The UK’s decision to leave the EU has raised inevitable questions about whether the UK will continue to align itself to European environmental laws and standards or take a divergent path. There is also considerable speculation around the UK’s new trading terms with the EU-27 and the other major trading partners.

Whilst international trade law has not traditionally been seen as a platform for enhancing global environmental standards, this is slowly changing (as witnessed in the latest round of WTO negotiations). As a result of Brexit, the UK has a unique opportunity to be at the forefront of this shift.

In the absence of a new trade agreement between the UK and the EU prior to the expiry of the Article 50 notice, the UK is likely to rely on WTO trading terms. What those precise terms will look like given that the UK does not have its own schedule of commitments is an open question. It may be possible for the UK to mirror the existing EU schedule but this is far from straightforward.

At its most basic, the WTO arrangements are a framework of multilateral terms of trade designed to liberalise international trade and reduce tariff and non-tariff barriers. At a high level, there is a balance to be struck between the push for greater trade liberalisation and domestic environmental protection. This balance becomes harder to strike when countries take a more assertive approach and look to trade agreements as a way of improving environmental standards.

Articles XX(b) and (g) of the GATT contain the main environmental exceptions to the core WTO principles. These allow members to take measures necessary to protect human, animal or plant life or health or to conserve exhaustible natural resources provided that these measures are not used as an arbitrary or unjustifiable means of discrimination between countries.

In many free trade agreements (FTAs), this is the default position and States are permitted to implement measures to protect the environment without infringing liberalisation principles. European environmental regimes such as REACH and the EU ETS, which in principle may be seen as imposing barriers to entry, need to be consistent with core WTO principles and/or rely on the exceptions.

Although the WTO Agreement aims to support environmental protection (its preamble recognises the objective of sustainable development and the protection of the environment), many have criticised the WTO for being too benign on environmental matters.

We have seen a growing number of FTAs go beyond the GATT style exceptions as States have sought to impose more positive environmental obligations. This is the case for both NAFTA and the Australia-US FTA which have included additional measures designed to protect and improve the environment through obligations concerning enhanced enforcement of environmental laws and better co-operation on environmental activities and projects. There has also been increasing activity on multilateral environmental agreements.

The Transatlantic Trade and Investment Partnership (TTIP) and the Canadian-EU Trade Agreement are good examples of how the terms of a trade deal can have wider environmental ramifications. Both these agreements have been heavily criticised as weakening environmental protection. The Investor State Dispute Settlement Mechanism (ISDS) in TTIP, which allows corporates to take State governments to arbitration if they believe that actions have been taken which damage profitability, has also given rise to significant concerns over whether it could be used to weaken the environmental protection measures and product standards adopted by Europe.

As the UK Government seeks to re-define its relationships within the international trading framework, it will need to decide whether to use trade law (and agreements) to promote environmental protection. Given the wider challenges of Brexit, the path of least resistance may be to simply reflect the principles in Article XX of GATT. However, there is clearly an opportunity for the UK to take a more assertive position over the promotion of good environmental practice and the Government should ensure this opportunity is not missed.