DEVELOPING COUNTRIES GIVE OPINIONS ON ENVIRONMENTAL GOODS

At a meeting of the WTO Committee on Trade and Environment Special (negotiating) Session (CTE-SS) held on 7-8 July in Geneva, developing countries called for development concerns to be incorporated into negotiating proposals on environmental goods. Specifically, they felt that that the list-based approach of talks in the Committee, which focused on designating certain goods for liberalisation, had failed thus far to adequately address their interests.

India continued to promote its "environmental project approach" (EPA) as the best way to ensure that EGS agreed upon in the CTE-SS address environmental and developmental goals. Cuba and Brazil focused on problems with the list approach, and proposed incorporating environmentally preferable products (EPPs) into the modalities for determining EGS.

In addition, several delegates expressed concerns regarding a Swiss submission that suggested principles for governing the relationship between multilateral environmental agreements (MEAs) and the WTO.

Project approach under scrutiny

Presenting its new paper (TN/TE/W/54), India clarified how the EPA would work and attempted to address concerns that had been raised at an informal meeting of the CTE-SS in June (see BRIDGES Weekly, 15 June 2005). The approach would have each WTO Member designate a national authority that would select 'environmental projects' based upon criteria agreed by the CTE-SS (TN/TE/W/51). Environmental goods and services used in the selected projects would then qualify for tariff concessions for their duration.

The paper reiterates that the EPA remains rules-based, and that the criteria would be determined by the CTE-SS so as to ensure the transparency of the process. Yet, the approach would provide policy space to individual Member countries through the operations of the designated national authority, which the submission likens to the public-private partnership outlined in the Kyoto Protocol's Clean Development Mechanism. The submission contended that its proposed methodology would ensure that approved EGS were used for environmental purposes, whereas under the list approach products receiving tariff concessions could instead be used for a different 'dual' non-environmental purpose. It also notes that the project approach would enable the transfer of environmentally sound technologies as mandated by Agenda 21, adopted at the Rio Summit on Environment and Development in 1992. This would improve their ability to meet technical and sanitary requirements, which would in turn improve their export potential. It would also facilitate compliance with MEAs.

Despite India's attempt to address the concerns raised at the June informal meeting, most developed countries remained sceptical, suggesting that the EPA was not 'clear,' 'viable,' or practical enough, and would not provide sufficient predictability for their exporters. They also expressed concerns that the approach was too complicated, would transfer authority to the national level, that the results would be less obvious than in the list approach, and that it would take too long for the CTE-SS to develop criteria given the tight negotiating timeline. Most developing countries, on the other hand, expressed support for the proposal.

List approach criticised

Brazil's presentation raised concerns that negotiations had thus far privileged a definition of environmental goods focused on high-technology products of little interest to developing countries. Their submission (TN/TE/W/59) called instead for considering developing country interests through the prism of special and differential treatment (S&D) and, in particular, through improved market access for products with low environmental impacts and/or derived from or incorporating cleaner technologies. In addition, it proposes to adopt the approach of the UN Conference on Trade and Development (UNCTAD) on environmentally preferable products (EPPs) as a basis for negotiations on environmental goods. The Brazilian paper said that liberalising trade in a number of these products, such as natural fibres and colourants and other non-timber forest products, as well as bio-fuels such as ethanol and biodiesel, would be in their interest.

Cuba's paper (TN/TE/W/55) noted that the list approach had failed thus far because developing countries were uncertain about the actual benefits of the negotiations. They attributed this to several reasons, including the need to address dual end-use; the inadequacy of proposed Asia-Pacific Economic Cooperation (APEC) and Organization for Economic Co-operation and Development (OECD) lists; a lack of S&D provisions; the poor linkage between goods and services; and the problem of non-tariff barriers such as certification and eco-labelling requirements. It also noted Cuba's interest in renewable energy or energy efficient technology and natural products.

New lists considered

Switzerland's new proposal (TN/TE/W/57) includes EPPs with "high environmental performance and/or low environmental impact" in its list. It broadly supports the inclusion of such goods in the list, specifying that they must be chosen based upon their end-use or disposal characteristics, as described by UNCTAD. Some delegates criticised the Swiss list, saying that it contained few products of interest to developing countries, and that certain products -- such as bicycle and railroad parts -- were of dubious environmental value.

The EU's new submission (TN/TE/W/56) reiterates its support for including products with high environmental performance or low environmental impact. It contains a list that includes such products. The proposal also offers to add eco-labelled products to the list of goods. New Zealand (TN/TE/W/49) noted in a similar vein that it would support the inclusion of EPPs that can be identified by end-use or disposal characteristics. The new US submission, on the other hand, does not explicitly recognise EPPs but includes seven UNCTAD-listed EPPs in their list of 158 possible products (TN/TE/W/52). A new category in their list, on natural resource protection, raised eyebrows at the meeting but Members were reassured that the three products in the category were not included because of the their manufacturing process.

The US and New Zealand responded to earlier criticisms that their lists only included products of export interests to developed countries by citing statistics that they import significant percentages -- forty percent in the US case -- of listed products from developing countries.

Discussions to continue on MEA-WTO relationship

Under the Doha Declaration Paragraph 31(i) mandate to negotiate on the relationship between existing WTO rules and specific trade obligations
(STOs) set out in MEAs, the EU submitted a document (TN/TE/W/53) outlining its internal policy co-ordination, development and negotiating processes in this regard. A bolder paper submitted by Switzerland on the MEA-WTO relationship (TN/TE/W/58) suggested that it was "useful and necessary" for the CTE-SS to consider three principles for the MEA-WTO relationship, namely: "no hierarchy" between the environmental and trade legal systems; "mutual supportiveness" of the two regimes; and "deference" to the framework that includes particular issues within its primary area of competence.

A number of Members, including several developing countries and the US, felt that there was little contradiction between the two regimes and expressed concern about the proposal's implications. They worried that revisiting the debate on principles might compromise the constructive discussions that have taken place in recent months on different countries' national experiences under the Paragraph 31(i) mandate, and indicated that they were content to focus on such experiences. Some developing countries pointed to clear tension between the two regimes in certain fields, such as the lack of disclosure of origin requirements in patent applications under the Agreement on Trade-related Intellectual Property Rights (TRIPS) and the provisions of the Convention on Biological Diversity (CBD), as repeatedly raised in the TRIPS Council (see BRIDGES Weekly, 22 June 2005). Members decided to simply "continue discussions" on the relationship between MEAs and the WTO.

At an informal meeting held at the end of the CTE-SS, Members decided to hold another formal meeting in mid-September along with the planned October meeting. Several developing countries expressed concerns regarding a comment in the Chair's statement to the general council that a 'list' of EGS is the most likely result that the CTE-SS will deliver to the Hong Kong Ministerial Meeting in December, and so Members agreed that it was hard to predict the modalities that would be agreed by that point.

ICTSD reporting.