BRAZIL SUBMISSION CAUSES STIR AT INFORMAL ENVIRONMENT SESSION

A new Brazilian proposal - which supports the concept of agricultural environmental goods and introduces the idea of a request-offer process within the Doha Round negotiations on environmental goods and services - has captured the interest of delegates.

Brazil created a flutter at an informal meeting of the WTO Committee on Trade and Environment (CTE) special (negotiating) session on 2 October with its submission on 'Environmental Goods for Development' (JOB (07/146). The paper further develops issues contained in an earlier Brazilian submission (TN/TE/W/59, available at http://docsonline.wto.org). According to the paper, trade liberalisation in the area of environmental goods should provide developing countries with export opportunities in their areas of competitive advantages. They should be encouraged to establish industries that do not replicate developed-countries patterns of energy consumption and resource depletion, and should be allowed to develop the capacity required to generate solutions adapted to local necessities and conditions.

Biofuels, organic ag on the EGS agenda

According to the Brazilian submission, the development concerns of most developing countries would be best addressed through improved market access for agricultural environmental goods - something not reflected in the current 'list' approach to environmental goods. The paper provides the first explicit link between the development dimension of the negotiations and agricultural environmental goods following the inclusion of non-industrial environmental goods in the 'July Framework' of 2005.

In its submission, Brazil also said biofuels were 'essentially an environmental good.' The response was mixed; several developed country delegates were less than enthusiastic, and Canada raised environmental concerns related to biofuel production.

While the Brazilian submission did not specifically propose designating organic products as environmental goods, it did so indirectly by referring the the mandate to deal with non-tariff barriers, noting that products such as biofuels and organically-produced foods faced important obstacles related to technical regulations and conformity evaluation procedures. According to trade sources, Brazil suggested that one of the results of the CTE's work should be a request to the relevant Codex Alimentarius Committee to develop standards for organically produced foods. Such global standards would help trigger the growth of a potentially large agricultural sector, which is currently held back by non-tariff barriers. Such an approach would lead to a triple win through "the elimination or reduction of trade restrictions and distortions [which] would benefit trade, the environment and development." The Codex Alimentarius is recognised by the WTO Agreement on Sanitary and Phytosanitary Standards (SPS) as the international standard-setting body in the area of food and agriculture.

The implications of including organic products concerned some delegates, with one trade negotiator noting that a discussion of organics would open the door to a discussion on process and production methods (PPMs) - something most Members want to avoid. Another delegate added that it would be difficult to categorise organic and non-organic products under different codes for customs purposes.

Request-offer approach and tech transfer

According sources, the Brazilian proposal broke new ground by suggesting an alternative approach to the 'list' and 'integrated' approaches for liberalising environmental goods currently on the table. The proposal suggested utilising a straightforward 'request-offer' approach to conclude specific product commitments. Each country could propose slashing tariffs for those agricultural and non-agricultural goods it felt would bring environmental benefits, while allowing other countries to make sure the liberalisation would not compromise their own efforts to develop industries - including industries producing environmental goods. Each country could also propose environmental goods it was ready to open its borders to.

Reportedly, most developed countries were supportive of the 'request-offer' approach. Some developing country delegates felt that the request-offer process would be cumbersome and time consuming.

The proposal further supported improved access to new and clean environmental technologies, especially for developing and least-developed countries. In order to facilitate such access, the proposal suggested that a mechanism to evaluate the transfer of clean technology following the EGS negotiations should be established.

More formal responses to the Brazilian submission are expected at the next session of the CTE, scheduled for1-2 November. In the meantime, delegations are reflecting on the proposal, engaging capital-based experts.

ICTSD reporting.