Trade and environment: ‘Trade off’ at Doha is no loss

Pradeep S Mehta

While India is rejoicing on major gains in several areas of the hard-fought agenda of the fourth Ministerial Conference of the World Trade Organisation (WTO), it is a bit upset on the inclusion of environment in the Ministerial Declaration. The mistake made is that instead of agreeing to the inclusion of environment like a reluctant bride, the Maran Brigade should have asked for a proactive agenda on trade and environment, demanding discussions on issues of trade in domestically prohibited goods (DPGs) and toxic waste, and the relationship between environment and the TRIPs Agreement.

One has to recognise the fact that environment is different from other non-trade issues, like labour standards and human rights, in the WTO context. It is quite unfortunate to note that despite participating actively in the discussions in the WTO Committee on Trade and Environment (CTE) and recognising the importance of environment, we never pushed for a proactive agenda on our own. As a result, we had to agree on negotiations on environment unwillingly.

However, if one carefully analyses the Doha Ministerial Declarations’ work programme on ‘trade and environment’ there is not much to worry. The work programme doesn’t actually go against Indian interests, as is being understood by some. It addresses many points, which have been repeatedly asserted by India in the CTE discussions. These include importance of technical and financial assistance, effects of environmental measures on market access and relevant provisions of TRIPs.

The only thing, which displeases India, is paragraph 31, which primarily talks about the relationship between WTO rules and specific trade obligations set out in Multilateral Environmental Agreements (MEAs); procedures for regular information exchange between MEA secretariats and relevant WTO committees, and the criteria for the granting of observer status; and the reduction, or as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.

Undoubtedly, the three-point environmental EU agenda supported by Switzerland and other countries was mooted partly to protect domestic agriculture. They pushed hard for clarification of WTO rules on MEAs, ecolabelling and precautionary principle before the Doha meeting. The other members, including India, vociferously opposed it, especially the precautionary principle saying that they have great potential for protectionism.

They argued that since the EU is obliged to lower farm trade barriers, it would simply keep out farm products by finding some ‘green’ objections to them. This will only be possible by raising the trade-related environmental standards globally.

However, the Declaration takes care of some of these concerns and talks about negotiations on MEAs only. If we consider the CTE talks, India never opposed clarifications between WTO rules and MEA trade provisions. It treated it as an important but not urgent issue.
However, our lack of preparedness on the issues has in fact allowed countries like the US to push for a qualification saying that the negotiations shall not prejudice the WTO rights of any member that is not a party to the MEA in question. This qualification helps the US more than any other country in ducking the MEA issue.

While India needs to be cautious about the potential for protectionism, the best way out seems to be having a proactive agenda on environmental issues. India is a party to most of the MEAs and clarification of conflicting provisions, in fact seems to be beneficial for it, as otherwise these will be left for interpretation of an appellate body, as in the shrimp-turtle case. India can still argue that as far as predictability and flexibility are concerned, the existing practices and disciplines in MEAs and the WTO do not seem to be deficient. Article XX of the Gatt allows for MEAs to take measures necessary for the protection of the environment.

The trade measures, which cannot be justified under these rules, should themselves be subjected to the tests of ‘necessity’ and ‘desirability’. Therefore, India at the first instance should demand a clear definition as to what constitutes an MEA during future negotiations and subsequently push for establishment of a committee to decide on the desirability/necessity of trade measure in any existing MEAs as well as new MEAs.

Most of the other things mentioned in the work programme actually support India’s viewpoint. It has been demanding continuation of work on all 10 items on the CTE agenda, which has been strengthened by the Declaration. Any direct mention of precautionary principle has been removed. The mention of relevant provisions of TRIPs and the emphasis on the need for technical assistance and capacity building is a morale booster for India.

On labelling, we have to keep in mind that informally Indian exporters are already following these requirements. We will have to, therefore, prepare ourselves with our own standards to counter any future demand in this regard.

India should also ask for more market access for environment-friendly products, including organic food, and strengthen its own labelling schemes. It should also ensure strict implementation of policies at home. In the trade-environment interface, we often argue that we will do it in our own way, and WTO has no business to tell us how to improve the environment. However, we rarely see things improving. Failure of the Indian eco-labelling scheme is a lesson for policy makers, on which we have wasted more than Rs 20 crore of public money, without a single label in the market.

On the other hand, India should use every opportunity to push for the case of developing countries. For example, the World Summit for Sustainable Development at Johannesburg in September 2002 offers a good opportunity to ask for commitments made by the rich to be fulfilled. This is an event to look back over the last 10 years of progress made since the Earth Summit held at Rio de Janeiro in June 1992. Then the rich countries had made commitments for additional resources of over $480 billion, but only $2 billion was mobilised.
Indeed, the Johannesburg summit will be the next big global event after Doha. At this meeting, the commerce ministry should also participate, as the environment ministry did at Doha.

India has been able to communicate to the world about the potential of environment as non-tariff barriers. Now it is India’s turn to show the world an alternative path to progress. It has to prepare itself for strict environmental standards and have its own proactive environmental agenda. There is no inherent contradiction between the WTO and the pursuit of a high level of environmental protection.

(The writer is Secretary General of the CUTS Centre for International Trade, Economics & Environment)