WTO ENVIRONMENT COMMITTEES STUCK ON ROLE OF MEA SECRETARIATS, ECO-LABELLING

On 7 and 8 July, WTO Members convened for the final meetings of the Committee on Trade and Environment (CTE) regular and special (negotiating) sessions before the Cancun Ministerial Conference in September. A proposal by the EC to recommend to trade ministers in Cancun that the CTE hold three dedicated sessions on eco-labelling was opposed by most other Members. At the special session, another proposal by the EC for trade ministers at Cancun to invite the UN Environmental Programme (UNEP) and multilateral environmental agreement (MEA) secretariats to observe the CTE special session received a mixed welcome, but no consensus.

Also at the special session, China, Chinese Taipei and Australia submitted papers on the MEA-WTO relationship (TN/TE/W/35/Rev.1, TN/TE/W/36, TN/TE/W/37, respectively, available online at http://docsonline.wto.org), following up on previous discussions on this point at the last special session on 1-2 May (see BRIDGES Weekly, 7 May 2003).

The CTE special session's final report to the Trade Negotiations Committee (TN/TE/6), which was also discussed on 8 May, will be circulated next week. The regular session adopted its reports to the General Council (WT/CTE/W/230) and to ministers in Cancun (available shortly).

Mandate

In paragraph 31 of the WTO's Doha Ministerial Declaration, adopted in November 2001, Members agreed to negotiations on: (i) the relationship between WTO rules and specific trade obligations set out in MEAs; (ii) procedures for regular information exchange between MEA secretariats and relevant WTO committees, and the criteria for granting of observer status; and (iii) liberalisation of trade in environmental goods and services. These issues are being addressed in the special CTE sessions. Paragraph 32 instructs the CTE to focus on issues around market access, intellectual property rights and eco-labelling, with a view to making recommendations, where appropriate, with respect to future action, including the desirability of negotiations.

EC proposals meet resistance

At the 8 July special session, a proposal by the EC to recommend to ministers in Cancun that the group should invite MEA secretariats and UNEP to observe the CTE special sessions met with mixed reactions. The EC also suggested that currently informal annual MEA information sessions be formalised. While some Members, particularly Canada and Norway, agreed with the EC that a strong signal needed to be made on MEA relations in Cancun, others, including the Philippines, Malaysia, Pakistan and Egypt, said that the EC's suggestion would circumvent the para. 31(ii) mandate to establish criteria on observership. Malaysia, Pakistan and China told the EC that they had no interest in formalising the current MEA information sessions.

The question of observer status for MEAs continues to be blocked for political reasons at the level of the General Council. Meantime, the special session has opted to invite UNEP and certain MEA secretariats on an ad-hoc, informal basis to participate in certain parts of its meetings. Due in part to disagreements over whether the International Tropical Timber Organization (ITTO) qualified as an MEA, delegates at the special session did not agree as to whether they would extend the invites again for its next meeting on 30-31 October.

At the 7 July regular CTE session, the EC, supported by Switzerland, the Czech Republic and Hungary, proposed that the group "...shall before the end of 2004 hold, in addition to its usual schedule of meetings to be agreed, [three] 'dedicated sessions' to engage in a positive dialogue on governmental and non-governmental voluntary eco- labelling schemes, notably those based on life-cycle analysis". While Japan and Canada said that this could be a useful basis for discussion after Cancun, a number of other Members -- notably Australia, Brazil, China, Hong Kong, Indonesia, Malaysia, the Philippines, Thailand and the US -- opposed the EC's suggestion. These countries said that a life- cycle analysis approach was too close to the sensitive issue of process and production methods (PPMs), and that the sessions would duplicate ongoing work in the Committee on Technical Barriers to Trade (TBT). In its response, the EC said that labelling was not currently a focus of the TBT Committee, and cited a study indicating that only ten percent of life-cycle elements were related to PPMs.

A proposal by Canada to recommend to ministers that the 10-point CTE work programme be reviewed "to determine whether it continues to meet the requirements of Members" also generated some discussion. While most Members agreed that there was value in reviewing the work programme, they thought the idea needed further discussion in the CTE, saying that this could happen after the Ministerial. China, Egypt, India, Indonesia, Malaysia and Thailand said they did not want to see the CTE work programme changed from its current format.

US papers on environmental goods

In discussions at the special session under para 31(iii), the US presented two papers on environmental goods. In its first paper (TN/TE/W/34), the US suggested that Members use the list of environmental goods emanating from the Asia-Pacific Economic Cooperation (APEC) forum as a starting-point in negotiations. It argued that the APEC list deserved attention as it was intended to serve as the basis for tariff liberalisation among participating economies, a situation similar to that currently at the WTO. The US noted that APEC countries did not include goods produced in a manner that is "environmentally friendly" (i.e. differentiated on the basis of PPMs), due to "the practical and WTO-legal issues" surrounding tariff discrimination on the basis of PPM criteria. Under WTO rules, it is not permitted to discriminate against products based on PPMs. In its second submission (TN/TE/W/38), the US proposed that two lists be established: a core list of goods that everyone agrees are environmental (i.e. sewage treatment equipment); and a second list of other proposed environmental goods. Tariffs would be eliminated on the core list of goods by 2010, and countries would be required to liberalise a certain percentage of products from the proposed list by 2010. Due to time constraints, there was no discussion on this paper.

ICTSD reporting.