Feb 30, 1993

TBT RULES MAY WEAKEN ENVIRONMENT PROTECTION, SAYS WWF

Geneva 3 Feb (Chakravarthi Raghavan) -- The proposed Uruguay Round agreement on Technical Barriers to Trade (TBT) and Decisions of Contracting Parties on application of Sanitary and Phytosanitary (S & P) measures could come in the way of environment protection and sustainable development and should be changed to enable mutually supportive trade and environment policies, according to a WWF report. 

"In its present form, the TBT agreement drawn up by Uruguay Round negotiators, will cripple national environment policies and counter efforts to conserve the Global Commons," Charles Arden- Clarke a policy analyst at the World Wide Fund for Nature (WWF) told newsmen Wednesday.

There is also need for something like the EC cohesion fund contemplated under the Maastrictht treaty, and this could be set up outside of GATT to deal with global questions as contemplated in the Rio Summit accords, he said.

The report, prepared for the World Wide Fund for Nature (WWF) by two environment lawyers James Cameron and Halina Ward, associated with the London-based Foundation for International Environment Law and Development (FIELD), argues that the new rules would mean international standards would set a ceiling for environmental, health and safety regulations and individual countries with better environmental standards would risk retaliation through the GATT unless they complied with trade-biased rules.

Third World trade negotiators however questioned this view, arguing that what was being sought to be prevented are technical standards being set or applied which, under the guise of protecting health, safety or environment or consumers are disguised measures of protection to local industry or trade or used as a disguised measure of discrimination against countries.

The history of the industrial world vis-à-vis the Third World has been one of using every trick of the trade -- technical standards --to keep out competitive imports, and the South has reason to be wary.

Without some international disciplines, and countries being forced to justify their measures in a multilateral forum, environment could easily be used as a catchall measure of protection. Unilateralism by the powerful, whether to impose different economic policies and systems, open up markets to their investors and products or for environment reasons or even for protection of the global commons would run counter to any international rule of law and a return to colonialism and the white man's burden, Third World observers said.

"The question of democratic accountability of GATT processes will be crucial in the aftermath of the Uruguay Round, because of the enhancement of the agreement's legal power," Charles Arden-Clarke argues in a foreword to the report. "The Multilateral Trade Organization (MTO) ....will have greater legal and economic force than any trade organization has ever had in the past and will produce significant conflicts with other multilateral agreements, including environmental ones, and place governments in the extremely difficult position of having to justify national policies that support sustainable development but which are apparently incompatible with the GATT."

Countries should have flexibility in setting standards and international standards should not become the ceilings, Arden- Clarke said.

The WWF was not happy with the impasse in the Round or look favorably at a possible failure, he said in replying to questions. The WWF favored a rule-based trading system. Any international trading system where large countries bully small ones would not be sustainable, he said.

There should be an element of 'justification' required for national rules and measures and a proper dispute settlement mechanism to deal with the trade and environment questions, he added.

The WWF document argues for ability of countries (setting the standards and restricting the imports) to be able to differentiate between products on the basis of their production and processing methods, citing as an example of such (from the WWF view) desirable action in differentiating between products from sustainably managed forests and unsustainably managed forests.

The document also appears to argue in favor of countries being able to have standards with "extra-territorial effect", and recognition to the 'proportionality' principle as well as 'precautionary' principle in judging environment standards and their effects on trade.

The report in its recommendations for amending the texts wants:

 

 

"Unilateral measures taken beyond or instead of international standards, in order to protect the global commons can be extremely valuable," the report argues, and is critical of what it sees as focus in the TBT on exclusively national concerns without taking account of transnational nature of environment problems, "such as need to prevent global warming, which can clearly be described as 'legitimate objectives'."

The study cites the GATT panel ruling on the Mexican tuna fish dispute as an example of national actions to protect dolphins which run against GATT's non-discrimination and national treatment rules and permissible levels of Art XX exceptions to the GATT rules.

But like other environmental groups, there appears to be a misreading of the GATT panel ruling in the report.

A number of 'facts' weighed with that panel and have been cited in its report and conclusions -- apart from others cited before the panel and set out in its report, but not in its conclusion -- which would suggest to any one the selective nature of the US concerns to protect dolphins and sea-mammals.

In ruling against extra-territorial attempts to unilaterally undertake environment protection or life and health protection measures, the panel noted that US had not 'demonstrated' to the panel that it had exhausted all options reasonably available to it pursue dolphin protection objectives through measures consistent with the GATT, in particular through negotiation of international cooperation arrangements. The US failure to pursue Mexican proposals in the FAO for suitable international agreements has been cited in the Mexican argument.

The US, the panel noted, linked the maximum incidental dolphin taking rate which Mexico had to meet during a particular period to enable export of tuna to the US to the taking rate actually recorded for US fishermen during the same period. Thus Mexican authorities could not know at any particular time whether their dolphin protection standards conformed to US standards.

A limitation on trade based on such unpredictable standards could not be considered as necessary to protect health or life of the dolphin, the panel added.

Any cp, the panel said, was free to tax or regulate imported products and like domestic products as long as its taxes or regulations did not discriminate against imported products or afford protection to domestic producers, and a cp was also free to tax or regulate domestic production for environmental purposes. But a cp may not restrict imports of a product merely because it originates in a country with environmental policies different from its own.

If the GATT CPs were to permit import restrictions in response to differences in environmental policies under the GATT, they would need to impose limits on the range of policy differences justifying such responses and develop criteria so as to prevent abuse.

If the CPs were to decide to permit trade measures of this type in particular circumstances it would therefore be preferable for them to do so not by interpreting Art XX, but by amending or supplementing the provisions of the General Agreement or waiving the obligations -- a process which would enable them to impose limits and develop criteria.

The adoption of its report, the Panel said, would affect neither rights of individual cps to pursue their internal environmental policies and cooperate with one another in harmonizing such policies, nor the right of CPs acting jointly to address international environmental problems which could be resolved through measures in conflict with the present rules of the GATT.

At the same time, the report complains that the new TBT agreement does little to strengthen scope for allowing developing countries to adhere to different technical regulations and standards, and there is not attempt, as for example in the EC cohesion fund under the Maastricht treaty, to give the least developed countries access to structured financial assistance and technology transfer.