8:53 AM Feb 18, 1994

TRADE DEBATE NEEDS SCIENCE, NOT SCARE

Geneva 17 Feb (Chakravarthi Raghavan) -- Trade and Environment protection were not an end in themselves, but a means to promote sustainable development including sustainable consumption, with mutually supportive policies and measures, guided by the 'precautionary principles' based on science, not scare, and by multilateral disciplines actions rather than unilateralism.

This, according to several participants, was the recurring theme and an important message out of an one-day, informal high-level meet on Environment and Trade, organized by UNEP and UNCTAD, to facilitate discussion of environment and trade issues in a North-South context, as UNEP Executive Director, Elizabeth Dowdeswell.

The informal meeting had no final conclusions or document, but helped to articulate concerns and apprehensions of developing countries that the trade/environment issue and measures as protectionist devices by the 'high cost economies' against exports from the Third World.

Among the issues raised and flagged were questions relating to the 'internalization' of production costs and need for adequate research and analysis, the use and misuse of 'eco-labelling' and 'green' packaging requirements in importing countries, and need for international and national policies and measures taking the Agenda 21 as a whole, and not in bits and pieces.

Ministers of Brazil, India and the UK, at a joint press conference midway through the meeting all suggested that there were no fundamental disagreements between North and South at the meeting, that everyone was agreed that there was no incompatibility between trade and environment protection, that the trade rules enabled countries to take actions to protect their environment and that there should be no unilateral measures against third countries except those sanctioned by multilateral trade system.

Brazilian Minister for Environment and the Amazon region, Rubens Ricupero, acknowledged that while he and his two colleagues at the press conference, Indian Environment Minister Kamal Nath and the UK Environment Minister John Gummer, had a similar view about trade measures and unilateralism, there were others who had a different view.

Though Ricupero did not name any one, Timothy Wirth, the Counsellor to the US Secretary of State has been quoted as having told the Congress on 3 February that the US would use trade measures to support its environment objectives, listing as preliminary four objectives as:

* trade measures required by an international environmental agreement to which the US is a party, and assuming non-discriminatory treatment of non-parties;

* when the environmental effect of an activity is partially within US jurisdiction and there was 'reasonable scientific basis' for US concerns;

* when a plant or animal species "wherever located" is endangered or threatened or where a particular practice will likely cause a species to become endangered or threatened, assuming there was a 'reasonable scientific basis' for the US concern; and

* where the effectiveness of a scientifically-based international environmental or conservation standard is being diminished, provided the standard was specific enough for the judgement that it was being 'diminished' could be made objectively.

In summing up what he termed as the views and concerns of developing countries and the responses of developed countries presented during the general discussion, Ricupero said that practically everyone agreed that there was no incompatibility between trade and environment protection, that much useful work was being done in the GATT by the Ukawa working group which had identified more than 150 international agreements on environment with trade provisions, as also the Rio Declaration and Agenda 21 of the 1992 UNCED 'Earth Summit'.

Many speakers, he said, had stressed the need to take the Agenda 21 as a whole including its provisions on financing and technology needs which should be viewed at the same time as environmental duties.

"All speakers," Ricupero said, "have expressed in very strong terms their preference for the multilateral approach to the building of international consensus and need to avoid unilateral measures that could be used as protectionist devices under the guise of environment protection."

Ricupero also stressed the view at the meeting that the UNEP could perform a useful role in provision of scientific data and expertise on environment principles and laws while UNCTAD could provide a helpful role in terms of guidance on measures like Eco-labelling, environmental costs etc, as also help build a consensus leading to international agreements and rules.

Indian Minister Kamal Nath said the developing countries had apprehension on the nexus between trade and environment and the latter being used as a protectionist instrument by the high-cost economies against exports from the developing world.

"In this area," he said, "science and intellectual input is at its infancy and caution was needed in making judgements the cross-cutting ramifications of proposed measures should be gone into in detail".

Trade and market access of developing countries had to be expanded to enable them to meet their basic needs as well as achieve environment protection. On the view that product prices should reflect the 'internationalisation' of environmental costs, Kamal Nath said that while environmental costs have an impact on global competitiveness, the costing should move from the 'polluter pays' to the 'buyer pays' principle. Environment problems and their solutions must have to be left to nations and their priorities. There could be no absolute or global standards, and hence no global solutions, he insisted.

Developing countries, he said, were concerned that 'free trade' would be stopped by the industrialized countries using environment reasons. By perception or reality, there appeared to be areas of conflict between demands of environment protection and free trade and ways had to be found to resolve these multilaterally to ensure that there was no disguised protection and unilateralism.

Gummer stressed the importance of proper scientific knowledge, noting that 'a little' knowledge or scare could damage both environment and trade. There was a stream of though in the environment movement that the only way to protect the environment was to stop growing, "a view that none of us share..we all believe in sustainable development and growth in a sustainable way..and no one should use these to impose on others their views unsupported by science".

Kamal Nath referred to the attempts to force developing countries to accept certain emission standards from their power plants, in ways that would involve construction of new plants. In the area of textiles, (process and production) standards which are perfectly compatible with local environment of developing countries are sought to be substituted by standards appropriate to the North.

Ricupero noted that there were international environment treaties like the Basle Convention on transboundary movement of hazardous wastes, the CITES on trade in endangered species or the Montreal protocol on Ozone depleting substances. All of these multilaterally negotiated treaties had trade provisions. But there were problems such as the tuna fishing disputes where the US took unilateral national measures and there was a GATT panel ruling which could never be adopted.

Again ecolabelling and packaging standards and measures could be set in a discriminatory way. The EC was considering guidelines on producing paper by recycling. The use of chemicals for bleaching the ink in used paper for recycling itself created some environmental damage or toxic wastes, but the recycling might be appropriate for Europe, but not for Brazil where they had paper and paper pulp was produced from tree plantations, as different from virgin forests. But restrictions on import of paper and paper products from Brazil produced from natural wood pulp (instead of recycled material) could not be justified on environmental grounds or of saving forests, he noted.

While Ricupero did not elaborate, industry in Europe producing paper out of waste-paper by recycling, and environment groups in support of it, have been pushing for import restrictions on non-recycled paper and products. A NGO statement on the GATT/WTO has called for work on PPMs and, in effect, for change in trade rules to sanction PPM-based import restrictions.

Asked about the US assertions of its right to take unilateral trade sanctions -- despite the Uruguay Round accords supposedly making them illegitimate -- Ricupero said the multilateral trading system was far from perfect. Unilateral measures were being resorted to by countries who were powerful enough to get away with them. GATT (or the future WTO), he said, did not have the expertise to deal with many of the issues, while there were other competent bodies like UNEP or UNCTAD, and GATT could be guided by them. He cited in this connection the GATT reliance on FAO, CODEX Alimentaire, WHO etc in regard to sanitary and phytosanitary measures.

Gummer noted in this regard that without such backing, actions based on 'scare' could be very damaging to other countries. He cited the damage caused to Chilean exports because of the scare in the US over toxic chemicals in imported Chilean grapes etc.

Asked whether the three ministers were trying to project a atmosphere of harmony and no North-South conflicts in this area, Ricupero said there were no fundamental disagreements. But the meeting was not aimed at negotiating solutions or agreements. He conceded that in this matter the US was still maintaining its right to impose trade sanctions unilaterally and "that problem has to be settled and appropriate mechanisms have to be evolved..but all of us here (presumably referring to his two colleagues from India and UK) are agreed that there should be no recourse to unilateral approach".

According to participants at the meeting, while the developing country environment ministers all gave support to the on-going work in the GATT, and the proposed WTO, it was clear that they did not envisage any expansion of the GATT's or WTO's "competence" or "jurisdiction" to deal with the wider trade-environment nexus for sustainable development. They underscored the need for the GATT and the WTO to be guided by scientific opinion and expertise about environment protection and sustainable development, with organizations like the UNEP, UNCTAD etc playing the lead roles in these areas.

UNEP and UNCTAD, as sponsoring organizations of the meeting, are now expected to produce a report or document on their own responsibility on various issues in this area.

Among the suggestions thrown up, and which received support, was that from the UNCTAD Secretary-General Kenneth Dadzie who called for the creation of a special certification scheme for "environmentally friendly" products produced by the developing countries.

The scheme jointly sponsored by UNEP and UNCTAD would have as its key elements:

* certification developed on the basis of "equivalent environmental standards" -- a term which Dadzie made clear would imply the "environmentally friendly" labels would be granted to products that improve the local environment of the producing country;

* that a system would develop principles and guidelines for mutual recognition of such certification schemes -- with principles of mutual recognition established with due consideration to the national environmental and economic priorities of the developing countries;

* the certification procedures would be based on internationally agreed guidelines that would outline the broad criteria for such certification, leaving the formulation of specific standards, testing and monitoring of the application procedures to local standardization bodies.