News and Analysis • Volume 12 • Number 3 • May 2008

Trade & Environment Talks Need Boost from Other Areas

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Progress in the Doha Round negotiations on trade and the environment remains sluggish, with little convergence in any of the key areas of the talks, including the scope of the mandate itself and the definition of products and services slated for deeper liberalisation on environmental grounds.

At an early May session of the Committee on Trade and Environment (CTE), Members remained fundamentally divided over how to fulfill the Doha mandate to “enhance the mutual supportiveness of trade and environment.”

At issue here is the scope and need for negotiations on the relationship between WTO rules and the specific trade obligations set out in multilateral environmental agreements (MEAs), with many preferring to focus on MEA implementation at the domestic level. Outside the WTO, some campaigners for sustainable development, concerned that any constraints on the trade and environment mandate might lead to more harm than good, have called for the WTO-MEA discussions to be abandoned altogether.

Norway Presents Draft Decision

During the CTE discussions, Members provided their initial reactions to a Norwegian proposal (JOB (08)/33) for an eventual Doha Round agreement on trade and environment to include a ministerial decision on potential conflicts between WTO rules and the trade provisions in multilateral environmental accords.

Among other things, the proposal noted that, up until now, specific trade measures that apply to countries that have signed MEAs have not been contested in the WTO. The proposal also recognised should such as case arise, a possibility many deem remote, WTO rules would apply. The proposal further acknowledged that MEAs and WTO rules have equal standing in international law, and stressed that all specific trade obligations should be implemented harmoniously and in good faith.

Canada and Korea expressed their support for the draft decision, but the US and Australia argued that the proposal was not ambitious enough and that it excluded important elements from an earlier submission (TN/TE/W/72/Rev.1), such as references to the key features in the design of specific trade obligations that contribute to mutual supportiveness. The two countries also stressed the need to highlight the importance of national-level co-ordination among domestic agencies and stakeholders that are involved in international agreements. The EU deplored the proposal’s lack of reference to the role of the WTO Dispute Settlement Understanding in resolving disputes between MEA and WTO rules.

African Countries Call for New Expert Group

The Africa Group presented an informal proposal (JOB 08/38) outlining its view that the aim of the TWO trade and environment negotiations should be to strengthen the relationship between the multilateral trading system and MEAs, rather than to try to develop mechanisms to deal with hypothetical problems that might arise in the future. The group felt that parallel discussions on information exchange between MEAs and the WTO could further contribute to a successful outcome of the talks.

In particular, the group called for the establishment of a specific and permanent technical assistance and capacity-building instrument to help developing country members meet their MEA obligations without violating WTO rules. This new instrument would complement existing technical assistance provided by the WTO, as well as the UN Environment Programme (UNEP) and the UN Conference on Trade and Development (UNCTAD).

EGS: Brazil Responds to Questions on Request-Offer Approach

Members have persistently disagreed over how to identify the environmental goods and services (EGS) that should be subject to liberalisation following the Doha mandate to negotiate “the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.”

A group of primarily industrialised countries has proposed that Members create a list of environmental goods to be liberalised. India and Argentina disagree, arguing that products on such a list might be used for non-environmental purposes. Instead, the two countries support tariff cuts for goods used for specific environmental goals such as air pollution control, soil conservation, waste management and renewable energy.

Brazil responded to Members’ questions regarding the ‘request-offer’ negotiating method it has proposed. Under this approach, each country would ask its trading partners to slash tariffs on those agricultural and non-agricultural goods it felt would bring environmental benefits. Countries would then determine whether such requests might compromise their own economic development, and indicate the environmental goods on which they are prepared to remove trade barriers. The plan would allow for several rounds of this ‘request- offer’ process.

According to Brazil, this approach would allow Members to preserve their ‘policy space’ with built-in special and differential treatment that allows developing countries to identify their own trade, environmental and developmental priorities.

Brazil also clarified that its ‘request-offer’ proposal would allow for a process that could be synchronised with developments in the agriculture and industrial goods negotiations. Acknowledging the importance of such linkages, some delegates contacted by Bridges noted that they saw greater possibilities for a breakthrough if and when a deal on tariff and subsidy cuts was reached in the industrial goods and agriculture negotiations. Such an agreement would also give delegates a sense of what products to include in the liberalisation agreement, and would provide a more solid idea of the potential extent of any tariff cuts, they said.

The date for the next formal session of the CTE has not yet been set, although it is likely to take place in June.