Environment and Trade: A HandbookUNEP/IISD   
3    The basics of the WTO
   3.3  The core principles
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The WTO aims to achieve its objectives by reducing existing barriers to trade and by preventing new ones from developing. It seeks to ensure fair and equal competitive conditions for market access, and predictability of access for all traded goods and services. This approach is based on two fundamental principles: the national-treatment and most-favoured nation principles. Together, they form the critical "discipline" of non-discrimination at the core of trade law.

  • The principle of national treatment requires, in its simplest terms, that the goods and services of other countries be treated in the same way as those of your own country.
  • The most-favoured nation principle requires that if special treatment is given to the goods and services of one country, they must be given to all WTO member countries. No one country should receive favours that distort trade.

Members follow these principles of non-discrimination among "like products"—those of a similar quality that perform similar functions in a similar way. They are, of course, free to discriminate among products that are not like-foreign oranges need not be treated the same as domestic carrots. Note, however, that products that are not physically or chemically identical can still be considered like products if, among other things, the products have the same end use, perform to the same standards and require nothing different for handling or disposal. The "like products test," which tries to determine which products are and are not like, is thus of central importance. These two complementary principles and the notion of "like products" are discussed further in section 3.4.1.

Sustainable development: Some argue that the concept of sustainable development has now emerged as a principle to guide the interpretation of the WTO Agreements, though not at the level of the core principles of non-discrimination. In the 1998 Appellate Body ruling in the so-called shrimp-turtle case, it was made clear that the interpretation of WTO law should reflect the Uruguay Round's deliberate inclusion of the language and concept of sustainable development. This ruling may have moved the WTO toward requiring the legal provisions of its agreements to be interpreted and applied in light of the principles and legal standards of sustainable development.

How the WTO will use sustainable development as a principle of interpretation in the future remains, of course, to be seen. But it is clear that elevating "sustainable development" to this role would be a major step in making trade policy and sustainable development objectives mutually supporting.

 © 2000 United Nations Environment Programme,
International Institute for Sustainable Development