4:11 AM Jan 12, 1994


Organisation (WTO) -- the proposed successor to the General Agreement on Tariffs and Trade (GATT) -- must include environmental and social clauses, U.S. President, Bill Clinton, said here Tuesday.

"The successor of the Uruguay Round must take account of the importance of environmental policies, anti-trust and competition policies and labour standards on trade," Clinton told reporters after meeting with European Commission President, Jacques Delors.

He added: "We must ensure that economic policies provide protection for the environment and promote the well-being of workers."

The North Atlantic Free Trade Agreement (NAFTA) between the United States, Mexico and Canada -- the free trade zone sewn up at the end 1993 -- was the first of its kind to include environmental and social clauses, Clinton said.

EC officials here said that Clinton's call for EC backing of both environmental and social policies was to be expected.

They are likely to head a political statement on the way ahead for the new WTO which is expected to be made during the signing ceremony of GATT's Uruguay Round on April 15.

But there was caution amongst EC officials on the inclusion of both the environment and social standards in post-GATT world trade rules.

"We feel that a lot of work still has to be done in these areas before any decisions are made," said Peter Guildford, EC spokesperson for Trade Commissioner, Leon Brittan.

Numerous Non-Governmental Organisations (NGOs) throughout the European Community's 12 member states, and Members of the European Parliament (MEPs), have already examined both the advantages and pitfalls of gradually bringing the sectors under the umbrella of international trade rules.

They warn that new rules could benefit the North more -- and could mean further losses for the South's trade balance.

Clinton himself admitted at the news conference, that stricter, internationally set, standards linking environment to trade would create more jobs in the North because the North has the premium when it comes to the development of new technology to protect the environment.

"I am glad about what Clinton said, but there must be caution. It can be a way of the West promoting its own interests," warned British Socialist European Parliamentarian, Michael Hindley, an expert in international trade.

Whilst future environment and social clauses might impose sanctions -- like import bans on goods deriving from production methods which cause environmental damage -- and set standards in the workplace to improve conditions, they could also backfire as protectionist.

Hindley said: "Standards might be set which are impossible for developing countries to meet. Unless they are complimented with a readiness on the part of the West to help third countries reach these standards, I am suspicious."

The British MEP says opposition to social clauses has already surfaced from India. It wants to hold on to its price advantage -- resulting from its low wage economy -- which enables its textiles to be sold in the North where there is fierce competition with Northern products.

Hindley, however, says that, on the other hand, this argument should not be used by the Indian government for keeping wages low.

He suggests that help be given by the West -- including schemes to exchange managers in factories with a view to improving standards of work and provision of direct aid to help them purchase technology.

Myriam Vanderstichele, trade programme coordinator of the International Coalition for Development Action (ICDA), a Brussels-based NGO, says that more thought must be put into the consequences of including the new sectors in future WTO rules.

"The environmental and social clauses could mean more obligations for the South and more protectionism for the North," she says.

She points to the existence of double standards already. She says that certain European countries are now advocating, or already implementing, import bans on tropical timber while the question of banning imports from the North's temperate forests -- under threat from acid rain caused by pollution -- never crops up.

Vanderstichele adds that links between environment and trade should place obligations on the North to change consumption habits. She also drew attention to the huge amounts spent on needless packaging which eat up the world's natural resources.