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United States—Standards for Reformulated and Conventional Gasoline
WTO Appellate Body
WT/DS2/AB/R (Apr. 29, 1996)
Under the Clean Air Act, The Environmental Protection Agency (EPA) of the United States adopted regulations aimed at minimizing air pollution by setting rules about the composition and emissions of gasoline. The Gasoline Rule required that only gasoline of a certain cleanliness, known as reformulated gasoline, could be sold in the most polluted parts of the United States. The EPA required all gasoline refiners to produce cleaner gasoline, but the agency had different metrics for measuring the cleanliness of gasoline for domestic and foreign refiners. Domestic refiners had to meet a so-called individual baseline, which measured the cleanliness of gasoline produced by domestic refiners against the cleanliness of gasoline produced by the refiner itself in 1990. Foreign refiners, however, had to meet a standard known as the statutory baseline based on the average of gasoline sold in the United States in 1990. Venezuela and Brazil brought a case against the United States in the World Trade Organization Appellate Body. Venezuela and Brazil argued that the Gasoline Rule violated Article III(4) of the 1994 General Agreement on Trade and Tariffs (General Agreement), which required signatories to treat imported goods and domestic goods with respect to the regulations affecting their sale or use within signatories to the General Agreement. The United States countered that the Gasoline Rule was permitted by Article XX of the General Agreement, which provided for certain exceptions to the General Agreement.
Rule of Law
Holding and Reasoning
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