The Uruguay Round of the General Agreement on Tariffs and Trade (GATT), concluded in 1993, not only tightened the rules governing trade between nations but also set the tone for environmental policies of national governments. This chapter describes this connection and speculates on the future, when GATT/WTO will explicitly discuss the subject of Trade and Environment in 1995 and beyond.
The World Trade Organisation (WTO), the 1995 successor to the GATT and executor of the new GATT agreement, will have increased authority to approach players who do not observe the rules. The WTO will also become involved in areas not yet clearly delineated including environmental pollution standards and possibly also social law (for example standards relating to child labour). It is still not clear what the outcome will be of the environmental standards, but the contours are being defined.
This concerned a dispute between Mexico
and the United States on the import ban on tuna in the US based on the
Marine Mammal Protection Act of 1972, the Dolphin Protection
Consumer Information Act of 1990 and the Fisherman's Protective
Act of 1967. US fishing boats were given permission by the US to catch
yellow tuna in the eastern part of the Pacific Ocean, on condition that
the catch include no more than 20,500 dolphins per year. It was forbidden
to import of tuna from fishers and countries that do not uphold the conditions
of the aforementioned legislation.
In January 1991 Mexico requested GATT
to adjudicate this matter. A GATT
panel reached its decision in the dispute on September 16th 1991. The US
import ban was forbidden. The three most important considerations were:
The tuna-dolphin decision illustrates that the present GATT rules make a strict delineation between import restrictions based on negative environmental effects the product will cause in the importing country (in that case import restrictions are allowed, in principle), and the restrictions to import of products which were produced under circumstances which created environmental damage. This second type is also known as trade restrictions based on the environmental production standards (this trade restriction is not allowed).
The discussion has not yet crystallized. The preparatory working group Environmental Measures and International Trade is still acquainting itself with the possible discrepancies between GATT principles and national environmental measures. The negotiations are still to begin and it is not clear where they will lead. The new GATT rules, which are the result of the Uruguay Round discussions on safety and health standards, do however indicate the sorts of discussions and problems we can expect concerning environmental production standards.
Because the GATT will only recognize production standards on scientific grounds, the World Health Organization's (WHO) recognized production safety and risk standards are no longer valid. The WHO recognizes that economic and other standards are important aspects of the acceptance of a product in a country. This can be seen in the code developed by the WHO in cooperation with UNICEF against marketing products which replace breast feeding. The new GATT now explicitly refers to two institutions for developing and standardizing internationally recognized scientific product standards: the FAO "Codex Alimentari- us" and the "International Office of Epizootics". Without wishing to cast doubt on the quality of the text of the Codex Alimentarius, it is striking that various sources have accused these two institutions of being strongly influenced by multinational chemical and food corporations. <29>
Analogous to the example of "Sanitary and
Phytosanitary Measures", we can expect a strong trend within the
Commission
for Environmental Measures and International Trade to argue for international
harmonization and scientific grounds for pollution standards for manufacturing
processes (just as safety and environmental standards for the
product
required a scientific basis).
With this approach, it will only be possible under
certain circumstances for countries to prohibit the import of goods, or
impose levies, if these goods are produced under standards less strict
than their own. As with product standards, the country wishing to place
import restrictions will have to prove scientifically that their own strict
process standards are necessary for the protection of their national environment.
From a global environmental perspective, there are
two important points to be made on future GATT/WTO rules which will be
based on internationally standardized process-pollution standards. The
first is a criticism of the content of the approach, the second highlights
its possible undesirable environmental effects:
The first criticism indicates that there is
consensus in the literature that international harmonization on environmental
standards is unnecessary and even undesirable. Countries have different
natural resources, environments and different environmental capacities
and every country has to balance its environmental and income issues. In
formulating the scientific basis for more stringent pollution standards,
it is important to take these aspects into consideration. This is no easy
task.
Even if we limit the scientific evidence to purely
ecological factors, it would be highly contentious for two reasons:
This criticism of the future GATT/WTO rules is from
the perspective of the global environment. There are others from the perspective
of the economic development of developing countries.
Non-governmental organizations have been campaigning
for years for the introduction of global minimum standards in the interest
of the environment, social justice and health. The goal was to protect
the interests of people and the environment in underdeveloped countries
where legal standards were lower or did not exist at all. Representatives
of (international) employers organizations, transnational corporations
and governments in the developed North have steadily resisted this, arguing
that such standards would endanger the stability of the world market and
be an unacceptable violation of the sovereignty of national governments.
Southern governments which lagged behind in establishing and applying national
environmental management (or legislation concerning social justice) easily
joined this campaign.
Now that Northern countries increasingly want to
influence environmental management outside their own national boundaries,
and the harmonization of environmental standards is threatened, the standards
in the North will not only, in all probability, be levelled down; in countries
which have as yet few regulations concerning the environment and social
justice the standards will be levelled up. There is a dichotomy of interests
between the North and the South.
The Southern countries now fear trade restrictions
on their products as these are being produced under lower environmental
standards than the likely world standard. This is unacceptable for these
countries as it is the rich countries that are most responsible for the
worldwide environmental problem. The problem is clearly outlined in the
following quote:
"Trade measures are seldom the best means of approaching
an environmental problem", is the opinion of the Dutch government.
It is better to get to the core of the problem. It is preferable to transfer
technology and money, to positively stimulate more environmentally friendly
production and to participate in international consultations. The government
does not however exclude the possibility of applying trade sanctions, as
a last resort, to punish uncooperative countries, particularly if the interests
of the international environment are at stake.
Because it is the rich countries that contribute
most to the global environmental problem, it is not right to pass the buck
to the poorer countries via trade. The Dutch government agrees with this
standpoint. Ideally sanctions against a certain product are compensated
through the transfer of technology or money to the supplier. Tragically,
in the period since the UNCED
environmental conference, the richer countries have kept their purse strings
closed. This makes it even more difficult for the poor countries to accept
"green protectionism". They will do whatever is in their power to fight
environmental demands - or social demands - which damage their competitive
position on the market being forced upon them." <30>
France and the United States are in favour
of the new World Trade Organization (WTO)
exploring the issue of social justice, in particular the desirability of
developing minimum rules on which trade restrictions can be based. The
Third World is unequivocally opposed to this "hidden protectionism"
of the rich North, saying it would cut the low-wage countries short and
protect their own industry. The ostensible issue is child labour and forced
labour.
The European Union is, as usual, divided on this
issue. The Netherlands belongs to the camp opposed to the French and US
proposals, arguing that we ought not weigh the WTO
down with non-trade, sensitive political issues. Belgium supports France.
Its Minister for Foreign Affairs R. Urbain proposed in the EU context to
provide extra trade advantages to countries with a "good social report".
<31>
There is less likelihood that the GATT/WTO discussion will end in a stalemate between Northern and Southern standpoints as happened at UNCED. Rich trading nations dominate negotiations within the GATT/WTO. Moreover each country is likely to be given ample time to grow toward the international harmonized minimum process standards. Whether the global environment will benefit from this depends heavily on the ability of the other countries to maintain and improve their own environmental management.
In May 1990, when it looked as though GATT
would fail due to the differences between Europe and the United States,
a number of leading companies in the US set up the Multilateral Trade
Negotiation Coalition (MTN). Companies strongly dependent on international
trade such as American Express, General Motors, IBM and Cargill were among
the participants. The goal of the coalition was to influence the GATT
through determined lobbying. Its success was clear during the July (1990)
meeting of the G7, when, after a briefing with the MTN, the Bush government
gave the Uruguay round top priority. <32>
There are many other examples of the power of the
US company lobby. For example, the US cigarette market declined in the
1980s, while markets in other parts of the world were protected against
imports either through monopolies or high imports tariffs. The US government
took several South-East Asian governments in hand, threatening unilateral
trade sanctions against Japan, South Korea, Taiwan and Thailand. Those
markets were eventually opened, and this led to a tremendous growth in
American exports of cigarettes from the large tobacco multinationals (Philip
Morris, Reynolds), to the detriment of local producers. <33>
The pharmaceutical industry provides another example.
The WHO worked for many years to compile
a list of essential medicines which Bangladesh took seriously and banned
all unnecessary medicines. The US government threatened to cut food aid
if Bangladesh continued to discriminate in this way against the US pharmaceutical
industry. <34>
Internationally applicable minimum process emission standards can have a positive effect on countries where standards are lower, as these countries will be threatened with trade restrictions. These, however, can have serious consequences for economic development. Countries should be given ample time to be able to meet the minimum standards. Transnational corporations can lobby for trade restrictions on the import of goods produced under polluting circumstances and can at the same time push for a GATT-panel decision against such restrictions, which will effectively put pressure on the stricter standards in the North.
Comments and questions are welcome:
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