Examination of Witnesses (Questions 1-19)
MS RONNIE
HALL AND
MR TOM
CROMPTON
6 JULY 2006
Q1 Colin Challen: Good morning. It is
nice to see you here on the first day of our new inquiry. In your
evidence to the Committee you have raised concerns about the impact
of trade liberalisation on the environment. Could you start off
by giving us a general overview of those concerns and the impacts
that led to those concerns?
Ms Hall: I should say that our
assessment comes from an international network, with groups in
countries in all continents in the world, so it takes into account
very much equity and developmental concerns, as well as environmental
concerns, which I think will be clear in our evidence. This will
be a quick sketch of what our concerns are about the environmental
impacts, because they are really so broad that there is not time
to go into them in a lot of detail. At the moment, our main concern
is about the Non-Agricultural Market Access (NAMA) negotiations
and the fact that all natural resources have been put on the table
for either partial or full liberalisation, with no attention being
paid at all, even by the WTO's Committee on Trade and Environment,
to the potential environmental and developmental impacts of that.
It is the case that one or two countries, including the European
Union, are now taking a position based on their concerns raised
in Sustainability Impact Assessments done at the national level,
but in the WTO there is no such thing as a multilateral Sustainability
Impact Assessment, and our position is that we really think that
natural resources should come out of the negotiations. We have
spoken to various trade negotiators about this issue and other
academics associated with and following the negotiations, and
my impression is that nobody has really thought of this so far
and that everybody immediately says, "This is a key issue
that we should be thinking about." I think our most immediate
concern is the fact that negotiations could be drawing to a close
without this issue being dealt with.
Q2 Colin Challen: Do you think the
United Nations Millennium Ecosystem Assessment will have an impact?
This is really quite groundbreaking work. Will that have an impact,
do you think, on trade negotiations?
Ms Hall: I think it is highly
unlikely unless certain governments endeavour to make sure that
it is on the table. I have been following the trade negotiations
in the WTO for 15 years now and it was only two weeks ago that
for the first time I heard a trade negotiator voluntarily mention
the Millennium Development Goals and that was a negotiator from
South Africa. Policy coherence is one of the issues I really wanted
to talk to you about today. It is up to countries like the UK
and the European Union to start moving on this.
Q3 Colin Challen: Do you see a big
disconnect between, say, the Doha Round and the COP talks?
Ms Hall: I would say a total disconnect.
There is no connection whatsoever. I do not think there is even
a legal connection. If you go back to the founding agreement that
set up the World Trade Organisation, there is no mention of a
legal relationship with the United Nations and that is an issue
that I think is also overlooked.
Q4 Colin Challen: Are there any benefits
to trade liberalisation? What have you identified as the positives,
if any?
Ms Hall: Before answering that
question, I have a long list of other concerns about the World
Trade Organisation and I should just say what they are, I think.
The GATS negotiations on services liberalisation are also likely
to have a significant impact in the areas of energy and water
services and the management of national parks and biodiversity—which
is again a small rather obscure issue to which nobody is really
paying any attention that could have significant impacts on the
poorest people in the world and Indigenous Peoples. Another issue
is what is happening on agriculture and the G33 group of countries'
proposal that developing countries should be allowed to self-designate
special products to protect their small farmers—which is
a key issue again. Also, there are proposals on the table from
the various countries in the WTO at the moment, developing countries,
on using the WTO to stabilise commodity prices—which is
an important issue—and amending the Trade-Related aspects
of Intellectual Property rights' (TRIPs) agreement so that it
comes into conformity with the Convention on Biological Diversity.
Q5 Colin Challen: Tom, you have said
that we should move the focus from liberalisation of the markets
at all costs to a more balanced approach, where economic, developmental
and environmental benefits are all considered. How would you propose
that to take place?
Mr Crompton: I would answer that
at two levels: firstly, at an institutional level, and then at
a political level—or maybe in the reverse order. I echo
much of what Ronnie says in terms of the institutional failures
for the way in which decision-making processes are structured
at the moment and the extent to which those fail to take full
account of environmental concerns. But, before those can be addressed,
there is an issue of political will. We could have the most perfect
institutional arrangement we wanted, but if the political will
was not there it would be subverted for the pursuit of, as we
see now, national economic self-interest. Our approach to Doha
has been to say: Where, within this, can we find glimpses of hope—areas
where, given the right political will, given the will to turn
European rhetoric about sustainable development and trade into
reality, we can see peripheral parts of the negotiations, where
there is not that much political capital involved, as opportunities
for beginning to set new precedents or to rehearse the types of
institutional relationship that might be needed? We can see, for
example, in fairly arcane areas of the negotiations (like those
on fishing subsidies or environmental goods and services, the
relationship between the WTO and MEAs) opportunities for beginning
to set seeds for those different institutional arrangements, but,
of course, that being preceded by the political will to do so.
Specifically, an example would be fishing subsidy negotiations,
where we propose—and it is a proposal that has been supported
by several members—that at the margin of the process of
distinguishing between legitimate and illegitimate fishing subsidies
there ought to be input from institutions which have the expertise
to review the social and environmental implications of fishing
subsidy use; for example, regional fisheries agreements and the
secretariats of those. These are things for which we already see
precedence in the WTO; for example, in its appeal to Codex Alimentarius,
for looking for standards to be used in the SPS agreement or the
use of appeal to the IMF. There are several existing precedents
where the WTO does defer decision making to external bodies and
that needs to be something which is reinforced and developed in
terms of environmental rule making.
Q6 Colin Challen: Only at the beginning
of this month, Pascal Lamy said the current round of negotiations
was in crisis. What impact do you think that will have on advancing
environmental or developmental goals in this round? Is it an opportunity
or simply yet another complete sideline of these issues?
Mr Crompton: I see it in the short-term
as a sidelining. I do not see that political will I was just talking
about emerging, particularly on the part of developing countries
until the most egregious aspects of the current imbalances in
international trade are redressed. Until that happens, I do not
think we can expect constructive engagement on issues of sustainable
development. In the longer term, maybe that crisis will create
the space for asking how those challenges should be addressed
in a more sensible and far-sighted way.
Ms Hall: I think there is an issue
as well that the perspective that a lot of civil society organisations
have is that the crisis is a crisis because countries already
perceive that they are not really going to gain. Most of them
are not going to gain from what is currently on the table. I think
the timing is very much ripe for a review of the institution itself
and the existing agreements that it has under the Uruguay Round
and so on. At the end of the Uruguay Round—and developing
governments have been clear about this since then—they did
not know what they were signing up to and I think they would be
very happy to review some of the WTO's components.
Q7 Colin Challen: We have the Committee
on Trade and Environment. How would you describe or characterise
the added value of that august body?
Ms Hall: Minimal, really. In Friends
of the Earth we were involved in calling for that Committee to
be set up in the early 1990s and, as soon as it was, we came to
regret it, because it caused a chilling factor in other intergovernmental
negotiations on environmental issues, for example. It has discussed
a variety of different issues, but it has been extremely slow
and tends to be very focused. One notable example of its failing
is in relation to NAMA negotiations because the Committee on Trade
and Environment has a mandate under paragraph 51 of the Doha Declaration
to oversee or assess the potential environmental and developmental
implications of all the negotiations. It absolutely has not done
that for the NAMA negotiations. All it has done is to focus on
taking on board the negotiations about what environmental goods
are or are not—so a very narrow focus—and it is not
fulfilling its mandate at all. I do not know if you do, Tom, but
I do not follow all its negotiations very closely because we have
become very disenchanted with it.
Mr Crompton: To my mind, at a
more generic level first, it is another example of trying to fix
a political problem with an institutional arrangement and because
there is not a political will there to use it, as Ronnie says,
it is marginalised, it is sidelined, and in the current debate
seems to be absolutely stagnant. With regard to the negotiations
on environmental goods and services, I think it is nonsensical
that members are sitting around debating at the moment whether
soap, windscreen wipers or hard hats should be considered environmental
goods and services and whether trade in those should be liberalised
as a consequence. To my mind, any particular good or service will
have an environmental impact which will be context specific. For
example, if you put in something to clean pollutants in pipe in
a paper pulp factory, the impact that has on the environment may
in some circumstances be positive because you evade the pollution
of the watercourse. If that in turn leads to more unsustainable
deforestation to feed the paper pulp factory, then it is clearly
contributing to the environmental problem. There are many examples
of that type of context specificity. One of the problems of the
structural response that we have in terms of the Committee on
Trade and Environment is this segregation of environmental and
developmental issues. Developing countries, quite understandably,
are concerned that the environmental agenda is going to be misappropriated
for the protectionist interests of developed countries. As I see
it, until we can begin over the course of the same debate to balance
the developmental and environmental costs and benefits of a particular
measure, as part of the same dialogue, and make concessions for
example to developing countries, recognising that perhaps the
environmental standards they have to meet should not be as tough
as those of developed countries, until we can begin to have those
two debates simultaneously and talk about how those balances are
struck between developmental and environmental needs, it is difficult
to foresee how developing country concerns that actually the environment
agenda is something which is being pursued for short-term economic
goals of developed countries is going to be assuaged.
Q8 Colin Challen: Do you find the
Government is offering a sympathetic ear to these arguments? If
so, how has it been translated into action?
Mr Crompton: I am very disappointed
by the response that we have—from the EU now, rather than
the UK Government: I work far more in Brussels. We are seeing
at the moment, for example, the EU pushing a dispute through the
WTO about re-treaded tyres in Brazil. The Brazilians are saying
that they do not want any more re-treaded tyres; they have enough
re-treaded tyres domestically. They do not see why they should
be importing European re-treaded tyres, which are stockpiled,
which will cause environmental problems in the course of their
destruction, which have all sorts of health problems in terms
of stagnant water which sits around in them. The Brazilians are
mounting a defence against the demand from the EU that they should
be able to export European re-treaded tyres to Brazil on European
grounds. That to me gives the lie to EU rhetoric on sustainable
development. There is a case where the EU can take a unilateral
decision on whether or not it is going to pursue this case. In
the case of EU bilateral negotiations, we just opened the negotiations
on an EU-China framework. These are opportunities where it is
in the EU's gift to pursue the types of measures that we are suggesting
should be then mainstream at a multilateral level through the
WTO and yet we do not see that political leadership from the EU
in seizing those opportunities at a bilateral level.
Ms Hall: I would like to give
one exception to that. Although the EU is generally seen as a
very aggressive driving force behind the current liberalisation
negotiations, when we talked to the European Commission about
this issue of natural resources and whether they should be included
in the negotiations on a sector by sector basis for full liberalisation,
we did get quite a sympathetic hearing, and the European Commission,
more or less unilaterally, seemed to change the position of the
Union just before the Hong Kong ministerial, which we were very
happy about. But that only applies to the sectoral part of the
negotiations; it does not apply to whether natural resources are
included in the sectors which are going to be liberalised partially
under the horizontal formula and it does not apply to other European
Union proposals (for example, they would like to eliminate export
taxes from developing countries, which could also have significant
negative environmental impacts) and it does not apply to its position
on non-tariff barriers. There is a certain lack of consistency
in its positioning as well, so I feel there is some opportunity
for pushing it in the right direction. We also heard when we spoke
to European Commission officials in Brussels that they thought
that the United Kingdom was possibly one of the countries that
might try to revert to the original position on sectoral negotiations
and not oppose them. I do not work very much with the UK Government
myself—a colleague has been doing that—and I do not
know the UK position on the sectoral issue, and I think it would
be very useful to investigate it further.
Mr Crompton: If we zoom out for
a moment from the details of the fairly arcane debates on particular
areas within the current negotiations, I see no sense of a wrong
turn political strategy about how the EU or the UK intends to
use international trade policy to address the international challenges
with which we are increasingly confronted. How do we use it to
respond to a challenge that the emerging economies present and
their voracious demand for natural resources? As far as I can
see, there is no long-term, 10/15/20-year strategy about how we
would want to see and need to see an international multilateral
trading regime redirected to address those challenges and by implication
how we use those opportunities that emerge now in order to move
strategically in that direction.
Ms Hall: That is one of the problems
with its Sustainability Impact Assessments: the European Commission
never uses them to change its positioning and its approach to
trade negotiations themselves; it just causes mitigating or flanking
measures to be applied afterwards. It is quite happy to move forward
very rapidly with negotiations and nobody knows what those flanking
measures might or might not be and whether they would work or
not.
Q9 Mr Vaizey: Are the European Commission
sustainability impact assessments effective? Should we be using
more of them?
Mr Crompton: Certainly, in principle,
the idea of reviewing, of taking some ex ante assessment
of the impact of the liberalisation programme, is positive. The
issue again comes back to one of political will. When those impact
assessments reveal negative environmental impacts, are they acted
upon? What are the processes for compiling and conducting those
assessments? Are they as transparent and as inclusive as they
might be? Are the parties that are conducting those assessments
as impartial as they might be? There have been some notorious
cases. For example, the EU has hired European consultants, one
from Luxembourg, who conducted an SIA in Latin America, and, as
I understand it, the person in charge could not even speak the
local language. That type of example, of the almost colonial,
if you like, use of SIAs, will do nothing to build developing-country
confidence that this is a genuine move on the part of the EU to
begin to take steps which may not be in the European short-term
economic interest but which nonetheless represent serious attempts
to redress sustainable development challenges.
Ms Hall: I do not follow the details
of the SIAs myself, but I think the SIA on forestry products has
in part been very useful but there are concerns about the methodology
that has been used with the SIAs. I do not know the details but
I could find out from our Brussels office, who are following it,
and forward them to the Committee if you would find that helpful.
Q10 Mr Vaizey: It sounds like you
are in favour of them in principle.
Ms Hall: Yes, completely.
Q11 Mr Vaizey: Much more in partnership
with developing countries.
Ms Hall: Yes.
Mr Crompton: They have to be developing-country
driven and owned, I think. There are two sides to it. On one side,
trivially, European countries see the European appetite for addressing
environmental issues as something that provides them with negotiating
capital. Irrespective of whether or not it is a concern to them,
it is something that the Europeans want more than them, and there
are a whole load of things that they want in terms of reform of
agricultural trade or market access before movement on the environment.
There is certainly an issue there about bargaining chips, but,
over and above that, there is legitimate and certainly very real
concern on the part of developing countries about the misuse of
the environment agenda to serve the protectionist interests of
a bloc like the EU, which sees that it is increasingly narrowing
its interest to begin to batten down the market-access hatches
and non-tariff trade barriers and environmental measures will—
Q12 Mr Vaizey: Presumably you would
not support environmental tariffs. Or, if you do support them
in principle, you would assume that would be opposed by developing
countries as another way for the West to—
Mr Crompton: I think environmental
tariffs are the wrong end to start: they are the thorniest part
of the problem. I could certainly foresee cases in future where,
for example, free riders on multilateral environment agreements
like Kyoto should not be afforded the same freedom on a level
playing field as countries which are taking action to address
a problem like climate change, which has economic implications.
Ms Hall: Also there are some environmental
issues on the table in the WTO which are of concern to developing
countries and they have stated their concerns. Their proposals
seem to be being ignored. I think there is a definite perception
within the WTO that the environment is a Northern issue and, when
it comes to their perspective, it somehow disappears off the table.
I think some genuine moves from the European Union and other countries
to look at environmental issues in a global way, with development
concerns very much at the forefront of the agenda, not commercial
interests, could make a huge difference to the way intergovernmental
relationships develop within or outside the World Trade Organisation.
Mr Crompton: We often hear that
it is not the WTO's job, but the WTO sets precedents in terms
of the concessions that it already affords to developing countries.
There is an example where, as a result of international negotiations,
there has been a decision that the particular challenges that
impoverished countries face ought to afford them greater latitude
in the course of derogations from the trading disciplines which
are imposed on other developed countries. The principle that a
challenge like poverty ought to be incorporated within international
trading regimes and the derogations from those disciplines ought
to be permitted in order to address development challenges has
already been conceded. It seems to me to be no different in principle
from saying that similar derogations ought to be taken in the
course of addressing an international challenge like climate change.
Q13 Mr Vaizey: The tone of your remarks
appears to be, perfectly understandably, enormous mistrust from
the developing world about the motives of the developed world.
In the World Wildlife Fund's memo you talk about the need ".
. . to eliminate complex and non-transparent non-tariff barriers
that can off-set benefits obtained by tariff reductions."
Does that not slightly contradict the environmental concerns such
as eco-labels, which could be seen as a non-tariff barrier?
Mr Crompton: I think the key words
there are abut transparency and predictability and dependability.
Certainly there are many non-tariff barriers which represent far
more efficient ways of addressing environmental challenges from
tariff barriers.
Q14 Mr Vaizey: Such as?
Mr Crompton: Like eco-labelling,
like national environmental standards. The important thing, of
course, is that those are transparent, predictable, and—
Q15 Mr Vaizey: They might be quite
a high hurdle for developing nations.
Mr Crompton: Are you thinking
of eco-labelling?
Q16 Mr Vaizey: Yes.
Mr Crompton: In the course of
designing those it is important that those legitimate developing
country concerns about the misappropriation of those non-tariff
trade barriers as protectionist instruments are addressed. That
requires their participation on the course of putting the shape
of those regulations together. As we see it, there ought to be
scope with eco-labelling, for example, not simply to stamp a label
on something because it meets a certain environmental standard
but also flexibility within that to recognise that a developing
country may, for example, be moving in the right direction but
not quite be there yet, but should still be able to avail itself
of some recognition of the fact that it has a clear strategy and
process for moving towards a more environmentally benign means
of production.
Q17 Mr Vaizey: You talked earlier
about developing countries not knowing what they were signing
up to. In the World Wildlife Fund you talk about the need for
technical and financial assistance packages to help adapt international
trade. Are you taking there about packages to help people during
negotiations?
Mr Crompton: Partly, yes. Of course
this is a recognition of the fact that many developing countries
do not have capacity to follow a plethora of negotiations that
may be ongoing in Geneva at any one time. But, more than that,
it refers back to the conversation we just had about how we ensure
the developmental concerns and interests are built in from the
start to the development of specific regulations and specific
sets of rules. I should apologise for that to some extent, because
it is stock in trade, I think, for environmental NGOs to revert
to the need for more financial and technical assistance. It is
a bit of a get-out clause. The problem is that when it comes to
dismantling trade barriers it is difficult. We struggle. It is
one area where the environmental and developmental goals do not
necessarily work in the same direction, where there may be a genuine
need on the part of a developing country for increased market
access but where that may have a detrimental environmental impact.
That, to my mind, is the difficult end of the spectrum. I prefer
to focus on how we begin to work more strategically and thoughtfully
about those issues, which were at the easier end of the spectrum,
where we can foresee a coincidence between developing-country
interest, for example, and environmental need. We are not even
seeing the political leadership we would like from the EU on those
issues. The thornier issue of the pace at which we should be dismantling
trade barriers at the difficult end of the spectrum, is something
which should perhaps come later.
Ms Hall: On the issue of capacity
of developing countries, it is not really just a financial issue,
it is about the pace and direction of the negotiations and the
complete inability of any one country, without hundreds of trade
negotiators, to have a clue what is going on. In October last
year, I was at a meeting with some developing-country negotiators.
One of the Caribbean negotiators said that the only reason his
country was participating in the negotiations was for damage-limitation
purposes. That is quite something for a government to say, when
the alleged purpose of this round of negotiations was to promote
development. A very important point I would like to get across
to you is that almost all the civil society organisations that
Friends of the Earth works with—and we do prioritise working
with networks—think that if the negotiations go into deadlock
this month that will be a good thing for the environment and a
good thing for developing countries because it will allow governments
to stand back and review what directions negotiations are going
in. I think there is also a related concern about the way in which
the negotiations are being dealt with right now, where certain
core issues have been picked out for immediate attention in agriculture
and NAMA. Developing countries are concerned that their issues
are not there in that first set of negotiations, that first level,
and that if certain deals are struck they will then lose their
leverage in the following negotiations and be progressively less
and less able to get what they want out of the negotiations.
Q18 Colin Challen: If we go into
some form of deadlock, where Pascal Lamy commented that it is
in crisis, bilateral agreements will be made without any of these
protections and that will make it in the long term even more difficult.
Ms Hall: That has been a major
concern amongst civil society organisations as well. Bilaterals
are very problematic. One of the good points about them is that
they are easier to get out of than the World Trade Organisation
if you are not happy with the way things are progressing. One
very interesting fact that I had not realised until recently is
that the US fast-track negotiating authority, which is the reason
for the deadlines existing in the WTO at the moment, also applies
to bilaterals and regional trade agreements in the case of the
US. Obviously the EU and Japan are separate cases. I think there
is some light at the end of the tunnel. There is also an extremely
interesting negotiation developing in Latin America between many
Latin American countries. I think it will come to a head at a
summit that is being held in December. It is about a people's
trade agreement rather than a free trade agreement, where they
are beginning to take a different approach to the way they interact
regionally on trade and other issues. It will be interesting as
well to see how that develops and whether it sheds any new light
on the way that the European Union could be operating with other
countries.
Q19 Mr Vaizey: On agriculture, do
the reforms implemented by the EU on the Common Agricultural Policy
go any way towards encouraging developing countries to take a
more positive stance on environmental negotiations? In terms of
the general argument about the need for developed countries to
open up their markets to developing nations' agriculture products,
how does that square with the current public debate about food
miles in the encouragement of us not to buy our food from thousands
of miles away?
Ms Hall: I think there are a couple
of points to make. In Friends of the Earth definitely we are opposed
to the export-led model of agriculture and see the immense problems
it is causing for subsistence farmers in exporting countries.
In that sense, we think there is a real win-win opportunity here,
in terms of supporting subsistence farming and reducing food miles
by buying food locally in countries around the world. We very
much support the general call for food sovereignty in different
countries. Another important point that I think it is worth bringing
to the table, because it is quite a new one, relates to a recent
research report from the Carnegie Endowment for International
Peace, which focuses very much on the potential outcomes and lack
of outcome from the Doha negotiations. They have done some quite
complicated modelling, where they have disaggregated the data
more extensively than other research reports have done. They have
found that certain developing countries will lose under all potential
scenarios for the Doha negotiations and they have found that it
really does not make much difference whether industrialised countries,
the importing countries, are cutting their tariffs. What is really
going to make a difference is whether developing countries are
allowed to restrict imports. On agriculture, that is the key issue.
Of course it is also at the heart of negotiations at the moment
because the G33 group of countries, led by the Philippines and
Indonesia, for example, are requesting that they be allowed to
self-designate any special products that they think are critical
for their small farmers and for rural development in general.
There is a real battle taking place, primarily between the G33
and the US—which wants extensive agricultural-market-opening
in the developing world and is basically being told by its lobbies
domestically that it cannot proceed with the negotiations unless
it gets that. The position that the UK and the European Union
take with respect to the G33 proposal is also very important.
I would say it is a key developmental and environmental issue.
It is interesting to see that such an issue is actually at the
heart of the negotiations; it is not just a commercial battle.
Mr Crompton: You have put your
finger on a difficult issue there, of the whole thing about market
access versus food miles, and of course there is no easy answer.
I have said this already but I will reiterate it: in the short
term those are problems which we are not going to be able to grapple
with until greater confidence has been built, particularly on
the part of developing countries, that developed countries, in
blocs like the EU, are serious about engaging international trade
rules in a way which begins to address challenges like climate
change, even where that may lead in a direction counter to their
short-term economic interest. In the short term, therefore, I
see the need to redress the current imbalances in agricultural
trade as being a sine qua non for beginning then a more
sophisticated dialogue with developing countries about how trade
rules may be used to address those challenges. In the longer term,
with that political will, I think we do need to begin to look
at institutional solutions. The balance you are talking about
that needs to be struck is between those cases where, if they
exist—and, I do not know, maybe they do not exist; maybe
when we look at the detail we do not find any—the poorest
of the poor developing countries, the least developed countries,
actually need export revenue from agricultural goods in order
to build their economies, and where that contradicts or conflicts
with international goals to address climate change. That is something
that has to be addressed multilaterally, at the interface between
an international regime to address climate change—so through
the confidence of the parties to Kyoto—and with WTO. It
comes back to our needing to foresee a time when the WTO is solely
reliant on the pursuit of its own agenda in terms of the mercantilist
perspective on the world but is able to begin to draw on the expertise
of bodies like the confidence of the parties to Kyoto to strike
the balances, to make the concessions, where necessary, for least
developed countries to export agricultural produce, albeit that
that has climate change implications, because that is in their
economic interests, whilst recognising that in the cases of other
countries the economic benefit that it brings to them or the economic
needs that they have are not sufficiently weighty to justify the
climate change implications of growing their economies on the
premise of exporting natural resources or high value agriculture
produce.
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