The WTO and its Agenda for Sustainable Development — Yale university

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Ladies and gentlemen,

I am very happy to join Ernesto Zedillo in discussing the WTO's sustainable development agenda. I would like to begin by commending Ernesto on the fine job he is doing at the Yale Globalization Centre. I happen to be a great fan of the Center's online journal on globalization, and of its thought-provoking analyses of economic and trade issues.

Ladies and gentlemen, it would be impossible for me to speak at Yale University on the WTO’s sustainable development agenda, and more precisely on the relationship between trade and the environment, without paying tribute to Yale University Professor Daniel Esty for his 1994 book “Greening the GATT.” His book was at the origins of the trade and environment debate. When it first came out, Senator Baucus described the book as one that would help break down the walls that divide the advocates of greater environmental protection from those calling for more open markets.

Carla Hills, former United States Trade Representative, said that the book would be certain to elicit “strong reactions” from both sides, but that those reactions would further the debate. And how right she was. Daniel Esty had, no doubt, brought an intellectual and academic rigour to a topic that was much in need of both.

Of course, back at the time when the book was being written, the multilateral trading system was caught up in an enormous controversy, especially in this country, due to its perceived supra-national force. The GATT had just taken its Tuna- Dolphin decision, and much discussion was taking place in the United States on the relationship between trade and the environment in the run-up to NAFTA. I still recall how anti-GATT protesters had papered Washington with posters of a giant monster, a gorilla, better known as “GATTZILLA,” walking all over the White House and pouring DDT.

In browsing through Daniel Esty's book on my way from the WTO to Yale, I could not help but think of the long way, that not only I was travelling, but that the trade and environment discussion had itself travelled since those days.

In fact, there is no doubt that when the trade and environment debate started in earnest, first in GATT and subsequently in WTO, it took the multilateral trading system by storm. Few realized at the time that what was under discussion were peoples' “values,” and the extent to which some of those values could be allowed to cross borders along with traded goods.

My staff recounts to me a humorous story that goes back to 1996, when all of the newly established WTO committees were rushing to finalize their reports to the organization's first Ministerial Conference in Singapore. Whereas all committees had managed to submit reports of 2-3 pages to Ministers, the Committee on Trade and Environment, was forced to pull an all-nighter due to the extent of the disagreements, and produced all of a 100 page document!

Now, here's the fun part. During that all-nighter, as men started to undo their ties, and women to undo their hair from sheer exhaustion, this is what a southern delegate, clearly fed up with the debate, had to say. Quote, “I was recently in the United States strolling in a supermarket, when I came across a can of tuna labelled as 'Dolphin-Safe.' I thought to myself,” he said, “what about the godammed tuna, is it not lying dead in the can! Why doesn't anyone care!” Needless to say the Committee realized that this was indeed a value-ridden debate.

Little was the Committee to know, of course, that right at the time when this dialogue was taking place, similar discussions were underway in environmental fora. Countries were engaged in a very serious debate (and indeed continue to be), in the Convention on International Trade in Endangered Species on how the world should determine priorities for the protection of different species. How it should choose between them!

At the time of the Tuna-Dolphin decision, some Americans perceived their beloved TV Dolphin, “Flipper”, to be in danger. But, to some others both in the United States and elsewhere, whereas dolphins were indeed important, there were other species that were also in need of protection. Ones equally vital to our ecosystem. Where would the WTO draw the line between the values that could cross national borders, became the question. And, more importantly perhaps, should the drawing of such a line at all be the role of the WTO?

Whereas to some, it was vital that the international system be made to stop morally, or environmentally-repugnant trade; to others, accommodating such values through the trading system spelt doomsday. Professor Jagdish Bhagwati wrote: “If a nation's trading rights can be suspended simply because it refuses to accept another nation's idiosyncratic values, everyone could insist on 'morality-driven' trade restrictions, and the whole international trading system would head down a slippery slope.”

Now, as this debate continued to rage, the WTO quietly went about its day-to-day business. It continued to administer its trade agreements, and to settle the commercial disputes lodged by its members. Some of the WTO's staunchest environmental critics found one particular fact very surprising. Whereas they had expected that myriads of environmental laws would be challenged in the WTO for their trade-restrictiveness, they found that until today only a handful of environmental cases ever came — and this over the WTO's ten year lifetime!

They were equally surprised that their prediction that trade rules would systematically trump environmental rules, did not materialize. Rather, the WTO showed itself capable of delivering not only trade justice, but some measure of environmental justice too. The WTO's “necessity test,” that was so feared by environmentalists, allowed France in 2001 to maintain its ban on the importation of Asbestos, so it could protect its citizens and construction workers. Moreover, in the Shrimp-Turtle dispute, the WTO pushed its members towards a strengthening of their environmental collaboration. It insisted that a cooperative environmental solution be found for the protection of sea turtles between the parties to the conflict. And, a Memorandum of Understanding on the Conservation and Management of Marine Turtles and their Habitats in the Indian Ocean soon came about! The image of GATTZILLA gradually began to fade.

Back in 1994, Daniel Esty saw a need for the reform of the multilateral trading system, and a strengthening of the global environmental governance architecture. As part of the environmental face-lift of the WTO, here are some of the elements of the reform menu he had proposed: that environmental impact assessments be undertaken in tandem with trade opening so effective flanking measures may be designed; that greater public participation be allowed in the WTO so the public's environmental concerns may be brought to bear; that environmental experts be consulted in WTO dispute settlement for more even-handed rulings; and that the WTO respect international environmental treaties. He also aspired to one day seeing what he referred to as a “Green Round of trade negotiations.”

Today, in 2007, as I stand before you, I am pleased to say that the WTO is well on its way to achieving this menu; and this, without a massive overhaul. The WTO has consulted environmental experts in nearly all of the environmental disputes that were brought to it for settlement since its creation. Its doors have been opened to the public in a variety of different ways. First is in the context of dispute settlement. When it was established, the WTO court quickly opened its doors to what are called “Friends of the Court” briefs (or amicus curie briefs) from concerned citizens, or basically “anybody who could help the court,” and since then such briefs have not stopped flowing. Similarly, in a growing number of dispute settlement cases WTO members are agreeing to hold “public hearings,” and this is gradually enhancing transparency.

Second is in the context of the WTO's day-to-day operation. The WTO Public Fora have become an annual event to which civil society looks forward. These are specific times of the year when the WTO invites civil society from across the globe to interact with its members. Just this month, our Public Forum drew a record 1750 participants from virtually all walks of life! No less than four sessions were devoted to climate change, with many more touching on sustainable development.

In the context of dispute settlement, the WTO has also proved itself capable of respecting other international treaties, including environmental ones. In fact, in a landmark ruling, the WTO's Appellate Body confirmed that the WTO “does not operate in clinical isolation.”

But, of course, much work remains to be done. Some of this work though, I would argue, can only be accomplished when the WTO completes its first Green Round. But is there a Green Round, you may well ask. Yes, is the answer. The Doha Round of trade negotiations is the first ever round of negotiations to include an “environmental or green chapter;” the first ever round of negotiations to encourage members to conduct environmental reviews at the national level. And, as part of that chapter, you will find the issue that was indeed on Daniel Esty's mind, that of respecting international environmental treaties. In the Doha Round, WTO members are mandated to explore the relationship between WTO rules and such treaties, with a view to ensuring their mutual supportiveness. The negotiation can but reinforce the openness that the Appellate Body has already demonstrated to taking other treaties into account.

But the green chapter is not confined to this issue. Part of the aim of this negotiation is also to help open markets to clean technology — whether in terms of the “goods” or “services” that it entails. That is a very legitimate aim, particularly in light of the enormous environmental problems that we face. Several of the goods that are currently on the table, for instance, could help combat climate change; such as solar panels, air filters and catalytic converters.

These technologies must now be allowed to cross borders, they must be made more accessible to the poor. We should not be penalizing environmental goods through tariffs, quite to the contrary we should be promoting them. And the same goes for environmental services.

Also featuring in the Doha's Round green chapter, is the reduction of fisheries subsidies that have contributed to the perilous state of much of the world's fish stock. An annual $14-20 billion of fisheries subsidies worldwide has been one of the causes of fish stock depletion, encouraging “too many fishermen to chase after too few fish” as the saying now goes. Worldwide, the global fishing fleet pulls 80 million tons of fish or more from the oceans. This is four times the 1950 total! The negotiations are aimed at helping reverse this dangerous trend.

In an astonishing book entitled “Hooked, Pirates, Poaching and the Perfect Fish,” Bruce Knecht recounts how a relatively ugly creature, known as the Patagonian toothfish, found its way from being “too bland for eating” to becoming the hottest restaurant craze: the Chilean Sea Bass. The Patogonian toothfish, as you know of course, is now endangered, and the story recounted by Knecht of its dangerous overfishing is reflective of the challenges that regional fisheries agreements face, and of the environmentally-harmful fisheries subsidies that must now go. The book is a thumping good read!

There is no doubt in my mind that for the WTO to accomplish bigger things on the environment, it must first complete the first ever environmental negotiating agenda that has been placed before it. More generally, it must also accomplish the entire Doha Round! I was astonished earlier this year when I flew to Nairobi to address the Governing Council of the United Nations Environment Program by a comment made to me by Achim Steiner, the Executive Director.

He said that for the international environmental agenda to advance, the world first needed to complete the Doha Round. Initially, I found myself puzzled by his comment. Later, I understood. If the world had trouble advancing the dominant paradigm of “economic growth,” would there be any hope of advancing any other paradigm? And indeed he was right. If we cannot make a success of international economic cooperation, than there is little hope for other aspects of the international agenda. And personally, I would take that even further. If the world cannot make a success of the first WTO Green Round, would any further “greening” be likely to follow?

Back to Daniel Esty, I would say that I could not agree with him more that there is a need to strengthen global environmental institutions. The WTO can only help address environmental problems through trade, but clearly the international environmental agenda is much broader. Having said that, I am glad that we no longer find ourselves before a choice of Greening the GATTs, or GATTing the greens; the choice that Esty posed. The GATTs have already been relatively greened, and if we accomplish the Doha Round, we would green them some more! Thank you for your attention.

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