GATT TO DISCUSS ENVIRONMENT AND SUSTAINABLE DEVELOPMENT.

Apr 2, 1991

GATT TO DISCUSS ENVIRONMENT AND SUSTAINABLE DEVELOPMENT.

GENEVA, MARCH 28 (CHAKRAVARTHI RAGHAVAN) – A range of trade, environment and sustainable development issues and policies and their linkages are expected to be discussed further, in a structured way, in the GATT Council, and this would help clarify issues and further course of action, GATT sources said Thursday.

This discussion is now expected to take place at the GATT Council meeting in May, sources said.

The issue of trade and environment has been brought up in the GATT by the EFTA countries who have sought the "resurrection" of the moribund working group on environment and trade, set up in 1972 but which never met, and want the group to address the trade policy and environment policy issues and their harmonisation.

The subject has been discussed twice in the GATT Council, with Third World countries generally suspicious of and opposed to the GATT involvement, viewing the exercise as another attempt at imposing barriers against their exports.

The Chairman of the GATT Contracting Parties, Amb. Rubens Ricupero of Brazil, had been asked to hold "consultations". He has been doing this both in informal and open discussions as well as in bilateral and plurilateral consultations

The idea of a structured debate in the GATT Council appears to have emerged after an open-ended informal consultations and discussions held at the GATT Wednesday by Ricupero.

Sources at the meeting said that Ricupero had put forward some personal and tentative views of his own, formulated after a series of consultations with delegations, to enable further discussions in the GATT council but in a structured way.

Ricupero reportedly said that a six-point agenda for structured discussion proposed by him were not to be seen as "exhaustive" and other items could be added.

The question of GATT's "contribution" on "input" on environment, trade and development questions to the for the UN Conference on Environment and Development (UNCED), and if so whether it should be something that would be "negotiated" and agreed upon by the contracting parties (CPs) or a factual input that could be provided by the GATT secretariat, without any way binding the CPs and their positions, would also appear to have been discussed.

In suggesting a structured discussion of the issue in the GATT Council, Ricupero reportedly put forward a six-point agenda.

* The relationship of environment policies to trade and sustainable development. * Identification of environment policies and measures that could affect trade such as:

(i) Import restriction and prohibitions,

(ii) Export restrictions and prohibitions,

(iii) Internal taxes and regulations such as emission or product charges,

(iv) Subsidies and fiscal charges,

* Differing environmental standards and environment labelling requirements.

Information available to GATT secretariat in notifications under technical barriers to trade suggests that this could be a major emerging problem within GATT.

* Identification of sectors of particular "interest to developing countries taking into account their trade, financing and development needs in which trade may be affected as a result of environment policies and measures - such as on tropical timber or fish;

* Global environment issues and trade provisions in environment agreements, such as in the Montreal protocols on CFCs;

* Identification of relevant GATT articles.

Sources said that Ricupero suggested that a structured discussion in the GATT Council could help in clarifying ideas and enable the Contracting Parties to decide on where to go from there.

In the discussions, sources said, there was a view that issues of environment and trade should only be in the context of GATT.

On the issue of a GATT contribution to the UNCED, several felt that there should be no negotiated contribution from the contracting parties and that the secretariat should provide a factual contribution of its own, without any way binding or committing the CPs, and taking account of the structured discussions.

There were some who favoured the revival of the defunct working group and the issue of "contribution" being addressed there. Others were opposed to this. Ricupero would appear to have said that he would be continuing his consultations on the question of the revival of the working group, sought by the EFTA countries in the GATT Council.

On the issue of GATT formulating some trade-environment standards, Japan for example reportedly felt that the environment standards should be addressed in the appropriate fora and GATT should only look at its trade implications.

There were also views on the need for environment regulations and policies relating to trade being made transparent and the principle of "proportionately" being brought in - whether the trade restrictions or bans were proportional to the purported environment objectives sought to be achieved, whether they were merely incidental or in fact a hidden protectionist barrier.

The discussions, some participants said, did not really reveal any basic change of position - with Europeans (EC, EFTA) and other Industrial Nations pushing for GATT involvement and Third World countries continuing to be suspicious and opposed.

Third World countries and groups like India, Asian, Egypt, Peru and Mexico reportedly said at the meeting that they were not convinced by the discussions on the need for GATT involvement but that they were willing to discuss the issue in the Council in the structured way suggested by Ricupero, with a few more points added.

This in their view would help in others being convinced that the existing GATT mechanisms were sufficient to address any trade disputes and conflicts, and that no separates mechanisms or provisions were called for.

In the same vein, the EC and others were convinced that the discussion would enable the other side to change its view.

Third World sources said the entire issue was very "tricky".

On the one side, consideration of the issues in GATT could help in looking at environment issues from a trade and trade policy perspective, rather than in some Northern views of environment and sustainable development.

Some of these views appear to be that the North's quality of life cannot be sustained if the South also develops like the North, and the South should hence lower its aims for better life.

In the entire UNCED debate and documentation, they note, there is little or nothing about the poverty and under-development in the South being no more than a mirror-image of the affluence and mal-development of the North or of the North reducing its consumption.

On the other hand, sources say, the view that GATT, given its ideology of promoting business, would be looking at things in a trade way, would be to forget the reality of international life and the power equations. Even now, they note, the GATT functions and operates in the interests of the major trading partners.

This coupled with its highly non-transparent processes and mechanisms and the ultimate jungle law reality in GATT of enforcement through retaliation, would mean that if the major trading partners and powers decide on a course of action, the GATT processes could turn out to be more oppressive.