The MERCOSUR Trade and Environment Linkage Debate: The Disputes over Trade in Retreaded Tires

Brazil is currently immersed in the project of building a new common market, known as MERCOSUR, with its neighbours Argentina, Uruguay, and Paraguay. That project is largely based on the assumption that increased regional trade and harmonization of environmental standards will be beneficial for the environment. However, these assumptions have been challenged after recent Brazilian efforts to regulate the environmental and health risks associated with retreaded tire imports. Despite the protests of environmentalists, MERCOSUR tribunals have now issued two separate decisions finding that the Brazilian measures violate international trade rules. This article examines the MERCOSUR framework on the relationship between trade liberalization and environmental protection and examines how this framework was applied by MERCOSUR tribunals with respect to the two disputes concerning trade in retreaded tires.