Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements

ENVIRONMENT: ISSUES

Environmental requirements and market access: preventing ‘green protectionism’

Environmental requirements can impede trade and even be used as an excuse for protectionism. The answer is not to weaken environmental standards, but to set appropriate standards and enable exporters to meet them.

Topics handled by WTO committees and agreements


The Trade and Environment Committee gives particular attention to this subject and its effects on developing countries.

The effect of environmental measures on market access, especially for developing countries and in particular to the least developed among them, is one of the items (Item 6) on the committee’s work programme. This was established in the 1994 Ministerial Decision on Trade and Environment.

In 2001, the Doha Ministerial Declaration instructed the Committee to give particular attention to this subject. (See paragraph 32(i).)

  
The key    back to top

The effect of environmental measures on market access is particularly important to the work of the Trade and Environment Committee because it holds the key to ensure that sound trade and environmental policies work together.

WTO member governments consider that the protection of the environment and health are legitimate policy objectives.

But they also acknowledge that measures designed to meet these objectives could hinder exports. And they agree that sustainable development depends on improved market access for developing countries’ products.

Environmental standards, objectives and priorities do need to reflect the particular environmental and developmental context to which they apply — so says Principle 11 of the 1992 Rio Declaration on Environment and Development.

In other words, environmental standards applied by some countries could be inappropriate. They could cause unwarranted economic and social cost to others, particularly developing countries, by hindering exports. Small and medium sized enterprises (SMEs) are especially vulnerable.

The answer is not to weaken environmental standards, but to enable exporters to meet them. WTO agreements do have enough scope to ensure that environmental measures do not unduly restrict exports. Examples include the Sanitary and Phytosanitary Measures (SPS) Agreement — which deals with food safety and animal and plant health — and the Technical Barriers to Trade (TBT) Agreement — which deals with product standards and labelling.

  
Designing a balance    back to top

So, a balance is needed, between safeguarding market access and protecting the environment. WTO member governments agree that they have to examine how environmental measures could be designed so that they are:

  • consistent with WTO rules

  • take into account capabilities of developing countries

  • meet the legitimate objectives of the importing country.

They recognize that it is essential to involve developing countries in designing and developing environmental measures so that the measures do not unnecessarily impede trade.

It is also important to help developing countries participate in developing international standards at an early stage.

Several members have argued that discussions on improving market access should give more weight to identifying opportunities to trade in a way that promotes sustainable growth.

  
In the committee    back to top

The discussion in the Trade and Environment Committee has highlighted a list of issues: transparency, notification, early warning, consultation, impact assessment, taking into account comments while a measure is being prepared, technical assistance and capacity building to assist the implementation of environmental requirements, and coordination within exporting countries.

Some members suggested that the discussion could be helped if case studies and the results of other work elsewhere in the WTO and in other intergovernmental organizations could be used.

This resulted in a December 2006 Secretariat note, which takes stock of two studies: the OECD Trade Policy Studies 2005 and the UNCTAD Trade and Environment Review 2006. The Secretariat note highlights recent trends in environmental requirements, market access difficulties faced by developing-country exporters, developing-country responses to environmental requirements, and approaches to addressing market-access difficulties faced by developing countries at national and multilateral levels.

At the May 2007 CTE meeting, a focussed discussion was held on the case of organic agriculture. A number of developing countries (Uganda, Kenya, India, China and Egypt) shared their national and regional experiences in this sector, reflecting a rapid growing consumers' demands on organic products which could provide new market opportunities for farmers, in particular small holders, in developing countries. Organic agriculture, in addition to income generation, could offer positive effects and in the social sphere and on natural resource conservation. While highlighting the possible contribution of organic production to creating a win-win-win situation for trade, the environment and development, they raised concerns on the difficulties faced by producers due to the proliferation of different government regulations and private voluntary standards in the market, the lack of international standards, as well as the high cost of multiple inspection, certification and accreditation requirements. The importance of providing the possibility for small holder group certification, as well as a multilateral solution on harmonization, equivalency and mutual recognition were emphasized. In this respect, reference was made to the relevant work of UNEP-UNCTAD Capacity Building Task Force on Trade and Environment and Development and IFOAM-FAO-UNCTAD International Task Force on Harmonization and Equivalence in Organic Agriculture.

  
Raised in two other committees    back to top

In 2006, the Secretariat prepared a second paper (available for members in document JOB(06)263), which considers the work in the Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS) committees on information related to the environment that members have notified to the WTO and on specific trade concerns that they have raised in the committees. These two committees provide a unique framework for making regulations that are related to the environment transparent, through notification and discussion of any concerns.

Around 10 per cent of all proposed regulations under the TBT and SPS Agreements that are notified to the WTO indicate environment protection as the objective, covering a wide range of sectors including: motor vehicles, electrical equipment, forestry management, packaging, plant and plant products, nursery stocks, wood products.

Various kinds of measures are notified: procedures for assessing whether products meet required standards, product performance, labelling requirements, quarantine and disinfection requirements, plant health (phytosanitary) requirements, pest risk analysis for the local natural environment and, occasionally, bans or restrictions.

The number of proposed environment-related regulations has steadily increased over the past ten years. The most frequently cited environmental objectives fall under the category of soil and water pollution abatement, energy conservation, plant and forestry conservation, consumer information, protection of plants or territory from pests or diseases.

Approximately 20 per cent of specific trade concerns raised in the Technical Barriers to Trade Committee are about measures citing environmental protection among their objectives. Since 1998, there have been approximately 32 environment-related TBT specific trade concerns: 10 deal with control of hazardous substances, chemicals and heavy metals, one example is the EC REACH (EU’s Registration, Evaluation and Authorization of Chemicals); 10 relate to vehicles and air pollution control; 5 to energy efficiency of equipment and electrical appliances; 5 to resource management, waste, reuse and recycling of vehicles, electrical and electronic products; others concern wood, fishery and seal products. Some of these refer to MEAs' implementation (CITES, Kyoto Protocol, Stockholm and Rotterdam Conventions). The measures taken vary from ban and restriction in use to labeling and certification requirements, as well as requirements for information, registration and testing, product design and performance. The CTE was informed of the concerns raised on these environmental requirements, as well as on how the TBT Committee was used by Members to discuss and seek solution to these concerns.

Among specific trade concerns raised in the Sanitary and Phytosanitary Measures Committee are measures for controlling pests that could damage the local natural environment such as long-horned beetle or the golden nematode.


Recent discussions in the CTE

At the May 2007 CTE meeting, a focussed discussion was held on the case of organic agriculture. A number of developing countries (Uganda, Kenya, India, China and Egypt) shared their national and regional experiences in this sector, reflecting a rapid growing consumers' demands on organic products which could provide new market opportunities for farmers, in particular small holders, in developing countries. Organic agriculture, in addition to income generation, could offer positive effects and in the social sphere and on natural resource conservation. While highlighting the possible contribution of organic production to creating a win-win-win situation for trade, the environment and development, they raised concerns on the difficulties faced by producers due to the proliferation of different government regulations and private voluntary standards in the market, the lack of international standards, as well as the high cost of multiple inspection, certification and accreditation requirements. The importance of providing the possibility for small holder group certification, as well as a multilateral solution on harmonization, equivalency and mutual recognition were emphasized. In this respect, reference was made to the relevant work of UNEP-UNCTAD Capacity Building Task Force on Trade and Environment and Development and IFOAM-FAO-UNCTAD International Task Force on Harmonization and Equivalence in Organic Agriculture.

At the November 2008 meeting, the CTE heard briefings from observer organizations on their recent activities related to environmental requirements and market access issues related to organic agricultural products, private standards and biofuels certifications.

On organic agricultural products, the representatives from ITC, UNCTAD and UNEP gave presentations that included the following aspects: current organic production and trade; main challenges of organic exports for developing countries; and some possible solutions and tools regarding equivalence and harmonization of standards, requirements for organic certification bodies, and best practices for developing country governments to promote the organic sector.

On private standards, the representative from UNCTAD informed the CTE about UNCTAD's recent studies on the challenges and opportunities arising from private standards on food safety and environment for exports of fresh fruit and vegetables. It was noted that although there was a real risk of private standards marginalizing small farmers, governmental proactive policies could help.

On biofuels certification, the representative from UNCTAD presented a recent publication entitled “Making Certification Work for Sustainable Development: The Case of Biofuels”. It was noted that certification of biofuels could be a strong market instrument and a criterion used by governments for tax breaks or meeting biofuels targets. However, developing country producers may face both general difficulties related to certification (e.g. cost, multiple testing and recognition of certifications) and challenges specific to biofuels (e.g. food security, water depletion, social causes and difficulties to quantify some of the sustainability criteria).

Following the presentation, Australia and China shared their national experiences on biofuels policies and production. The US said it was important to bear in mind that the national biofuels policies currently in place are only in their infancy and warned against jumping to conclusions in the debate on the legal aspects. The EC recognized the need to promote sustainable production of biofuels and the risk of opacity and market segmentation created by the proliferation of certification schemes. The importance of a balance between comprehensiveness of criteria for biofuels certification and the feasibility of implementation was highlighted.