Examination of Witness (Questions 40-47)
MR RICHARD
TARASOFSKY
6 JULY 2006
Q40 Colin Challen: If a ruling of
the DSB was in contravention of an MEA, what might be the consequences
of that?
Mr Tarasofsky: I think it would
be very bad for the WTO itself and very bad for the MEA. One other
thing occurred to me in response to your last question. The best
check against corruption or the hijacking of a process by a political
agenda is transparency. The WTO Appellate Body has taken some
steps towards making the process more transparent. For example,
by permitting the submission of amicus curiae briefs from
non-parties or NGOs. That said, the process is still not transparent
in the sense that one would recognise in English courts or even
at the International Court of Justice. Therefore, the general
public can only really rely on the written record and that is
a flaw in the dispute settlement process which ought to be addressed.
I do not think that we will see a scenario where a WTO dispute
panel or the Appellate Body would rule that an MEA itself is illegal.
I think that that would be beyond the scope of such a body, but
it is possible for the WTO Dispute Settlement Body to rule that
the implementation measure of an MEA, whether that is a specific
or non-specific measure, does contravene WTO law, and that of
course, would create a crisis of confidence in the system, one
where it is not readily apparent that the tools are in place for
a constructive salvaging of that situation. I think that would
be a severe problem for the WTO, especially at a time when, as
you noted earlier, the overall negotiations are in crisis. Nonetheless,
I would not want to say that the damage would only be at the WTO
end. We heard earlier testimony that there is a chill effect on
negotiators in the environmental field out of fear of what the
WTO might rule in relation to trade measures that they are contemplating.
No doubt a WTO ruling of the nature that you indicated would contribute
to that chill effect and that would indeed be a serious problem
that would need to be corrected.
Q41 Mr Vaizey: Could you talk a bit
about the Committee for Trade and Environment, which I think you
say has not lived up to its promise?
Mr Tarasofsky: It has not, because
if one goes back to the original mandate, it is quite clear that
it was fully within the remit of the Committee to come up with
recommendations on reforming the multilateral trading system.
Throughout its existence it has done nothing of the sort. The
most far reaching conclusion it ever reached was a long time ago,
back in its 1996 report, and that report was only adopted after
it was agreed that nothing in the report alters the balance of
rights and responsibilities in the WTO, but the report does say
that where there is a dispute between an MEA and the WTO that
parties to the MEA should consider taking the dispute to the MEA
before the WTO. That is the strongest it has ever reached in terms
of coming up with a clear message. So the mandate is there, it
still exists as a mandate, because it has not been changed. Presumably,
once the Doha Round is completed or collapses, there is the legal
possibility to simply continue those discussions, but the political
will is absent in terms of coming up with concrete recommendations.
Q42 Mr Vaizey: So the mechanism is
there; it is just not being used properly.
Mr Tarasofsky: The mechanism is
there. I think it is an imperfect mechanism because it is not
as transparent and as participatory as it ought to be considering
the issues that it is dealing with. So there is not a full, meaningful
dialogue between the environmental institutions and the WTO in
the negotiations. The MEA information sessions, as they are called,
are really one-off events that do not seem to permeate into the
deliberations of the WTO in any observable way. The other thing
to note is that many of the really difficult, controversial issues
related to the environment are not even addressed in the Committee
on Trade and Environment. One sees them, or rather one reads of
them, being debated in the Committee on sanitary and phytosanitary
measures or in the Technical Barriers to Trade Committee as a
result of notifications that relate to the remit of those committees
but also have environmental implications. So those are where the
real debates are happening. Those committees of course are even
less transparent and absolutely not participatory as compared
to the Committee on Trade and Environment. So the mechanism is
there, yes. It is a flawed mechanism and, as you say, it has not
been used nearly to the effect that it ought to be used.
Q43 Mr Caton: If we could move on
to the Doha negotiations, you have said developing countries are
deeply suspicious that demands to introduce environmental provisions
are actually cover for protectionist policies. How do we set about
engaging the developing countries to move forward the environmental
agenda?
Mr Tarasofsky: I think there is
a lot of confidence building to do here and that does involve
addressing the imbalances in the agricultural sector. Of course,
that is not the end of the story. I do not think that once agreement
is reached on agricultural tariffs and subsidies in this round
that that should be the end of the discussions on agriculture
and the relationship to the environment, but I think that the
developed countries need to show their bona fides more
to the developing country negotiators. It is a tough nut to crack
though, I am the first to admit, because the developing countries
themselves are not always unified in their approach to these issues.
One finds, for example, that in the context of a multilateral
environmental agreement, such as the Cartagena Protocol on Biosafety,
that it is developing countries that were pushing for trade restrictions
and it was developed countries who were resistant. One finds similar
dynamics in the Convention on International Trade in Endangered
Species of Wild Fauna and Flora, where it is again often developing
countries who are asking for trade restrictions because they know
that they do not have the capacity to control the trade themselves
without having the importers also establishing trade barriers,
and yet those, of course, tend to be staffed by the environmental
ministry, so the negotiators are different in many cases than
the ones who appear in the WTO, representing their interests in
the WTO often in a less than joined-up manner. So clearly, capacity
building to enable more joined-up government, more integrated
approaches to policy making, is an important piece of the puzzle.
The last thing I would say follows on from the examples I just
gave. To the extent that there is greater inter-institutional
co-operation and meaningful interaction in relation to policy
making on trade and environment, then developing countries and
developed countries will be able to negotiate more meaningfully
with one another, so that you do not end up with the perhaps bizarre
case where that can happen in the WTO where, say, environmental
demands are traded off against something completely unrelated
to environment—eg textiles or something else. That is the
nature of a single undertaking, but if you had a more integrated
approach, then you could have a more substantial negotiation,
more substantial and more substantive negotiation, whereby the
bargaining is more rational and more directed to the actual problems.
Q44 Mr Caton: Going back to the first
part of your answer, would you say that the most significant factor
in this distrust that is clearly there is the position of the
United States and the European Union on agricultural subsidies?
If there were movement on that, do you think that we would get
the engagement on the environmental issues?
Mr Tarasofsky: Of course, the
bargaining would have to be structured in a way to enable the
outcome that you just referred to, so to the extent, for example,
that the EU in making concessions on agriculture is able to perhaps
pocket potential concessions on environment, then yes, one could
imagine an outcome like that. I do not know the extent to which
that kind of discussion is actually taking place in Geneva or
even within the European Commission but that said, it is also
quite evident that until agriculture moves, nothing else is going
to move on the agenda. It is difficult to imagine any scenario
other than that.
Q45 Mr Caton: The lack of progress
within the WTO on trade and environmental issues has led you,
I believe, and others to suggest that a new body be created to
consider these issues. What form would that body take?
Mr Tarasofsky: I think ideally
that body ought to have three functions. One would be the analysis
of the problem. I am thinking here of, for example, the Intergovernmental
Panel on Climate Change, a scientific body set up to enhance international
understanding of the problem of climate change and to feed that
into the policy-making process. I think there is a lot more analysis
and fact finding that needs to take place on the very complex
relationship between trade liberalisation and the environment.
Secondly, the body would need to develop recommendations for policy-making,
and I am saying that very cautiously because I am not suggesting
that we create a brand new institution that is going to make all
the decisions on trade and environment. I envisage a more realistic
scenario whereby a body can make recommendations to the more specialised
agencies that relate to their competencies, so the WTO in relation
to eliminating economic and trade protectionism, and MEAs in the
development of their trade agenda that promotes their objectives.
So, while I think the second function is related to policy-making,
I do not envisage that body taking the decisions itself. The third
function is dispute settlement. There will be cases where conflicts
will arise. The WTO Dispute Settlement Body, as robust and in
many ways constructive as it has been, is really there to apply
WTO law. It is not there to interpret or apply the law of other
international treaties, and in fact it even said that in a recent
case relating to soft drinks. So there is a gap.There is not yet
a place where there is a sufficient mandate or sufficient trust
to resolve disputes relating to trade and environment. In principle,
legally speaking, the International Court of Justice could be
that body but the trade negotiators have always resisted assigning
the ICJ with a mandate to deal with trade disputes, which is why,
going back to the earliest days of the GATT, there was a notion
that disputes over the GATT will be settled within the GATT. The
Appellate Body was created specifically because it was more credible
to that policy community than having disputes go to the International
Court of Justice. But I think those three functions are the essential
ingredients to an institution or some network of institutions
which ought to be at the interface of trade and environment.
Q46 Mr Caton: Why do you think the
WTO process is so secretive, and how do we create greater openness?
Mr Tarasofsky: I suppose it is
so secretive because of the commercial implications of those negotiations,
and I imagine if one drills down one could find all kinds of other
reasons that relate to that. For example, there are reported to
be instances where governments are willing to concede on issues
where there are strong domestic lobbies pushing them to go in
a different direction. So governments would not want to perhaps
be open or would not want it to be well known the extent to which
they are perhaps not pursuing certain domestic interests or not
favouring other interests. I think that the commercial element
explains a lot of the way the WTO works. I think also habit explains
a lot of the way the WTO works. It was an organisation that was
founded back in a time when there was less transparency in these
kinds of discussions. So there is, I think, a momentum that is
generated through that kind of legacy. I do not think that is
justified in today's world. I think if one looks at the way the
WTO has evolved over the last 10 years, it has become more open.
If you look at the situation back in 1995, it is really night
and day compared to the situation today. Many documents are freely
available on the internet which were considered restricted documents
10 years ago. Nonetheless, I think in today's world there is no
legitimate reason why UN negotiations on security matters, for
example, should be more open than negotiations relating to trade
interests, especially if one adopts the perspective of Pascal
Lamy that trade is not an end in itself; it is always meant to
be in pursuit of a wider public good. Therefore the case for transparency
overrides the case against it.
Q47 Colin Challen: One last question,
if I may. On the question of this new body, what are the chances
or the likelihood of it actually being established do you think?
Mr Tarasofsky: I am not by nature
a betting man, so I cannot give you a precise answer. What I would
say is this. There is one scenario where the negotiations in the
present round collapse completely, and if that does happen, one
would hope that wise minds would prevail and a period of sober
reflection will take place that really assesses why the round
has failed, what the procedural implications of that are, and
perhaps there lies an opportunity for more creative thinking about
joined-up international decision making. That is not a scenario
which I am advocating. I would not want to see the round collapse
completely. I do not want to see the WTO weakened, because I do
think that a global institution that regulates international trade
is necessary for global welfare and is much better than a spaghetti
ball of bilateral and regional trading arrangements. Another scenario
which is perhaps more likely, although I am not sure how likely
it really is, is that the negotiations do succeed in coming to
completion and the negotiators looking at the environmental aspects
come to the conclusion that they could not address the full problem.
So I think the best outcome of such negotiations would be a snapshot,
an affirmation of the legal status quo that the Appellate
Body has provided over the years. I think that would be a real
contribution. It ought not to be controversial because it would
reflect WTO law, but of course, politically it would be difficult.
If that were the case, if the WTO negotiators were to come up
with an outcome which preserves what has already been achieved,
but then says this is as far as we can go, then perhaps a moment
would be created for thinking about new institutional arrangements
to carry on the discussion in a more balanced and integrated way.
Colin Challen: I think that brings us
to the end of our questions. Thank you very much for your time
and contribution this morning. It has been great. Thank you.
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