Oct 23, 1992

AUSTRIAN "ECO-LABELLING" RULES ON TROPICAL TIMBER CHALLENGED.

GENEVA, 21 OCTOBER (CHAKRAVARTHI RAGHAVAN) – A new "eco-labelling" regulation brought into effect by Austria for "labelling" imported products made of timber on purported grounds of promoting "sustainable" production of tropical timber came under attack in the GATT this week for its violation of Austria's GATT obligations.

Austria recently appears to have enacted a law, brought into force from 1 September this year, requiring "marking" of all imported products made of tropical timber.

The regulation requires that all such products must be "labelled" as having been produced out of tropical timber. An optional provision enables "eco-labelling", namely for the products to be certified and labelled as products made through sustainable use of the tropical forests.

Together, these would have the effect of ensuring "consumers" boycotting products made of timber and not carrying the "sustainable" label.

However, Austria which is a signatory to the GATT Tokyo Round code on technical barriers to trade did not notify its intention to undertake such a measure, and elicit the views of the affected parties. It took recourse to a provision in-the code of having had to take action because of "urgency" and then notified it to the GATT.

At this week's meeting of the TBT committee, Singapore raised the issue on behalf of the Asean members.

Participants at the meeting said that the Austrians appear to have been taken by surprise and gave some unsatisfactory answers in claiming "urgency" for not engaging in pre-notifications and consultations. They were hard put to answer the urgency involved in bringing in new "standards" in a trade that has been in vogue for sometime.

Though purportedly intended to "protect" the tropical timber and rainforests in the developing world, the sweep of the regulation some of the Third World participants explained was such that any product, even a handicraft made out of wood or containing some wood would be affected and would need labelling and eco-labelling.

It would not merely be the countries like Malaysia or Indonesia - who are the targets of Northern "green" movements on tropical timber - but a wide range of countries and their products, and the least that could have been done was prior notification and adequate consultations and discussions in the GATT and its bodies. This is the kind of environmental unilateralism of the North that would fuel trade tensions, some participants said.

The TBT took no decision, but Malaysia and others aggrieved are expected to bring it up in an appropriate GATT forum, perhaps the next meeting of the GATT Council set for November 4.