Reconciling trade with ecological protection

Date: 30/05/1996

THE two ideas appear, at first sight, to be an anathema to one another - trade, which in today's pact-crazy world means the reduction of barriers and controls on imports and exports, and environmental protection, which naturally implies state control over production methods and means of transport.

But the European Commission says that the two need not pull EU governments in opposite directions.

In a recent report to member states and the European Parliament, the Commission declared its commitment to both a higher level of environmental protection and an open, global trading system, and said both interests could be served by working for multilateral agreements in international fora.

The question of how to make increased trade and greater protection for diminishing resources compatible is being posed at the World Trade Organisation, the United Nations and in most regional trade blocs.

The toughest challenge is to get partners to agree on global standards for products which cover 'green' needs but do not become trade barriers or distort competition. New requirements always mean new costs for producers and often lead to charges of protectionism.

WTO agreements allow member countries to require the product standards they deem necessary to protect their environment, as long as those requirements apply equally to all trading partners. They also sanction trade restrictions to “protect human, animal or plant life or health” or to conserve natural resources.

But now the WTO is finding itself fighting new standards that are beginning to restrict imports and exports, such as green taxes or subsidies - eco-duties on exports from developing countries which have not yet invested in environmental technology.

The trade body may yet find itself one day fighting the Commission, which declared in its report to EU governments and MEPs that “there may be specific exceptional circumstances” in which a government could take trade measures against a country which broke environmental laws, particularly if its practices harmed the environment in a neighbouring country. It also stated that the relationship between trade rules and new environmental policies needed “to be clarified in order to encompass instruments such as eco-labelling”.

But the Commission is determined that trading partners support environmental needs rather than hurting them.

Last month, Trade Commissioner Sir Leon Brittan said growing concern about the effects of world-wide economic activity on working conditions and the environment easily led to criticisms of efforts to liberalise trade.

“If the open trading system is not seen to be actively contributing to a solution to that problem, it will too readily be assumed that open trade is part of the problem,” he warned.

Although he dismissed critics who say Europe has no right to impose its ideals on other cultures, Brittan said he recognised that the fear of foreign exploitation was real and must be dealt with in the WTO.

Even as they established the global body to replace the General Agreement on Tariffs and Trade, member states asked for the creation of a special committee to study the environmental standards needed to promote sustainable development and, if necessary, amend world trade rules to suit them.

The Commission's recent report says the dispute settlement procedures already in place at the WTO should be applied to environmental conflicts, and proposes that the trade referee develop dispute settlement and enforcement mechanisms for existing and future environmental agreements.