What's This Organization (WTO):
An Annotated Glossary of Terms and Concepts
About the World Trade Organization
By Tom Barry, Codirector Foreign Policy In Focus
III. Environment
Aid Not Protectionism:
A common concern expressed by Southern nations is that Northern countries,
having higher standards of living and a relatively high level of environmental
regulations already in place, use environmental and consumer protection
as a cover for economic protectionism that limits Southern export markets.
Rather than resorting to trade sanctions against poorer nations with limited
regulatory infrastructures, the industrialized nations should aim to increase
sustainable development in the South by providing easy access to environmental
technology, funding for environmental protection, and technical support.
In particular, Southern nations and NGOs have objected that the Trade-Related
Intellectual Property Rights (TRIPS) agreement has been used to enable
technology owners to reap profits from monopoly pricing while hindering
the transfer of technology, and that nontariff barriers are commonly in
place in sectors--such as agriculture and textiles--that are not competitive
with Southern exports.
Committee on Trade and Environment (CTE):
Established at the conclusion of the Uruguay Round, the CTE is "to
identify the relationship between trade measures and environmental measures
in order to promote sustainable development" and "to make appropriate
recommendations on whether any modifications of the provisions of the
multilateral trading system are required, compatible with the open, equitable,
and nondiscriminatory nature of the system." According to the WTO,
the CTE has "brought environmental and sustainable development issues
into the mainstream of WTO work." Most observers disagree, with many
in the environmental community calling for the committee's termination
on the grounds that it keeps the environment off the main negotiating
agenda.
Eco-Labeling:
At issue within the WTO is the extent to which eco-labeling functions
as a barrier to imports and as protection for domestic production. U.S.
environmentalists widely support a broad right to eco-labeling--meaning
voluntary systems that promote a consumer's right to know through objective,
transparent, and scientifically defensible labeling systems.
Environment as a WTO Concern:
The absence of the environment or other trade-related social concerns--such
as respect for core labor rights--from the WTO's negotiating agenda reflects
the traditional, narrow view of international trade prevalent in the corporate
world, the opposing perspectives of North and South governments, and the
lack of a clear NGO agenda for environmental global governance. Although
hardly in the mainstream, the environment does have a place within the
WTO--not only in the form of the CTE, but also in the Marrakech Agreement
that established the WTO. The preamble notes the importance of "allowing
for the optimal use of the world's resources in accordance with the objective
of sustainable development, seeking both to protect and preserve the environment
and to enhance the means for doing so in a manner consistent with their
[member countries] respective needs and concerns at different levels of
economic development." As evidence of this concern, WTO points to
a provision in the Agreement on Agriculture that exempts direct payments
under environmental programs from rules requiring members to reduce support
for agricultural production. Similarly, the Agreement on Subsidies and
Countervailing Measures treats as a nonactionable subsidy cases where
governments cover up to 20% of an industry's costs of adapting existing
facilities to new environmental legislation. Additionally, the new Agreements
on Technical Barriers to Trade on Sanitary and Phytosanitary Measures
take into account governments' use of measures to protect human, animal,
and plant life, and health and the environment.
Institutional Balance:
Swirling around the contentious issues of trade and environment within
the WTO is a larger debate on the proper institutional framework for global
governance with respect to international environmental protection and
preservation. Multilateral Environmental Agreements (MEAs), although varying
widely in effect, are the most effective form of global environmental
governance because they have steadily created a new set of international
norms that are slowly gaining acceptance. NAFTA's environmental side agreements
created an important layer of trade-related regional environmental governance
that environmentalists advocate should be a minimum for future trade agreements.
Some have proposed the creation of a new multilateral environmental organization
similar to the International Labor Organization (ILO), but this proposal
has been criticized on several grounds: 1) that like the ILO a new environmental
organization would be sidelined by such organizations as the WTO and would
be without enforcement power, and 2) that there already exist such multilateral
environmental organizations as the Commission on Sustainable Development
(CSD), UN Environmental Program (UNEP), and Global Environmental Facility
(GEF). It has been argued that rather than relying on its internal advisory
committee, the WTO should rely on these multilateral environmental organizations
in coordination with other UN entities such as UNDP and UNCTAD to set
trade and environment guidelines.
Impact Assessment, Not Further Liberalization:
Many NGOs have forcefully expressed the view that there should be no further
liberalization of global trade and investment without a serious impact
assessment of the liberalization advanced by the Uruguay Round, and numerous
governments have noted the same concern, especially with respect to intellectual
property rights.
Mainstreaming the Environment:
Some Northern trade representatives have advocated that the WTO "mainstream"
environmental issues within WTO trade rules rather than having environmental
concerns ignored, left to one powerless committee, or, worse yet, seen
as the source of actionable trade barriers. Such demands are routinely
opposed by Southern countries on the grounds that economic development
and poverty alleviation should be the top priorities of trade rules and
that Northern countries will use any new environmental language as justification
for nontariff barriers to Southern exports.
MEAs and WTO:
Within the CTE and among the international environmental community, the
relationship between the WTO and Multilateral Environmental Agreements
(MEAs) must be worked out. There have been proposals that the WTO rules
acknowledge that member countries can modify their trade practices as
deemed necessary to abide by MEAs. Northern countries have expressed some
support for modifying Article XX to ensure that measures taken by nations
to comply with international norms and standards as established by international
treaties will not be regarded as violations of free trade rules. Within
the environmental community, there is a strong conviction that the environmental
regimes created by Multilateral Environmental Agreements (MEAs) should
be extended and enforced--and that WTO rules should not have priority
over MEA-related measures even when one of the disputing parties has not
ratified the MEA in question.
Sustainable Development:
Most WTO members favor a conservative interpretation of sustainable development
that sees no contradiction between environmental protection and increased
trade and economic growth. They argue, in fact, that trade and growth
facilitate environmental protection by advancing more efficient technology
and decreasing poverty (regarded a major cause of environmental destruction
because of associated land- and fuel-use practices, for example). Although
there are many environmental NGOs that are comfortable with this conservative
spin on sustainable development, many others assert that there are ecological
limits to trade, growth, and consumption that must be acknowledged if
sustainable development is to be meaningful.
U.S. Leadership:
The United States has been a leading--although not forceful--supporter
of integrating environmental concerns into WTO rules. President Clinton
expressed the need to ensure that trade rules support national policies
providing for high levels of environmental protection, support for the
demand of environmental NGOs that there be greater inclusiveness and transparency
in WTO proceedings, and opposition to environmentally damaging subsidies.
But this rhetorical commitment by Washington has not been backed up by
effective leadership either in vigorous intervention in disputes that
challenge the country's right to implement higher standards of environmental
protection or in facilitating an increased voice for environmental NGOs
in trade negotiations. The U.S. government has not used its influence
to forge a consensus position within the CTE and the WTO membership at
large advocating stronger trade and environment protection linkages. Moreover,
the U.S. government tends to support elements of the business community
that warn against the use of the precautionary principle (lack of full
scientific certainty should not be used as a reason for postponing cost-effective
measures to prevent environmental degradation, where there are threats
of irreversible or serious damage) or that work to ensure that international
treaties (such as climate change and biodiversity) do not adversely impact
important elements of the U.S. business community.
Win-Win-Win Scenario:
Increasingly, proponents of new WTO commitments to environmental protection
argue there is no inherent contradiction between sustainable development
and increased international trade. They advocate identifying measures
that will lead to trade liberalization, better environmental protection,
and improved economic and social development of developing countries.
Ending environmentally destructive subsidies by governments would be one
such measure.
For More Information
Trade and Environment, FPIF Policy Brief
By David Hunter and Brennan Van Dyke, Center for International Environmental
Law (CIEL)
Website: http://www.fpif.org/briefs/vol1/tradenv.html
World Trade Organization (WTO)
Website: http://www.wto.org/wto/environ/environm.htm
International Center for Trade and Sustainable Development (ICTSD)
Website: http://www.ictsd.org/
Contents | part I | part II | part III | part IV | part V | Appendix
