20 June 2000

Interim Report Issued in Canada-France Asbestos Case:

Environmentalists have welcomed a leaked WTO interim report on a case between France and Canada involving a French ban on imports of Canadian chrysotile (white) asbestos. In the report, the adjudicating panel has rejected Canada’s claim that the ban constitutes an unnecessary obstacle to trade under Article 2 of the WTO agreement on Technical Barriers to Trade, arguing that the ban is not a technical regulation and therefore does not fall under the scope of the agreement. The ruling favours the position of the European Union (EU), which represents France at the WTO.

The panel has stated that although the French ban was incompatible with national treatment provisions outlined in Article III of the General Agreement on Tariffs and Trade (GATT), France nevertheless had a right to apply the ban under GATT Article XX (b) (General Exceptions). According to one specialist in international environmental law, “The finding is important. It’s one thing to say that a health measure does not violate WTO rules. It’s quite another to say that it does violate WTO rules but that it qualifies for an exception, where the burden of proof is higher.”

According to Article XX (b), there is nothing in the GATT that prevents “the adoption or enforcement by any contracting party of measures…necessary to protect human, animal or plant life or health.” Until now, no WTO dispute settlement panel has allowed a WTO Member to use this article to impose trade measures.

The case dates back to 1996, when France banned imports and use of chrysotile asbestos. In 1998, Canada moved to challenge the ban at the WTO on behalf of its Quebec-based asbestos industry, which is the world’s second largest producer and the largest exporter of chrysotile asbestos. The interim report is only a preliminary decision, but no WTO panel to date has reversed interim findings in the final ruling. The final decision is expected to be forwarded to Canada and the EU sometime in July. It will be circulated to other WTO Members and made public several weeks thereafter. The panel had originally been expected to decide the case in December 1999, but the panel’s chairman Adrian Macey (New Zealand) indicated on 7 March that the panel needed more time to complete its work.

Throughout the dispute, Canada has argued that France’s outright ban is not based on adequate science and that the ban is contrary to international trade rules. The Canadian government has also argued that chrysotile asbestos is safer than many alternative products, and that it is perfectly safe to use and install if adequate safety measures are taken. Canada also contends that other uses of the asbestos — such as incorporating the fibres into asbestos cement — are safe.

The EU argues that asbestos claims the lives of about 2,000 people in France each year. The EU also conducted a risk assessment of using asbestos in cement, and found that other fibres pose less of a health risk. According to trade officials, the five scientific experts consulted by the panel unanimously agreed with the EU that chrysotile asbestos is carcinogenic and dangerous to human health.

Though a ban on white asbestos is already in place in nine of the 15 EU member states, and while France represents only about five percent of Canada’s asbestos exports, Canada is most concerned about other countries taking up a ban, particularly its Latin American and Asian trading partners.

Environmentalists welcomed the decision by the WTO panel. Remi Parmentier, the head of the political unit for Greenpeace International, has said that a final ruling in favour of the French asbestos ban would set an important precedent in favour of environmental and public health concerns, but that it should not be interpreted as a sudden “greening” of the WTO. Geneva-based legal experts remarked that “WTO panels are now doing their job: interpreting Article XX exceptions in the way the Dispute Settlement Understanding indicates” and that “this ruling could open up a big window of opportunity. Article XX (b) applies to human, animal, and plant life, which can just about cover anything.”

Labour bodies also recognise this decision as one in their favour. The Brussels-based International Confederation of Free Trade Unions has said that the finding, if confirmed, would give new impetus to a worldwide workers’ campaign for a global ban on chrysotile asbestos.

“WTO upholds white asbestos ban,” FINANCIAL TIMES, 15 June 2000; Canada said losing WTO asbestos case against France,” REUTERS, 14 June 2000; “WTO Interim Panel Report Said to Find Against Canada in French Asbestos Case,” WTO REPORTER, 14 June 2000; “WTO panel rules against Canada on French asbestos ban,” UNITED PRESS INTERNATIONAL, 13 June 2000; WTO Ruling on Asbestos Ruling Welcomed By Environmentalists, But Lawyers Doubtful,” WTO REPORTER, 16 June 2000; “EU wins right to keep asbestos ban against Canada,” BRIDGE NEWS, 13 June 2000; “Health Tops Free Trade in WTO Ruling,” INTERNATIONAL HERALD TRIBUNE, 16 June 2000; “Global labour body hails WTO asbestos ruling,” REUTERS, 15 June 2000; “WTO Upholds French Ban on Canadian Asbestos,” DOW JONES NEWSWIRES, 14 June 2000.ICTSD Internal Files

Source: International Centre for Trade and Sustainable Development (ICTSD). 20 June 2000