This is from remarks by U.S. Trade Representative Katherine Tai today on issues related to trade and the environment:
Even as investors take a greater interest in companies’ environmental risk exposure, the multilateral trading system has no rules to address the corporate incentive to participate in the race to the bottom. Rather, the environmental protection measures of WTO members are exposed to challenge.
While countries can avail themselves of what amounts to an affirmative defense, that defense has proven difficult to invoke successfully. This is part of the reason why, today, the WTO is considered by many as an institution that not only has no solutions to offer on environmental concerns, but is part of the problem.
If you are worried about affirmative defenses at the WTO being applied too strictly, I would think necessity tests would be an area of concern. In the past, when I've raised the issue of replacing necessity tests with looser "related to"-style tests, people at USTR have not seemed very receptive. Are Tai's remarks a sign that perhaps USTR is ready to revisit the issue?
Tim Meyer has a good new paper on these issues here, which I'll be blogging about soon.