o The Founex Report of June 1971 and the Environmental Measures and International Trade Group (EMIT) was the first group to consider the relationship between development and environment under a directive by the Secretary General of the UN Conference on Human Development(1972)

o The Stockholm Conference on Human Environment 1972 gave the matter further thought when a group produced a report on "the Control of Industrial Pollution and International Trade".

o The United Nations Conference on Environment and Development (UNCED) 1992 later observed that “ an equitable and non-discriminatory trading system had a key contribution to make to national and international efforts to better protect and conserve environmental resources and promote sustainable development.” This was further reinforced by the Rio Declaration, which cautions that environmental standards must take account of the different environment and development context of each nation and that there must be “collective but differential” responsibility of states towards environmental protection.

o The Committee on Environment and Trade (CET) was established in 1994 at the Marrakech meeting and was tasked with various responsibilities as detailed below:

- relating trade to environmental measures so as to promote positive interactions to recommend changes in the multilateral trade system in the light of the need to preserve the environment,
- to promote transparency of trade measures adopted for environmental reasons, ensuring that they are not used for protectionist purposes,
- to consider the linkage between the environmentally motivated provisions of the multilateral trading system and any charges, taxes and other requirements prescribed for the same purpose with regard to particular products,
- to develop effective mechanisms for the settlement of disputes between the multilateral trading system and the multilateral environmental agreements and to
- consider any environmental measures relating to market access, and to the export of products whose sale was prohibited in the country of origin

Despite this worthy mandate, the CET has not made much progress in making trade and environment mutually supportive.

Environmental Effects of International Trade and Trade Liberalisation

Many international discourses have argued that trade has implicitly been the main cause of environmental degradation for the following reasons:

• Exploitation and extraction of primary commodities to satisfy consumer demands in the developed countries often causes environmental degradation related to waste mismanagement and pollution;

• Trade in Agricultural Commodities has in some instances resulted in over-cultivation of Marginal lands due to the cash crop syndrome. Environmentalists argue that trade liberalisation may stimulate economic growth and increase production levels, which in turn could lead to higher levels of pollution and accelerated exploitation of natural resources. By introducing subsidies, more farmers may be lured into cash-crops, resulting in more chemicals and additional water and fertiliser use at unsustainable levels;

• Mining can have a devastating effect on the landscape. Large areas are often cleared for very small volumes of mineral outputs. Most mining, forestry and tourism development in the developing world are undertaken by multinational companies that take advantage of a country’s lax environmental standards;

• There has been a growing trend toward trade in services, such as tourism. Views are often divergent as to the impact of tourism on the natural resource sector. It is generally agreed that there are two types of tourism: eco-tourism and mass tourism, each with its own impacts on the environment and on the socio-cultural aspects of the communities affected. Mass tourism has the greatest impact on the environment as it is likely to place excessive strain on natural resources, due to overcrowding brought about by the high concentration of hotels and other recreation facilities, leading in some cases to pollution. The excessive infrastructure, may among other things, destroy the natural resource base that attracts tourists;

• The production or manufacture of international products in developing countries where environmental regulations are not yet stringent is the main cause of air and water pollution. Production levels of export commodities tend to match world prices and when these increase, production levels also increase, leading to more pollution.

• Article XX of GATT allows nations to depart from the provisions of the Agreement for purposes of protecting the health and life of persons, animals and plants and to conserve non-renewable natural resources. This provision has been used mainly by developed countries to put in place a host of environmental measures (refer to annex 1), which some argue have tended to restrict the movement of goods, particularly from developing countries into developed country markets.

Potential Areas of Conflict
The linkage between trade and the environment continues to be the focus of WTO debate, which has centred around the following issues:

• Is the relationship between multilateral environments and the international trade system, mutually supportive?
• Little has been done to integrate Multilateral Environmental Agreements (MEAs), into the decisions of the trade body.
• Contradictions have been observed between TRIPs and the Convention on Biological Diversity (CBD) (Refer to Annex 2). The CBD gives nations sovereign public rights over their biological resources. National sovereignty implies that countries have the right to prohibit Intellectual Property Rights (IPRs) on life forms (biological resources). TRIPs overlooks this right by requiring the provision of IPRs on micro-organisms, non-biological and micro-biological process, as well as patents and/or sui generis protection of plant varieties. (see also SEATINI Factsheet 2)

• The environmental provisions in most trade agreements tend to be general and non-committal, as is the case with the North American Agreement on environmental co-operation, which supplements the North American Free Trade Agreement (NAFTA).

• The Trade measures imposed by MEAs, with a view to getting compliance from non-parties, such as required by the Montreal Protocol and CITES, are not specifically provided for in Article XX of GATT and may actually violate GATT provisions.

• The WTO remains uncertain on how Article XX of GATT may be adjusted to take into account trade related measures based on environmental agreements. The majority of members of the Committee on Environment and Trade are of the view that Article XX of GAAT does not permit an MEA party to impose unilateral trade restrictions that are inconsistent with WTO obligations.

• GATT considers subsidies to be unfavourable, as they distort competition,. However other subsidies, especially those that seek to promote the adaptation of environmental requirements, are considered non-actionable which means that no action can be taken against countries applying them. This may be the case with subsidies imposed in line with the Climate Change Convention, for example. In reality however, the subsidies that have been applied by developing countries for diversifying their productive base have been considered actionable, whilst those by the developed countries have been considered non-actionable.

REFERENCES

French H. F. (1993): Costly Tradeoffs, Reconciling Trade and the Environment: World Watch Institute Paper 113

Housman R (1994): Reconciling Trade and Environment: Lessons from the North American Free Trade Agreement: Environment and Trade 3, UNEP

Hurni H. (1996): Precious Earth: From Soil and water Conservation to Sustainable Land Management: International Soil Organization and Centre for Development and Environment

Konz P, Bellmann C. Assunciao L. and Melendez-Ortiz R. (eds) 2000. “ Trade, Environment and Sustainable Development” Views from Sub-Saharan and Latin America, A Reader: ICTSD-UNU/IAS, Geneva, 2000
Repetto R (1994): Trade and Sustainable Development: Environment and Trade1, UNEP

Vaugan S. (1994): Concepts and Principles of International Environmental Law: An introduction: United nations Environment Program : Environment and Trade 2

Diversity: Volume 11 Nos 1&2 1995: A news Journal for the International Genetic Resources Community

Diversity: Volume 14 No1&2 1998 Ecosystems: The CBD Framework for Action, 10th Global BiodiversityForum

ECOFORUM: Volume 21 Number 2, July 1997

WTO (1998): Trading into the Future: WTO Publications
The South Centre 1998: The WTO Multilateral Trade Agenda and the South.
World in Transition: Ways towards management of Freshwater Resources: German advisory Council on Global Change Annual Report 1997.
Brown l. R., Flavin C. and French H. 2000: State of the World 2000; The WorldWatchInstitute

ANNEX 2: THE BIO-DIVERSITY CONVENTION AND THE TRIPS AGREEMENT