Select Committee on Environmental Audit Second Report


The Environmental Audit Committee has agreed to the following Report:—




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.


5. The Committee's principal findings recommendations are summarised below:


(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)


(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)


(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)


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 Back

4  Communication from the European Commission, The EU Approach to the WTO Millennium Round,10297/99.  Back

5  See 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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