Memorandum submitted by WWF UK
THE FAILURE OF THE FIFTH WTO MINISTERIAL
MEETING—AN OPPORTUNITY FOR SUSTAINABLE DEVELOPMENT
SUMMARY
A new and narrower focus for WTO negotiations
is long overdue. Since the early rounds of the GATT, when negotiations
focused on tariff and quota reform, the purview of the WTO has
expanded dramatically. We should now reflect on where this expansion
is leading, what its implications are for the contribution of
the WTO to the pursuit of sustainable development, and what this
implies for other international agencies. The WTO is not the appropriate
forum for regulating many aspects of issues central to sustainable
development. Whilst placing sustainable development at its core,
the WTO must recognise the need for other organisations to operate
fully within their own areas of expertise.
WWF views the events in Cancún as presenting
an opportunity. With the right political will and vision, the
British Government could work with the European Commission to
begin to put sustainable development at the heart of international
policy making.
1. WWF'S WORK
ON INTERNATIONAL
TRADE
1.1 WWF has been working on international
trade policy and its implications for sustainable development
for more than a decade. With dedicated staff working on trade
policy issues in both developed and developing countries, it is
well placed to comment on these implications from a global perspective.
1.2 WWF's work on international trade has
focussed particularly on the WTO, and the organisation has engaged
on the trade and environment debate in Geneva longer than any
other civil society organisation.
1.3 WWF followed the process leading up
to the Fifth WTO Ministerial Meeting very closely, particularly
in its offices in Brussels, Geneva and London.
2. THE CHALLENGE
OF SUSTAINABLE
DEVELOPMENT
2.1 Although our understanding of the serious
environmental problems with which we are faced is constantly improving—and
with this, an understanding of how to address these problems—the
political will and ability to act seems to be receding. In recent
years we have seen a litany of international conferences on sustainable
development—Stockholm in 1972, Rio in 1992 and Johannesburg
in 2002. All recognise the urgent need for change. All bemoan
its absence. Indeed, the European Commission has itself recognised
that:
"Since the Rio Conference in 1992, many
new initiatives have emerged to address specific elements of sustainable
development, but overall progress has been slow. A new impetus
is thus required in order to tackle, in a more comprehensive and
effective way, the many remaining challenges, as well as new challenges
arising from globalisation."[80]
2.2 The UNEP Global Environment Outlook
3 looks ahead to 2032 and a world shaped by the current "markets
first" economic orthodoxy, based on the "values and
expectations prevailing in today's industrialised countries".
The report foresees a world where "social stresses threaten
socio-economic sustainability as persistent poverty and growing
inequality, exacerbated by environmental degradation, undermine
social cohesion, spur migration and weaken international security".
2.3 The fact that our economic institutions
have delivered such significant—albeit unequal—prosperity
begins to explain why so little has been done to address the sustainability
challenges that we face. It helps us to understand why many of
today's decision-makers still struggle even to discuss the impacts
that current economic development patterns have on the environment,
and the implications of these for future generations—let
alone act to address these problems.
3. TRADE POLICY
AS A
COMPONENT IN
GOVERNANCE FOR
SUSTAINABLE DEVELOPMENT
3.1 At the High Level Round Table on Trade
and Environment in Cozumel, on 9 September this year, the UK Secretary
of State for Environment, Margaret Beckett commented:
"We have a responsibility and a duty to
put sustainable development at the heart of everything we do.
Trade, development and environment must go hand in hand. Environmental
concerns must not be an afterthought in trade discussion—they
should be integrated from the beginning."
3.2 If international governance frameworks
are to operate to promote sustainable development, then these
must be capable of striking a balance. Macroeconomic policy must
address immediate economic needs, whilst ensuring that these are
not provided through the irreversible depletion of natural resources
or degradation of the global environment in a way that will threaten
the welfare of future generations. This, too, is something that
the European Commission has recognised:
"To be sustainable, development must strike
a balance between the economic, social and environmental objectives
of society, in order to maximise well-being in the present, without
compromising the ability of future generations to meet their needs."[81]
3.3 The WTO is designed to promote the liberalization
of trade in goods and services. But its work-programme extends
into many other areas. This frustrates attempts to use other,
more appropriate institutions to address many issues which are
central to the sustainability debate, but peripheral to the areas
of core WTO competence.
3.4 This frustration was experienced directly
throughout the World Summit on Sustainable Development process,
culminating in the Johannesburg Summit last year. This failed
manifestly to begin to strike the balance which the Commission's
Communication (cited above) recognized as so essential. The "trade
and globalization" chapter of the Draft Johannesburg Plan
of Implementation was of central importance to the negotiations,
and yet there was a point-blank refusal to negotiate on issues
which might—however marginally—be seen to impinge
on the WTO work-programme. This led to the breakdown of talks
in the Preparatory Meeting in Bali, and the rejection of the corresponding
elements of the text in Johannesburg as "abysmal" by
a coalition of major NGOs.[82]
3.5 Romano Prodi noted in addressing the
European Parliament in 2001 that we should ensure "all policies
have sustainable development as their core concern", but
he recognized too that "policymaking will often mean reconciling
divergent interests and, in certain cases, achieving trade-offs
between policy-sectors".[83]
The international system must create a framework that can make
sure that synergies are captured and tensions relieved between
trade policy and policies directed at sustainable development.
3.6 The WTO, with its focus on liberalisation
as an end in itself, is manifestly the wrong forum for attempting
to achieve the trade-offs of which Romano Prodi speaks. Nor will
these concerns be reconciled in the interests of sustainable development
whilst the WTO continues to address a range of issues at the interface
of trade and environment—it simply doesn't have the expertise.
Rather, we need a structure where those institutions which are
expert in sustainable development set targets and define the role
of the WTO in contributing to this. The WTO must recognize the
limits of its competence, and scope must be created for other
institutions to negotiate solutions to problems that are now seen
as being the preserve of the WTO.
4. THE FAILURE
OF THE
CANCÚN MEETING,
AND ITS
IMPLICATIONS FOR
THE MULTILATERAL
RULES-BASED
TRADING SYSTEM
4.1 The precise reasons for the failure
of the Cancún meeting are far from clear. What is clear,
however, is that one important contributory factor was the insistence
of some WTO Members—both in the run up to Cancún,
and over the course of the Ministerial itself—that the WTO
agenda should be expanded to include a range of so-called "Singapore
Issues".
4.2 A new and narrower focus for WTO negotiations
is long overdue. Since the early rounds of the GATT, when negotiations
focused on tariff and quota reform, the purview of the WTO has
expanded dramatically. We should now reflect on where this expansion
is leading, and what its implications are for the contribution
of the WTO to the pursuit of sustainable development.
4.3 WWF believes that it is important that
international trade is based on a multilateral rules-based system.
The response of the British Government to events in Cancún
may be key in determining whether the opportunities with which
we are now presented are to be used to promote a fairer and more
sustainable multilateral trading system, or whether they augur
a descent into a free-for-all scramble for bilateral trade deals.
They also provide an opportunity for reviewing the role of the
WTO in upholding and developing this system.
4.4 Some have responded to the failure of
talks in Cancún by threatening retreat to the pursuit of
their trading relationships on a bilateral basis. The US Trade
Representative, Robert Zoellick has said that, "as WTO Members
ponder the future, the US will not wait: we will move towards
free trade with can-do countries".[84]
There have been equivocal signals from Brussels as to whether
or not the failure of the Cancún meeting will lead the
European Commission to place increased emphasis on bilateral trade
relationships.[85]
This response is to be resisted. We note, in this respect, that
the Secretary of State for Trade and Industry, has underscored
that the multilateral system should be the cornerstone for world
trade rules.
4.5 The success of the Doha round is now
clearly contingent upon a focus on a far narrower agenda. The
European Commission's blithe pursuit of the launch of negotiations
on the Singapore Issues must now be abandoned. To continue to
press any of these issues whilst claiming that these are in the
best interests of developing countries would be at best paternalistic,
and at worst duplicitous. If there is one lesson to be learnt
from Cancún, it is surely that WTO Members—the EU
in particular—must moderate their appetite for further expanding
the WTO agenda. This is something that many developing countries
themselves have pointed out, both before and after Cancún.
Celso Amorim, Brazil's foreign minister has commented that "with
the introduction of the Singapore agenda, the Doha round became
like an overloaded plane". Re-focussing the WTO on its core
business—desisting from attempts to overload the agenda
with "Singapore issues" or trade and environment issues
will resonate with developing country concerns.
4.6 Whilst there seems to be widespread
acceptance that the pursuit of agreements on investment and competition
are now off the EU's agenda, this belated concession to the long-standing
demands of developing countries should also be extended to trade
facilitation and transparency in government procurement.
4.7 The emergence of a self-confident alliance
of developing countries—the G20+—within the WTO is
a positive development, and one which presents new opportunities
for working with developing countries to forge a more sustainable
international trading regime.
5. SUSTAINABLE
DEVELOPMENT CONCERNS
IN THE
WTO
5.1 The EU is the main demandeur for
the negotiation of sustainable development concerns within the
WTO, and considerable resistance is encountered in the course
of trying to develop this position within the WTO.
5.2 The reasons for this resistance are
multifold. It springs in part from a systemic opposition on the
part of developing countries to further expansion of the WTO agenda
to address issues which they have neither the appetite nor resources
to negotiate. It is also attributable to a concern that the EU's
pursuit of an environment agenda within the WTO is essentially
for protectionist ends. This concern is expressed by many developing
countries.
5.3 These problems are compounded by the
fact that developing countries themselves—although frequently
demandeurs for robust provisions in multilateral environment
agreements—do not have a proactive sustainable development
agenda in the WTO. Rather they may be co-opted to the position
of some developed countries which view EU environmental concerns
as being narrowly protectionist.[86]
6. THE SHAPE
OF WTO REFORM
6.1 Although there is no necessary
reason why it should be the case, there are instances where trade
liberalisation and the pursuit of sustainable development coincide.
The reform of some agricultural and fishing subsidies provides
an example. Such policies—once identified through use of
sustainability impact assessments[87]—should
be pursued through the WTO. It is here that the conjunction between
the dual aims of the WTO, as identified in the Marrakesh Agreement
establishing the Organisation, are achieved.[88]
6.2 Equally, there are many instances where
the pursuit of liberalisation policies exacerbates environmental
problems, fuelling global inequalities and irreversible natural
resource loss, and undermining the long-term prospects of developed
and developing countries alike. Indeed, this is recognised by
the Commission: "Globalisation involves costs as well as
benefits. Increased global economic activity can result in negative
pressures on the environment and in risks for social cohesion
if it goes uncontrolled."[89]
6.3 The WTO is also ill-suited to the further
development of such measures—or even to safeguard the legitimacy
of those which have already been internationally agreed. Indeed,
the WTO has as yet failed to resolve the tensions between its
own set of rules—focussed narrowly on promoting liberalisation—and
the trade provisions under some Multilateral Environment Agreements
(such as, for example, the Kyoto Protocol on climate change).
These policies should not be pursued by the WTO.
6.4 Policies aimed at liberalisation, but
which undermine sustainable development should clearly not be
pursued at the WTO. Reciprocally, though, it is widely accepted
that there are policies which, whilst interventionist, nonetheless
promote sustainable development. Consider, for example; some agricultural
subsidies aimed at providing environmental benefits, the retention
of specific tariffs to safeguard the livelihoods of small subsistence
farmers, or restrictions on trade in environmentally harmful goods—as
provided for under some Multilateral Environment Agreements. In
view of the WTO's explicit agenda of progressive liberalisation,
these too should be shaped elsewhere.
6.5 Sustainable development—for which
all international economic policy should aim—is a vague
concept. In practice, and as Romani Prodi was quoted as saying
above, it is approached through some balance of policies
that address immediate economic needs, whilst ensuring that these
are not provided through the irreversible depletion of natural
resources or degradation of the global environment in a way that
will threaten the welfare of future generations. This balance
must be approached through drawing on a broad range of expertise,
and through the exercise of circumspection. This requires the
input of a range of agencies—for example, UNEP, CSD, ECOSOC,
UNCTAD, UNDP—in addition to the WTO.
7. THE BRITISH
GOVERNMENT'S
ROLE IN
RESPONDING TO
EVENTS IN
CANCÚN
(A) The British Government should work with
the European Commission to set out an agenda for re-examining
the scope of the WTO's work-programme
7.1 We need new mechanisms for deciding
where the expertise for tackling a range of policies for sustainable
development issues lies, and for pursuing international negotiations
on these.
7.2 Some policies—such as the reform
of some agricultural and fishing subsidies—are consistent
with the pursuit of a liberalised trading regime, whilst also
contributing to the pursuit of sustainable development. By focussing
on these issues, the WTO would simultaneously work towards an
open trading system, in those respects that promote sustainable
development, whilst presenting a more manageable set of issues
for negotiation. This would help to ensure that the WTO focussed
on its areas of core competence, allaying developing country grievances
that that the WTO agenda is over-loaded, and relieving public
criticism of the organisation.
7.3 Other issues should be dealt with by
agencies with the relevant expertise.
(B) The British Government should work with
the European Commission to set out an agenda for re-examining
the relationship between the WTO and other institutions
7.4 The EU Trade Commissioner, Pascal Lamy,
asked, in the aftermath of Cancún, "are we still looking
to strike a dynamic balance between market opening and rule-making,
rules without which market opening is neither effective, nor in
line with our values?"[90]
We do indeed need rules governing market opening—rules which
explicitly view this as one policy tool of many that should be
pressed into service to deliver more sustainable development.
The problem is, the WTO is poorly equipped to make many of these
rules.
7.5 Negotiations on many issues are complex,
and fall outside the proper competence of the WTO. This leads
to resistance—particularly from developing countries—to
their negotiation in the WTO.
7.6 Issues which should be tackled outside
the WTO include frameworks for sustainable investment; approaches
to dealing with scientific uncertainty—whilst safeguarding
these against protectionist abuses; defining environmental goods
and services; and the use of ecolabelling schemes.
7.7 Re-examining the scope of the WTO will
require the input of other agencies—both in defining this
scope, and in undertaking to pursue international agreement on
issues falling outside it. Such agreements, once reached, may
nonetheless benefit from a reformed WTO. There may be ways, for
example, in which appeal can be made, under these agreements,
to the robust dispute-settlement mechanisms which the WTO wields—in
order to enforce policies that they develop.
(C) The British Government should work with
the European Commission to strengthen international governance
for sustainable development in other forums
7.8 The role of the UN Agencies will be
critical in the process outlined above. Within a few days of the
failure of the Cancún meeting, the UN Secretary General
expressed the view that "the role of the Economic and Social
Council—and the role of the United Nations as a whole in
economic and social affairs, including its relationship to the
Bretton Woods institutions—needs to be re-thought and reinvigorated."[91]
Such re-thinking must surely provide an opportunity for considering
the appropriate distribution of responsibilities between international
bodies, and the proper role of WTO.
7.9 The EU Environment Council conclusions
of 17 October 2002 recognise the related need to strengthen international
environmental governance: The council
"stresses the commitment of the Environment
Council to fully engage in the global efforts to strengthen international
environmental governance, which could lead to the upgrading of
UNEP into an UN specialised agency with a broadly based mandate
on environmental matters, and enhance linkages between IEG and
sustainable development governance in the relevant UN bodies,
in particular in ECOSOC, the Commission for Sustainable Development
and UNEP."
(D) The British Government should work with
the European Commission and developing countries to develop a
joint, proactive, agenda for sustainable development
7.10 A proactive agenda for trade and environment,
which clearly delineates the WTO's role, will clearly not emerge
at the WTO. Nor will it be successfully promoted by the EU alone.
At present, many developing countries are skeptical of the pursuit
of the environment agenda—particularly through the WTO.
This is exacerbated by attempts to co-opt them into opposing environmental
regulations on the grounds that these are protectionist. The EU
needs to work with developing countries to develop a common proactive
agenda for the development of governance regimes supportive of
sustainable development, whilst allaying developing country concerns
about green protectionism. Indeed, developing country concerns
about green protectionism are perhaps exacerbated by the fact
that it is only the EU that has a clearly articulated proactive
agenda on trade and environment.
7.11 One approach would be to work with
other international agencies to identify those developing countries
which will be impacted by particular environmental regulations.
These agencies would then be mandated to develop, in collaboration
with the affected countries, an effective set of policies to mitigate
any impacts—through technical and financial assistance programmes,
for example. Although UNCTAD and UNEP engage in work on capacity-building
on trade, environment and development (through, for example, the
UNEP-UNCTAD Capacity-Building Task Force) these initiatives are
woefully under-funded, and are undermined by some developed country
WTO members opposed to such initiatives.
7.12 But there is also a need to work with
developing countries to develop policies to address domestic environmental
problems on their own terms—even where these conflict with
the short-term economic interests of their developed country trading-partners.
The emergence of the G21 group of countries in Cancún presents
one opportunity for working with a developing country bloc to
develop such a proactive agenda. But the EU should also be working
with other developing countries.
(E) The British Government should press to
reform the way that the European Commission develops trade policy
internally
7.13 Attention will focus—rightly—on
the failures of decision-making processes within the WTO. But
this should not lead us to ignore the failures of policy-making
processes in the EU. Trade-policy making in the European Commission
is an opaque process that draws too little on the input of experts
outside DG-Trade, and too little on the expertise of government
departments in Member States. It is conducted with too little
accountability to elected representatives.
7.14 Reform of the type envisioned above—reform
that would lead us to view trade policy, and the WTO, as an important,
though small, component in a broad policy framework for sustainable
development—would require the full involvement of a broad
range of actors in the course of formulating EU trade policy.
This would require a more open and accountable process for its
development.
(F) The EU should make full use of sustainability
impact assessments
7.15 The Commission has undertaken to conduct
"sustainability impact assessments" (SIAs) for all of
its major bilateral, regional and multilateral agreements, and
to use them to inform the negotiations. Such studies are complex,
and can never aim to be exhaustive in foreseeing all impacts of
particular trade policies. They can nonetheless be of great value
in identifying those areas where liberalisation in specific sectors,
or under specific circumstances, can be anticipated to promote
sustainable development. They can also signal circumstances under
which far greater circumspection should be exercised prior to
negotiating particular policies, or where the complexity of particular
policies and their probable impacts suggests that the WTO should
not be left to negotiate these alone.
7.16 It is nearly four years since the Commission
launched its SIA programme, but there is still little evidence
that these are actually influencing EC Trade negotiating positions.
SIAs are conducted at arms-length from policy formulation and
need to be integrated into the policy-making machinery. What is
more, rather than fundamentally questioning and influencing the
thrust of EC Trade policy, the studies so far have focused on
mitigating and enhancing measures—mainly to be taken by
trading partners—to offset the negative effects of liberalisation.
October 2003
80 Towards a Global Partnership for Sustainable Development
Communication from the Commission to the European Parliament,
the Council, the Economic and Social Committee and the Committee
of the Regions, 13 February 2002. Back
81
Towards a Global Partnership for Sustainable Development Communication
from the Commission to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions,
13 February 2002. Back
82
Scrap the Trade Text and Start Again. EcoEquity Press-release,
Johannesburg, South Africa 30 August, 2002. (EcoEquity included:
ANPED, Consumers International, Danish 92 Group, Friends of the
Earth International, Greenpeace, Oxfam International, World Development
Movement, WWF). Back
83
Romano Prodi, European Parliament, Strasbourg, 15 May 2001. Back
84
Robert Zoellick, Financial Times, 21 September,2003. "America
will not wait". Back
85
Pascal Lamy, Quoted in: Financial Times, 17 September 2003. Back
86
A report written by the former Australian Ambassador to the GATT,
Alan Oxley, published by the Australian APEC Study Centre, and
promoted at Cancún suggests that environmental regulations
introduced by the EU are "being introduced without regard
to their impact on trade . . . Trade from developing countries
is being restricted." Back
87
Sustainability impact assessments are an important tool, and are
discussed further below. Back
88
The Marrakesh Agreement Establishing the World Trade Organisation
foresees "expanding the production of trade in goods and
services, while allowing for the optimal use of the world's resources
in accordance with the objective of sustainable development." Back
89
Communication from the Commission to the European Parliament,
The Council, The Economic and Social Committee and the Committee
of the Regions, Brussels, 13 February 2002. COM(2002)82 final. Back
90
Pascal Lamy, Strasbourg, 24 September 2003. Back
91
The UN Secretary-General Address to the General Assembly, New
York, 23 September 2003. Back
| 
