4:48 AM Mar 21, 1994

WTO INAPPROPRIATE FOR GLOBAL RESOURCE MANAGEMENT

By Vandana Shiva*

New York, 20 March (TWN) -- While experts on both sides continue to differ on free trade and environment, there appears to be an emerging consensus that attempts to bring global environment management into a trade organization like WTO are politically, ecologically and economically misplaced.

The world views, assumptions and values of trade and environmental experts are different and divergent, and the debate whether free trade is good or bad for the environment will continue for many years.

However, there does seem to be an emerging consensus that attempts to bring global environment management into a trade organisation like WTO are politically, ecologically and economically misplaced.

This emerging consensus was visible as key experts on trade and environment met in New York during the past two days to discuss the linkages between trade and environment, and to assess whether GATT and the WTO are appropriate platforms for dealing with environmental issues.

Trade sanctions encourage unilateralism and hence violate the norms of democratic governance. They will only be used by the powerful against the weak.

Both the environment and trade experts are agreed that unilateralism will leave the Northern governments and countries less accountable and will further erode the democratic capacity of Third World countries.

This will be neither good for the environment nor for trade.

Though the motivating reasons differ among the two groups of experts, there is a strong consensus against unilateralism in the form of a "green 301" or a "green GATT".

While the proposals for a green GATT come in a green guise, they are in reality aimed at trade protectionism and at increasing US domination in global decision making.

The US Administration and the environmental groups based in Washington D.C. might display concern for the environment in Third World countries as the reason for the use of unilateral trade instruments.

But this concern is totally missing when it comes to fulfilling obligations that emerged from the Earth Summit in Rio.

The concern is also missing when it is related to steps that need to be taken domestically in the US to stop the export of environment burdens to the South.

Thus the issue of trade in domestically prohibited goods has been buried in GATT because of the US attempt to make exceptions for pharmaceuticals, pesticides and chemicals.

This issue has become one of central importance to environmental movements and policy making in the South as the export of hazardous goods, substances, technologies and wastes to the South is a major mechanism by which environmental damage is taking place in the Third World.

The US environmental groups which have become active in promoting the use of trade sanctions to protect the environment and environment resources of the South, have remained totally silent on the role of US government and corporations in promoting the export of environmental hazards to the Third World.

These double standards indicate that it is not the environmental protection but the protection of US economic and political interests which motivates the proposals for a green 301 or a green GATT.

Even when the environmental objectives for proposing trade related environment measures (TREMs) are politically sincere, they are scientifically inoperable in most situations.

TREMs would require instruments such as process and production methods (PPMs) and internalisation of costs.

But these environmental tools work only when three conditions are fulfilled:

* The actor and activity causing environment damage is clearly identifiable so that "internalisation of costs" is politically and economically feasible.

* The ecosystem boundaries are clear to assess the full environmental impact and internalise ecological costs.

* The social groups affected by the environmental impact in terms of health and livelihoods are identifiable.

In a transnationalised production system without national boundaries, none of the above conditions are met.

Since GATT involves discipline on countries who are its contracting parties, and not regulation of the transnational corporations who are the main producers across national boundaries, applying PPM methodology can at best be fruitless. At worst, since it can only deal with the simplest of primary commodity production, it will be an instrument selectively used against the primary producers of the South, e.g. tropical timber producers.

The case of non-sustainable rice production in the US or meat production in the Netherlands will not be taken up both because of their complexity as well as because of the fact that such an audit will hurt the powerful interests of the North.

The impact of rice production in the US and free trade in rice would have to include depletion of soil and water and the intensive use of chemicals. It would have to include energy costs of transport of rice to countries where it was grown where production was protected under domestic agricultural policy. It will also have to include the social and ecological impact of displacement of rice production in the regions where rice has evolved and where it is ecologically a more suitable crop.

The impact of meat production and trade in Europe would have to include the environmental and social impact of cultivation of tapioca in Thailand or soyabean in India or Brazil. It would have to include the environmental externalities of intensive factory farming of cows and pigs for meat. It would have to include the impact on African pastoralists and ecosystems when that meat is dumped on African cities. It would have to include the social and economic costs of that poverty.

These are major issues for internalisation of costs and taking into account the environmental costs of PPMs. But GATT is not the platform for this because it has no ecological competence, and because its rules apply to governments, not transnational corporations.

Ecological audits of globalised production systems requires new international initiatives -- from movements and international organisations. It is only when independent research and analysis will throw up the full ecological costs of free trade, that we will be able to bring environmental accountability into trade.

In the absence of this homework, TREMs are merely yet another instrument for the assertion of brute force and power, not for the protection of the environment.

A major shift of focus is therefore needed in the work of Northern environmental groups. They need to look more closely at their own corporations and governments, and not turn the Third World into a scapegoat for their failure to deal with powerful interests at home.

When the citizens movements grow, the trade and environment issue will be more democratically and ecologically addressed through new mechanisms and/or institutions.

Maybe Rio's real failure was it did not create an international environment organisation for building up global competence in assessing the environmental impact of international trade.

If the environment is a serious enough issue we should be pushing for a full-bodied environment body under the UN. Environmental objectives will not be met by making the environment a responsibility of WTO.

The free trade paradigm is ill equipped conceptually to deal with ecological issues, and a trade organisation has no competence and jurisdiction in this area which is vital to the survival of people everywhere, but even more urgently in the South.

While free traders and Northern environmental groups differ in terms of paradigms, they share certain assumptions about the world.

A shared assumption is that the environment is a recent human concern and that Northern countries and their NGOs are the primary agents for articulating this "new" concern.

The "discovery" of the environment by the industrialised West is like the discovery of Americas by Columbus. It is a discovery through the denial of ecological cultures across history and across the world. It also denies the strong grassroots movements of Third World communities who are putting their very lives on the line in struggles to protect their environment -- their land, water and biodiversity which are the very basis of their livelihoods.

These struggles are putting peoples' rights to survival and peoples' rights to resources at the centre of the trade and ecology discourse.

Both free traders and Northern environmentalists are deaf to that demand for the protection of rights as they debate over a narrow issue of standards. Standards can address certain issues of industrial pollution, but they are inadequate to deal with the issue of ecological disruption, of soil and water erosion, and of biodiversity.

Thus the major ecological concerns have remained unaddressed in the trade and environment debate of the North although these are the issues central to the movements against the free trade paradigm in the South.

Free traders have very creatively used the concepts of "sovereignty" (each country should be able to pursue policies that reflect its values) and "diversity" (domestic variability in institutions, policies and practices) to resist the onslaught of Northern environmental groups who want globalisation through trade sanctions.

In the South, sovereignty and diversity are the key principles on which the peoples' movements to protect their livelihoods, resources and environment are based.

And the primary concern about GATT in the South is that in the Uruguay Round it has overstepped its role of rule-making for international trade by undermining domestic policy, practices and institutions in areas like agriculture and intellectual property rights which are better left to domestic policy-making in accordance with the principles of sovereignty and diversity.

By pre-fixing "trade-related" to any domestic issue, it can now be subjected to the external control through the bite of trade retaliation.

From a Southern perspective, TREMs are thus scientifically flawed, undemocratic, and asymmetric instruments of power.

For the same reasons, TRIPs too is a scientifically flawed instrument which violates sovereignty and diversity especially in the area of biodiversity where sovereignty is recognised through the Biodiversity Convention and protection of diversity is the very issue at stake.

If principles of sovereignty and diversity have to be protected as central to democratic governance, not only should we say no to TREMs in WTO, we should also seriously evaluate the Uruguay Round in terms of its violation of these fundamental principles.

(Vandana Shiva is a well-known author and ecologist from India who has recently attended several consultations on trade and environment issues. She wrote this paper specially for the SUNS)