Th e wider issues raised by the Brazilian Tyres case are discussed in this contribution. Regarding the institutional aspects, this case examines the diffi culties between regional dispute settlement systems and the global WTO dispute settlement system. In particular, the WTO Appellate Body showed no deference towards the prior report of the MERCOSUR Arbitral Tribunal. Indeed, the WTO Appellate Body is espousing a supremacy of WTO law -not only vis-à-vis regional dispute settlement bodies, but also regarding WTO panels. It is argued that this attitude is not sustainable in the light of the increasing proliferation of international courts and tribunals, which inevitably results into disputes being adjudicated by diff erent courts and tribunals at different levels. Regarding the substantive aspects, this case is a prime example of the diffi culties of balancing non-trade interests and trade interests. At the end, trade interests superseded the nontrade interests. It is argued that the way Article XX GATT has been interpreted and applied by the WTO Appellate Body leaves states insuffi cient room to address urgent environmental and health problems by restricting trade. It is argued that in this case Brazil's non-trade interests should have been given preference over the trade interests of the EC and Uruguay.
Brazilian efforts to regulate remoulded and retreaded tires on the basis of human health and environmental considerations have been challenged by both the European Community and Uruguay in WTO and MERCOSUR dispute settlement fora respectively. Such cases are part of and belong to the evolving history of so–called “trade and environment” disputes that have appeared over the past 20 years. Since the infamous and divisive “Tuna–Dolphin” dispute litigated at the GATT in 1991, European and international attention has focused increasingly on this apparently divisive field of law. Rather encouragingly, the more recent case law is moving to were a more balanced and proportionate approach to the trade–environment interface. Ironically, in the wake of the EU–Brazil WTO retreaded tyre dispute, the German nongovernmental organization Form for Environment and Development has sought to encourage EU Trade Commissioner Mandelson to withdraw his appeal of the WTO decision stating that “(A)n appeal of the panel report would be an assault on the health needs of the poor and the environment” and noting that “the European Community has defended several European environmental and health policies at the WTO (asbestos, GMO imports, hormones in beef) and will likely have to defend others in the future. It does notmake sense to challenge a decision that will be useful for arguing pending and future environment and health cases at the WTO.” This article examines the WTO and MERCOSUR dispute settlement challenges and the interaction between the two dispute settlement bodies prior to providing some concluding analysis on balancing health and environment and trade law considerations.
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