WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/CTE/W/115 
25 June 1999 
 (99-2630) 
Committee on Trade and Environment Original:   English/ 
 anglais/  inglés 
 
 
 
COMMUNICATION FROM THE SECRETARIAT FOR 
THE VIENNA CONVENTION AND THE 
MONTREAL PROTOCOL, UNEP 
  
 The attached background paper
1 has been received from the Secretariat for the 
Vienna Convention and the Montreal Protocol, UNEP.  It is being circulated to Members of the CTE in preparation for the Committee Meeting on Trade and Environment to be held on 29-30 June 1999. 
 
 
 
Comité du commerce et de l'environnement 
  
COMMUNICATION DU SECRÉTARIAT DE LA CONVENTION DE VIENNE  
POUR LA PROTECTION DE LA COUCHE D'OZONE  
ET DU PROTOCOLE DE MONTRÉAL, PNUE 
  
 Le Secrétariat de la Convention de Vienne et du Protocole de Montréal, PNUE, a fait parvenir 
au Secrétariat la note d'information ci-jointe
1, qui est distribuée aux membres du Comité du commerce 
et de l'environnement en vue de la réunion que le Comité tiendra les 29 et 30 juin 1999. 
 
 
 
Comité de Comercio y Medio Ambiente 
  
COMUNICACIÓN DE LA SECRETARÍA DEL 
CONVENIO DE VIENA Y EL PROTOCOLO 
DE MONTRAEL, PNUMA 
  
 Se ha recibido de la secretar ía del Convenio de Viena y el Protocolo de Montreal (PNUMA) 
el siguiente documento de información
1, que se distribuye a los miembros del Comité de Comercio y 
Medio Ambiente para preparar la reunión sobre come rcio y medio ambiente que el Comité celebrará 
los días 29 y 30 de junio de 1999.   
 
                                                     
 
1 English only/En anglais seulement/En inglés solamente. WT/CTE/W/115 
Page 2  
 
TRADE RELATED DEVELOPMENTS IN THE MONTREAL PROTOCOL ON 
SUBSTANCES THAT DEPLETE THE OZONE LAYER 
 
K. Madhava Sarma 
Executive Secretary 
Secretariat for the Vienna Convention and 
the Montreal Protocol, UNEP 
 
 
TABLE OF CONTENTS 
 
Subject
  Paragraph(s)  
 
I. Montreal Protocol ------------------------------------------------------------------ 1-4 
II. Trade Measures--------------------------------------------------------------------- 5-9 III. New Substances -------------------------------------------------------------------- 10 
IV. Who and Why of th e non-Parties ------------------------------------------------ 11-16 
V. Non-compliance Procedure ------------------------------------------------------- 17-18 VI. Why Trade Measures -------------------------------------------------------------- 19-21 VII. Assistance to Developing Countries--------------------------------------------- 22-28 VIII. Technology Transfer--------------------------------------------------------------- 29 
IX. Compatibility between GATT and the Protocol ------------------------------- 30-33 
 Annex I - Indicative List of categories of incremental costs of Developing  
  Countries met by the Multilateral Fund   Annex II - List of countries that have not ratified the Amendments/Protocol 
  WT/CTE/W/115 
 Page 3 
 
 
I. MONTREAL PROTOCOL 
 
1. The Montreal Protocol on Substances that De plete the Ozone Layer has been arrived at in 
1987 as a Protocol under Article 8 of the Vienna C onvention for the Protection of the Ozone Layer, 
1985.  The Protocol seeks to protect the ozone layer by phasing out global emissions of specified 
ozone depleting substances on the basis of developm ents in scientific knowledge, taking into account 
technical and economic considerations and bearing in mind the developmental needs of developing 
countries.  The preamble of the Protocol specifical ly acknowledges the need for special provisions to 
meet the needs of developing countries, includi ng provisions for additional financial resources and 
access to relevant technologies. 
2. The Protocol of 1987 was acknowledged only to be the first step as only eight substances 
were included as controlled substances and the cont rol measures prescribed only sought to freeze or 
reduce consumption of these substanc es over a time period.  Article 6 of the Protocol provided for 
assessment of the control measures at least every four years on the basis of available scientific, 
environmental, technical and economic information.  Article 2, paragraph 9 provided for adjusting the 
ozone depleting potentials and the control measures based on these assessments.  The adjustments are 
binding on all Parties after a decision by a Meeting of  the Parties with 2/3 majority vote of the Parties 
present and voting and representing a majority sep arately from the developing countries and from 
other countries and six months after the communication of such adjustments by the Depositary of the Protocol.  Article 9 of the Vienna Convention pr ovided for the procedure to amend the Protocol. 
A. A
DJUSTMENTS AND AMENDMENTS TO THE PROTOCOL  
3. Based on the assessments made by panels of e xperts established by the Parties in 1989, 1991 
and 1994, the Parties have adjust ed the control measures of substa nces already included in the list 
through adjustments.  The Parties also included more substances and prescribed control measures for 
them through amendments in 1990 (London Ame ndment) and 1992 (Copenhagen Amendment).  
There were also adjustments and an amendmen t adopted in 1997 (Montreal Amendment) which 
advanced the phase-out dates but no new substance was included.  The Montreal Amendment has not 
yet entered into force.  While the Montreal Prot ocol of 1987 controlled only eight substances, the 
London Amendment added twelve more and the Co penhagen Amendment added 75 more.  Totally, 
95 chemicals are controlled.  
B. KEY PROVISIONS OF THE PROTOCOL  
4. As adjusted and amended, the Protocol provides for, inter alia : 
- A timetable of phased reduction and phase out of the 95 ozone-depleting 
substances (ODS) by Parties.  (Control measures of Articles 2A-2H); 
- a grace period of ten years (more in some cases) for Parties, classified as 
developing and consuming less than the specified per-capita quantities of ODS, to observe the time-table of phase out (Article 5 Parties).  All the 
countries of the Group of 77 (in 1989), China, Albania, South Africa, Georgia 
and Moldova are classified as developing countries. 
- a multilateral fund, contributed by non-Ar ticle 5 Parties, to meet the agreed 
incremental costs of Article 5 Parties for implementing the phase-out.  The indicative list of agreed incremental costs is attached.  (Article 10). WT/CTE/W/115 
Page 4  
 
- mandate to parties to take “every practicable step” to transfer “the best 
available, environmentally safe subs titutes and related technologies” “under 
fair and most favorable conditions”.  (Article 10A). 
- control of trade with non-Parties (Article 4); 
- reporting of data and information (Articles 7 and 9); 
- making a non-compliance procedure (Article 8). 
II. MEASURES OF THE PROTOCOL FOR CONTROL OF TRADE WITH NON-
PARTIES  
5. The trade measures of the Protocol under Artic le 4 are directed against non-Parties.  These 
measures are as follows: 
(a) Control of trade in ODS with non-Parties 
 (i) Annex A substances: 
- import from non-Parties banned from January  1990 (Article 4, paragraph 1); 
- export banned from January 1993 (Article 4, paragraph 2); 
 (ii) Annex B substances: 
- Import and export banned from August 1993 for non-parties to the London 
Amendment (Article 4, para graphs 1 bis and 2 bis). 
 (iii) Annex C - Group II - HBFCs: 
- Import and export banned from June 1995 for non-Parties to the Copenhagen 
Amendment (Article 4, para graphs 1 ter and 2 ter). 
(iv) Annex C Group I (HCFCs), no restrictions as yet since it was felt by the 
Parties that such restrictions may affect the phase out of CFCs (of much 
higher Ozone Depletion Potential th an CFCs) since HCFCs are used 
temporarily as substitutes for CFCs). 
(b) Control of Trade in ODS products with non-Parties 
- Import of products (listed in Annex D) containing Annex A substances 
banned from May 1992 (Article 4 paragr aph 3 and Decision 15 of the Third 
Meeting of the Parties, 1991); 
- fifth Meeting of the Parties decided that it is not feasible to ban or restrict 
trade in products made with, but not co ntaining, Annex A substances (Article 
4, paragraph 4 and Decision 17 of the Fifth Meeting); 
- the Parties also decided that produc ts containing Annex B and Annex C, 
Group II, substances or products made with, but not containing the Annex C, 
Group II substances will not be listed.  (Ar ticle 4, paragraphs 3 bis, 3 ter and 4 
ter and Decisions 12 of the Sixth Mee ting and 18 of the Eighth Meeting). 
(c) Exports of ODS-technologies:  WT/CTE/W/115 
 Page 5 
 
 
- Parties to discourage “to the fullest practicable extent,” export of technology 
for producing of ODS (excepting HCFCs); 
- no new subsidies, aid etc., for export to non-Parties of equipment or 
technology to make ODS (excepting HCFCs); 
- exception for equipment or technology to recycle ODS. 
6. The Ninth Meeting of the Parties introduced, through the Montreal Amendment, inter alia , 
trade controls for methyl bromide (Annex E)  with non Parties.  These controls are: 
• Within one year of the date of entry of the Montreal Amendment each Party shall ban 
the import of methyl bromide from any state not party to this Protocol. 
 
• Commencing one year after the date of entry of the Montreal Protocol, each Party 
shall ban the export of methyl bromide to any state not party to the Protocol. 
 
• Each Party undertakes to the fullest practicab le extent to discourage the export to any 
non-Party of technology for producing or for utilizing methyl bromide. 
 
• Each Party shall refrain from providing any assistance for the export to non-parties of 
any equipment or technology that would facilitate production of methyl bromide. 
 
 The Montreal Amendment has not yet entered into force. 
 A. M
EASURES FOR CONTROL OF TRADE WITH PARTIES  
7. The control measures of the Protocol which mandate phased reduction of the consumption of 
ODS can be implemented only by Parties curbing im ports from other Parties.  The parties adopted a 
wide variety of restrictions on trade th rough policies and regulations.  These include: 
- Agreements with industry to phase down imports; 
- product labeling; 
- licensing for ODS trade; 
- duty reductions for ODS-substitutes and non-ODS technologies; 
- excise taxes on ODS; 
- quantitative restrictions, a nd bans on imports of ODS; 
- total or partial bans on import of  ODS products or technologies. 
8. During the last few years, the developing coun try Parties wanted voluntary restraint by the 
exporting Parties from exporting new or used CFC- using equipment such as refrigerators.  The 
developing countries agreed that such exports created a demand for CFCs in their countries making it 
difficult for them to cut down consumption of CF Cs.  The Tenth Meeting of the Parties in 1998 
decided that a Party will inform the Se cretariat of the ODS equipment it does not  want imported into 
its country (along with the declaration that it does not itself make such equipment).  The Secretariat will communicate this list to all the Parties.  About te n Parties have so far informed the Secretariat on 
this issue.  It is hoped that he exporting Par ties will honour the wishes of the importing Parties. WT/CTE/W/115 
Page 6  
 
9. The Montreal Amendment has introduced some controls on trade with Parties.  Article 4A 
prescribes that where a Party is unable to phase out its production on the mandated date (i.e. it is in 
non-compliance) it shall ban the export of used, recy cled and reclaimed substances over that for the 
purpose of destruction.  This provision is inte nded to encourage countries to use their recycled 
substances within their country and phase out producti on.  It is also intended to prevent illegal export 
of virgin substances in the guise of used substa nces.  Article 4B of the Montreal Amendment 
mandates implementation of a system for licen sing import and export of the ozone depleting 
substances, whether virgin or recycled.  This pr ovision is intended to co ntrol illegal trade and to 
enable countries to implement the control provisions of the Protocol. 
III. NEW SUBSTANCES WITH OZONE DEPLETION POTENTIAL 
10. The Protocol prescribes control measures for the 95 chemicals it lists in its annexes.  
Recently, a concern has been raised about new ozone depleting substances being put in the market as 
substitutes for CFCs.  Two such chemicals, N-Pr opyl bromide and chlorobromomethane, with some 
ozone depleting potential are being marketed by a company as substitutes to HCFCs in the Solvents 
Sector.  These substances have an ODP similar to that of CFCs which are permitted now as substitutes 
for CFCs but which need to be phased out by the year 2030.  The Ninth and Tenth Meetings of the 
Parties considered this issue and are very concer ned about the possibility of the marketing of new 
ODS not controlled by the Montreal Protocol.  They  have sought advice of their Assessment Panels 
and of the Legal Drafting Group on this issue.  The Eleventh Meeting of the Parties in December 1999 
will consider this issue further. 
IV. WHO ARE THE “NON-PARTIES”? 
11. Under the procedure established by the Vienna  Convention, an Amendment is binding on a 
Party only if it ratifies that Amendment.  Hen ce, the control and trade measures for substances 
included in a Protocol by an Amendment are applicab le to a country only if that country has ratified 
that Amendment.  At the moment 169 Parties have ratified the Vienna Convention, 168 the Montreal 
Protocol, 129 the London amendment and 89 the Copenhagen Amendment.  The Montreal 
Amendment has not yet entered into force.  13 Parties have so far ratified it.  It needs a total of 20 
ratifications to enter into force.  It has been pr ovided in each Amendment that a country can ratify it 
only if all the previous amendments are ratified.  In effect, the Montreal Protocol is actually three 
separate Protocols i.e. the Montreal Protocol, the Montreal Protocol with the London Amendment and 
the Montreal Protocol with the Copenhagen Amendmen t.  Soon there will be a fourth agreement i.e. 
the Montreal Protocol with a Montreal Amendment. 
12. Article 4 Paragraph 9 makes it clear that a Part y that has not agreed to be bound by the control 
measures for a substance is considered a non-Party fo r that substance.  Hence, 22 countries (which 
have not ratified the Montreal Protocol are non-Pa rties for all the 95 substances controlled by the 
Protocol, 51 countries for the 87 (Annex B, C, and E) substances and 101 c ountries for the 75 (Annex 
C and E) substances.  
13. The list of Parties to the Protocol who are non-Parties to the Montreal Protocol, to the London 
Amendment and to the Copenhagen Amendment is annexed along with the populations.  
A. W
HY DO THE “NON-PARTIES ” NOT RATIFY THE PROTOCOL /AMENDMENTS ? 
14. There are only 22 countries, which have not ye t ratified the Montreal Protocol, and their total 
population is less than 5% of the world’s population.   It is surmised that the consumption of these 
countries of the ozone depleting substances will be insignificant and that their non-ratification is due 
to instability in their Governments.  The non-Pa rties to the London Amendment are also small 
consumers of the controlled substa nces and their non-ratification may be due to long administrative 
procedures.  The number of Parties who have not  ratified the Copenhagen Amendment is, however,  WT/CTE/W/115 
 Page 7 
 
 
much larger.  It includes large countries such as Ch ina, Bangladesh, Philippines, India etc.  The reason 
for non-ratification is not clear.  No Party has ev er objected to the substance of the Amendment.  
Many of these Parties also submit their data regularly for HCFCs and Methyl Bromide, which are controlled by Copenhagen Amendment.  Some of th ese Parties have obtained the assistance of the 
Multilateral Fund for Methyl Bromide projects afte r assuring that they will ratify the Amendment 
soon. 
15. It is noteworthy that meetings of all the Pa rties to the Protocol through consensus approved 
the Amendments to the Protocol.  No Government ev er objected to the substance of any Amendment.  
Indeed, many of the non-Parties periodically announce their intention to ratify it and explain the long 
procedure in their countries for such ratification as an explanation for the delay. 
16. Article 4, paragraph 8 of the Protocol specifi es that the trade restrictions do not apply to a 
non-Party if a Meeting of the Parties determines that the non-Party is in full compliance with the control measures and has provided data to that e ffect; Colombia, Malta, Jordan, Poland and Turkey 
were so determined to be in compliance in  1992-93 prior to their ratification of the 
Protocol/Amendment, so that they could import the ODS for their requirements. 
V. NON-COMPLIANCE PROCEDURE OF THE PROTOCOL 
17. The Protocol’s non-Compliance Procedure has been elaborated by the Fourth Meeting of the 
Parties in 1992 in accordance with Article 8 of the Montreal Protocol.  The Procedure establishes an 
implementation committee of ten members, elected by the Meetings of the Parties each year, two each 
from each of the five geographical regions.  Th e committee considers submissions by one Party 
regarding another Party, by Secretariat or by a Pa rty itself regarding its own implementation.  After 
considering the submissions, the Implementati on Committee would recommend appropriate action to 
the Meeting of the Parties.  The measures, which co uld be taken in a case of non-compliance, include 
assistance, caution or suspension of specified rights and privileges under the Protocol.  That the measures for non-compliance include assistance, on the assumption that a Party’s non-compliance is 
not deliberate but only due to its inability, is a n ovel provision introduced by the Parties to the 
Montreal Protocol. 
18. So far, only the case of the Russian Federa tion and other Republics of the former Soviet 
Union are before the Committee for non-compliance, on the basis of the Secret ariat’s report.  These 
States are not classified as developing countri es (excepting Georgia and Moldova) and hence are 
expected to phase out production and consumption of  Annex A and Annex B s ubstances by 1996.  
These States have represented to the Meetings of th e Parties that they are unable to comply with the 
phase-out schedule due to the difficulties of their tr ansition to a market ec onomy and have promised 
to comply by the end of the year 2000, if they ar e given adequate technical and financial assistance.  
The Meetings of the Parties considered these representations and, on recommendation by the 
Implementation Committee have requested the Global  Environment Facility to assist these Parties. 
The GEF has so far given about US$110 million to these countries to assist their phase out.  There 
have not been any cases of non-compliance with the trade provisions. 
VI. WHY CONTROL TRADE WITH NON-PARTIES?  WHAT IS THE IMPACT? 
19. While including trade measures in the Montreal  Protocol, the Parties have always kept in 
mind the provisions of GATT and consulted the GA TT Secretariat, not surprisingly since there are 
many members who are Parties to both the Treaties.  The trade measures with non-Parties were considered essential to prevent CFC providers a nd producers of equipment containing CFCs moving 
their capacity to a non-Party territory.  Initially at leas t, the CFCs were cheaper than their alternatives:  
it was considered that non-Parties would reap econom ic benefits and at the same time negate the 
efforts of others to protect the ozone layer.  The trade restrictions do not
 apply, in accordance with 
Article 4 paragraph 8, if a non-Party is in compliance with the Protocol. WT/CTE/W/115 
Page 8  
 
20. It is almost the universal consensus that th e ozone depletion is occurring due to use of CFCs 
and that ozone depletion would lead to adverse consequences for human health and environment in 
general.  The objective of the Montreal Protocol is to eliminate the produc tion and consumption of 
CFCs.  Obviously, trade will increase the consum ption negating the objectives of the Protocol.  
Permitting a Party to trade freely with a non-Party, wh ich does not act in conformity with the control 
measures would go against the objectives of the Prot ocol.  The trade restrictions with non-Parties 
acted as a penalty for staying outside the controls of the Montreal Protocol.  There is no doubt that many countries who do not produce these substances acc eded to the Protocol as, otherwise, they 
would have lost access to the CFCs needed by th em.  The preservation of the global resource of the 
ozone layer is possible only with universal partic ipation since the emission of CFCs from anywhere 
causes damage to the ozone layer and the trade rest rictions promoted the universal participation  
A. W
HY TRADE RESTRICTIONS BETWEEN PARTIES ? 
21. The only trade restriction between Parties, a pa rt of the Montreal Amendment, is that a Party 
which continues to produce CFCs in non-complian ce with the Protocol shall ban the export of 
recycled substances.  The logic of this provision is that the country which exports recycled substances 
could instead use those recycled substances itself and reduce its production.  The exemption given to 
recycled substances from control measures is intende d to stop production soon and there is no reason 
why a country should produce virgin substances in  defiance of the control measures if it can use 
recycled substances.  Another factor, which led to this provision, is that some companies may have 
exported virgin substances in the guise of recycled substances. The provision is to help to curb such 
illegal trade.  Illegal trade arises because there is  still some demand for CFCs in the industrialized 
countries for maintenance of the existing equipm ent and the developing countries are given a grace 
period of ten years for their phase-out schedule.  Th e Russian Federation also continues to produce in 
non-compliance with the Protocol, on the plea of unsettled conditions. 
VII. ASSISTANCE TO DEVELOPING COUNTRIES – THE FINANCIAL MECHANISM 
22. It is also true to say that almost all the developing countries willingly joined the Protocol in 
view of the grace period of ten years for implementing their control measures and in view of the 
financial mechanism and the Multilateral Fund establis hed under Article 10 of the Montreal Protocol.  
They understood that by being outside they will lo se assistance from this Fund and, at the same time, 
may be forced to change their technologies to CF C alternatives with their own money since the CFC 
technologies are becoming obsolete throughout the world.  No country can maintain its CFC technology in isolation without loss of trade opportunities due to consumer resistance. 
A. T
HE MULTILATERAL FUND 
23. The Multilateral Fund of the Protocol has func tioned very effectively since 1991.  The Fund 
has disbursed nearly US$900 million to 110 devel oping countries for the purpose of institutional 
strengthening, training, project preparation, and im plementation of investment projects.  The Fund has 
the obligation to meet all the agreed incremental costs of developing countries for implementing the 
control measures.  An indicative list of agreed in cremental costs approved by the Fourth Meeting of 
the Parties is enclosed.  As can be seen, the list is  fairly comprehensive, compensating the industries 
adequately for changing to ozone-fri endly technologies.  The Fund meets the incremental costs of 
technology transfer, training, the equipment need ed and the installation costs for all industries 
producing or using ODS.  The Fund has so far sanctioned more than two thousand projects to phase out nearly 60% of the developing country consumption. 
24. The Fund is administered by the Execu tive Committee of 14 members - 7 members from 
developing countries and 7 from others.  Allocations to the Fund are approved by Meetings of the 
Parties once in 3 years based on a study of the requirements of the Fund.  The contributions are wholly from Parties who are not developing countries  in proportion to their UN scale of contributions.  WT/CTE/W/115 
 Page 9 
 
 
The allocations so far have been as follows: 
Period     Amount (US Dollar Millions) 
1991 - 1993      240 1994 - 1996      455 1997 - 1999      465 
 
 The allocation for the period 2000 - 2002 will be  finalized by the Eleventh Meeting of the 
Parties to be held in Beijing, China on 29 November - 3 December 1999.   
 25. The list of pledges to the Fund includes the Russian Federation and countries of the former 
USSR that have not paid their contributions.  A ll the other countries i.e. industrialized countries are 
paying their contributions promptly.  90% of  the contributions due are being collected. 
26. The fund operates through four implem enting agencies, UNEP, UNDP, UNIDO and the 
World Bank.  UNEP concentrates on preparation of country programmes, institutional strengthening 
by establishing ozone focal points in each developing country, training, networking of the ozone focal 
points and information exchange on expertise and te chnologies available.  The other three agencies 
prepare investment projects and help  the countries to implement them. 
27. The functioning of the Multilateral Fund has r esulted in establishmen t of the ozone focal 
points in every country and in raising awareness am ong all the sections of countries such as industries 
who need to change their technologies.  It is no ex aggeration to say that this effort to eliminate 95 
chemicals through out the world is an unprecedented exercise, which is being successfully carried out.  
28. More than 80% of the Parties regularly re port their data on producti on and consumption of 
these substances and the only countries who do not  report data are the ones whose country 
programmes are yet to be prepared.  The data from 1986 - 1997 shows that the developed countries 
have reduced their consumption from one million t onnes in 1986 to about twenty thousand tonnes in 
1997.  The CFC consumption of developing countries has increased about 11% over these eleven 
years.  It has to be noted that the Protocol provides for increase of production and consumption of 
developing countries to meet their basic domestic needs without any limit up to 1999.  In the developing countries the annual growth rate of popul ation has been 2-3% and the economic growth 
rate of many of these countries have been about 6-7% annually.  The products, which use CFCs like 
refrigerators, air conditioners etc, have two digit grow th rates in most countries.  In spite of this, the 
growth rate of CFC consumption in the developing  countries as a whole has been negligible over the 
past eleven years thanks to the wo rk of the Multilateral Fund and transfer of alternative technologies.   
VIII.  TECHNOLOGY TRANSFER 
29. That nearly 2500 projects are under implementa tion in developing countries’ industries to 
shift to non-ODS technologies shows that technology transfer has been mostly successful.  However, 
there have been complaints from the Republic of Ko rea, India and China that the few companies who 
hold the HFC 134A (an alternative to CFC) techno logies stipulate unfavourable conditions such as 
joint enterprises and market restrictions for the tr ansfer of technologies.  Some companies cite lax 
intellectual property protection in the recipient coun tries as a reason for reluctance to transfer.  The 
Protocol asks Parties to take “every practicable step” to transfer technologies but does not compel 
such transfer.  The Executive Committee is consid ering the issue of how to promote technology 
transfer in general.  In the abstract, the probl em appears intractable but in practice, commercial 
considerations win out. WT/CTE/W/115 
Page 10  
 
IX. COMPATIBILITY BETWEEN GATT AND THE TRADE PROVISIONS OF THE 
PROTOCOL 
30. The relationship between the provisions of GATT and trade provisions of the Montreal 
Protocol has been discussed in many publications .  The following has raised the possibility of 
inconsistency: 
- The trade measures in Article 4 of the Protocol ban imports from non-Parties 
to the Protocol who may be GATT Par ties:  Similar restrictions are not 
imposed on Parties, thus violating GATT Article I – “The most-favoured-
nation principle”; 
- the restrictions on imports of products from non-parties violates GATT 
Article III, “The national treatment principle”. 
- Article XI of GATT on “General elimination of quantitative restrictions” is 
also said to be violated by the provisions of the Montreal Protocol.   
31. The answer by many experts to the charge of  inconsistency is based on exceptions provided 
by Article XX of GATT.  Article XX (b) provides for measures “necessary to protect human, animal 
or plant life or health” and Article XX (g) provides for exceptions for measures “relating to 
conservation of exhaustible natural resources if such  measures are made effective in conjunction with 
restrictions on domestic production or  consumption”.  Many experts consider that the exceptions of 
Article XX of GATT are applicable to the trade provisions of the Montreal Protocol for the following reasons: 
- The ozone layer is an exhaustible natu ral resource and its depletion adversely 
affects human, animal and plant life and health. 
- the Protocol has been based on interna tional scientific assessment of what is 
necessary to protect the ozone layer.  These assessments are backed by an 
international consensus. 
- free trade in ozone depleting substances increases production and 
consumption of ozone de pleting substances and a ffects the ozone layer. 
- Article 4 exempts non-Parties from trade restrictions if they comply with the 
control measures. 
- the trade measures are but a part of an integrated set of policy instruments 
used within the Protocol. 
- there is no arbitrary and unjustifiabl e discrimination between countries where 
same conditions prevail. 
- the terms of the Protocol are fully transparent. 
X. ARE THE TRADE MEASURES NECESSARY? 
32. A question occasionally asked is whether econo mic instruments could have replaced the trade 
measures.  The answer is in the negative for the following reasons: 
- Many countries are inexperienced in efficient use of economic instruments;  WT/CTE/W/115 
 Page 11 
 
 
- many countries have controlled econom ies in varying degrees and economic 
instruments of other countries have little effect on them; 
- it would have taken a long time for any economic instrument to bring in non-
Party producers and consumers.  The unrestricted consumption of ODS of such non-Parties would have made the ozone-depletion worse.  The trade 
measures helped bring in almost all the countries. 
- the word ‘necessary’ will have to be interpreted liberally in environmental 
situations where the health of the entire planet is at stake. 
XI. SOLUTIONS FOR INCOMPATIBILITY? 
33. Many solutions have been suggested to make GATT “environment-friendly”: 
- Amending GATT to include sustainability principles; 
- amend GATT to extend the exemptions of Article XX to include trade 
provisions of the environmental agreements; 
- use the waiver clause (Article XXV).  WT/CTE/W/115 
Page 12  
 
ANNEX I 
 
INDICATIVE LIST OF CATEGORIES OF INCREMENTAL COSTS  
 
(Extracted from Annex VIII of the Report of the 4
th Meeting of the Parties) 
 
1. The evaluation of requests for financing increm ental costs of a given project shall take into 
account the following general principles: 
(a) The most cost-effective and efficient option should be chosen, taking into account the 
national industrial strategy of the recipient party. It should be considered carefully to 
what extent the infrastructure at presen t used for production of the controlled 
substances could be put to alternative uses, thus resulting in decreased capital 
abandonment, and how to avoid deindustria lization and loss of export revenues; 
(b) consideration of project proposals for fundi ng should involve the careful scrutiny of 
cost items listed in an effort to ensure that there is no double counting; 
(c) savings or benefits that will be gained at both the strategic and project levels during 
the transition process should be taken into  account on a case-by-case basis, according 
to criteria decided by the Parties and as elaborated in the guidelines of the Executive Committee; 
(d) the funding of incremental costs is intended as an incentive for early adoption of 
ozone protecting technologies. In this respect the Executive Committee shall agree 
which time scales for payment of incremental costs are appropriate in each sector. 
2. Incremental costs that once agreed are to be met by the financial mechanism include those 
listed below. If incremental costs other than tho se mentioned below are identified and quantified, a 
decision as to whether they are to be met by the financial mechanism shall be taken by the Executive 
Committee consistent with any criteria decided by th e Parties and elaborated in the guidelines of the 
Executive Committee. The incremental recurring co sts apply only for a transition period to be 
defined. The following list is indicated: 
(a) Supply of substitutes 
(i) Cost of conversion of existing production facilities: 
• cost of patents and designs and incremental cost of royalties; 
 
• capital cost of conversion; 
 
• cost of retraining of personnel, as well as the cost of research to adapt 
technology to local circumstances; 
 
(ii) Costs arising from premature retirement or enforced idleness, taking into 
account any guidance of the Executive Committee on appropriate cut-off dates: 
• of productive capacity previously used to produce substances controlled by 
and/or amended or adjusted Protocol provisions; and 
  WT/CTE/W/115 
 Page 13 
 
 
• where such capacity is not replaced by  converted or new capacity to produce 
alternatives; 
(iii) Cost of establishing new producti on facilities for substitutes of capacity 
equivalent to capacity lost when plants  are converted or scrapped, including: 
• cost of patents and designs and incremental cost of royalties; 
 
• capital cost; 
 
• cost of training, as well as the cost of research to adapt technology to 
circumstances; 
 
(iv) Net operational cost, including the cost of raw materials; 
(v) Cost of import of substitutes; 
(b) Use in manufacturing as an intermediate good 
(i) Cost of conversion of existing equipment and product manufacturing 
facilities; 
(ii) cost of patents and designs and incremental cost of royalties; (iii) capital cost; (iv) cost of retraining; 
(v) cost of research and development; 
(vi) operational cost, including the cost of raw materials except where otherwise 
provided for; 
(c) End-use 
(i) Cost of premature modification or replacement of user equipment; 
(ii) cost of collection, management, recyc ling, and, if cost effective, destruction 
of ozone-depleting substances; 
(iii) cost of providing technical assistance to reduce consumption and 
 unintended emission of ozone-depleting substances. WT/CTE/W/115 
Page 14 
 
 ANNEX II 
 
Table I 
Countries that have NOT Ratified the 
London Amendment 
 Country Name Population  
1.  Benin 5742  
2.  Bosnia and Herzegovina 3700  
3.  Brunei Darussalam 314  
4.  Burundi 7145  
5.  Central African Republic 3478  
6.  Chad 6731  
7.  Dominican Republic 8098  
8.  El Salvador 6027  
9.  Ethiopia 58414  
10.  Fed. States of Micronesia 136  
11.  Gabon 1397  
12.  Georgia 5479  
13.  Guatemala 11241  
14.  Guyana 854  
15.  Honduras 5981  
16.  Kazakhstan 17437  
17.  Kiribati 84  
18.  Korea, Dem. People's Rep. of 24772  
19.  Lao People's Dem. Rep. 5309  
20.  Lesotho 2219  
21.  Libyan Arab Jamahiriya 5980  
22.  Madagascar 16221  
23.  Mauritania 2453  
24.  Moldova 4476  
25.  Nicaragua 4876  
26.  Nigeria 121773  
27.  Saint Lucia 148  
28.  Samoa 180  
29.  Solomon Islands 417  
30.  Sudan 30427  
31.  Suriname 437  
32.  Swaziland 929  
33.  Syrian Arab Republic 16220  
34.  Tonga 100  
35.  Trinidad and Tobago 1350  
36.  Tuvalu 10  
37.  United Arab Emirates 2028  
38.  Yemen 16065  
39.  Yugoslavia 10781  
Total 409429  
  WT/CTE/W/115 
 Page 15 
 
 
 Table II 
Countries that have NOT Ratified the  
Copenhagen Amendment 
 Country Name Population  
1.  Algeria 29205  
2.  Bahrain 608  
3.  Bangladesh 125898  
4.  Belarus 10107  
5.  Bulgaria 8686  
6.  China 1266838  
7.  Comoros 701  
8.  Congo 2815  
9.  Cote d'Ivoire 15722  
10.  Cyprus 757  
11.  Dominica 71  
12.  Fiji 808  
13.  Gambia 1190  
14.  Ghana 18504  
15.  Grenada 93  
16.  Guinea 7109  
17.  India 998056  
18.  Lebanon 3194  
19.  Maldives 280  
20.  Mali 11832  
21.  Malta 373  
22.  Monaco 33  
23.  Myanmar 49516  
24.  Namibia 1664  
25.  Nepal 23645  
26.  Niger 10119  
27.  Papua New Guinea 4602  
28.  Paraguay 5360  
29.  Peru 25153  
30.  Philippines 71775  
31.  Romania 22683  
32.  Russian Federation 146107  
33.  Senegal 9001  
34.  Singapore 2922  
35.  South Africa 44275  
36.  Tajikistan 6618  
37.  Tanzania, United Republic of 32277  
38.  Turkmenistan 4369  
39.  Uganda 23281  
40.  Ukraine 51140  
41.  Zambia 10231  
  
Total 3047618  WT/CTE/W/115 
Page 16  
 
 Table III 
Countries that have Not Ratified the  
Montreal Protocol 
Country Name Population  
1. Afghanistan 22720 
2. Albania 3509 
3. Andorra 48 
4. Angola 11865 
5. Armenia 3690 
6. Bhutan 1709 
7. Cambodia 10808 
8. Cape Verde 414 
9. Djibouti 602 
10. Eritrea 3850 
11. Guinea-Bissau 1119 
12. Haiti 7482 
13. Holy See  
14. Iraq 21674 
15. Kyrgyzstan 4982 
16. Oman 2434 
17. Palau  
18. Rwanda 8595 
19. San Marino 26 
20. Sao Tome & Principe 141 
21. Sierra Leone 4839 
22. Somalia 10099 
 
TOTAL 120606 
  WT/CTE/W/115 
 Page 17 
 
 
 Table IV 
Countries that have Ratified the Montreal Protocol  
 Country Name  Population
1.  Algeria 29205
2.  Antigua & Barbuda 67
3.  Argentina 35405
4.  Australia 18550
5.  Austria 8053
6.  Azerbaijan 7726
7.  Bahamas 284
8.  Bahrain 608
9.  Bangladesh 125898
10.  Barbados 264
11.  Belarus 10107
12.  Belgium 10174
13.  Belize 227
14.  Benin 5742
15.  Bolivia 7774
16.  Bosnia and Herzegovina 3700
17.  Botswana 1577
18.  Brazil 167046
19.  Brunei Darussalam 314
20.  Bulgaria 8686
21.  Burkina Faso 10866
22.  Burundi 7145
23.  Cameroon 13998
24.  Canada 30101
25.  Central African Republic 3478
26.  Chad 6731
27.  Chile 14691
28.  China 1266838
29.  Colombia 36200
30.  Comoros 701
31.  Congo 2815
32.  Congo, Dem. Republic of 46691
33.  Costa Rica 3575
34.  Cote d'Ivoire 15722
35.  Croatia 4470
36.  Cuba 11191
37.  Cyprus 757
38.  Czech Republic 10311
39.  Denmark 5194
40.  Dominica 71
41.  Dominican Republic 8098
42.  Ecuador 11937
43.  Egypt 65445
44.  El Salvador 6027
45.  Estonia 1412
46.  Ethiopia 58414
47.  Fed. States of Micronesia 136
48.  Fiji 808
49.  Finland 5149
50.  France 58433
51.  Gabon 1397
52.  Gambia 1190
53.  Georgia 5479
Table IV (cont'd)WT/CTE/W/115 
Page 18  
 
 Countries that have Ratified the Montreal Protocol  
 Country Name  Population
54.  Germany 81845
55.  Ghana 18504
56.  Greece 10512
57.  Grenada 93
58.  Guatemala 11241
59.  Guinea 7109
60.  Guyana 854
61.  Honduras 5981
62.  Hungary 10037
63.  Iceland 274
64.  India 998056
65.  Indonesia 203631
66.  Iran, Islamic Republic of 70136
67.  Ireland 3577
68.  Israel 5854
69.  Italy 57268
70.  Jamaica 2502
71.  Japan 125958
72.  Jordan 6033
73.  Kazakhstan 17437
74.  Kenya 30812
75.  Kiribati 84
76.  Korea, Dem. People's Republic of 24772
77.  Korea, Republic of 46297
78.  Kuwait 2130
79.  Lao People's Democratic Republic 5309
80.  Latvia 2501
81.  Lebanon 3194
82.  Lesotho 2219
83.  Liberia 3347
84.  Libyan Arab Jamahiriya 5980
85.  Liechtenstein 32
86.  Lithuania 3693
87.  Luxembourg 418
88.  Madagascar 16221
89.  Malawi 11765
90.  Malaysia 21450
91.  Maldives 280
92.  Mali 11832
93.  Malta 373
94.  Marshall Islands 59
95.  Mauritania 2453
96.  Mauritius 1154
97.  Mexico 98995
98.  Moldova 4476
99.  Monaco 33
100.  Mongolia 2558
101.  Morocco 28615
102.  Mozambique 17744
103.  Myanmar 49516
104.  Namibia 1664
105.  Nepal 23645
106.  Netherlands 15784
107.  New Zealand 3690
Table IV (con't) WT/CTE/W/115 
 Page 19 
 
 
 Countries that have Ratified the Montreal Protocol  
 Country Name  Population
108.  Nicaragua 4876
109.  Niger 10119
110.  Nigeria 121773
111.  Norway 4393
112.  Pakistan 152984
113.  Panama 2767
114.  Papua New Guinea 4602
115.  Paraguay 5360
116.  Peru 25153
117.  Philippines 71775
118.  Poland 38605
119.  Portugal 9812
120.  Qatar 583
121. Romania  22683
122.  Russian Federation 146107
123.  Saint Kitts & Nevis  41
124.  Saint Lucia  148
125.  Saint Vincent an d the Grenadines  115
126.  Samoa  180
127.  Saudi Arabia  19787
128.  Senegal  9001
129.  Seychelles  76
130.  Singapore  2922
131.  Slovakia  5420
132.  Slovenia  1948
133.  Solomon Islands  417
134.  South Africa  44275
135.  Spain  39779
136.  Sri Lanka  19277
137.  Sudan  30427
138.  Suriname  437
139.  Swaziland  929
140.  Sweden  8901
141.  Switzerland  7391
142.  Syrian Arab Republic  16220
143.  Tajikistan  6618
144.  Tanzania, United Republic of  32277
145.  Thailand  60681
146.  The Former Yugoslav Republic of Macedonia  2216
147.  Togo  4537
148.  Tonga  100
149.  Trinidad and Tobago  1350
150.  Tunisia  9378
151.  Turkey  65460
152.  Turkmenistan  4369
153.  Tuvalu  10
154.  Uganda  23281
155.  Ukraine  51140
156.  United Arab Emirates  2028
157.  United Kingdom  58743
158.  USA  270537
159.  Uruguay  3239
160.  Uzbekistan  24354
161.  Vanuatu  182
   Table IV (con't)WT/CTE/W/115 
Page 20  
 
 Countries that have Ratified the Montreal Protocol  
 Country Name  Population
162.  Venezuela  23242
163.  Viet Nam  79400
164.  Yemen  16065
165.  Yugoslavia  10781
166.  Zambia  10231
167.  Zimbabwe  12012
   
Total  5,838,389
 
 
__________