Bridges Trade BioRes • Volume 1 • Number 1 • 22nd November 2001

Environment Makes Its Way Onto The WTO Negotiating Agenda

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Environment Makes Its Way Onto The WTO Negotiating Agenda

WTO Members for the first time in the trade body’s history agreed to negotiations on environmental issues, thereby at least partly meeting one of the key demands pushed by the EC at the Fourth WTO Ministerial Conference, held in Doha, Qatar, on 9-14 November. The negotiations will be part of a single undertaking which includes negotiations on a range of other issue areas (see BRIDGES Weekly, 15 November 2001). The EC and the United Nations Environment Programme (UNEP) welcomed this move, while developing countries and environmental organisations showed mixed reactions to the environment-related outcomes of the Conference.

As set out in the Ministerial Declaration, negotiations on all but the Singapore issues (ie investment, competition, transparency in government procurement and trade facilitation) will begin immediately. The Trade Negotiating Committee — instructed to meet for the first time not later than 31 January 2002 — will supervise the overall conduct of the negotiations under the authority of the General Council. The negotiations are set to conclude by 1 January 2005. The outcomes of the different negotiating areas (with the exception of the Dispute Settlement Review) will enter into force as part of a single undertaking.

Stronger language in the preamble

Using stronger language than ever before in WTO agreements, WTO Members in para. 6 of the Ministerial Declaration’s preamble stress that the multilateral trading system and efforts towards environmental protection and sustainable development "can and must" be mutually supportive. In addition, the preamble recognises Members’ right "to implement measure to protect human, animal or plant life or health". The text also for the first time explicitly recognises the importance of promoting cooperation between the WTO and relevant international environmental and developmental organisations, singling out the WTO’s continued cooperation with UNEP in particular.

Negotiations launched on environment

The Ministerial Declaration launches negotiations on trade and environment in three areas (para. 31): (i) relationship between WTO rules and trade obligations set out in Multilateral Environmental Agreements (MEAs); (ii) procedures for information exchange between MEA secretariats and relevant WTO committees, including criteria for granting observer status; and (iii) the reduction or elimination of tariff and non-tariff barriers to environmental goods and services.

The first area was further qualified by adding that the negotiations "shall not prejudice the WTO rights of any Member that is not a party to the MEA in question", thereby avoiding the ‘party versus non-party’ issue, according to one UNEP official. Environmental groups are also concerned that this qualification could in fact prove to be a disincentive for getting countries to sign on to MEAs. "These are loopholes for the US so it can duck the MEA issue," said Remi Parmentier of Greenpeace.

In addition, the Declaration further waters down the mandate under (i) and (ii) by saying that the negotiations "shall not add to or diminish the rights and obligations of Members under existing WTO agreements". According to sources, this shifts the possible outcomes of negotiations on these points away from rule changes and towards clarifications or footnotes to existing rules.

Members also agreed to conduct negotiations on clarifying and improving WTO disciplines on fisheries subsidies as part of negotiations on ‘WTO Rules’, "taking into account the importance of this sector to developing countries" (para. 28). This decision marks a significant change from the previous WTO mandate on this issue, which had restricted discussions to the non-negotiating body of the Committee on Trade and Environment (CTE). The World Wildlife Fund (WWF), one of the key campaigners on fisheries subsidies, welcomed the launch of the negotiations, praising in particular the leadership of Iceland and the US at Doha. "For the first time, governments have recognised the responsibility of the WTO to do its part in promoting the health of a vital natural resource," said David Schorr, Director of WWF’s Sustainable Commerce Program.

CTE mandate more focused

The CTE is instructed to continue its work programme while focusing in particular on the effect of environmental measures on market access, relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and eco-labelling (para. 32). The first two issues are of particular concern to developing countries and might have been singled out in order to obtain their support for negotiations on environment, as one trade source speculated. Similar to points (i) and (ii), however, discussions in the CTE should not impact on Members’ rights and obligations under WTO agreements.

Para. 51 of the Declaration furthermore identifies the CTE together with the Committee for Trade and Development (CTD) as fora "to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected". As one environmental source pointed out, this provision could help to elevate and focus the mandate of the CTE, where environmental discussions have remained at the purely analytical level since the WTO’s creation in 1995.

Developing country concerns on environment

The Declaration recognises the technical assistance (TA) and capacity building needs of developing countries in the area of trade and environment, and calls for a report on these activities to be prepared for the Fifth Session (para. 33). Activities will be carried out through the WTO Secretariat’s technical cooperation programmes, and other external mechanisms, including bilateral donors, regional banks and international organisations, such as UNCTAD. The budget for the WTO overall TA efforts will be "no lower than that of the current year" (ca. USD 10 million for 2000).

Environment also finds mention in the Decision on Implementation-Related Issues and Concerns, which takes note of a proposal that measures implemented by developing countries with a view to achieving legitimate development goals, such as "development and implementation of environmentally sound methods of production", should be treated as non-actionable subsidies. This proposal will be discussed in the Committee on Subsidies and Countervailing Measures, which will report on the outcomes by the end of 2002.

Mixed Reactions

The EC in their assessment of the results at Doha expressed satisfaction with the way in which the Ministerial Declaration reflected its calls for increased action on sustainable development and environmental protection, which they say will be "mainstreamed throughout the negotiations". While the EC claims that the Declaration also covers precaution and labelling, EC Trade Commissioner Pascal Lamy has assured US Trade Representative Robert Zoellick that the EC will not use the controversial "precautionary principle" to justify illegitimate trade barrier.

The positive sentiments were echoed by Klaus Toepfer, Executive Director of UNEP. "Negotiations on trade and the environment were, until recently, a taboo subject in the WTO," he pointed out. "We still have a long way to go. But the agreements in Doha are, I believe, a new beginning". While welcoming the launch of negotiations on environment as "encouraging", one UNEP official cautioned that the outcomes for the environment will now depend on various other factors, including how Members use their mandate, the yet to be determined body that will carry out the negotiations, processes and coordination at the national level, participation of civil society and other international organisations, and further clarification of the negotiating mandate.

Developing countries — who have so far strongly resisted negotiations on environment at the WTO fearing that resulting provisions might be used for protectionist purposes — remain weary of the references to environment in the Ministerial texts and the resulting ‘qualitative jump’ from a work programme in the CTE to negotiations. While agreeing that the relationship between MEAs and WTO rules should be clarified, a developing country representative questioned why the WTO should be singled out as the forum for negotiations rather than the MEA Secretariats. One developing country delegate also pointed out that the environmental provisions in the end were "much less rigorous" than expected, but highlighted continued concern among developing country that negotiations might expand to other issues, such as precaution.

While environmental groups cautiously welcomed the launch of negotiations on environment, they also highlighted potential negative environmental impacts of the outcomes at Doha. WWF expressed concern about the launch of negotiations on investment, which they referred as a "significant setback for the environment" given the important role of investment flows on the world’s environment. Greenpeace, one of the strongest critics of Conference’s environmental outcomes, claims that "the agreement on environment offers very little progress in defending environmental protections against trade concern". "This meeting has failed to produce a vision for sustainable development and the protection of the environment," said Parmentier.

Additional Resources

The Ministerial texts (Declaration, Decision on Implementation and Declaration on TRIPs and Public Health) and Daily Updates of the Conference are available on the ICTSD website.

"EU assures U.S. it will not pursue ‘precautionary principle’ in new talks," WTO REPORTER, 21 November 2001; "environmental issues make significant progress at key trade talks," UNEP, 15 November 2001; "WTO Meeting Fails the World," GREENPEACE, 14 November 2001; "CAFOD analysis of WTO Doha Declarations," CAFOD, 19 November 2001; "Environment scores two wins, one loss in Doha," WWF, 14 November 2001; ICTSD Internal Files.