SECOND REPORT
The Environmental Audit Committee has agreed to
the following Report:—
WORLD TRADE AND SUSTAINABLE DEVELOPMENT:
AN AGENDA FOR THE SEATTLE SUMMIT
INTRODUCTION
1. A Ministerial meeting of the World Trade Organisation
(WTO) is set to commence on 30 November 1999. At this meeting
members of the WTO will decide on the substance and scope of further
negotiations on international trade in goods and services and
related matters. The choice appears to be between the 'built-in
agenda'[3]
comprising a timetable for further negotiations and reviews agreed
at the conclusion of the last round of trade negotiations—the
Uruguay Round—and what is termed a 'comprehensive round'
looking for substantial further liberalisation in sectors covered
by existing agreements as well as in new areas under consideration
for multilateral rules such as investment, government procurement
and competition policy.[4]
2. We decided to examine the UK and EU position on
a new 'Millennium' round of negotiations at the WTO and the prospects
for sustainable outcomes. This Report is intended to inform the
House in advance of the Seattle summit on the key environmental
and sustainable development issues and to provide a checklist
against which any Ministerial Declaration can be assessed in terms
of its adequacy as a foundation for a sustainable round.[5]
Negotiations at the WTO are likely to be protracted with an ambitious
timetable of only three years being sought by the EU at this stage.
Depending on what is agreed at Seattle, we intend to return to
this topic in due course. In addition to a watching brief it would
appear opportune to assess progress of negotiations in the run
up to any United Nations event marking ten years since its Special
Assembly on Sustainable Development at Rio in 1992—the 'Earth
Summit'.[6]
We consider it important for this work, which will fall in a new
Parliament, to be undertaken by the Committee. We note complementary
inquiries into relevant aspects of any new negotiations by the
International Development Committee (opportunities and dangers
for development)[7]
and the Agriculture Committee (implications for UK agriculture
and EU agricultural policy)[8]
due to commence after the Seattle Summit.
3. One impetus behind this inquiry was our previous
work on the failed OECD negotiations on a multilateral agreement
on investment (MAI)[9]
and our findings that the environmental and developmental considerations
that had been introduced were too little and too late. The Government's
reply to our report on the OECD MAI is appended to this Report.
4. In this initial Report we look at the merits of
a comprehensive round and single-undertaking versus a more cautious
'review, reform and repair' agenda; the issue of environmental
and sustainability assessment and appraisal; the UK and EU's specific
environmental priorities; the proposal to negotiate multilateral
rules on international investment (in the light of the OECD experience);
and issues of openness and accountability at the national level
and at the WTO.
Summary
5. The Committee's principal findings recommendations
are summarised below:
Overall
(a) The case for a comprehensive round has yet to
be made convincingly. The existing 'built-in agenda' appears to:
contain sufficient scope for benefits for all participants; constitute
an already challenging task for negotiations in the time-scale
proposed, particularly for developing countries; and cover the
key areas in terms of sustainable development. A more satisfactory
approach would, in our view, be to address this agenda with a
view to consolidating the achievements of the multilateral trading
system, building in environmental and development considerations,
to achieve real and lasting promotion of development that is sustainable.
(Paragraph 27)
Developing countries
(b) We fail to see from our evidence what has changed
since the Uruguay Round that rules out the danger of another 'stitch-up'
by developed countries as described by the Environment Minister.
(Paragraph 19)
(c) Assistance to build the negotiating capacity
of developing countries to enable the effective participation
at the WTO is as important as their presence at the table. The
scope and progress of negotiations should therefore be linked
in a concrete way to achievements in capacity-building
programmes rather than simply relying on the provision of inputs
to the process. (Paragraph 17)
(d) The Government must apply the relevant advice
from the British Government Panel on Sustainable Development (Fifth
Annual Report) in the forthcoming review of the agreement on Trade-related
Intellectual Property Rights (TRIPs) which is an important issue
for developing countries and which should certainly be on the
agenda agreed at Seattle. (Paragraph 23)
The environment
(e) The overall conclusion of the non-governmental
organisations (NGOs) was that the UK and the EU environmental
agendas contained some fine words and important priorities, if
little evidence of environmental integration across all areas.
But there were grave concerns about the ability of the Commission,
as lead negotiator, to deliver its environmental objectives. The
Department of Trade and Industry assured the Committee that the
Trade and Environment Directorates-General had performed a "double
act" in developing and presenting the EU's position. The
NGOs were concerned however, that this act might not survive through
to the negotiating process and recommended to us that concerned
EU Member States must ensure that adequate environmental expertise
was on hand to boost the Commission's capacity in this regard
throughout the negotiations. We agree with these views. (Paragraph
39).
(f) We regard achieving consensus to negotiate new
WTO rules on the treatment of trade provisions within multilateral
environmental agreements (MEAs) as a high priority for the Seattle
Summit. We recommend that the UK and EU adopt the inclusion of
text to that effect as its bottom line for the environment in
any Ministerial Declaration. This could open the door to focussed
negotiations of more effective MEAs without the need for participants
to have one eye constantly on the free trade implications and
the possibilities of challenge within the WTO—a forum based
on entirely different priorities. (Paragraph 34)
Investment
(g) We remain unconvinced of the need for multilateral
rules for investment and wary of the risks that were identified
for us during our inquiry into the OECD multilateral agreement
on investment (MAI). Witnesses from NGOs pointed to the network
of existing bilateral treaties and also to the UN Commission on
Trade and Development's conclusion that there was no discernible
link between levels of liberalisation and investment flows. (Paragraph
49)
Appraisal
(h) We are concerned that once again environmental
considerations have not been integrated into the development of
'mainstream' policy proposals but left to a later stage in terms
of both preparatory analysis and strategy development. (Paragraph
44)
(i) We believe that new negotiations should do more
than try to take note of lessons from the previous round. It seems
axiomatic that the impacts of the last set of agreements should
be informing the negotiations of the next. This is unlikely to
be accomplished by individual WTO members acting in a piecemeal
way, but needs some explicit agreement within the Organisation,
as well as inclusion in any Declaration intended to shape negotiations.
(Paragraph 45)
Openness and coordination
(j) We urge the Government to press, through the
EU, for continued efforts by the WTO and its members to engage
with other international institutions and civil society in the
debate over the best way to improve the multilateral trading system's
contribution to sustainable development. One proposal we have
heard of merit is for there to be a parliamentary assembly associated
with the Organisation as there is with a number of other multilateral
institutions such as NATO, the OSCE and the Council of Europe.
With respect to engagement with other international bodies, we
regard the establishment of coordination mechanisms between the
WTO and other global economic, development and environmental institutions
to be a priority. (Paragraph 50)
(k) In terms of parliamentary oversight we welcomed
the Government's commitment to providing the House with ministerial
statements before and after the Seattle summit but there was no
commitment to even the possibility of a full debate the House
a chance to express its opinion. In the case of the OECD MAI the
Government said that it had never ruled out the possibility of
a debate in the House "had the right circumstances arisen".
We would like to hear the criteria for the 'right circumstances'
in relation to the Millennium Round. We regret that the House
has been asked to approve the Government's proposals for Seattle,
on the back of taking note of the European Commission's position,
without a full debate in the Chamber and in advance of the promised
ministerial statement. (Paragraph 52)
Inquiry
6. We were grateful for a joint memorandum from the
Department of Trade and Industry (DTI), the Department for the
Environment, Transport and the Regions (DETR) and the Department
for International Development (DfID). We also received memoranda,
and other material, from the Environment Agency and English Nature,
from non-governmental organisations and the business community.
The Committee took evidence from the Trade Minister, Rt Hon Richard
Caborn, MP, the Environment Minister, Rt Hon Michael Meacher,
MP, and officials from the DTI and the DETR. We also heard from
representatives of the World Wide Fund for Nature (WWF UK), the
Royal Society for the Protection of Birds (RSPB), Friends of the
Earth (FoE) and the World Development Movement (WDM).[10]
3 See http://www.wto.org/wto/about/beyond2.htm. Back
4 Communication
from the European Commission, The EU Approach to the WTO Millennium
Round,10297/99. Back
5 See http://www.ictsd.org/html/seattleministerial.htm. Back
6 Efforts
to promote such an event come under the banner of 'Rio +10' or
Earth Summit III (there was a Special Assembly attended by UN
heads of government in July 1997). Back
7 International
Development Committee, Press Notice No. 38, 1998-99, 28 October
1999. Back
8 Agriculture
Committee Press Notice, 1998-99, No. 23, 30 July 1999 Back
9 First
Report, 1998-99, Environmental Audit Committee, Multilateral
Agreement on Investment, HC58. Government Reply is appended
to this Report. Back
10 The
written and oral evidence received is published in a separate
volume: HC 45-II (1999-2000). Back
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