BRIDGES Trade BioRes - SPECIAL WSSD UPDATE No. 5

5 September 2002

Trade @ WSSD - Summit Outcomes Evoke Mixed Reactions

The World Summit on Sustainable Development (WSSD) ended on 4 September with governments congratulating each other on the success of the Summit while calling for the Plan of Implementation to be put into action. Many civil society groups were much less enthusiastic about the Summit's outcomes and described the meeting as a missed opportunity to come up with concrete timeframes, targets and funding to implement "Agenda 21. Others, however, were less pessimistic, noting that the Johannesburg documents more explicitly acknowledged the links between poverty alleviation and environmental protection than the Rio texts. Reactions were also mixed regarding trade-related aspects of the Plan of Implementation and its likely impact on WTO negotiations. Several highlighted a number of provisions that could directly influence the current round of trade negotiations, while others pointed to the outcomes of the Summit as a strong signal to negotiators at the WTO to integrate sustainable development considerations in the negotiations.

WSSD outcomes - a preliminary analysis

Overall, many noted that the Summit outcomes delivered little on specifics, but that the impact of WSSD should be seen in a broader context. In particular, the outcomes reflected an increasing understanding among politicians of the links between environmental protection and poverty alleviation, as one observer stated. The Summit has thereby begun to reverse the trend set in Rio to pursue separate environment and development agendas. This was reflected, inter alia, in the equity-focus of the globalisation chapter as well as the political declaration, which refers to the "deep fault line that divides human society between the rich and the poor and the ever-increasing gap between the developed and developing worlds". This shift in focus was largely driven by developing countries, civil society and development assistance agencies in the North, the sourced added.

Regarding the WSSD's impact on the WTO negotiations, one trade source noted that the Plan was unlikely to have a significant influence on the Doha round as the text largely repeated WSSD-relevant commitments made at the Doha Ministerial Conference. Nevertheless, the source added that as a result of this reiteration at the highest political level and the recognition of trade as a 'means' of implementing sustainable development objective, the trade agenda had now become more political rather than remain separate from the global agenda. Similar, one delegate concluded that the Summit had sent a strong message to WTO negotiators to step up their efforts to integrate sustainable development objectives in the current trade round, which now had to be complemented by a push from within the WTO to translate these objectives into detail.

From an environmental point of view, an environment official described the final Plan of Implementation "satisfactory", while acknowledging that ca. 60 percent of the Plan consisted of "reiterations and deliberations" of earlier commitments. The biggest disappointment, the official added, was the absence of sufficient benchmarks, targets and timelines, and the lack of a significant break-through on issues such as trade, finance and debt. At the same time, the official lauded the recognition in the Plan that much more needed to be done to make trade and environment mutual supportive.

When comparing the outcomes of Rio and Johannesburg, several observers pointed out that it was unrealistic to expect Johannesburg to deliver the same as Rio due to a number of factors. First, the Rio documents could be more easily agreed on as they did not contain concrete actions, but focused more on broad statements. Second, the WTO did not exist in 1992 let alone the current round of negotiations, nor other relevant agreements, such as the Monterrey Consensus or various MEAs. Also, while Rio addressed many new issues, most 'hardcore' environmental issues are now being dealt with. In addition, the political circumstances and atmosphere had significantly changed since 1992 when the Earth Summit took place following the fall of the Berlin wall and the worldwide move towards greater integration. This is now contrasted with the aftermath of the September 11 events and the growing tendency towards unilateralism and isolation.

What does it mean for trade and the WTO?

Means of implementation

Several observers criticised the Implementation section for focusing too much on trade and finance, thereby sending the message that industrialised countries would simply need to increase overseas development assistance and open markets to achieve sustainable development. Instead, concrete implementation arrangements should have been included throughout the entire text and linked directly to the draft Plan's commitments. Others, however, noted that while such a structure would be desirable, it was not feasible given the large number of countries involved in the negotiations which all pursued different goals and objectives. Instead, the Summit's role was to provide overall guidance on implementation, which should then be realised at the national level. Also, the existence of separate trade and finance sections was a result of the existence of the Doha texts and the Monterrey Consensus, leading countries to combine the trade and finance-related provisions in distinct sections to facilitate consistency with the existing agreements.

Doha Outcome and the Multilateral and Regional Trading Systems

Paragraph 91 (a) calls on two inter-governmental WTO bodies, the committees on "trade and environment" and "trade and development", to promote the objective of "achieving an outcome [of the Doha negotiations] which benefits sustainable development"; a mandate issued less emphatically by WTO Members in the Doha Declaration. In similar, "add on" language, several paragraphs of the Plan of Implementation reinforce emphatically the need for the WTO talks to focus on developing country concerns, address the deficiencies of the current WTO Agreements identified by developing countries as "implementation issues" at Doha, and provide preferential treatment to least developed countries and small and vulnerable economies. The Plan also stresses the need to reinvigorate "special and differential treatment" provisions in the trade agreements. In addition, countries in Johannesburg agreed to unequivocally condemn the use of unilateral measures, without the qualifications inserted in Rio ten years ago.

Reform efforts to ensure "open and transparent" decision-making processes and institutional structures at the WTO, are encouraged. Also, in several parts of the Johannesburg documents, the WTO is urged to cooperate with United Nations agencies in implementing Agenda 21 and advancing sustainable development. The text encourages international financial institutions to support countries engaged in regional trade and cooperation processes to strengthen their agreements with a view to achieving sustainable development.

Subsidies

Most references to the elimination and/or removal of subsidies were moved to the trade provisions of the 'Means of Implementation' section. Still included in the other sections of the text are calls to phase out "harmful subsidies" related to energy "to reflect their environmental impacts", and fisheries subsidies (see below). Regarding the contentious issue of agricultural subsidies, the Plan simply reiterates the language found in the Doha Ministerial Declaration. References to subsidies that contribute to unsustainable production and consumption were dropped after they were moved to the Implementation section. Instead, the Plan includes a general provision to "support the completion of the work programme of the Doha Ministerial Declaration on subsidies so as to promote sustainable development and enhance the environment, and encourage reform of subsidies that have considerable negative effects on the environment and are incompatible with sustainable development" (para. 91 b). The Doha Declaration instructs Members to negotiate reductions in agricultural subsidies, and to "clarify and improve" other WTO subsidies disciplines, but these mandates contain no references to promoting sustainable development or the enhancing environmental protection. While the Johannesburg language could be used to guide the WTO's subsidy discussions in a direction that benefits sustainable development goals, Members' different interpretations of the concept may instead lead countries on the opposite ends of the debate to refer to it in order to reinforce their existing positions on subsidies in the WTO negotiations.

The Plan of Implementation calls on countries to "eliminate subsidies that contribute to illegal, unreported and unregulated fishing and to over-capacity" while completing the reform of fisheries subsidies in the WTO. This language goes beyond the mandate on fisheries subsidies agreed at Doha, which simply instructs WTO Members to begin negotiations with the "aim to clarify and improve WTO disciplines on fisheries subsidies". These negotiations are currently underway in the WTO Negotiating Group on Rules (see BRIDGES Trade BioRes, 16 May 2002; http://www.ictsd.org/biores/02-05-16/story1.htm).

MEA-WTO relationship

Language on the relationship between the Convention on Biological Diversity (CBD) and WTO rules had already been agreed at PrepCom IV in Bali when delegates settled on "enhancing synergy and mutual supportiveness" between the CBD and agreements related to trade and intellectual property rights. Regarding the relationship between the multilateral trading system and multilateral environmental agreements (MEAs) more generally, the Plan of Implementation refers to the promotion of "mutual supportiveness" (para. 92).

While not explicitly calling for trade measures taken pursuant to MEAs to be presumed consistent with WTO rules as demanded by many civil society groups in the lead-up to the Summit, the Plan recognises the "importance of maintaining the integrity of both sets of instruments" (i.e. MEAs and the multilateral trading system). One observer noted that this phrase provided an important safeguard for the integrity of MEAs in the current negotiations at the WTO on clarifying the MEA-WTO relationship in addition to the safeguard for WTO rules already included in the Doha Ministerial Declaration which stipulates that the negotiations "shall not add to or diminish the rights and obligations of Members under existing WTO agreements" (para. 31 of the Doha Ministerial Declaration).

The Eco Equity Coalition of NGOs, including WWF, Consumers International, Danish 92 Group, Greenpeace, Oxfam International, Friends of the Earth International and ANPED, strongly criticised paragraph 92 for stating that the promotion of mutual supportiveness should be "in support of the work programme agreed through the WTO", which they said provided "a cowardly reinforcement of the WTO's dangerously unbalanced Doha mandate." Others, however, noted that "in support of" could also be interpreted more broadly as leaving room for action that was different or went beyond Doha, as well as an invitation for other institutions to promote mutual supportiveness in their work programmes.

Environmental goods and services

The Plan calls on countries to support the creation and expansion of domestic and international markets "for environmentally friendly goods and services, including organic products". Some noted that this paragraph might be of relevance in the ongoing negotiations at the WTO on the "reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services", in particular as an input to shaping the interpretation of environmental goods and services to include organic products. They acknowledged, however, that it still remained debatable whether "environmentally friendly" could be equated to "environmental". In addition, this call could be used at the WTO talks as leverage to bring PPM (process and production methods)- based criteria to the definition of "environmental goods and services". Observers noted positively the approach based on incentives rather than sanctions emphasised on this issue.
Technical assistance

Both the globalisation section (V) and the implementation section (IX) contain various references to technical assistance in the context of trade, including for the examination of the relationship between trade, environment, and development; for developing countries' effective and full participation in trade negotiations; and for economic diversification, sustainable resource management and to address the instability of commodity prices and declining terms of trade. While these provisions are likely to impact on the design of technical assistance programmes by the various agencies, a trade source pointed out that it was up to WTO Members to interpret the text when requesting technical assistance, rather than the WTO Secretariat.

International regime on benefit-sharing

In what some referred to as the only concrete outcome of the summit other than partnerships, the Plan calls on countries to "negotiate within the framework of the Convention on Biological Diversity, bearing in mind the Bonn Guidelines, an international regime to promote and safeguard the fair and equitable sharing of benefits arising out of the utilization of genetic resources". The negotiated instrument -- be it a legally binding Protocol or voluntary Guidelines -- will build on the Bonn Guidelines which provide guidance to Parties in the development of access and benefit-sharing regimes at the national level. Implications of this provision will be discussed at the next meeting of the CBD Bureau at the end of September and is likely to also come up at the 7th Conference of the Parties (COP) to the CBD in 2004. The provision is expected to accelerate the implementation of the Bonn Guidelines in order to gain experience, which can then be extrapolated to the international level. While most believe that it is up to the COP to decide whether the resulting regime will be legally binding or voluntary, the US in their speech to the Plenary said that they interpreted the decision to drop the phrase "legally binding" from the text as meaning that the regime would be voluntary.

WSSD documents are available at http://www.johannesburgsummit.org. Past issues of BRIDGES Trade BioRes - WSSD Special Updates are available at http://www.ictsd.org/issarea/wssd/wssdmain.htm. For daily coverage, see http://www.iisd.ca/2002/wssd/.