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Round Table Contents

The World Trade Organization

Richard Eglin

Thinking ahead to how G7 leaders might wish to address the subject of trade, environment and sustainable development at the Halifax Summit, there are three points related to the work of the WTO that come to mind. The first is the time frame involved. The second is the socalled NorthSouth issue. The third is the area of institutional arrangements.

WTO Trade and Environment Timetable

Two dates deserve to be kept in mind for WTO work on trade and environment. One is December 1996, when the first ministerial meeting of the WTO will take place in Singapore. The second is 1999-2000, when WTO members will start revisiting the agreements reached in the Uruguay Round to see how it may be possible to extend them.

In December 1996, the WTO Trade and Environment Committee will report to ministers on its progress and put forward recommendations on its further work program. There is not a great deal of time to prepare for the Singapore meeting on a subject as broad as trade and environment. Nevertheless, the WTO Committee has defined its schedule such that all elements of its current work program will have been discussed at least once by September 1995. The Committee will then need to decide what issues might be ripe for results by the end of 1996, and where it might be more appropriate to think in terms of a progress report with an eye to longerterm results.

It is too early to say what issues might be candidates for results in 1996. One that is known to be high on the list of priorities of certain of the G7 countries is the use of trade measures taken pursuant to multilateral environmental agreements; the G7 wishes to see greater flexibility introduced into WTO disciplines in this area. However, this point of view is not necessarily shared by all G7 countries, much less by many other WTO members, and it will not be easy to find consensus. Differences in points of view, including among the G7 countries, exist for the time being with respect to other elements of the work program as well. Political guidance will be needed later this year on how those differences might be resolved.

Looking beyond the Singapore meeting, there are opportunities to build on the complementarities that exist between trade and environmental policy making. A considerable body of empirical evidence is emerging which suggests that further liberalization of trade encompassing improvement in market access and reductions in domestic support and export subsidisation, can bring benefits from the point of view not only of the trading system but also of the environment.

These opportunities deserve to be clarified and acted upon sooner rather than later. It would appear that environmental communities in certain of the G7 countries continue to regard the relationship of trade and the WTO to the environment as essentially antagonistic rather than complementary. That was evident from the opposition they voiced to ratification of the Uruguay Round results in 1994. To avoid similar opposition in four or five years time to the extension of the Uruguay Round results, the environmental community needs to be convinced that it is in the clear interest of better environmental protection worldwide and the promotion of sustainable development for the multilateral trading system to be reinforced and for the Uruguay Round results to be built upon further.

A large part of the responsibility for ensuring that the multilateral trading system exists comfortably side by side with multilateral and national environmental policies lies with the WTO work program on trade and environment. Attention to the positive links between trade liberalization, better environmental protection and sustainable development therefore deserves to receive a high profile in the WTO Committee. The success of efforts the WTO brings to bear in this area, however, will depend in part on progress made elsewhere in the next few years; in particular, in moving ahead with the multilateral environmental agenda and on the willingness of the G7 and other industrialized countries' governments to meet the political commitments they made at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro to support the promotion of sustainable development in developing countries not only through trade liberalization but also by ensuring that the necessary transfers of financial and technological resources are forthcoming.

No NorthSouth Debate

It would be a mistake for the WTO to treat its work program on trade and environment as a NorthSouth issue. There is no evidence that any balance of interests could be found along those lines, and there is a great danger in polarizing the debate.

At the Naples Summit in 1994, Canada was among those countries which suggested that discussion on trade and environment should be concentrated in the Organization for Economic Cooperation and Development (OECD). The OECD has an important role to play in this area, but it should not be the sole focus of G7 efforts, and the temptation to try to negotiate agreements or understanding among OECD countries before bringing them to the WTO for "multilateralization" should be resisted.

NonOECD countries have far too great a stake in the outcome of discussions in this area to be left out until the last minute, and the main challenges involved in ensuring that trade and environmental policies are compatible and mutually reinforcing cannot be met without their full cooperation.

Institutional Arrangements

Several aspects of current institutional arrangements have a bearing on the WTO work program on trade and environment.

One is the need for close cooperation between ministries with an interest in the work program at the national level. This is a sine qua non for making progress at the multilateral level. It is worth recalling that the WTO is an intergovernmental organization, not solely an intertrade ministry organization. During the Uruguay Round negotiations, close cooperation between different ministries at the national level was evident in such areas as agriculture, intellectual property, and financial services. Similar arrangements need to be in place to ensure the success of the WTO trade and environment work program.

With regard to suggestions that have been made to establish some new intergovernmental organizations or other body with the responsibility to oversee work on trade, environment and sustainable development, the temptation to place form in front of substance needs to be avoided. It is governments, and not the secretariats of intergovernmental organizations, who ultimately bear responsibility for the results of their efforts in different international forums. Governments are right to insist on the need for close cooperation between secretariats, such as exists already among the WTO, United Nations Conference on Trade and Development (UNCTAD) and the United Nations Environment Programme (UNEP), but those secretariats cannot operate outside the mandates of their respective organizations. To the extent there is any real lack of coordination in the efforts under way in different organizations to address the issues of trade, environment and sustainable development, it would seem more efficient and certainly more costeffective to review and improve on the mandates of existing organizations rather than thinking in terms of establishing new bureaucratic structures.

Finally, WTO members are currently considering what appropriate arrangements might be made for consultation and cooperation with NGOs concerned with matters related to the WTO. While no decisions have yet been taken, there seems to be little appetite for involving NGOs directly in the work of the WTO. Other arrangements may therefore have to be found, perhaps relying on the WTO Secretariat to operate as one means of liaison with NGOs. In all likelihood, however, the most productive and valuable channels of communications between NGOs and WTO members will be those that operate at the national level.

Richard Eglin is the Director of Trade and Environment at the World Trade Organization in Geneva.

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