UK AND EU ENVIRONMENTAL PRIORITIES
28. The European Commission's communication on the
Round states admirably that "a central benchmark of the New
Round should be the WTO's overall objective of sustainable development.
Trade and environment policies should play a mutually supportive
role in favour of sustainable development."
However, by the time the document comes to defining the overall
objective the language is significantly weaker, describing a desirable
outcome "where environmentally friendly consequences can
be identified in the relevant parts of the final package."
We asked Mr Meacher whether this formulation was a recipe for
a 'greenwash'. He replied "I hope not".
Witnesses from the NGOs were concerned that there was no attempt
to define and seek a "net gain" for the environment
and they were interested to know the Commission's definition of
the 'relevant parts'.
29. The specific environmental items for the Seattle
agenda sought by the UK and WTO comprise principally the clarification
of the relationship between WTO rules and:
- trade measures taken in pursuance of multilateral
environmental agreements (MEAs);
- non-product related process and production methods
requirements, in particular, eco-labelling schemes; and
- core environmental principles, in particular the
Multilateral environmental agreements (MEAs)
30. The Government identifies a lack of full certainty
about the relationship between MEAs and WTO rules which may have
the effect of inhibiting or 'chilling' the development and application
of trade measures in MEAs although there has never been a challenge
to an existing MEA in the WTO. The Government's position is clear
that there should be no hierarchy between MEAs and WTO rules but
that they should be in harmony.
Witnesses all agreed that the WTO should not be put in the position
of making judgements about environmental issues because that is
not its competence.
However, as the situation currently stands, the validity of trade
measures implemented under an MEA would, if challenged, be adjudicated
by a WTO dispute panel of trade experts. And, no matter how open
the panel was to environmental inputs from NGOs, or others, acting
as amicus curiae, such a panel could only rule on the basis
of international trade law and WTO disciplines having no other
31. Mr Meacher described the relationship between
MEAs and the WTO as "fraught". He told us that the classic
example was the breakdown in negotiations on the Biosafety Protocol
to the UN Convention on Biological Diversity. He said that a key
conflict was between the 'Miami Group' of grain exporters who
wanted the Protocol to be subordinated to WTO rules and others
including the EU whose position "was very clear, and I am
absolutely convinced it was correct, namely that the Biosafety
Protocol, and other MEAs, should be on a par with the WTO system,
that neither should dominate or override the other and both have
their appropriate place."
32. There appear to be a number options for resolving
the potential conflict between MEAs and WTO rules which include:
- amending Article XX of the General Agreement on
Tariffs and Trade (the GATT) by adding trade measures in pursuance
of an MEA under its list of permitted exceptions (where the environment
- an agreed interpretation of Article XX presuming
MEA trade measures to fall under the environmental exemption already
- a voluntary political declaration between WTO members
not to take action against each other in the WTO pursuant to actions
implemented under an MEA; and
- a separate WTO agreement on MEAs exempting related
trade measures from WTO challenge.
We note that the Environment, Transport and Regional
Affairs Committee reported on MEAs last Session including conclusions
on the relationship between MEAs and WTO rules. That Committee
preferred a separate WTO agreement and but principally it urged
the Government to make up its mind and set about gathering international
support for whichever option it chose.
33. Mr Duncan Brack, Royal Institute of International
Affairs, analyses the options for achieving a resolution to this
problem concluding that a new agreement is the most certain and
practicable route creating harmony between the two legal systems.
He wrote that the biggest danger in this debate was a lack of
political impetus arising from perceptions that no action is required
due to: the absence of trade provisions from most MEAs; the absence
of a relevant dispute within the WTO; and evidence of some sensitivity
to environmental concerns in recent WTO Dispute Panel and Appellate
Body findings. He described this as a "profound mistake"
in view of the growth of evidence of global environmental degradation
and the consequent need for global solutions.
Mr Brack, the NGOs and the Environment Minister all pointed to
cases where arguments of WTO-incompatibility had been used to
retard MEA development.
The recent WTO special study on trade and the environment recommended
the further development of multilateral efforts protect the environment
and offered an insight into why the WTO has become such a focal
point for environmental disputes by contrasting the relative weakness
of international governance and enforcement on environmental issues
with the WTO's integrated dispute settlement system backed up
by the threat of trade sanctions.
34. 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 WTOa forum based
on entirely different priorities.
Non-product related process and production methods
35. PPMs refer to the processes and conditions in
which a product is manufactured rather than the characteristics
of the product itself. WTO rules do not allow national policy
measures which discriminate on the basis of PPMs (other than products
made using slave labour). This is in line with EC rules on government
procurement on which we have commented in other reports.
However, PPMs are relevant to the encouragement of sustainable
consumption and the production of goods that have lower environmental
impacts over their life-cycle. The Government states that it fully
supports the development of labelling schemes which inform consumers
about the wider impacts of the goods they consume.
Mr Meacher told us that he thought that there was another opportunity
for a win-win solution if the development of eco-labelling schemes
that open markets for sustainably-produced goods from developing
countries, particularly forestry products and tropical fruit.
However, he identified this area as one where accusations by developing
countries of developed countries raising non-tariff trade barriers
Core environmental principles
The precautionary principle
36. The Government states that WTO rules do not prevent
measures being taken on the precautionary principle but that its
application is limited to measures taken under the Agreement on
the Application of Sanitary and Phytosanitary Measures (SPS) for
human, animal and plant life and health. The Government is seeking
an incorporation of the principle in relation to wider environmental
concerns. The Government wants to ensure that WTO rules do not
inhibit appropriate precautionary action being taken, based on
objective assessments of the risks, costs and benefits involved.
37. The RSPB pointed out what they saw as a contradiction
in the Government's evidence in that, while Ministers told us
that the precautionary principle was incorporated into WTO rules,
Mr Jeff Rooker, MP, Deputy Minister, Ministry of Agriculture,
Fisheries and Food (MAFF) had said that a moratorium on the import
of GMOs was impossible because of the potential for challenge
under WTO rules.
We put this to Mr Meacher who responded: "I do agree with
that I think the precautionary principle, whilst it is there,
is not significantly reflected in a number of other key and controversial
areas, that is absolutely right. Getting agreement on that is
one of our core objectives."
WWF also criticised the reliance on 'sound science' in the current
formulation of the principle in WTO disciplines. Mr Mabey pointed
to the growing body of respectable academic work on decision-theory
which indicates that scientific evidence is often an inadequate
basis for policy-making and that something needs to bridge the
gap between scientists and politicians to create rules and methods
for decision-making which can gather public confidence in the
face of different levels and sorts of risk, uncertainty and ignorance.
Other environmental principles
38. The Government and the EU have focussed on the
precautionary principle but Mr Mabey identified prior informed
consent (PIC) and the related principle the polluter pays
as two further principles that should inform the whole negotiations.
PIC requires the exporter of certain products, deemed to be hazardous
or to involve some kind of risk, to secure the agreement of the
importing country and to provide information on the product involved.
This principle was another sticking point in the negotiation of
the Biosafety Protocol where the grain exporting countries did
not accept the imposition of what they saw as onerous reporting
requirements in relation to exports of Live Modified Organisms
(LMOs (equivalent to GMOs)). NGOs said that the principle of ecological
limits should be set by MEAs but respected by the WTO which came
back to the priority of clarifying the respective jurisdictions
of MEAs and WTO rules.
39. The overall conclusion of the NGOs was that the
UK and EU agendas contained some fine words on the environment,
if little evidence of the need to integrate environmental considerations
across all areas. However, there were grave concerns about the
ability of the Commission, as lead negotiator, to deliver its
Mr Bridge, DTI, assured the Committee that the Trade and Environment
Directorates General had performed a 'double act' in developing
and presenting the EU's position.
However, the NGOs were concerned that this act might not survive
throughout the negotiating process and recommended to us that
concerned Member States must ensure that adequate environmental
expertise was on hand from a range of sources including both Member
States and NGOs to boost the Commission's capacity in this regard
throughout the negotiations.
We agree with these views. Mr Mabey concluded that "on
the environment specifically, although the EU has a lot of nice
words on paper, we do not think it is prepared to achieve that
at Seattle or beyond Seattle at the moment. We do not see any
signs that it is preparing to prepare to achieve its shopping
55 Commission communication, p.16 Back
56 Ibid Back
57 Q144 Back
p. 3 Back
43 and 166 Back
p. 111, paragraph 2.3 Back
61 Q166 Back
Appendix 6 Back
Report, HC307-I, 1998-99, paragraph 57 Back
p. 113 Back
Q166, ev. pp 110 and 18 Back
Study No. 4: Trade and Environment, October 1999, WTO Back
Report from the Committee, Greening Government Initiative,
Session 1997-98, HC517-I, paragraph 135 Back
p. 3 Back
69 Q172 Back
p. 3, paragraph 15 Back
p. 31 Back
72 Q174 Back
74 Q95 Back
75 Ibid Back
76 Q56 Back
77 Q33 Back
p. 21 Back
79 Q56 Back