Biofuels certification and the law of the World Trade Organization

Aug 2009

This report assesses under what circumstances a biofuels-certification programme might be WTOcompatible.
Part I describes biofuels policies. They provide a starting point for any analysis of the trade legitimacy of a biofuels programme. Part 2 introduces two basic rules of WTO law – mostfavoured-nation (MFN) treatment and national treatment. Like the biofuels policy, these two rules are a starting point for understanding what to, and especially what not to, include in a biofuels certification programme. Part 3 of the report considers why governments choose to certify.
The following parts of the report concern the details of a certification programme: Parts 4 and 5 address what to certify from the product and process perspective, respectively. The choice of which products to cover and which to exclude from possible certification should be made so as to meet “like product” considerations under GATT Article III and the TBT Agreement. If the certification programme concerns a preferred or disfavoured PPM, then the TBT Agreement is the likely WTO framework.
Certification is a document-based process. Part 6 concerns the most used categories of documents: technical regulations and standards as they are covered by the TBT Agreement. The related procedures – conformity assessment procedures – are considered in Part 7. Once certified, there are many possible benefits or rewards, as described in Part 8. In spite of the careful development of a biofuels policy and certification procedure, the certification programme might not meet the WTO requirements. Part 9 explores possibilities for using the Article XX exceptions when the scheme does not conform to the WTO. Parts 10 and 11 point to two special considerations. Part 10 highlights the role of local governments and explains the need for a central government to monitor and oversee the biofuels policies of local governments. Part 11 offers other approaches to biofuels certification, including through international agreements and harmonization. The conclusions are in Part 12.

By: M. A. Echols (ICTSD)

 
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