Can imports be banned according to method of production?

Question

If an imported product is functionally indistinguishable from a domestically traded product, but is produced by a different process, are countries free to ban (or apply large tariffs to) that import?

Examples:

• Fish caught with a high proportion of by-catch (e.g. trawling for shrimp without using turtle excluder devices, or netting methods that fail to separate dolphins from tuna).
• Products of forced labour (and other differences in worker conditions and welfare).
• Large discrepancies in embodied carbon (atmospheric greenhouse footprint).
• Sugar from sugarcane vs corn (or beets).

Does the WTO require discriminating by final product rather than by process? Does it have any power to open trade, or does it depend on countries voluntarily submitting to it?

Answer 1

In general, a sovereign state can regulate what is or isn't allowed within its borders in any way it wants - that is a part of the whole "sovereignty" thing. But international agreements and organisations can influence what an independent state is actually willing to do.

WTO is one such organisation. It can't actually do anything but expel a member from organisation - it only provides a framework for negotiation and dispute resolution. But it is usually in a member country's interests to comply with advised agreements, as otherwise it would lose the protection from arbitrary tariffs and bans the membership provides.

Generally, WTO is against any and all trade restrictions and bans between members, but there are exceptions to that rule for environmental protection causes. Such policies do have to fit certain requirements, and they will be rejected by WTO if they do not pass scrutiny. These policies are required to be necessary (in other words, no other reasonable way to achieve the same results) and be fair to other WTO members (no discrimination).

An example of a policy discriminating by process would be the 1989 USA shrimp import restriction (your first example). This policy was rejected by WTO - not because it judged that WTO members couldn't impose bans to protect vulnerable species, but because the policy discriminated between WTO members, allowing for certain advantages for countries in the Caribbean, but without such boon for other potential importers. There are also examples of such policies being accepted (for example, EU asbestos ban).

On your other examples - WTO does not have labor on its agenda at the moment, so any tariffs or bans citing labor conditions as the reason would not be upheld by the organisation. But this is a hotly discussed question since the organisation's creation, so this might still change in the future.

Note that WTO only regulates trade relations between member states, so all bets are off if the target or the imposer of the ban is not a member of WTO. Another important point - WTO is not a trade police. They cannot make countries do something, and only act as an assessor - i.e. they can tell the involved parties whether the deal is fair or not according to the guidelines, but any actions taken to actually make the deal fair would be a result of negotiations between the affected countries.

Thus, for your last example, if you are a member of WTO, you would have to first provide a compelling reason on why, for example, cane sugar is impacting your country's ecology, demonstrate how nothing but a blanket ban on all imported cane sugar would help the problem, and to prove that no members of WTO would be discriminated by such ban. But if you wanted to ban import from, say, North Korea (who is not a member of WTO) - you would be free to do it without WTO having any say in the matter.

Answer 2

Yes, but on a business level rather than an international trade level.

As an example of this, the intention and implications of the UK Modern Slavery Act 2015 is discussed in this devex article. This act is modelled on the California Supply Chain Transparency Act

The U.K. legislation aims to make companies accountable and proactive against modern slavery by requiring them to issue a statement saying they have investigated their supply chains for possible labour abuse.

Other legislation could require companies to act in similar ways sustainability or environmental protection as in your examples.

Amendments to the UK 2019-2020 trade bill that were rejected by the UK Parliment following Government opposition, would have prevented import of agricultural goods that fell below UK standards for animal welfare and environmental protection.

“Import of agricultural goods
(1) Agricultural goods may be imported into the UK only if the standards to which those goods were produced were as high as, or higher than, standards which at the time of import applied under UK law relating to—
(a) animal welfare,
(b) protection of the environment, and
(c) food safety.

(2) “Agricultural goods”, for the purposes of this section, means—
(a) any livestock within the meaning of section 1(5),
(b) any plants or seeds, within the meaning of section 22(6),
(c) any product derived from livestock, plants or seeds.”

Answer 3

It probably mostly depends on the country doing the importing, as well as countries that the goods pass through.

The most prominent example that comes to mind is an executive order by Bill Clinton banning Blood Diamonds.

There was also an Obama era change to ban imports on goods produced with forced labour.

I have also read (although I can't find a source at the moment) that artisanal (local small scale) miners in some African have a hard time exporting raw product because they aren't certified child-labour-free mines. I think this is local export law though. These goods are then smuggled into neighbouring countries, or sold on to the large mining companies and then exported - completely undermining the laws, and demonstrating that a law is only as useful as it is easy to enforce.