This preambular recognition of the right to regulate for environmental and human, animal or plant life or health concerns must be read together with the 2^nd sentence of the Preamble above. It is a paraphrasing of both GATT Article XX(b) and (g) and their common "chapeau" paragraph. It also echoes, to some extent, Article 2.2 of theTBT Agreement, and Article 2 of the SPS Agreement. It also reflects Principle 12 of the 1992 Rio Declaration on Environment and Development, and Paragraph 39.3(d) of Agenda 21.

In short, in the context of the WTO, Members’ regulations to protect human, animal or plant life or health, or to protect the environment, must not be applied in such a way that it violates WTO rules against "arbitrary or unjustifiable trade discrimination between countries where the same conditions prevail, or a disguised restriction on international trade".

This indicates that the focus of the negotiations will be clarifying exactly how existing WTO rules relate -- i.e. interact -- with specific provisions in MEAs that allow Parties thereto to impose certain trade measures in order to achieve that MEA’s objectives.

This implies, first of all, that WTO Members will have to identify the specific provisions in MEAs that provide for trade measures. Among such provisions would be:

• Arts. 4 and 4A of the Montreal Protocol on Ozone-Depleting Substances (in force)
• Art. 3(5) of the UN Framework Convention on Climate Change (in force)
• Art. 2(3) of the Kyoto Protocol (not yet in force)
• All of the provisions of the Convention on International Trade in Endangered Species, but in particular Art. XIV(1) and (2) thereof (in force)
• Arts. 4(5) and 5 to 10 of the Basel Convention on Trade in Hazardous Substances (in force)
• Art. 3 of the Persistent Organic Pollutants Convention (not yet in force)
• Art. 2(4) of the Cartegena Protocol on Biosafety (not yet in force)

The fact that these negotiations will effectively interpret the limits to which obligations under MEAs can or cannot adversely impact WTO obligations means that these negotiations effectively allows the WTO to determine the extent to which WTO Members that are Parties to the MEAs above can carry out their obligations under those MEAs.

Given that most MEA Secretariats do not have regular nor ad hoc observer status in the WTO, it is highly likely that the WTO negotiations relating to their respective MEAs will not benefit from any input or effective participation from MEA Secretariats.

This limits and focuses the scope of the negotiations on the relationship between WTO rules and trade provisions in MEAs specifically to the issue of how existing WTO rules should be applied vis-à-vis MEA trade provisions by WTO Members who are also Parties to the specific MEA whose trade provisions are the subject of negotiations. This means that WTO Members are supposed to negotiate rules that will determine the boundaries or limits of the use of MEA trade provisions.

It most likely will not result in any amendments to the WTO Agreement or its annexed trade agreements, not only because of the requirement in the 2^nd subparagraph of Para 32 that the results of the negotiations should not add to nor diminish existing WTO rights and obligations, but also because the process for amendments under Article X of the WTO Agreement makes it virtually impossible to do so. On the other hand, amendment of MEAs are also subject to their own amendment processes (i.e. Art. 29 of the CBD, Art. 15 of the UNFCCC, etc.), such that any proposals for their amendment made by WTO Members who are also Parties thereto under these WTO negotiations will have to be submitted to the other Parties of that MEA for appropriate action under that MEA's amendment rules.

However, in view of the mandate in the 2^nd subparagraph of Para 32 that the outcome of these negotiations must not add to nor diminish existing WTO rights and obligations, it would seem that such negotiations will have to be conducted with a view towards ensuring that the use by a WTO Member which is also a Party to an MEA of that MEA’s trade provisions in compliance will not violate WTO rules.

This effectively means MEA trade provisions face the prospect of becoming effectively subordinate to WTO rules, when applied by WTO Members who are Parties to such MEAs, through these negotiations even if, in many cases, MEA trade provisions provide for completely separate and special (i.e. lex specialis) legal trade regimes for specific subjects as would take these subjects out of the scope and coverage of WTO rules, and even if those MEAs will not be formally amended.

In short, the outcome of the negotiations in this regard will most likely result in new rules, set by the WTO, that will ensure that WTO Members who are also Parties to such MEAs interpret and apply such MEA trade provisions in ways that will ensure that their use will not violate WTO rules. This means that WTO Members who are also Parties to such MEAs face the possibility that they will not be able to fully comply with their MEA obligations through the use of trade measures authorized under such MEAs as they are Party to in the event that the use and application of such MEA-authorized trade measures will lead to a violation of WTO rules.

This sentence reinforces the previous sentence of this subparagraph. This indicates that the results of the negotiations will be applicable only to WTO Members who are also Parties to the MEA in question. This provides a clear disincentive for WTO Members who are currently non-Parties to MEAs from becoming such MEA Parties, or even from participating in the mandated negotiations on this subject.

The results of the negotiations will effectively impose a new set of rules that will be applicable only to those WTO Members who are also MEA Parties but not to the others. Hence, WTO Members who are currently not Parties to MEAs, and who wish to prioritize their trade liberalization objectives over sustainable development and environmental concerns, would most likely refrain from joining MEAs. The corollary of this is that MEA Parties who are not WTO Members will also not be bound by any new rules that WTO Members who are also MEA Parties may agree to within these WTO negotiations to govern the application of WTO rules to their use of MEA trade measures.

There are currently two (2) types of observers in the WTO: (1) "regular observers" -- those intergovernmental organizations who have been granted the privilege to observe all WTO meetings (including its councils and committees); and (2) "ad hoc observers" -- those intergovernmental organizations who have been granted the privilege to be invited and to observe WTO meetings (General Council, other councils, or committees) only in those specific instances in which the agenda of such meetings contain items of interest to them.

The fact that negotiations on the criteria for the granting of observer status for MEA Secretariats have been mandated by Para 31(ii) means that:

1. the earliest that MEA Secretariats that currently do not have regular observer status with the WTO can expect to gain such regular observer status will be after the conclusion of the single undertaking negotiations contemplated by the Doha Work Program ... i.e. after 1 January 2005;
2. MEA-related negotiations and discussions in the WTO will take place most likely without the input and participation of the relevant MEA Secretariats. This gives rise to the great possibility that the environmental objectives of trade-related MEA provisions will be negated by any agreement among WTO Members as a result of the mandated negotiations under Para 31(i) that such MEA provisions will not affect WTO rules. This also means that the WTO, as an institution, is entering into negotiations into an area in which neither its Secretariat nor the delegates of its Members have much capacity nor knowledge in, absent effective input and participation from MEA Secretariats;
3. The grant of observer status for MEA Secretariats with the WTO will not be automatic but rather dependent on compliance by such Secretariats with the criteria finally agreed upon by WTO Members for the grant of such observer status. This effectively provides WTO Members (who are not Parties to a particular MEA or who may be opposed to the participation of such MEA Secretariat in WTO deliberations) to permanently bar such MEA Secretariats from gaining WTO regular observer status by the simple expedient of pushing for restrictive criteria or restrictive conditions in the application of such criteria.

The negotiations mandated under Para 31(ii) above should be read in the light of Article V.1 of the WTO Agreement (the Marrakesh Agreement establishing the WTO). It requires the General Council to "make appropriate arrangements for effective cooperation with other intergovernmental organizations that have responsibilities related to those of the WTO." Read in this light, this phrase of Para 31(ii) can be taken to mean in two (2) ways:

1. that only those MEA Secretariats whose MEAs have specific trade-related provisions fall within the classification of "intergovernmental organizations that have responsibilities related to those of the WTO" -- i.e. the regulation of trade in some things -- and hence may be granted regular observer status. This is a restrictive interpretation and should not be adopted; or
2. given the Marrakesh Agreement’s first preamble as well as the Doha Ministerial Declaration’s Para 6, both reaffirming the objective of sustainable development for the WTO, since all MEAs (and by connection their respective Secretariats) likewise can be said to promote the objective of sustainable development, all MEAs therefore may be considered as "intergovernmental organizations that have responsibilities related to those of the WTO" -- i.e. the promotion of the objective of sustainable development in their areas of expertise -- and hence should be granted observer status in the WTO. This interpretation would be more in line with the objective of sustainable development to which all WTO Members subscribed and hence should be adopted.

Trade liberalization negotiations on environmental goods and services have been pushed in the WTO as a "win-win" situation for trade and environment concerns, as well as for both developed and developing countries. Currently though, the principal producers and consumers of commercial environmental goods and services are developed countries. The lowering of trade barriers to environmental goods and services is supposed to both enhance the free flow of goods and services globally and promote environmental protection. Furthermore, both the exporter (primarily developed countries) and importer (primarily developing countries) of environmental goods and services benefit -- the former due to increased export receipts and the latter due to improved environmental conditions as a result of the use of the imported environmental goods and services.

Para 31(iii) contains the following elements: (a) the objective of trade liberalization through the reduction or elimination of trade barriers; (b) such reduction or elimination will be targeted at both tariff and non-tariff measures; and (c) the trade measures covered are those that apply to "environment goods and services." The key concepts here are: (a) what constitutes tariff and non-tariff barriers; and (b) what constitutes "environmental goods" and "environmental services".

The mandated negotiations are to be targeted at both tariff and non-tariff barriers. This indicates that the scope of these negotiations will not simply be tariff liberalization, but will also involve non-tariff regulations -- i.e. national environmental standards and regulations, product quality standards, -- that, when applied, may facilitate or limit the entry of imported goods and services into the domestic market.

The mandated negotiations will refer to trade measures relating to "environmental goods" and "environmental services." These are terms that have not been defined anywhere in the Doha Ministerial Declaration. WTO Members must first clearly define what constitutes both "environmental goods" and "environmental services" before embarking on the trade liberalization negotiations for them mandated under Para 31(iii). In general, "environmental goods" would fall under the GATT 1994’s rules on trade in goods, while "environmental services" would fall under the rules of the GATS.

"Environmental goods", as such, do not have a settled definition in the context of the WTO in GATT 1994. They are not treated as a different class of goods subject to different rules under the GATT 1994. Goods that may be used for environmental purposes or to carry out environmental services generally have other "non-environmental" uses. One possible way in which products could be identified as "environmental goods" under Para 31(iii) in order to separate them from the broad mass of "non-agricultural products" under Para 16 for purposes of the mandated negotiations under Para 31(iii) is to link them to the concept of "environmental services" such that a key part of the definition of "environmental goods" would be their specific relevance to the provision of environmental services. The WTO Secretariat has noted that the OECD has attempted to come up with a definition of "environmental goods" (see WT/CTE/W/67/Add.1).

Unlike "environmental goods," the concept of "environmental services" in the context of the GATS is now fairly well defined. The services that are currently classified as "environmental services" for purposes of the GATS under GATT Doc. MTN.W/120 of 10 July 1991 (based on the UN’s Provisional Central Product Classification [CPCprov] system) include only the following:

• Sewage and tank treatment services (but not collection, distribution and purification of water services)
• Refuse disposal services (focused on hazardous and non-hazardous waste collection, treatment and disposal services by dumping, incineration, storage, landfill, composting, etc. This does not include wholesale trade services of waste, scrap and other materials for recycling)
• Sanitation and similar services (focused on outdoor sweeping, ice and snow removal, runway sweeping, beach cleaning, drain unblocking services)
• Other environmental services (such as emission monitoring and control services of pollutants into the air, whether from mobile or stationary sources, mostly caused by the burning of fossil fuels. Concentration monitoring, control and reduction services of pollutants in ambient air, especially in urban areas; noise pollution monitoring, control and abatement services -- i.e. traffic-related noise abatement services in urban areas; nature and landscape protection services -- i.e. ecological system protection services, e.g. of lakes, coastlines and coastal waters, dry land, etc., including their respective fauna, flora and habitats, services consisting in studies on the interrelationship between environment and climate (e.g. greenhouse effect), including natural disaster assessment and abatement services, and landscape protection services not elsewhere classified (but not forest damage assessment and abatement services); and other environmental protection services such as acid rain monitoring, control and damage assessment services.

The core services in this sector are thus end-of-pipe disposal services, not environmental services that provide prevention or remediation of environmental damage.

Only 37 WTO Members (of which 16 are developing or least developed and 6 are economies in transition while the rest are developed countries) have made specific GATS commitments -- with varying levels of exclusions from coverage and limitations on market access and national treatment -- in one or more environmental services class. In addition to the 37 WTO Members above, the EC has also made commitments in environmental services. However, several developed country WTO Members have already put several proposals on the table for the on-going GATS negotiations with respect to environmental services.

The US, Australia, EC, Switzerland, and Canada have all proposed the "clustering" the core environmental services above with other services (such as professional, research and development, consultancy, and construction services) related to the provision of the core environmental services. The EU has proposed the inclusion of, among others, water services for human use and wastewater management as environmental services. Switzerland also proposed, among others, wastewater management as an environmental service. No proposals on environmental services have been tabled by developing or least developed country WTO Members.

Although the current developed country negotiating proposals suggest that services involving the prevention and remediation of pollution might be included in new environmental services negotiations, the dominant services in this sector remain end-of-pipe operations. The likely outcome of expanded commitments thus is most likely to lead to expansion of multinational operations in such environmentally harmful activities as waste incineration. Such commitments may also lessen the ability of the host country to develop its own technologies in ways that benefit the country’s environment. Furthermore, it can lead to developing countries committing themselves, inadvertently or not, to becoming recipients of waste for disposal from developed countries.

The EU environmental services proposal also includes a major new area to be subject to GATS disciplines -- water services. Water supply is rapidly becoming a privatized sector, with large multinational companies increasingly collecting, extracting and distributing bulk and retail water. Estimates place the worldwide water and wastewater industry at between US$300 and $800 billion per year. The EU proposal would expand the access of these water supply corporations by bringing water collection, purification and distribution under GATS disciplines.

Given increasing water scarcity in many countries, both in developing and developed countries, the inclusion of water collection and distribution services in particular raises troubling concerns. Market access commitments, which prohibit quantitative restrictions, could limit the right to governments to restrict the quantities of water collected from lakes, rivers and groundwater sources by private service operators. The resulting increased pressure on water sources could lead to sustained environmental damage. In addition, the lack of clarity surrounding the GATS rules on public provision of services means that local governments may be required to open their water collection and distribution systems to private firms. For instance, if some localities within a country have privatized their water services systems, other localities may be required to permit private water operators to enter their local market. Given the restraints that market access commitments could pose for effective regulation of water extraction, increased private service provision could pose significant environmental problems.

The possible environmental impacts of trade liberalization in environmental services aside, the question as to what is the relationship of the mandated trade liberalization negotiations for "environmental goods" under Para 31(iii) with the mandated trade liberalization negotiations for non-agricultural products under Para 16 of the Doha Ministerial Declaration must also be asked. In the same manner, the relationship between the mandated negotiations for "environmental services" under Para 31(iii) and the on-going GATS negotiations must likewise be clarified.

This phrase clearly lays down the limits beyond which both the CTE’s work program as well as the trade and environment-mandated negotiations cannot go. It indicates that both the CTE’s work program and the trade and environment negotiations must take place solely within the context of existing WTO rules and are not expected to result in any changes to the existing rights or obligations of WTO Members under WTO rules.

Furthermore, the mandated trade and environment negotiations must take into account the needs of developing and least-developed countries -- meaning that these negotiations must also be sensitive to the perspectives of developing and least-developed countries relating to the use of trade measures for environmental objectives. This implies that both the CTE’s work program and the mandated trade and environment negotiations must address the concerns of developing and least-developed countries that environmental measures must not be used, overtly or in a disguised manner, for trade-protectionist purposes.

In particular, the specific reference to the SPS Agreement indicates that the mandated trade and environment negotiations must not result in any changes to such agreement. This implies that the requirements laid down by the SPS Agreement for a valid application of an SPS measure for environmental or health purposes should not be changed or amended as a result of the negotiations. This effectively means that the requirement for, among others, a risk assessment to be conducted, using scientific and objective criteria and data, prior to the imposition of an SPS measure for environmental or health purposes must not be deleted.