WTO AND ENVIRONMENT ENVIRONMENTAL LAW PROJECT

TABLE OF CONTENTS

INTRODUCTION RESEARCH METHODOLOGY. EMERGING ENVIRONMENT DEBATE IN GATT/ WTO... The 1971 GATT study EMIT - GATT Group on Environmental Measures and International Trade Rio in 1992 and after Trade and Environment in the WTOs Founding Charter

1-3 4 5-8

WORLD TRADE ORGANIZATION.. Objectives of the WTO Functions of the WTO The Uruguay Round Committee on Trade and Environment

9- 19

WTO AGREEMENTS.. Introduction Important WTO Agreements - GATT - TRIPS - GATS - Agreement on Agriculture - The Sanitary and Phytosanitary Measures Agreement - Agreement on Subsidies and Countervailing Measures - Agreement on Technical Barriers to Trade - Agreement on Trade Related Aspects of Investment Measures

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MULTILATERAL ENVIRONMENTAL AGREEMENTS (MEAs).. Definition Basic information on selected MEAs in tabular format MEAs and International Law How does a multilateral agreement enter into force internationally? Mechanisms used for implementing agreements

45 - 56

MEAs AND THE MULTILATERAL TRADING SYSTEM 57- 73 Multilateral Environmental Agreements Trade measures in MEAs Why Trade Restrictions have been incorporated in MEAs Inter-relationships between MEA trade measures and WTO Rules. Interaction of MEA trade measures with the WTO Relationship between key MEAs and the WTO agreements - CITES - Montreal Protocol - Basel Convention - Kyoto Protocol - Convention on Biological Diversity - Cartagena Protocol - Stockholm and Rotterdam Conventions The Doha Mandate on MEAs Developing Countries and MEAs 74 - 95

TRADE & ENVIRONMENT IN CONFLICT CASE LAWS.. Case 1: Tuna-Dolphin Case Case 2: Gasoline case Case 3: Shrimp turtle case 3

Case Studies on MEAs - Case Study 1- The Kyoto Protocol - Case Study 2 - Virunga National Park - Case Study 3 - Invasive Alien Species - Case Study 4 - The Aarhus Convention

POSSIBLE SOLUTION TO THE CONFLICTS BETWEEN THE WTO & ENVIRONMENT CONCLUSION 100 BIBLIOGRAPHY

96 - 98 99 101

INTRODUCTION

"Trade is a powerful engine of economic growth, and that economic growth is vital to creating conditions which favour advancing environmental protection, improving social conditions, or sustaining ethical values. By opening markets, particularly to exports from developing countries, and by keeping markets open through clear and enforceable rules, the global trading system is a natural ally of sustainable development"1. Interaction between international trade and the environment is as old as trade itself. However, awareness that the interaction has implications in public policy terms dates back at least to the trade provisions in 1933 convention on fauna and flora. 2 In the late 1960s environmental problems caused by the discharge of waste and other pollutants into the natural environment emerged seriously, and so did concerns over the implications for international competitiveness. Over the past two decades, producers in countries with stricter environmental standards have worried increasingly about the impact of those standards on their competitiveness in world markets. At the same time, governments and firms in other countries have expressed concern about new barriers being erected against imports produced under less strict standards. Most recently, there has been growing public concern with issues related to the pollution of the global commons (for example, ozone depletion and climate change) as well as with species diversity and the treatment of animals. This has raised important questions about the use of trade policies to influence environmental measures in other countries. Since trade and environment both affect the use of natural resources, they naturally interact, and have had a long legacy of mutual mistrust. For both free-traders and environmentalists, the inter-linkage has been a topic of contention and serves as a point of reference to NGOs as well as to industrial lobby groups. The debate initially was quite contentious and unproductive as both parties differed greatly in their trust of market
1 2

Speech by Renato Ruggiero, A shared responsibility: Global Policy Coherence For Our Global Age, December 9, 1997. The full title of the convention, which is still in force, is the Convention Relative to the Preservation of Fauna and Flora in their Natural State.

forces and typically value the environment differently.3 Free traders feared that talk about environmental protection will be used as an excuse by some economic sectors to gain protection for themselves against competition from abroad. Environmentalists feared that free trade will be used as an excuse to give inadequate weight to environmental goals and excessive weight to maximization of market-measured GDP. The environmental implications of international trade are becoming an important part of multilateral and domestic policy agendas. This is particularly the case for trade relations between developing and developed countries. To what extent developing countries should devote their resources to lowering domestic environmental costs for their own welfare and that of the world as whole has frequently been debated. The debate stems from the widely held view that a tradeoff between economic growth and environmental quality exists. Many policymakers in developing countries argue that they have the right to pursue the same material aspirations by the same means as did the industrialized world during it developmental stages and are thus willing to spend smaller percentages of their productive resources for pollution abatement than developed countries. It is increasingly recognized that the import of goods and services entails an implicit transfer of environmental effects to the exporting country. The relationship between trade and environment is a complex and highly debated issue. Addressing this relationship is fundamental in order to achieve sustainable development. As a result of increasing global economic inter-dependence and further trade liberalisation as well as growing pressure on the environment and the use of natural resources, there is an ever growing inter-face between trade and environment. It is widely recognised that trade and environment can be mutually supportive, but, differences remain on effective implementation. In fact, trade liberalisation and trade policy have positive and negative impacts on the environment. However, a number of conditions should be met to ensure that the net gains deriving from trade liberalisation will support and reinforce the protection of the environment. The trade and environment debate is complex and varied, and it involves some of the most fundamental WTO principles and rules, such as the concept of non-discrimination
3

Copeland and Taylor, 2004.

and the definition of "like products". It is a horizontal issue that cuts across many disciplines in WTO. For example, Multilateral Environmental Agreements have consequences for trade which may come into conflict with the general aim of the WTO to reduce trade barriers. The WTO has no specific agreement dealing with the environment. However, the WTO agreements confirm governments right to protect the environment, provided certain conditions are met, and a number of them include provisions dealing with environmental concerns.

RESEARCH METHODOLOGY Aims and objectives The project aims at studying the issues associated with the trade and the environment debate. This paper begins with the genesis of the issue of trade and the environment and examines the inter-relation between trade, environment and the WTO. The Paper further tries to examine the relationship between certain Multilateral Environmental Agreements (MEAs) and the WTO Agreements. The paper analyzes how environmental provisions have permeated into the multilateral trading system, through the incorporation of environmental provisions under new WTO agreements and the concern of the developing countries with regard to the MEAs. The Project covers the basic conceptual issues, as well as the genesis of trade and environment as it has been dealt with in the WTO. The ultimate objective is to understand the justification for policy linkages between trade and the environment and the rationale for special trade rules to reflect environmental concerns. Method of writing The researcher has endeavored to use a combination of descriptive and analytical styles of writing throughout this project. More emphasis has been placed on the analytical style of writing. Sources of Data The main sources have been textbooks, articles and web-search.

EMERGING ENVIRONMENT DEBATE IN GATT/ WTO Trade and environment, as an issue, is by no means new. The link between trade and environmental protection, both the impact of environmental policies on trade, and the impact of trade on the environment, was recognized as early as 1970. Growing international concern about the impact of economic growth on social development and the environment led to a call for an international conference on how to manage the human environment, and the 1972 Stockholm Conference was the response. The 1971 GATT study In 1972, the UN held a Conference on the Human Environment in Stockholm. During the preparations in 1971, the Secretariat of the General Agreement on Tariffs and Trade (GATT) prepared a study entitled, "Industrial Pollution Control and International Trade". The study focused on the implications of environmental protection policies on international trade. It reflected the concern of trade officials at the time that such policies could become obstacles to trade as well as could constitute a new form of protectionism i.e. "green protectionism". In the discussions that followed, a number of GATT members suggested that a mechanism be created in GATT for the implications to be examined more thoroughly. EMIT - GATT Group on Environmental Measures and International Trade In November 1971, the GATT Council of Representatives agreed to set up a Group on Environmental Measures and International Trade (EMIT), which would be open to all GATT members (i.e. GATT signatories). However, the decision also said group would only convene at the request of GATT members. Therefore, it was not until 1991 when the members of the European Free Trade Association (EFTA) asked for the EMIT Group to be convened. (EFTA, at the time included Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland.) Developments: 19711991

Between 1971 and 1991, environmental policies began to have an increasing impact on trade, and with increasing trade flows, the effects of trade on the environment had also become more widespread. This led to a number of discussions: During the Tokyo Round of trade negotiations (19731979), participants took up the question of the degree to which environmental measures (in the form of technical regulations and standards) could form obstacles to trade. The Tokyo Round Agreement on Technical Barriers to Trade (TBT), also known as the "Standards Code", was negotiated. Amongst other things, it called for nondiscrimination in the preparation, adoption and application of technical regulations and standards, and for them to be transparent. During the Uruguay Round (19861994), trade-related environmental issues were once again taken up. Modifications were made to the TBT Agreement, and certain environmental issues were addressed in the General Agreement on Trade in Services, the Agreements on Agriculture, Sanitary and Phytosanitary Measures (SPS), Subsidies and Countervailing Measures, and Trade-Related Aspects of Intellectual Property Rights (TRIPS). In 1982, a number of developing countries expressed concern that products prohibited in developed countries on the grounds of environmental hazards, health or safety reasons, continued to be exported to them. With limited information on these products, they were unable to make informed decisions regarding their import. At the 1982 GATT ministerial meeting, members decided to examine the measures needed to bring under control the export of products prohibited domestically (on the grounds of harm to human, animal, plant life or health, or the environment). This led to the creation, in 1989, of a Working Group on the Export of Domestically Prohibited Goods and Other Hazardous Substances. In 1991, a dispute between Mexico and United States put the spotlight on the linkages between environmental protection policies and trade. The case concerned 10

a US embargo on tuna imported from Mexico, caught using "purse seine" nets which caused the incidental killing of dolphins. Mexico appealed to GATT on the grounds that the embargo was inconsistent with the rules of international trade. The panel ruled in favour of Mexico based on a number of different arguments. Although the report of the panel was not adopted, its ruling was heavily criticised by environmental groups who felt that trade rules were an obstacle to environmental protection. During this period, important developments were also taking place in environmental forums. The discussion on the relationship between economic growth, social development and environment that began at the Stockholm Conference continued throughout the 1970s and 80s. In 1987, for example, the World Commission on Environment and Development produced a report entitled Our Common Future (also known as the Brundtland Report), in which the term "sustainable development" was coined. The report identified poverty as one of the most important causes of environmental degradation, and argued that greater economic growth, fuelled in part by increased international trade, could generate the necessary resources to combat what had become known as the "pollution of poverty". As a result of these developments, the EMIT groups proposal met with a positive response. Despite some countries initial reluctance to have environmental issues discussed in GATT, they agreed to have a structured debate on the subject. In accordance with its mandate of examining the possible effects of environmental protection policies on the operation of the General Agreement, the EMIT group focused on the effects of environmental measures (such as eco-labelling schemes) on international trade, the relationship between the rules of the multilateral trading system and the trade provisions contained in multilateral environmental agreements (MEAs) (such as the Basel Convention on the Transboundary Movement of Hazardous Wastes), and the transparency of national environmental regulations with an impact on trade. 11

Rio in 1992 and after The activation of the EMIT group was followed by further developments in environmental forums. The 1992 UN Conference on Environment and Development (UNCED), also known as the Rio "Earth Summit", drew attention to the role of international trade in poverty alleviation and in combating environmental degradation. Agenda 21, the programme of action adopted at the conference, also addressed the importance of promoting sustainable development through, amongst other means, international trade. The preparatory work for the summit had itself influenced developing countries approach discussing trade and environment issues in the EMIT group. The concept of "sustainable development" had established a link between environmental protection and development at large. These moves were about to yield more concrete results within the trading system. The environment and trade were to be linked more explicitly in the new constitution of the multilateral trading system that was to be signed in 1994. Trade and Environment in the WTOs Founding Charter The preamble to the Marrakesh Agreement establishing the World Trade Organization refers to the importance of working towards sustainable development. The first paragraph of the preamble4 recognizes sustainable development as an integral part of the multilateral trading system, which illustrates the importance placed by WTO members on environmental protection.

See under objectives of the WTO, in the next chapter

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WORLD TRADE ORGANIZATION The World Trade Organization (WTO) is an international organization designed to supervise and liberalize international trade. The WTO came into being on January 1, 1995, and is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1948. It represents the culmination of an eight-year process of trade negotiations, known as the Uruguay Round. The WTO is located in Geneva, and is administered by a secretariat that also facilitates ongoing trade negotiations and oversees trade dispute resolution. There are currently 146 member countries of the WTO. The WTO deals with the rules of trade between nations at a global level. It is responsible for negotiating and implementing new trade agreements, and is in charge of policing member countries' adherence to all the WTO agreements, signed by the bulk of the world's trading nations and ratified in their parliaments. These documents provide the legal ground rules for international commerce. The agreements are like contracts which bind governments to keep their trade policies within the boundaries set by the agreements. Objectives of the WTO The reasons for establishing the WTO and the policy objectives of this international organization are set out in the preamble to the WTO Agreement. According to the preamble, the parties to the WTO Agreement agreed to the terms of this agreement and the establishment of the WTO "recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising the standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the worlds resources in accordance with the objective of sustainable development, seeking both to protect and preserve environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development". The ultimate objectives of the WTO are thus: 13

 The increase of standards of living; The attainment of full employment; The growth of real income and effective demand; and The expansion of production of, and trade in, goods and services However, it is clear from the Preamble that in pursuing these objectives the WTO must take into account the need for preservation of the environment and the needs of the developing countries. The Preamble stresses upon the importance of sustainable economic development and of integration of developing countries, and in particular leastdeveloped countries, in the world trading system. Functions of the WTO Among the various functions of the WTO, these are regarded by analysts as the most important: It oversees the implementation, administration and operation of the covered agreements. It provides a forum for negotiations and for settling disputes. Additionally, it is the duty of WTO to review the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making. Another priority of the WTO is the assistance of developing, leastdeveloped and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. The WTO is also a center of economic research and analysis, regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization. Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank.

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The Uruguay Round As mentioned earlier, the World Trade Organization represents the culmination of an eight-year process of trade negotiations, known as the Uruguay Round. The Uruguay Round commenced in September 1986 and continued until April 1994. The Round, based on the GATT ministerial meeting in Geneva (1982), was launched in Punta del Este in Uruguay (hence the name), followed by negotiations in Montreal, Geneva, Brussels, Washington, D.C., and Tokyo, with the 20 agreements finally being signed in Marrakech - the Marrakesh Agreement. The Round transformed the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO). Despite the profile of the trade and environment issue in the mid to late stages of the Uruguay Round,5 the negotiations concluded in the Round did not deal directly with Trade and Environment issues. This was largely a reflection of the absence of reference to the environment in the agenda of Uruguay Round. As a consequence, the WTO agreements that emerged from the Round did not deal with environment as a standalone issue. Environmental groups made much of the fact that their concerns were not reflected in the 500 pages of legal texts that emerged from the Round, including the tariff schedules, running to some 26,000 pages. This perceived neglect of the WTO to deal directly with the Environmental problems was seen by environmentalists as squandering a crucial chance to centrally address the trade and environment issue and establish broad principles to guide the WTO in its future work. On other environmental-related matters, the Uruguay Round generated results with varying degrees of ambiguity. In the area of standards, the thrust of the agreements from the round was to discipline trade barriers while allowing for differences in non-border measures. Exactly how much discipline would be exerted on National regulations, especially in the case of sanitary and phytosanitary standards, and what would constitute sufficient scientific justification for standards that were higher than international standards, remained unclear. Under the subsidies agreement the use of countervailing
5

A number of events contributed to raising the profile of trade and environment during the later part of Uruguay Round besides the tuna/ dolphin dispute. These included the Earth Summit in Rio in June 1992, the vocal opposition of environmentalists to NAFTA and the Uruguay Round decisions in the US.

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measures to deal with 'unfair' trade practices in the form of lax environmental standards was not permitted. But the agreement did imply that subsidies that take the form of foregone revenue for environmental taxes can be countervailable if they are specific. Nonetheless, trade and environment issues were important in developments running parallel to the negotiations themselves, and in particular played a role in defining the work programme for the WTO following the Round. At the ministerial meeting in Marrakesh in April 1994, governments agreed that trade and environment should be on the future agenda for the WTO, and that a Committee on Trade and the Environment should be formed to assess trade and environment linkages. Committee on Trade and Environment When Ministers approved the results of the Uruguay Round negotiations in Marrakesh in April 1994, they took a decision to begin a comprehensive work programme on trade and environment in the WTO. During the past five years, this work programme has provided the focus of discussions in the Committee on Trade and Environment (CTE). The CTEs main aim is to build a constructive relationship between trade and environmental concerns. The CTE has a two-fold mandate: first "to identify the relationship between trade measures and environmental measures in order to promote sustainable development"; and second, "to make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system are required, compatible with the open, equitable and non-discriminatory nature of the system". This broad-based mandate covers goods, services, and intellectual property rights and builds on work carried out in the previous GATT Group on Environmental Measures and International Trade. Since 1997, the CTE has adopted a thematic approach to its work to broaden and deepen the discussions and to allow all items of the work programme to be addressed in a systematic manner. Discussions of the items on the work programme have 16

been clustered into two main areas: issues relevant to market access and issues related to the linkages between the multilateral environment and trade agendas. Important parameters which have guided CTEs work The Committee on Trade and Environment (CTE) has brought environmental and sustainable development issues into the mainstream of the WTOs work. There are several important parameters which have guided the CTEs work. The first parameter is that WTO competency for policy coordination in this area is limited to trade and those trade-related aspects of environmental policies which may result in significant trade effects for its Members. In other words, it is not intended that the WTO should become an environmental agency. Nor should it get involved in reviewing national environmental priorities, setting environmental standards or developing global policies on the environment. That will continue to be the task of national governments and of other inter-governmental organizations better suited to the task; The second parameter is that increased national coordination as well as multilateral cooperation is necessary to address environmental concerns; and The third parameter is that secure market access opportunities are essential to help developing countries work towards sustainable development. The contribution which the WTO could make to environmental protection was recognized at the United Nations Conference on Environment and Development (UNCED the Earth Summit) in 1992, which stated that an open, equitable and nondiscriminatory multilateral trading system has a key contribution to make national and international efforts for better protection and conservation of environmental resources and promotion of sustainable development. Among the most important recommendations of the UNCED to the GATT at the time was to implement the results of the Uruguay Round.

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The CTE's in its first report in 1996, recognized that trade and environment are both important areas of policy making and that they should be mutually supportive in order to promote sustainable development. The report noted that the multilateral trading system has the capacity to further integrate environmental considerations and enhance its contribution to the promotion of sustainable development without undermining its open, equitable and non-discriminatory character. To raise awareness of the linkages between trade, environment and sustainable development and to enhance the dialogue between policy makers from Ministries of both trade and environment in WTO Member Governments, the WTO Secretariat has organized a series of regional seminars on trade and environment for government officials from developing and least-developed countries and countries with economies in transition. At its meeting in October 1999, the CTE agreed to continue to deepen the analysis of all items on the work programme based on the thematic clusters of market access and the linkages between the multilateral environment and trade agendas with the objective of fulfilling the mandate of the CTE. Main points of discussion of the CTEs work programme Some of the main points of discussion of the CTEs work programme include the following: 1. Trade measures applied pursuant to MEAs Throughout the discussions on this issue in the WTO, it has become clear that the preferred approach for governments to take in tackling transboundary or global environmental problems is through cooperative, multilateral action under an MEA. While some MEAs contain trade provisions, trade restrictions are not the only or necessarily the most effective policy instrument to use in MEAs. In certain cases they can play an important role. It has also been stated that the WTO already provides broad and valuable scope for trade measures to be applied pursuant to MEAs in a WTO-consistent manner.

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As in the past few years, in June 1999 the CTE held an Information Session with Secretariats of MEAs relevant to the work of the CTE to discuss the trade-related developments in these agreements. At the June Session, presentations and papers were provided by the Convention on the International Trade in Endangered Species of Wild Fauna and Flora; the Montreal Protocol on Substances that Deplete the Ozone Layer; the United Nations Framework Convention on Climate Change; the Intergovernmental Forum on Forests; and the International Tropical Timber Organization. This meeting illustrated how trade-related measures function in MEAs and helped to deepen the understanding of the relationship between MEAs and the multilateral trading system. 2. Dispute settlement A related item concerns the appropriate forum for the settlement of potential disputes that may arise over the use of trade measures pursuant to MEAs. There is general agreement that in the event a dispute arises between WTO Members who are also signatories to an MEA, they should try first to resolve it through the dispute settlement mechanisms available under that MEA. Were a dispute to arise with a non-party to an MEA, but with another WTO Member, the WTO would provide the only possible forum for resolving the dispute. The CTE agrees that better policy coordination between trade and environmental policy officials at the national level can help prevent situations from arising in which the use of trade measures applied pursuant to the MEAs could become subject to disputes. Furthermore, it is unlikely that problems would arise in the WTO over trade measures agreed and applied among parties to an MEA. In the event of a dispute, however, WTO Members are confident that the WTO dispute settlement provisions would be able to tackle any problems which arise in this area, including those cases requiring input from environmental experts. 3. Eco-labelling Eco-labelling programmes are important environmental policy instruments. Eco-labelling was discussed extensively in the GATT, and provided the basis in the CTE for a detailed 19

examination of related issues. The key requirement from the WTOs point of view is that environmental measures that incorporate trade provisions or that affect trade significantly, should not discriminate between home-produced goods and imports, nor between imports from or exports to different trading partners. Non-discrimination is the cornerstone of secure and predictable market access and undistorted competition: consumers are guaranteed a wider choice and producers better access to the full range of market opportunities. Subject to that requirement being met, WTO rules place essentially no constraints on the policy choices available to a country to protect its own environment against damage either from domestic production or from the consumption of domestically produced or imported products. The CTE has acknowledged that well-designed, eco-labelling programmes can be effective instruments of environmental policy. It notes that in certain cases such programmes have raised significant concerns about possible trade effects. An important starting point for addressing some of these trade effects is to ensure adequate transparency in the preparation, adoption and application of eco-labelling programmes. Interested parties from other countries should also be allowed to voice their concerns. Discussion is continuing on how the use in eco-labelling programmes of criteria based on non-product-related processes and production methods should be treated under the rules of the WTO Agreement on Technical Barriers to Trade. 4. WTO Transparency Provisions The WTO transparency provisions fulfil an important role in ensuring the proper functioning of the multilateral trading system. They help to prevent unnecessary trade restrictions and distortions and ensure that WTO Members provide information about changes in their regulations. They can also provide a valuable first step in ensuring that trade and environment policies are developed and implemented in a mutually supportive way. Trade-related environmental measures should not be required to meet more onerous transparency requirements than other measures that affect trade. The CTE has stated that no modifications to WTO rules are needed to ensure adequate transparency for traderelated environmental measures. In 1998, the CTE also established a WTO 20

Environmental Database which can be accessed electronically by WTO Members. The WTO Secretariat updates this database annually by reviewing all the environment-related notifications. The Environmental Database is seen as an important step towards increasing the transparency of trade-related environmental measures notified by WTO Members. 5. Export of domestically prohibited goods During the mid-1980s, concerns were raised by a number of developing country GATT Contracting Parties that they were importing certain hazardous or toxic products without knowing the full environmental or public health dangers such products could pose. In the late 1980s, a GATT Working Party examined ways of treating trade in goods which are severely restricted or banned for sale on the domestic market of an exporting country. A key consideration was that the importing country should be fully informed about the products it was receiving and have the right to reject them if it felt such products caused environmental or public health problems. Several MEAs have been negotiated in the last few years to deal with problems of trade in environmentally hazardous products (e.g. the Basel Convention and London Guidelines). The WTO does not intend to duplicate work that has already been accomplished elsewhere in the area of domestically prohibited goods. WTO Members, in the context of the CTE, have agreed to support the efforts of the specialized intergovernmental environmental organizations that are helping to resolve such problems. However, they have noted that there may be a complementary role for the WTO to play in this area. 6. Trade liberalization and sustainable development Further liberalization of international trade, both in goods and services, has a key role to play in advancing economic policy objectives in Member countries. In that respect, WTO Members have already made an important contribution to sustainable development and better environmental protection world-wide by concluding the Uruguay Round negotiations. This contribution will steadily increase as the results of the Round move 21

towards full implementation. The UN Conference on Environment and Development (the Earth Summit) also recognized an open, non-discriminatory trading system to be a prerequisite for effective action to protect the environment and to generate sustainable development. This is based on the perspective that countries, particularly developing countries, are dependent on trade as the main source of continued growth and prosperity. The CTE is continuing to tackle this item of its work programme in the context of the built-in agenda for further trade liberalization initiatives contained in the results of the Uruguay Round negotiations. The CTE has noted that the removal of trade restrictions and distortions, in particular high tariffs, tariff escalation, export restrictions, subsidies and non-tariff barriers, has the potential to yield benefits for both the multilateral trading system and the environment. Discussions in 1999 included the sectors of agriculture and fisheries, energy, forestry, non-ferrous metals, textiles and clothing, leather and environmental services. The discussions highlighted areas where the removal of trade restrictions and distortions can be beneficial for the environment, trade and development, providing win-win-win opportunities. 7. Trade in services and TRIPS The CTE also is to examine the role of the WTO in relation to the links between environmental measures and the new trade agreements reached in the Uruguay Round negotiations on services and intellectual property. Discussion on these two items of the work programme have broken new ground since there was very little understanding of how the rules of the trading system might affect or be affected by environmental policies in these areas. With respect to the General Agreement on Trade in Services (GATS) and the environment, the CTE has noted that its discussions so far have not led to the identification of any measures that Members feel may be applied for environmental purposes to services trade which are not already adequately covered by GATS provisions. In the case of intellectual property rights, WTO Members have acknowledged that the Agreement on Trade-related Intellectual Property Rights (TRIPS) plays an essential role in facilitating access to and the transfer of environmentally-sound technology and 22

products. However, further work is required in this area, including clarifying the relationship between the TRIPS Agreement and the Convention on Biological Diversity.

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WTO AGREEMENTS Introduction Environmental issues began to be systematically addressed in the WTO following the Decision on Trade and Environment taken towards the end of the Uruguay Round at Marrakesh in 1994. The Committee on Trade and Environment was established in the same year, with the explicit mandate to resolve environmental issues in the trading system. Some new agreements under the WTO also contained environmental provisions. In 2001 the environment was explicitly put on the negotiating agenda in the Doha Ministerial Declaration in 2001. Today the environment has been mainstreamed into the multilateral trading system, and has significant implications for shaping future rules under the WTO regime. The WTO's agreements are the legal foundation for the international trading system that is used by the bulk of the world's trading nations. Most of the WTO agreements are the result of the 198694 Uruguay Round negotiations, signed at the Marrakesh ministerial meeting in April 1994. The WTOs agreements are often called the Final Act of the 1986 - 1994 Uruguay Round of trade negotiations. These agreements are also called the WTOs Trade Rules. The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the secretariat on countries trade policies. Important WTO Agreements Some of the important WTO Agreements are summarized below. The General Agreement on Tariffs and Trade (GATT) 24

The General Agreement on Tariffs and Trade was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). GATT was formed in 1947 and lasted until 1994, when it was replaced by the World Trade Organization. The Bretton Woods Conference had introduced the idea for an organization to regulate trade as part of a larger plan for economic recovery after World War II. As governments negotiated the ITO, 15 negotiating states began parallel negotiations for the GATT as a way to attain early tariff reductions. Once the ITO failed in 1950, only the GATT agreement was left. The GATT's main objective was the reduction of barriers to international trade. This was achieved through the reduction of tariff barriers, quantitative restrictions and subsidies on trade through a series of agreements. The GATT was a treaty, not an organization. The functions of the GATT were taken over by the World Trade Organization which was established during the final round of negotiations in early 1990s. The history of the GATT can be divided into three phases: the first, from 1947 until the Torquay Round, largely concerned which commodities would be covered by the agreement and freezing existing tariff levels. A second phase, encompassing three rounds, from 1959 to 1979, focused on reducing tariffs. The third phase, consisting only of the Uruguay Round from 1986 to 1994, extended the agreement fully to new areas such as intellectual property, services, capital, and agriculture. Out of this round the WTO was born. In 1993 the GATT was updated (GATT 1994) to include new obligations upon its signatories. One of the most significant changes was the creation of the World Trade Organization (WTO). GATT was a set of rules agreed upon by nations and the WTO is an institutional body. The WTO expanded its scope from traded goods to trade within the service sector and intellectual property rights. Although it was designed to serve multilateral agreements, during several rounds of GATT negotiations (particularly the Tokyo Round) plurilateral agreements created selective trading and caused fragmentation among members. WTO arrangements are generally a multilateral agreement settlement mechanism of GATT. 25

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) The agreement recognises that widely varying standards in the protection and enforcement of intellectual property rights and the lack of a multilateral framework of principles, rules and disciplines dealing with international trade in counterfeit goods have been a growing source of tension in international economic relations. Rules and disciplines were needed to cope with these tensions. To that end, the agreement addresses the applicability of basic GATT principles and those of relevant international intellectual property agreements; the provision of adequate intellectual property rights; the provision of effective enforcement measures for those rights; multilateral dispute settlement; and transitional arrangements. Part I of the agreement sets out general provisions and basic principles, notably a national-treatment commitment under which the nationals of other parties must be given treatment no less favourable than that accorded to a partys own nationals with regard to the protection of intellectual property. It also contains a most-favoured-nation clause, a novelty in an international intellectual property agreement, under which any advantage a party gives to the nationals of another country must be extended immediately and unconditionally to the nationals of all other parties, even if such treatment is more favourable than that which it gives to its own nationals. Part II addresses each intellectual property right in succession. With respect to copyright, parties are required to comply with the substantive provisions of the Berne Convention for the protection of literary and artistic works, in its latest version (Paris 1971), though they will not be obliged to protect moral rights as stipulated in Article 6bis of that Convention. It ensures that computer programs will be protected as literary works under the Berne Convention and lays down on what basis data bases should be protected by copyright. Important additions to existing international rules in the area of copyright and related rights are the provisions on rental rights. The draft requires authors of computer 26

programmes and producers of sound recordings to be given the right to authorize or prohibit the commercial rental of their works to the public. A similar exclusive right applies to films where commercial rental has led to widespread copying which is materially impairing the right of reproduction. The draft also requires performers to be given protection from unauthorized recording and broadcast of live performances (bootlegging). The protection for performers and producers of sound recordings would be for no less than 50 years. Broadcasting organizations would have control over the use that can be made of broadcast signals without their authorization. This right would last for at least 20 years. With respect to trademarks and service marks, the agreement defines what types of signs must be eligible for protection as a trademark or service mark and what the minimum rights conferred on their owners must be. Marks that have become well-known in a particular country shall enjoy additional protection. In addition, the agreement lays down a number of obligations with regard to the use of trademarks and service marks, their term of protection, and their licensing or assignment. For example, requirements that foreign marks be used in conjunction with local marks would, as a general rule, be prohibited. In respect of geographical indications, the agreement lays down that all parties must provide means to prevent the use of any indication which misleads the consumer as to the origin of goods, and any use which would constitute an act of unfair competition. A higher level of protection is provided for geographical indications for wines and spirits, which are protected even where there is no danger of the publics being misled as to the true origin. Exceptions are allowed for names that have already become generic terms, but any country using such an exception must be willing to negotiate with a view to protecting the geographical indications in question. Furthermore, provision is made for further negotiations to establish a multilateral system of notification and registration of geographical indications for wines. Industrial designs are also protected under the agreement for a period of 10 years. Owners of protected designs would be able to prevent the manufacture, sale or 27

importation of articles bearing or embodying a design which is a copy of the protected design. As regards patents, there is a general obligation to comply with the substantive provisions of the Paris Convention (1967). In addition, the agreement requires that 20-year patent protection be available for all inventions, whether of products or processes, in almost all fields of technology. Inventions may be excluded from patentability if their commercial exploitation is prohibited for reasons of public order or morality; otherwise, the permitted exclusions are for diagnostic, therapeutic and surgical methods, and for plants and (other than microorganisms) animals and essentially biological processes for the production of plants or animals (other than microbiological processes). Plant varieties, however, must be protectable either by patents or by a sui generis system (such as the breeders rights provided in a UPOV Convention). Detailed conditions are laid down for compulsory licensing or governmental use of patents without the authorization of the patent owner. Rights conferred in respect of patents for processes must extend to the products directly obtained by the process; under certain conditions alleged infringers may be ordered by a court to prove that they have not used the patented process. With respect to the protection of layout designs of integrated circuits, the agreement requires parties to provide protection on the basis of the Washington Treaty on Intellectual Property in Respect of Integrated Circuits which was opened for signature in May 1989, but with a number of additions: protection must be available for a minimum period of 10 years; the rights must extend to articles incorporating infringing layout designs; innocent infringers must be allowed to use or sell stock in hand or ordered before learning of the infringement against a suitable royalty: and compulsory licensing and government use is only allowed under a number of strict conditions. Trade secrets and know-how which have commercial value must be protected against breach of confidence and other acts contrary to honest commercial practices. Test data submitted to governments in order to obtain marketing approval for pharmaceutical or agricultural chemicals must also be protected against unfair commercial use.

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The final section in this part of the agreement concerns anti-competitive practices in contractual licences. It provides for consultations between governments where there is reason to believe that licensing practices or conditions pertaining to intellectual property rights constitute an abuse of these rights and have an adverse effect on competition. Remedies against such abuses must be consistent with the other provisions of the agreement. Part III of the agreement sets out the obligations of member governments to provide procedures and remedies under their domestic law to ensure that intellectual property rights can be effectively enforced, by foreign right holders as well as by their own nationals. Procedures should permit effective action against infringement of intellectual property rights but should be fair and equitable, not unnecessarily complicated or costly, and should not entail unreasonable time-limits or unwarranted delays. They should allow for judicial review of final administrative decisions. There is no obligation to put in place a judicial system distinct from that for the enforcement of laws in general, nor to give priority to the enforcement of intellectual property rights in the allocation of resources or staff. The civil and administrative procedures and remedies spelled out in the text include provisions on evidence of proof, injunctions, damages and other remedies which would include the right of judicial authorities to order the disposal or destruction of infringing goods. Judicial authorities must also have the authority to order prompt and effective provisional measures, in particular where any delay is likely to cause irreparable harm to the right holder, or where evidence is likely to be destroyed. Further provisions relate to measures to be taken at the border for the suspension by customs authorities of release, into domestic circulation, of counterfeit and pirated goods. Finally, parties should provide for criminal procedures and penalties at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies should include imprisonment and fines sufficient to act as a deterrent. The agreement would establish a Council for Trade-Related Aspects of Intellectual Property Rights to monitor the operation of the agreement and governments compliance 29

with it. Dispute settlement would take place under the integrated GATT disputesettlement procedures as revised in the Uruguay Round. With respect to the implementation of the agreement, it envisages a one-year transition period for developed countries to bring their legislation and practices into conformity. Developing countries and countries in the process of transformation from a centrallyplanned into a market economy would have a five-year transition period, and leastdeveloped countries 11 years. Developing countries which do not at present provide product patent protection in an area of technology would have up to 10 years to introduce such protection. However, in the case of pharmaceutical and agricultural chemical products, they must accept the filing of patent applications from the beginning of the transitional period. Though the patent need not be granted until the end of this period, the novelty of the invention is preserved as of the date of filing the application. If authorization for the marketing of the relevant pharmaceutical or agricultural chemical is obtained during the transitional period, the developing country concerned must offer an exclusive marketing right for the product for five years, or until a product patent is granted, whichever is shorter. Subject to certain exceptions, the general rule is that the obligations in the agreement would apply to existing intellectual property rights as well as to new ones.

The General Agreement on Trade in Services (GATS) The General Agreement on Trade in Services (GATS) came into force in 1995 and constitutes the legal framework through which World Trade Organization (WTO) Members progressively liberalize trade in services, including health-related services. Within the GATS framework, trade in health services is understood as the provision of specialized and general health personnel, nursing services, hospital services, ambulance services, and physiotherapeutic and paramedical services provided by medical and dental laboratories.

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GATS allows WTO Members to choose which service sectors to open up to trade and foreign competition. To date, only 50 WTO Members have made some type of commitment on health services under GATS, much less than in financial services (100 Members). Liberalization of financial services may have implications for health systems through its impact on health insurance. Individual Members' commitments to open markets in specific sectors - and how open those markets will be - are the outcome of negotiations. The commitments appear in schedules that list the sectors being opened, the extent of market access offered in those sectors (e.g. whether there are any restrictions on foreign ownership), and any limitations on national treatment (whether some rights granted to local companies will not be granted to foreign companies). For example, a Member could require all foreign-owned hospitals to provide 25% of beds to care for the uninsured, but this would have to be scheduled as a national treatment limitation (if it were not already a requirement for locally-owned hospitals). The overall aim of GATS is to liberalize trade in services. The agreement covers four different modes (modes 1-4 trade in services) all of which affect health: Mode 1 Cross-border supply Health services provided from the territory of one Member State in the territory of another Member State. This is usually via interactive audio, visual and data communication. The patient therefore has the opportunity to consult with physicians in a different country, as do local doctors. Typical examples include Internet consultation, diagnosis, treatment and medical education. This form of supply can bring care to underserved areas, but can be capital intensive and divert resources from other equally pressing needs. Mode 2 Consumption abroad This usually covers incidents when patients seek treatment abroad or are abroad when they need treatment. This can generate foreign exchange, but equally can crowd out local

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patients and act as a drain on resources when their treatment is subsidized by the sending government. Mode 3 Foreign commercial presence Health services supplied in one Member State, through commercial presence in the territory of another Member State. This covers the opening up of the health sector to foreign companies, allowing them to invest in health operations, health management and health insurance. It is argued that, on the one hand, FDI can make new services available, contribute to driving up quality and create employment opportunities. On the downside, it can help create a two-tier health system and an internal brain-drain - and thus exacerbate inequity of health provision. Mode 4 Movement of natural persons (individuals rather than companies) The temporary movement of a commercial provider of services (for example, a doctor) from their own country to another country to provide his or her service under contract or as a member of staff transferred to a different country. This is one of the most contentious areas for health, as there is concern that it will increase the brain drain of health personnel from poor to rich countries. However, GATS is concerned only with health professionals working in other countries on a temporary basis. Brain drain refers to the emigration of educated, qualified, and skilled people from poorer countries to richer countries. WHO's Human Resources for Health initiative aims to increase individual countries' pools of qualified health staff. The extent to which GATS will have an impact on public services such as health and education is controversial. GATS comes into the equation when countries decide to allow foreign private suppliers to provide services. Opponents of GATS are convinced that it will limit a state's sovereign powers to protect human health, and ensure provision of good quality, affordable health services. Specifically, they fear that progressive liberalization of services under GATS will force WTO Members to privatize health care currently provided by governments, and that

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these changes will be irreversible. They are also concerned that the capacity of states to regulate health-related services will be eroded. The counter-argument stresses that GATS allows WTO Members to decide for themselves which sectors will be liberalized and to define country-specific conditions on the form that liberalization will take. Some WTO Members have already indicated they will not be requesting or offering commitments on health services in the current negotiations. Those states that do proceed are not obliged to respond positively to any particular request. Nor is there any requirement for reciprocity. Moreover, the Doha declaration specifically reaffirmed the right of Members to regulate or introduce new regulations on the supply of services. Defenders of GATS therefore argue that national control over policy and practice has been enhanced. The political dynamic around GATS may be somewhat different from that affecting the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Many developing countries are keen to welcome foreign direct investment and to secure access in the north for their professionals. Many developed countries, on the other hand, are nervous about the political and economic effects of liberalization on publicly-funded health services. GATS is a complex treaty and it does not lay down minimum standards as TRIPS does. Rather, it takes shape through the process of negotiation. Overall, there is lack of empirical data on the level of international trade in health-related services, as well as on the effects of liberalization in specific countries. Finally, trade in services is increasing in any case (often through bilateral negotiations), thus making attribution to GATS very difficult. Certain other WTO Agreements are as follows: Agreement on Agriculture The WTO Agreement on Agriculture was one of the many agreements which were negotiated during the Uruguay Round.

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The implementation of the Agreement on Agriculture started with effect from January 1, 1995. As per the provisions of the Agreement, the developed countries would complete their reduction commitments within 6 years, i.e., by the year 2000, whereas the commitments of the developing countries would be completed within 10 years, i.e., by the year 2004. The least developed countries are not required to make any reductions. The products, which are included within the purview of this agreement are what are normally considered as part of agriculture except that it excludes fishery and forestry products as well as rubber, jute, sisal, abaca and coir. Salient Features The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture and trade policy: market access, domestic support and export subsidies. Market Access This includes tariffication, tariff reduction and access opportunities. Tariffication means that all non-tariff barriers such as quotas, variable levies, minimum import prices, discretionary licensing, state trading measures, voluntary restraint agreements etc. need to be abolished and converted into an equivalent tariff. Ordinary tariffs including those resulting from their tariffication are to be reduced by an average of 36% with minimum rate of reduction of 15% for each tariff item over a 6 year period. Developing countries are required to reduce tariffs by 24% in 10 years. Developing countries as were maintaining Quantitative Restrictions due to balance of payment problems, were allowed to offer ceiling bindings instead of tariffication. Special safeguard provision allows the imposition of additional duties when there are either import surges above a particular level or particularly low import prices as compared to 1986-88 levels. It has also been stipulated that minimum access equal to 3% of domestic consumption in 1986-88 will have to be established for the year 1995 rising to 5% at end of the implementation period. 34

Domestic support For domestic support policies, subject to reduction commitments, the total support given in 1986-88,measured by the total Aggregate Measurement of Support (AMS) should be reduced by 20% in developed countries (13.3% in developing countries). Reduction commitments refer to total levels of support and not to individual commodities. Policies which amount to domestic support both under the product specific and non-product specific categories at less than 5% of the value of production for developed countries and less than 10% for developing countries are also excluded from any reduction commitments. Polices which have no or at most minimal trade distorting effects on production are excluded from any reduction commitments (Green Box-Annex 2 of the Agreement on Agriculture - http://www.wto.org). The list of exempted green box policies includes such policies which provide services or benefits to agriculture or the rural community, public stock holding for food security purposes, domestic food aid and certain de-coupled payments to producers including direct payments to production limiting programmes, provided certain conditions are met. Special and Differential Treatment provisions are also available for developing country members. These include purchases for and sales from food security stocks at administered prices provided that the subsidy to producers is included in calculation of AMS. Developing countries are permitted untargeted subsidised food distribution to meet requirements of the urban and rural poor. Also excluded for developing countries are investment subsidies that are generally available to agriculture and agricultural input subsidies generally available to low income and resource poor farmers in these countries. Export Subsidies The Agreement contains provisions regarding member's commitment to reduce Export Subsidies. Developed countries are required to reduce their export subsidy expenditure by 36% and volume by 21% in 6 years, in equal instalment (from 1986-1990 levels). For developing countries the percentage cuts are 24% and 14% respectively in equal annual installment over 10 years. The Agreement also specifies that for products not subject to export subsidy reduction commitments, no such subsidies can be granted in the future. 35

The Sanitary and Phytosanitary Measures Agreement The Agreement on the Application of Sanitary and Phytosanitary Measures sets out the basic rules for food safety and animal and plant health standards. It allows countries to set their own standards. But it also says regulations must be based on science. They should be applied only to the extent necessary to protect human, animal or plant life or health. And they should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail. Member countries are encouraged to use international standards, guidelines and recommendations where they exist. However, members may use measures which result in higher standards if there is scientific justification. They can also set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary. The agreement still allows countries to use different standards and different methods of inspecting products. Key Features All countries maintain measures to ensure that food is safe for consumers, and to prevent the spread of pests or diseases among animals and plants. These sanitary and phytosanitary measures can take many forms, such as requiring products to come from a disease-free area, inspection of products, specific treatment or processing of products, setting of allowable maximum levels of pesticide residues or permitted use of only certain additives in food. Sanitary (human and animal health) and phytosanitary (plant health) measures apply to domestically produced food or local animal and plant diseases, as well as to products coming from other countries. Protection or protectionism?

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Sanitary and phytosanitary measures, by their very nature, may result in restrictions on trade. All governments accept the fact that some trade restrictions may be necessary to ensure food safety and animal and plant health protection. However, governments are sometimes pressured to go beyond what is needed for health protection and to use sanitary and phytosanitary restrictions to shield domestic producers from economic competition. Such pressure is likely to increase as other trade barriers are reduced as a result of the Uruguay Round agreements. A sanitary or phytosanitary restriction which is not actually required for health reasons can be a very effective protectionist device, and because of its technical complexity, a particularly deceptive and difficult barrier to challenge. The Agreement on Sanitary and Phytosanitary Measures (SPS) builds on previous GATT rules to restrict the use of unjustified sanitary and phytosanitary measures for the purpose of trade protection. The basic aim of the SPS Agreement is to maintain the sovereign right of any government to provide the level of health protection it deems appropriate, but to ensure that these sovereign rights are not misused for protectionist purposes and do not result in unnecessary barriers to international trade. Justification of measures The SPS Agreement, while permitting governments to maintain appropriate sanitary and phytosanitary protection, reduces possible arbitrariness of decisions and encourages consistent decision-making. It requires that sanitary and phytosanitary measures be applied for no other purpose than that of ensuring food safety and animal and plant health. In particular, the agreement clarifies which factors should be taken into account in the assessment of the risk involved. Measures to ensure food safety and to protect the health of animals and plants should be based as far as possible on the analysis and assessment of objective and accurate scientific data. International standards The SPS Agreement encourages governments to establish national SPS measures consistent with international standards, guidelines and recommendations. This process is 37

often referred to as "harmonization". The WTO itself does not and will not develop such standards. However, most of the WTOs member governments (132 at the date of drafting) participate in the development of these standards in other international bodies. The standards are developed by leading scientists in the field and governmental experts on health protection and are subject to international scrutiny and review. International standards are often higher than the national requirements of many countries, including developed countries, but the SPS Agreement explicitly permits governments to choose not to use the international standards. However, if the national requirement results in a greater restriction of trade, a country may be asked to provide scientific justification, demonstrating that the relevant international standard would not result in the level of health protection the country considered appropriate. Adapting to conditions Due to differences in climate, existing pests or diseases, or food safety conditions, it is not always appropriate to impose the same sanitary and phytosanitary requirements on food, animal or plant products coming from different countries. Therefore, sanitary and phytosanitary measures sometimes vary, depending on the country of origin of the food, animal or plant product concerned. This is taken into account in the SPS Agreement. Governments should also recognize disease-free areas which may not correspond to political boundaries, and appropriately adapt their requirements to products from these areas. The agreement, however, checks unjustified discrimination in the use of sanitary and phytosanitary measures, whether in favour of domestic producers or among foreign suppliers. Alternative measures An acceptable level of risk can often be achieved in alternative ways. Among the alternatives and on the assumption that they are technically and economically feasible and provide the same level of food safety or animal and plant health governments should select those which are not more trade restrictive than required to meet their health objective. Furthermore, if another country can show that the measures it applies provide 38

the same level of health protection, these should be accepted as equivalent. This helps ensure that protection is maintained while providing the greatest quantity and variety of safe foodstuffs for consumers, the best availability of safe inputs for producers, and healthy economic competition. Risk Assessment The SPS Agreement increases the transparency of sanitary and phytosanitary measures. Countries must establish SPS measures on the basis of an appropriate assessment of the actual risks involved, and, if requested, make known what factors they took into consideration, the assessment procedures they used and the level of risk they determined to be acceptable. Although many governments already use risk assessment in their management of food safety and animal and plant health, the SPS Agreement encourages the wider use of systematic risk assessment among all WTO member governments and for all relevant products. Transparency Governments are required to notify other countries of any new or changed sanitary and phytosanitary requirements which affect trade, and to set up offices (called "Enquiry Points") to respond to requests for more information on new or existing measures. They also must open to scrutiny how they apply their food safety and animal and plant health regulations. The systematic communication of information and exchange of experiences among the WTOs member governments provides a better basis for national standards. Such increased transparency also protects the interests of consumers, as well as of trading partners, from hidden protectionism through unnecessary technical requirements. A special Committee has been established within the WTO as a forum for the exchange of information among member governments on all aspects related to the implementation of the SPS Agreement. The SPS Committee reviews compliance with the agreement, discusses matters with potential trade impacts, and maintains close co-operation with the appropriate technical organizations. In a trade dispute regarding a sanitary or

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phytosanitary measure, the normal WTO dispute settlement procedures are used, and advice from appropriate scientific experts can be sought.

Agreement on Subsidies and Countervailing Measures The Agreement on Subsidies and Countervailing Measures (SCM Agreement) addresses two separate but closely related topics: multilateral disciplines regulating the provision of subsidies, and the use of countervailing measures to offset injury caused by subsidized imports. Multilateral disciplines are the rules regarding whether or not a subsidy may be provided by a Member. They are enforced through invocation of the WTO dispute settlement mechanism. Countervailing duties are a unilateral instrument, which may be applied by a Member after an investigation by that Member and a determination that the criteria set forth in the SCM Agreement are satisfied. Structure of the Agreement Part I provides that the SCM Agreement applies only to subsidies that are specifically provided to an enterprise or industry or group of enterprises or industries, and defines both the term subsidy and the concept of specificity. Parts II and III divide all specific subsidies into one of two categories: prohibited and actionable(1), and establish certain rules and procedures with respect to each category. Part V establishes the substantive and procedural requirements that must be fulfilled before a Member may apply a countervailing measure against subsidized imports. Parts VI and VII establish the institutional structure and notification/surveillance modalities for implementation of the SCM Agreement. Part VIII contains special and differential treatment rules for various categories of developing country Members. Part IX contains transition rules for developed country and former centrally-planned economy Members. Parts X and XI contain dispute settlement and final provisions. Coverage of the Agreement 40

Part I of the Agreement defines the coverage of the Agreement. Specifically, it establishes a definition of the term subsidy and an explanation of the concept of specificity. Only a measure which is a specific subsidy within the meaning of Part I is subject to multilateral disciplines and can be subject to countervailing measures. Definition of subsidy Unlike the Tokyo Round Subsidies Code, the WTO SCM Agreement contains a definition of the term subsidy. The definition contains three basic elements: (i) a financial contribution (ii) by a government or any public body within the territory of a Member (iii) which confers a benefit. All three of these elements must be satisfied in order for a subsidy to exist. The concept of financial contribution was included in the SCM Agreement only after a protracted negotiation. Some Members argued that there could be no subsidy unless there was a charge on the public account. Other Members considered that forms of government intervention that did not involve an expense to the government nevertheless distorted competition and should thus be considered to be subsidies. The SCM Agreement basically adopted the former approach. The Agreement requires a financial contribution and contains a list of the types of measures that represent a financial contribution, e.g., grants, loans, equity infusions, loan guarantees, fiscal incentives, the provision of goods or services, the purchase of goods. In order for a financial contribution to be a subsidy, it must be made by or at the direction of a government or any public body within the territory of a Member. Thus, the SCM Agreement applies not only to measures of national governments, but also to measures of sub-national governments and of such public bodies as state-owned companies. A financial contribution by a government is not a subsidy unless it confers a benefit. In many cases, as in the case of a cash grant, the existence of a benefit and its valuation will be clear. In some cases, however, the issue of benefit will be more complex. For example, when does a loan, an equity infusion or the purchase by a government of a good confer a benefit? Although the SCM Agreement does not provide complete guidance on these issues, the Appellate Body has ruled (Canada Aircraft) that the existence of a benefit is to be determined by comparison with the market-place (i.e., on the basis of what the 41

recipient could have received in the market). In the context of countervailing duties, Article 14 of the SCM Agreement provides some guidance with respect to determining whether certain types of measures confer a benefit. the context of multilateral disciplines, however, the issue of the meaning of benefit is not fully resolved. Specificity Assuming that a measure is a subsidy within the meaning of the SCM Agreement, it nevertheless is not subject to the SCM Agreement unless it has been specifically provided to an enterprise or industry or group of enterprises or industries. The basic principle is that a subsidy that distorts the allocation of resources within an economy should be subject to discipline. Where a subsidy is widely available within an economy, such a distortion in the allocation of resources is presumed not to occur. Thus, only specific subsidies are subject to the SCM Agreement disciplines. There are four types of specificity within the meaning of the SCM Agreement: Enterprise-specificity. A government targets a particular company or companies for subsidization; Industry-specificity. A government targets a particular sector or sectors for subsidization. Regional specificity. A government targets producers in specified parts of its territory for subsidization. Prohibited subsidies. A government targets export goods or goods using domestic inputs for subsidization. Categories of Subsidies The SCM Agreement creates two basic categories of subsidies: those that are prohibited, those that are actionable (i.e., subject to challenge in the WTO or to countervailing measures). All specific subsidies fall into one of these categories. Prohibited subsidies 42

Two categories of subsidies are prohibited by Article 3 of the SCM Agreement. The first category consists of subsidies contingent, in law or in fact, whether wholly or as one of several conditions, on export performance (export subsidies). A detailed list of export subsidies is annexed to the SCM Agreement. The second category consists of subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods (local content subsidies). These two categories of subsidies are prohibited because they are designed to directly affect trade and thus are most likely to have adverse effects on the interests of other Members. The scope of these prohibitions is relatively narrow. Developed countries had already accepted the prohibition on export subsidies under the Tokyo Round SCM Agreement, and local content subsidies of the type prohibited by the SCM Agreement were already inconsistent with Article III of the GATT 1947. What is most significant about the new Agreement in this area is the extension of the obligations to developing country Members subject to specified transition rules (see section below on special and differential treatment), as well as the creation in Article 4 of the SCM Agreement of a rapid (threemonth) dispute settlement mechanism for complaints regarding prohibited subsidies. Actionable subsidies Most subsidies, such as production subsidies, fall in the actionable category. Actionable subsidies are not prohibited. However, they are subject to challenge, either through multilateral dispute settlement or through countervailing action, in the event that they cause adverse effects to the interests of another Member. There are three types of adverse effects. First, there is injury to a domestic industry caused by subsidized imports in the territory of the complaining Member. This is the sole basis for countervailing action. Second, there is serious prejudice. Serious prejudice usually arises as a result of adverse effects (e.g., export displacement) in the market of the subsidizing Member or in a third country market. Thus, unlike injury, it can serve as the basis for a complaint related to harm to a Member's export interests. Finally, there is nullification or impairment of benefits accruing under the GATT 1994. Nullification or impairment

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arises most typically where the improved market access presumed to flow from a bound tariff reduction is undercut by subsidization. The creation of a system of multilateral remedies that allows Members to challenge subsidies which give rise to adverse effects represents a major advance over the preWTO regime. The difficulty, however, will remain the need in most cases for a complaining Member to demonstrate the adverse trade effects arising from subsidization, a fact-intensive analysis that panels may find difficult in some cases(2). Agricultural subsidies Article 13 of the Agreement on Agriculture establishes, during the implementation period specified in that Agreement (until 1 January 2003), special rules regarding subsidies for agricultural products. Export subsidies which are in full conformity with the Agriculture Agreement are not prohibited by the SCM Agreement, although they remain countervailable. Domestic supports which are in full conformity with the Agriculture Agreement are not actionable multilaterally, although they also may be subject to countervailing duties. Finally, domestic supports within the green box of the Agriculture Agreement are not actionable multilaterally nor are they subject to countervailing measures. After the implementation period, the SCM Agreement shall apply to subsidies for agricultural products subject to the provisions of the Agreement on Agriculture, as set forth in its Article 21. Countervailing Measures Part V of the SCM Agreement sets forth certain substantive requirements that must be fulfilled in order to impose a countervailing measure, as well as in-depth procedural requirements regarding the conduct of a countervailing investigation and the imposition and maintenance in place of countervailing measures. A failure to respect either the substantive or procedural requirements of Part V can be taken to dispute settlement and may be the basis for invalidation of the measure. Substantive rules A Member may not impose a countervailing measure unless it determines that there are subsidized imports, injury to a domestic industry, and a causal 44

link between the subsidized imports and the injury. As previously noted, the existence of a specific subsidy must be determined in accordance with the criteria in Part I of the Agreement. However, the criteria regarding injury and causation are found in Part V. One significant development of the new SCM Agreement in this area is the explicit authorization of cumulation of the effects of subsidized imports from more than one Member where specified criteria are fulfilled. In addition, Part V contains rules regarding the determination of the existence and amount of a benefit. Procedural rules Part V of the SCM Agreement contains detailed rules regarding the initiation and conduct of countervailing investigations, the imposition of preliminary and final measures, the use of undertakings, and the duration of measures. A key objective of these rules is to ensure that investigations are conducted in a transparent manner, that all interested parties have a full opportunity to defend their interests, and that investigating authorities adequately explain the bases for their determinations. A few of the more important innovations in the WTO SCM Agreement are identified below: Standing. The Agreement defines in numeric terms the circumstances under which there is sufficient support from a domestic industry to justify initiation of an investigation. Preliminary investigation. The Agreement ensures the conduct of a preliminary investigation before a preliminary measure can be imposed. Undertakings. The Agreement places limitations on the use of undertakings to settle CVD investigations, in order to avoid Voluntary Restraint Agreements or similar measures masquerading as undertakings Sunset. The Agreement requires that a countervailing measure be terminated after five years unless it is determined that continuation of the measure is necessary to avoid the continuation or recurrence of subsidization and injury.

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Judicial review. The Agreement requires that Members create an independent tribunal to review the consistency of determinations of the investigating authority with domestic law.

Transition Rules and Special and Differential Treatment Developed countries Members not otherwise eligible for special and differential treatment are allowed three years from the date on which for them the SCM Agreement enters into force to phase out prohibited subsidies. Such subsidies must be notified within 90 days of the entry into force of the WTO Agreement for the notifying Member. Developing countries The SCM Agreement recognizes three categories of developing country Members: leastdeveloped Members (LDCs), Members with a GNP per capita of less than $1000 per year which are listed in Annex VII to the SCM Agreement, and other developing countries. The lower a Member's level of development, the more favourable the treatment it receives with respect to subsidies disciplines. Thus, for example, LDCs and Members with a GNP per capita of less than $1000 per year listed in Annex VII are exempted from the prohibition on export subsidies. Other developing country Members have an eightyear period to phase out their export subsidies (they cannot increase the level of their export subsidies during this period). With respect to import-substitution subsidies, LDCs have eight years and other developing country Members five years, to phase out such subsidies. There is also more favourable treatment with respect to actionable subsidies. For example, certain subsidies related to developing country Members' privatization programmes are not actionable multilaterally.. With respect to countervailing measures, developing country Members' exporters are entitled to more favourable treatment with respect to the termination of investigations where the level of subsidization or volume of imports is small. Members in transformation to a market economy

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Members in transformation to a market economy are given a seven-year period to phase out prohibited subsidies. These subsidies must, however, have been notified within two years of the date of entry into force of the WTO Agreement (i.e., by 31 December 1996) in order to benefit from the special treatment. Members in transformation also receive preferential treatment with respect to actionable subsidies. Dispute Settlement The SCM Agreement generally relies on the dispute settlement rules of the DSU. However the Agreement contains extensive special or additional dispute settlement rules and procedures providing, inter alia, for expedited procedures, particularly in the case of prohibited subsidy allegations. It also provides special mechanisms for the gathering of information necessary to assess the existence of serious prejudice in actionable subsidy cases. Agreement on Technical Barriers to Trade This agreement clarifies the Agreement on Technical Barriers to Trade reached in the Tokyo Round. It seeks to ensure that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade. However, it recognizes that countries have the right to establish protection, at levels they consider appropriate, for example for human, animal or plant life or health or the environment, and should not be prevented from taking measures necessary to ensure those levels of protection are met. The agreement therefore encourages countries to use international standards where these are appropriate, but it does not require them to change their levels of protection as a result of standardization. Innovative features of the revised agreement are that it covers processing and production methods related to the characteristics of the product itself. The coverage of conformity assessment procedures is enlarged and the disciplines made more precise. Notification provisions applying to local government and non-governmental bodies are elaborated in more detail than in the Tokyo Round agreement. A Code of Good Practice for the Preparation, Adoption and Application of Standards by standardizing bodies, which is

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open to acceptance by private sector bodies as well as the public sector, is included as an annex to the agreement. Agreement on Trade Related Aspects of Investment Measures The agreement recognizes that certain investment measures restrict and distort trade. It provides that no contracting party shall apply any TRIM inconsistent with Articles III (national treatment) and XI (prohibition of quantitative restrictions) of the GATT. To this end, an illustrative list of TRIMs agreed to be inconsistent with these articles is appended to the agreement. The list includes measures which require particular levels of local procurement by an enterprise (local content requirements) or which restrict the volume or value of imports such an enterprise can purchase or use to an amount related to the level of products it exports (trade balancing requirements). The agreement requires mandatory notification of all non-conforming TRIMs and their elimination within two years for developed countries, within five years for developing countries and within seven years for least-developed countries. It establishes a Committee on TRIMs which will, among other things, monitor the implementation of these commitments. The agreement also provides for consideration, at a later date, of whether it should be complemented with provisions on investment and competition policy more broadly. While both MEAs and the WTO agreements are the result of multilateral cooperation to pursue mutually beneficial goals, the approach in MEAs is based on mutual cooperation while that in the WTO is rule-based.

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MULTILATERAL ENVIRONMENTAL AGREEMENTS Definition An MEA is a legally binding instrument between two or more nation states that deals with some aspect of the environment. Aside from the requirement that they deal with some aspect of the environment, two elements of the definition are very important to understand: 1. Legally binding Multilateral environmental agreements are legal instruments binding countries that have agreed to become parties through ratification or accession. For the countries which have only signed and not as yet ratified, they are nonetheless not expected to do anything that will affect the aims and purposes of the MEA. They are not declarations of intention or avowals; they are rules of law. As such, they are a powerful tool for the implementation of policies with environmental protection and sustainable development goals. Civil society actors can make use of MEAs to achieve environment-related objectives. 2. Between two or more nation states The better-known environmental agreements are multilateral in the sense that they involve many nations and deal with broad aspects of environment (climate, biodiversity, etc.). However, an MEA can be any treaty between two or more nation-states if and when this instrument deals with direct environmental objectives. MEAs offer a framework for collectively addressing environmental problems on the basis of policy consensus and science. In addition, as environmental challenges become more and more complex, MEAs increasingly provide a comprehensive approach to effectively and equitably deal with those challenges. Thus, most MEAs include a broad range of provisions that take into account issues such as: the lack and inadequacy of data and other information; the need for broad stakeholder participation; the different levels at which countries have contributed to the problem and can contribute to the solution; and the need for incentives to take action. In addition to addressing environmental problems, many of 49

the measures contained in MEAs also have positive social and economic impacts. For example, the harmonization of standards and practices encouraged by many MEAs is designed to enhance environmental protection, but may also have positive effects on trade and the economy by avoiding trade distortions, facilitating the technical and legal implementation of standards and technical regulations, and assisting consumers in their decision-making. Trade-related measures are sometimes also needed and incorporated in MEAs to address other types of problems, such as the lack of adequate data and information for policy development or decision-making and the absence of incentives to contribute to the protection of public environmental goods. Trade-related measures also play an important role in supporting other MEA provisions, including the phase-out of certain substances, and ensuring the effectiveness of MEAs, for example by assisting in compliance and enforcement. Basic information on selected MEAs Following is very basic information on the most salient global MEAs. Some of these conventions are directly administered by UNEP while others fall within different United Nations or other regional organizations administration.

Ramsar Convention on Wetlands Other names Signature Date Date of entry into force Link Ramsar convention Ramsar 02.02.1971 01.12.1975 http://www.ramsar.org Conventions charge is to promote the conservation and wise use of all wetlands through local, regional, and national actions and international cooperation, as a contribution towards achieving sustainable development worldwide.

Convention on International Trade in Endangered Species of Wild Flora and Fauna Other names CITES 50 Aims to ensure that

Signature Date Date of entry into force Link

Washington, D.C 03.03.1973 01.07.1975 http://www.cites.org

international trade in specimens of wild animals and plants does not threaten their survival. Subjecting international trade in specimens of selected species to certain controls via licensing of import, export, re-export, and introduction from the sea of species.

Convention on the Conservation of Migratory Species of Wild Animals Other names Signature Date Date of entry into force Link CMS or Bonn Convention Bonn 23.06.1979 01.11.1983 http://www.cms.int Aims to conserve terrestrial, marine, and avian species that migrate across or out of national limits. The protection of these animals by conserving or restoring their habitats and mitigating obstacles to migration is sought through this agreement.

Convention for the Protection of the Ozone Layer Other names Signature Date Date of entry into force Link Vienna Convention Vienna 22.09.1988 1988 http://ozone.unep.org Aims at establishing the framework for co-oparation, development and policies, and formulation of agreed measures in order to protect human health and the environment against adverse effects resulting or likely to result from human activities which modify the ozone layer (art.2).

Montreal Protocol on Substances that Deplete the Ozone Layer Other names Signature date Date of entry into force Montreal Protocol Montreal 16.09.1987 01.01.1989 51 Aims at protecting the ozone layer by taking measures to control global emissions of substances that deplete it. Its

Link

http://www.unep.org/ozone

definitive objective is the elimination of these materials based on scientific developments, taking into account technical and economic considerations as well as developmental needs of developing countries.

Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal Other names Signature Date Date of entry into force Link Basel Convention Basel 22.3.1989 8.05.1994 http://www.basel.int Ensure that management of hazardous wastes and other wastes including their transboundary movement and disposal is consistent with the protection of human health and the environment whatever the place of disposal.

Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade Other names Signature date Date of entry into force Link Rotterdam Convention / PIC Rotterdam 10.09.1998 24.02.2004 http://www.pic.int To promote shared responsibility and cooperative efforts among Parties in the international trade of certain hazardous chemicals in order to protect human health and the environment from potential harm and to contribute to their environmentally sound use.

Convention on Persistent Organic Pollutants Other names Signature date Stockholm Convention / POPS Stockholm 22.5.2001 52 To protect human health and the environment from persistent organic pollutants. The convention guards

Date of entry into force Link

13.02.2005 http://www.pops.int

human health from chemicals that remain intact in the environment for long periods, become widely distributed geographically, accumulate in the fatty tissue of living organisms and are toxic to humans and wildlife.

United Nations Framework Convention on Climate Change Other names Signature date Date of entry into force Link UNFCCC New York 9.5.1992 21.03.1994 http://unfccc.int Achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with climate. Level to be accomplished within sufficient timeframe to allow ecosystems to adapt naturally to climate change, to ensure the nonthreat to food production and enable economic development to proceed in a sustainable way.

Protocol to the United Nations Framework Convention on Climate Change Other names Signature date Date of entry into force Kyoto Protocol Kyoto 11.12.1997 16.02.2005 Ensure that aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A to the Protocol do not exceed the assigned amounts, with a view to reducing overall emissions of such gases by at least 5 per cent below 1990 levels in the commitment period 2008 2012. Besides setting binding constraints on

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greenhouse gas emissions, the Protocol encourages the use of economic incentives to meet with the changes. The Kyoto Protocol is an amendment to the UN Framework Convention on Climate Change. Convention on Biological Diversity Other names Signature date Date of entry into force Link CBD Rio de Janeiro 5.6.1992 21.03.1994 http://www.biodiv.org To conserve biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilisation of genetic resources, taking into account all rights over those resources.

Protocol on Bio-safety to the Biodiversity Convention Other names Signature date Date of entry into force Link Cartagena Protocol Montreal 29.1.2000 11.09.2003 http://www.biodiv.org Ensure an adequate level of protection in safe transfer, handling and use of living modified organisms resulting from biotechnology that may have adverse effects on the conservation and sustainable use of biological diversity, taking also into account risks to human health, and specifically focusing on transboundary movements.

MEAs and International Law

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The main method available under international law for countries to work together on global environmental issues is the multilateral environmental agreement (MEA). MEAs are agreements between states which may take the form of soft-law, setting out nonlegally binding principles which parties will respect when considering actions which affect a particular environmental issue, or hard-law which specify legally-binding actions to be taken to work toward an environmental objective. Multilateral environmental agreements must conform to international public law (as must all international instruments of this type3). The compliance is guided by the 1969 Vienna Convention on the Law of Treaties. This treaty, which entered into force in 1980, prescribes the components and general guidelines for the development, negotiation and adoption of international treaties. How does a multilateral agreement enter into force internationally? MEAs enter into force after a series of institutional processes take place. Subsequent to a global agreements negotiation, several steps and measures need to be taken at national and international levels to ensure it becomes enforceable. Basically, the phases that an agreement goes through after negotiation of a draft text(s) is agreed are as follows: Adoption: Upon finalising the negotiation of text, a treaty will be first adopted then signed. This is a proclamation that usually takes place upon the finalization of a conference specially convened to negotiate the treaty. The adoption of the treaty signals the ending of text negotiation and the beginning of the process that an international treaty passes through before enforceability. Signature: A country begins a process of endorsing a treaty by signing it. However, for multilateral agreements, this is a necessary but not sufficient step for the application of the treaty. It is understood that when a state becomes a treatys signatory it expresses its readiness to proceed with the steps needed to fulfil entering into force procedures. This action is at times called Signature Subject to Ratification, Acceptance or Approval.

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Ratification, acceptance, or approval: Action by which a state specifies its assent to being bound by the treaty after completion of required national constitutional procedures for ratification or accession or approval depending upon the countrys legal system. The treatys depository keeps track of ratification/acceptance/ approval. This is particularly important since a certain quantity of states must ratify a treaty before it enters into force. Ratification and acceptance/approval also implies that a country will enact national implementing legislation to put national effect to the multilateral treaty.

Entry into force: Normally, multilateral treaties enter into force after an established period has elapsed subsequent to a set number of states ratifying or acceding to the agreement. Some agreements have other terms that must be met so that it enters into force.

Accession: This is the act by which a state accepts to become a party to an agreement whose text has been negotiated, adopted and signed by other countries. Basically, this act has the same denotation as ratification, the only difference being that accession occurs after negotiations have taken place.

Withdrawal or denouncing: Countries can (and do) withdraw or denounce themselves from some international agreements in accordance with the procedure set in that instrument. If the treaty has a denunciation clause or is silent about this matter, a state may withdraw after a certain period of notice or after consent of contracting parties.

Mechanisms used for implementing agreements When a country indicates its commitment to an international accord, this needs to be followed by a decision or an action in the form of establishing a mechanism for implementing the agreement in the country. The most common mechanisms used have either been enacting acts or laws in the country to implement what has been agreed at the international level, or incorporating these agreements in domestic policy in the form of creating national incentive or disincentive schemes. It is worth noting that sometimes 56

countries have used a combination of both these mechanisms, while at other times, there has been no action at all and no implementation mechanisms were established. The two mechanisms used by countries are discussed below. 1. Enacting laws

A country can enact a domestic law that incorporates what has been agreed upon at the multilateral level. The advantage of this is that when the domestic law includes internationally agreed provisions, it becomes legally binding in nature. This indicates a strong commitment on the part of a country to implement these provisions. However, as noted earlier, such laws are often not enforced in many developing countries for reasons such as an inadequate legal system, long waiting lists for hearing cases, low penalties attached etc. This implies that actual implementation of the laws may not take place. The following are a few examples of enactment of local laws in response to international agreements. The Philippines passed an act known as the Toxic Substances and Hazardous and Nuclear Waste Act of 1990, which was inspired by the Montreal Protocol. The Act bans the importation, storage and transportation of toxic nuclear wastes into or through the Philippines. In response to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, an administrative order was issued by the Department of Environment and Natural Resources which restricts importing recyclable materials containing hazardous substances. In response to the United Nations Conference on Environment and Development, in 1992, the country promulgated Republic Act 7586 of 1992, which provides for the establishment of a national integrated protected areas system to conserve and use biodiversity in a sustainable manner. As a response to the United Nations Framework Convention on Climate Change, an executive order was issued establishing an inter-agency committee on climate change. In order to comply with provisions of the Conference held in Stockholm in 1972, Malaysia enacted the Environment Quality Act in 1974 and established the Department of Environment. Many Pacific island countries have prepared comprehensive environ-mental legislation, largely in response to the call in the Rio Declaration for countries to enact environment legislation for the elimination of unsustainable patterns of production and consumption. 57

The examples are Fijis Sustainable Development Bill, Tongas environment assessment planning bill and Vanuatus comprehensive environmental and resource management legislation. 2. Incorporating provisions in domestic policy

The incorporation of provisions of agreements signed at the international level in national policy can include giving tax incentives, and export or import subsidies, imposing bans, introducing licensing requirements, setting standards etc., in the country to adhere to what is agreed upon at the international level. The advantage is that once these international provisions become part of domestic policy, they are immediately mainstreamed in national plans and priorities, which facilitates their implementation. In addition, it avoids problems associated with the implementation of laws, such as lengthy legal procedures to enforce these agreements. However, it should be cautioned that because a provision becomes national policy it does not necessarily mean that it is going to be implemented. There are many domestic policies which have poor implementation records. The following examples show how different countries have incorporated provisions of international agreements in their domestic policy. The Republic of Korea has given domestic industries incentives to adopt ISO 14000 standards to meet the rapidly emerging international norms and standards. Moreover, the central and local governments, as well as government financial organizations, are encouraged to purchase products bearing the ISO labels. The Environment Labelling Association, an NGO, was established to authorize the use of environmental labelling and to manage the labelled products. However, these fast responses to external agreements are thought to be the consequence of not only elevated environment awareness but mainly the countrys externally oriented economy. In response to the Montreal Protocol, Philippines drafted the Philippines Country Programme detailing its plan for the phase-out of ozone depleting substances (partial phase-out in the commercial, industrial and consumers sectors by 1998 and total phase-

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out by 2010). It granted incentives such as tax exemptions to shift to non-ozone depleting substance technologies through the Board of Investment. Fiji responded to the Vienna Convention and the Montreal Protocol by giving incentives to research and development activities, and developed a nonchemical quarantine treatment technology which has given its agricultural products a competitive advantage in the international markets. After the Montreal Protocol, India conducted three workshops for small and mediumsized enterprises in 1996 to assist them in phasing out ozone depleting substances, gave full exemptions from all forms of duties on goods required to phase out these substances for all enterprises, banned their export to developed countries, imposed licensing for using the substances as inputs, and prepared comprehensive regulations on phase-out of the substances. However, as mentioned earlier, the incorporation of agreements in domestic policy does not necessarily lead to effective implementation. The following examples illustrate that point. Following the Rio Conference, Pacific island countries developed their own national programme called Capacity 21 to implement Agenda 21 of the Rio Conference. The national programmes aimed to promote the role of NGOs and landowners and to help them to come together with other stakeholders in developing a framework for the integration of environment with development. However, despite the initial enthusiasm, the programmes seem to have lost momentum in most of the countries. The Tonga case study reports that there has been little progress in pursuing the call for improved collection, analysis and presentation of environmental data and information. As a result, periodic analysis of environment conditions and trends is not undertaken. There is neither a programme of action to this effect nor have resources been allocated for this activity. The situation is the same for other Pacific island countries. Nepal developed a national conservation strategy in 1988, and an environment policy and action plan in 1993 to incorporate international environment agreements in domestic 59

policy. However, in practice, it appears that these obligations remain in oblivion, so much so that it is hard to obtain information on a specific convention from the government agency which is directly concerned with its implementation (ESCAP, 1999(a)). Sri Lanka introduced policies to phase out the use of ozone depleting substances before the prescribed deadline of 2010 set by the Montreal Protocol. However, the resource crunch is the most important obstacle that the country faces in trying to implement this policy. While both MEAs and the WTO agreements are the result of multilateral cooperation to pursue mutually beneficial goals, the approach in MEAs is based on mutual cooperation while that in the WTO is rule-based.

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MULTILATERAL ENVIRONMENTAL AGREEMENTS AND THE MULTILATERAL TRADING SYSTEM One of the key issues in the debate over how best to reconcile the two objectives of environmental protection and trade liberalisation revolves around the inter-relationship between Multilateral Environmental Agreements (MEAs) and the Multilateral Trading System. Multilateral Environmental Agreements Transboundary and global environmental problems are of international concern and it is increasingly recognised that they can effectively be addressed through international cooperation within the framework of Multilateral Environmental Agreements (MEAs). Globalization requires new integrated approaches to define effective policies in all the relevant socio-economic dimensions. Many environmental problems, such as Transboundary air/ water pollution or resource over-exploitation, have international or global dimensions and cannot successfully be addressed through national policies alone. For transboundary problems, international co-operation is required to achieve effective policies for pollution abatement or to prevent resource depletion. Such co-operative approaches can also ensure that, from an economic point of view, there is some leveling of competitiveness playing field for economic agents in countries that are parties to such agreements. An increased number of agreements have been negotiated, signed, ratified and implemented in order to consolidate international co-operation to address environmental problems. MEAs are instrumental in addressing environmental concerns at the global level, such as ozone depletion, climate change, endangered species of wild fauna and flora, etc. As Principle 12 of the Rio Declaration states, international agreement is clearly preferable to unilateral action in tackling transboundary or global environmental problems. Over 200 MEAs now exist with memberships varying from a relatively small group to over 180 countries, which means effectively the whole world. The main global MEAs include: 61

 Those covering biodiversity and wildlife, including the 1946 International Convention for the Regulation of Whaling; the 1971 Ramsar Convention on Wetlands of International Importance; the 1973 Convention on International Trade in Endangered Species (CITES); the 1979 Bonn Convention on the Conservation of Migratory Species; the 1992 UN Convention on Biological Diversity and its protocol, the 2000 Cartagena Protocol on biosafety;1 and the 1994 International Tropical Timber Agreement. Those designed to protect the atmosphere, including the 1979 UN Economic Commission for Europe (UNECE) Convention on Long-Range Transboundary Air Pollution (together with five protocols on particular pollutants: nitrogen oxides, volatile organic compounds, sulphur, heavy metals and persistent organic pollutants); the 1985 Vienna Convention for the Protection of the Ozone Layer, and its protocol, the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer; and the 1992 UN Framework Convention on Climate Change, and its protocol, the 1997 Kyoto Protocol (agreed but not yet in force). Those dealing with the marine environment, including the 1972 London Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter; the 1973 Convention for the Prevention of Pollution from Ships, and its protocol, the 1978 Marpol Protocol; and the 1982 UN Convention on the Law of the Sea, together with an implementing agreement, the 1995 Agreement on Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (agreed but not yet in force). Those regulating the use of chemicals, including the 1998 Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade and the 2001 Stockholm Convention on Persistent Organic Pollutants (both agreed but not yet in force). The Montreal Protocol could be considered under this category, since it regulates the production and consumption of ozone-depleting chemicals.

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 Those dealing with waste, including the 1989 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (see also under marine environment). Others including the 1991 Espoo Convention on Environmental Impact Assessment, the 1992 UN Convention to Combat Desertification, and the 1998 Aarhus Convention on Access to Information, Public Participation in Decisionmaking and Access to Justice in Environmental Matters. In addition, there are important regional agreements, such as the 1966 International Convention for the Conservation of Atlantic Tunas, the 1979 Bern Convention on the Conservation of European Wildlife and Natural Habitats, the 1982 Convention on the Conservation of Antarctic Marine Living Resources, and the 1992 Ospar Convention for the Protection of the Marine Environment of the North East Atlantic. Together these global and regional MEAs provide an extensive framework for the protection of the global environment. In general the last two decades have seen the extension of MEAs from agreements covering the protection of particular species of endangered wildlife (many of the earlier MEAs dealt with individual populations, such as Arctic polar bears) to ever wider areas of economic activity. Trade measures in MEAs Almost thirty of these MEAs6, incorporate trade measures, regulating or restraining the trade in particular substances or products, either between parties to the treaty and/or between parties and nonparties.

The WTO Secretariat lists 31 MEAs containing potential trade measures, though some of these are regional rather than global

agreements, and protocols are included along with their parent conventions under single headings, though for most purposes it makes more sense to treat them as different agreements (Matrix on Trade Measures Pursuant to Selected Multilateral Environmental Agreements, WT/CTE/W/160.Rev.2, TN/TE/S/5, 25 April 2003).

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The term 'Trade Measures' is often taken to mean restrictions on trade in the forms of bans or embargoes. There is a very wide variety of policies and measures included in MEAs that may impact international trade. They include: Reporting requirement: the extent of trade in a particular product must be monitored and reported; Labelling or other identification requirement: products in trade must be identified in some way, depending on their product and/or process characteristics; Requirement for movement documents / notification and consent: the import and/or export of particular products cannot proceed without the presence of some combination of permits or licenses or other documents indicating the consent of the states involved in the trade to the movement of the products. Export and/or import bans (targeted): trade in specified products with particular states (generally, non-complying parties or non-parties) is not permitted. Export and/or import bans (general): trade in specified products with any state is not permitted. In general this accompanies production and consumption bans within the state applying the trade measure; there may also be specified exemptions. Market transformation measures: taxes, charges, subsidies or other forms of fiscal measures, and non-fiscal measures such as government procurement, may be applied to products (whether domestic or imported) as a means of growing market share for desired products, and reducing it for non-desired products, with the aim of complying with the requirements of the MEA. These trade measures are often set out in the texts of the MEAs themselves. In some cases, however, they derive from decisions of the parties after the MEAs enter into force and are not described explicitly in the agreement. In other cases, aspects of the ways in which trade measures are applied may be affected by decisions of the parties.

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Why Trade Restrictions have been incorporated in MEAs There are three broad sets of reasons why trade restrictions have been incorporated in MEAs: To provide a means of monitoring and controlling trade in products where the uncontrolled trade would lead to or contribute to environmental damage. This may extend to a complete exclusion of particular products from international trade. To provide a means of complying with the MEAs requirements. To provide a means of enforcing the MEA, by forbidding trade with non-parties or non-complying parties. Inter-relationships between MEA trade measures and WTO Rules. The WTO agreements themselves contain measures allowing for environmental considerations. The Agreement establishing the WTO recognises that trade should be conducted while allowing for the optimal use of the worlds resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so7. This was reaffirmed in the Doha Declaration in 2001: We strongly reaffirm our commitment to the objective of sustainable development, as stated in the Preamble to the Marrakesh Agreement. We are convinced that the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, and acting for the protection of the environment and the promotion of sustainable development can and must be mutually supportive.8 The Doha negotiating agenda deals explicitly with the topic of MEAs in paragraph 31, which agrees to negotiations on the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements.

Marrakesh Agreement Establishing the World Trade Organization, preamble, para 2

8 WTO Doha Ministerial Declaration, 14 November 2001, para 6.

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MEAs are, like the WTO agreements, multilateral in scope, they do not involve unilateral measures (trade-related or otherwise) and therefore tend to avoid the kind of arbitrary and discriminatory behaviour that most WTO agreements are designed to reduce. In practice, however, the debate has not been an easy one. The WTO Committee on Trade and Environment (CTE) has been examining the relationship since 1995, yet has failed to reach any real conclusion.9 Interaction of MEA trade measures with the WTO The interaction of MEA trade measures with the multilateral trading system centered around the GATT and overseen by the WTO has remained one of the key issues of the trade and environment debate almost since its beginnings in the early 1990s. There is a conflict between MEA trade measures and the WTO, and what constitutes a conflict would be a matter of interpretation of the MEA and the various agreements under the WTO. A general conflict does not exist unless one treaty requires a particular course of action that is either prohibited in the other instrument, or the latter instrument requires the opposite course of action. The incompatibility emerges where a party to both treaties cannot comply with the obligations under both treaties simultaneously.10 The basic WTO rules require WTO members not to discriminate between other WTO members like products, or between domestic and international production. MEA based measures could potentially run foul of these requirements where imports are treated less favourably than domestic goods in the market, which, may sometimes be the case, particularly where enforcement measures are being taken against non-complying parties or non- parties. The exceptions to WTO requirements listed in GATT Article XX11 make no reference to MEAs (not surprisingly, since very few MEAs existed when the GATT
9

WTO, Report of the General Council to the Ministerial Conference of Singapore, 12 November 1996. Trade Measures in Multilateral Environmental Agreement, pp. 198.200.

10

11

GATT Article XX (General Exception) is a broad umbrella clause, which allows countries to take measures of unilateral trade restrictions for various reasons, including the pursuit of environmental protection. Subject to non-discrimination (Articles I Most favoured nation and II National treatment) or disguised protectionism, it allows for restrictions under Art. XX (b) necessary to protect human, animal, or plant life or health, and XX (g) relating to the conservation of exhaustible natural resources if such measure are made effective in conjunction with restriction on domestic production or consumption.

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was first written). However, the exceptions for the protection of animals, human and public health, and the conservation of exhaustible natural resources may be applicable; some of these exceptions have been used in various environment-related cases at the WTO, though to date none of these have involved measures taken under MEAs. The threat of a WTO challenge to the MEAs Trade Measure, however, has arisen in a number of discussions within CITES, and may become more common as CITES listings increasingly cover economically important sectors such as fish and timber. Some commercial entities in the industrial waste shipment industry have expressed concerns over the proposed overall ban on trade between industrialised and developing countries under the Basel Convention, and queried whether a distinction based on the state of import or export, rather than the actual capacity of states to engage in environmentally sound recycling, can be justified.12 Similarly, the threat of a conflict with WTO rules has been raised in almost all recent MEA negotiations, generally by those opposed to the principle of the MEA and/or its effective enforcement, and there have been various attempts to write savings clauses into the agreements, ensuring that they remain subordinate to WTO disciplines. In some cases, e.g. the UN Straddling Stocks Agreement, trade measures were not included in order to obtain wider political support. In recent years, matters of WTO-consistency have also arisen in discussions within many MEAs themselves, and also in wider forums, such as the World Summit on Sustainable Development in autumn 2002. The lack of clarity on the issue, and the uncertainty about the outcome of any WTO dispute, has thus led many to call for some kind of resolution of the potential conflict. Relationship between key MEAs and the WTO agreements Against this background, it is worth examining the details of the relationship between a number of key MEAs and the WTO agreements. The first three, i.e. CITES, the Montreal
12

J. Crawford and P. Sands, The Availability of Article 11 Agreements in the Context of the Basel Convention.s Recyclable Ban Amendment (Ottawa: ICME, 1997).

67

Protocol and the Basel Convention, were all negotiated before the WTO came into existence, and do not contain any WTO-consistency language, thereby arguably creating a special system of trade rules that exist outside the scope of WTO rules. 13 Negotiations on later MEAs saw much greater awareness of the potential conflicts, often seeing specific language incorporated into the MEAs in an attempt to deal with the issue, the socalled savings clauses. CITES Out of all the MEAs considered here, CITES is the one under which the greatest number of enforcement-related trade measures, directed against non-complying parties and nonparties, has been taken. The agreements Secretariat has aimed, however, to build mutual supportiveness with the WTO into its operations, adopting a five-year strategic plan that includes the goal of ensuring the continuing recognition and acceptance of CITES measures by the WTO and ensuring the mutual supportiveness of decision-making processes between CITES and the WTO. The treaty contains language that could ensure mutual supportiveness with WTO requirements. Article XIV(2) stipulates that: the provisions of the present Convention shall in no way affect the provisions of any domestic measures or the obligations of Parties deriving from any treaty, convention, or international agreement relating to other aspects of trade, taking, possession or transport of specimens which is in force or subsequently may enter into force for any Party including any measure pertaining to the customs, public health, veterinary or plant quarantine fields. The WTO Agreement on Sanitary and Phytosanitary Measures (the SPS Agreement) might possibly apply, and be used to assess the WTO-compatibility of the basic CITES trade measures, the requirements for import and export licenses. Montreal Protocol

13

V. Yu, .Discussion Paper on the World Trade Organisation and Multilateral Environmental Agreements. (Geneva: Friends of the

Earth, 2002), p. 7.

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The issue of the Montreal Protocols relationship with the GATT was raised during the original negotiations in 1985-1987.14 A sub-group provisionally concluded that that the proposed trade measures against non-parties could be justifiable under Article XX(b), and possibly XX(g), of the GATT. They had in mind the precedent of CITES, whose trade measures had never been objected to, and were also confident that because the proposed trade measures were to be applied pursuant to a multilateral agreement, and not on a unilateral, ad hoc, basis, there would be no problem with the GATT. Consultations were held with a legal expert from the GATT Secretariat in April and September 1987. No definite opinion was given, the expert provided advice as to whether particular language was relatively closer to or further away from traditional interpretations of the GATT. The GATT lawyer stressed that, the judgement as to whether a proposed action to implement the trade restrictions satisfied Article XX lay with GATT Contracting Parties normally in the context of a complaint by one GATT Party against another.15 The GATT Secretariat was presented with an advance copy of the proposed trade provisions, but did not respond.16 The lack of any formal objection from the GATT Secretariat, however qualified its advice, was seen as a green light for further negotiations, helping the US to convince the EU of the value of the proposed trade measures. The Protocols trade measures against non-parties are probably inconsistent with the GATT principles of most-favoured nation, national treatment, and the elimination of quantitative restrictions. In 1999 the Ozone Secretariat issued a communication to the WTO Committee on Trade and Environment17 noting that the measures could be saved under Article XX since the ozone layer is an exhaustible natural resource and its depletion adversely affects human, animal and plant life and health, there would not be
14 15

Brack, International Trade and the Montreal Protocol, section 4.2.

Report of the Ad Hoc Working Group on the Work of its Third Session - cited in Rosalind Twum-Barima and Laura B. Campbell, Protecting the Ozone Layer through Trade Measures: Reconciling the Trade Provisions of the Montreal Protocol and the Rules of the GATT (Geneva: UNEP, 1994), p.63.
16

Ibid., p. 63, n113. WT/CTE/W/115.

17

69

any arbitrary or unjustifiable discrimination since the Montreal Protocol is a multilateral instrument based on an international consensus relating to the scientific assessment of what is necessary to protect the ozone layer. Moreover, it contains provisions that exempt non-parties from trade restrictions if they comply with the control measures under the Protocol - hence there is no arbitrary and justifiable discrimination between countries where the same conditions prevail. There has never, of course, been a GATT or WTO challenge to the Protocols trade measures, but as discussed above, less trade-restricting alternatives have been suggested, though none would appear to be as effective. In 1996, the then Director of the WTO Trade and Environment Division questioned both the necessity and efficacy of the trade provisions, suggesting, that at least in his view, they would not be saved by Article XX.18 Basel Convention The "Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal" controls the international trade in hazardous wastes. The Convention, which was adopted in 1989 and entered into force in 1992, was negotiated to establish a "notice and consent" regime for the export of hazardous waste to importing countries. Under the Convention's provisions, trade in hazardous wastes generally cannot take place: without the importing country's written consent to a particular export; or where the exporting country has reason to believe that the particular wastes will not be handled in an environmentally sound manner. As with the Montreal Protocol and CITES, there is no explicit GATT-compatibility language in the Basel Convention. As a result, there is no specific requirement that WTO obligations are to be taken into consideration when adopting or implementing any trade measures relating to hazardous wastes, suggesting that the parties intended to keep
18

House of Commons Environment Committee, Inquiry into World Trade and the Environment, evidence session of 14 February 1996. A. Rutgeerts, Trade and Environment: Reconciling the Montreal Protocol and the GATT, 33(4) JWT 61-86 (1999), p. 76.

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hazardous waste a distinct and separate class of products, not subject to international trade obligations.19 Kyoto Protocol Only parties to the Kyoto Protocol can participate in the Kyoto mechanisms i.e. emissions trading, joint implementation and the Clean Development Mechanism. As a result, markets in emission permits or the CDMs certified emission reductions (CERs) would be barred to nonparties (at least, in the sense of being able to earn credits for greenhouse gas emissions). However, most commentators have held that licenses or permits provided by the parties to the Kyoto Protocol are a form of government regulatory activity, and would not be equivalent to either a good or a service under WTO disciplines.20 This view is not universally shared, however, and the application of CDM criteria to determine whether credits can be obtained under the Protocol could potentially be considered to be burdensome, not transparent or generally incompatible with the requirements of the General Agreement on Trade in Services (GATS). Although the GATS is limited in its scope, some aspects of the Kyoto mechanisms could entail services or service-related functions such as brokerage or consulting services. 21 The allocation of permits could also be seen as a violation of the subsidies agreement, but this depends more on how the allocation process is designed rather than being a subsidy in principle. In addition to the CERs, it could include the services employed in the

19

Yu, Discussion Paper on the World Trade Organisation and Multilateral Environmental Agreements, p. 9.

20

G. Wiser, .Frontiers in Trade: The Clean Development Mechanism and the General Agreement on Trade in Services. (CIEL: Washington DC, 2001), p. 5, argues that CERs would neither be a good nor a service, but a licence instilling a future right to pollute and therefore not subject to WTO scrutiny. See also, S. Charnovitz, .Improving Synergies in International Trade and Climate Policy., (2003); A. Appleton, .The World Trade Organisation.s View: Emissions Reductions in a Free Trade World. (Paper for Swiss RE Centre for Global Dialogue in Rschlikon, Switzerland, 2001); J. Werksman, Greenhouse Gas Emissions Trading and the WTO, 8 RECIEL 251 (1999); and T. L. Brewer, .The Kyoto Protocol and the WTO: Institutional Evolution and Adaptation. (Centre for European Policy Studies: CEPS Policy Brief No. 28, 2002).
21

Wiser, .Frontiers in Trade., p. 3; J. Werksman, .Greenhouse Gas Emissions Trading and the WTO.. The US has proposed in the GATS Committee that services activities in support of the protection of ambient air and climate, such as services to reduce exhaust emissions and other emissions to improve air quality, be included as an environmental service.

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development and management of CDM projects as well as the financial services related to trade in CERs.22 More likely areas for WTO conflicts may arise under other policy measures affecting trade. As pointed out earlier, parties with emission reduction targets will have to implement a wide variety of policies and measures to curb greenhouse gas emissions. Article 2 of the Protocol lists a wide range of potential areas for action, including energy efficiency, renewable energy sources (and advanced technologies in general), removal of market distortions such as subsidies, and transport. It is virtually inevitable that some of these measures, for example, carbon or energy taxes will affect, or be perceived to affect, the prices and competitiveness of a wide range of products, particularly those manufactured though energy-intensive processes. It is quite possible, then, that parties could claim justification from the Kyoto Protocol for measures that then compensate their own industries, for example via border tax adjustments on imports and exports. Convention on Biological Diversity No specific trade measures are authorized under the Convention on Biological Diversity (CBD), although several of the issues it covers may impact trade, such as access and benefit-sharing arrangements, alien species, incentive measures for the conservation and sustainable use of components of biological diversity, provisions concerning knowledge, innovations and practices of indigenous and local communities, impact assessment, liability and redress, sustainable use, agricultural biodiversity, and the relationship between intellectual property rights (IPRs) and the relevant provisions of the CBD and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). Probably because it does not contain specific trade obligations, the CBD also contains no language addressing its relationship with the GATT or the other WTO agreements. Article 22 specifies that the CBD is not to affect the rights and obligations deriving from existing international agreements, unless those rights and obligations would cause serious
22

Wiser, .Frontiers in Trade., p. 5.

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damage or threat to biological diversity. As the Convention entered into force in December 1993, it predated the WTO agreements that came into force at the end of the Uruguay Round, rendering this savings clause inapplicable, and leaving any potential conflict to be resolved under the customary international legal rules of treaty interpretation.23 The CBD does not predate the GATT itself, however, so arguably the WTO dispute settlement bodies could end up interpreting what constitutes serious damage or threat to biodiversity in the case of a challenge under the WTO. It has long been recognised that the CBD, with its emphasis on state sovereignty over genetic resources, and the TRIPS Agreements protection of private property rights, may lead to an intrinsic conflict of objectives between the two agreements, 24 Paragraph 19 of the Doha Declaration calls for a specific examination of their relationship. Measures under Article 15 of the CBD, which permits States to limit or place conditions on access to genetic resources, could in theory be WTO-inconsistent, though it would depend on their design, and whether they treated foreign companies (for example by charging for resource use) differently to domestic enterprises.25 There may also be conflicts between the CBD and the TRIPS Agreement under Article 27.2 of the TRIPS Agreement, which allows WTO members to exclude from patentability inventions for the purpose of protecting ordre public or morality, including to protect human, animal and plant life or health or to avoid serious prejudice to the environment. Article 27.3(b) allows members to exclude plants and animals from being patented but prohibits members from excluding micro-organisms, non-biological and microbiological processes from patenting. WTO members may still exclude certain lifeforms from patentability where it might interfere with a countrys ability to preserve genetic resources or traditional knowledge. However, the area of potential conflict is
23

The TRIPS Agreement does not address the TRIPS-CBD interface, although Article 2(2) of the TRIPS Agreement states that nothing in Parts I to IV can derogate from existing obligations that the WTO member may have under a variety of specific intellectual property treaties. Arguably, the CBD would not be a specific intellectual property treaty.
24

IISD/CIEL, The State of Trade Law and the Environment: Key Issues for the Next Decade . Working Paper (Geneva: IISD/CIEL, 2003), p. 46.
25

T. Schoenbaum, .International Trade and Environmental Protection., in P. Birnie & A. Boyle, International Law and the Environment (OUP).

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whether WTO members would be obliged to provide intellectual property protection to plant parts such as cells or genes conferred in other jurisdictions by countries that have allowed for such patentability, which would then have implications for access and benefit-sharing regimes. Cartagena Protocol The Cartagena Protocol regulates the transboundary movement of living modified organisms (LMOs), thereby directly affecting trade, and debates around the relationship between the Protocol and the WTO were a major feature of the long-drawn-out negotiations on this MEA.26 The agreements preamble states that the Protocol and the WTO agreements are to be mutually supportive, that the Protocol cannot be interpreted as implying a change in the rights and obligations of a party under any existing international agreements, and that such statements are not intended to subordinate the Protocol to other international agreements. Parties are also entitled to take stricter measures than those prescribed under the Protocol, although such action is required to be consistent with the objectives of the Protocol and be in accordance with other international law obligations, which would include WTO commitments. These could include obligations under the GATT, GATS, SPS and TBT Agreements, but the most relevant is the SPS Agreement, which allows WTO members to take SPS measures necessary for the protection of human, animal or plant life or health. Its applicability will depend on the characterization of the measure, its purported objective, and whether food safety or human, plant or animal health is the primary goal. Trade restrictions for socio-economic or cultural considerations, or labelling schemes for the purpose of providing information to the consumer, would fall under the requirements of the TBT Agreement. Under the Protocol, the parties can take into account socioeconomic considerations in the risk assessment process, but this is subject to a savings clause requiring the parties to act consistently with their international obligations.

26

Christoph Bail, Robert Falkner and Helen Marquard (eds), The Cartagena Protocol on Biosafety: Reconciling trade in biotechnology with environment and development? (London: Royal Institute of International Affairs, 2002), chapters 49 and 50

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The Protocols labelling requirement for products containing LMOs might be challenged under either the SPS or TBT Agreements.27 Under the former, mandatory labels for a food safety measure are required to be based on scientific principles and sufficient scientific evidence. A dispute in this area could call into question the compatibility of all labelling systems with WTO disciplines. The application of the WTO agreements to mandatory or voluntary ecolabelling initiatives is currently unclear and disputed by parties.28 Stockholm and Rotterdam Conventions As with the Cartagena Protocol, the two chemicals conventions were negotiated against a background of increasing awareness of the trade-environment interaction. The preamble to the Stockholm Convention recognises that the Convention and other international agreements in the field of trade and the environment are mutually supportive. Similarly, the preamble to the Rotterdam Convention reinforces the mutual supportiveness of trade and environment, stating that the Convention does not change the rights and obligations of the parties under any existing international agreement to chemicals in international trade or to environmental protection, and affirms that there is to be no hierarchy between the Convention and other international agreements. The Doha Mandate on MEAs These negotiations aim to reaffirm how important it is for trade and environmental policies to work together for the benefit of both. They focus on how WTO rules are to apply to WTO members that are parties to environmental agreements, in particular to clarify the relationship between certain trade measures taken under the environmental agreements, and WTO rules.

27

Where the measure aims to ensure food safety, it would be subject to the SPS Agreement. If the objective is for the purposes of consumer protection or environmental protection, it would fall under TBT Agreement disciplines. What becomes problematic is when the measure is based on a multiplicity of objectives, such as seen with the proposed EU Regulation of GMOs. COM (2002) 559 final (October 2002).
28

D. French, The International Regulation of Genetically Modified Organisms: Synergies and Tensions in World Trade, 3 Env Liability 127-139 (2001), p. 132; M. Stilwell and R. Tarasofsky, .Towards Coherent Environmental and Economic Governance: Legal and Practical Approaches to MEA-WTO Linkages. (Geneva: WWF/CIEL, 2001), p. 9.

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At the 2001 Doha Ministerial Conference, members agreed to negotiate on the relationship between WTO rules and the MEAs, particularly those that contain specific trade obligations (STOs). These negotiations take place in special sessions of the Trade and Environment Committee. Members agreed that the scope of these negotiations would be limited to applicability of WTO rules to WTO members that have signed the MEA under consideration. Since the beginning of the negotiations, discussions have focused on the scope of the negotiating mandate (including the definition of specific trade obligations) and on potential outcomes of the negotiations. In parallel, members have also embarked on an exercise of sharing their national experiences in the negotiation and domestic implementation of trade measures under MEAs. Following the Doha ministerial conference in November 2001, the MEA-WTO relationship was revisited at the World Summit on Sustainable Development (WSSD) in Johannesburg in August/September 2002. The call for the enhancement of mutual supportiveness between trade and environment was renewed, though only after many delegations had expressed their concern with the draft text proposed by Australia and the US, which aimed to ensure the WTO-compatibility of any trade or trade-related activities, implying a hierarchical relationship, with environment subordinate to trade. The final wording in the WSSD Plan of Implementation reinforced the mutually supportive language between trade, environment and development, with the promotion of mutual supportiveness between the multilateral trading system and environmental agreements, consistent with sustainable development goals, in support of the WTO work programme.29 By agreeing to avoid deviating from the agreed language in the Doha Ministerial Declaration, the parties may have missed an opportunity to operationalise mutual supportiveness30 - though possibly this was never realistically possible. Developing Countries and MEAs
29

Johannesburg Plan of Implementation, Art. 92.

30

Kevin R. Gray, World Summit on Sustainable Development: Accomplishments and New Directions?, 52:1 International and Comparative Law Quarterly (2003).

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Developing countries often express the strongest resistance to any codification of the MEA relationship in the WTO agreements. Developing countries tend to argue that traderelated measures, even if carried out pursuant to a MEA, will have a negative economic impact through restricting market access, and that the costs of compliance can be significantly outweighed by any perceived environmental and developmental benefits. It should be noted, however, that this is probably more a perception than a reality, and (in common with other countries) developing countries. Environment negotiators often hold very different views from their trade counterparts. MEAs can, however, address developing country concerns by offering facilities through which parties are given financial assistance, technology transfer and other incentives to ease the difficulty of implementation. Moreover, market access can improve for some products directly regulated by the MEA. Effective attention to development issues will render it easier for WTO members to integrate MEAs into their international trade strategies. Efforts by UNEP, UNCTAD and the WTO to improve capacity-building in this area can lead to better awareness of the MEA-WTO relationship and therefore greater coordination in developing countries.

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TRADE & ENVIRONMENT IN CONFLICT CASE LAWS Case 1: Tuna-Dolphin Case Introduction The U.S. Marine Mammal Protection Act placed bans on imports of tuna harvested by a method called purse seining which results in killings of marine mammals in excess of U.S. standards. It placed embargoes on countries such as Mexico to restrict imports from countries that import tuna from Eastern Tropical Pacific and export that tuna to the United States. It was in the first panel (GATT I) that Mexico challenged the MMPA. GATT found that the United States violated Article XI of GATT, by adopting quantitative restrictions on imports. The United States in turn used GATT's Article III:4 as an instrument in arguing the restrictions were internal regulations. This argument was rejected by GATT I's panel on the grounds that Article III restrictions were only to be applied to "products" and not "processes" by which products were produced. Thus, the panel concluded that Article III:4 was not relevant. Three years later the GATT TunaDolphin II case occurred, a separate panel from the first, and it came to the same conclusion about Article III:4. GATT II decided the embargoes were not helpful in furthering U.S. conservation objectives. Also, these objectives could have been achieved only if the primary exporter changed its policies and practices. France and the EC were among the 34 countries who demanded that the GATT Council adopt a dispute panel report condemning the U.S. legislation on banning imports of "non-dolphin friendly tuna", or in other words tuna caught with purse seine driftnets. They argued that "the issue needs a multilateral base because if one nation enforces strict regulations for protection of dolphins," then the actions of all nations will be obstructed. Description The tuna/dolphin controversy provides a useful and current case study in the conflict between global free trade and international environmental protection. Furthermore, there are numerous laws in the United States and in other industrialized countries which rely on trade measures to achieve environmental objectives. Effective international agreements 78

are not quickly made, and in turn irreparable harm such as species loss may occur. As for one of environment's most well known dilemmas; the dolphin/tuna story, the reconciliation of global free trade goals and international environmental protection are to be addressed. Fishing induced dolphin mortality could be eliminated by prohibiting the use of purseseine gear in fishing for yellowfin tuna associated with dolphins. There is little likelihood that all the nations fishing in the Eastern Tropical Pacific Ocean (ETP) would agree to the prohibition since purse-seining is the only economically efficient means of gathering tuna. The act of purse-seining begins where dolphin schools are encircled with mile long nets that "purse" the fish, dolphins and other sea life by drawing the cable attached to the net, thus gathering all the contents. The animals become trapped and eventually drown. This technique has incidentally killed over 6 million dolphins over the years from the time of the first purse-seine net invention. Different environmental regulations have mushroomed out of this one problem. The main imposers of environmental improvement have been by the MMPA (Marine Mammal Protection Act), the EPA (Environmental Protection Agency), and GATT (General Agreement on Tariffs and Trade), they have all worked diligently to reduce dolphin mortalities. Deaths caused by US vessels are now reduced to less than 1,000 annually due to the environmental eyes watching. However, vessels flying foreign flags such as the Mexican one are estimated to exceed 50,000 deaths per year. In GATT I, Mexico challenged the US MMPA's restrictions on fishing operations. The U.S. created standards so that other countries seeking to export tuna harvested in the ETP to the US have to adopt similar environmental programs as the US. Mexico won the case in that the U.S. violated Article XI of GATT. The US argued that the restrictions were internal regulations enforced at the point of entry as permitted by Article III:4; nevertheless, GATT I's panel put aside this argument aside on grounds that Article III restrictions could only be applied to products and not processes by which the product was produced.

79

This conclusion was reached in part by analogizing internal regulations to internal taxes, which may also be applied at the point of entry under Article III:2. This article noted that taxes levied directly on products were eligible for border adjustments (those taxes collected at the point of entry). On the other hand, certain taxes not directly levied on products were not eligible for border adjustment. The panel did not mention that there was disagreement as to the eligibility of certain other taxes not levied directly on products, including taxes on capital equipment, energy, machinery, and transport. These taxes would seem to have had provided a closer analogy as to regulations affecting production processes of the tuna. Also, since regulating dolphin mortality incidental to fishing operations does not affect the final product, the panel concluded Article III:4 did not apply. Next, the panel realized the US embargo was really a quantitative restriction prohibited under Article XI. The panel for GATT I concluded at that point that a country can only control the production or consumption of a natural resource if the production is within its own jurisdiction. This is a crucial issue taken into GATT II's case as well. Another issue raised in GATT I and relevant in GATT II was Article XX sections b, d and g. The United States argued that even if the restrictions placed on them were prohibited in other provisions of GATT, the restrictions could be utilized as exceptions to the general obligations of Article XX(b), (d), and (g). Article XX states that "...subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures". Section B enforces the humanitarian rights of the matter saying, nothing shall prevent the protection of humans, animals, health, etc.; Section D measures the securement of compliance with laws which are consistent with the provisions of the above agreement; Section G relates to the conservation of exhaustible natural resources, in this case dolphin, when dealing with restrictions of consumption and production. From these laws, Panel 1 concluded that Article XX(b) was not to be used extrajurisdictionally. Furthermore, if the extra-jurisdictionality rule was useful, the measures brought before the panel were not "necessary" as in conjunction with Article XX. Necessary according to GATT means that no GATT consistent measures (the cooperation 80

efforts of all countries to protect dolphins in the process of tuna fishing) were available at the time.

In looking at the MMPA regulations, the panel found that the US' measures were too unpredictable to be considered as "necessary" to protect dolphins since the rate of Mexican dolphin takings as compared to the US' were linked together. "Mexican authorities could not know in advance whether they were in compliance with the MMPA." Article XX(g) couldn't be applied extra-jurisdictionally as well because the panel interpreted the rules as being taken in "conjunction with restrictions on domestic production or consumption to mean that they must be primarily aimed at rendering "effective" those restrictions." A country can only control its production/consumption only if it is under its jurisdiction. Article XX(g) must not have been meant to have been applied extra-jurisdictionally. In addition, the US measures did not meet Article XX(g) requirements in that they relate to conservation of the natural resource, dolphins. At the same time section D was thrown out since the MMPA was clashing with GATT. In June, 1992, the EEC (mainly France) requested GATT to establish a dispute resolution panel to review US restriction policies dealing with the import of tuna under the federal MMPA. In 1994, the panel announced that the US embargo violated the GATT prohibition of quantitative restrictions. The MMPA prohibits the taking of marine mammals (dolphins) in the act of tuna fishing where purse seine nets are used. This bar is inclusive of those nations that import tuna from nations that do both exporting/importing of tuna. In GATT II, the United States is not entitled under GATT to use trade measures to force other countries to adopt its own domestic policies, environmental or otherwise. To satisfy the terms of the US law, it is not enough to kill fewer dolphins, a country also has to adopt fishing methods which conform to those used by US fishing fleets. The latest panel report on GATT II relates to the secondary tuna embargo, only this time the France has replaced Mexico. It adopts somewhat of a different reasoning from GATT I. The three man panel says GATT rules do not in principle disbar countries from using trade measures to protect "the global commons" or environmental resources outside their jurisdiction. The panel argues that these measures have to be designed directly in order to 81

protect the resource in question, dolphins. Further, they do not have to satisfy the criterion that no other more GATT consistent measure is available. On both counts, it is saying that the US embargo is a failure. The United States is in an appealing position of undermining its own environmental protections, such as its embargo on imports of tuna caught by methods that also kill dolphins. "The US is shooting itself in the foot by attacking EU's law." The US views it as "we have our obligations and the European's have theirs". Article XX(g) was interpreted by the second panel as such: 1. Article XX(g) must be invoked to further policies to conserve exhaustible natural resources. 2. "must be related to the conservation of exhaustible natural resources and made effective in conjunction with the restrictions on domestic production or consumption." 3. The measure can not be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade. Utilizing the components of Article XX seen above, the panel rejected the EEC's contention that dolphins are not an exhaustible natural resource. The depletion of the stocks of dolphins are not relevant at any given time. The main issue here is whether the resource could be depleted, and they can be. Next, Article XX(g) was reviewed. Panel 2 stated the article could be applied extra- jurisdictionally and they also concluded that Article XX(g) didn't support the protection of resources located within the territory of the country invoking it. The article lacked limitation when it came to the location of the living things being protected, i.e. dolphins. Looking at Article XX(g) part 2, panel 2 added to panel 1's decision in that under both the primary and intermediate nation embargoes GATT's basic problem with the Marine Mammal Protection Act, is that it requires other nations to change internal policies. With the Mexican case, the United States insisted that Mexico was to make the same calculations and adopt same solutions, or else lose its opportunity to offer their tuna to American consumers. Since then the tuna-dolphin case has since become a potent symbol of friction between environmental 82

and trade policies and of the heat it can generate. GATT seems to have been bothered by the broad brush of the U.S. measure: "the tuna is embargoed simply on the basis of a country's policies, regardless of whether an individual tuna may have been caught without harming dolphins." Case 2: Gasoline case One of the first WTO cases brought up by Venezuela and later Brazil, against the US. The panel report was adopted in 1996. The case did not challenge a countrys right to set environmental standards. The central question was about discrimination whether the US measure discriminated against imported gasoline and in favour of domestic refineries. On 23 January 1995, Venezuela complained to the Dispute Settlement Body that the United States was applying rules that discriminated against gasoline imports. Venezuela formally requested consultations with the United States, as required under WTO dispute settlement process. The case arose because the United States applied stricter rules on the chemical characteristics of imported gasoline than it did for domestically refined gasoline. Venezuela said this was unfair because US gasoline did not have to meet the same standards it violated the national treatment principle and could not be justified under exceptions to normal WTO rules for health and environmental conservation measures. Just over a year later (on 29 January 1996) the dispute panel completed its final report. (By then, Brazil had joined the case, lodging its own complaint in April 1996. The same panel considered both complaints.) The dispute panel agreed with Venezuela and Brazil. The US was found to be violating WTO rules because it discriminated against the gasoline imports. The United States appealed.

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The Appellate Body completed its report, and the Dispute Settlement Body adopted the report on 20 May 1996, one year and four months after the complaint was first lodged. The appeal report upheld the panels conclusions (although it made some changes to the panels legal interpretation). The United States and Venezuela then took six and a half months to agree on what the United States should do. The agreed period for implementing the solution was 15 months from the date the appeal was concluded (20 May 1996 to 20 August 1997). The Dispute Settlement Body monitored progress the United States submitted status reports on 9 January and 13 February 1997, for example. The United States agreed with Venezuela that it would amend its regulation within 15 months, and on 26 August 1997 it reported to the Dispute Settlement Body that a new regulation had been signed on 19 August. Case 3: Shrimp turtle case The Shrimp/Turtle dispute symbolizes the controversy between proponents and opponents of the World Trade Organization (WTO). Supporters of the WTO downplay the significance of the Shrimp/Turtle decision by claiming that the Appellate Body ruled only that the United States failed to apply its ban on shrimp imports in a nondiscriminatory way. In contrast, critics of the WTO often cite Shrimp/Turtle as proof that the WTO completely ignores the environment to promote liberalized trade. Both views are only partially correct. In truth, the Appellate Body interpreted the rules of the General Agreement on Trade and Tariffs (GATT) very narrowly. While the Appellate Body found that the United States applied its ban on shrimp imports discriminatorily, it also imposed interpretative hurdles that make it virtually impossible for a WTO Member to impose trade measures to protect the environment or natural resources. In Shrimp/Turtle, several Asian countries complained that Section 609 of the Endangered Species Act constituted an impermissible restriction on trade under the GATT. Section 609 and its implementing regulations prohibited the importation of shrimp into the United States unless a country's shrimping program requires shrimpers to use turtle excluder 84

devices (TEDs) comparable in effectiveness to those used in the United States and the country has in place a credible enforcement effort. Shrimp may not be imported into the United States unless U.S. officials have certified that the importing nation has implemented a turtle conservation program that is "comparable" to U.S. restrictions. The Shrimp/Turtle dispute again highlighted the inability of a Member to tax or regulate products differently based on the way the product is produced. Products with the same or similar physical characteristics or end uses are "like products" and must be taxed and regulated the same. Under Section 609, however, the United States regulated shrimp differently based on the way they were caught, not based on any physical differences in the shrimp itself. Just as in Tuna/Dolphin, Shrimp/Turtle found that the United States was impermissibly regulating shrimp from countries that use TEDs differently from countries that did not use them. According to the panel, shrimp is shrimp, regardless of the manner in which it is produced, and must be treated the same. Shrimp/Turtle confirms that any measure that taxes or regulates a product differently because of the way it is produced, caught, or otherwise brought to market, will be deemed inconsistent with the rules of the GATT. The Fact Sheet prepared by the New Democrat Coalition thus incorrectly states that Shrimp/Turtle did not rule against the restrictions. After finding that Section 609 violated the GATT, the Appellate Body further ruled that Section 609 could not be justified under the GATT's Article XX exception for measures relating to the conservation of exhaustible natural resources. Although the Appellate Body found that Section 609 fell with the category of measures protected this exception, it ruled that Section 609 did not meet the requirements of the "Chapeau" to Article XX. The Article XX Chapeau states that a measure otherwise inconsistent with the GATT may be permissible, provided that the measure does not constitute (1) a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or (2) a disguised restriction on international trade. On its face, the Chapeau permits some discrimination but the discrimination must not be unjustifiable or arbitrary. In ruling that Section 609 constituted unjustifiable discrimination and arbitrary discrimination, the Appellate Body made the test for determining whether the measure 85

constitutes unjustifiable or arbitrary discrimination exceedingly difficult to meet, in part because of its inconsistent reasoning. On the one hand, the Appellate Body found that application of Section 609 constituted unjustifiable discrimination and arbitrary discrimination, because the United States required all importing countries to adopt a comprehensive regulatory program that was essentially the same as the U.S. program, without inquiring into the appropriateness of that program for the conditions prevailing in the exporting countries. Appellate Body Decision. The Appellate Body thus ruled that treating all Members the same constitutes discrimination and that this discrimination is unjustifiable and arbitrary. While treating all foreign and U.S. shrimpers the same may be unfair, it cannot be called discriminatory. In trade, "discrimination" is the failure to treat all products alike.31 The Appellate Body makes clear that the United States must inquire into the "appropriateness of the regulatory program for the conditions prevailing in those exporting countries." Appellate Body Decision, para. 165. In essence, it suggests that the United States must treat countries differently. On the other hand, however, the Appellate Body ruled that treating Members differently also constitutes unjustifiable and arbitrary discrimination. It ruled that the failure of the United States to reach an international agreement with the complaining WTO Members was "unjustifiable discrimination," because the United States completed an agreement to protect sea turtles with Latin American countries.32 Although the United States made attempts to negotiate with the complaining Members, the Appellate Body found that the United States failed to act as quickly with the Asian countries as it did with the Latin American countries.33 The Appellate Body concluded that the "failure to have prior consistent recourse to diplomacy as an instrument of environmental protection policy ...

31

See, e.g., Black's Law Dictionary, page 467 (6th ed. 1990); see also American Heritage Dictionary: New College Edition (1979) ("discrimination" means "to make a clear distinction"). 32 Appellate Body Decision, paras. 171, 172. 33 Appellate Body Decision, para. 166.

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produces discriminatory impacts on countries exporting shrimp to the United States with which no international agreements are reached or even seriously attempted." 34 The Appellate Body's findings are of concern for at least four reasons. First, whereas the Appellate Body first ruled that treating Members the same constitutes unjustifiable and arbitrary discrimination (where the Member fails to account for the conditions prevailing in a given country), it later ruled that treating Members differently also constitutes unjustifiable and arbitrary discrimination. Second, the Appellate Body's conclusion that the failure to negotiate an international agreement with all relevant Members "is plainly discriminatory and, in our view, unjustifiable" makes the use of unilateral measures virtually impossible. To save Section 609, then, the United States must attempt, at a minimum, "serious negotiations" with all countries that are currently not certified as having comparable legislation to protect sea turtles before it imposes trade sanctions against that nation. This requirement imposes a very serious obstacle to the use of trade measures to protect the environment and is without support in any language of any WTO agreement. Third, the Appellate Body stated that the U.S. sea turtle agreement with Latin American countries suggests that those countries "marked out the equilibrium line" between environmental and trade goals and that "multilateral procedures are available and feasible."35 However, just as the Appellate Body noted that conditions may differ in some countries, a country's willingness to negotiate an international treaty, and to include similar provisions in that treaty, may also differ. The Appellate Body used the successful negotiation of one treaty to conclude that the United States and Asian countries could successfully negotiate a treaty with provisions that similarly balance trade and environmental goals. That conclusion is far from obvious, however. Fourth, the decision is discouraging because all international treaties and institutions with jurisdiction over sea turtles consider all species of sea turtles to be threatened or endangered. The critical status of sea turtles worldwide suggests that action must be taken
34 35

Appellate Body Decision, para. 167. Appellate Body Decision, para. 170.

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sooner rather than later. The Appellate Body decision, however, suggests that just the opposite is required to be consistent with the rules of the WTO. The reasoning of the Appellate Body and the four concerns highlighted in this analysis indicate that the Fact Sheet of the New Democrat Coalition understates the impact of Shrimp/Turtle. The Fact Sheet suggests that the U.S. must merely treat all countries fairly in order to remedy Section 609. The Appellate Body's interpretation of unjustifiable and arbitrary discrimination makes plain, however, that all WTO Members will have great difficulty saving trade-related environmental measures through GATT's Article XX exceptions. Case Studies on MEAs Case Study 1The Kyoto Protocol: International Agreement, Domestic implications The Issue: The threat of ratifying the Kyoto Protocol, a binding international agreement which is not necessarily favorable to various U.S. industries and interest groups, has prompted the proposal of domestic legislation related to some aspects of the Protocol. Whether this legislation will be passed is one issue. If it is passed, whether the legislation will serve as a substitute to the United States ratifying the Protocol, or as a stepping stone towards ratification, remains to be unseen. But the impact and power of American interest groups and industries on U.S. foreign policy is apparent in this issue. International agreements are highly correlated with our nation's domestic economy and the numerous parties associated with it.. Description: The Kyoto process involves nearly every government in the world and the means by which their people power their industries, transport their goods and themselves, heat their homes and cook their suppers. Background The United Nations Framework Convention on Climate Change (UNFCCC) is an agreement that was reached by 165 nations in 1992. The participating countries agreed to work together to combat global warming and climate change. At the third meeting of the 88

UNFCCC in December, 1997, 175 nations agreed to the Kyoto Protocol. The Protocol sets a legally binding agreement for 39 developed countries to reduce their greenhouse gas emissions by 5.2 percent (using 1990 as the base year) for the years 2008 to 2012. Specifically, the United States must reduce emissions by 7 percent, the European Union by 8 percent, and Japan 6 percent (Boukhari, 1998:12). The Protocol does not mandate any reductions for developing countries. The treaty provides that each country show progress towards that goal by 2005. The UNFCCC points out that it is only fair that developed countries initially take on the burden of reducing emissions, exempting, at this point in time, developing nations. Historically, developed countries are the one mostly responsible for greenhouse gases. Currently, industrial nations account for 64 percent of carbon dioxide emissions (Srodes, 1998: 15). All the early industrializers such as Europe and the United States created their wealth by polluting the atmosphere, therefore they should have the largest role in cleaning it up. Developing countries have a right to economic development, even if it comes at a time period much later than developed nations. At this point in time, these poorer nations do not have the technological or economic resources to cope with the problem. If they are allowed to develop and prosper, they will achieve these resources, and be able to participate in the future fight against emissions reduction (UNFCCC "Understanding...", 1999). The Controversy The Kyoto Protocol has been receiving vast amounts of attention in the United States from politicians, businesses, industries, interest groups and organizations. This is because the Protocol has implications for each of the aforementioned groups. There is a general consensus that curbs on carbon dioxide emissions will impact domestic trade, jobs, and consumers. Specifically, the agreement is expected to have significant effects on the Chemicals, Petroleum Refining, Paper, Iron and Steel, Aluminum, and Cement Industries. It will affect the entire Energy Industry, with effects spilling over to the jobs and consumers connected with it (Global Climate Coalition, 1999). Consequentially, there are a vast number of interest groups associated with these industries who oppose the 89

Protocol. However, even the opponents of Kyoto agree that something must be done to combat emissions problems. They also agree that even if Kyoto is not ratified, there is likely to be some sort of regulatory standard in the future regardless. This attitude has prompted industries to lobby for legislation that may help them with this dilemma. A partial solution welcome to many of these interest groups would be S.547, the Credit for Voluntary Reductions Act, introduced in the Senate March 4, 1999 by Senator John Chafee. This bipartisan legislation addresses the concerns of many companies. Should the Protocol win ratification and take affect in 2008, companies want to be sure they get credit for any reductions they achieve before that time. The bill gives credits that can be financially valuable for early actions to control waste gases that Kyoto would strictly limit. It gives ton for ton credits to companies that can document reductions in their greenhouse gas emissions under various voluntary federal programs (Chafee, 1999). The legislation was immediately heralded by both concerned industries and environmentalists. The Global Climate Coalition (GCC) is an organization comprised of trade associations and companies whose goal is to coordinate participation on global climate change. One of its largest members (although the group has recently collectively disbanded) is the American Automobile Manufacturers Association. The GCC argues that ratification of the Kyoto Protocol would cause redistribution of output, employment, and emissions from developed to developing countries, harming significantly the six aforementioned energy intensive industries (Global Climate Coalition, 1999). The GCC cites various studies that have concluded that prices will rise for U.S. consumers while wages will fall or jobs be eliminated completely for workers whose employment is associated with the Energy Industry. What the GCC does support is legislation such as S. 547, the promotion of voluntary programs. "Voluntary programs let the marketplace dictate the best way to meet environmental goals" (ibid.). The GCC asserts that voluntary agreements are more effective because they encourage industry innovation to address environmental problems and cooperation between business and government. They also assert that environmental objectives are achieved faster with voluntary programs than with mandates and regulations. The recent proposal of S.547 seems to be an important victory for the lobbying efforts of the GCC and its members. 90

An option available to businesses that is specified under the Kyoto Protocol is emissions trading. Emissions trading in part was developed to reduce the economic costs of the treaty. Emissions trading encourages countries to cut emissions below assigned levels so they can "sell" the difference. Trading allows companies who do not meet carbon dioxide emissions quotas to buy excess emissions certificates from those who do. A company can receive credit against its company's emissions limits by buying emissions rights from companies that have reduced emissions below their own limits. Or a company could receive credit for helping developing nations reduce their own emissions, such as by financing emissions reducing technology. Either way, trading can reduce the economic impact of emissions controls for developed countries (Fialka, 1998: A8). Trading entitles major energy consumers such as the United States, or countries such as Japan, where its expensive to cut emissions, to "buy" the right to pollute from others (Boukhari, 1998: 12). The United States is hoping to meet three quarters of its Kyoto requirements by buying permits from other countries (ibid.). Emissions trading is something that also represents the influence of big business and domestic politics on treaty negotiations. The Clinton Administration delegates to the Kyoto summit, under presure from lobbying efforts and Congress, had to fight to allow emissions trading into the original agreement, as it was opposed by the European Union and Brazil (Paemen, 1998:28). This was seen as a major victory for the U.S. delegates. There are reasons why some countries oppose emissions trading. There is some fear that emissions trading will not decrease overall carbon dioxide emissions. There is also fear that trading will become a substitute to the alternative of countries and companies pursuing new technological advances in emissions reductions. On the other hand, some believe that trading can promote technological leadership and the development of international technology pools in efforts to attain more permits (ibid.). Two more opponents to ratification of the Kyoto Protocol are the National Association of Manufacturers and the U.S. Chamber of Commerce. The two organizations have funded the Global Climate Information Project, and its thirteen million dollar media campaign opposing Kyoto.

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But there is an outpouring of money associated with the Protocol on both sides of the fence. It is interesting to note that some large businesses, who will be restricted by the Protocol's standards and possible financially hurt should it be implemented, support the treaty. Some of these supporters include General Motors, British Petroleum, Monsanto, and United Technologies. General Motors was previously a member of the Global Climate Coalition until the GCC adopted their current position on the Kyoto Protocol. General Motors realizes the growing importance for the need to do something about climate change. It appears they are willing to take responsibility for their part of the problem, even if it is at a financial cost to the company. However, the portrayal of the company as an environmental crusader and absorbing the costs of emissions reduction may be just as financially valuable as opposing the standards and not implementing and reductions measures. There is much disagreement just over what ratification of Kyoto really means, as numerous studies have been conducted by groups paid by both pro and against parties to the Protocol. What the exact numbers are concerning job loss, changing energy prices, the amount of emissions that will actually be eliminated, and at what rate emissions actually speed the deterioration of the environment, are in dispute. The Energy Information Administration, part of the U.S. Department of Energy, authored a report entitled "Impacts of the Kyoto Protocol on U.S. Energy Markets and Economic Activity." The EIA estimates higher energy prices, which in turn will reduce consumer energy consumption and will change the amount and kind of resources used. The EIA concludes that the cost of the Protocol to the American economy will depend on the amount of permits that can be purchased internationally, and on the number of projects to reduce emissions and develop sinks that absorb greenhouse gases both in developing countries and on the domestic front (Energy Information Administration, 1998). In other words, at this time the effects, depending on various circumstances, are immeasurable. The EIA examined six cases with different reductions in carbon emissions, adding and subtracting different factors from each case, and arriving at different conclusions ranging from best case to worse case scenarios. A different study by DOE concluded that a national investment in energy efficiency technologies can reduce U.S. emissions whereby 92

energy savings will equal costs. In essence, emissions reduction achieved through technology improvements will not necessarily increase the nation's energy bill (Global Climate Coalition, 1999). Many opponents of the protocol emphasize the potential loss of thousands of U.S. jobs because they expect companies to relocate to developing countries to take advantage of the lack of emissions standards. Research published in a British journal, Energy Policy, estimated there would be 23,000 jobs lost in the U.S. aluminum industry and anywhere from 7,500 to 75,000 jobs lost in the chemical manufacturing sector (Anonymous, 1999: 32). A study by WEFA, the Wharton Economic Forecasting Associates, estimates U.S. job loss in trade related industries totaling 751,000 between 2001 and 2020 (Srodes, 1998: 14). They also estimate that U.S. aluminum smelters and paper producers will be forced out of business, petroleum refinery output would be reduced by 20 percent, and 30 percent of the chemical, steel and cement industries would be forced to move elsewhere (ibid.) The above concern is basically the same concern of opponents of greater globalization and freer trade. During NAFTA negotiations, the United States harbored some of the same protests: jobs lost to the developing countries, certain industries being hurt, and the question of whether environmental standards will truly be improved. There is no doubt that globalization of markets hurts labor-intensive industries in developed countries, simultaneously having positive aspects for developing countries. In sum, the Kyoto Protocol may not be directly to blame for some of the negative impacts on the U.S. economy that some are claiming it will have. The negative impacts may merely be the result of the ever-changing world economy. The Senate will not ratify the Protocol until it is amended to include the participation of developing countries in emissions reduction. Amendments mean putting in provisions to the international agreement that 175 countries did not agree to, the ever-present problem of U.S. foreign economic policy and its relation to treaty negotiations. Conclusion

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While it is too early to tell if S. 547 will pass, the bill seems like it would satisfy many of the participants in the debate over the ratification of the Kyoto Protocol. I spoke with Dan Dellich, the Committee Aid on Environment and Public Works, which is chaired by John Chafee. Dellich believes that at this time Chafee, although concerned about the environment, would oppose ratification of the Protocol. The current problems with the agreement such as the lack of enforcement provisions and developing country participation, are too significant to be overlooked. Dellich asserts that the bill is indirectly related to the Protocol, and Chafee sees it neither as a substitution nor as a stepping stone towards Kyoto's ratification. The passing of S. 547 is expected to be difficult because it is the first legislation of its kind, it will take a a lot of effort to explain it to people, and "...because there is a lot of money involved and a lot of politics involved" with it (Dellich, 1999). That statement reaffirms the power of domestic parties stemming from their concerns with both domestic and international legislation. A Case Study 2 - Virunga National Park Virunga National Park (Parc National des Virunga, PNVi), in the eastern part of the Democratic Republic of Congo, is Africas oldest and most diverse park. Stretching along the Congolese border with Uganda and Rwanda, PNVi has more bird, mammal and reptile species than any other on the continent. But for the past two decades, the park and the surrounding area in North Kivu province have experienced near-constant violent conflict. For the local population, the result has been widespread suffering: death, rape, displacement, sickness and starvation. Beyond the humanitarian crisis, conflict has threatened the species, habitats and communities that depend on PNVi for their survival. The park is in crisis: its governance systems have collapsed; its boundaries are encroached upon by the surrounding local and refugee populations; its habitats are being destroyed by overfishing and charcoal production; and its animals are killed for meat and ivory. Conflict has significantly contributed to the fact that the United Nations environmental conventions are not able to achieve their stated objectives in the park. Multilateral environmental agreements (MEAs), designed to protect such globally-significant 94

ecosystems, have thus far been unable to address the threats to the park. Despite the proliferation of relevant environmental conventions and the DRCs participation in them, environmental destruction continues in PNVi. Using PNVi and the Great Lakes conflicts as a case study, this paper analyzes where entry points exist for policy-makers and conservationists to use five existing international environmental agreements to better protect biodiversity and ecosystems in times of conflict: UNESCO WHC, CBD, CMS, CITES and Ramsar. While not an exhaustive study, the paper identifies some of the shortcomings of existing agreements, where entry points might exist and what other international policy instruments and fora could be used to help protect important ecosystems like PNVi. The UN MEAs are not designed or expected to offer practical solutions to conservation crises on the ground; it is up to the national governments of the signatory states, and their conservation authority, to enforce and achieve Convention goals. Their sovereignty must be respected by the other parties. However the MEAs, their COPs and their Secretariats can help them do so by building capacity, improving information gathering (i.e., the IPCC model) and supporting underfunded budgets. This analysis reveals a number of specific opportunities for elevating environment-conflict issues to international policy levels to help save important ecosystems in times of conflict. Case Study 3 - Invasive Alien Species, Multilateral Environmental Agreements and site management Parties to conventions and agreements requiring site-based action face particular challenges in dealing with invasive alien species. Globally these are notably the Ramsar Convention on Wetlands, World Heritage Convention, UNESCOs Agreements, The ecological character of many designated sites is being compromised by invasives, so managing these biodiversity jewels in the crown in the context of the impacts of invasives is a high priority for us. A major challenge in achieving this is, however, to 95 Man and the Biosphere Programme and the Convention on Migratory Species and its range state

provide protected area managers with the best possible knowledge, tools and access to expert assistance so that they can recognize and address invasives in their management planning and implementation, and be helped in raising awareness of invasives amongst their local community stakeholders. To achieve this requires particularly: better understanding of invasive issues; improved invasives identification knowledge; more consistent inclusion of invasives and the threats from them in site descriptions when listing/designation of sites, leading to; enhanced incorporation of monitoring for invasives in management planning objectives; improved vulnerability and early warning assessment tools, especially in relation to changing vulnerability through climate change effects; and better access to, and sharing of, experience and expert advice on management options and control and eradication. The GISP, and the CBD work we are developing here, is producing a wealth of relevant materials. Now the task of the site-based agreements is to get this into the hands of their site managers - in a form they can use. So how are the agreements and conventions tackling this? First through all affording increased recognition to invasives. instrument. Amongst the joint invasives initiatives underway through the site-related instruments, I will highlight four: Second, by working together increasingly, particularly where sites are designated in delivery of commitments to more than one

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First, development of Joint management and monitoring guidance:

Ramsar and

Man and the Biosphere Programme are both currently preparing further guidance to their site managers on good practice in management planning and monitoring, including a focus on invasives. The guidance will be harmonized and made available to manager networks, under both instruments and tested and promoted through demonstration implementation on sites designated under both instruments. Second, increasing management expertise and capacity at an inter-regional scale: The CMS African-Eurasian Migratory Waterbird Agreement is, in collaboration with the Ramsar Convention, developing a UNEP-GEF funded project to demonstrate good practice management, incorporating invasive species management, for a network of key wetlands (Ramsar sites) for migratory waterbirds in Africa, Europe and the Middle East, and through this to build site management capacity and transfer of experience at a flyway-scale. Third, Site manager awareness and networks: Ramsar, working with its partner organizations IUCN and Wetlands International, has started implementation work on African wetland invasives to produce accessible wetland invasive awareness materials for site managers, and increase invasives management capacity through regional managers workshops and establishing networks for exchange of experience. region. Fourth, Joint action in specific shared protected areas to provide expertise and advice on managing invasives problems: The World Heritage and Ramsar Conventions have recently mounted a joint advisory mission to assist Senegal in developing management for the control of an urgent aquatic invasive problem, here from the water fern Salvinia, in the Djoudj National Park, Senegal. This site has been listed as both a Heritage Site in Danger and on the Ramsar Conventions Montreux Record. The mission brought together a wide range of local, national and international stakeholders. Their recommendations have now led to the two Conventions funding work to develop a comprehensive management planning, implementation and monitoring process for the 97 This will bring together managers of Ramsar sites, Biosphere Reserves and World Heritage Sites in the

site that will incorporate invasives control through enhanced local capacity and local community involvement. Furthermore this has brought in technical expertise through the GISP, and is being developed in collaboration also with broader-scale European Commission funded work on invasives management in the Senegal river basin, and with the CMS African-Eurasian Waterbird Agreement, since this site is internationally important for its migratory waterbirds, as the distinguished delegate from Senegal reported to us yesterday. It is our further intention to bring together the outcomes and experiences of this suite of joint site-management related work, and other related activity, to promote consistent and enhanced management response to invasive alien species throughout our extensive combined network of key protected areas for biodiversity. All these initiatives will draw importantly on the tools and guidance tools and guidance prepared by GISP and CBD. To aid on the ground delivery of effective action, we consider it vital that the options for future invasives work through priorities under the planned GISP2 and any future CBD focus on invasives includes enhancing information transfer and implementation at the local manager and community stakeholder level, as well as effective collaboration between the site-based environmental agreements. Case Study 4 - The Aarhus Convention Although regional in scope, the significance of the Aarhus Convention is global. It is by far the most impressive elaboration of principle 10 of the Rio Declaration, which stresses the need for citizens participation in environmental issues and for access to information on the environment held by public authorities. As such it is the most ambitious venture in the area of environmental democracy so far undertaken under the auspices of the United Nations. - Kofi A. Annan, Secretary-General of the United Nations The Aarhus (rhus) Convention on Access to Information, Public Participation in Decision- Making and Access to Justice in Environmental Matters is an MEA that applies mainly across Europe1. The explicit objective of the Aarhus Convention is as follows: 98

In order to contribute to the protection of the right of every person of present and future generations to live in an environment adequate to his or her health and wellbeing, each Party shall guarantee the rights of access to information, public participation in decisionmaking, and access to justice in environmental matters in accordance with the provisions of this Convention. Some of the Aarhus Conventions key attributes are: Rights-based approach Establishing of minimum standards Non-discrimination Inclusion of regional institutions and international bodies Open to accession by non-ECE countries

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POSSIBLE SOLUTION TO THE CONFLICTS BETWEEN THE WTO & ENVIRONMENT Productive multilateral discussions require the identification of realistic reform proposals on the central issues of the trade and environment debate. But before they address any proposals, it would be helpful for the trade and environmental communities to reach a common understanding of what will be needed to achieve certain kinds of reforms - an agreed framework for action. A Framework for Action A useful way to think about efforts to resolve trade and environment conflicts is to organize proposals into groups defined by the necessary degree of government involvement or negotiation. On this basis, one can envisage three categories of initiatives: First, measures for which there may be sufficient informal support from WTO Members for the Director-General and the Secretariat to act without formal decision-taking by Members. In cases like these, consultation would be a necessary and sufficient requirement for action. Second, initiatives that would require the collective approval of Members, but would not necessarily require changes in formal rules or obligations. Finally, objectives that could only be achieved through formal changes in rules, which would probably require a comprehensive trade round. By helping establish a shared understanding of the steps necessary to achieve certain reforms, this framework can facilitate cooperation and build confidence between the trade and environmental communities. Several critical trade and environment issues must be addressed within this framework. Transparency and Public Access. Dialogue between the WTO and civil society has improved in recent years, but interaction between the two could still be more productive. During future WTO symposia, for NGOs, for example, the WTO 100

Secretariat could organize government-civil society working groups that would address specific trade and environment issues. Funding from the WTOs regular budget should be allocated both for the WTOs NGO symposia and for the participation of developing country officials in the WTOs new regional seminars on trade and environment issues, in which representatives of regional NGOs participate. Finally, the WTO General Council should examine NGO proposals for a Standing Conference on trade and environment issues. Trade Liberalization and the Environment. Eliminating trade restrictions and distortions can produce win-win outcomes in many sectors: environmental benefits and improved market access. New Zealand and the United States, for example, have urged the WTOs Committee on Trade and Environment to consider the potential environmental benefits of removing trade-distorting subsidies in the fisheries sector. Agricultural subsidies and market access restrictions distort trade and exacerbate over-production and other environmental problems. Governments, with the support of NGOs, need to do more to identify sectors in which the removal of trade distortions would simultaneously benefit trade and the environment. Once promising targets have been identified, governments have a responsibility to put them on the negotiating agenda. Multilateral Environmental Agreements (MEAs) and the WTO. Several countries have urged the WTO to address the possibility that measures inconsistent with WTO rules could be applied under Multilateral Environmental Agreements (MEAs). A potential remedy would be to amend certain WTO Agreements or to draft an Understanding on Interpretation. The goal of enhancing the mutual supportiveness of trade and environmental treaties must be achieved not only through the establishment of an appropriate framework for interaction between international organizations, but also through the operation of fundamental legal principles relating to the harmonious interpretation and application of treaty rules. States that are both parties to an MEA and to the WTO should normally aim 101

at fulfilling both sets of obligations in a consistent way, following an interpretation of the relevant legal rules that avoids any potential conflict between them. One essential condition for making sure that trade and environment are mutually supportive is to ensure that the trade liberalisation process is paralleled with the development and strengthening of effective and non-protectionist environmental legislation, at national, regional and international levels. Environmental policies could, in turn, provide an incentive for technological innovations, promote economic efficiency and, consequently, improve productivity. Having recognised the need for such policies, one should also ensure that trade rules do not unnecessarily constrain but rather support and promote the ability of countries to develop and implement adequate and nonprotectionist environmental measures, at both national and international levels. Trade policy as such has also a role to play in actively supporting sustainable trade flows and, in particular, environmentally friendly trade. Trade policy and trade related instruments should be further encouraged to act as a sustainable driver by providing incentives for more sustainable trade flows. This is valid at the multilateral level but even more so at the regional and bilateral levels where the identification of positive synergies among trading partners as well as convergence and/or co-operation should be easier than is the case at the international level. Trade tools could, for instance, be instrumental in making tangible progress towards more sustainable consumption and production patterns. Economic instruments also need to be more actively developed, notably with a view to allow for the necessary internalisation of external environmental costs. In addition, positive synergies between trade, environment and development should be further considered, particularly regarding the elimination of environmentally damaging subsidies and the promotion of environmentally friendly goods and services, with a special focus on those originating in Developing Countries (DCs).

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CONCLUSION Environmentalists and trade advocates have clashed frequently in recent years. Environmentalists argue that international trade rules restrict the legitimate use of trade measures to enforce environmental standards internationally and undermine environmental standards at home. Trade officials argue that trade measures are not the appropriate tools to deal with environmental problems, and the World Trade Organization (WTO) is not the appropriate institution. They contend that environmentalists need to put their own house in order rather than resort to trade measures to achieve their objectives. Studies by the various environmentalists provide that the effect of trade liberalization on the environment can be subdivided into three categories (i) product effect, (ii) structural effect, and (iii) scale effect. (i) The product effect of trade is positive when trade liberalization expands the market for goods produced in an environmentally sound manner and/or environmental services like resource saving technology. Negative product effect results when goods directly harmful to the ecosystem are exchanged internationally. (ii) The structural effect of trade is the trade-induced change in the industrial composition and consumption, and depends on the pollution intensity of national output. The effect on the environment is positive if expanding export sectors are less polluting on average than contracting import-competing sectors; and negative if the opposite holds. (iii) The scale effect of trade results from enhanced economic activity, including higher levels of production, resource extraction, and transportation. The impact on the environment is typically negative due to the greater pollution generated. The study on the interface of trade and environment, as well as the evaluation of trade measures within MEAs indicate that trade restrictions are not the only nor necessarily the most effective policy instrument to achieve the environmental objective of the MEAs. The root cause of environmental degradation following trade liberalization is not trade per se, but the underlying market or regulatory failures. A WTO Secretariat Report on Trade and Environment (WTO 1999) recognized the theoretical and empirical literature that trade is rarely the root cause of environmental degradation (except under the scale effect) and that most environmental problems result from polluting production processes, 103

certain kinds of consumption, and the disposal of waste products. The WTO report observed that trade would unambiguously raise welfare if proper environmental policies were in place. An expansion of trade can conceivably produce large negative environmental effects to outweigh the conventional benefits from liberalization only if a country lacks domestic environmental policy that reflects its environmental values (GATT 1992: 2). Indeed, a lack of appropriate environmental policies creates problems not just in the trade sector, but through every facet of a countrys economic life. Conflict between environmental protection and the rules and institutions of the trading system is not inevitable. Indeed, the two can play mutually supportive roles.

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BIBLIOGRAPHY

Websites www.wto.org www.environmentallaw.org www.unece.org/env/pp http://www.gdrc.org Books WTO and International Trade, M.B. Rao, Vikas publishing House Pvt Ltd, New Delhi; The WTO, Trade and the Environment, edited by Gary Sampson and John Whalley; WTO in the new Millennium, Commentary, published and edited by Academy of Business Studies; The World Trade Organisation, Dr. S.R. Myneni, published by Asia Law House; The World Trade Organisation (Law Practice and Policy), Mitsuo Matsushita, Thomas J. Schoenbaum and Petros C. Mavroidis, published by Oxford University Press Inc., New York; Reforming the World Trading System (Legitimacy, Efficiency, and Democratic Governance), edited by Ernst-Ulrich Petersmann, published by Oxford University Press Inc., New York; Guide to the WTO and the Developing Countries, by Peter Gallagher, published by Kluwer Law International P.O. Box 85889, 2508 CN The Hague, The Netherlands;

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