WTO rules and environmental policies: Other relevant WTO texts
Trade and environment interface is also addressed in a number of different WTO Agreements and Decisions.
- The Agreement on Technical Barriers to Trade
- The Agreement on Sanitary and Phytosanitary
- The Agreement on Trade-Related Aspects of
Intellectual Property Rights
- The Agreement on Subsidies and Countervailing
- The Agreement on Agriculture
- Ministerial Decision on Trade and Environment
- A Decision on Trade in Services and the Environment
TIP: if you cannot print the right-hand column properly, set the printer to landscape
The General Agreement on Trade in Services
Negotiated during the 1986–94 Uruguay Round, the General Agreement on Trade in Services (GATS) contains a “general exceptions” clause, Article XIV, similar to GATT Article XX.
The GATS article starts with an introduction (“chapeau”) that is identical to that of GATT Article XX.
Addressing environmental concerns, paragraph (b) allows WTO members to adopt policy measures that would normally be inconsistent with GATS if this is “necessary to protect human, animal or plant life or health” (identical to GATT Article XX(b)).
As under GATT, this must not result in arbitrary or unjustifiable discrimination and must not constitute protectionism in disguise.
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The Agreement on Technical Barriers to Trade (TBT)
The WTO Agreement on Technical Barriers to Trade seeks to ensure that product specifications, whether mandatory or voluntary (known as technical regulations and standards), as well as procedures to assess compliance with those specifications (known as conformity assessment procedures), do not create unnecessary obstacles to trade. In its preamble, the Agreement recognizes countries’ rights to adopt such measures to the extent they consider appropriate — for example, to protect human, animal or plant life or health, or the environment.
Moreover, members are allowed to take measures to ensure that their standards of protection are met. (This is known as adopting “conformity assessment procedures”.)
Among the agreement’s important features are:
non-discrimination in the preparation, adoption and application of technical regulations, standards, and conformity assessment procedures;
avoiding unnecessary obstacles to trade;
harmonizing specifications and procedures with international standards as far as possible;
the transparency of these measures, through governments notifying them to the WTO Secretariat and establishing national enquiry points.
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The Agreement on Sanitary and Phytosanitary Measures (SPS)
The WTO Agreement on Sanitary and Phytosanitary Measures deals with food safety, and human, animal and plant health and safety regulations.
It recognizes members’ rights to adopt SPS measures but stipulates that they must be based on a risk assessment, should not create unnecessary obstacles to trade (should be applied only to the extent necessary to protect human, animal or plant life or health), and should not arbitrarily or unjustifiably discriminate between members where similar conditions prevail. The Agreement encourages members to adapt their SPS measures to the areas (regions, countries or parts of countries) that supply their imports.
The SPS Agreement complements the Technical Barriers to Trade Agreement. It allows members to adopt SPS measures for environmental purposes, but subject to such requirements as risk assessment, non-discrimination and transparency.
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The Agreement on Trade-Related Aspects of Intellectual property (TRIPS)
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) refers explicitly to the environment in Section 5, which deals with patents.
It says (in paragraphs 2 and 3 of Article 27 — Arts 27.2 and 27.3 for short — of Section 5) that members can make certain inventions ineligible for patenting:
To protect human, animal or plant life or health, to avoid serious harm to the environment. A member can exclude an invention from patentability if it believes the invention has to be prevented (within its territory) for these and certain other objectives.
Plants and animals. Micro-organisms have to be eligible for patenting. So do non-biological and microbiological processes for the production of plants or animals. Invented plant varieties have to be also eligible for protection either by patenting, or by an effective system specially created for the purpose (“sui generis”), or a combination of the two. Otherwise, plants and animals do not have to be eligible for patenting.
These provisions are designed to address the environmental concerns related to intellectual property protection.
The TRIPS Agreement allows members to refuse to patent inventions that may endanger the environment (provided their commercial exploitation is prohibited as a necessary condition for the protection of the environment). For ethical or other reasons, they can also exclude plants or animals from patentability, subject to the conditions described above.
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The Agreement on Subsidies and Countervailing Measures
The Agreement on Subsidies, which applies to
non-agricultural products, is designed to regulate the use of subsidies.
Under the Agreement, certain subsidies referred to as “non-actionable”
are generally allowed. Amongst the non-actionable subsidies that had
been provided for under Article 8 were subsidies used to promote the
adaptation of existing facilities to new environmental requirements
(Article 8.2(c)). However, this provision expired in its entirety at the
end of 1999. It was intended to allow members to capture “positive
environmental externalities” when they arose.
The Agreement on Agriculture
Adopted during the 1986–94 Uruguay Round, the WTO Agriculture Agreement seeks to reform trade in agricultural products, and provide a basis for market-oriented policies.
In its preamble, the agreement reiterates members’ commitment to reform agriculture in a manner that protects the environment.
Under the agreement, domestic support measures with minimal impact on trade (known as “green box” policies) are allowed and are excluded from reduction commitments — they are listed in Annex 2 of the Agreement. Among them are expenditures under environmental programmes, provided that they meet certain conditions. Again, the exemption enables governments to capture “positive environmental externalities”..
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Two ministerial decisions addressing environmental issues were adopted at the end of the Uruguay Round.
A ministerial Decision on Trade and Environment created the Committee on Trade and Environment (CTE) with the aim of making international trade and environmental policies support each other. The decision contains the work programme of the CTE.
Ministers also adopted a Decision on Trade in Services and the Environment. It instructs the CTE to examine and report on the relationship between services trade and the environment, including the issue of sustainable development, in order to determine if any modifications of GATS Article XIV are required. The CTE has taken up this issue as part of its work programme.