APPENDIX 4
Memorandum from the Environment Agency
THE MAIN
POINTS
Free trade must be seen in the overall context
of sustainable development. It is good where it helps further
concern for environment, economy and society. It should not be
an end in itself. In particular the impact on agricultural economics
could have a major effect on the appearance and conservation value
of the countryside.
This negotiating round needs proper environmental
assessment. This can only be done if the Government has already
prepared an environmental impact assessment of the negotiating
position and of possible outcomes to assist in negotiations.
The government must take account of the global
environment. In developing its position the Government needs
to be clear about how WTO negotiators can affect the domestic
environment. Changes in the WTO rules will affect the environment
of other countries, for example by forcing changes in traditional
agricultural patterns, and potentially affecting the welfare of
poorer people in other countries. While this is not the direct
remit of the Environment Agency, it does raise substantial concerns
for sustainable development, in which the Agency has a direct
interest. The UK must be concerned about the impact of free trade
on the environment in other countries, just as it has taken a
lead on global environmental problems such as climate change.
These concerns cannot be dropped simply because these negotiations
are about trade.
The position of environmental regulators
must be protected. A regulatory body, such as the Environment
Agency, must be able to deal with environmental problems and use
sound environmental principles, such as the precautionary principle,
in a way that is not unduly hindered by any agreements reached
in the WTO. Environmental regulation and regulatory principles
can be used in a way that does not damage free trade, and in particular
will not damage trade of a type that can contribute to sustainable
development. The Agency would be concerned if its applications
of these principles were to be judged in a forum, such as the
WTO, which had a presumption against them, or a presumption for
free trade. Therefore these negotiations should run in parallel
with discussions on international environmental governance, so
that the international environment has the same status as the
international economy. Ideally the brief for the WTO would also
include explicit reference to a duty of environmental care.
Environmental payments must be separated
from trade negotiations. The Agency would wish Government
to resist pressures from the WTO negotiators to limit or reduce
those environmental payments to agriculture not linked to production.
Such environmental payments need to be judged on their own merits,
not as inputs to a trade debate.
BACKGROUND
There are a number of drivers within this
next round, which could have impacts on the environment:
— General pressure to move to world
prices: While EU agriculture prices are still a good distance
away from world prices, it is clear that the long term goal of
the WTO is precisely to move them in that direction. Therefore
in the longer term, the Government, and the Agency, may have to
be prepared to live in and regulate in an environment where agricultural
prices were at world level. At present it is not clear what the
implications of this would be. For example whether or not it would
lead to greater intensification in the cultivation of traded crops;
more rapid changes in produce or production techniques, as farms
respond to rapidly changing global prices, or further changes
in the ownership structure of agriculture, as larger corporations
seek to expand and achieve greater economies of scale. Clearly
this should be explored by scenario assessments.
— Imports of agricultural products
may offset domestic production: in certain circumstances, this
may mean substantial changes to land use patterns and therefore
to the UK environment, which may need to be avoided, if the impact
is very severe, or at least the transition may need to be managed.
— Direct pressure to reduce exempt
environmental support payments: Because the EU is already well
on its way to reducing its domestic support for agriculture below
the levels agreed in the last WTO round it does not need to change
its rules on these payments. The Agency believes that the development
of these instruments needs to be done in the context of environmental
policy, and not just as a response to trade negotiations.
— Pressure to reduce non-tariff barriers:
This raises an important issue of principle. Some of these non-tariff
barriers to trade can be associated with human, animal or environmental
welfare:
— For example the UK is considering
whether the issue of farm animal welfare is a reasonable non-tariff
barrier. UK welfare standards tend to be high, raising concerns
about unequal competition for other countries, which have lower
standards. If this position were rejected by the WTO it would
send an unfortunate signal that welfare concerns did not count
in the face of trade liberalisation. Clearly this principle could
be applied in the future to dismissing local environmental concerns,
for example in protecting low-intensity agriculture where there
were environmental reasons for doing so.
— This could also affect the use of
the precautionary principle. The WTO is the main court of arbitration
on its own rules. The WTO tends to have a presumption in favour
of trade, making it very difficult to use the precautionary principle
unless one already has substantial scientific evidence of harm.
Although the WTO seems to be trying to improve its approach, it
nevertheless adds weight to the arguments that where the environment
is an issue in trade disputes there is a need for a higher court
of arbitration to protect the environment.
September 1999
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