International Trade Daily | By Daniel Pruzin | October 10, 2001
GENEVA--The European Union put forward new proposals Oct. 8 aimed at strengthening provisions in a draft WTO ministerial declaration related to trade and the environment, but the initiative was panned by developing countries as well as key EU trading partners such as the United States and Canada.
The text presented by EU ambassador Carlo Trojan to an informal WTO General Council meeting puts forward two options for addressing trade and the environment in future WTO work: members should either agree to initiate negotiations as part of a new trade round directed at clarifying existing WTO rules on matters relating to the environment; or members should agree to negotiations within the WTO's existing Committee on Trade and Environment (CTE) aimed at increasing "predictability in the multilateral trading system" and ensuring "compatibility between WTO and public policy or market responses to environmental concerns."
The text would replace a section on trade and environment in a draft ministerial declaration issued by WTO General Council chairman Stuart Harbinson Sept. 26. That text merely calls on the CTE to continue its ongoing work with a focus on barriers to trade whose removal would benefit the environment and clarifying the relationship between the multilateral trading system and multilateral environmental agreements.
The draft declaration is being prepared for the WTO's fourth ministerial conference scheduled to take place in Doha, Qatar on Nov. 9-13. The declaration calls for the launch of a new trade round covering issues such as agriculture, services, industrial tariffs, transparency in government procurement, trade facilitation, and possibly investment and competition.
Environment Could Be 'Deal Breaker'
The EU has made it clear that the Harbinson language on the environment is not acceptable. Speaking to reporters Oct. 3, EU Director-General for trade Peter Carl described the environment provisions as a possible "deal breaker" in getting a consensus in Doha on the launch of a new round.
"What we are concerned about in particular is with the fact that we do not see in this text any clear, upfront commitment to address in the future negotiations some of the issues we have been putting forward under the general heading of trade and environment," Carl declared. "We are not alone. The [EU's] position on this is strongly backed up by all other European countries, which make up around 30 members of the WTO, and Japan and Korea."
But resistance to expanding the WTO's environmental agenda is equally strong, especially among developing countries, which see the agenda as opening the door to so-called "green protectionism." Trade officials said that all developing countries speaking at the Oct. 8 General Council meeting opposed the EU's alternative text on the environment and reiterated their opposition to negotiations on the issue.
The EU and its allies "are pretty much isolated on this," a trade diplomat from one of the supporting European countries told BNA. "I think we have to realize we won't get what we want on the environment and that we will have to consider stepping back our ambitions."
The official added that finding compromise language which is politically acceptable to the EU and its opponents will be difficult and that the issue would probably not be settled in advance of the Doha ministerial.
LDCs Spurn 'Sweeteners'
The rejection of the EU text came despite efforts by Brussels to offer sweeteners to developing countries. The proposal for negotiations within the CTE highlights the need to clarify rules on implementing the WTO's TRIPS Agreement in a manner "mutually supportive" of the United Nations' Convention on Biodiversity and to clarify WTO rules on the export of goods which are banned domestically, both issues of importance to the WTO's poorer members.
An Asian ambassador speaking on condition of anonymity said that while other WTO members "recognize that the EU has tremendous political problems" domestically on trade and the environment, the EU has yet to make its case that conflicts exist between trade and environmental rules which need to be resolved through negotiations.
"If you look at WTO rulings, for example on asbestos (where the WTO upheld a French ban on chrysotile asbestos), they are moving the frontiers of WTO rules to accommodate those concerns," the ambassador noted. "This is in itself a revolutionary advance. They are getting through dispute settlement much more than what they would get through negotiations."
"For the EU, it's a political problem," the ambassador added, declaring that the WTO should not start negotiations on the environment to address "social dynamics in Europe."
But the EU's Carl told BNA that the gains made in WTO dispute rulings on clarifying the relationship between trade and the environment need to be consolidated into a formal understanding among members. Carl noted that the dispute rulings are quasi-juridical and that the common law practice of using past rulings as guidance for future decisions as recognized in the United States and United Kingdom is not widely accepted in Europe.
The EU is under strong domestic political pressure to address trade and environment as part of the new round, partly to placate public concerns about issues such as food safety and the use of genetically modified organisms, and partly to placate governments who depend on the support of green coalition partners to stay in power.
U.S. Resistance on Environment
Perhaps the biggest hurdle to EU efforts at getting the environment on the negotiating agenda is resistance from the United States. U.S. officials told the General Council meeting that Washington does not see any case for opening up WTO rules for negotiation and that the EU should first clearly explain where the specific problems lie in the trade and environment nexus.
The United States is particularly opposed to EU demands for a clarification of WTO rules on the use of the "precautionary principle," the idea that WTO member governments should be allowed to impose trade restrictive measures to protect the environment or human health in cases where scientific evidence proves inconclusive for assessing the level of risk. The United States argues that this principle is already recognized under Article 5.7 of the WTO's Agreement on the Application of Sanitary and Phytosanitary Measures, which allows members to impose temporary restrictions pending the outcome of more conclusive studies.
U.S. farm organizations in particular fear the EU wants WTO members to address the "precautionary principle" in order to justify continued restrictions on the import of products containing GMOs under the guise of protecting the environment from GMO "contamination." The American Farm Bureau has already called on the U.S. government to initiate WTO dispute proceedings against proposed new EU rules on the market authorization of GMO foods if Brussels does not ease the restrictions before they enter into force.
Text of the trade and environment proposals is available from BNA PLUS at 800-452-7773 or (202) 452-4323 in Washington, D.C., or email bnaplus@bna.com.
Copyright c 2001 by The Bureau of National Affairs, Inc., Washington D.C.International Trade Daily:
