Few legal battles have been more exotic than the lawsuit tried over the past five years in a steamy jungle courtroom in Ecuador's Amazon rain forest. Brought by a group of U.S. trial lawyers on behalf of thousands of indigenous Indian peasants, the suit accuses Chevron of responsibility for the dumping (allegedly conducted by Texaco, which Chevron bought in 2001) of billions of gallons of toxic oil wastes into the region's rivers and streams. Activists describe the disaster as an Amazon Chernobyl. The plaintiffs—some suffering from cancer and physical deformities—have showed up in court in native garb, with painted faces and half naked. Chevron vigorously contests the charges and has denounced the entire proceeding as a "shakedown."
Chevron is pushing the Bush administration to take the extraordinary step of yanking special trade preferences for Ecuador if the country's leftist government doesn't quash the case. A spokesman for U.S. Trade Representative Susan Schwab confirmed that her office is considering the request.
My first reaction was, taking into account the guidance provided by the Appellate Body in the EC - Tariff Preferences decision, can the U.S. take away preferences from Ecuador on this basis? That is, would the resulting discrimination against Ecuador be permitted under the Enabling Clause? But then I realized the preferences at issue might not be under the GSP, but rather under the Andean preference program (which currently has the acronym of ATPDEA, but used to be the ATPA). I asked the Eyes on Trade person who reported on this, and he confirmed that his understanding is that it was, in fact, under ATPDEA.
I then looked at the ATPA/ATPDEA WTO waiver, to see if there was anything interesting or informative in there. From what I could gather, currently there is no waiver in place for the ATPDEA. The U.S. has requested one, but it has not yet been granted. So, I turned to the old ATPA waiver [WordPerfect file], which expired in 2001. I noticed that there were several cross-references to the Enabling Clause rules, or key parts of the Enabling Clause language, in the preamble to the waiver:
Bearing in mind the 1979 Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries;
Considering also that the duty-free treatment provided under ATPA is designed to promote the expansion of trade and economic development of beneficiaries in a manner consistent with the objectives of the GATT 1994 and with the trade, financial and development needs of the beneficiary countries, and not to raise barriers or to create difficulties for trade of other Members;
Considering, furthermore, that the tariff preferences provided under the ATPA by the Government of the United States shall not adversely affect the maintenance, operation and improvement of the Generalized System of Preferences of the United States;
Are these references in the preamble enough to make the Appellate Body's interpretations in the GSP case apply to the ATPA waiver? (It has expired, of course, but assuming it was still in force). My initial inclination is that this argument would probably fail. But I do wonder if perhaps there are other WTO rules that might apply here.