Trade_and_environment - Source Book

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Edited byAdil NajamMark Halle

Ricardo Melndez-Ortiz

TRADE AND

ENVIRONMENT

A RESOURCE BOOK


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TRADEENVIRON

A RESOURCE

Ricard


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2007 International Institute for Sustainable Development (IISD), In

Trade and Sustainable Development (ICTSD) and the Regional and InGroup (The Ring).

Trade and Environment: A Resource Book

Edited by Adil Najam, Mark Halle and Ricardo Melndez-Ortiz

ISBN 978-1-895536-99-7

Published by International Institute for Sustainable Development, InTrade and Sustainable Development, The Regional and International N

This publication is available online athttp://www.trade-environment.orghttp://www.iisd.orghttp://www.ictsd.orghttp://www.ring-alliance.org

Cover photos from iStockphoto.

Readers are encouraged to quote and reproduce this material for educpurposes, provided the source is acknowledged.



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The International Institute for Sustainable Development (IISD, htt

tributes to sustainable development by advancing policy recommendatrade and investment, economic policy, climate change, measurement anural resources management. Through the Internet, we report on internashare knowledge gained through collaborative projects with global partrigorous research, capacity building in developing countries and better dand South. IISDs vision is better living for allsustainably; its mission tion, enabling societies to live sustainably. IISD is registered as a cha

Canada and has 501(c)(3) status in the United States. IISD receives core the Government of Canada, provided through the Canadian InterAgency (CIDA), the International Development Research Centre (IDCanada; and from the Province of Manitoba. The institute receivesnumerous governments inside and outside Canada, United Nations agethe private sector.

The International Centre for Trade and Sustainable De

http://www.ictsd.org) was established in Geneva in September 1996 tounderstanding of development and environment concerns in the contexAs an independent nonprofit and nongovernmental organization, ICTSDof actors in ongoing dialogue about trade and sustainable developmentof governmental, nongovernmental and intergovernmental partners, ICTtemic role as a provider of original, non-partisan reporting and facilitatisection of international trade and sustainable development. ICTSDbetween policy-makers and those outside the system to help trade polportive of sustainable development. By helping parties increase capacinformed about each other, ICTSD builds bridges between groups wiagendas. It seeks to enable these actors to discover the many places whereorities coincide, for ultimately sustainable development is their common

The Regional and International Networking Group (The RING, http:/is a global alliance of predominantly Southern independent research an

It was formed in 1991 to stimulate preparations for the 1992 Rio Earthgroup designed and implemented an ongoing program of capacity devcollaborative research at regional and global levels, with the goal of creatential platform for international comparative policy research, action aemphasis on South-South and South-North collaboration, the Ring aimment and development policy formulation processes, and to increase

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Contributors

Acronyms and Abbreviations

Acknowledgements

A Users Guide Adil Najam, Mark Halle and Ricardo Melndez-Ortiz

Section I: Setting the Context

The Evolution of the Trade and Environment Debate at the WTO Hugo Cameron

Expert Opinion: The future of the trade and environment debate Hector T

Expert Opinion: Its time to make the global debate local K.G. Anthony H

The Trade and Environment Policy Formulation Process Doaa Abdel Motaal

Expert Opinion: The case for integrated assessment Hussein Abaza

Expert Opinion: Policy should be made through negotiation, not litigation

Section II: Issues and Debates

1. Agriculture Malena SellExpert Opinion: Agriculture, environment and social justice Adriano Camp

Expert Opinion: Dealing with the hidden agenda on agricultural subsidies

2. Biotechnology Heike Baumller

Expert Opinion: Making the Cartagena Protocol work Veit Koester

Expert Opinion: Biotechnology and the multilateral trading system Gusta

3. Capacity Building Christophe BellmannExpert Opinion: The Andean experience on capacity building Luisa Elena

Mara Elena Gutirrez

4. Climate Change and Energy Malena Sell

Expert Opinion: Doing trade and climate policy together ZhongXiang Zhan

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Contents


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7. Environmental Services Mahesh Sugathan and Johannes Bernabe

Expert Opinion: Making trade liberalization work for the poor Sitanon Jes

8. Environmental Technologies Sandeep Singh

Expert Opinion: Encouraging trade in biofuels Suani Teixeira Coelho

9. Fisheries Subsidies Anja von Moltke

Expert Opinion: Fisheries subsidies and beyond John Kurien

Expert Opinion: Fixing Cotonous rules of origin regime Roman Grynberg an

10. Illegal Trade in Natural Resources Duncan Brack

Expert Opinion: Illegal trade in tropical timber Chen Hin Keong

11. Intellectual Property Rights David Vivas-Eugui and Heike Baumller

Expert Opinion: The limits of geographical indications Dwijen Rangnekar

Expert Opinion: Protecting genetic resources Manuel Ruiz

Expert Opinion: Focusing on the local agenda Stella Wattimah Simiyu

12. Investment Luke Eric Peterson

Expert Opinion: Investment rules for sustainable development Konrad von

Expert Opinion: Investment law as if development mattered Marcos A. Or

13. Multilateral Environmental Agreements Vicente Paola B. Yu III

Expert Opinion: The logic of the WTO-MEA relationship Alejandro Jara

Expert Opinion: MEA misconceptions and contradictions Rob Monro

14. Policy Coherence Otto Genee

Expert Opinion: Promoting policy coherence Bernice Wing Yee Lee

Expert Opinion: New policy coherence challenges Stphane Guneau

15. Regional Arrangements Aaron Cosbey

Expert Opinion: Fostering sustainable development with RTAs Hank Lim a

Expert Opinion: The shadow trading system of RTAs Adil Najam and Dir

16. Standards and Labelling Tom Rotherham

Expert Opinion: Eco-labels from a Southern perspective Veena Jha

Expert Opinion: Confronting eco-labelling myths Nicola Borregaard and A


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HUSSEINABAZA(Egypt) is the Chief of the Economics and TradUnited Nations Environment Programme (UNEP), based in Ge

GUSTAVOALANS-ORTEGA(Mexico) is President of the Centro MDerecho Ambiental (CEMDA) and teaches environmental law aUniversidad Iberoamericana in Mexico City.

YVONNEAPEA(Ghana), formerly Program Co-ordinator Dispuat the International Centre for Trade and Sustainable Developmenow Conference and Project Manager at the Economist Intellige

WELBERBARRAL (Brazil) is a professor of law at the Federal UnivCatarina, Florianpolis, Brazil .

HEIKE BAUMLLER (Germany), formerly Program Manager EnNatural Resources at the International Centre for Trade and SustDevelopment (ICTSD), is now an independent consultant workCambodia.

CHRISTOPHE BELLMANN (Switzerland) is Programs Director at thCentre for Trade and Sustainable Development (ICTSD).

JOHANNES BERNABE (Philippines) served as a trade negotiator foand is currently the Trade in Services Coordinator at the Internafor Trade and Sustainable Development (ICTSD).

NATHALIE BERNASCONI-OSTERWALDER (Switzerland/Canada) is Attorney of the Geneva Office of the Center for International En

Law (CIEL).NICOLABORREGAARD (Chile) is Advisor to the Chilean Ministerand Energy.

DUNCAN BRACK(United Kingdom) is an Associate Fellow with tEnvironment and Development Programme at Chatham House

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Contributors

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SACHIN CHATURVEDI (India) is a Research Fellow at the Research

Information System for Developing Countries (RIS), based in NIndia.

BEATRICE CHAYTOR(Sierra Leone) served as a trade negotiator foand is currently the Director of Policy, Planning and Research atLeone Ministry of Trade and Industry.

HYUNJUNGJO CHOI (Korea) is a graduate researcher at the Flet

Law and Diplomacy, Tufts University.SUANI TEIXEIRACOELHO (Brazil) is So Paulo States Deputy Sefor the Environment and Head of the Brazilian Reference CenteUniversity of So Paulo.

AARON COSBEY(Canada) is an Associate of and Senior Advisor tInternational Institute for Sustainable Development (IISD).

ANNIE DUFEY(Chile) is Research Associate at the International IEnvironment and Development (IIED).

OTTO GENEE (The Netherlands) is the Director of the Policy CoDevelopment Unit at the Dutch Ministry of Foreign Affairs.

ROMAN GRYNBERG (Canada/Australia) is the Director for EconoGovernance at the Pacific Islands Forum Secretariat.

STPHANE GUNEAU (France) is a Policy Analyst and at the InstiSustainable Development and International Relations (IDDRI) i

LUISAELENAGUINAND (Venezuela) is the Coordinator for EnvirSustainable Development at the General Secretariat of the Andea

MARAELENAGUTIRREZ (Peru) studies sustainable developmention biology at the University of Maryland, U.S.

MARKHALLE (U.S./Italy) is the European Representative and Glothe Trade and Investment Program of the International Institute fDevelopment (IISD).

K.G. ANTHONYHILL (Jamaica) is a seasoned trade negotiator andtrys Ambassador and Permanent Representative to the United Na



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CHEN HIN KEONG (Malaysia) is the Senior Forest Trade Advisor

International, based in Malaysia.VEIT KOESTER(Denmark) was with his countrys Ministry of Enis now the Chairman of the Compliance Committees of the Carand the Aarhus Convention.

JOHN KURIEN (India) is a professor at the Centre for DevelopmeThiruvananthapuram.

BERNICEWINGYEE LEE (Hong Kong, China) was the Policy AnStrategy Advisor at the International Centre for Trade and SustaiDevelopment (ICTSD).

HANKLIM (Singapore) is the Director of Research at the SingapInternational Affairs.

HOWARD MANN (Canada) is a practicing lawyer and the Senior

Law Advisor to the International Institute for Sustainable DeveloRICARDO MELNDEZ-ORTIZ (Colombia) is the Executive DirectInternational Centre for Trade and Sustainable Development (IC

ROB MONRO (Zimbabwe) was head of Zimbabwe Trust, an NGone of the founders and promoters of the CAMPFIRE program.

DOAAABDEL MOTAAL (Egypt) is Counsellor in the Cabinet of th

General of the World Trade Organization (WTO).ADIL NAJAM (Pakistan), an IISD Associate, teaches internationaland diplomacy at the Fletcher School of Law and Diplomacy, Tu

MARCOSA. ORELLANA(Chile) is Senior Attorney with the CentInternational Environmental Law (CIEL) in Washington, D.C., Professor at American University Washington College of Law.

LUKE ERIC PETERSON (Canada) is Editor of Investment Treaty Ning service published by the International Institute for SustainabDevelopment (IISD).

GAO PRONOVE (Philippines) is the Executive Director of Earth CGeneva.

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MALENASELL (Finland) is Program Officer, Environment and A

the International Centre for Trade and Sustainable DevelopmentMAGDASHAHIN (Egypt) is her countrys Assistant Foreign MinisInternational Economic Affairs and earlier served as her countryto Greece and chief trade negotiator.

SABRINASHAW(Canada) is an Associate at the International InstSustainable Development (IISD), currently on leave from the Wo

Organization (WTO), where she served as Secretary to the ComTrade and Environment (CTE).

LINSEYSHERMAN (Canada) is studying law at the University of Oa researcher with the Center for International Environmental Lashe contributed to this book.

STELLAWATTIMAH SIMIYU (Kenya) is a Research Scientist with tMuseums of Kenya.

SANDEEP SINGH (India) is with The Energy and Resources InstitNew Delhi, India.

MAHESH SUGATHAN (India) is the Economic and Trade Policy ACoordinator at the International Centre for Trade and SustainabDevelopment (ICTSD).

DIRKSWART (South Africa) is a non-academic staff member at CUniversity and an independent researcher.

HECTOR TORRES (Argentina) served as a trade negotiator for hisnow an Executive Director at the International Monetary Fund

VANGELISVITALIS (New Zealand) is a former Chief Advisor at thcurrently a Senior Trade Negotiator for the New Zealand Minist

Affairs and Trade.

DAVIDVIVAS EUGUI (Venezuela) is Program Manager Intellectuthe International Centre for Trade and Sustainable Development

THE LATE KONRAD VON MOLTKE (Germany) was a Senior FellowInternational Institute for Sustainable Development (IISD) and AProfessor of Environmental Studies at Dartmouth College


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AB Appellate Body

ABS access and benefit-sharing

ACP African, Caribbean and the Pacific

AFP Asia Forest Partnership

AoA Agreement on Agriculture

APEC Asia Pacific Economic Cooperation (Forum)

ASEAN Association of Southeast Asian Nations

AU African UnionBITs bilateral investment treaties

BOT build-operate-transfer

BTA border tax adjustment

CAF Andean Development Corporation

CAN Community of Andean NationsCAP Common Agricultural Program (of the Europ

CARICOM Caribbean Community

CBD Convention on Biological Diversity

CBFP Congo Basin Forest Partnership

CCAMLR Convention on the Conservation of AntarcticLiving Resources

CCICED China Council for International CooperationEnvironment and Development

CDM Clean Development Mechanism

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Acronyms and Abbreviat


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DSU Dispute Settlement Understanding

EC European Communities

EEZ exclusive economic zone

EFTA European Free Trade Association

EGS environmental goods and services

EIA environmental impact assessment

EMIT (Group on) Environmental Measures and InteEPPs environmentally preferable products

EST environmentally sound technology

EU European Union

FAO Food and Agriculture Organization

FDI foreign direct investmentFLEG Forest Law Enforcement and Governance

FLEGT Forest Law Enforcement, Governance and Tra

FPA Fisheries Partnership Agreement

FTA free trade agreement

FTAA Free Trade Agreement of the Americas

G8 Group of Eight

G90 Group of Ninety

G10 Group of Ten

G33 Group of Thirty-Three

G20 Group of Twenty

GATS General Agreement on Trade in Services

GATT General Agreement on Tariffs and Trade

GEN Global Eco-labelling Network

GIs geographical indications


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ICSID International Centre for Settlement of Investm

ICTSD International Centre for Trade and Sustainabl

IDB Inter-American Development Bank

IEA International Energy Agency

IEC International Electrotechnical Commission

IFC International Finance Corporation

IFOAM International Federation of Organic AgricultuIGC Intergovernmental Committee (on Intellectua

Genetic Resources, Traditional Knowledge andWIPO)

IISD International Institute for Sustainable Develop

ILEAP International Lawyers and Economists Agains

ILO International Labour Organization

IMF International Monetary Fund

IPOA-IUU International Plan of Action to Prevent, DeterIllegal, Unreported, Unregulated Fishing

IPPC International Plant Protection Convention

IPR intellectual property rightISBs international standards bodies

ISEAL International Social and Environmental AccreLabelling Alliance

ISO International Organization for Standardization

ITPGRFA International Treaty on Plant Genetic Resourc

and AgricultureITTA International Tropical Timber Agreement

ITU International Telecommunication Union

IUU illegal, unreported and unregulated (fishing)

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MT metric tons

NAFTA North America Free Trade Agreement

NAMA non-agricultural market access

NFIDs net food-importing developing countries

NGMA Negotiating Group on Market Access

NGOs non-governmental organizations

NGR Negotiating Group on RulesNTBs non-tariff barriers

NTMs non-tariff measures

OECD Organisation for Economic Co-operation and

OIE World Organization for Animal Health

OPEC Organization of the Petroleum Exporting CouPCD policy coherence for development

PCT Patent Cooperation Treaty

PIC prior informed consent

POPs persistent organic pollutants

PPMs process and production methods

PPPs public-private partnerships

PRONAF National Program for Strengthening Family F(in Brazil)

PRSP poverty reduction strategy paper

REACH Registration, Evaluation and Authorization of

The Ring The Regional and International Networking GRTA regional trade agreement

S&DT special and differential treatment

SCM subsidies and countervailing measures


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Trade and Environm

TEDs turtle excluder devices

TK traditional knowledge

TNC Trade Negotiations Committee

TPRM Trade Policy Review Mechanism

TRIMs trade-related investment measures

TRIPS Trade-related Aspects of Intellectual Property

U.K. United KingdomUN CPC UN Provisional Central Product Classification

UN United Nations

UNCCD United Nations Convention to Combat Dese

UNCED United Nations Conference on Environment Development

UNCHE United Nations Conference on the Human E

UNCLOS United Nations Convention on the Law of th

UNCTAD United Nations Conference on Trade and Dev

UNDP United Nations Development Programme

UNEP United Nations Environment Programme

UNFCCC United Nations Framework Convention on C

UNPIC United Nations Convention on the Prior InfoProcedure for Certain Hazardous Chemicals aInternational Trade

UPOV International Union for the Protection of Newof Plants

U.S. United States

W/120 WTO Services Sectoral Classification list

WCO World Customs Organization

WHO World Health Organization


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Throughout the process of producing this book, we have been inspired who responded to our call for thought-provoking and thoughtful essayand tedious review and editing process with patience, grace and goodwiby the authors are entirely their own and do not imply any institutional pown institutions or by IISD/ICTSD/The Ring.

In addition to the chapter authors, a large number of individuals and instithe intense process of consultation with literally hundreds of practitionernegotiators from all over the developing world. In particular, we would like that assisted in organizing the various regional consultations: Environnemen

Tiers Monde (ENDA), Senegal; Recursos e Investigacin Para El DesarrollChile; IUCN The World Conservation Union, Sri Lanka; SustainabInstitute (SDPI), Pakistan; African Centre for Technology Studies (ACTS), Kfor Southern Africa (TRALAC), South Africa; and the Chinese Academy of Economic Cooperation (CAITEC), China.

Jointly implemented by the International Centre for Trade and Sustainable the International Institute for Sustainable Development (IISD) and Th

Development, the Southern Agenda for Trade and Ebenefited from the intellectual and managerial talents of these institutions. Incially grateful to Heike Baumller and Hugo Cameron (at ICTSD) and Davhave been critical to the intellectual substance as well as the management oinputs were also provided by Sarah Mohan (at ICTSD) and Sabrina ShawStuart Slayen (at IISD) at various stages in the process. Hyun Jung Choof Law and Diplomacy, Tufts University, provided invaluable editorial anpulling together the final drafts of the various chapters. The book was d

Finally, and importantly, this book, and the larger research project of wnot have been possible without the generous financial support provideDevelopment Research Centre (IDRC), Canada; the Swiss Agency Cooperation (SDC); the Norwegian Ministry of Foreign Affairs (NMInternational Development Cooperation Agency (SIDA) We thank the

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We hope that this book is not just readable, but also useful and useable.

This book flows from the realization that the trade and environment pol

complex, is becoming highly specialized and is full of cumbersomeanjargon. As a result, it has become increasingly difficult to understand anstrands of trade and environment debates. This is not only true for new debates, but also for seasoned practitioners who may have been focusing of trade and environment discussions, or on adjacent discussions within policy arena or the broader environmental policy space. This can also imnificant stress on developing country capacities to participate in these di

tantly, there is the danger of the policy focus becoming ever-narrower andcross-issue connections that are sometimes central to resolving complex challenges.

Our ambition, therefore, is to produce a volume that provides relevantpertinent analysis on a broad set of trade and environment discussions wly as possible (a) what are the key issues from a trade and environment pthe most important policy debates around them; and (c) what are the di

that define these debates. We call this a Resource Book because that iit to bea resource for policy practitioners, scholars and activists that easy-to-use map of ongoing and upcoming trade and environment discuto also provide our readers with a nuanced understanding of where theand why.

This book is a truly and deeply collaborative effort. As many as 61 autcountries have contributed to this volume. We believe that this is a tru

some of the best minds that work on these issues. They bring with themand insight from the worlds of practice, scholarship and activism. Whileof the trade and environment debate, we have consciously tried to give spoping country concerns and aspirations within this debate because these cresented in the global discussions and they are particularly central to thresponses to the trade and environment challenges we face

Trade and Environm

A Users GuideAdil Najam, Mark Halle and Ricardo Meln


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orated upon in a set of short Expert Opinion essays which provide provoc

voking ideas and analysis related to that issue. For easier reading, eachstructured identically a general introduction lays out the essentials of whas evolved, and what aspects are currently in debate; this is followed byests and faultlines which focuses on aspects of the issue which are of paor particularly contentious for, key parties; finally, there is a section on ttions which looks towards the future of the debate and tries to chart whto head and why. While the tone and presentation of the background sethe Expert Opinion essays are meant to be provocative articulations of sothinking on each of these issues, and particularly on what might be dothorny debates related to them. A total of 34 Expert Opinion essays froexperts and practitioners from all over the world are included in the booktion provides additional informational resources that may be uImportantly, this section includes a version of the Doha Ministerial Dectated to highlight all the various trade and environment connections coin the sections that relate to these issues directly but also to the indirect

tion also includes a timeline of the trade and environment debate, a tradesary, and a list of useful online and in-print resources. Important techniare highlighted in the background sections, as you see here, and then expEnvironment glossary.

The goal of this organization of the Resource Book is to retain the richdiscussion while making the volume as accessible and useable for the reanot a book that needs to be read from one end to the otheralthough w

This is a volume that invites the reader to flick through it, that helps twhat they are looking for, and then, hopefully, excites the reader enougkeep reading more. Our hope is that those actively involved in trade ansionsas practitioners, as scholars and as activistswill not only find thful thing to keep on their bookshelf, but useable enough to keep closer adesks.



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SectiSetting th


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The relationship between trade and environ-ment has evolved over time. The inclusion ofenvironmental issues on the negotiating agen-da of the World Trade Organization (WTO)at the Doha Ministerial in 2001 moved this

relationship into the spotlight. However, thisis by no means a new relationship; indeed, aswe will see below, this is a relationship that hasgone through many phases and will continueto evolve in the future.

The Early Years

At a fundamental level, the production andexchange of goods and services relies on theenvironment in the form of natural resources.Trade in everything from shrimp to shampooimplies an environmental impact of somesort The trade-environment relationship is

tively). However, Artsuch measures cannotions on trade appintent. This provisiofocal point for the t

debate at the GATT aAmidst growing enviroemerged in the late 196GATT members estEnvironmental MeasTrade (EMIT) in 197single request for it to b

Group lay dormant fotrade and environmenhallways. At the 1972 Human EnvironmenGATT Secretariat preimplications of environ

The Evolution of the TradEnvironment Debate at thHugo Cameron

By the close of the 1990s, the field of trade and environme

much more attention than at its start. Among other issues, ecogenetically modified organisms (GMOs) and perverse subsidies

sectors were providing policy-makers with a host of new


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While trade officials were factoring the envi-

ronment into international trade agreements,trade measures were being used as a tool toadvance global environmental goals. In 1975,the Convention on International Trade inEndangered Species of Wild Fauna and Flora(CITES) entered into force, mandating a sys-tem of trade bans and restrictions on traffic inendangered species. Trade restrictions subse-quently formed key elements of other multi-lateral environmental agreements (MEAs),including those on trade in ozone-depletingsubstances (Montreal Protocol, 1987) andhazardous wastes (Basel Convention, 1989).By 2003, according to a paper released by the

WTO Secretariat, there were no fewer than

14 MEAs with trade-related provisions,including a number of others with potentialtrade effects. The two streams of internation-al interaction on environment and trade con-tinued to evolve in parallel until they begancoming into increasing contact with eachother in the 1990s.

The 1990s: A RockyDecadeThe 1990s marked the coming of age of thetrade-environment debate. In 1991, theEuropean Free Trade Association (EFTA)finally prompted the EMIT Group to meet

in order to study the trade and environmentlinkage and provide input to the 1992 RioEarth Summit. Leaders at the Rio Summitrecognized the substantive links betweeninternational trade and environment by

i k li i i h

firmed the fears of en

decisions also provokepart of developing coronment becoming a based on how they weed. The first case wGATT by Mexico, wUnited States (U.S.) laprohibited tuna importappropriate dolphin Mexico believed that lated its GATT rights btorially how it should The U.S. defended itsthat its neighbour was ures to prevent the ac

phins by its tuna fishruled in 1991 that the Mexicos trading rightsally the process and(PPMs) by which that The U.S. eventually lifing an extensive do

labelling campaign aMexico. A subsequent U.S. tuna embargo b(EU) on behalf of the 1992 found that the U

policy was GATT-coapplied extraterritoriallupheld the first panel

the actual measure used was neither necessaArticle XX), nor GATTDolphin cases broughtdiffering environmenta



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existing environmental laws among signato-

ries. Similar provisions subsequently foundtheir way into bilateral trade agreementssigned by the U.S. and Canada with otherdeveloping country trading partners, in orderto guard against lower environmental stan-dards as a source of comparative advantage.Environmental cooperation elements havesince also been included in a number ofregional trade arrangements.

The 1990s also saw the conclusion of theeight-year Uruguay Round negotiations andthe creation of the WTO on January 1, 1995.By then, the trade bodys ranks had swelled to128 Members, over three-quarters of which

were developing countries. In addition toincluding preambular language claiming sus-tainable development as an objective, the

WTO agreements established a Committeeon Trade and Environment (CTE), includeda new Agreement on the Application ofSanitary and Phytosanitary (SPS) Measures,and instituted a strengthened dispute settle-

ment mechanism. The CTE, a regular meet-ing of all WTO Members, was mandated toidentify the relationship between trade andenvironmental measures and make appropri-ate recommendations on whether any modi-fications to WTO rules were required. Whilethe Committee has provided a valuable

forum to enhance understanding of thetrade-environment relationship, it has strug-gled to fulfill its mandate, and many haveaccused it of being little more than a talkingshop. The SPS Agreement elaborated onArticle XX by setting out parameters for the

The Evolution of the Trade and Environm

The future ofthe trade andenvironmentdebate

A Conversation withHector Torres

Has the trade andenvironment debatelost steam? I wouldsay that the debate hasince the December 199and has been going arouUruguay Round was finpush from the United Sronment in the WTO. Th

and Environment (CTE)clear mandate and wasfindings at the Singapoby the time Singapore had lost interest in tradthe CTE was pushed bacstripped of its clear neg

Since then, the discussia rut. Neither developingrent U.S. Republican admdeurs, willing to push tment debate to the foEuropeans have an instronger environmental have neither the willistrength to push this de

However, even though in the WTO is now stallewhere the debate needs meaningful, especially ftry perspective. I can tspecific issues that ne


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A number of WTO disputes added further

depth to the trade-environment debate, andunderlined the difference in approach to theissue between developing and developedcountries, notably the U.S. The 1998Shrimp-Turtledispute case, brought by four

Asian countries against the U.S., proved alandmark in that it put into doubt the ration-ale that discrimination based on PPMs wasnot compatible with WTO rules. The WTO

Appellate Body ultimately determined that, while the disputed U.S. law prohibitingshrimp imports caught without the use ofturtle excluder devices was justifiable under

Article XX, it had been implemented in a dis-criminatory fashion. In other words, the

Appellate Body did not require the U.S. todismantle its law, but only change the way it

was implemented. The decision was particu-larly disturbing to Thailand, India and anumber of other developing countries, who

were deeply concerned with the approach tointerpretation of WTO law applied by the

Appellate Body. They felt that the ruling per-mitted Members to discriminate againstlike products based on non-product-relatedPPMs, an issue that had not been negotiatedin the Uruguay Round. From their perspec-tive, the Shrimp-Turtle decision could beinterpreted as allowing Members to take uni-lateral actions based on the way in which

products are produced (i.e., the way in whichshrimp are harvested), and that these actionscould be justified under Article XX as long asthey were not implemented in an arbitrary ordiscriminatory manner.

between exporters,

sumers. Dramatic stremental and other grouSeattle Ministerial Conto remind trade negoteral trading system neaddress how it dealt However, developin

wary, not least becautrade and environmegreen protectionism, cally prohibited goodsment of their biologback seat to developenvironment issues at

Doha and BeyAt the Doha MinisteriWTO Members decitions that, for the firtrade and environmenating agenda. The neunder Paragraph 31 o

Declaration were primby developed countbetween WTO rules gations in MEAs; obsecretariats; and the lienvironmental goodreflected the percept

environmental mandafor developing counbeen demandeursin th

Paragraphs 32, 33 annon-negotiating tr

d h



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mental aspects of the negotiations, in order to

help achieve the objective of having sustain-able development appropriately reflected.

Importantly, Paragraph 6 of the Preamble tothe Doha Declaration makes a detailed casefor the trade and environment linkage:

We strongly reaffirm our commitment tothe objective of sustainable development,

as stated in the Preamble to the Marrakech Agreement. We are convinced that theaims of upholding and safeguarding anopen and non-discriminatory multilateraltrading system, and acting for the protec-tion of the environment and the promo-tion of sustainable development can and

must be mutually supportive. We takenote of the efforts by Members to conductnational environmental assessments oftrade policies on a voluntary basis. We rec-ognize that under WTO rules no countryshould be prevented from taking measuresfor the protection of human, animal or

plant life or health, or of the environmentat the levels it considers appropriate, sub-ject to the requirement that they are notapplied in a manner which would consti-tute a means of arbitrary or unjustifiablediscrimination between countries wherethe same conditions prevail, or a disguisedrestriction on international trade, and are

otherwise in accordance with the provi-sions of the WTO Agreements. We wel-come the WTOs continued cooperation

with UNEP and other inter-governmentalenvironmental organizations.


continued from page 5However, as a global citinternational arena shability and accountabiltion of national envirOnce nations have set thand regulations, they stional obligation to ens

regulations are implempush for international rof sovereignty, but bameans that national laenforced.

In developing countrienational environmental

factory. Politicians tendtal legislation in respotent or concern over thment or international pcapacity and/or willingnlegislation remain low. nations to demand theown environmental stato match their economicthe obligation of everynational environmentalof the trade and envdetermined not just by lations to which we agrewe enforce our domesticto both trade and envir

2. Shift of Focus from and Disposal. Therethe debate to look lifecycle rather thanMuch of the trade anto date has revolve


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continued from page 7ends up targeting outdated production meth-ods mostly used in developing countries, with-out being equally vigilant about externalitiesstemming from lavish consumption and irre-sponsible disposal. Some of the most severeenvironmental effects come not from PPMs,but from consumption and disposal of prod-

ucts.

Beyond this, it should be noted that thedebate over whether PPMs are consistent withWTO rules could be solved by delving into theoriginal intention of the 1995 TechnicalBarriers to Trade (TBT) Agreement and the sub-sequent practice of countries. There is a subtle

difference in the definition between technicalregulations and standards that leaves room forthe argument that PPMs unrelated to the prod-uct could be used in standards to differentiatelike products. To make the situation evenmore confusing, many of the countries thatargue that the use of PPMs to differentiatelike products is WTO-inconsistent, actually

use PPMs in eco-labelling and other voluntarylabelling schemes (for example, to differenti-ate organic food). This could be clarifiedthrough legal interpretation, but it would befar more desirable to settle the issue at thepolitical level, where agreement can be soughton when and where PPMs are an acceptablemeans to differentiate products.

3. Tariff Escalation and Export Taxes. Weneed to carefully consider the perverse eco-nomic and environmental effects of the tar-iff escalation that developing countriesface. Given the capital constraints thatmany developing nations face, they are

opportunities for suHowever, the more vtries add to their ethey go up the prodmore tariffs these prtariff escalation in e

In addition to beinment, tariff escalat

effects on the enviescalation on valuedeveloping nations exclusively on trade face lower tariffs. Tincentive for the overal resources. The pbecause some develrestrict exports of coffset the effects otheir processing iexported commodittries are providing cing industries to oquences of tariff esthus feed into a pemately leads to over

resources with negathe environment.

In short, if the trade ais to make any meaninbroaden its focus to insions. First, it has toinclude the enforcemetions as an internationa

has to broaden its foexternalities stemming product lifecycle, includisposal. Third, and imhas to examine the imand market instruments


30/274

dates Members to clarify and improve WTO

disciplines on fisheries subsidies, taking intoaccount the importance of this sector to devel-oping countries.

Less than a year after the launch of the Dohanegotiations, leaders at the 2002 WorldSummit on Sustainable Development(WSSD) sent a clear message to WTO nego-

tiators to step up their efforts to integrate sus-tainable development objectives into thetrade round. Amongst other commitments,the Plan emphasized the phase-out of harm-ful fisheries and energy subsidies and dis-couraged the use of unilateral actions to deal

with environmental challenges outside coun-tries jurisdictions.

Since Doha, Members have met several timesin the CTE in Special Session to address thenegotiating mandate. European countrieshave remained the most active supporters ofthe MEA-WTO relationship discussions.Some of the larger developing countries haveengaged actively on different aspects of themandate, for instance by analyzing thepotential benefits (and pitfalls) for theireconomies of further trade liberalization inenvironmental goods and services. However,modest progress has continued over this timeand, slowly but surely, the trade and environ-ment agenda has started digging in its roots

within the corridors of the WTO.

Interests and Fault LinesThe major players in the debate on the trade-environment relationship have traditionally


Its time tomake the globaldebate local

By Amb. K.G.Anthony Hill

The barriers hadalready been breached.

It was left to theyouthful, sometimesorganized non-governmister the coup de grace.reggae beat of Bob MBerlin Wall in 1989. Thwas in full swing. Seatt

It was a decade earliergealing Washington Conliberalization and outilied its way into the South. The transnationwas opening markets, eof consumers.

The pressure of North

and realism had movedpressure the World Banthe environment in Notwithstanding, one ofcers with the cold lobureaucrat, observed tgrowth was a certain dedegradation and polluti

Transnational business, turbed. No pressure froAfter all, they were thstantial business in investment projects, thrits and multilateral fi


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Table 1: Key actors and the evolution of the trade and environment deb

Actors Pre-1990s 1990s Seattle-Doha

Europe Intra-EU Support for MEAs Support for harmonization clarification of MEA-

Support for WTO relationshipmultilateral Seek recognition of solutions to eco-labelling in environmental WTO agreementsproblems

US Support for MEAs Use of unilateral Support for trade-based increased solutions to transparency and environmental NGO participationproblems

Developing Concern over Market access Resistance to Countries trade in concerns, inclusion of

domestically especially over environmental prohibited goods unilateral use of negotiations in (DPGs) trade measures for the WTO

Support for MEAs environmental Suspicion over purposes

use of trade Support for measures for TRIPS-CBDenvironmental linkagepurposes

IGOs Some key Implementation of UNEP, WTO and (including agreements MEAs with trade UNCTAD collaborate MEAs) adopted: CITES, measures and on building

Montreal Protocol, negotiation/ synergiesBasel Convention adoption of new Important

UNEP, OECD MEAs capacity buildingcontribute on Rio Earth Summit rolecoordination and highlights trade- Certain MEAsanalysis environment accredited as


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The European Union, frequently supported

by like-minded countries such asSwitzerland and Norway, has been the centralproponent of including environmental issuesin trade discussions at the multilateral level.This position is informed, to a great extent,by the EUs support for multilateral environ-mental solutions and the influence of envi-ronmental groups. However, most other

countries have remained suspicious ofEuropes enthusiasm for environmental issuesat the WTO, particularly its support for theprecautionary principle in instances of scien-tific uncertainty. Developing countries, inparticular, are wary of European efforts topush eco-labelling and the clarification of the

MEA-WTO relationship. They view theseefforts as an attempt by the EU to seek addi-tional space to block imports in sensitive sec-tors and obtain trade-offs for concessions inother areas, such as agriculture.

The EU has made increasing efforts to inte-grate its trade strategy with the principles of

sustainable development. In addition to con-ducting sustainability impact assessments(SIAs) of all its new trade arrangements, theEU has launched initiatives to help develop-ing countries gain from sustainable trade.These include the promotion of trade in sus-tainably-produced products, funding for

technical assistance on trade and environ-ment and an online help desk for develop-ing country exporters to navigate Europesoften cumbersome import standards.However, many remain unconvinced andsome developing countries have expressed


continued from page 9

It was finally at the Wo(WTO) that these two press for negotiations othe other to press for tIrresistible! The negotcountries, yielding to constituencies, secureagenda. When the city-green Seattle and failed, the innovativremained with Developromise of rule-making

How can the intellectuelled? How can developnavigate the tributaries

by design? What specirescue the WTO-centred international trade as itin and without? And hothe seamless connectioof goods; delivery of gtechnologies of productfinancing of trade; theenvironment; and how

by institutions endowed

The General Agreement(GATT) embodies princisable for civilized discounequally endowed parto negotiate binding is no firm expectation tas a bond and the agree

all parties and adminisprinciples of national tcrimination are temperety; the recognition exceptions; safeguamore favourable treat


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The generic term South was always contrived.When equated with Third, the die was cast.Thus was lumbered the Third World. So too,the term developing countries. These termshave outlived their utility. At the same time,where is the serious, practical collaborationamong developing countries in general, South-

South cooperation? Where is the collaborationand involvement of all their stakeholders in afocused way, and with the fulsome support oftheir heads of government and state?

The governments of developing countries andtheir private sectors, NGOs, academics andcitizens should be more intensively engagedamong themselves in the unfolding negotia-

tions on the inter-related environment-facili-tating measures for trade. The technical assis-tance and capacity building of the WTO, deliv-ered by a Secretariat, can be self-serving andcounterproductive. There is a pressing needfor local circumstances to be the basis forinformation and knowledge driving theirnegotiating positions.

There is clear and indisputable evidence thatefficient trade facilitation is welfare-enhanc-ing. There is equally clear evidence that thepollution from road, air and sea transportbears heavily on the environment. As negoti-ations on trade facilitation take place underthe Doha mandate, it is also clear that with-out fulfillment of trade-facilitation supply-side commitments, it will be difficult fordeveloping countries to meet their end of thebargain and secure the balance of benefitsfrom the negotiations.

The WTO dispute resolution mechanisms, theiroperation and their decisionsso hugely

Both technology and fiponents of all trade. Hferential treatment in

They are not integral totions. The CommitteeTechnology and Trade groups, with little chmaking their way into obligations. This lack not seem to make sens

The question arises whon both market access on environmental goodtribute to improving theral and the specific obdevelopment.

The conventional lens oations at the multilaterathat is likely to lead results across the boardof regional trade agreemorder of magnitude as mtal agreements. Tradesolutions may well have

at the regional level, if efits from trade liberalizThe trade impact assess21 principles must there

An important considerational arrangements thaincreased regional arranWorld Environment O

overkill. It would only ative bureaucracies, detrafocus at the national an

No. The answer is not tcapacity of the internlandscape with more


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ronmental regulations. On the other hand,

its refusal to play by the rules in key MEAs with trade-related elementssuch as thoseon biodiversity, climate change and biosafe-tyhas made its trading partners skeptical ofits environmental intentions. At Doha, theU.S. was less enthusiastic than the EU aboutincluding trade and environment on thenegotiating agenda. Indeed, the U.S. ensured

that the negotiations would not open upmore space for consideration of the precau-tionary principle in WTO rules, and hassince sided with developing countries inadvocating a limited interpretation of theMEA-WTO mandate.

Developing countries have engaged in tradeand environment issues at the GATT at leastsince the 1980s. In 1982, a number of devel-oping countries at the GATT expressed con-cern that products prohibited in developedcountries due to environmental hazards,health or safety concernssuch as certainchemicals and pesticidescontinued to be

exported to them. With limited informationon these products, developing countriesmade the case that they were unable to makeinformed decisions regarding their import.Domestically prohibited goods (DPGs) sub-sequently became a standing item on theagenda of the CTE, though the issue has

received less attention since 2001 due to thefocus of CTE discussions around the Dohaissues.

While developing countries have been activecontributors on trade and environment at the

tic environmental st

countries. At the sacountries have advocthat reflect Southern interests. In addition ing trade in DPGs, mtries have sought to

Agreement with the Cleast developed cou

emphasized the impresources for technicNorthern environmedards.

Developing countriNorth-South coalitioFriends of Fish whicplines on fisherie

Argentina, Chile, EPhilippines together wNew Zealand, NorwaSouth cooperation henvironmental aspect

wide coalition of dev

agriculture-exporting Group) denouncing harmful effects of

Argentina, Chile andAustralia, Canada andrestrictions on transboGMOs under the CB

while some African support for the EUs pto GMO imports.

Developing countriesWTO linkage manda



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Intergovernmental organizations have

played a key role alongside WTO Membersin the discussions on the trade-environmentrelationship. Secretariats from relevant MEAshave been regular invitees to the CTE andhave participated in a limited fashion in theenvironment negotiations in the DohaRound. The United Nations EnvironmentProgramme (UNEP) has played a useful role

in highlighting synergies and mutual sup-portiveness between MEAs and the WTO.UNEP has been an observer at the CTE since1995 and, as host of the 1992 Rio Summit,

was instrumental in elaborating the linksbetween the trade and environment regimes.Together with the UN Conference on Trade

and Development (UNCTAD), UNEP hasengaged in extensive capacity building andresearch activities for developing countries ontrade and environment.

Many non-governmental groups haveemerged in both the North and South to fol-low the multifaceted issues around trade and

environment. The number of these groupsmushroomed in the mid-to-late 1990s, duein large part to the coming into force of the

WTO and to the growing public interest inpursuing sustainable development. The fieldsof expertise of NGOs active in trade andenvironment are varied, and their impact can

be substantial, especially through interactionwith trade policy-makers. In particular, thesegroups have contributed significantly asmonitors of the trade policy-making process,as knowledge providers, information dissem-inators and capacity builders

but in different ways

WTO Members comagreed terms around thWTO rules and MEAopen up to address aronment concern to China, India and BrazGroup of Twenty (G2tries opposed to Nort

diescan be expectetrade-environment pincluding the envirreductions in agricultution of GMOs is alsotrade-environment recome.

Changes in modes oftion, partly as a resulare likely to shift issuand environment tosuch as negotiating muments for different prferent countries. Glo

consumer preferencesplay an increasingly developing countries,have already adoptedlabelling and certiresponse to consumNorth. To continue m

and to advance sustaicountries will have to protectionist fences cooperation on greenin a globalized worldenvironment cannot a


Th E l ti f th T d d E i


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MinisterialConference

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Trade and En ironment A Resource Book


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It is impossible to discuss the trade and envi-ronment policy formulation process withoutenquiring about the nature of the policy rela-tionship involved. Does trade and environ-mental policy differ from the policy relation-ship between trade and any other non-com-mercial consideration? Arguably, there isnothing intrinsically different about the tradeand environment relationship that distin-guishes it from, let us say, the trade andhealth or trade and national security rela-tionships. All relationships involving tradeand non-commercial concerns tend to sharethe same set of challenges in the policy for-mulation process, with the principal chal-

lenge being that of reconciling trade objec-tives with broader public policy goals.

However, of the many trade and relation-ships, trade and environment tends to cap-ture public and media attention the most

expanding reach of tsystem. The multilaterno longer stops at a ctariffs; it goes beyond that health, environmregulations do not obstacles to trade. So formulate policies at environment interface

Actors and InPolicy Formulation

All trade and issuespolicy formulation p

issues that are mainlyThey typically involveests; a broader set of aof fora within which pformulation take plac

l d f d f

The Trade and EnvironmenFormulation Process

Doaa Abdel Motaal

it is mainly developed countries that have the financial renvironmental experts to WTO meetings held in Geneva from

Developing countries seldom do so



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fisheries or energy). At the national level,industry is involved in policy formulationmainly in order to advance the economicpoint of view on an issue, and NGOs toadvance the economic, developmental orenvironmental angles. The regional offices ofinternational organizations such as the WorldBank, the International Monetary Fund(IMF), the United Nations Environment

Programme (UNEP) and the United NationsDevelopment Programme (UNDP) caninfluence policy formulation by giving policyguidance to governments, or funding target-ed studies and projects. Moreover, aid agen-cies in developing countries can play a partic-ularly influential role in giving policy advice

and direction to governments. Whereas the coordination process at thenational level among different actors andstakeholders is often led by trade agencies,some countries have established special inter-ministerial task forces to explore the tradeand environment policy interface. These tend

to act as more neutral fora for policy deliber-ation, supposedly giving equal weight toenvironmental considerations as they do totrade.

Figure 1: Policy formulation at the nationallevel.

Conference on Trad(UNCTAD), and thetal institutions are muagreements (MEAs) aextent, however, tradecussions at the interaround developments

There are a number o

while MEAs often nefor environmental pagreements, there are

within MEAs in whichcuss all aspects of the relationship, nor is thin UNEP. The WTOand Environment (C

sively reserved for tradcussions among goverlel in any other intern

To explain, whereas din the Convention o(CBD) on the rela

WTO Agreement on TIntellectual Property RCBD, other aspects ofment relationship canMEA. Thus, in MEAronment relationship fragmented way. Whilof the MEAs, and c

their strength in that narrower and better-dstill means that the platform at the interngeneral, cross-cutti

Differential GovernmentalActors (trade, natural

resources, etc.)

Industry

NGOsPolicy Formulation at

the National Level


The Trade and Environment Po


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are the relevant fora within the WTO? Whenthe WTO was established in 1995, the CTE

was created as a forum for dialogue on thevarious linkages between trade and the envi-ronment. It was asked to examine the tradeand environment relationship in relation toall areas of WTO rules (i.e., issues related togoods, to services and to intellectualproperty), and advise the WTO General

Council on the need for changing WTOrules. It was the very first forum created with-in the WTO for making recommendationson policy formulation in the area of trade andenvironment.

In terms of its mandate and institutional set-up, the CTE was strong in some respects, but

weak in others. It was strong in the sense thatit reported to one of the highest decision-making bodies of the WTO (the GeneralCouncil is second only to the WTOsMinisterial Conference), and also because itsmandate was to explore the trade and envi-ronment relationship in relation to all areas of

WTO rules (i.e., issues related to goodsarea, to services and to intellectual proper-ty). However, it was weak in the sense that,unlike certain other committees of the

WTO, it could not itself alter any WTOAgreement. Any change of rules can only beproposed by the CTE to the GeneralCouncil, and it is up to the Council to decide

what to do with a proposal. However, sinceits establishment, the CTE has not recom-mended any change to the rules of the multi-lateral trading system.


The case forintegratedassessment

By Hussein Abaza

Environment needs tobe put at the centreof all planning and

d ec i s i o n -mak i ngprocesses and tradeneeds to be seen as a mtainable development not an end in itself.

Traditional sectoral appolicies, plans and progineffective. We therefor

developing integrated on a full understandininteractions among theand economic dimensioopment. Environmentaland the services they pbe deployed to achievobjectives. Environme

designed to promote poverty reduction. On tmentally-sound trade designed to promote management and pover

Moreover, it is essentinational level go handtional-level decision-m

national agreements shto take account of the nsuch agreements. Intergenerally designed andsectoral issueswhesocial or economica



41/274


persist. Major shifts in mindset are needed toensure the complementarity of economic,trade and environmental policies that realizethe objectives of sustainable developmentand broader poverty reduction.

While there is no lack of international fora,agreements or pronouncements, there is a lack

of real political will and genuine commitmentbacked by the necessary institutional and finan-cial mechanisms. Multilateral environmentalagreements (MEAs) are toothless and weak andthe United Nations Environment Programme(UNEP) needs to be strengthened. While someprogress is being made on some of theMillennium Development Goals (MDGs), we are

still a very long way from achieving them. TheWorld Trade Organization (WTO) pays lip service,at best, to environmental concerns. To contin-ue to have international instruments that onlyaddress one dimension will fail to deliver uponthe goal of sustainable development.

The international community is reactive. In mostcases, it addresses a crisis in response to inter-

national calls for action, but fails to deal withthe root causes. Often, international institutionslack the necessary authority to implement andmonitor proposed solutions. Therefore, interna-tional institutions need to change the way theyoperate and the process needs to be fed byempirical research and scientific studies basedon national experiences. Integrated assessmentand planning is one way through which we can

start to make the necessary changes. It can beused as a tool to design trade policies thatreduce environmental and social impacts andmaximize the net development gains from trade.Ideally, trade agreements need to be subjectedt h t t id h li ti i

at the national level by policiesincluding tradoped and implemented and poverty reduction. ed for the assessment aninternational policies an

The development of sucin pooling internationaing a widely acceptablethe national level in theof sustainable developmprograms. This will save provide a consistent mapproach for national-limplementation for suThe initiative will contridination by internation

tions and bilateral aid ain a framework documfacilitating its use and aat the country level, regional and internatiassist in achieving the f

1. Ensure that the econsocial considerations

sidered at all stages omentation of a plan,

3. Analyze the sustainfuture plans, policaccordance with development goals.

4. Identify win-win

trade-offs.5. Enhance public par

making, including ialized and affected

6 Promote inter-min



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In 2001, the launch of what some have calledthe Doha Development Agenda (DohaRound) multiplied the number of WTO fora

within which trade and environment policyformulation takes place. The CTE in SpecialSession (CTE-SS) was created to act as a spe-cial arm of the regular CTE, and to conductnegotiations on the trade and environmentissues agreed to in Doha. Furthermore, vari-

ous other new negotiating groups were creat-ed, some of which are negotiating on issueslinked to trade and environment. Forinstance, the Council for Trade in Services inSpecial Session is looking at liberalizing tradein environmental services (such as waste dis-posal services), and the Negotiating Group

on Rules (NGR) is looking at improvingWTO disciplines on fisheries subsidies. Thenegotiating groups that were created in theDoha Round are, of course, more powerfulfora than the regular bodies of the WTO inthe sense that they have been mandated toeither examine the potential for changing

WTO rules in certain areas, or for making

certain changes right away.

Figure 2: Principal fora for trade and envi-ronment discussions within the WTO.

enquiries about the devin the different negotilaunch discussions oconsiderations can However, it remains toindeed succeed in inconsiderations into the

To influence the outthe WTO, various othtrade and environmeUNCTAD helps devemulating their natioreinforcing the deve

WTO work. UNEPcoordinated positions

WTO issues, so as

mental guidance to thtinuously lobbies WTindustry associations merce, mainly to ensurequirements do nottrade. And, finally, Nexercise pressure on th

consumer, environmeconcerns, as well as mconsidered in policy fcontribute amicus cuthe court briefs) to ithe WTO dispute sett

Principal Actors wit

within EnvironmenFor the most part, goveign affairs representalead trade and envirthe WTO However

Other Regular Bodies(Ex. TBT Committee)

Other Negotiating Groups(Ex. the Negotiating Group

on Rules)

CTE

CTE in Special Session

Dispute SettlementBodyPrincipal Fora within the WTO



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when UNEP has financed their environmen-tal representatives to attend UNEP meetingsorganized back-to-back with the CTE. WhenCTE meetings are attended by environmen-tal officials, discussions can have a greaterenvironmental focus. However, there is nocontinuity in their participation. In othermore technical WTO committees, it is morecommon for countries, both developed and

developing, to bring capital-based experts tomeetings, such as in the TBT Committee.

In many areas of WTO work, country group-ingslike the Group of Twenty (G20) or theCairns Group on agriculturecan play animportant role in policy coordination andformulation at the regional and international

levels. However, in the environment area, nosuch groupings exist. The Asia PacificEconomic Cooperation (APEC) forumcountries, the Association of Southeast AsianNations (ASEAN) countries and the Africancountries have sometimes spoken in onevoice for their regions in the CTE, but this

has been rare, reflecting little policy coordi-nation at the regional level, or a limited con-vergence of interests. In the CTE-SS, regionalgroupings have spoken in unison on evenfewer occasions.

Within MEAs, the main players tend to begovernmental environment officials and

NGOs. Most countries tend to send theirenvironmental officials to MEAs, includingofficials working in highly specialized fields,such as fisheries. In MEAs, NGOs also play animportant role in the policy formulation

MEAs that have, or tstantial impact on tradnegotiations of the Bicountries included entrade experts in their d

Interests andMany assumptions aformulation at the intrade and environmenall policies are formulof active governmentaond, related assumptiointernational level arsions at the nationareverse. The third is

tions taken by countrtional fora must be thnational coordinationposition in a trade forenvironmental forum

whose trade and enviroproperly coordinating

tions are sometimes trnot. WTO deliberatioties of the policy focomplex and simpleexplain the course tha

In the WTO, differendifferent levels of eng

environment negotiatproposals have been focountries in the newlythere have been verydeveloping countries d l



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Deliberate disengagement can be motivatedby a variety of factors. First, trade and envi-ronment, as an area, may not be of equalimportance to all countries. Countries withlimited representation in Geneva (includingmany developing and least developed coun-tries) may prefer to channel the little negoti-ating resources that they have towards marketaccess, rather than environmental, negotia-

tions. Second, for some of the smaller playersin the WTO, in particular those that areopposed to environment negotiations, it maybe more efficient to allow the bigger playersthat share their position to argue their case.These countries may choose to only substan-tially engage at crunch time, when key deci-

sions are taken. Both of these factors wouldreflect very deliberate disengagement, andactive policy or strategy formulation.

However, not all disengagement is deliberate.Some negotiators may underestimate theimportance of trade and environment negoti-ations, only to suffer the consequences later

(for instance, in terms of dispute settlement).For countries that fall into this category, poli-cies are not formulated, nor are interna-tional decisions based on national interests.Instead, it is the decisions at the internationallevel that tend to fill in the domestic policygap.

There is a widespread view among certaingovernmental actors, scholars and activiststhat potential inconsistencies between WTOrules and the trade obligations in MEAs arethe result of insufficient national coordina-

Policy shouldbe madethroughnegotiation,not litigation

By Sabrina Shaw

Will the Doha man-date bring us closerto policy coordinationand coherence betweemental policy? Or will tbe thrashed out by dings? And, if so, why s

Despite all the fanfare

the Doha Round negotfocuses on only three trade and environmenexchange between theenvironmental agreemtionship between WTOobligations between ption of environmental grepresents only a smalissues being debated Trade and Environment

Yet, there is a rather that trade and environit into mainstream WTbut only minimally. Ingest that by definingagenda, the Doha manumber of controversiclarifying the relationsand MEA trade-relateMEA parties, is of mumeasures taken by ME



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This is so primarily because, unlike theInternational Court of Justice (ICJ) and MEAdispute resolution systems, the WTO has anautomatic and compulsory enforcement mech-anism as well as a relatively quick turnaroundfor resolving disputes.

A growing list of casesGasoline, Shrimp-

Turtle,Asbestos and Hormonesis evidence ofthis reality. The nuanced decisions in thesecases illustrate the ability of the WTOAppellate Body to respond in a measuredmanner to non-trade concerns. Yet, it is alsoa fact that jurisprudence has become de factotrade and environment policy.

Doha had raised the hope that we might now

move from trade and environment policy-mak-ing by jurisprudence to consensus-based nego-tiations. However, the CTE Special Session ismired in a vortex of definitional debates, andone is left to wonder whether the WTOAppellate Body will remain the real arbiter ofthe trade and environment relationship.

To be fair, WTO jurisprudence has made consid-

erable progress in recent years towards clarify-ing that WTO rules provide sufficient flexibilityto accommodate legitimate environmentalmeasures. The Appellate Body has shown rea-soned restraint by focusing only on thespecifics of the environment-related cases thathave come before it, and avoiding generalizedor generalizable verdicts on politically charged

issues such as genetically modified organisms(GMOs) or the precautionary principle.

However, too many of the most controversialtrade and environment issues remain unre-solved, and are likely to remain unresolved

Members, continuing t

of a negotiated consebership runs the risk ofical legitimacy of the policy process as well ament system. Insofar aities in the WTO agreecompromises and negquestion is whether it

pute settlement systemguities or whether Mepolitical will to providinterpret WTO rules.

The temptation to restlement process is cleaa dispute than to forgeMember states to d

issues. However, sustaWTO must be built on mises that can only emamong the broader mincluding developing c

Policy-making througunpredictability. It alsopower away from Mem

how accurate the judicbe from a technical anlegitimacy of the WTO states and trade anshould also emanate fr

The trade and environin the Doha negotiatistart, but many more

troversial issuesstillThe WTO should look tonegotiation rather jurisprudence as thresolving them.



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MEAs. The explanation could lie in the factthat these countries see the WTO and MEAsas playing fundamentally different roles.

While they want to regulate trade under var-ious MEAs, they also want a strong WTOthat is capable of protecting them against anydisguised restrictions on trade (green protec-tionism). Thus, some countries may simplytry to obtain the most they can out of differ-

ent foraeven if this means certain inconsis-tenciessince different regimes play differ-ent roles. Their intention would be to seethese different fora balance each other out onthe international stage.

Trends and Future

DirectionsThe focus of the current WTO negotiationson trade and environment has been on the

ways in which policy is formulated. In thenegotiations, WTO Members are not onlylooking at the relationship between WTOand MEA obligations, but are also exploring

mechanisms for greater coordination andinformation flow between the WTO and

MEA secretariats. Whave serious differenceone issue on which thfor greater national trade and environmMembers have argbetween these two poto averting potential W

The trend towards emphasis on policy fohow central the policyto the trade and enviroical signal by the WTOsuch coordination couoration among differeat the national level a

being allocated to sucinternational stage. Whinate all policy inconsimay be deliberateiinconsistency that recoordination. As withthe multiplicity of in

makes it crucial to havprocesses of policy form



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SectioIssues and



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Agriculture lies at the heart of the currentround of trade negotiations.

This is an area in which developing countriesare seeking to rectify historic imbalances dueto massive developed country subsidies andhigh levels of protection, including tariffescalation. Certain developing countries are

looking for new market opportunities, whileothers are seeking to protect their vulnerablerural populations consisting mainly of subsis-tence farmers. While some developed coun-tries have offensive interests, others are seek-ing both to continue to support their farmersin addressing non-trade concernssuch asthe environment, rural landscapes and food

securityand to manage the adjustment of ahighly distorted sector towards greater mar-ket orientation, which will involve dealing

with powerful vested interests.

The Millennium Ecosingled out agriculturdrivers of ecosystem ction. Sustainable agricly linked to the provises, including the mainand agrobiodiversity. practices, on the othe

ronmental externalitietion and erosion.Agrileads to fresh-water anadjacent areas, includand eutrophication. Uand irrigation triggers depletion of aquifers a

In addition, currentagriculture is a major sfertilizers and pesticdependent on the inpinducing fossil fuels.

AgricultureMalena Sell

While the numbers quoted for the amount of subsidies develtheir farmers vary across sources, one thing is clear: the subsidlions of dollars per year, and developing countries have no w



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Current agricultural subsidies are usually notgeared towards environmental protection,

but rather towards promoting increased pro-duction, and have often led to the exacerba-tion of environmental problems associated

with agriculture. In the ongoing negotiations,developed countries are generally pressuredto decouple their subsidies from production,

which would ease the pressure on the land,

make a dent in overproduction and possiblyopen up global markets for developing coun-tries which are currently dominated by subsi-dized developed country products.

Change will not come rapidly, however.Negotiations addressing the three pillars ofagricultureexport subsidies, domestic sup-

port and market accessbegan in 2000under the WTO Agreement on Agricultures(AoA) built-in agenda. In 2001, theseissues were folded into the Doha Round.This means that Members have to strike dealsand make trade-offs across all trade sectorsrather than being constrained to agriculture

alone. As part of the single undertaking, agri-culture negotiations were originally set to becompleted on January 1, 2005. This deadlinehas passed, and the negotiations are progress-ing step-by-step, with partial agreementsstruck in Geneva and Hong Kong since thebreakdown of negotiations in Cancun inSeptember 2003. Delegates are moving from

a framework for negotiating modalities,towards pre-modalities and ultimatelytowards the actual modalitiesthe reductionformulae including percentages for tariff andsubsidy cuts criteria for domestic support

what extent more intecultural products ac

addition, the currentpline the amount ofagriculture, with expphased-out.

Subsidies under the Athree boxes. TheAmdomestic support meered to distort produmeasures are slated forplete elimination. Bluexemption from the gsidies linked to produor kept within definemeasures typically inc

ing programs, i.e., payto acreage or animal that milk/meat prodexceeded. The only Mfied Blue Box measurEU, Iceland, NorwayGreen Boxmeasures sh

ing effects in agricultuworst, their effects mudistorting. They incluexceptions for the proty stocks; direct paymare decoupled from cution levels; structuralsafety-net programs

grams; and regionalThese measures, whicat particular productsgovernment revenue, price support


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Interests and Fault Lines

In the context of the WTO, environmentalissues have been clustered with other non-trade concerns, such as food security, struc-tural adjustment, rural development andpoverty alleviation. In practice, the environ-ment debate has been confined to a discus-sion of the Green Box and the future of sub-

sidies for environmentally friendly farmingpractices.

While negotiations related to the Green Box will have important implications for thefuture environmental impacts of agriculture,this will be but one determinant, and onemore relevant for developed countries given

that they are the big subsidizers.Environmental issues related to sheer scaleeffects of agriculture and globally shiftingcropping patterns fall outside the discussionat the WTO.

Negotiating Groups and Positions

The fifth WTO Ministerial Conference inCancun in September 2003 marked a shift innegotiating dynamics. This shift was mainlytriggered by imbalances in the area of agri-culture. In the lead-up to Cancun, the U.S.and EU drafted a joint compromise text onagriculture, which, in practice, served as thebasis for negotiations. Developing countries

reacted with outrage, feeling that their inter-ests had not been incorporatedand bandedtogether into a new grouping, the Group ofTwenty (G20), to challenge the status quo.The group was led by Brazil, South Africa,

Agriculture,environmentand social

justice

By AdrianoCampolina

Any analysis of the

impacts of agricultur-al trade on the envi-ronment needs to colooked diversity that extural sector. Considerinences within the sectorcarefully at how trade ferent impacts on diffe

and, therefore, differenronment.

It is possible to devise gories upon which to bof the agricultural secexample, suggested trural worlds, comprisindustrialized farmers,

global markets throagribusiness, have supeand capital, and use inof production; (b) smalers, who face decliningrisks, lack capital, infoand are vulnerable to subsistence farmers awho are seasonal, migrwith little or no land.

In Brazil, the governmedifferent categories in and their different cirand devised two separ



53/274


peasant movement. As a result, PRONAF creditnow offers lower interest rates, among othermeasures.

It is also necessary to recognize the differentcircumstances and needs of rural agriculturalcommunities with respect to trade policy.ActionAid has analyzed the impacts of trade

liberalization on small- and large-scale farmersin Brazil during its unilateral liberalization inthe 1990s. During that period, the large-scalefarmers tended to defend trade liberalizationpolicies, particularly improved market access.The priority of small-scale farmers, on the otherhand, was to seek protection from dumping andcheap imports. Given Brazils active member-ship in the Cairns Group, the government hadmostly responded to the needs of the largefarmers and its agenda had centred on elimi-nating export subsidies, reducing domestic sup-port and increasing market access. Analyzingthe evolution of the prices of the crops in thisperiod, ActionAid found that prices fell muchmore for family-farmed agricultural products(decreasing by 4.74 per cent per year), than for

large-scale agriculture (decreasing by 2.56 percent per year).

If we look at the environmental impacts ofagriculture, once again the different agricultur-al worlds will have different impacts. Usingthe case of Brazil again, 45 per cent of thecountrys area is used for agriculture. Theimpacts of commercial agriculture based on

Green Revolution techniquese.g., high use offertilizers and agrochemicals, monoculture,mechanization, large-scale farms and intensiveirrigationinclude deforestation, soil erosionand contamination and biodiversity loss.

tion unit, small-scale

through shared crops distributed in a balancization of labour in tunit favours the technfor sustainable agricufarmers have a long-lapositive relationship wrecognize the particula

ecosystem and use it induction strategies.

We need to urgently rtrade negotiations in considering how tradesmall-scale farmers, hplaced to provide envithat most of the glob

farmers, peasants, landThe main outcome should be a set of rulesen and protect small-s

It is crucial to removethat currently allow rtheir agricultural prodkets. However, puttin

should be closely linkrights of developing coconsolidate their smatherefore, important tosidies and reduce doNorth. Yet, it is equalspecial and differentiadeveloping countries tthe key crops of theirenable a stable econo(i.e., Special Products)raise tariffs and creatMechanism.

T d l h ld ll


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interests in agriculture are as varied as thecountries themselves. The G20 is generally

perceived as focusing on expanding agricul-tural export opportunitiesthis is, however,a truth with modification, as India is one ofthe dominant forces of the G20 and clearlyseeks protection for its small and vulnerablefarmers and their livelihoods. The Group ofThirty-Three (G33), an alliance of develop-

ing countries including many from Africa,the Caribbean and the Pacific (ACP), focuseson securing the designation of effectiveSpecial Products for developing coun-triesfor which lower tariff reductions

would be requiredand a Special SafeguardMechanism to shield developing countriesagainst import surges. There is a certain over-lap between the members of the G20 and theG33, and India and China coordinate closely

with the G33.

The Group of Ninety (G90)the largestcoalition of Members operating in the WTOcomprises least developed countries

(LDCs), the ACP countries and the AfricanUnion. The group has actively coordinatedpositions around major events such asMinisterials. The group argues that any agri-culture deal should allow its members to pur-sue agricultural policies that are supportive oftheir development goals, poverty reductionstrategies, and food security and livelihood

concerns. A special case within the G90 arethe so-called net food-importing developingcountries (NFIDs)many of them alsoLDCswhich do not produce enough fooddomestically and actually benefit from low

es across the board, thneed for special and

(S&DT) of developiless onerous commitBoth the G20 and Cplace little emphasis oRegarding the envi

Argentina made a prnegotiations noting th

have a strong interest ural resource base.

The EUwhich is Common Agriculturaparallel with WTO neto give up export supcautious approach to

betting on designatinfor which smaller tarifmade, thus protectRegarding domestic suly argues that cuts shodistorting support andbe left alone (the EU i

ing much of its suppoan area in which the U

On non-trade concernsocietal goals and exte

welfare, the EU araddressed in a targeteddistorting way und

European consumersaction on food safety.concern regarding isstreated beef and geneisms (GMOs).



55/274

according to the U.S., should be dealt with inthe Green Box exclusively.

In this regard, the Group of Ten (G10), agroup of net food importers includingSwitzerland, Norway and Japan, has taken abroader approach supporting the integrationof non-trade concerns into all aspects of the

agreement. These countries with uncompeti-tive agriculture sectors have high tariffs andsubsidies, and wish to maintain them giventhat they do little harm in the way of exportsor international competition. According toh l l b f

jointly with productport should sometim

especially in uncomremote or climatically

What Future for the

While the numbers qusubsidies developed coers vary across sources

subsidies amount to year, and developing of competing. Therefoamong developing cousidies have to go, and tpicion regarding the sing measures of the Gdeveloped countries

with massive subsidiesing field, be it for hysugar producers in Brapicking their cotton hand, developing cothey should be able tosidize in order to stra

own development; anlow-income and resou

As part of current athe Green Box is to beDisagreement imme

what this should entwere of the opinion th

just a health checCairns Group preferrstantial review, inclucriteria and improvedveillance to ensure th

continued on page 32

that lobby to maintain high levels of subsi-dization in much of the developed world. Itwill also require a shift in the trade negotiat-ing strategy of developing countries from sim-ply prioritizing market access to include anemphasis on special and differential treat-ment, as well as ensuring provision for thetools necessary to protect and develop their

small-scale farming sector.

This change in the focus of agricultural nego-tiations represents both a challenge and anopportunity for developed and developingcountries.

Adriano Campolina is the Regional Director forthe Americas for ActionAid International, based

in Brazil.

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