BRIDGES Trade BioRes Special Issue

HIGH-LEVEL ROUNDTABLE ON TRADE AND ENVIRONMENT

8-9 September, Cozumel, Mexico

Chairman's Statement in English and Spanish

It has been evident for some time that trade policy and environmental policy can no longer ignore each other's existence. Conceptually, each is an integral element of sustainable development; which, ostensibly, is a stated goal of both as enshrined in Agenda 21 and the Preamble of the Marrakech Agreement that established the WTO. Their interdependence was reaffirmed at the Fourth WTO Ministerial meeting in Doha in November 2001 where countries, albeit many of them only reluctantly, agreed to place a limited set of trade and environment issues on the negotiating agenda of the multilateral trading system and to include, in the work programme, elements to make operative the objective of sustainable development. Similarly, at the World Summit on Sustainable Development (WSSD) governments underlined the need to enhance the mutual supportiveness of trade, environment and development, setting out a number of measures to achieve this objective.

Mexico is hosting the Fifth Ministerial Conference of the WTO in Cancun from September 10-14th, 2003. The WTO Ministerial Conference will carry forward the mandate set out in the Doha Ministerial Declaration, including negotiations related to trade and the environment. The Mexican Government convened a High-Level Roundtable on Trade and Environment in Cozumel, Mexico on September 9th, 2003. The Mexican Minister of Environment and Natural Resources (SEMARNAT) in collaboration with the Minister of Economy (Secretaria de Economia) and the Minister of Foreign Affairs (Secretaría de Relaciones Exteriores) joint forces to bring together experts in the field. Participation at the Roundtable included Ministers of Trade and Environment, as well as representatives from intergovernmental organisations, civil society and academia.

The Roundtable discussions examined:

• the role that subsidies play in trade and environment policies;
• the effects of environmental measures on market access;
• the importance of building mutual supportive trade and environment regimes;
• the main issues arising from the trade liberalization of environmental goods and services; and
• the relationship between intellectual property rights and the environment.

Participants stressed that the question was no longer whether, but how trade and environmental policies were going to be linked. They saluted the vision of the Mexican government in organising the high-level roundtable and hoped it would mark a turning point for discussions on these issues and set a precedent for similar meetings in the future. They noted that a better integration of the trade and environment agendas -- and more broadly significant advancements in better representing sustainable development objectives in trade policy making -- could raise public support for trade liberalisation. They also acknowledged that the debate on trade and environment-related issues of particular concern to developing countries had moved slower than the rest of these discussions and that efforts needed to be made to address this gap.

Participants agreed on the importance of phasing out environmentally-harmful subsidies, in particular those that distort trade. At the same time, participants acknowledged that subsidy reduction per se would not lead to environmental benefits. Rather, they noted the importance of setting the goals of subsidy reduction, establishing criteria for achieving theses goals and verifying that the goals were being achieved. The issue of subsidies was seen to be of importance in a number of sectors, notably agriculture, but also fisheries, forestry, energy and transport. Participants highlighted subsidies as a tool largely used by developed countries, noting that developing countries often lacked the financial capacity to support their industry and agricultural sector. Moreover, they recognised that subsidies might not necessarily present the best means to deal with global environmental problems, such as climate change, which should rather be addressed by the appropriate multilateral environmental agreements (MEAs). Thus, the reduction of environmentally harmful subsidies needed to be accompanied by the strengthening and increased collaboration of relevant institutions, the recognition of MEAs' responsibilities and their equal status with WTO rules, the development of supporting environmental policies, and a transparent and open process that involved all relevant stakeholders.

There was widespread acknowledgment of the dilemma presented by the need to preserve market access opportunities for developing countries while at the same time maintaining the space to implement measures to address legitimate environmental objectives. Dealing with this dilemma needed to take into account the unequal burden placed on developing countries in complying with environmental requirements due to a lack of technical and institutional capacities. The growing leadership of developing countries in discussions on balancing market access and environment was recognised, which was seen as crucial to move the debate forward and establish rules that addressed the trade and environment interface. Participants noted that the balance needed to be found at the multilateral level with increased cooperation among institutions and ministries within and between countries and with the active and effective involvement of developing countries. One participant also noted that measures, which restrict trade on environmental grounds, should be and often were part of a bigger package that included positive measures to make the restrictions more acceptable.

Participants generally agreed that in order to advance the mutual supportiveness of trade and environment, the compatibility of MEAs and WTO rules should be recognised. As a matter of urgency, they called on the Cancun Ministerial meeting to grant observer status to UNEP and MEA Secretariats in relevant WTO bodies. They noted the need for increased cooperation among agencies and strengthened dialogue between MEAs. Participants, however, differed on which environmental issues should be discussed in the WTO. Some regarded the WTO as an appropriate multilateral forum for dealing with environment-related concerns. At the same time, they recognised that the WTO was not an environmental organisation and was not necessarily equipped to deal with complex issues, such as subsidies, standard setting or the definition of environmental goods and services, which should be discussed in an open dialogue with relevant UN bodies. In contrast, others would like to see discussions on the MEA-WTO relationship and eco-labelling to be taken out of the WTO. They stressed that in order to achieve a balanced outcome, a neutral body should define the systemic relationship between environmental and trade rules rather than the WTO with its strong focus on trade liberalisation.

Participants generally agreed on the need for progress in liberalising environmental goods and services including environmentally-friendly agriculture, based on common and transparent classification and definitions, and in a way that maximised environmental and trade benefits for both developed and developing countries. Participants noted the potential benefits of liberalising environmental good and services, including welfare benefits for developing countries resulting from a reduction in prices of environmental goods and services related to pollution and sanitation, greater market access for 'green' products and services, and ultimately the pursuit of sustainable development objectives. However, they acknowledged that at the current stage of the negotiations, the definition of environmental goods continued to focus largely on industrial goods and efforts needed to be made to broaden the definition to include products of interest to developing countries, including organic agriculture or products from traditional knowledge or folklore. This shift in focus required a better understanding and quantification of the sustainable development benefits that would arise from the liberalisation of environmental goods and services with input from the UN environment and development network.

The need for progress on resolving the issues arising at the interface between the Agreement of Trade-related Aspects of Intellectual Property Rights (TRIPs) and the Convention of Biological Diversity (CBD) was acknowledged, in particular as they relate to the protection of traditional knowledge and folklore. Participants recognised addressing this interface as a positive agenda issue for developing countries where they could use their comparative advantage, with the potential of creating a win-win-win outcome. Participants generally agreed on the need to respect and preserve traditional knowledge and genetic resources and to establish regulations that prevented biopiracy. Acknowledging that these issues had made little progress in the trade and environment discussions to date, they highlighted the need for political will to move the debate forward. One participant noted that although the issue touched a very essential part of people's lives, it had been turned into a complex set of agreements and technical issues dealt with by experts. It was now up to politicians to move these issues out of the technical level and place them on the political agenda. In this context, the TRIPs and health debate was cited as an example of where success had been achieved despite initial warnings that the intellectual property system would not be able to accommodate these concerns.