Examination of Witness (Questions 34-39)
MR RICHARD
TARASOFSKY
6 JULY 2006
Q34 Colin Challen: Good morning, Richard.
It is good to see you here. I have to say I had a very pleasant
visit to Chatham House last week for a climate change conference,
which was very rewarding, so a great welcome to you. Could I ask
you just to start off perhaps by giving us a general overall assessment
of the impact of international trade liberalisation on the environment.
Mr Tarasofsky: I think, like one
of the previous speakers, it is important to take a nuanced approach
to the impact of trade liberalisation on the environment. It really
depends on the context in which the trade is taking place. Of
course, increased trade can put pressure and often does put pressure
on the environment: it intensifies use of natural resources, the
building of new infrastructure has environmental consequences,
there is a greater chance of oil spills in the ocean, that kind
of thing. At the same time, of course, trade liberalisation can
create new markets for sustainably produced products and thereby
create incentives for production that is more environmentally
friendly. On a more general level, to the extent that trade liberalisation
increases general welfare and to the extent that poverty is a
significant threat to the environment, particularly in the developing
world, which is something I believe quite strongly, then trade
liberalisation can create new opportunities for addressing environmental
challenges. It is also important to recognise that there are win-wins
that can be identified as between trade liberalisation and environmental
gains. I am thinking here particularly of the negotiations on
fisheries subsidies; to the extent that subsidies in the fisheries
sector can be eliminated then some of the perverse incentives
for over-fishing can also be eliminated. As against that, it is
also important to note that, to the extent that trade liberalisation
deepens, there is a political context that is strengthened whereby
it is more difficult perhaps to create exceptions to trade liberalisation;
in other words, trade-related environmental measures which are
then characterised as barriers to trade. That is not always a
constructive debate to have, but I think at the end of the day
it is important not to be dogmatic about this. I was quite pleased
to hear Pascal Lamy a few months ago state quite categorically
that trade is not an end in itself. The purpose of the WTO, indeed,
in his view, was the achievement of sustainable development, and
I think that wider context, that more long-term approach, is what
is needed in assessing the relationship between the two.
Q35 Colin Challen: Do you think that
positive assessment is actually being translated in practice on
the ground? This Committee—and I have been on it for five
or six years—has heard a lot of evidence about the degradation
of the environment through particularly unsustainable timber and
a whole range of other things. We have a lot of high-level, high-flown
political talk about the benefits of trade, but on the ground
some of this stuff and some of the rules do not even get close
to the deforestation argument, for example. What is your take
on that?
Mr Tarasofsky: I would fully agree
that there has been relatively little evidence that the trend
towards trade liberalisation has had concrete positive impacts
on the environment. I think there are perhaps three reasons for
that. One is that there is a lack of certainty as to the rules,
the regulatory framework. I think the procedures for decision-making
are inadequate, and also there is a lack of political will to
maximise the gains that could be achieved through trade liberalisation.
Q36 Colin Challen: Looking at the
WTO, I think you have stated that an effective balance between
liberalisation and environmental protection has been reached within
the WTO's Dispute Settlement Body but we have had conflicting
evidence on this. Could I ask you if it is not simply the case
that we have not really seen enough disputes yet being determined
to tell whether the balance is right?
Mr Tarasofsky: I am not sure that
the number of disputes is really going to be the best indicator.
Of course, to the extent that a trend can be identified, then
yes, that could be the case, but it is important to remember that
the WTO Dispute Settlement Body does not operate under the principle
of stare decisis. When the Appellate Body takes a decision,
interprets the WTO agreements in a particular way, there is nothing
in principle for stopping the same body from taking a different
view the next time. Of course, that is not something that they
would do lightly but legally speaking, there is no rule of precedence
as one has in English law.
Q37 Colin Challen: So future rulings
could be quite different from previous rulings.
Mr Tarasofsky: Absolutely, which
is why I think that although there have been some very interesting
decisions on the relationship between trade and environment in
the WTO in recent years—I am thinking about the Shrimp/Turtle
case, for example—a truly sustainable solution, one which
sends long-term signals, which allows for greater certainty, will
have to be a political decision rather than a judicial one.
Q38 Colin Challen: Is the Dispute
Settlement Body subject to or could it be subject to, shall we
say, ulterior influences? A parallel example might be the International
Whaling Commission, where Japan allegedly is able to buy off countries
who allegedly do not even have a coastline with investment or
whatever and you get delegates turning up at the last minute to
vote the right way. Could a similar kind of situation develop
in this structure?
Mr Tarasofsky: I have never heard
any allegations of impropriety among the WTO Appellate Body members.
As far as I know, the people elected to the body are people of
the highest integrity and they take their jobs extremely seriously.
Q39 Colin Challen: As is everybody
on the International Whaling Commission and the Olympic Commission
and the other commissions that we have.
Mr Tarasofsky: Yes, but I think
one is perhaps more prone to have that kind of situation in a
political decision-making body, like the commissions which you
have just referred to, than a judicial body. It is also important
to note that the way the WTO dispute settlement process works
is that it is not just in the hands of the panel members or the
Appellate Body members themselves. The secretariat also has a
strong involvement in providing the tools, the basic analysis,
which the panel members and the Appellate Body members can use.
Of course, I am not saying that the process is completely immune
from corruption or from ulterior motives, as you say, but I would
have thought that it would be quite difficult for that kind of
agenda to be implemented without someone noticing, without someone
making a fuss. The decisions, as I am sure Committee members well
know, tend to not just be short documents. They are full of quite
detailed, complicated and rigorous legal reasoning. As I say,
it is quite difficult, I would have thought, to derive an ulterior
political motive through that kind of process.
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