Decisions of the Appellate Body of the World Trade Organization Gasoline:United States - Standards for Reformulated and Conventional Gasoline Introduction Complete Text of this Survey (RTF Format) Full text of the WTO Appellate Body Report (PDF Format) * Sungjoon Cho** WTO Appellate Body Report: Gasoline:United States - Standards for Reformulated and Conventional Gasoline, AB-1996-1, WT/DS2/AB/R, Adopted by Dispute Settelemt Body, 20 May 1996, Appellant: United States, Appellees: Brazil, Venezuela, Third Participants: European Communities, Norway Introduction On May 20, 1996 the first Appellate Body Report (United States - Standards for Reformulated and Conventional Gasoline)1 was adopted under the new World Trade Organization (WTO)2 system. This case was unique and controversial in two respects. First, the case was initiated by two developing countries (Venezuela and Brazil), who filed a complaint against a developed country (the United States) in contrast to the prevailing practices under the former GATT.3 Second, the case involved environment-related issues, drawing attention from environmentalists as well as government officials handling environmental policies4. The latter tension between trade and environment had heightened since the famous Tuna-Dolphin case5, and an increasing number of environmental treaties signed since the early nineties. This note focuses on the "international trade" perspective of this case in terms of both substantive law, concentrating on Article XX (General Exceptions) of the General Agreement of Tariffs and Trade 1994 (GATT 1994)6 and procedural law found in the Dispute Settlement Understanding (DSU)7. This note is divided into five parts. Part I-IV digest the factual background leading up to the case, the Panel report, the U.S. appeal, and the Appellate Body Report. Part V critiques the analysis of Appellate Body's ruling and raises questions distilled from the analysis of this case. In particular, this part argues that the Appellate Body failed to delve into an important legal issue - the applicability of Agreement on Technical Barriers to Trade (TBT)8 - in the name of judicial economy; that it replaced legal analysis by consensus (acquiescence) of the disputants; that it disregarded a conditional appeal merely on a formalistic ground; that it was not faithful to the principle of treaty interpretation by downplaying the ordinary meaning; that it conducted the necessary test in interpreting the chapeau, thereby leading to the dilution of the distinction between "necessary" and "relating to". This note concludes that the Appellate Body review should be more judicialized and that Member countries should exert more effort in regulatory cooperation in order to address the trade-off between free trade and domestic regulation. * provided by worldtradelaw.net **  Visiting Scholar, Harvard Law School; LL.M.- International Economic Law, University of Michigan (1997) 1 United States - Standards for Reformulated and Conventional Gasoline, Panel and Appellate Body Report adopted on May 20,1996, WT/DS2/9 [hereinafter Panel Report and Appellate Body Report, respectively]. 2 See Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, LEGAL INSTRUMENTS - RESULTS OF THE URUGUAY ROUND vol. 1; 33 I.L.M. 1140, 1144 (1994) [hereinafter WTO Agreement]. For a historical background of the creation of the WTO, see generally WORLD TRADE: TOWARD FAIR AND FREE TRADE IN THE TWENTY-FIRST CENTURY (Marie Griesgraber & Bernhard G. Gunter eds., 1997); ASIF H. QURESHI, THE WORLD TRADE ORGANIZATION (1996) ; BRUCE E. MOON, DILEMMAS OF INTERNATIONAL TRADE (1996); PHILIP RAWORTH & LINDA C. REIF., THE LAW OF THE WORLD TRADE ORGANIZATION: FINAL TEXT OF THE GATT URUGUAY ROUND AGREEMENTS (1995). 3 General Agreement on Tariffs and Trade, Oct.30, 1947, T.I.A.S. No. 1700, 55 U.N.T.S. 187 [hereinafter GATT 1947]. From 1948 to 1989, 73 percent of all GATT panel cases were filed by developed countries like the U.S., the EC, Canada, and Australia. Robert E. Hudec et al., A Statistical Profile of GATT Dispute Settlement Cases: 1948-1989, 2 MINN. J. GLOBAL TRADE 1, 29 (1993). 4 In fact, a good deal of articles approaches this case from an environmental viewpoint. Search of WESTLAW, by Terms and Connectors: "Reformulated and Conventional Gasoline" (Jan. 27,1998). 5 United States - Restrictions on Imports of Tuna from Mexico, not adopted, GATT, B.I.S.D. (39th Supp.) at 155 (1993) [hereinafter Tuna - Dolphin]. 6 General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, LEGAL INSTRUMENTS -RESULTS OF THE URUGUAY ROUND vol. 2; 33 I.L.M. 29, art. III (1994) [hereinafter GATT 1994]. WTO Agreement Annex 1A incorporates a document labeled GATT 1994 which is essentially GATT 1947, as amended changed through the Uruguay Round, along with all the ancillary agreements pertaining to GATT 1947, as modified. JOHN H. JACKSON ET AL., LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC RELATIONS- CASES, MATERIALS, AND TEXT ON THE NATIONAL AND INTERNATIONAL REGULATION OF TRANSNATIONAL ECONOMIC RELATIONS 290-291 (3rd ed. 1995) [hereinafter JACKSON ET AL.]. 7 Understanding on Rules and Procedures Governing the Settlement of Disputes, Annex 2 of the WTO Agreement, supra note 1, art. 26 [hereinafter DSU]. 8 Agreement on Technical Barriers to Trade, Annex 1A of the WTO Agreement, supra note 2 [hereinafter TBT].
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