Limited Edition:

The Basel Convention Export Ban Amendment: Arguments Against Ratification

A paper prepared for the International Council on Metals and the Environment by:
Maria Isolda P. Guevara,
Centre for Trade Policy and Law,
Ottawa, Canada

CONTENTS

Executive Summary

1. Introduction
2. Status
3. Arguing Against Ratification of the Ban Amendment
   

   3.1 Environment

   3.2 Trade

   3.3 Other Arguments

4. Courses of Action

EXECUTIVE SUMMARY

In September 1995, the Third Conference of Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal adopted Decision III/1 that would ban the transboundary movement of hazardous recyclables from States listed in Annex VII (mainly OECD countries) to States not listed in Annex VII (mainly non-OECD countries).

This paper elaborates on a number of arguments, in particular environmental and trade arguments, in order to show that the ban amendment is not providing any long-term solution and should therefore not be ratified by the Parties. The paper further calls for a focus on environmentally sound management of hazardous wastes as a major component of the management system for assuring protection of human health and the environment.

The export ban denies importing countries equipped with the capacity to manage wastes in an environmentally sound manner the right to determine their recycling policy and what they wish to import. On the contrary, these countries should be authorized to have access to resources needed to further develop their recycling abilities and their economies.

The export ban appears to be GATT-inconsistent and trade-disruptive. Indeed, the export ban is applied in a manner that discriminates between countries where the same conditions may prevail. There exists no environmental justification for this discrimination which appears to be grounded not on differences in conditions, but on arbitrary membership in a list.

The continued availability of Article 11 arrangements or the expansion of Annex VII would both help reduce the trade disruption that would result from the export ban and give States clear sovereign rights to control their own imports.

Instead of confirming the trade restriction approach by ratifying the export ban amendment, Parties should develop internationally accepted environmental criteria to ensure the safe handling and recycling of the wastes. Together with material and technology transfer, this approach would, more than any other, contribute to improving the recycling capacity and environmental performance of non-Annex VII countries. Ultimately, such countries will be able to develop more solutions to managing their own wastes in an environmentally sound manner.

1. INTRODUCTION

In September 1995, the Third Conference of Parties (COP) to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal adopted Decision III/1. This decision embodies an amendment to the Convention that would ban the transboundary movement of hazardous wastes destined for final disposal and recycling/recovery operations from States listed in Annex VII to States not listed in Annex VII. Annex VII comprises Parties and other States that are members of the OECD, the European Union, and Liechtenstein. To be legally binding, the amendment must be ratified by 63 Parties.

Decision III/1 also instructed the technical working group (TWG) to give full priority to the completion of its work on hazard characterization of wastes subject to the Basel Convention and to the development of lists of wastes which are hazardous and wastes which are not subject to the Convention. These lists will be critical in significantly clarifying which wastes are to be subject to the export ban. In addition, the Conference of Parties instructed the TWG to give priority to the technical guidelines being developed to assist any Party or State that has sovereign right to conclude agreements or arrangements, including those under Article 11, concerning the transboundary movement of hazardous wastes.

As of this date, the Basel Convention has noted the ratifications of the EU, Denmark, Ecuador, Finland, Luxembourg, Norway, Spain, Sweden, Paraguay, Slovakia and the United Kingdom. The European Union amended the European legislation on waste shipments to incorporate Decision II/12 and III/1. The EU legislation now stipulates that Article 11 arrangements that would circumvent the export ban from EU to non-OECD States are no longer possible. Moreover, it ends existing agreements that covered exports from EU to non-OECD States, whether concluded by the EU or by individual member states.

The fact that the export ban would prohibit trade on the basis of being on a list and completely disregard environmentally sound management (ESM) capacity, remains contentious. Not only would non-Parties be affected, but Parties to the Convention would also be discriminated against if they are non-Annex VII States. Trade from developed to developing countries would no longer operate within the system of Prior Informed Consent which stipulates that Parties that export, import, and transit must take environmentally sound management into consideration before agreeing to any transboundary movement. Under the export ban, importing non-OECD countries would be precluded from determining for themselves what they can import from Annex VII countries, which are mostly from the OECD.

2. STATUS

At the Fourth Conference of Parties held in February 1998, only the waste lists and Annex VII accession issues were addressed. The issue of Article 11 bilateral agreements was not discussed.

The TWG created list A (now Annex VIII) as the list of wastes “characterized as hazardous” by the Convention (this was required by Decision III/1). The annex covers wastes characterized as hazardous if they belong to any category listed in Annex I and exhibit a characteristic listed in Annex III. In addition, the TWG created list B (now Annex IX) as the wastes characterized as non-hazardous under Article 1.1(a) - unless they contain Annex 1 material to an extent to cause them to exhibit one or more Annex III hazard characteristics. Annex IX contains most internationally traded metals and other secondary raw materials. A notable exception is the classification of used lead acid batteries in Annex VIII.

Annex VIII and IX have full legal status in the Convention but do not preclude the continued use of Annex I/Annex III combination as described above so that Parties can apply the export ban to wastes beyond those in Annex VIII. In particular, the implementation of the export ban by the European Union is not limited to Annex VIII. The EU export ban applies to materials in Annex IX that the EU considers hazardous per European legislation.

With respect to Annex VII, the Parties decided to leave the current list unchanged, until the ban amendment enters into force (i.e., when ratified by 63 Parties). Therefore, no action will be taken on recent applications from Monaco, Israel, and Slovenia to join Annex VII. The Parties requested the TWG to work with the Sub-group of Legal and Technical Experts in providing an analysis of the issues relating to Annex VII. Its findings will be reported at the Fifth COP in December 1999.

As to the continued availability of Article 11 arrangements under the export ban, the matter was not discussed. Instead, the TWG will continue to work on clarifying the criteria for establishing Article 11 arrangements.

The creation and adoption of lists A and B as annexes has reduced one major uncertainty in the Convention. Moreover, with the notable exception of spent lead acid batteries, almost all traded recyclable materials should not be subject to the ban amendment, except through individual decisions by Parties. At a glance, therefore, it might appear that the ban amendment would not pose a major problem. However, there are several underlying problems.

1. An Annex VII exporting country can unilaterally decide to ban the export of anything they alone determine is hazardous waste.

2. Unlike in the original Convention, where the PIC system operates, the ban amendment removes from importing countries the responsibility of determining what can be imported.

3. Instead of limiting the export ban to countries that do not expressly wish to receive hazardous wastes, the ban is more generally to apply to all non-OECD countries. This encompasses those that may wish to receive one or more materials and are prepared and capable to treat them in an environmentally sound manner.

4. Instead of imposing obligations on both importing and exporting Parties, the ban places on OECD countries the responsibility of “protecting the non-OECD countries” with the obligation not to export to them. Importing countries, particularly those with the capacity or potential to manage hazardous materials in an environmentally sound manner, lose their right to determine their recycling policy and what they can import.

Should the ban become legally binding, it is critical that non-Annex VII countries be able to continue importing their raw materials requirements. This may be accomplished either through Article 11 bilateral arrangements or by having the countries included in Annex VII. Short of these mechanisms, there are solid grounds to argue that the export ban is GATT-inconsistent and trade-disruptive.

This paper elaborates on these arguments to show that the ban amendment is not a solution. The paper further strengthens arguments for a focus on the environmentally sound management of hazardous wastes as a major component of the management system for assuring protection of human health and the environment.

3. ARGUING AGAINST RATIFICATION OF THE BAN AMENDMENT

The arguments in favour or against the ban amendment generally fall into two major categories: environment and trade.

3.1 Environment

Proponents of the ban amendment stress the largely environmental rationale for the export ban. Their reasoning may be summarized as follows:

The ban amendment meets the primary objectives of the Convention, which are the reduction of hazardous waste generation and their treatment and disposal at source. The ban is an appropriate response to concerns that wastes are being exported from industrialized nations for cheap disposal in inadequately prepared sites in developing countries. With the demand for, and consequent implementation of stringent environmental policies resulting from the Not In My Backyard (NIMBY) syndrome and public awareness, prohibitively high disposal costs in developed countries have forced wastes to be transported overseas for disposal. The OECD produces the vast majority of toxic wastes and their high disposal costs encourage exports of wastes, especially to developing countries. As the North-South ban would lead to treatment and disposal as close to home as possible, it is expected to internalize external environmental costs, urge producers and manufacturers to alter production and processing methods, and encourage consumers to switch to alternative products that generate less wastes.

While the Convention’s objectives should be supported, such arguments in favour of the ban amendment make sweeping generalizations: that all industrialized countries share a callous attitude towards developing countries in terms of their waste materials; and that all developing countries share a lack of capacity for environmentally sound treatment of wastes. However, it ignores the fact that industrializing economies among the developing countries, particularly in Asia, may have a better capacity for environmentally sound management of wastes than some OECD members. If non-Annex VII States do not have the capacity for environmentally sound management, why have the Parties not considered the real or potential risks associated with the transboundary movement of hazardous wastes within the group of non-Annex VII States? As intra non-OECD trade is found to be increasing much faster, should not the Parties to the Convention be concerned, especially if environmentally sound management capacity is weak or non-existent in this part of the world?

While most traded recyclables will not be subject to the ban as Annex VIII currently stands, it does not guarantee that developing countries dependent on waste recyclables will be able to continue importing their requirements from Annex VII States. Hazard characterization and classification of wastes are ongoing activities. Existing and new entries will be added to, or removed from, Annex VIII and IX as these lists are reviewed. Moreover, despite consensus on these annexes, some countries or group of countries have decided to apply the export ban beyond wastes classified under Annex VIII. Such a decision is an undisputable sovereign right for importing countries but it is a very questionable anti free-trade practice when unilaterally imposed by an exporting country. Annex I is always applicable and domestic legislation may define certain wastes as hazardous and, therefore, subject them to an import ban.

Should the ban come into force, Article 11 arrangements or membership in Annex VII on the basis of environmentally sound management capacity would still provide developing countries with the means to continue importing their requirements. This is especially the case for countries dependent on imports because of insufficient resources or prohibitively high costs of primary production. Developing countries in need of these recyclables as secondary raw materials should not be deprived of their sources. Instead of banning access, the Convention should authorize countries equipped with the capacity for environmentally sound management of wastes to have access to resources needed to further develop their recycling industry and their economies. By focusing on environmentally sound management, the Parties would contribute to sustainable development and help minimize risks inherent in backyard operations. Moreover, if continued movement is allowed, materials would not be forced into final disposal when they would otherwise be recycled or recovered for secondary use.

3.2 Trade

The export ban amendment needs to be analysed in terms of trade implications. Not only is the export ban prohibited under the GATT/WTO, it is not saved by any of the exceptions for environmental protection. At the same time, WTO members are affected, be they non-Parties to the Convention or Parties to the Convention but not to the amendment. Again, the export ban GATT-inconsistency and trade disruption can be strongly underscored.

When questions of consistency or compatibility arise, reference is initially made to the general trade rules and trade principles negotiated in the GATT. When inconsistencies are detected, reference is then made to provisions within the GATT which permit derogations or exceptions. As an initial step, this review looks at GATT Article I and Article XI.

• The most-favoured-nation treatment (Article I)

The policy of non-discrimination is fundamental to the operation of the WTO. The most-favoured-nation (MFN) treatment (Article I) clause incorporates this principle of non-discrimination.¹ According to Article I:

With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to all matters referred to in paragraphs 2 and 4 of Article III,² any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.

Because the Basel ban amendment is an export ban, there are no products and customs duties or charges involved. However, the export ban would appear to constitute a formality that confers upon Annex VII States the advantage of access to supply, which is not similarly accorded to non-Annex VII States. The same waste materials are involved. In the context of the export ban, Annex VII States would be agreeing to prevent non-Annex VII States from sourcing their import requirements of waste recyclables from Annex VII States, while at the same time, allowing the same wastes to be exported to other countries listed in Annex VII.

In this respect, the ban amendment would appear to be inconsistent with the trade policy objectives agreed to in Article I.

• General Elimination of Quantitative Restrictions (Article XI)

Article XI(1) stipulates that:

No prohibitions or restrictions other than duties, taxes, or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.

Given the Article's explicit proscriptions against the use of prohibitions or restrictions other than customs tariffs, the export ban would appear to be inconsistent with the trade policy objective of Article XI. At the same time, the export ban would not appear to be saved by any of the Article’s exceptions.³ The exception relating to exports refers to prohibitions applied to prevent or relieve critical shortages of foods and products essential to the exporting country. Within the context of the export ban, however, critical shortage is not cited as a justification for the ban from Annex VII States to non-Annex VII States. On the contrary, it would likely be the non-Annex VII States which would experience a possible critical shortage of waste recyclables, but this is not relevant because the trade policy objective of this specific exception applies only to the exporting country and not the importing country.

Given what appear to be inconsistencies between the export ban and the agreed-to trade policy objective of two leading GATT provisions, it would be useful to examine whether the ban is saved under the exceptions provided in GATT Article XX. In other words, whether Article XX provides a basis for Parties to the Convention who are also members of the WTO to deny MFN treatment to non-Parties or non-amendment Parties also members of the WTO.

• General Exceptions (Article XX)

Article XX states:

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
...
• necessary to protect human, animal or plant life or health...
...
(g) relating to conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production and consumption.
...

The trade policy goal of Article XX(b) is to ensure that no alternative measures consistent with the GATT/WTO are available or that no alternative measures consistent with the GATT, or less inconsistent with it, could be employed to achieve the specified goal.⁴ However, the measure would still be subject to the general requirement of non-discrimination, i.e., it may not constitute an unjustifiable and arbitrary means of discrimination or a disguised restriction on international trade. “Relating to conservation” means that it should be primarily aimed at addressing this goal ⁵(and invoked in conjunction with comparable restraints on domestic production). As long as the main purpose is environmental, mixed motives are permitted. Although not law, these findings have become the basis for interpretations of GATT trade policy provisions.

As a trade measure, the export ban does not appear to constitute a disguised restriction. Countries ratifying the amendment would have to implement the ban through domestic measures that would have to be notified to the GATT. Yet, although it does not disguise its intentions, the export ban would still appear not to be justified for a number reasons.

First, the export ban is applied in a manner that arbitrarily or unjustifiably discriminates between countries where the same conditions prevail. There are differences in conditions within the group of Annex VII States as well as non-Annex VII States. Some non-Annex VII States are far more economically advanced and industrialized than the rest of the group. They may share similar conditions with a majority of the Annex VII States and yet be discriminated against because they do not belong to Annex VII. On the other hand, there are Annex VII States that do not necessarily share the same conditions as the others, but that would be able to continue receiving waste recyclables from the other Annex VII States. Several of these States are in Annex VII because they are OECD members but it can be argued that they are not as industrialized and advanced as the other members. Nevertheless, they would not be discriminated against in the context of the export ban.

Overall, there exists no environmental justification for the discrimination of the ban which appears to be grounded not on differences in conditions, but on membership in a list.

With respect to the trade policy underlying Article XX(b), the export ban does not appear to constitute a necessary measure for the protection of health and life. The Parties do not appear to have explored alternatives that are less trade-restrictive than an export ban and yet able to achieve the environmental objectives of the Convention. In particular, the possibility was not given to the original Convention to be applied and demonstrate its ability to meet these objectives. On the argument that the export ban is intended to pursue an overriding public policy goal, i.e., to protect public life and health, is the inconsistency with GATT provisions unavoidable? In other words, would a restriction of exports only from OECD to non-OECD countries be considered necessary for life and health protection? If the argument for the ban on North-South movement is the absence of the capacity for environmentally sound management of wastes in the non-OECD area, then should not the ban also apply to intra non-OECD transboundary movements? As this is not the case under the amendment, it would be difficult to argue the export ban’s necessity within the meaning of Article XX(b).

Finally, with respect to Article XX(g), the export ban does not appear to be primarily aimed at conservation of exhaustible natural resources, nor is it made effective in conjunction with restrictions on domestic production and consumption. By definition, conservation embraces preservation, maintenance, sustainable utilization, restoration and enhancement of the environment. In a manner of speaking, recycling leads to conservation. However, if banning the transboundary movement of waste recyclables leads to the cessation of recycling activity in the importing countries, to the extent that they rely on Annex VII States either wholly for the requirements or for supplementing domestic supplies so as to achieve production-level economies of scale, then domestic wastes that would otherwise be recycled may end up in final disposal. Production-level economies of scale are essential to support economic recycling. Additionally, wastes normally exported from Annex VII States for recycling because of the labour-intensive nature of these materials may now become subject to premature final disposal. Exporting these domestic wastes may not be feasible, as foreign transportation charges may be prohibitive when compared with final disposal options. For non-Annex VII States that rely on imported waste recyclables for secondary raw materials, the manufacture of new products would entail the utilization and possible exhaustion of virgin material, which would not otherwise be the case. It may also entail the consumption of more energy.

In conclusion, it appears that the export ban cannot be saved by Article XX(b) and (g).

It is clear that trade in wastes from OECD to non-OECD countries is not affected as long as the wastes are not hazardous. The argument remains, however, that countries with the capacity for environmentally sound management should be in a position to import their requirements from any source. The trade disruption created by the export ban will certainly be magnified in cases where Article 11 arrangements are not allowed to continue in the context of the export ban. In the Convention, Article 11 allows for bilateral and multilateral arrangements to cover transboundary movement between Parties and non-Parties and among Parties as long as these arrangements are compatible with, or do nor derogate from, the principles of environmentally sound management of wastes.

There are different interpretations as to the continued availability of Article 11 arrangements in the context of an export ban. Some countries are of the opinion that bilateral agreements are considered consistent with the ban amendment. They point to the third preambular paragraph of the amendment, which notes that the TWG will develop technical guidelines to assist in the conclusion of agreements or arrangements, including those under Article 11, related to the transboundary movement of hazardous wastes.

Other countries do not share this view. It has been posited that since Article 11 is referred to only in the Preamble, the amendment does not confirm the ability of Parties to continue trading under Article 11 arrangements. In a 1996 letter to the Basel Secretariat, the Head of the EU Commission’s Waste Management Policy Unit at the Directorate General of Environment, Nuclear Safety and Civil Protection (DG 11) stated that “after legal analysis, it concluded that such arrangements would circumvent the legal requirement of Article 4A that is not foreseen by the Convention and not acceptable from a legal point of view.”

Trade disruption also occurs in a case where, in the absence of Article 11 arrangements, non-Annex VII States are unable to join Annex VII. Under the ban amendment, Annex VII States cannot export their wastes to non-Annex VII States, simply on the basis of membership in a list, and regardless of the latter’s capacity for environmentally sound management. The decision of the Conference of Parties is to keep Annex VII unchanged until the amendment becomes legally binding. Therefore, it remains uncertain whether non-Annex VII States will be able to join Annex VII and thus be in a position to import waste recyclables from existing Annex VII States. However, while joining Annex VII may appear to be the simplest solution for non-Annex VII States to secure raw material supplies, the action of joining Annex VII becomes a double-edged sword. Countries may gain access to an essential raw material available from Annex VII States; however, the new Annex VII entrant is then prohibited from important regional export trade opportunities with their neighbouring non-Annex VII States.

In conclusion, the continued availability of Article 11 arrangements or the expansion of Annex VII would help reduce the trade disruption that would result from the export ban and give States clear sovereign rights to control their own imports.

This trading group would indirectly, yet effectively, influence the price of these waste recyclables and increase the supply of waste recyclables within their group. These supplies would cover what are generated domestically, what are imported from developing countries, and what are imported from one another. At the same time, the creation of the group would mean that the number of countries utilizing the waste recyclables of Annex VII States would be reduced because non-Annex VII States would be cut off from their suppliers in the Annex VII States. The combination of higher supply and lower demand may be expected to exert downward pressure on the prices of some recyclables. Overall, production costs would be expected to decline. For some waste recyclables, final disposal may become the only alternative if increased supply greatly surpasses market demand within Annex VII States and such recyclables cannot be moved to available markets outside of the group. In cases where disposal costs would be high, or there would not be sufficient disposal sites, illegal shipments may result. It should be noted though that even within the group of Annex VII States and non-Annex VII States, there would be variations in prices and costs depending on the availability, capacity and efficiency of recycling facilities, disposal sites and energy costs.

In contrast, the export ban would have the effect of curtailing supply in the non-Annex VII States to the extent of what they normally import from Annex VII States. Developing countries would have to rely on each other. The most advanced among them may be able to provide the secondary materials that other States would require. If not, then there could be a scramble for waste recyclables, which would push prices upwards. This competition for limited supply of waste recyclables would result if the import-dependent non-Annex VII States find their requirements included in List A in the long run, if they are not invited to enter into Article 11 arrangements, and if they cannot source their requirements elsewhere. A resort to stockpiling could exacerbate this price hike. Consequently, the price increase of secondary raw materials will encourage countries to prefer primary materials which could result in accumulations of recyclables in both Annex VII and non-Annex VII countries, defeating thereby the environmental goals of the Convention.

3.3 Other Arguments

At the same time, a review of the various provisions of the Convention shows that the application of the export ban would appear to derogate from Article 4(9).

It stipulates that:

“Parties shall take appropriate measures to ensure that the transboundary movement of hazardous wastes and other wastes only be allowed if: (a) environmentally sound management of the wastes in question cannot be provided in the State of export due to lack of technical capacity and the necessary facilities, capacity, or suitable disposal sites; (b) the wastes are required as raw materials for recycling and recovery in the State of import; and (c) the transboundary movement meets the criteria to be decided by the Parties, which must not differ from the Convention’s objectives.”

If Article 11 arrangements would be allowed in the context of the export ban, it would appear that the trade policy intent of Article 4, paragraph 9(b) might be accommodated.

¹The other is Article III on national treatment.

²Article III refers to national treatment on internal taxation and regulation.The analysis of the export ban does not entail a review of this trade rule because the rule pertains to the treatment of products after they have been imported into the territory of another contracting party, i.e., it does not address the question of import or export bans.

³Paragraph 2 of the Article provides some exceptions in recognition of balance of payment difficulties, particularly in reference to shortages of essential foods and products, and consequent significant changes in the domestic prices of foodstuffs due to increases in foreign prices. Other exceptions pertain to prohibitions found necessary for the application of standards or regulations for classification, grading, or marketing of commodities in international trade. Another exception is a prohibition to enable countries to cope with irregular levels of production due to the unpredictability of nature.

⁴The interpretation of these policy objectives arose with respect to the following cases: United States - Section 337 of the Tariff Act of 1930and Thailand-restrictions on Importation of, and Internal taxes on, Cigarettes.

⁵Interpretations of this policy have emerged from the following cases: Canada – Measures Affecting Exports of Unprocessed Herring and Salmon, the 1991 rulings on the US restrictions on Mexican tuna exports (referred to as Tuna/Dolphin I and II), and United States – Standards for Reformulated and Conventional Gasoline.

4. COURSES OF ACTION

It cannot be speculated what disputes could likely arise with the conflicts that the export ban creates, especially if Article 11 arrangements cannot continue or Annex VII cannot be expanded. In the meantime, the following courses of action are worth considering by national governments:

Once they ratify the amendment, non-OECD countries may have no grounds for negotiating Article 11 arrangements, or joining Annex VII, should these mechanisms be allowed to exist in the context of the ban. Moreover, if they are WTO members, they will have clearly waived their GATT rights and thus lose the option and the grounds for challenging Annex VII States before the WTO for the nullification or loss of benefits.

To meet its objectives, the Convention restricts access to recyclables and thereby creates a disincentive to technology transfer which, as history has demonstrated, accompanies trade. Instead, internationally accepted environmental criteria should be developed to ensure the safe handling and recycling of the wastes. Together with material and technology transfer, this approach would, more than any other, contribute to improving the recycling capacity and environmental performance of non-Annex VII States. Ultimately, this will help these countries develop solutions to managing their own wastes in an environmentally sound manner.

In the event that the amendment becomes legally binding or that the ban is applied unilaterally in the spirit of the decision, non-Annex VII States will be at a trade disadvantage as they will lose control over their import policy. If Article 11 arrangements are not made available, or if membership in Annex VII is not possible, the likelihood of a dispute with an Annex VII State increases. In cases of conflicts arising as a result of the implementation of a multilateral environmental agreement like the Basel Convention, Parties are encouraged to resolve their problems within the dispute settlement procedures of the agreement. However, in cases where the complainant is a WTO member that is not a Party to the Convention, or not a Party to the amendment, it has recourse to the WTO.

Also, if there is a likelihood of success in its challenge, an aggrieved non-Annex VII State may have the confidence to pursue this option to seek redress. Much will depend on whether a dispute panel would be formed to hear the case and what the dispute panel would take into account. The panel could consider the general broad support for the Convention as evidenced by the 120 ratifications to date. It could note that Decision III/1 was adopted by consensus, although this does not necessarily translate into unanimous support. Moreover, it could note the number of developing countries that have initiated their own regional agreements to ban traffic from developed countries, non-Parties and other countries. Given these factors, countries contemplating this route need to prepare their arguments carefully. They should also be aware that it would be setting a precedent. There has not been a WTO challenge raised with respect to the use of a trade measure in a multilateral environmental agreement.