Biofuels, Sustainability, and Trade-Related Regulatory Chill

Recent European Union sustainability criteria for biofuels provide an opportunity to understand more precisely the relationship between national sustainable development policies and World Trade Organization (WTO) law. A desire to avoid WTO conflict was one reason for the omission of stronger criteria addressing negative social and environmental impacts of increased biofuels production. Thus, despite declarations of sustainable development's central importance in WTO legal texts and statements by the Secretariat, national sustainability regulations risked trade law conflict. This article documents potential reasons for a WTO regulatory chill effect on the sustainability criteria. It then outlines challenges that the regulatory concept poses to trade law, which result primarily from its breadth and complexity, as well as the lack of targeted international standards, and its emphasis on production processes which intrude heavily, in an extraterritorial sense, on importers. It is important to identify these limitations to the mutual supportiveness between trade liberalization and national policies to achieve sustainability goals. However, despite these limitations, the case study also suggests that, with regard to sustainability criteria, sustainable development's soft power as a WTO legal principle is an important source of influence. Oxford University Press 2012, all rights reserved, Oxford University Press.