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Environmental labelling is a timely and important subject. In less than 20 years environmental labels, including eco-labels, have become widely used, chiefly in developed countries, but also increasingly in developing countries. The importance of this subject is magnified by the possible implications of environmental labelling schemes for trade relations, economic development and the environment. Until now there has not been a thorough study of the legal limits applicable to these schemes. This work is intended to fill the gap. In addition to examining the economic rationale behind environmental labelling, and the policy issues associated with labelling schemes, this study explores the extent to which environmental labelling schemes: can be operated in conformity with the requirements of general international law, specifically the principles of sovereignty and jurisdiction; conform to the principles agreed upon at the United Nations Conference on Environment and Development; and can be operated in accord with obligations arising pursuant to the WTO Agreement.