functional isolation or siloing of different international cooperation. Trade agreements or organizations lack a formal mandate and also lack needed expertise to address non-monetary welfare.

As to the subsidiarity and fragmentation issues, as suggested in Wolfgang Friedmann’s 1964 classic, *The Changing Structure of International Law*,<fnref n="23" /> international law grows in different subjects at different times, and in accordance with different dynamics. There are also dynamic feedbacks from one area to another, especially from trade liberalization law to these environmental and social fields. Regulation follows the market. Thus, reasonably successful economic integration gives rise to the need to cooperate in the environmental and social fields. Concerns regarding leakage through trade arising from national carbon regulation, and consequent opposition to regulation, seem like a good reason to link environment to trade. Globalization has intensified the external effects of national policy in many areas.

These are natural linkages, but there are also constructed linkages—linkages that exploit cross-subject matter bargaining potential.<fnref n="24" /> William Nordhaus proposed climate clubs that would be secured through threats of trade sanctions, and it is evident that working within carbon regulation, without linkage, has not produced sufficient carbon reduction.<fnref n="25" /> Nordhaus’ assumption is that states advocating greater carbon reduction hold unused bargaining power that they could use to induce other states to comply. Although it might be thought that this assumption is simply wrong—that all bargaining power is fully deployed in equilibrium—as discussed below, bargaining power can be redeployed from one goal to another, if there is political will to do so. And additional bargaining power may be gained by making additional trade liberalization available.

Sustainable trade requires that we bring these linkages into equilibrium to maximize global welfare. Regardless of the debate about what law is applicable in WTO dispute settlement,<fnref n="26" /> it is clear that international society must work holistically, recognizing that no area of public policy is isolated from other areas. This is a task of integrating different functional spheres more effectively, through bureaucratic and institutional cross-functional engagement. The era of siloed regimes with discrete social purposes, identities and institutional loyalties must end. International organizations must expand their concerns beyond narrow mandates and cooperate with other international organizations to solve problems.

There is a need for more integrated and flexible international law-making capabilities. It was always strange that diplomats would block discussion of “non-trade” issues in the WTO simply on the basis of this categorization. (It is worth noting that this principle was compromised for the *WTO Agreement on Trade Related Aspects of Intellectual Property*.)<fnref n="27" /> Siloing the making of international law is simply ignorant of the natural, and constructed, linkages between fields.

In order to reach equilibrium, international politics must be integrated in order to better integrate legal regimes: diplomats must negotiate over trade and sustainable development, so that legal rules are not developed in functional isolation. This task requires trade-offs among the varying preferences that different states have with respect to different aspects of global welfare. In particular, developing countries may have different preferences with respect to environmental and social action compared to wealthy countries. On the domestic side, there is a need for states to develop the capacity for a more integrated diplomacy—they can no longer separate trade from data, environment, labor, competition, taxation, inequality, or other national policies. Diplomats need new mandates to fully address these cross-functional tradeoffs. Furthermore, international organizations must be charged with “inter-functional” mandates. For example, it is no longer enough for the WTO to maximize trade liberalization: it must maximize overall welfare including a focus on trade liberalization but also take into account, and achieve, sustainable development.

Broader linkage may make international legislation easier by facilitating cross-functional bargaining and tradeoffs. In addition, international law needs quasi-constitutional reform to enhance the ability to legislate, by reducing veto points whereby small numbers of states can block global collective action, imposing a tyranny of the minority. The move to majority voting, or qualified majority voting, could begin in specific areas viewed as less politically sensitive. The experience of the European Union is instructive. Where specific rules are too difficult to create, states need explicitly to delegate the making of these tradeoffs to judges under general standards. This would require policy analysis and synthesis of the type that is common in domestic contexts, but all too lacking in international fora. This is what is required for sustainable trade: integration of trade with other parts of global law.

<footnote n="22">Joel P Trachtman & José-Antonio Monteiro, “Environmental Laws” in Aaditya Mattoo, Nadia Rocha & Michele Ruta, eds, *Handbook of Deep Trade Agreements*(Washington, DC: World Bank Group, 2020) 553 at 583.</footnote>

<footnote n="23">Wolfgang Friedmann, *The Changing Structure of International Law*(New York: Columbia University Press, 1964).</footnote>

<footnote n="24">See generally Giovanni Maggi, “Issue Linkage” in Kyle Bagwell & Robert W Staiger, eds, *Handbook of Commercial Policy*(Amsterdam: Elsevier, 2016) 513 at 564.</footnote>

<footnote n="25">William Nordhaus, “The Climate Club: How to Fix a Failed Global Effort”, *Foreign Affairs* (10 April 2020), online: <foreignaffairs.com> [perma.cc/CQH6-L4T7].</footnote>

<footnote n="26">See, e.g., Joel Trachtman, “Review of Joost Pauwelyn, Conflict of Norms in Public International Law: How WTO Law Relates to Other Rules of International Law” (2004) 98:4 AJIL 855 at 861.</footnote>

<footnote n="27">*Agreement on Trade-Related Aspects of Intellectual Property Rights*, Annex 1C of the*Marrakesh Agreement Establishing the World Trade Organization*, 15 April 1994, 1869 UNTS 299.</footnote>