4:48 AM Mar 21, 1994


Geneva 21 Mar (TWN) -- In a position paper made public today, the Third World Network (TWN) has appealed to developing-country contracting parties to the GATT to oppose any attempts to bring new issues into the World Trade Organization (WTO) by the subterfuge of prefixing 'trade-related' label to them.

The Network has also called upon the public of the Third World to reject any WTO agreement that comes out of Marrakesh packaged with such side-agreements.

In the position paper, "The World Trade Organization, Trade and Environment", presented to the GATT Director-General and to GATT CPs, the TWN has said the inclusion in the WTO agenda of new areas like environment, labour standards and human rights, is being sought by the North, "not for advancing the noble cause of protecting the environment or people's rights but to use them to reduce the competitiveness of the South in their home markets and enlarge the market space for the TNCs in the world."

The Third World Network, a grouping of organizations and individuals involved in Third World and development issues, with an international secretariat based in Penang, prepared the paper with valuable inputs obtained during a consultation organized with the help of the South Centre in Geneva during the first week of March 1994.

In the paper, the TWN has welcomed the decision to develop a work programme on Trade and Environment in the WTO, but recommends that the programme should be tailored to the proper role and limitations of the GATT/WTO and focus on the objective of Sustainable Development.

Any work programme, in terms of the GATT/WTO legal and technical competence, calls for

* a complete review of the Trips agreement visavis environment and sustainable development, including questions about patenting of life forms and changes in the rules;

* a ban on Trade in Domestically prohibited products and goods;

* measures enabling export restrictions by developing countries on natural resource products to gain value added and thus protect environment and promote sustainable development.

Trade and Environment, it stresses, are not an end in themselves, just as the market and free trade theories are not.

They are only means to achieving "Sustainable Development" and call for adoption of international policies, measures and instruments to reduce the pressures and burdens on the planet's ecological capacity caused by the overconsumption of the North, and create ecological space and ensure availability of resources for the Sustainable Development of the South and alleviating poverty of its masses.

Any international consideration of Trade and Environment and Sustainable Development must build on, and not dilute from, the Earth Summit (Rio Declaration) and Chapter 2 of Agenda 21 which identified open markets, finance and transfer of technology as instruments.

Also, trade, money and finance and environment to promote sustainable development are interlinked questions of political economy, not mere technical issues and must be addressed in institutions like the United Nations, the UN Commission on Sustainable Development (UNCSD) and the UN Conference on Trade and Development (UNCTAD).

The issues must be studied and discussed in an integrated way in order to forge international policies and measures and create instruments with equitable and interlinked rights and obligations.

The TWN paper looks at the WTO, Trade and Environment in the context of the Uruguay Round negotiations and its outcome.

The negotiations, it notes, were "launched, conducted and concluded under the threat or use of the family of '301 laws' of the United States, and with the objective of expanding the 'economic and political space' for US TNCs and for transnationalizing the national systems of production, distribution and trade, and consumption".

The outcome, throughout the negotiations and in its final phases, was determined by the United States and the European Union, through bilateral negotiations outside the multilateral process, and sometimes in conjunction with Japan. All others acquiesced in or were forced to accept these decisions.

"It was not a democratic decision-making process."

While a full and proper assessment of the Round, and gains and losses to countries, is yet to be made and none is even possible until atleast 10-15 years, it is clear that the major share of potential benefits accrue to the industrialized countries, and at the cost of the developing world and its poor. Africa as a whole appears to be a major loser.

The overall result, the TWN says, are unsatisfactory for the South and lack any balance within and across sectors, places onerous new rules and disciplines on the countries of the South and more obstacles in the way of their development.

"In some ways the new rules negate the few gains of the South in the post-war post-colonial era and will perpetuate an unjust international division of labour dating back to the colonial era. It is likely to result in creation of a new laissez faire world trade and economic order."

In this perspective, the TWN calls on the Marrakesh Ministerial meeting to set up a WTO mechanism to undertake a proper and continuous assessment of the outcome at each country level, see how far the promises of Punta del Este have been kept and mandate corrective action and special measures to compensate losers.

The TWN points out that the assertions by US leaders and the administration about its sovereign right to unilateralism and decisions like revived Super 301 call into question US good faith in negotiations and implementation and the credibility of the claims by Southern governments of the WTO ushering in an effective rule-based system where the powerful will obey the rules of the system.

Sustainable development is not merely a question of generational equity between present and the future, but also between the past and present and, within the present, equity between privileged and under-privileged.

It requires development of the under-developed South and adjustment and transformation of the over-developed and maldeveloped North.

It also requires democratic governance, not only within societies, but internationally too.

"This," the paper says, "requires an end to control and attempts to manage the world economy by a few nations for their own benefit. It demands unreserved acceptance in good faith of international agreements and abiding by them in national laws, measures and actions.

"Everyone, governments and non-governmental organizations, working under the banner of environmental protection and sustainable development must unequivocally abandon and repudiate resort to or advocacy of unilateralism and extra-territorial exercise of power by the powerful over the weak."

The paper stresses that the GATT and WTO, because of their narrow trade focus, lack the jurisdiction, competence and capacity to be a coordinating agency to handle the interlinked issues of trade, money and finance. Nor can these be appropriated by the WTO in conjunction with the IMF and the Bank.

They should be studied and discussed in an integrated way in fora like the UN, the UNCSD and UNCTAD, in order to create equitable and interlinked rights and obligations.

At the end of such a process, the GATT/WTO could be given jurisdiction to handle matters where it has been determined that trade rules and/or measures are required.

But the process should not be turned on its head by first assuming or deciding that trade rules and measures are needed to promote environment and sustainable development and the WTO appointed to coordinate matters.

Decision making in the future WTO would be asymmetric, as it has been in practice in the GATT and Uruguay Round, and would be dominated by two or three major entities. Any rules developed in such a forum would serve to legitimise use of trade weapons which the powerful North countries can use against the weak South but not vice versa.

The paper also warns against the danger of extending the Uruguay Round practice of bringing in new concepts, activities and areas under management and control of the WTO by prefixing the 'trade-related' label and taking them away from decision-making at national levels.

Multilateral discussion and treatment of environment protection, labour rights, social standards and norms etc must be taken up in UN agencies and bodies such as the ILO, UN's Council for Sustainable Development, UNEP, UNCTAD and the Conference of Parties of environment treaties.

On the issue of global environment standards, the paper stresses that different countries have different natural resource endowments, levels of pollution, waste and absorptive capacities, systems of production, labour and capital intensities and levels of development. Within each country some choices and balances are involved on policies for environment and sustainable development. "Any uniform approach to solving environmental problems through an international trade agency is misplaced."

Where an environment question involves no spill-over beyond national borders, measures to protect and deal with these should be left to national and domestic decision-making, while encouraging governments to do so by incentives and making available necessary technology and financial resources.

Where transboundary effects are involved, these should be dealt with through regional and global multilateral agreements, using trade weapons as exceptions. Any trade restrictions should be based on a multilateral environment treaty negotiated in an universal fora and adherents fully representative of various regions and levels of development.

"In any such treaty, obligations on developing, particularly poorer countries, for sustainable resource management, must have integrated provisions for transfer of technology and financial resources."

Concepts like Trade-Related Environment Measures (TREMs), Process Production Methods (PPMs), 'internalization of external costs' and 'eco-dumping', though unintended, shift the burden of environment protection on to the South.

They need much greater study and analysis in all their economic and social ramifications, and in the international trade context and should be studied in more objective and democratic fora than the WTO.