estic economy, the importation and exportation became easy. With revoking the tariff barrier, businessman thinks much more about the other aspects of the investment surroundings than the tariff. For some pollution-intensive products, the environment requirements become the most important. The developing countries want to develop the economy as soon as possible. For them, the first important thing is to attract the foreign investment to develop domestic economy. The environment protection undoubtedly including the strong policies and requirement will increase the cost of some products—high requirements will improve the cost twice or three times than the cost under lower requirements so as to impede some pollution intensive industry. So the developing countries usually lower the environment requirements for some industries so as to attract the foreign investment. Whereas the international trading system, actually encourages any participant country, particularly one that is less wealthy, to relax its environmental standards to gain a competitive advantage. Once any country does so, other countries, also struggling to develop sustainable economics, feel compelled to relax their standards in order to stay competitive in the international markets. So we can imagine the horrible result. Both the developing countries and developed countries will lower the environment standards. Under such circumstance, trade liberalization like a breeze makes the burned house---already harmed environment---much worse. Countries compete with each other in a “ race to the bottom” with respect to the environmental standards to attract or keep capital. Even though competing countries want environmental protection at high levels, the countries’ inability to agree with (or trust) each other means that each country will opt for lower levels of protection in order to maximise their market share in the world economy.

The environmentalists also criticise the world trade organisation plays negative role as to the environmental protection. It is also a big issue, we will discuss it in the following part:
Part Two: The possibility to solve the conflict between environment and trade under existing WTO framework.

WTO is a trade organisation, which was founded to limit discriminatory trade practice and help trade flow as freely as possible. However, there are some environmental considerations in WTO. The preamble of <Marrakesh Agreement Establishing The World Trade Organization> states “seeking both to protect and preserve the environment”7. Actually Article XX of GATT does recognise the ability of a country to place other concerns ahead of obligations under the GATT, especially sub-article (b),(g)8. Such article was regarded as “environmental exception” or “Green Exception”.

Although there are black letters in white paper, it is another issue whether they are working. So next we would like to introduce some of the leading cases handed down by the Dispute Resolution Panel of the GATT/WTO, which are specific related to environmental protection. Then we can see whether the trade organisation really concerns about environmental protection.

1. Tuna-dolphin case9

Under the U.S. Marine Mammal Protection Act, countries seeking to export tuna to the U.S. had to show that they had a tuna fishing regulatory program comparable to that of the U.S. and the dolphins taken incidentally by their tuna fishing boats was no greater than 1.25 times the US rate. The U.S. argued the “green exception” allowed it to do so. However the GATT dispute panel found that the measures in the Act were not “necessary” to the protection of animal life within the reservation of ArticleXX(b). The decision was criticised by lots of environmentalists for its narrow interpretation of Article XX. One commentator felt that this decision “jeopardised the future efficacy of international environmental treaties” and argued the decision put free trade a “far higher priority than environmental prot

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