Refer to the following scenario (mix of fact and fiction) to make a case analysis based on…
Refer to the following scenario (mix of fact and fiction) to make a case analysis based on international law in trade.
GASOLINE CASE. This fact scenario is based on DS2: United States – Standards for Reformulated and Conventional Gasoline.
The US enacted the Clean Air Act (“CAA”) in 1963, to prevent and control air pollution in the US. In 2018 the US amended the CAA to reduce overall C02 emissions and to regulate the composition and emissions effects of gasoline, in order to improve air quality by reducing toxic vehicle emissions. Reducing the amount of air pollution is part of the policy to combat climate change and improve the health of US citizens.
The CAA regulations divided the states into areas in which only ‘reformulated gasoline’ could be sold to consumers (the metropolitan areas with the worst air pollution), and the remainder where ‘conventional gasoline’ could be sold.
The regulations under the CAA sets out rules for establishing baseline figures for overall CO2 emission by companies selling cars on the US market, with the purpose of protecting the environment and reducing impacts on global climate. Foreign manufacturers of cars must comply with a baseline standard for their corporation’s overall greenhouse gas emissions, or an additional duty will apply to products exported to the US. The foreign baseline is set slightly higher than for domestic manufacturers, to account for the additional distance and therefore emissions associated with the products. The international standard of greenhouse gas accounting used is the Greenhouse Gas Protocol (GHG).
The CAA regulations on gasoline (the “Gasoline Rules”) regulate the content of ‘reformulated gasoline’, providing for specific requirements regarding the content of biodiesel, methanol, ethanol, oxygen, benzene, lead, and manganese to make the gasoline ‘clean’. The CAA gasoline rules also provide for emission performance specifications, requiring a reduction in emission by 25% of volatile organic compounds (“VOCs”), toxic air pollutants, and nitrogen oxides (“NOx”). The emission performance is measured by comparing the performance of the ‘reformulated gasoline’ against the performance of a ‘baseline gasoline’ in a ‘baseline vehicle’. The ‘baseline gasoline’ represents the average industry gasoline sold in 2015. The ‘baseline vehicle’ is a 2015 Ford Focus.
The regulations also include rules for conventional gasoline, to ensure that it remains as clean as it is today, to prevent refiners, blenders, and importers from adding the ingredients that are prohibited in reformulated gasoline into conventional gasoline. To this end, the regulations require that any additives to gasoline or the raw energy products sent to US refiners (such as crude oil) must be wholly obtained or produced in North America. Because refiners have different formulas, the CAA baseline for conventional gasoline is determined individually for each refiner, blender, and importer and sets the cleanliness requirement for that seller’s gasoline.
Domestic refiners and foreign refiners who export at least 75% of their production to the US are permitted to determine their baseline in accordance with a method that uses actual data on the quality of gasoline produced by the refiner. Foreign refiners not meeting the 75% export to the US are assigned a statutory baseline based on industry average quality of 2015 gasoline produced by US refiners, and are not given the opportunity to establish a baseline based on their own actual data (which is likely more favourable). Because of the statutory baseline, Venezuela, and country that exports a considerable amount of gasoline to the US (40%), has to have cleaner gas than the US refiners.
Brainstorm key issues/questions you see fit related to the class International Trade Law. Ensure you provide a summary/description of characteristics of the legal element under review, and then analyze it using the facts in the scenario (how do the facts relate to this legal element/requirement?). Fully explain the legal analysis.
Facts – Issue – Laws (Rules) – Analysis (Application/Arguments) – Conclusion
Encouraged to write your answers in detailed, point-form format, but ensure you have enough detail