Can green mean free?

Published: Saturday 15 December 2001

Can green mean free?

Muted voices: strict security< (Credit: Reuters)Developing countries also fear the huge costs associated with greener technologies, which will be unbearable by their domestic industries. It could make their goods uncompetitive in western markets. This unequivocal opposition to greening of trade is what brings the motley crew of poor countries together. "If there's one thing that unites developing countries, it is opposition to negotiations on trade and environment," said a developing country official before the meeting. "If the eu says it's a deal-breaker, so be it. There are just too many people against it." The Republican Bush administration shares these views (unlike the democrats), and would rather the green issues remain outside the purview of the wto , as they could harm the interests of us industry. For instance, us biotechnology firms stand to lose out, due to the wariness against genetically modified (gm) food.

Despite this opposition, the eu threat that it would negotiate on liberalising agricultural trade only if other wto members agree to talk on trade and environment, eventually worked. The final ministerial declaration controversially proposes negotiations to enhance "mutual supportiveness of trade and environment". The declaration reiterates the eu demand seeking clarification on the relationship between the wto rules and "trade obligations set out in multilateral environmental agreements (meas)" instructs the wto 's committee on trade and environment (cte) to give special attention to, among other things, ecolabelling suggests reduction and even elimination of trade barriers to environmental goods and services, a move that has been mutely welcomed by developing nations seeks to further strengthening the links between trade and environment by proposing negotiations on "procedures for regular information exchange" between the relevant mea bodies and their counterparts in the wto .

Indian industry minister Murasoli Maran dismissed the environment provisions in the declaration as "the price we have to pay for something in agriculture". "We have marginally agreed on environment, which to a large extent, is a political acknowledgement of its importance rather than rebalancing of rights and obligations," he said.

The environmental measures listed in the Doha declaration are not new. They have been part of the discussions at the cte for several years now, and have been discussed in by the wto's dispute settlement mechanism before that. cte was set up in 1995 and is composed of all wto members and a number of observers from inter-governmental organizations. It functions with the understanding that "it does not modify the rights and obligations of any wto member under the wto agreements." A ten-point agenda forms the basis of the committee's work, which includes decisions on environment measures for trade, ecolabelling, environmentally unfriendly subsidies and intellectual property rights.

cte has not reached any conclusions due to the controversial nature of the issues. In 1996, it presented an inconclusive report at the Singapore ministerial due to the fact that its members had failed to reach agreements on most of the issues under discussion. The ministerial made note of the "the breadth and complexity of the issues covered by the committee" and "further work needs to be undertaken on all items of its agenda". The committee was directed to carry on its work.

Although cte discussions have been unfruitful, the trade and environment debate is being addressed in other fora. As the pressure from Northern civil society to take on board environmental concerns increases, the dispute settlement mechanism has come out more and more in support of green issues. In a recent ruling on the shrimp-turtle case, a wto appellate body (ab) endorses a us ban on shrimp imports from countries that do not use turtle excluder devices to prevent harming sea turtles (see box: In through the backdoor). These judgments cannot be taken lightly, since they are making law by setting precedents.

Morevover, as the eu faces pressure from its civil society on the issue of genetically modified organisms (gmos), the Union is unlikely to let go of issues such as the primacy of public health, the precautionary principle, and process and production methods (ppms) (see box: In favour of health).

Developing country concerns over green protectionism are legitimate, but they cannot simply continue to oppose negotiations on the links between trade and environment -- they have to take them head on to make sure their concerns are addressed through legitimate multilateral negotiations, rather than through the back door, by a few people on a dispute settlement panel or appellate body.

Conflict with environment treaties
For instance, the discussion on the relationship between trade rules and meas has been uneasy to say the least. While the wto currently allows importing countries the freedom to choose their own standards in the interests of public health and the environment in their own countries, they are not allowed to impose standards aimed at improving health or environmental practices of exporting countries. But can environmental standards be imposed on another country if a multilateral treaty has been signed to this effect? The eu considers it necessary to ensure that when there is dispute concerning environment-related trade measures, linkages between trade and environment are taken into account so that one does not jeopardise the fulfillment of the other.

Developing countries see the debate on meas as a non-trade issue, but it is in fact in their interests to sort out the issue once and for all, rather than leave the issues open for interpretation by the wto's dispute settlement mechanism. Several feasible options have been suggested in the past, such as moving environment-trade conflicts to tribunals provided specifically under meas; or moving such disputes to the International Court of Justice. But even before agreeing to a venue, developing countries must insist on clarification on a set of overarching rules. For instance, they should insist on a provision that forbids the use of trade sanctions to conserve the global environment, since such sanctions can only be used by the more economically powerful nations against the less economically powerful. Extra-jurisdictional and unilateral action should not be possible even within a multilateral agreement.

Northern green activists were not entirely happy with the outcome at Doha, though for reasons other than those troubling developing countries. The declaration states that negotiations on the relationship between trade and meas shall not prejudice the wto rights of any Member that is not a party to the mea in question . Greenpeace fears that this phrase would prove a powerful disincentive for countries to sign the meas. The declaration also states that negotiations on the effect of environmental measures on market access and the Trade Related Intellectual Property Rights (trips) accord shall not add to or diminish the rights and obligations of Members under existing wto agreements . These environmental activists feel that the final outcome of the negotiations on these points could end up as footnotes rather than effect any change in the wto rules.

Marks of shame?
Ecolabelling star ted out as a consumer awareness aid to help them make better choices. The eu penchant for ecolabelling was on full display in all the pre-Doha drafts. Ecolabelling is a way to ensure that all exports are harmless to humans and the environment -- in itself a rational and benign idea. However, its practice could erect new insurmountable barriers to exports from the poorer countries.

Ecolabelling requires that products be marked environmentally friendly not just because they do not directly harm the environment but also indirectly. At the centre of the debate is the ppm criterion which looks at the environmental-friendliness of the technologies used to make a product rather than the superficially judge the product, the final outcome of the process. Life cycle criterion is another specification applied for ecolabelling. This looks at the ppm , the product and how the product will be eventually disposed, making ecolabelling an even more stringent requirement.

This is has raised hackles in the developing world where state-of-the-art green technologies are seldom considered for their prohibitive costs. Insisting on ppm for labelling would bar most of poorer countries' exports from the northern markets. At the moment this agenda has only been put on a fast track, but it is not for negotiations.

Precautionary principle
The eu locked horns with the us by banning American beef exports on the ground that the beef was laced hormones that could cause cancer and other health problems. The ban was not upheld by the wto because it was not convinced with the scientific evidence the eu had provided to prove its case and that it was imposing its higher standards on health and food safety on others. The eu insisted that it was acting according to the precautionary principle. This better-safe-than-sorry principle lets a country take a similar action like the one the eu took even in the absence of supporting scientific rationale.

The wto had judged the case by the 1996 agreement on sanitary and phytosanitary measures (sps), which favoured a more scientifically demanding risk assessment to the precautionary principle. The us also proved that its beef hormones met standards set by Codex Alimentarius Commission, a world body that develops standards for food additives, pesticides, chemicals and contaminants. The precautionary principle has since become pet issue that the eu pushes in every wto meeting. Doha was no exception. On the fourth day of the talks the eu broached the subject, but intense opposition kept it out of the final declaration.

At the insistence of the Philippines, the us and Iceland the Doha text pushes for negotiations on clarifying and improving wto disciplines on fisheries subsidies . Fisheries subsidies have been seen as a major cause for the depletion of fish stocks due to overfishing. Apart from the environmental impact the subsidies-caused depletion also undermines the livelihood of those dependant on fishing. This is particularly the case in many developing countries as the text also points out.

Though fisheries subsidies have figured in the wto debates and in its predecessor gatt , no agreement was earmarked to cover the issue during the Uruguay Round. At the Seattle 1999 meeting a proposal was made to tackle environmentally harmful and trade-distorting fisheries subsidies but disagreements over which wto body should cover the subject halted progress. The eu is one of the leading providers of subsidies to its fishermen and hence has been shying from bringing the issue into wto forum. The presence of the subject vindicates the view that much give and take has tran spired to prevent Doha ending up as a disaster.

Public health over profits
Developing countries can now override patent laws for life-saving drugs. Still, TRIPS jeopardises the right over traditional knowledge

developing countries have always maintained that the wto's intellectual property accord, known as the agreement on trade related aspects of intellectual property rights (trips), over-protects 'formal' corporate innovators by giving them exclusive marketing rights for 20 years, during which time society bears the cost of higher prices for the innovation. They contend that the trips agreement largely defends the profits of the pharmaceutical, entertainment and information technology sectors, based mostly in the North.

trips-style protection has forced several developing countries to dismantle domestic drug production dependant on copied foreign-patented drugs and slightly altered production processes. Before trips , patents in developing countries used to protect only the process, not the end product, so that as long as the process was changed, the developing country did not have to pay royalties to the foreign pharmaceutical firm. trips put an end to this, raising concern over the morality of forcing the South into buying expensive drugs that its citizens need, but cannot afford. Earlier in the year, a court battle between the South African government and 39 pharmaceutical giants ended in the vindication of the South African government's stand, allowing the country to procure life-saving medicines at cheaper prices for its poor populations in contravention of trips .

At Doha, developing countries won some concessions in this regard. After considerable haggling, they won the right to manufacture cheaper medicines to fight health crises like aids , tuberculosis and malaria. According to a declaration on the trips agreement and public health adopted at Doha, the trips agreement does not and should not prevent members from taking measures to protect public health .

The declaration comes at the end of a bitter struggle between the industrialised and developing world. The former, represented mainly by the us , took up cudgels for its drug companies. The latter, led by Brazil and a group of African countries, is struggling to cope with epidemics. The eu backed developing countries in advocating greater flexibility in the use of compulsory licensing -- licensing without the agreement of the patent owner. According to the international federation of pharmaceutical manufacturers, the eu was "not being an honest broker," and was siding with the poor countries on trips in order to buy concessions on the issues of investment and competition policy it wanted in the new round.

The us and Switzerland were against a broad interpretation of article 31 of trips , which is related to compulsory licensing. The us argued that the strong implementation of patent rights encourages innovation, and serves as an incentive for companies to invest in research to discover, develop, and commercialise new products. Instead, the us put forward a proposal to exempt the world's poorest countries from patent protection for ten years, and introduce a moratorium on making a trade complaint for manufacturing or importing hiv/aids drugs in Africa. But despite frantic phone calls from Washington and lobbying by its us $300 billion-a-year drug industry to scuttle the deal, the South's call for a slightly more compassionate patent regime held sway.

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