Out of Crooked Timber : The Consistency of Australia's Illegal Logging Prohibition Bill with the WTO Agreement

This article examines whether a proposed measure that would prohibit the importation into Australia of illegally logged timber would be consistent with the WTO Agreement if passed by the Australian Parliament in its current form. The Illegal Logging Prohibition Bill 2011 (Cth) would prohibit the importation of timber harvested in contravention of the laws of its country of origin, including timber in manufactured products such as furniture. Importers would also be required to comply with certain due diligence requirements, such as assessing the risk that their imports contained illegally logged timber. The Bill is patterned on similar measures adopted by the United States and the European Union and is part of a global movement to combat illegal logging. However, by conditioning entry into the Australian market solely on whether timber was harvested legally, the Bill raises clear issues under the WTO Agreement. In particular, the Bill is likely to lead to differential treatment of like products from different countries, contrary to the Most-Favored-Nation obligations in Article I of the GATT 1994. Moreover, as a restriction on imports the Bill is likely to contravene GATT Article XI. Finally, because the logging laws of countries differ from each other in ways that may not correspond to sound environmental practice, it is unlikely that the Bill could be justified under GATT Article XX because it would lead to arbitrary or unjustifiable discrimination between products. An ancillary difficulty under Article XX is that there is evidence that the Bill will not contribute significantly to a net reduction in illegal logging, meaning it would be unlikely to pass a ‘necessity’ test. Although it might be thought that the Bill could fall under the TBT Agreement as well as the GATT 1994, it is unlikely to do so because it does not lay down physical product characteristics or production methods. However, if the TBT Agreement does apply, the Bill is likely to be inconsistent with it for similar reasons to its inconsistency with the GATT 1994. Ultimately, Australia may wish to consider reformulating the Bill so that it more accurately and effectively targets environmentally destructive logging practices and unfair competition against which the Australian government seeks to protect