WTO Ministerial Section • Volume 7 • Number 16 • 7th May 2003

MEA-WTO Relationship: Debate Matures, No Solution Yet


WTO Members convened on 1-2 May for a special (negotiating) session of the Committee on Trade and Environment (CTE), where discussion focussed on the relationship between the WTO and so-called ’specific trade obligations’ in multilateral environmental agreements (MEAs). Although the question of formal observer status has yet to be decided, secretariats from six trade-related MEAs attended as ad-hoc invitees, and responded to questions from Members (see BRIDGES Weekly, 19 February 2003). Countries used the opportunity to further explore how to define a specific trade obligation (STO) and other aspects of the environmental mandate contained in the Doha Ministerial Declaration, though there was little agreement on how to move forward with the mandate or on the continuing status of MEA secretariats in the negotiations.

In paragraph 31 of the Doha Declaration, adopted in November 2001, Members agreed to negotiations on: (i) the relationship between WTO rules and specific trade obligations set out in MEAs; (ii) procedures for regular information exchange between MEA secretariats and relevant WTO committees, and the criteria for granting of observer status; and (iii) liberalisation of trade in environmental goods and services.

MEA-WTO: divergent approaches

At the meeting, most Members continued to press for a bottom-up, or an ‘STO approach’ that would base discussions on examples of specific trade obligations in MEAs. Members at this stage are still attempting to define what constitutes an STO, which MEAs should be considered, and ultimately how to go about clarifying the WTO-MEA relationship. A WTO Secretariat paper compiling submissions thus far on 31(i) (TN/TE/S/3/Rev.1, available at http://docsonline.wto.org), and an updated matrix on trade measures pursuant to selected MEAs (WT/CTE/W/160/Rev.2) were released to help underpin the discussions.

A submission from Hong Kong, China (TN/TE/W/28) that elaborated its experience in implementing the Convention on International Trade in Endangered Species (CITES) was reportedly well-received by most Members that support an STO approach. Hong Kong said that, based on its experience, it was not easy to generalise a set of common criteria for defining STOs, nor was it feasible to find a one-size-fits-all solution. A possible way forward, it said, was to screen obligations in different MEAs with a view to whether they are deemed to be STOs, and if so, whether some tailor-made solutions are required. Regardless, one Member said after the meeting that it was clear now that there was a need for more structure in the MEA discussion, and mentioned clustering STOs together in certain categories, which could then be addressed as a group, as a possible way out.

The EC and Switzerland, which were demandeurs on trade and environment at Doha, reiterated their traditional views that broader concepts — such as the mutual supportiveness of trade and environment — should be elaborated by examples, but that a list of qualifying STOs should not be exclusive or exhaustive.

The meeting also showed that developing countries in particular have become more engaged. Most developing countries have tended to view the environment mandate with suspicion, and regard it as primarily an issue pushed by the Europeans. As a result, most are looking to limit the mandate so as to prevent it from expanding to include issues that could constrain their future market access. They are in general supported in this position by the US and Canada, who advocate that STOs be both specific and mandatory.

This was clear in Malaysia’s proposal (TN/TE/W/29), in which Malaysia aligned itself with the relatively circumscribed approach forwarded by Argentina (TN/TE/W/2) and India (TN/TE/W/23), who also favour a very specific definition of STOs. According to the Malaysian submission, "… [T]here can only be one category of specific trade obligations, where the trade obligations are mandatory and specific". Malaysia cited examples of provisions that it felt could qualify as STOs set out in three trade-related MEAs that are already in force — the Basel Convention on Transboundary Movements of Hazardous Wastes, the Montreal Protocol on Substances that Deplete the Ozone Layer, and the Convention on International Trade in Endangered Species (CITES).

Other Members (i.e. the US, Canada, India) have suggested looking at three other MEAs identified as having explicit trade obligations but that have not yet entered into force: the Cartagena Protocol on Biosafety, the Stockholm Convention on Persistent Organic Pollutants (POPs), and the Rotterdam Convention on Prior Informed Consent (PIC).

Japan, which also submitted a proposal at the meeting (TN/TE/W/26), used all six MEAs in its analysis. Japan examined the degree of discretion allowed for each party to an MEA in taking trade measures pursuant to the MEA in question. In its submission, Japan identified two categories of trade-related MEA measures that could classify as STOs: "(i) The trade measure in question is explicitly provided for as mandatory under an MEA; and (ii) where the so-called ‘obligation de résultat’, or the agreement’s objective, is explicitly provided for in an MEA and the trade measure in question is identified in that MEA as potential means to meet that obligation".

COP decisions

One recurring item of discussion was how to address decisions taken at MEA Conferences of the Parties (COPs) that might have trade-related provisions. According to the EC, which favours a relatively expansive vision of STOs, legally binding COP decisions that introduce amendments to MEAs should qualify as STOs. Other COP decisions aimed at interpreting or at further specifying implementation of MEAs should be recognised, the EC said, for their potential role in interpreting STOs.

For its part, Malaysia said it could only consider COP decisions to be STOs where these are "contained in Annexes, Protocols and amendments to MEAs adopted by Parties and where they have been ratified by the broader membership".

One MEA secretariat official present at the session expressed concern regarding COP decisions after the meeting, noting that MEA law is constantly evolving through various decisions from their membership, and questioned the ability of the WTO to appreciate the nature of MEA decisions.

MEAs circumspect about CTE role

An MEA secretariat official expressed disappointment with the format after the session, saying that while secretariat representatives were happy to have been invited, they were not given an opportunity to make interventions beyond answering questions from the Members. "It was an experiment," the official said, "we listened, and were given an opportunity to speak at the end. But we do not want to be there just to legitimise an eventual WTO decision". Some MEA secretariats were further constrained in responding to queries, sources said, because they were not in a position to provide advice without a mandate from their own members.

The following secretariats attended: UN Environment Programme (UNEP), the Basel Convention; the Convention on Biological Diversity (CBD); CITES; the International Tropical Timber Organization (ITTO); the Montreal Protocol, and the United Nations Framework Convention on Climate Change (UNFCCC).

Frustration at the process in general was evident, as one MEA source said it was not clear that MEAs had anything to gain from devoting resources to the WTO-MEA endeavour, particularly as they did not see any sign that the WTO negotiations were helping them to implement their own MEA mandates.

Information exchange and observer status

The MEA secretariats were asked to leave the session after the discussion around para. 31(i) on the relationship between WTO rules and STOs, and were not present for the ensuing debate around para. 31(ii) on information exchange and observer status. While 31(ii) includes the sensitive sub-topic of criteria for observer status for MEAs, the session focused rather on procedures for regular information exchange between MEA secretariats and relevant WTO committees. One MEA official found this to be somewhat ironic, and questioned how they were supposed to figure out how to exchange information if they were not even allowed in the room.

According to a WTO official, most Members agreed at the meeting that WTO information exchange with MEAs should be formalised, but some — primarily developing country — Members resisted proposals that would increase their workload and/or require additional financial resources.

In a proposal submitted on 31(ii), Switzerland (TN/TE/W/30) provided a number of suggestions, including the institutionalisation of MEA information sessions at the WTO; CTE and MEA information sessions on specific topics of the Doha mandate; adaptation of existing websites; and guidelines for observer status.

It remained unclear whether MEA secretariats would be asked back to the next session, given the ongoing impasse on observer status in the Doha negotiating sessions. The next meeting of the CTE special session is on 8 July, although it will be primarily geared toward finalising the body’s report to the Cancun Ministerial in September, and is therefore unlikely to involve MEA secretariats. Informal consultations will be held on 22 May, at which point it is expected that MEA representation will be addressed, particularly with regard to the October session.

Environmental goods & services During discussions on para. 31(iii) on environmental goods and services, countries for the most part reiterated previously-stated positions on environmental goods (see BRIDGES Weekly, 19 February 2003, http://www.ictsd.org/weekly/03-02-19/story4.htm). Kenya, however, suggested that Members look beyond the current definitions of environmental goods — which for the moment are based on lists from the Asia Pacific Economic Cooperation forum (APEC) and the Organization for Economic Cooperation and Development (OECD) — to include products of export interest to developing countries. Kenya referred in particular to goods such as organic agricultural products, and indicated that it planned on submitting its list at the next meeting of the CTE special session. The US told Kenya that it was interested in exploring this idea. Such an initiative would likely be supported, one trade source said, by the EC and Switzerland, and just might be acceptable to other developed countries. But some other developing countries that fear the definition could expand to include goods produced in an environmentally- friendly fashion (so-called process and production methods, or PPMs) would be likely to resist such a move, the source said.

CTE regular session

The CTE met for its regular session on 29-30 April, where delegates focused on the ‘non-negotiating’ mandate contained in the Doha Declaration. This included EC papers on TRIPs - CBD (EC, WT/CTE/W/223), and on eco-labelling based on a life-cycle approach (WT/CTE/W/225), a Japanese proposal on fisheries subsidies and over-fishing (WT/CTE/W/226), and presentations on the environmental aspects of Doha round talks on rules (WT/CTE/GEN/10) and services (WT/CTE/GEN/11). Many Members told the EC that eco-labelling should be addressed at the TBT Committee, and that ambiguity remained over life-cycle analysis. Japan was overwhelmingly asked to raise its issue in the Negotiating Group on Rules under the rubric of fisheries subsidies.

While the CTE is mandated to make recommendations to the Fifth Ministerial Conference (in Cancun in September) on potential future negotiations, there were no formal proposals of this nature submitted.

ICTSD reporting.