7:16 AM Feb 23, 1994

GATT COUNCIL DISCUSSES UNCED FOLLOW-UP

Geneva 22 Feb (Chakravarthi Raghavan) -- The membership of the General Agreement were unanimous Tuesday that the successful conclusion of the Uruguay Round negotiations was a direct response to the UNCED 'Earth Summit' Declaration and Agenda 21 programmes, and that the proposed work programme on Trade and Environment in the GATT and the World Trade Organization should be pursued.

The discussions on this issue at the Special Session of the GATT Council was (based on the report of the Group on Environmental Measures and International Trade (EMIT) chaired by Amb. Ukawa of Japan, the report of the GATT Committee on Trade and Development and a draft report of the GATT secretariat on the followup activities.

While mostly procedural, some of the comments reflected the controversies surrounding this issue, namely, attempts of some Northern environment groups to legitimise exercise of unilateral trade restrictions to set environment standards beyond national jurisdiction, or use of scarcely disguised protectionist instruments under the guise of environment protection such as new and questionable concepts like Product Process Methods (PPMs) to discriminate between like or identical imports based on the process of manufacture or levy of anti-dumping and other duties on the basis of socalled Eco-dumping.

Several of the interventions showed that attempts to legitimise within the future World Trade Organization the exercise of unilateralism would meet with considerable resistance.

While the GATT or the future WTO, it was said, should remain open to inputs from non-governmental actors, this was seen essentially and only in terms of country-specific national actions, and not be injecting the NGOs into what was an intergovernmental processes of the WTO based on a contract among governments.

As Australia, India and several others put it, the intergovernmental processes of a Contract had to remained confined to those who could undertake obligations and implement them, and not others.

Governments in the formulation of their trade or other policies should and should have wide consultations within the country, and present that position at the WTO or any other intergovernmental process. They cannot take shelter behind NGOs in order to get positions they had not embraced to be put forward in the hope that other contracting parties could be sensitised and pressured to accept positions, one of the participants later explained.

But this is precisely what the US and some others seem to be attempting, the delegate said and this was simply not feasible in a contractual relationship, as different from the UN and other fora for debate and discussions and general recommendations to membership.

The discussions showed that not only developing countries are becoming very wary of the PPM, Eco-dumping and similar concepts, but also several of the developed countries like Australia who saw 'environment' being sought to be invoked to perpetuate European agricultural protection.

The EC, for example, sought the modification of the views in the Secretariat draft report to the CSD on the agriculture agreement in the Uruguay Round to imply that 'free trade' in agriculture could affect environment and the disciplines and future reform programmes must be guided by these.

But others said that attempts to make changes in the secretariat draft, a factual report of GATT activities since UNCED, would land the Council, and the cps, into a negotiating process over the report.

It was ultimately decided that the GATT secretariat should on the basis of its draft, and views expressed, prepare and submit on its own responsibility a factual report to the Second meeting of the UN Commission on Sustainable Development (CSD), due to be held in New York on the followup in GATT to the UNCED.

A number of delegations said that GATT had made a substantial contribution to the Agenda-21 by the conclusion of the Uruguay Round and that the resultant higher export earnings of participants, particularly from the developing world, would enable more resources to be expended on environment protection.

The EU in its intervention stressed the importance of the principle of equity in the debate, namely, need for equitable burden sharing in the protection of the environment in accordance with the financial and development needs of all countries. But it was in the interests of the developing countries to reach the environmental standards of the industrial countries as soon as possible.

In the EU view, the post-Marrakesh work on trade and environment, including the establishment of the Committee on Trade and Environment, should be operational and relate to technical work on Art XX (exceptions on health and other grounds and conservation of natural resources. In the EC view agricultural trade and free trade rules would have an impact on rural life and have an impact on environment. Other UN bodies were engaged in the trade/environment work and GATT should expand its work to get the same clout as others.

The Nordics and Switzerland stopped short of endorsing the CTE, but stressed that any future work should build on the work already being done in EMIT and the CTD.

Egypt was concerned that the CTE to be established, coupled with the Dispute Settlement Understanding and cross-retaliation provisions of the WTO, could result in environment disputes and use of cross-retaliation to force standards on others. The GATT and the WTO should thus carefully consider the institutional structures after Marrakesh.

On the question of GATT/WTO relations with NGOs, the Council welcomed the move of the GATT Director-General to host a seminar or symposium (expected to be held in May-June) of nongovernmental experts on trade, environment and sustainable development.

While the charters of the GATT and the WTO, being in the nature of contracts among governments, would not allow for director participation of NGOs, the participants welcomed greater communication between GATT and the NGOs in this area.

Many developing countries stressed the importance of sustainable development, and said that trade and environment were also means towards that end. There was also a stress on the Agenda-21 being looked at as a whole.

The Asean said that the opening up of markets for developing country exports was crucial for sustainable development. The GATT/WTO outlook should be guided by two principles: avoidance of unilateral measures to deal with environmental situations outside the jurisdiction of a country and creating a climate of genuine cooperation and consensus.

Mexico did not see the trade-environment debate as a North-South issue and said there was protectionism in all countries and thus also a North-North and South-South issue. Everyone should avoid protectionist measures under the guise of environment nor use trade measures to exert pressures on other countries to change their environment standards.

Japan agreed that the conclusion of the Round was a significant contribution and trade-distortive or restrictive measures should be avoided in addressing environmental problems. There was need for genuine international consensus and the future institutional structures should be based on the existing structures like the EMIT group.

Venezuela instanced as concrete examples of unilateral and protectionist actions under the guise of environment the US actions on tuna fishing and the restrictions on imports of Venezuelan gasoline.

The US felt that GATT had come a long way on this issue, and the 'comfort' level in discussing the issue had grown greatly. But much more remained to be accomplished and GATT should remain open to non-governmental views.

Australia stressed that increasing public knowledge and transparency in trade policy formulation was country-specific and it was for governments in countries to engage in wide consultations and debate before formulating and establishing trade policy instruments. But there was no way for NGO participation in the intergovernmental GATT/WTO process which was a contract between governments.

India said that the followup to UNCED was not a one-short affair but a continuing process. While supporting greater information exchanges with NGOs, India made clear that there was no way for NGOs to be directly participate in intergovernmental discussions and decision-making and that only those who could undertake the obligations and implement the commitments could participate.

Korea said that it supported the view that the successful completion of the Round would greatly contribute to sustainable development and the two years of work on trade and environment in the GATT deserved greater appreciation inside and outside the GATT.

The future work should focus on how to differentiate genuine environmental measures from trade protectionism. Towards this end, open and non-discriminatory multilateral trading system was a pre-requisite to make trade and environment mutually supportive. Some basic rules and principles such as avoidance of unilateral action, transparency requirements and the least trade-restrictive principle should be adequately respected in the future discussion of this issue.

Brazil supported the view that there should be genuine international cooperation in this and no unilateral measures. The environment debate must have the objective of promoting sustainable development and the work in GATT should build on Agenda 21 approved at Rio.

Hong Kong was against unilateral protectionist measures and warned that the talk about PPMs and Eco-dumping had not studied the real complex trade effects of such actions. No country could claim a higher moral ground in the area of environment and this was not a "us vs them" issue.

Uruguay cautioned against eco-protectionism could affect concessions already negotiated in the GATT, while Hungary referred to the special problems of the countries in transition.