In the Committee’s work programme back to top
Labelling is one of the subjects assigned to the Committee on Trade and
Environment (CTE). It is part of an item (3b) on the committee’s work
programme in which the committee is assigned to consider the
relationship between the provisions of the WTO’s agreements and the
requirements governments make for products in order to protect the
environment. (In addition to labelling, this includes standards and
technical regulations, and packaging, and recycling requirements.)
In 2001, the Doha Ministerial Conference made this an issue of special
focus for the regular CTE (i.e. the regular committee sessions that are
not part of the Doha Round negotiations). (See
of the Doha Declaration.)
The use of eco-labels (i.e. labelling products according to
environmental criteria) by governments, industry and non-governmental
organizations (NGOs) is increasing.
Concerns have been raised about the growing complexity and diversity of
environmental labelling schemes. This is especially the case with
labelling based on life-cycle analysis, which looks at a product’s
environmental effects from the first stages of its production to its
final disposal. These requirements could create difficulties for
developing countries, and particularly small and medium-sized
enterprises in export markets.
WTO members generally agree that labelling schemes can be economically
efficient and useful for informing consumers, and tend to restrict trade
less than other methods. This is the case if the schemes are voluntary,
allow all sides to participate in their design, based on the market, and
However, these same schemes could be misused to protect domestic
producers. For this reason, the schemes should not discriminate between
countries and should not create unnecessary barriers or disguised
restrictions on international trade.
At the meeting of May 2007, the United States gave
a presentation on the US “Energy Star” energy efficiency programme, a
voluntary performance based labelling scheme covering more than 50
product categories. This self-certification scheme was created with the
objectives to reduce greenhouse gas emissions and to facilitate
consumers to identify and purchase products with enhanced energy
efficiency. There is a demand for these products in the market, since
energy efficient appliances, equipment, window and doors could cut down
consumers' energy bills. Information was provided on how the relevant
requirements are developed with guiding principles and involving public
notifications as well as stakeholder consultations; how the label is
used inside and outside the US; how the integrity of the label can be
protected; and how coordination efforts have been made with other WTO
Members on harmonization of specifications and testing procedures.
At the meeting of November 2008, Australia informed the CTE of its
national experience on minimum energy performance standards and
mandatory labelling requirements that had led to an increase in sales of
energy efficient appliances in Australia.
The ‘PPM’ problem back to top
A particularly thorny issue in the eco-labelling debate has been the use
of criteria linked to processes and production methods (PPMs).
WTO Members agree that countries are within their rights under WTO rules
to set criteria for the way products are produced, if the production
method leaves a trace in the final product, for example cotton grown
using pesticides leaving pesticide residue in the cotton itself.
However, they disagree about discriminatory measures based on “unincorporated PPMs” (or
“non-product related PPMs”), i.e. process and production methods which
leave no trace in the final product. For example you cannot tell whether
a table has been produced from sustainably managed wood by simply
looking at it.
The key question is: are these measures consistent with WTO agreements?
Many countries argue that measures which discriminate between
products based on unincorporated PPMs, such as some eco-labels, should
be considered inconsistent with WTO agreements.
Technical barriers too back to top
The 2001 Doha Declaration (Paragraph 32(iii)) tasked the Trade and
Environment Committee to focus on environmental labelling, and some
members believe that the results of discussions in the CTE could then be
used as an input to the debate in other relevant WTO bodies,
particularly the Technical Barriers to Trade (TBT) Committee.
However, many other members argue that the TBT Committee is better
suited for the task. “Technical barriers to trade” covers product
standards and labelling, and the latter, including environmental
labelling, is regularly discussed in the TBT Committee under “specific
trade concerns”. Most members believe that existing disciplines on
technical barriers to trade are adequate to deal with environmental
labelling, and that the TBT Agreement has created the appropriate
balance of rights and obligations for both mandatory and voluntary
For voluntary environmental labelling schemes, the TBT Agreement
contains a “Code of
Good Practice for the Preparation, Adoption and Application of Standards”. Agencies and organizations that develop
labelling requirements are encouraged to accept this code.
One of the TBT’s tasks is to review the TBT Agreement’s implementation.
It does this every three years. In the
in November 2000, the TBT Committee “reiterated the importance of any
such labelling requirements being consistent with the disciplines of the
Agreement, and in particular stressed that they should not become
disguised restrictions on trade.”
In October 2003, the TBT Committee held a
“Learning Event” on
labelling to provide members with a better understanding of the
preparation, adoption and application of labelling requirements. This
took account of both the implementation of the TBT Agreement, and the
impact of the requirements on market access. This event was based on
real case studies, with a particular focus on developing countries’
concerns. It took into account a range of labelling schemes in different
sectors and with varying objectives, including environmental labelling