Environment symposium or promoting new trade round?

by Chakravarthi Raghavan

Geneva, 15 March-- If the aim of the sponsors of the WTO Symposium on Trade and Environment had been, as professed, to remove mutual suspicions and promote greater understanding between North and South the trading and environmental communities, the symposium seems more likely to end up in hardening positions and widening the gaps in perception.

A reiteration of positions by governments was perhaps to be expected.

But far from removing the mutual suspicions, as Sir Leon Brittan the European Community Trade Commissioner explained at a press conference, the speeches of the two major trading powers, the US and the EC, showed an attempt to convert legitimate concerns and worries of governments and civil societies to promote their agendas for a comprehensive new trade round of WTO negotiations, with old and all new issues, to be launched at the 3rd Ministerial meeting in Seattle.

And the suggestion of the WTO head, Mr. Renato Ruggiero, for the establishment of a new World Environment Organization to deal with environment questions and standards, probably created more suspicion all around. Ruggiero was trying to undercut the attempts to overload the WTO agenda by bringing in environment issues and setting standards through the trade organization and its sanctions procedures.

But it ended up in raising questions why a new organization need be created, instead of using, strengthening and funding the existing one -- UN Environment Programme, UNEP -- and why the secretariats of the two major conventions (on climate change and biodiversity) have been dispersed around the world, and starved of enough funds too. And given the current glaring rift between the WTO and its TRIPs pushed strongly by the US, and its successful attempt recently to block any bio-safety protocol being negotiated under the auspices of the Bio-Diversity Convention, which the US has not ratified but working to thwart.

Ruggiero stressed that there was no conflict between the trading rules and environment protection (citing an appellate body ruling), and the existence of a framework to improve these relations (by attacking trade barriers and subsidies that waste resources and harm the environment). He also argued that the trade and environment communities were not divided that a strong rule-based trading system and strong and effective environmental system were both needed to support one another.

But strengthening the bridge between trade and environment needed both pillars, he said, and complained that the responsibility for environmental issues are now scattered among a multitude of organizations and agreements while there is no global consensus on environmental priorities and answers.

The WTO was becoming a universal trading system with one set of international rules and a binding dispute settlement mechanism. "We need a similar multilateral rules-based system for the environment - a World Environment Organization (WEO) to also be the institutional and legal counterpart to the World Trade Organization," Ruggiero said.

Pakistan's Amb. Munir Akram, commenting on this, wondered whether Ruggiero would also be proposing a World Development Organization in the symposium to follow (17-18 March) on Trade and Development.

It was not clear whether Akram intended it seriously or was making a sarcastic comment on the Ruggiero suggestion.

Speaking later, Indian Ambassador, S. Narayanan, who endorsed much of Akram's remarks and position paper, came out in discouragement of Ruggiero's WEO idea or of a separate WDO.

Underscoring the need for development to permeate every part of the WTO activities, Narayanan said the WTO should in effect function as World Development Organization, and be perceived by developing as a WDO.

As for Ruggiero's call for a separate World Environment Organization, Narayanan pointed out that the UNEP in a way was a world environment organization. Also, he said, it was not reasonable for the environmental community, to expect WTO to arrive at consensus-based conclusion when a consensus on environmental standards eludes countries even in environmental fora.

"It look," he said, "as though some who have failed to achieve their objectives in the relevant environmental fora are hoping to achieve the same objectives in the WTO. It is not possible for the WTO to come up their expectations in this regard nor is it desirable. As pointed out by the Chief of UNEP, too much should not be demanded from the WTO."

In his opening statement Ruggiero spoke of the WTO being an organization to promote greater international openness and cooperation, a system where decisions are taken by consensus, and one that was "transparent" -- giving as an example that the proceedings of the WTO symposium were being broadcast live on the internet!

But this claim too was quickly challenged.

In a comment from the floor, and in a paper circulated to the symposium, Martin Khor of the Third World Network, questioned the WTO's claims of transparency and democratic decision-making. Drawing pointed attention to the non-transparent decision-making among a closed few that was evident to NGOs, media and Ministers at the Singapore Ministerial, and the continuance of the same situation even now, Khor warned that unless this situation was remedied during the preparatory process and the Seattle Ministerial, "the credibility and legitimacy of the WTO system will suffer an even bigger blow."

And the WTO "will suffer the same fate as other institutions and systems that are illegitimate and undemocratic."

In an address to the symposium, the EC Commissioner, Sir Leon Brittan, said sustainable development must be placed at the heart of the WTO decision-making.

He used the occasion to make a further bid for launching a "Millennium Round" with a comprehensive agenda, including any item that anyone wanted. He also made a big pitch for the EC version of "transparency and civil society" at the WTO, arguing that trade was no longer a technical subject that to be discussed only among experts in private meetings, and called for improving transparency through circulation of documents and "more general openness" in WTO processes.

An EC Commission (background note) sent to the media spoke of the need for grater political involvement of WTO countries in decision-making processes, greater publicity for the WTO, greater coordination at national level within and between administrations, and capacity building within developing countries, and how NGOs could contribute to this with their own expertise.

In some infelicitous language, the document added that "NGOs and civil society must also be implicated in the WTO processes" and that NGOs have a contribution on the themes to be addressed at the symposium.

Brittan said in every WTO activity, the Rio Earth Summit principles should be applied, and the competing demands of economic growth, environmental protection and social development reconciled. Trade policy has also to be reconciled with other public policy objectives, including consumer protection. There was also need for a balance between liberal, forward-looking trade policy and need for effective regulatory measures on product safety.

He also called for a framework to ensure compatibility between MEAs and WTO rules, but noted WTO rules did accommodate aims of parties to the MEA and allow trade measures. However, there was a problem relating to application of such trade measures against non-members, and the WTO should resolve this conundrum, so that trade measures taken under MEAs would not be taken to the WTO dispute settlement.

The EC commissioner went on to deal with use of trade restrictions based on process and production methods (PPMs), but said that there should be agreed international standards on such PPMs or use of a particular substance. However, each WTO member could not decide unilaterally that it disapproved of some practices elsewhere and ban imports on that basis. Brittan also advocated labelling of products to inform consumers and enable them to make an informed choice, and linked PPMs to this, and supported voluntary labelling schemes as compatible with GATT rules.

At his press conference when asked to comment on the controversies that have erupted in Netherlands over forest certification and ECO labelling schemes, Brittan seemed to side-step the controversy by arguing that labelling was not a panacea, but argued against focusing on problems, but rather on principles to be applied in order to make progress.

In his speech, the EC Commissioner also favoured precautionary principle, but said that use of the principle to reduce risks to zero would be unjustified. He did not elaborate who could judge the level of risks that a country or society must tolerate or accept for free trade.

He advocated the Seattle ministerial to set an overall guideline for the objectives of the new round, and make sustainability as a mainstream so that it would be addressed in each individual group and for coherence in decision-making between WTO and other international organizations.

At his press conference, he said any issue raised should be put into the agenda for the new round which however should be completed in 2-3 years time. The EC, he said, was ready to begin negotiations on agriculture, but noted that in fact the US support for its own agriculture had increased.

In its statement at the meeting, the US said that interlinkages between issues under negotiations in a new round and environment should be considered throughout the negotiating process.

There should be early consideration of environmental effects. The US also wanted WTO actions on improving public access to WTO documents, for finding ways for greater openness of the WTO dispute settlement system. The WTO should also recognize right of members to achieve high levels of environment protection and consumer safety.

A position paper about developing countries' perspective on trade and environment -- by Pakistan, Honduras and Egypt among others, underscored the Rio principles adopted at the UNCED Summit in 1992, as also the Agenda 21, plan of action adopted to further the principles.

There has been a distinct lack of progress towards goals set at Rio, and even some backtracking from obligations undertaken by developed countries, including improvement of market access for exports of developing countries, transfer of technology and provision of new and additional resources. The developed countries were also retreating from the systemic approach to sustainable development agreed at Rio, and focusing now on unilateral measures and environmental conditionalities attached to trade, investment and development cooperation, Pakistan complained.

The High Level symposium should be an occasion for participants to recommit themselves to the comprehensive approach adopted at Rio including on measures;

* for establishment of a more equitable multilateral trade regime, and addressing the concerns of developing countries on the unbalanced and incomplete implementation of the Uruguay Round Agreements and the asymmetry in benefits as between developed and developing countries. Further trade liberalisation should be in areas of interest to developing countries and must result in improved market access;

* continue current efforts to produce environmental benefits and improve market access, including subsidies by developed countries to fisheries and agricultural sector;

* systematic review of the TRIPs agreement to ensure that it contributes, rather than impede access to and transfer of environmentally sound technologies;

* agreement to abide by WTO rules enabling regulation of imports on basis of product characteristics, but prohibit discrimination on imports based on processes;

* agreement to avoid changes in WTO rules to accommodate concerns about hypothetical conflicts between MEAs and WTO rules.

While it was necessary to promote a more informed public debate on trade and environment issues, the WTO was an intergovernmental organization in which national governments acted for their constituents.

In another position paper, India said there was no conflict between trade and environmental measures, and existing GATT provisions were more than adequate to deal with any conflicts. The fact that out of hundreds of MEAs, none had been challenged at the WTO was proof of this.

"What is objected to is not trade measures taken as a part of a package of measures within the framework of a genuine MEA, but unilateral trade measures taken by individual countries, imposing their environmental values and standards upon other countries, with different values and standards and priorities," the Indian paper said.

But India was "enormously concerned at the evolutionary theory of interpretation adopted by the Appellate Body in interpreting Art. XX of the GATT," an authority vested exclusively in Members and not the appellate body. But India did not believe there was any need for any authoritative interpretation of the provisions of Art. XX (general exceptions provision). India regretted attempts being made by some developed countries to justify unilateral measures for environmental purposes by resorting to Art. XX (g), which deals with protection of human, animal or plant life or health, rather than Art. XX (b) which deals with conservation of exhaustible natural resources. The recourse to XX (g) was because the standards required for XX (b), namely the test of "necessity" for the trade measures, was more difficult to fulfil. This was the reason for developing countries looking with concern and scepticism to moves to further dilute the standards set in Art. XX, the Indian paper argued.

The Indian paper also rejected use of PPMs, and use of eco-labels based on them, particularly voluntary ones issued by non-government groups.

Given the contractual nature of the WTO, embodying legal relationships between sovereign governments, there is no place for NGOs or civil society to play a direct or indirect role in negotiations or dispute settlement processes, India said in its paper. Making information available to civil society through derestriction was a different matter.

The Indian paper also stressed the importance of relations between TRIPs and use of environmentally sound technologies and products (EST&Ps), and called for positive measures to reconcile TRIPS with global environmental objectives. At the national level, transfer and dissemination of EST&Ps, and suggested that at national level transfer could be facilitated by appropriate use of Art 31 of TRIPs through revocation/cancellation of IPRs already granted, subject to judicial review. At the international level, the patent term could be reduced and obligation imposed on owners to sell them on affordable terms to any interested party which has an obligation to adopt such technologies either under national law of another country or international law.

The Indian paper also referred to the conflict between TRIPs and the UN Convention on Biodiversity (CBD). The TRIPs required products patents to be provided for micro-organisms and non-biological and micro-biological processes and for protection of plant varieties.

The CBD, on the other hand, reaffirmed the sovereign right of nation-states over their biological resources, recognized the desirability of sharing equitably benefits arising from use of these resources, as well as traditional knowledge, innovation and practices. The intrinsic linkages between the two agreements need to be explored. While actions could be taken at national level, denial of access to biological/genetic resources was not always feasible. Therefore patent applicants must be obliged to mention origin of their biological or genetic resource and indigenous or traditional knowledge used in bio-technological inventions, and these should be open to full public scrutiny so that countries with possible opposition claims could stake their claims before grant of patents. Inventors should also be obliged to obtain prior informed consent of country or origin. (SUNS4396)

The above article was originally published in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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