Developing countries cool to blanket waivers for MEAs

GENEVA - The Committee on Trade and Environment (CTE) of the World Trade Organization discussed on 26 February 1996 the proposals of the European Union and New Zealand to legitimize trade restrictive measures taken by any country in pursuance of a Multilateral Environment Agreement (MEA).

The EU and New Zealand have put forward separate proposals.

The EU proposal is for amending Art XX (General Exceptions article) of the GATT and a separate WTO 'Understanding' (to be decided by the Singapore Ministerial meeting in December) to effectively limit the scope of a WTO Dispute Panel looking into complaints in this area where the trade restricting country claims to be acting in pursuance of an MEA.

In such an event, under the EU proposal, the panel would not go into whether the trade restrictive measure is needed to achieve the environmental objective or whether it is least restrictive, but could look into the complainant's case (with the burden of proof shifted to the complainant) that the action is arbitrary, discriminatory as between two countries similarly situated, and or a hidden protectionist action.

The New Zealand proposal does not involve any amendment to the GATT article, but an Understanding, similar to that of the EU in terms of a dispute settlement panel's jurisdiction. However, the New Zealand proposal would be an Understanding applying across the board to goods, as well as for the agreements on Trade-related Intellectual Property Rights (TRIPs) and the General Agreement on Trade in Services.

The CTE, which is chaired by Ambassador Sanchez Arnau, appears to have had some preliminary views from delegations, and is to discuss the two proposals in detail later this week in informal consultations.

At the meeting, Egypt, Nigeria, Singapore (for the ASEAN), Korea, India and Morocco clearly disfavoured the two proposals, arguing that the existing GATT provisions sufficiently covered the problem and there was no need or justification for a blanket waiver for the MEAS and actions purported to be taken under them.

India, in addition, made the point that there must be very strict criteria governing the definition of MEAs, and only multilateral agreements negotiated under the United Nations auspices or that of its specialized agencies could be considered a genuine MEA.

All the countries expressed their concerns that having such provisions in the WTO rules governing MEAs would pose the danger of focus on environmental protection via trade restrictions. In their view, the emphasis should be on positive measures, and providing wider market access for developing countries and enhancing these opportunities to enable them to have necessary resources that would encourage environmental protection.

Canada also supported the view that the existing WTO provisions were adequate to cover MEAs and any WTO waivers on trade provisions of the MEAs should be on a case-by-case basis.

However, Switzerland and Norway supported the EU proposals.

Norway also expressed reservations on the New Zealand proposals for an Understanding that would be across-the-board. Norway felt that while sufficient work had been done in the CTE on "goods" to permit of changes in rules and the Understanding, this was not the case in other areas.

The United States welcomed the EU and New Zealand papers, but reserved further elaboration to the informal meeting. It however referred to the CITES agreement (on protection of endangered species, which requires members to prohibit trade in such species) as an example of an MEA where trade restrictions were needed for enforcement. A WTO dispute settlement panel, would not have the technical competence to judge whether the trade restrictive provisions were justified or not and the WTO could not "referee" an MEA. - SUNS3708

The above article first appeared in the SUNS of which Chakravarthi Raghavan is the Chief Editor.