Pro­posed ban on ‘un­eth­i­cal’ oil could end up back­fir­ing on Al­berta

Ar­bi­trary trade poli­cies could throw global sys­tem into chaos, writes Hel­mut Mach.

Edmonton Journal - - EDITORIAL - Hel­mut Mach is a for­mer Al­berta trade rep­re­sen­ta­tive and chief pro­vin­cial trade ne­go­tia­tor.

The pro­posal by the Wil­drose trade critic to ban im­ports of “dic­ta­tor” oil from coun­tries con­sid­ered to have un­de­sir­able hu­man rights sta­tus, or for be­ing “un­eth­i­cal,” is a poorly thought out pro­posal, fraught with dan­ger­ous im­pli­ca­tions and po­ten­tial con­se­quences.

The “un­eth­i­cal” im­port re­stric­tion idea flies in the face of 45 years of Al­berta trade pol­icy that has con­sis­tently cham­pi­oned trade lib­er­al­iza­tion and in­creased mar­ket ac­cess while re­ject­ing pro­tec­tion­ism and im­port re­stric­tions.

The pro­posal also is in­con­sis­tent with some seven decades of in­ter­na­tional trade rule de­vel­op­ment un­der the Gen­eral Agree­ment on Tariffs and Trade (GATT) and the World Trade Or­ga­ni­za­tion (WTO), which have sought to en­sure that a rules-based, im­par­tial, non-dis­crim­i­na­tory trade en­vi­ron­ment worked for all coun­tries to reap the ben­e­fit of trade lib­er­al­iza­tion.

There is good rea­son why the GATT “morals” ex­cep­tion of Ar­ti­cle 20 (a), to al­low im­port re­stric­tion based on ar­bi­trary “eth­i­cal” or “moral” rea­sons, has vir­tu­ally never been used and has no GATT case law as­so­ci­ated with it.

The rea­son is that all mem­bers of the GATT rec­og­nize the per­ils of go­ing down this road. If one coun­try started to im­pose ar­bi­trary, self-de­fined, uni­lat­eral im­port re­stric­tions based on its own stan­dard of how other coun­tries should gov­ern them­selves, then soon other coun­tries would do the same and the world trad­ing sys­tem would be in chaos.

Ma­jor trad­ing sanc­tions have re­sulted from in­ter­na­tion­ally rec­og­nized sit­u­a­tions that re­quired uni­fied, mul­ti­lat­eral re­sponse, such as sanc­tions on North Korea, or deal­ing with sit­u­a­tions such as apartheid, in the past. Co-or­di­nated, agreedupon sanc­tions should only be put into place through mul­ti­lat­eral or­ga­ni­za­tions such as the United Na­tions.

Uni­lat­eral, ar­bi­trary re­stric­tions will lead to prob­lems for all. It takes very lit­tle move­ment to go from “eth­i­cal” trade, to “fair” trade, as self-de­fined by which ever gov­ern­ment wants to re­strict im­ports. The cur­rent dis­cus­sion in the United States fo­cuses on this “fair” trade idea and with it, a pos­si­ble 20-per­cent border ad­just­ment tax, to make things “fair” for U.S. in­dus­tries.

Such a tax would be dev­as­tat­ing for Al­berta and Canada for all its prod­ucts, oil or other­wise.

Self-de­fined “eth­i­cal” jus­ti­fi­ca­tions could lead to poorly in­formed or ide­o­log­i­cally mo­ti­vated re­stric­tions based on views of Al­berta be­ing “un­eth­i­cal” in the way it man­ages its re­source de­vel­op­ment, for ex­am­ple, the de­gree of clear-cut­ting in forestry, habi­tat de­struc­tion caused by forestry and en­ergy ex­plo­ration af­fect­ing wood­land cari­bou and griz­zly bears, any forestry or en­ergy de­vel­op­ment with­out ex­plicit con­sent or ap­proval by any and all in­dige­nous groups, agri­cul­tural prac­tices in­volv­ing drugs or chem­i­cals con­sid­ered “un­de­sir­able,” and oil­sands de­vel­op­ment con­tribut­ing to emis­sions growth be­ing un­ac­cept­able at any level.

Trade re­stric­tions need to be con­sid­ered in light of ex­plicit trade rules, fully doc­u­mented and jus­ti­fied, and if im­posed for cer­tain “moral” or “eth­i­cal” ideas, done only in the con­text of in­ter­na­tion­ally agreed upon sanc­tions through a mul­ti­lat­eral fo­rum.

Prospec­tive gov­ern­ing par­ties, and cur­rent gov­ern­ing par­ties, need to con­sider two ba­sic prin­ci­ples — trade re­stric­tions usu­ally harm the ju­ris­dic­tion im­pos­ing the re­stric­tion as much as the other ju­ris­dic­tion; Self-de­fined and ar­bi­trary jus­ti­fi­ca­tions for trade re­stric­tions usu­ally will come back to haunt and bite the ju­ris­dic­tion us­ing them.

All po­ten­tial gov­ern­ing par­ties in Al­berta should main­tain their com­mit­ment to trade lib­er­al­iza­tion, and fo­cus on mar­ket ac­cess and not try to jus­tify ar­bi­trary im­port re­stric­tions.

Uni­lat­eral, ar­bi­trary re­stric­tions will lead to prob­lems for all.

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