New U.S. fuel efficiency standards were signed into law today. Will we see a repeat of the early 1990s U.S. - Autos case? A National Foreign Trade Council report thinks it is possible, but probably unlikely:
Unlike other bills, which continue the 1994 CAFE standards' distinction between foreign and domestic manufacturers, H.R. 1506 is structured to impose a more equal burden on domestic and foreign manufacturers. H.R. 1506 is less likely to violate the WTO's National Treatment provisions than the approach to CAFE regulations used in 1994, which used separate foreign and domestic fleet accounting. However, it is possible that this "safeguard" may still, in effect, discriminate between foreign and domestic producers, in violation of GATT Article III.
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The CAFE regulations that affected the sale of automobiles in the U.S. based on whether they were produced domestically or imported, rather than on some intrinsic “un-likeness” between the automobiles, violated Article III Paragraph 4. In the case of the CAFE standards, the regulation could still be permissible by qualifying under GATT 1994 Article XX, Paragraph (b) or (g). However, having scrutinized the manner in which the 1994 CAFE regulations had been applied, the panel found that they did not qualify for an exception. This suggests that although they are meant to preserve clean air, CAFE standards must be applied in a non-arbitrary, non-discriminatory manner in order to be justifiable under GATT Article XX.
See pages 9-10. The report also has analysis of how trade rules apply to other aspects of U.S. policies related to climate change.
