TRADE AND ENVIRONMENT How the WTO relates to environmental agreements


Background back to top

At Doha, Members agreed to launch negotiations on the linkage between trade and environment. However, these negotiations are circumscribed to four issues:

  • the need to clarify the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs)
  • the exchange of information between the WTO and MEA secretariats
  • the criteria for granting observer status to other international organizations
  • the liberalization of trade in environmental goods and services.

The deadline for these negotiations is 1 January 2005 and they are taking place in “special sessions” of the Trade and Environment Committee.


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Identifying specific trade obligations

How do WTO rules apply to WTO members that have also signed environmental agreements outside the WTO? Suppose a WTO member government puts into place a trade measure to protect its environment that is provided for in an environmental agreement that it has signed. Should it fear being challenged in the WTO dispute settlement procedure? This is an issue these negotiations are exploring.

There are approximately 200 multilateral environmental agreements (MEAs) in place today. Only about 20 of these contain trade provisions. For example, the Montreal Protocol for the protection of the ozone layer applies restrictions on the production, consumption and export of aerosols containing chlorofluorocarbons (CFCs). The Basel Convention, which controls trade or transportation of hazardous waste across international borders, and the Convention on International Trade in Endangered Species (CITES) are other multilateral environmental agreements containing trade provisions.

The new negotiations aim to clarify the relationship between trade measures taken under the environmental agreements and WTO rules. However, in practice so far no action taken under an environmental agreement has been challenged in the GATT-WTO system.

Focus on actual obligations, or broader principles? Members started the negotiations by attempting to define what a “specific trade obligation” is, and to develop a common understanding on this.

Some members advocate identifying individual “specific trade obligations” that the WTO should examine. Others prefer a more general approach that would look at the principles governing the relationship between the WTO and the environmental agreements, and how the environmental agreements’ trade measures might be accommodated in the WTO. For example, some advocate the principle that there should be no “hierarchical” relationship between the two legal regimes—neither the WTO, nor the environmental agreements should be dominant.

The Trade and Environment Committee’s special sessions are following both approaches at the same time.


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Information exchange

Ministers agreed in Doha to negotiate procedures for the secretariats of multilateral environmental agreements and the WTO to exchange information better. Currently, the Trade and Environment Committee holds information sessions once or twice a year with the different secretariats of the environmental agreements to discuss the trade-related provisions in these agreements and their dispute settlement mechanisms. The new information exchange procedures are likely to institutionalize the exchanges.

Among the possible ways of achieving this are:

  • turning the information sessions with environment agreements’ secretariats into more formal arrangements, and organizing them more regularly
  • holding information sessions on specific themes by grouping the environmental agreements that share common interests
  • having other WTO committees organize meetings with the environmental agreements’ secretariats, either jointly with the Trade and Environment Committee or separately
  • creating avenues for government representatives from the trade and environment sides to exchange information with each other.


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Observer status

Overall, proposals to grant observer status in the WTO to other international governmental organizations are currently blocked for political reasons. In the Trade and Environment Committee’s special sessions, eight requests are pending, including four from multilateral environmental agreements. The negotiations aim at developing criteria for allowing these organizations to be observers in the WTO.

Some members would prefer to wait for the outcome of deliberations in the General Council (for regular WTO committees) and Trade Negotiations Committee (for negotiating bodies). Others believe that work in the Trade and Environment Committee’s own negotiating sessions should be used to make progress in the discussions, particularly since the ministers issued their instruction to the committee.

In the mean time, six environmental agreements’ secretariats and the United Nations Environmental Programme (UNEP) have received ad hoc invitations to participate in the committee’s special session — each invitation is for one meeting, and each invitation has to be approved by the committee before it is issued.


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Liberalizing trade in environmental goods and services

Ministers also agreed to negotiate freer trade on environmental goods and services through the reduction or elimination of tariffs and non-tariff barriers. (Examples of environmental goods and services are catalytic converters, air filters or consultancy services on wastewater management.)

At the Trade and Environment Committee’s first special session, members agreed that the bargaining should take place in the Services Council’s negotiating “special session” and in the Negotiating Group on Market Access for Non-Agricultural Products.

However, the Trade and Environment Committee’s special sessions would oversee those negotiations. And they would try to clarify the concept of what are environmental goods. In the discussion, some members have referred to the lists of environmental goods used by Organization for Economic Cooperation and Development (OECD) and the Asia Pacific Economic Cooperation forum (APEC). Other members say that these lists have no particular standing in the WTO, and that the WTO should do its own work on this issue.

 Other material:
> Negotiations
> Doha declaration