175pxls.gif (835 bytes)
Click here to return to ‘trade topics’

An introduction to trade and environment in the WTO

Through its goals, rules, institutions and forward-looking agenda, the WTO provides an important means of advancing international environmental goals.

Click for Doha Development Agenda gatewaySee also:
Negotiations, implementation and development: the Doha agenda
Hong Kong Ministerial Declaration

175pxls.gif (835 bytes)
Note: This webpage is prepared by the Secretariat under its own responsibility and is intended only to provide a general explanation of the subject matter it addresses. It is in no way intended to provide legal guidance with respect to, or an authoritative legal interpretation of, the provisions of any WTO agreement. Moreover, nothing in this note affects, nor is intended to affect, WTO members' rights and obligations in any way.

Sustainable development and environmental protection are goals of the WTO...

Allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development and seeking to protect and preserve the environment are fundamental to the WTO. These goals, enshrined in the Preamble of the Marrakesh Agreement, go hand in hand with the WTO’s objective to reduce trade barriers and eliminate discriminatory treatment in international trade relations. For WTO members, the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, on the one hand, and acting for the protection of the environment and the promotion of sustainable development, on the other, can and must be mutually supportive.

Trade liberalization and stable and predictable trade conditions support the environment...

An important element of the WTO’s contribution to sustainable development and protection of the environment comes in the form of furthering trade opening in goods and services to promote economic development, and by providing stable and predictable conditions that enhance the possibility of innovation. This promotes the efficient allocation of resources, economic growth and increased income levels that in turn provide additional possibilities for protecting the environment. The importance of trade’s contribution to efforts on sustainable development and the environment has been recognized in such forums as the 1992 Rio Summit, 2002 Johannesburg Summit and 2005 UN World Summit.

Under WTO rules, members can adopt trade-related measures aimed at protecting the environment...

The commitment of WTO members to sustainable development and the environment can also be seen in WTO rules. In general terms the rules, with their fundamental principles of non-discrimination, transparency and predictability, help set the framework for members to design and implement measures to address environmental concerns. Moreover, WTO rules, including specialized agreements such as the Agreement on Technical Barriers to Trade (which deals with product regulations), and the Agreement on Sanitary and Phytosanitary Measures (which concerns food safety and animal and plant health), provide scope for environmental objectives to be followed and for necessary trade-related measures to be adopted. WTO rules set up the appropriate balance between the right of members to take regulatory measures, including trade restrictions, to achieve legitimate policy objectives (e.g., protection of human, animal or plant life or health, and natural resources) and the rights of other members under basic trade disciplines. For example, GATT Article XX on General Exceptions lays out a number of specific instances in which members may be exempted from GATT rules. The provision seeks, among other things, to ensure that environmental measures are not applied arbitrarily and are not used as disguised protectionism.

A number of WTO cases have covered environmental measures...

Since the entry into force of the WTO in 1995, the WTO Dispute Settlement Body has had to deal with a number of disputes concerning environment-related trade measures. Such measures have sought to achieve a variety of policy objectives — from conservation of sea turtles from incidental capture in commercial fishing to the protection of human health from risks posed by air pollution. WTO jurisprudence has affirmed that WTO rules do not take precedence over environmental concerns.

The WTO's dispute settlement allowed a member in 2001 to maintain its ban on the importation of asbestos so it could protect its citizens and construction workers. In the US — Shrimp dispute, the WTO pushed members towards a strengthening of their environmental collaboration; it required that a cooperative environmental solution be sought for the protection of sea turtles between the parties to the conflict.

WTO institutions advance dialogue and understanding of trade and environment linkages...

The WTO also supports sustainable development and the environment through its specialized committees and bodies. One unique institutional venue is the Committee on Trade and Environment (CTE). As a forum for dialogue on trade and the environment, the Committee is an incubator for ideas on how to move the discussion forward. Already, this is bearing fruit. Some issues first raised in the CTE have become fully-fledged negotiations — for instance, on fisheries subsidies and on the relationship between the WTO and multilateral environmental agreements (MEAs). Other WTO bodies are also important. For example, the committee administering the Technical Barriers to Trade Agreement (which deals with regulations, standards, testing and certification procedures) is where governments share information on actions they are taking and discuss how some environmental regulations may affect trade.

The Doha Development Agenda and the environment...

The current Doha Round of negotiations gives members a chance to achieve an even more efficient allocation of resources on a global scale through the continued reduction of obstacles to trade. The Round is also an opportunity to pursue win-win-win results for trade, development and the environment. For example, the Doha Round is the first time environmental issues have featured explicitly in the context of a multilateral trade negotiation and the overarching objective is to enhance the mutual supportiveness of trade and environment. Members are working to liberalize trade in goods and services that can benefit the environment. They are also discussing ways to maintain a harmonious co-existence between WTO rules and the specific trade obligations in various agreements that have been negotiated multilaterally to protect the environment. Other parts of the Doha negotiations are also relevant to the environment, for example aspects of the agriculture negotiations and also disciplines on fisheries subsidies. The Doha Development Agenda also has a section specifying the priority items in the CTE’s regular work.

International efforts on the environment...

Since environmental problems often transcend national borders, the response must involve concerted action at the international level. WTO members have long recognized the need for coherence amongst international institutions in addressing global environmental challenges. The current negotiations on the WTO-MEA relationship provide a unique opportunity for creating positive synergies between the trade and environment agendas at the international level. In addition, there is regular and routine contact between the WTO Secretariat and secretariats of multilateral environmental agreements.

175pxls.gif (835 bytes)