Memorandum submitted by ICC UK
INTRODUCTION
ICC UK represents the interests of the business
and international trade community within the United Kingdom and
consists of members from the manufacturing, banking, insurance,
transport, trading, legal, and other professional sectors.
ICC itself is the world business organisation.
With comprehensive membership in more than 130 countries, it is
the only representative body that speaks with authority on behalf
of enterprises from all sectors and every part of the world. Founded
in 1919, ICC's purpose is to promote an open international trade
and investment system and the market economy world-wide. Its rules
for international trade transactions and trade finance are accepted
globally by traders, governments and judges as the foundation
of law of international trade. Since its foundation more than
85 years ago, ICC has promoted the market economy and the greatest
possible economic freedom for business, based on self-regulation
and responsible business conduct.
ICC UK welcomes the opportunity to submit its
views to the sub-Committee enquiry of the Environmental Audit
Committee into trade, development and the environment. This submission
draws on existing policy statements developed and approved by
ICC.
As the world business organisation the International
Chamber of Commerce (ICC) is of the view that a major private
sector contribution is essential to help define the agenda and
outcome of the Doha Trade Round. ICC has made a number of submissions
encouraging negotiators and individual governments to reach an
ambitious agreement.
In April 1996, the ICC issued a general statement
on behalf of world business, on the present and future agenda
of the WTO. This statement suggested that in the area of trade
and environment, drawing on the work being carried out by the
WTO Committee on Trade and Environment (CTE), the WTO should clarify
or modify WTO rules in relation to some of the issues which appear
ready for such an approach. Chief among these, in the ICC's view,
should be the relationship between WTO rules and the provisions
for using trade measures contained in Multinational Environmental
Agreements (MEAs). ICC remains of this view.
The ICC firmly believes that there is no inherent
conflict between preserving the earth's environment and fostering
economic growth. Indeed, the technological innovation and financial
resources generated by global economic growth must be increasingly
harnessed to bring about environmental improvements. Economic
growth is necessary in order to generate the resources needed
to develop and invest in clean technologies. Therefore, environmental
improvements require a positive development of the multilateral
trading system. Conversely, sound environmental policies can contribute
to avoiding trade frictions.
International intergovernmental co-operation
will be essential to the development of environmental measures
which promote sustainable development, while safeguarding an open,
equitable and non-discriminatory multilateral trading system,
by guaranteeing the integrity of WTO disciplines. -Integration
and mutual compatibility of environmental and trade policies will
enable governments to achieve more fully the beneficial effects
of trade liberalisation for both economic development and the
environment.
1. What is the impact of increased trade
liberalisation on the environment?
Evidence gathered over many years by bodies
such as the OECD[1]
and the Centre for Economic Policy Research shows that, on the
whole, liberalised trade leads to economic growth that leads to
improvements in the environment and positively affects the interests
of the poor. The converse can also be true where projects are
poorly planned and executed and there is an inadequate framework
or enforcement of environmental protection legislation, but in
general the relationship between trade, growth and environmental
protection is very positive.
2. To what extent should the WTO process
encompass environmental considerations?
Environmental concerns are specifically included
in the WTO work programme, in particular through the work of its
Committee on Trade and Environment (CTE), including consideration
of appropriate technical assistance. Environmental concerns are
also incorporated into the Doha Round through negotiations mandated
in para 31 of the Doha Declaration. Issues considered include:
— The relationship between existing
WTO rules and specific trade obligations set out in multilateral
environmental agreements (MEAs); and
— The reduction or, as appropriate,
elimination of tariff and non-tariff barriers to environmental
goods and services.
In addition, some governments have filed position
papers with the WTO in the course of CTE meetings which have sought
to introduce interpretations of the so-called "precautionary
principle" into discussions of environmental labelling and
other trade and environment issues. Recent speeches by the Director-General
of the WTO, Pascal Lamy, have reiterated the importance of environmental
considerations in taking the Doha negotiations forward and has
urged negotiators to make further progress in this regard.
http://www.wto.org/english/news_e/sppl_e/sppl28_e.htm
http://www.wto.org/english/news_e/sppl_e/sppl25_e.htm
3. What is the role of multinational organisations,
such as the World Bank and IMF, and the EU?
These organisations can reinforce the importance
of sustainable development and environmental considerations in
seeking to complete the Doha negotiations.
4. How are business and other interests influencing
the trade agenda?
As indicated above ICC has in recent years made
a series of policy submissions to the WTO and member governments
on trade and environment issues, including on:
The relationship between existing WTO rules
and specific trade obligations set out in multilateral environmental
agreements
ICC has called for the development of "further
internationally agreed criteria for the use of trade measures
within the context of MEAs, in order to minimise opportunities
for protectionist and trade-disruptive measures. This may be achieved
by applying clearly defined presumptions of WTO consistency to
specific trade measures considered for inclusion in MEAs. Such
criteria would provide an effective guide for the development
and design of trade measures in MEAs, and ensure mutual consistency
between international environmental and trade law". ICC believes
that the use of trade measures in MEAs to achieve environmental
objectives should be subject to a number of basic disciplines
namely:
"As a matter of principle, the use of trade
measures in MEAs to achieve environmental objectives should only
be contemplated as a last resort, following the proper consideration
of all alternative policy options. Whenever other policy options
are feasible to achieve the same objectives, these should be used
in preference to trade measures. Trade measures should only be
used when alternative measures would be ineffective in achieving
the environmental objective without the complementary use of trade
measures."
WTO jurisprudence in this area has developed
substantially since the issuance of the ICC statement referenced
above in 1996, and several MEAs with trade measures have moved
ahead or been concluded. Nonetheless, progress in clarifying the
relationship between MEAs and WTO disciplines has been slow. Therefore,
the policy recommendations above are still relevant and continue
to reflect ICC's position on this issue.
The reduction or, as appropriate, elimination
of tariff and non-tariff barriers to environmental goods and services
On the issue of reduction or, as appropriate,
elimination of tariff and non-tariff barriers to environmental
goods and services, the stated ICC position is as follows: "ICC
( . . . ) urges WTO members to take all necessary steps to ensure
that the letter and the spirit of the Doha Development Agenda
regarding the reduction and/or elimination of tariffs on environmental
goods is satisfied. WTO members should identify a list of commonly
agreed objective criteria for the identification of environmental
goods, in conjunction with work undertaken in APEC and the OECD.
Production and/or process methods (PPMs), as well as the end-use
of a product, should be excluded as criteria. WTO members should
allow the necessary flexibility for these criteria to cover new
or improved environmental goods. This will ensure that the benefits
of this initiative, in terms of trade, development and the environment,
can be maintained and expanded in the face of new technology and
new environmental risks, without the need to wait for another
multilateral round of negotiations."
The appropriate use of precaution, science
and risk in trade and environment policy
Concerning strengthening the scientific foundation
of policies aimed at protecting human health and the environment
while minimizing trade barriers, the ICC position is as follows:
"The exercise of precaution in the context
of international trade is expressly provided for in multilateral
trade agreements under the GATT/WTO. The authority to take science-
and risk-based action under these provisions should be maintained,
as should the scientific discipline that underpins them."
"ICC is concerned that some governments
as well as private groups favour extreme uses of precautionary
measures, considering a modest indication of doubt or concern,
or even an unanswered question, as an absolute standard for action
overriding all other considerations, and in some cases, taking
precedence over domestic and international regulations. Such unbalanced
application of precaution has been used to justify restricting,
or even eliminating a technology even though the risk may be remote
or manageable and the evidence of the risk limited, unsupported
or unverified. As a result, concern persists that governments
will use this concept to justify discriminatory and trade-restrictive
measures without scientific rationale instead of relying on existing
domestic and international rules and disciplines and cooperative
efforts to carefully evaluate and address the risk in question."
"Business supports cooperative international
efforts involving both public and private sectors to develop and
share scientific data that help improve the accuracy and relevance
of risk assessments and recognizes best practices with regard
to methodology and quality assurance. The responsibility remains
with governments to ensure that precautionary risk-management
measures that they take in circumstances of uncertainty involve
scientifically substantiated threats to health or the environment,
are least trade-restrictive and are taken only after full consideration
of their negative impact on economic development and on further
improvements in social and environmental wellbeing."
The full texts of the ICC Policy statements
from which the above extracts are taken are attached as Annexes.
5. What are the likely impacts, beneficial
or otherwise, of the Doha Round—if completed—on the
environment?
As indicated in the introductory section ICC
believes that a successful outcome to the Doha Round will generate
additional economic activity making possible investment in environmental
protection and clean technologies. A failure in the round risks
a return to the protectionism that would make the raising of environmental
standards globally a significantly greater challenge. Successful
completion of the Round could result in clearer rules on the relationship
between MEAs and the WTO and could pave the way for much greater
access for environmental goods around the world.
6. Will the Doha "Development"
round produce the pro-development outcome originally intended?
What should this include?
ICC in its policy statements has repeatedly
highlighted the potential benefits for developing countries of
an ambitious agreement. Among other things, the Round should include
improved market access for developing country businesses as well
as providing the rules based environment in which those businesses
can prosper. There may also be commitments to aid for trade to
help with the development of trade infrastructure in the poorest
countries but questions about the subjects of the negotiations
themselves are best addressed to the negotiators directly. It
is not currently possible to assess whether an ambitious agreement
will be reached.
7. To what extent is the environment under
the heading "environmental services" being treated as
a commodity within the WTO negotiations?
This question is best addressed to WTO negotiators.
8. What coordination is there between the
WTO process and International Environmental Agreements processes
such as Kyoto and FLEGT?
This question is best addressed to WTO negotiators.
9. How do DTI, DFID and DEFRA Ministers and
officials co-ordinate their activities when planning their participation
in different conferences—such as Kyoto in Montreal and WTO
in Hong Kong—to ensure they are not pursuing contradictory
measures on trade and environment?
This question is best addressed to the relevant
Ministers and officials.
10. How can we protect natural resources
as a resource for the very poor as international trade increasingly
impacts developing countries?
This question cannot be addressed in general
terms but requires careful consideration in respect of each category
of natural resource. The WTO currently provides for governments
to take certain measures in respect of natural resources within
their sovereign control.
June 2006
1 Trade Measures in Multilateral Environmental Agreements,
OECD, 1999. Back
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