Committee on Trade & Development & Committe on Trade &Environment

The Committee on Trade and Development and Committee on Trade and Environment

Source: www.wto.org

The Committee on Trade and Development and Committee on Trade and Environment are two of the several committees continued or established under the Marrakech Agreement in 1994. They have specific mandates to focus on these relationships, which are especially relevant to how the WTO deals with sustainable development issues. The Committee on Trade and Development was established in 1965. The forerunner to the Committee on Trade and Environment (the Group on Environmental Measures and International Trade) was established in 1971, but did not meet until 1992. Both Committees are now active as discussion grounds but do not actually negotiate trade rules. The terms of reference given to the CTE in Marrakech are, in part:

"To identify the relationship between trade measures and environmental measures, in order to promote sustainable development;

To make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system are required, compatible with the open, equitable and non-discriminatory nature of the system..."

The Committee narrowed this broad mandate down to a 10-item agenda for work (see Box 3-1) and has used this agenda as its framework for discussions. Since 1996 the Committee has grouped the 10 items into two clusters for better focus: those items on the theme of market access (items 2, 3, 4 and 6), and those on the linkages between international environmental management and the trading system (items 1, 5, 7 and 8). Item 9, on trade in services, has not been much discussed, and item 10, on openness, sits in its own category.

Committee on Trade and Environment

Mandate of the Committee on Trade and Environment

Mandate of the Committee on Trade and Environment

Work programme of the Committee on Trade and Environment

CTE on: trade rules, environmental agreements and disputes

CTE on: how environmental taxes and other requirements fit in

CTE on: environmental protection and the trading system

CTE on: transparency of environmental trade actions

CTE on: environment and trade liberalization

CTE on: domestically prohibited goods

CTE on: intellectual property

CTE on: services

CTE on: other organizations

The ministerial Decision on Trade and Environment, adopted in Marrakesh on 15 April 1994, called for the establishment of a Committee on Trade and Environment (CTE).

The CTE took over from the GATT EMIT group. Its mandate is:

• to identify the relationship between trade measures and environmental measures in order to promote sustainable development;

to make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system are required, compatible with the open, equitable and non-discriminatory nature of the system.

Work programme of the Committee on Trade and Environment

Since its establishment, the WTO Committee on Trade and Environment (CTE) has discussed all of the items contained in its work programme.

In 1996, the CTE presented a comprehensive report to the Singapore Ministerial Conference. The conclusions presented in this report are summarized below for each agenda item.

1. Trade rules, environmental agreements, and disputes

The relationship between the rules of the multilateral trading system and the trade measures contained in multilateral environmental agreements (MEAs), and between their dispute settlement mechanisms(Items 1 and 5 of the work programme)

2. Environmental protection and the trading system 

The relationship between environmental policies relevant to trade and environmental measures with significant trade effects and the provisions of the multilateral trading system (Item 2 of the work programme)

Trade-related environmental policies: subsidies
The environmental review of trade agreements

3. How taxes and other environmental requirements fit in

The relationship between the provisions of the multilateral trading system and: (a) charges and taxes for environmental purposes; and (b) requirements for environmental purposes relating to products, such as standards and technical regulations, and packaging, labelling and recycling requirements. (Includes an explanation of “product” versus “process”)

(Item 3 of the work programme)

Eco-labelling
Handling requirements

Environmental charges and taxes

4. Transparency of environmental trade actions

The provisions of the multilateral trading system with respect to the transparency of trade measures used for environmental purposes(Item 4 of the work programme)

5. Environment and trade liberalization

The effect of environmental measures on market access, especially in relation to developing countries, in particular to the least developed among them, and the environmental benefits of removing trade restrictions and distortions(Item 6 of the work programme)

6. Domestically prohibited goods

The issue of exports of domestically prohibited goods (DPGs), in particular hazardous waste (Item 7 of the work programme)

7. Intellectual property

The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)(Item 8 of the work programme)

 8. Services

The work programme envisaged in the Decision on Trade in Services and the Environment (Item 9 of the work programme)

 9. The WTO and other organizations

Input to the relevant bodies in respect of appropriate arrangements for relations with intergovernmental and non-governmental organizations (NGOs)(Item 10 of the work programme)

CTE on: trade rules, environmental agreements and disputes

The relationship between the rules of the multilateral trading system and the trade measures contained in multilateral environmental agreements (MEAs), and between their dispute settlement mechanisms. (Items 1 and 5 of the work programme)

Multilateralism preferred Back to top

Environmental and trade policy-makers widely recognize that it is better to solve transboundary environmental problems multilaterally — whether regional or global — than by taking unilateral action.

Resort to unilateralism runs the risk of arbitrary discrimination and disguised protectionism, which could damage the multilateral trading system.

The 1992 UN Conference on Environment and Development (UNCED), also known as the Rio “Earth Summit”, strongly endorsed the idea that multilateral enviromental agreements (MEAs) should be negotiated as a means of addressing global environmental problems.

The Rio Earth Summit’s Agenda 21 (The United Nations Programme of Action from Rio) states that measures should be taken to

“avoid unilateral action to deal with environmental challenges outside the jurisdiction of the importing country. Environmental measures addressing transborder or global environmental problems should, as far as possible, be based on international consensus.” (in chapter 2)

Out of approximately 200 multilateral environmental agreements, about 20 include provisions that can affect trade: for example they ban trade in certain products, or allow countries to restrict trade in certain circumstances.

Among them are the Montreal Protocol on Substances that Deplete the Ozone Layer, the Basel Convention on the trade or transportation of hazardous waste across international borders, and the Convention on International Trade in Endangered Species (CITES).

 But how should MEAs’ trade provisions be handled? Back to top

Whilst multilateral environmental agreements are encouraged, the WTO’s CTE has wrestled with the issue of how to address the trade provisions that several of them contain.

• Problems are less likely to occur in the WTO between countries that have signed the relevant multilateral environmental agreement and have therefore agreed to the trade measures prescribed in the agreement.

Problems are more likely to occur in the WTO when the relevant environmental agreement says signatory countries should take action against countries which have

• not signed.

An example of a trade measure amongst parties to an agreement is the ban on trade in hazardous wastes — whether for recycling or for final disposal — under the Basel Convention on the Transboundary Movement of Hazardous Wastes. This is an agreement reached between essentially OECD and non-OECD parties to the convention.

Examples of trade measures against non-signatories include measures prescribed in:

• the Montreal Protocol on Substances that Deplete the Ozone Layer,
• the Basel Convention,
• the Convention on International Trade in Endangered
• Species.

These require countries that are parties to the agreements to apply more restrictive trade provisions against non-parties than to fellow-signatories.

A possible source of conflict between the trade measures contained in MEAs and GATT rules, is the fact that several of the trade measures they contain violate the principle of non-discrimination. They envisage trade in a product with some countries but not with others — violating the most-favoured-nation clause. Or they violate national treatment by allowing discrimination between domestic and imported products. (As with all non-discrimination discussions, the proper technical term here is “like” products, i.e. the same or equivalent products.)

The WTO’s Trade and Environment Committee discussed whether the trade provisions contained in multilateral environmental agreements and WTO rules are compatible.

It argued that the problem should not be exaggerated because out of the 200 MEAs currently in force, only 20 contain trade provisions.

In addition, so far there have been no disputes in the WTO on the trade provisions contained in an MEA. If there were such a dispute, the following principles could prevail.

More specialized treaties prevail? Back to top

The principle of “lex specialis” in public international law says that if all parties to a treaty conclude a more specialized treaty, the provisions of the latter prevail over those of the former.

This, the committee said, would likely be taken into account in the WTO. According to a widely held view in the CTE, trade measures that parties to a multilateral environmental treaty have agreed, could be regarded as “lex specialis”, prevailing over WTO provisions. They therefore ought not to give rise to legal problems in the WTO — even if the agreed measures are inconsistent with WTO rules. However, this is not a definitive interpretation, and numerous uncertainties remain.

Of greater concern, however, is trade discrimination against WTO members that have not signed the relevant MEA.

  
CTE on using the rules and preventing disputes

In the conclusions reached at the time of the WTO’s 1996 Singapore Ministerial Conference, the CTE stated that it fully supported multilateral solutions to global and transboundary pollution problems, and urged WTO members to avoid unilateral actions in this regard.

It stated that, whilst trade restrictions are not the only — nor necessarily the most effective — policy instrument to use in MEAs, in certain cases they can play an important role.

The CTE agreed that GATT/WTO rules already provide broad and valuable scope for trade measures to be applied pursuant to MEAs in a manner that is consistent with WTO rules. It argued that there is no need to change WTO provisions to provide increased accommodation in this regard. For instance, GATT Article XX is often cited.

On dispute settlement, the CTE agreed that better policy coordination at the national level between trade and environmental policy-makers can help prevent disputes arising in the WTO over the use of trade measures contained in MEAs.

The committee took the view that problems are unlikely to arise in the WTO over trade measures agreed and applied amongst parties to an MEA.

It urged that, in the negotiation of future MEAs, particular care be taken over how to consider trade measures that may apply to non-parties.

In the event of a conflict in the WTO over the trade measures prescribed in an MEA (in particular against a WTO member that is not a party to the MEA), the CTE expressed its belief that WTO dispute settlement provisions are satisfactory for tackling any such problems. It is also possible for WTO dispute settlement panels to resort to environmental expertise in cases where this problem could arise.

CTE on: environmental protection and the trading system

The relationship between environmental policies relevant to trade, and environmental measures with significant trade effects, and the provisions of the multilateral trading system. (Item 2 of the work programme).

The main issue that the WTO Committee on Trade and Environment (CTE) has examined under this heading (item 2 of the work programme) has been the treatment of environmental subsidies in the WTO. Other issues raised have included proposals that trade agreements should be reviewed from an environmental persective.

Trade-related environmental policies: subsidies Back to top

Subsidies can contribute either positively or negatively to the environment.

They may be beneficial when they encourage producers such as companies or farmers to take action that is beneficial environmentally to the community as a whole and not simply to the producers themselves — in the jargon, these subsidies “capture positive environmental externalities”.

On the other hand, subsidies can be harmful if they cause environmental stress for instance by encouraging the overuse of water, fertile soil, forests, fish stocks, or other natural resources.

Subsidies for agriculture and energy are widely considered to distort trade, and in some instances to cause environmental degradation. But in general, environmentalists have suggested that multilateral trade rules should be more flexible so that subsidies can be used to encourage environmentally beneficial activities or technologies.

During the Uruguay Round both the positive and negative contributions that subsidies may make to the environment were considered. This led to new disciplines on subsidies as a whole, and exemptions for some.

The new disciplines were included in two agreements: Agriculture, and Subsidies and Countervailing Measures. Both these agreements make certain exemptions for environmental subsidies:

• The Agriculture Agreement says environmental subsidies may be exempt from commitments to reduce domestic support when certain conditions are met.

The Subsidies Agreement says — again, provided certain conditions are met — that environmental subsidies may be exempt from actions that other countries could normally take to counter the subsidies, in particular charging countervailing duties on imports that have been subsized in the exporting country. The subsidies cannot be challenged under the WTO’s dispute settlement procedure.

At the same time, the Subsidies Agreement also has provisions allowing tax refunds on energy used to produce exports — the refunds are not export subsidies, the agreement can be interpreted to say. The environmental implications have been discussed in the Committee on Trade and Environment.

Some WTO members argued in the CTE that this provision encourages the greater use of energy-intensive technologies to produce exports. (Concern has also been expressed that these provisions could be abused and could lead to market access commitments being undermined.) In addition, some questioned whether these provisions are consistent with the OECD’s “polluter pays” principle.

However, no definitive conclusions on subsidies were reached by the CTE. It was agreed that further examination and analysis of policies of this nature would be required in future.

 Environmental review of trade agreements Back to top

In recent years, several governments, including the US, have come under increasing pressure from non-governmental organizations (NGOs) to review the environmental implications of trade agreements.

The US and Canada have prepared reviews of the North American Free Trade Agreement, and of the results of the 1986–94 Uruguay Round negotiations, which created the WTO.

In the CTE (under item 2 of the work programme), the US has recommended that governments individually carry out national environmental reviews of trade agreements.

In November 1999 the US issued an executive order to study the environmental implications in every substantial trade negotiation and the environmental impacts of trade agreements.

Some WTO members have proposed that individual governments should assess the environmental impact of trade agreements within their own countries. The proposals were made during the preparations in Geneva for the Third WTO Ministerial Conference in Seattle, 30 November to 3 December 1999.

These reviews will have to be analysed further in CTE discussions.

CTE on: how environmental taxes and other requirements fit in

The relationship between the provisions of the multilateral trading system and:
(a) charges and taxes for environmental purposes; and
(b) requirements for environmental purposes relating to products, such as standards and technical regulations, and packaging, labelling and recycling requirements
(Item 3 of the work programme)

Discussion of the work programme’s item 3 has focused primarily on the issues of eco-labelling, handling requirements (such as requirements for packaging, recycling, re-use, recovery, and disposal), and environmental taxes.

Eco-labelling

Eco-labelling — labelling products, often voluntarily, according to environmental criteria such as use of recycled material, etc — has been one of the most controversial aspects of the WTO Committee on Trade and Environment’s work.

It has received considerable attention, and its use by governments, industry and non-governmental organizations is increasing.

The CTE recognized that well designed programmes for eco-labelling can be effective environmental policy instruments, which may be used to foster environmental awareness amongst consumers.

However, it noted that these schemes raise significant concerns about their possible trade effects (if labelling requirements are too narrow they could be unnecessarily difficult for some suppliers to fulfil).

Eco-labelling schemes differ in their design. Some are based on a single criterion, such as what the products contain. Others are based on life-cycle analysis, i.e. they take into consideration the environmental effects of products all the way through their production process until their final disposal.

In practice, life-cycle analysis is not easy to conduct. Labels following the latter approach are frequently based on criteria that relate to only a few aspects of a process of production or of a product. This creates the potential for unwarranted trade restriction, in particular protectionism in disguise.

The criteria used for eco-labelling are determined through consultation among interested parties within countries. As a result, a common complaint by the users of eco-labels has been that the criteria focus on local concerns and do not address the views of foreign suppliers, nor the specific environmental situation of the supplier countries.

The use of life-cycle analysis also results in eco-labels being based on process and production methods (PPMs) that are not related to specific products.

In other words, when eco-labels are successful in influencing consumer choice, and are necessary to maintain market share, suppliers have to alter their production processes in order to qualify for the eco-labels.

Some countries have therefore expressed concern in the CTE that eco-labelling means that the environmental concerns of importing countries are imposed on the production methods of their trading partners. The principal WTO rules dealing with labelling are those of the Technical Barriers to Trade (TBT) Agreement.

The extent to which the agreement applies to labels based on processes (instead of the characteristics of the products themselves) is unclear, and has been the subject of some discussion both in the CTE and the Committee on Technical Barriers to Trade, which administers the TBT Agreement.

Currently, a major challenge to the TBT Agreement’s effectiveness is the increasing use of regulations and standards that are process-based, as opposed to product-based, and not only in the area of the environment. This may require added reflection on the TBT Agreement’s rules on mutual recognition and equivalency (i.e. countries recognizing each others’ methods and standards) as a means of addressing the problems posed by countries having differing environmental standards.

The CTE has supported the view that environmental concerns are not the same in all countries, and that the eco-labels developed by different countries need not be based on the same criteria.

In the context of international trade, this raises the issue of how to compare different criteria and different methods of assessing whether a product or process conforms.

Some of the issues raised in this regard have included: how the positive environmental qualities of the imported products can be taken into account in the design of labelling schemes; how eco-labelling schemes can be made more transparent; the extent to which trading partners can participate in selecting the criteria; and so on.

The CTE concluded that further discussions are needed on how criteria based on PPMs that are not related to the product itself should be treated under the TBT Agreement. It urged WTO members to respect their obligations under the TBT Agreement, including those on transparency.

Handling requirements

At present, handling requirements (such as requirements for packaging, recycling, re-use, recovery, and disposal) are applied on a smaller scale than eco-labels, but their use as environmental policy instruments is spreading.

A number of countries, particularly in Europe, have instituted policies stipulating, for instance, the kind of packaging that can or cannot be used in their markets. They also prescribe the recovery, re-use, recycling or disposal of packaging materials once they have served their purpose.

These policies can increase costs for exporters and can potentially be barriers to trade. They can result in discriminatory treatment, even if the same requirements are imposed both on domestic products and imports, when countries differ in the materials and other resources available to them, and when they face different constraints.

For example, wood is used for packaging in many Asian countries, but in Europe it is not   regarded as recyclable and therefore pays a penalty in the marketplace.

On waste handling requirements, the CTE has followed a similar approach in its analysis of the potential trade effects to that used for eco-labelling.

Among the concerns it has expressed are:

• the extent to which the criteria for selecting waste handling schemes are delegated to domestic industry groups and therefore tailored to their preferences;
• the degree to which foreign suppliers are allowed to participate in the design and preparation of these schemes;
• the extent to which packaging favoured by overseas suppliers is accepted by the schemes;
• the cost of participating in the schemes.

  
Environmental charges and taxes

Governments are increasingly using environmental charges and taxes in order to meet national environmental policy objectives, and to “internalize” domestic environmental costs (i.e. to make producers pay for the environmental costs such as pollution, which they would not normally have to face).

These charges have an impact on international trade if they are imposed on imported products or rebated on exports. That is where WTO rules discipline governments’ actions.

The issue is of considerable interest and importance to trade and environment policy-makers in the context of proposals to increase taxes on environmentally sensitive inputs, such as energy (i.e. carbon taxes) and transportation.

Under existing GATT rules and jurisprudence, “product” taxes and charges can be adjusted at the border (i.e. when products are imported or exported), but “process” taxes and charges by and large cannot.

For example, a domestic tax on fuel can be applied perfectly legitimately to imported fuel. But a tax on the energy consumed in producing a ton of steel (a tax on the production process) cannot be applied to imported steel, even if it is charged on domestically produced steel, which could make the imported steel cheaper (and presumably less environmentally friendly).

For this reason, there is some concern that the WTO rules could affect the competitiveness of domestic producers when they face environmental process taxes and charges. Indeed, these concerns about competitiveness were widely reported to have been behind the European Commission’s decision to abandon its proposal for a carbon tax in 1992.

The CTE says it is important for further work to be undertaken on the extent to which WTO rules need to be reviewed to accommodate environmental taxes and charges.

CTE on: transparency of environmental trade actions

The provisions of the multilateral trading system dealing with the transparency of trade measures used for environmental purposes
(Item 4 of the work programme)

Transparency is an important aspect of WTO work on trade and environment. As with other WTO work, a key component of transparency is “notification”: WTO members keep each other informed about their actions and policies by reporting them to the relevant committees and councils through the WTO Secretariat.

Numerous notification systems in the WTO increase the transparency of trade-related environmental measures. Various provisions in WTO rules create a broad basis for ensuring that these measures are transparent internationally:

• GATT Article X (i.e. 10) on the Publication and Administration of Trade Regulations;
• the 1979 (GATT) Understanding Regarding Notifications;
• consultation, dispute settlement and surveillance;
• the transparency provisions of the Technical Barriers to Trade and Sanitary and Phytosanitary agreements

They address many of the concerns raised under this item of the Committee on Trade and Environment’s work programme.

The CTE agreed that WTO rules do not need to be modified: they already ensure adequate transparency for existing trade-related environmental measures.

However, it recommended that trade-related environmental measures notified to the WTO under different agreements, be compiled in a single database for easier access and for the greater transparency of this particular category of measures.

For this purpose, a WTO Environmental Database of all trade-related environmental notifications to the WTO has been established and is periodically updated.

CTE on: environment and trade liberalization

The effect of environmental measures on market access, especially in relation to developing countries, in particular to the least developed among them, and the environmental benefits of removing trade restrictions and distortions. (Item 6 of the work programme)

This item is particularly important to the work of the Committee on Trade and Environment (CTE). It holds the key to the way sound trade policy-making and sound environmental policy-making can support each other.

Yet to be fully explored is the potential of this compatibility between good trade and environmental policies. It could help the push towards the next new round of market access negotiations. And it could ensure that the WTO is associated with positive efforts to promote environmental protection and accelerate sustainable development in developing countries.

The CTE has recommended that further work be undertaken on the environmental benefits that may arise from enhancing existing market access opportunities for developing countries. This is the first part of this item of the work programme.

It has also recommended further work on whether and how the removal of trade restrictions and distortions have the potential to yield “win-win” benefits — i.e. results that make winners out of both the multilateral trading system and the environment. The relevant distortions include high tariffs, tariff escalation (higher tariffs and protection for processed products than for the unprocessed materials used), export restrictions, subsidies, and non-tariff measures.

One response has been a WTO Secretariat background paper (WT/CTE/W/67, downloadable from on-line documents). The paper is also designed to help the CTE’s discussions to be more specific when it examines the relationship between the removal of trade restrictions and distortions and environmental benefits.

The paper looks at sectors: agriculture, energy, fisheries, forestry, non-ferrous metals, textiles and clothing, leather, and environmental services. It outlines the most prevalent trade restrictions and distortions in each sector, and the environmental benefits that might be gained if the restrictions and distortions are eliminated.

The basic premise of the Secretariat’s paper is that in well functioning market-based economies, prices reflect the relative scarcity of resources and consumer preferences. This helps to allocate resources efficiently.

But the benefits can be undermined when market prices fail to capture the harm caused by environmentally-damaging activities (for example when no one pays directly for the air pollution that they cause). The prices then send misleading signals about the optimal use of environmental resources.

Distorted prices obscure the abundance of under-utilized environmental resources.They contribute to the excessive depletion of exhaustible resources. They generate new environmental problems. And they contribute to the excessive use of environmentally damaging inputs.

In other words, if resources are not allocated optimally, effective environmental management is undermined.

CTE on: domestically prohibited goods

The question of exports of hazardous waste and other domestically prohibited goods. (Item 6 of the work programme)

As early as 1982, the GATT examined the issue of the export of domestically prohibited goods.

Concern was raised by a number of developing countries in GATT that they were receiving exports of goods that could not be sold domestically in the exporting countries or whose sale was severely restricted on health and environmental grounds.

They said this raised ethical concerns that needed to be addressed within the bounds of the multilateral trading system.

In 1982, the GATT ministerial meeting agreed that the GATT should examine the issue, and that all signatories (“contracting parties”) should begin to notify the GATT of any goods produced and exported by them but whose sale, for health reasons, they had banned in their domestic markets.

The notification system was set up, but governments tended to notify the domestically prohibited goods whose export had also been prohibited rather than the ones they continued to export. The notification system was not successful, therefore, and no notifications were received after 1990 (even though the 1982 decision remained in force, as it still does).

In 1989, a Working Group on the Export of Domestically Prohibited Goods was set up in GATT. It met 15 times between 1989 and 1991, when its mandate expired, but failed to resolve the issue. Then in 1994, the Ministerial Decision on Trade and Environment incorporated domestically prohibited goods into the terms of reference of the new WTO Committe on Trade and Environment (CTE).

While numerous international instruments already address the export of domestically prohibited goods (such as the Basel Convention on the Transboundary Movement of Hazardous Wastes), these instruments principally address chemicals, pharmaceuticals, and hazardous wastes.

The list does not include consumer products, an important group that most WTO studies on the issue have identified as missing.

Certain delegations have argued that while other conventions exist, several are only voluntary (in other words, signatory countries are free to decide whether to comply). They have expressed the wish to see quicker and better progress on the issue in the WTO.

The CTE has stated that while there is a need to concentrate on the role the WTO can play on this issue, it is important neither to duplicate nor to deflect attention from the work of other specialized inter-governmental forums.

For domestically prohibited products whose trade is allowed, the committee also recognized the important role that technical assistance and technology transfer can play both in tackling environmental problems at their source and in helping avoid unnecessary additional trade restrictions on the products involved.

It stated that WTO members should be encouraged to provide technical assistance to other members, especially developing and least-developed countries, either bilaterally or through inter-governmental organizations. This would assist these countries in strengthening their technical capacity to monitor and, where necessary, control the import of the domestically prohibited products, the committee said.

Based on a Secretariat note prepared from information already available in the WTO on the export of these products, some delegations called for the 1982-90 notification system to be revived, particularly as the decisions taken to establish it remain in force. The system has not been revived to date.

CTE on: intellectual property

The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). (Item 8 of the work programme)

The Trade and Environment Committee’s discussions of the TRIPS Agreement have revolved around a number of specific concerns:

• The extent to which the agreement allows indigenous environmental knowledge to be protected. A few countries argue that the agreement does not allow knowledge that has been in the public domain for centuries to be protected because it says ideas and inventions qualify only if they are new.

• The extent to which the agreement allows for the transfer of environmentally sound technology. A few countries argue that patents act as obstacles to this transfer.

• The ethical concerns associated with the patenting of living organisms (which the agreement is said to allow).

• the general compatibility between TRIPS and the Convention on Biological Diversity, a multilateral environmental agreement. The convention calls for technology transfer on “fair and favourable grounds”, which some countries say conflicts with TRIPS, etc.

Much of the discussion has been between the United States, an ardent defender of the TRIPS Agreement, and India, an ardent critic (which has called for its revision).

CTE on: services

The work programme envisaged in the Decision on Trade in Services and the Environment. (Item 9 of the work programme)

The “Decision on Trade in Services and the Environment” is one of the WTO ministerial decisions issued in Marrakesh in 1994.

It notes that “since measures necessary to protect the environment typically have as their objective the protection of human, animal or plant life or health, it is not clear that there is a need to provide for more than is contained in paragraph (b) of Article XIV” of the General Agreement on Trade in Services (GATS).

As a result, the ministers decided to ask the Committee on Trade and Environment to help clarify the position. The CTE was asked to examine the relationship between services trade and the environment — including sustainable development — and to make any appropriate recommendations. The ministers also asked the CTE to examine the relevance of inter-governmental agreements on the environment, and their relationship to the GATS.

GATS was negotiated in the 1986–94 Uruguay Round. During the negotiations, several delegations proposed that GATS include exceptions allowing governments to restrict services trade in order to address problems of “the environment”, “sustainable development”, “the integrity of infrastructure or transportation systems”, or “the conservation of exhaustible natural resources”.

Among the governments pressing for these provisions were Austria and Switzerland. They wanted to maintain restrictions on trucks crossing their countries, which they felt was seriously damaging their environments.

Negotatiators were unable to reach agreement on these special references before the end of the Uruguay Round. The Decision on Trade and Environment reflected these delegations’ insistence that the issue should be revisited.

In the CTE, Switzerland in particular has continued to press for broader exception clauses in GATS than exist at present. Many other delegations feel that since GATS is still evolving it would be premature to assess how adequate Article XIV(b) is in dealing with environmental concerns. This issue is linked to the adequacy of Article XX of GATT in dealing with environmental concerns for trade in goods.

GATS is a new agreement which is still evolving. It also includes concepts that are not found in GATT.

So far, in its preliminary discussions of this issue, the CTE has not identified any environmental measures that members would apply to services trade for environmental purposes that would not be covered adequately by GATS provisions, in particular Article XIV(b).

Further work in the CTE is necessary before it is in a position to draw any conclusions about the relationship between services trade and the environment, the relevance of inter-governmental environmental agreements, and their relationship to the GATS in the context of sustainable development.

CTE on: other organizations

Input to the relevant bodies concerning appropriate arrangements for relations with intergovernmental and non-governmental organizations (NGOs). (Item 10 of the work programme)

There is considerable public interest in WTO activities to do with trade and the environment. WTO members clearly recognize the need to respond and to build support for the contribution the WTO can make towards trade and environment policies that support each other, and towards promoting sustainable development.

At the same time, the primary responsibility for taking into account the different elements of public interest lies with national governments. They can also contribute constructively to closer consultation and cooperation with various segments of public opinion, including NGOs, within their countries.

On 18 July 1996, the WTO General Council decided on “Procedures for the circulation and derestriction of WTO documents” and on “Guidelines for arrangements on relations with NGOs”. Through the two decisions, WTO members have agreed to make WTO documents more accessible to the public, and to improve communication with NGOs.

The CTE has followed up the General Council decision on NGOs by agreeing broadly:

• It would be inappropriate to allow NGOs to participate directly as observers in the CTE’s proceedings. Many delegations felt that national governments have the primary responsibility for informing the public and establishing relations with NGOs. Many also felt that it would be inappropriate because of the special character of the WTO both as a legally binding instrument, involving members’ rights and obligations, and as a forum for negotiations.

• Nevertheless, delegations felt that more information should be made public about the WTO’s work on trade and environment, and that there was a need to respond to public interest in this area in order to avoid misunderstanding of the role of WTO, as had occurred in the past.
  
  Delegations said that increased transparency should be achieved through derestricting working documents to the greatest extent possible, and through the publication of periodic, comprehensive reports of the activities in this field in the form of a Trade and Environment Bulletin (a WTO publication).

• The WTO Secretariat is mandated to act as an intermediary between NGOs and WTO members and to provide channels for an exchange of information and views.

In addition to its on-going and regular contact with NGO representatives, the Secretariat organized an NGO Symposium on 17-18 March 1998, back-to-back with the first meeting of the CTE of that year. The Symposium provided a useful exchange of information between civil society and WTO members.

On 18 July 1996, the General Council made another decision relevant to the CTE’s work: “Guidelines for observer status for international intergovernmental organizations in the WTO”.

Previously a number of inter-governmental organizations had been ad hoc observers at the CTE’s meetings. As a result, of the General Council’s decision, the CTE agreed to make these organizations permanent observers.

The CTE has accepted as observers all inter-governmental organizations that have asked for the status, including the secretariats of many multilateral environmental agreements. Future requests can also be considered under the General Council’s decision.

As observers in the CTE and other WTO bodies, the relevant multilateral environmental agreements can help create a clearer appreciation of the way trade and environmental policies can support each other.

 (Item 10 of the work programme)