ENVIRONMENT SUB-COMMITTEE MULLS OVER APPROACHES

5:19 AM Nov 1, 1994

ENVIRONMENT SUB-COMMITTEE MULLS OVER APPROACHES
Geneva 31 Oct (Chakravarthi Raghavan) -- The Trade and Environment Subcommittee of the WTO Preparatory Committee at its meeting last week appears to have had some wide-ranging discussions on approaches to deal with possible conflicts between the General Agreement and any multilateral environmental agreement with trade provisions.

The Ukawa Committee which preceded the present WTO subcommittee chaired by Brazil's Amb. Felipe Lampreia had identified several approaches put forward in the discussions within that committee.

The discussions in the WTO Prepcom's sub-committee has been proceeding from this earlier work, but with greater focus on the viewpoints advocated by various participants.

Some of the issues before the Prepcom sub-committee relates to trade measures taken, or purportedly taken, in pursuance of multilateral environmental agreements.

In this context, the question has been raised whether those negotiating such treaties in the future could have a clearer indication of what would be permissible limits of trade measures under their environment treaty and what would not be.

Related to these is the question as to what would or would not constitute a multilateral environment agreement.

Several of the participants want general criteria to be laid down on the kinds of multilateral environment treaties -- global concerns, regional or territorial etc -- and the kinds or limits to acceptable trade measures.

Related to this is the question of defining a 'multilateral' treaty.

In strict international law, treaties among three or more parties could be viewed as multilateral. This would mean that three or more countries could band together, conclude a socalled multilateral environment treaty and use it as a cloak to take trade protectionist measures.

Hence the view that to gain some legitimacy in GATT law and practice, there should be criteria as to what would constitute a 'multilateral' agreement -- how many adherents, whether there should be a North-South balance or balance based on levels of development and regions should be satisfied before the 'multilateral' qualification can be attracted.

As to the specific GATT/WTO provisions, the suggestions range from blanket exemptions from GATT rules for 'environment' protection and environment agreements, a carefully defined collective interpretation of the relevant GATT provisions, and an approach based on a case-by-case consideration of an agreement after the event, with possibilities of waivers if needed.

There has been the EU viewpoint that there should be a collective 'interpretation' of the Art XX provisions, exception clause in the General Agreement, to enable use of trade restrictive measures on grounds of protection of environment.

Any such measures, so long as they apply equally to domestic and imported products, are not considered to be in conflict with the GATT, though the question could arise whether the objective of a country imposing restrictions could not have been achieved by a less trade restrictive measure.

Despite the considerable controversies aroused by non-governmental organizations of the North, and public debates about the environmental effects of the GATT and of its provisions interfering with environment protection, a factual review undertaken shows that of over 200 environment agreements studied, very few have any kind of trade measures.

Such agreements do not come into conflict with the GATT.

Even in the agreements that have references to 'trade measures', fewer still have provisions about specific trade measures.

This has impelled critics to say that no blanker exemptions or 'derogations' from the GATT rules could be provided for all environment treaties, and there has to be a case-by-case approach.

As one of the participants put it, "We cannot agree to a situation that a country or a few of them have only to join together and cloak themselves in 'green' garbs to get blanket authority to impose trade restrictions against others. The simple fact is that so far, no genuine environment treaty with a trade provision has been challenged in the GATT. The only ones challenged, and successfully, are those using the environment argument to impose discriminatory trade measures for protective reasons."

The United States which has been raising these issues is viewed by several Third World participants to be seeking through this route not only 'GATT cover' for trade measures under multilateral treaties, but also unilateral actions -- a route being pushed upon the US administration by some of its NGOs.

But few save the US support such an unilateral approach.

In last week's discussions, one or two participants like the US would also appear to have floated the idea as to whether the 'Appellate body' under the WTO's Dispute Settlement Understanding could be asked to give an advisory view about the state of the GATT law visavis any proposed provision in a treaty.

However, this did not get much support. Just as in the national arena, internationally too, there would be reluctance to rule on hypothetical situations.

Developing countries have generally been opposed to any blanket rulings or advice before-hand because of possibilities of misuse against them.

They have been much more in favour of parties to any multilateral agreement, if they find themselves in conflict with any GATT/WTO provisions seeking a waiver from their obligation.

But with the tightened provisions for waivers under the WTO -- both time-bound, and annual reviews -- industrialized countries who are the ones seeking 'protection' from their GATT obligations are opposed to the waiver approach.

Some of the interventions, like that of Argentina at last week's meeting suggested a combination of ex-ante and ex-poste facto approaches, but ensuring there is no blank cheque.

The GATT secretariat is expected now to prepare a paper on the issues relating to multilateral environment agreements, and the various views and ideas put forward.

But this is not expected to be ready in time for the Committee's next meeting, set for 28 November.

Another paper to be prepared would relate to the effectiveness and necessity of trade measures used for environmental purposes. This would analyze the various environment agreements that have trade provisions, and analyze how they have worked in terms of their effectiveness and other related matters.

Participants in the sub-committee said that at the moment they were in an exploratory stage, rather than a prescriptive stage, and this last might have to await the entry into force of the WTO.