Publications

Relevant links

Environmental aspects-background

The relationship between the environment and international trade is complex. On one hand, the relationship is positive since international trade contributes to an efficient use of resources through specialisation according to comparative advantages. Trade also allows the introduction of new, cleaner technologies. On the other hand, economic growth and increased trade lead to more consumption which is accompanied by rising waste levels and depletion of resources such as fish stocks and energy resources. Moreover, traded goods and services need to be transported to the location of consumption which implies pressures on the environment e.g. through pollution by road or air transport. There is a need for both developing and developed countries to balance the positive and negative impacts of trade on the environment in a way that ensures a net contribution to sustainable development.

As a result of high technological standards and economic strength developed countries are in a better position to deal with environmental concerns. For developing countries, the situation is more complicated. In the initial stage of development countries have different priorities. Only at later stages there will be more focus for environmental concerns. For example in the case of transport, traditional transport means can be replaced by second-hand cars imported from developed countries, which will put pressure on the environment. Not until a later stage will older car models in turn be replaced by newer and more efficient models. When assessing the environmental aspects of trade, special attention is needed for the situation of developing countries.

In an international setting several agreements concerning trade and environment have been concluded. The most relevant agreements are the Multilateral Environmental Agreements (MEAs). There exist around 200 MEAs and approximately 20 of them are related to trade. Examples of trade-related MEAs are the Montreal Protocol for the protection of the ozone layer, the Basel Convention on the trade or transportation of hazardous waste across international borders, and the Convention on International Trade in Endangered Species (CITES).

Developing countries have shown reluctance against the inclusion of environmental concerns in trade agreements. They fear that developed countries will use the environment as a mask to restrict imports from developing countries e.g. through the requirement of fulfilling certain environmental standards. Developing countries have partly been successful in keeping environmental issues from the trade agenda. In the WTO negotiations there has not yet been a specific agreement concerning the environment, although some agreements of the Uruguay Round include clauses which are related to environmental issues. Examples are the Agreement on Technical Barriers to Trade (TBT), the Agreement on Sanitary and Phyto-Sanitary measures (SPS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  More recently, in the Doha Declaration the environment was not mentioned as an independent item either, despite pressure from the European Union, which advocates the inclusion of environmental issues. Nevertheless, the European Union did succeed in having the environment mentioned throughout the text of the Declaration. It seems that in the coming years environment-related market access issues, eco-labelling and the like will become a more integral part of the ongoing trade negotiations.

Literature on the environmental aspects of trade focuses on some of the issues raised here. They cover the relationship between the environment and trade, and the role of the environment in trade negotiations, such as the discussion on standards/labelling. In this section you will find a number of publications which touch upon the environmental aspects of trade, in particular in reference to the interests and viewpoints of the European Union and developing countries.

Publications

Trade and Environment – Developments Since the Fourth WTO Ministerial Conference, ICTSD/IISD, 2003, Doha Round Briefing Series, Vol. 1, No. 9, Geneva

This three-page document gives an overview on the state of negotiations among the WTO members. It sets out the positions of the members ahead of the Fifth WTO Ministerial Conference (Cancun, Mexico, 10-14 September 2003). Special attention is given to the position of the EU, Switzerland, Norway and Japan, which are in favour of discussing environmental issues within the WTO, and to the position of the US, Canada and developing countries which are against the inclusion of environmental concerns.

For this document click here.

Environment at the WTO – Implications for Poor Countries, Ong’olo, D., 2002, CUTS-ARC Policy Brief No. 1/2002, CUTS Africa Resource Centre, Harare

This brief addresses the role of environmental issues in the current WTO negotiations. In particular it focuses on the possibility that developed countries will use environmental concerns as a mask for the protection of their domestic markets. The authors mentions three issues which are important for development countries in this perspective: the MEAs, the precautionary principle which allows trade bans on health grounds, even if there is no clear evidence of risks yet, and the TBT and SPS Agreements. The brief makes a number of recommendations. MEAs should not be rushed into the WTO. Furthermore, developed countries should stimulate transfer of environment-friendly technologies and provide technical assistance to meet SPS requirements. Technical assistance should be complemented with financial support.

For the document click here. 

Dirty Exports and Environmental Regulation: Do Standards Matter to Trade? J.S. Wilson, T. Otsuki, M. Sewadeh, 2002, World Bank, Washington D.C.

In this document the authors analyse the impact of linking trade and environmental regulation in a WTO setting from a developing country perspective. The analysis is based on an econometric model covering exports of highly polluting products in 24 countries. A higher degree of environmental regulation implies lower net exports for a number of the polluting products. Furthermore, a trade agreement with common standards will be more costly for a non-OECD country than an OECD country, because OECD countries already have high standards, whereas developing countries are lagging behind. This will affect competitiveness of exports from developing countries. If international standards are to be agreed upon, there will be a need for transition periods in developing countires. In addition, the loss of export competitiveness for developing countries should be considered in WTO negotiations.

For the document click here.

IISD Commentary: After Doha – Assessing the outcomes of the WTO Fourth Ministerial, K. von Moltke, 2002, IISD, Winnipeg

This document discusses the role of the environment in the Doha Development Round. The author underlines the role which the European Union has been playing in putting environment-related issues on the agenda, although a specific item on the environment has not been included in the final agreement. Three categories are identified within the current negotiations, namely: (1) environmental issues which are included in the Doha Agenda, e.g. MEAs and trade barriers on environmental goods; (2) environmental issues which are considered for negotiation, e.g. market access, labelling; and (3) other, more broader matters which are indirectly linked to the environment, e.g. agriculture, TRIPS. In order to make the Doha negotiations a round for sustainable development, the document advocates more co-operation between the WTO’s Committee on Trade and Development and the Committee on Trade and Environment. It furthermore underlines the need for strong leadership and partnership to deal with environmental matters in this round of negotiations.

For the document click here. This document is one out of a series of comments on the WTO Ministerial Meeting in Doha. For related documents click here.

Labour and environmental standards: the “Lemons Problem” in International Trade Policy, E. Beaulieu, J. Gaisford, 2001, University of Calgary, Calgary

This paper discusses alternative trade policies for an importing country with concerns over labour and environmental standards. An issue in trade policy is labelling or certification. This means that products meeting environmental standards are labelled. Both labelled and unlabelled goods will be imported and consumers in the importing country can decide which goods to buy. Another option is a full import embargo. A full embargo only allows imports of goods which are produced according to acceptable labour and environmental standards.

The authors support the view that certification of standards is a better option than a full embargo, although there are some exceptions. They believe furthermore that the WTO Agreement on Technical Barriers to Trade does allow the use of labelling as provision of information to consumers. However, if these kinds of cases are brought to the WTO panels, then they need to be judged individually and be accompanied by a cost-benefit analysis which is to prevent the use of standards as hidden protectionist measures. According to the authors it will be important to set broad standards rather than a number of differing unilateral national standards. A sufficient degree on a certain standard is also needed to deal with it within a WTO setting.

For the document click here.

Reference Manual for the Integrated Assessment of Trade-Related Policies, UNEP, 2001

This manual discusses theory and practise of integrated assessments. It gives suggestions for making integrated assessments of trade policy on sustainable development, covering not only environmental, but also social aspects. The authors regard integrated assessments as important tools to involve a large number of stakeholders and, if conducted ex ante, as ways to create policies cushioning social and environmental impacts in the process of trade arrangements or measures.

For the document click here.

Environment and Trade – A Handbook, UNEP/IISD, 2000

This handbook discusses the relationship between environment and trade. However, rather than dealing in-depth between the linkages of environment and trade, the publication gives suggestions for policy makers to integrate environment and trade into their policies. The discussion includes general trends in global trade and environment, MEAs, WTO issues and regional trade agreements. It underlines the need for more research and consensus building, and for increased international co-operation. Policy makers need to make formal assessments of trade liberalisation on the environment. In this process the involvement of all relevant stakeholders is crucial.

For the document click here.

Trade and Environment, H. Nordstrom, S. Vaughan, 1999, Special Studies 4, WTO, Geneva

This study addresses several questions in the debate on the link between trade and environment. First, is economic integration through trade a threat for the environment? Also, is trade undermining efforts by national governments to protect the environment? Thirdly, will trade bring about a sustainable use of environmental resources? An important presumption throughout the publication is that countries will always be interdependent on environmental issues even without trade. As an answer to all three questions, the role of trade in regard to the environment is limited. The link between trade and environment is indirect. The most important effect of trade is probably the dismantling of economic borders which limits the regulatory power of individual states and which increases the need to co-operate on environmental issues due to the borderless character of environmental problems. However, based on the presumption mentioned, the authors do not see trade policy as a sufficient way of addressing environmental matters. Accordingly, they do not believe the WTO is capable of addressing environmental issues effectively. The WTO’s role is limited to contributing to the decrease of trade barriers of environmental friendly goods and services and to the reduction in subsidies that harm the environment. Finally, in its structure of legal rights and obligations the WTO may, as an organisation, be an example for a similar organisation which deals with the environment.

For the document click here.

Relevant links 

International Institute for Sustainable Development (IISD) 

This site contains information and research on sustainable development including environmental aspects. 

Trade Knowledge Network 

IISD has established the Trade Knowledge Network (TNK), which aims to link and disseminate research on trade and sustainable development.

Economics and Trade Branch (ETB), United Nations Environment Programme (UNEP) 

This site offers several links to publications, projects, case studies, meetings and more concerning the link between trade and environment.

WTO Committee on Trade and Environment (CTE) 

This site gives more information concerning the role of environment in the WTO negotiations.

World Bank’s Trade section on Environmental Standards

This site contains some background information on the issue of environmental standards. A reference list to major publications is included.

UNCTAD’s section on Trade, Environment and Development

This site includes information of UNCTAD’s activities in the field of environmental aspects of trade and development.

The Centre for the Study of Globalisation and Regionalisation (CSGR) at the University of Warwick

This site has a section with working papers on Global Environmental Issues. Some papers deal with WTO negotiations.

Global Trade Negotiations’ (GTN) section on Environment

This site discusses the role of environmental issues in the WTO. It also contains links to research material and to other research institutes.

WWF’s Balanced Trade Project 

This project aims to support stakeholder-oriented sustainability assessments within the ongoing trade negotiations. The website of the project has publications and links to other NGOs, academic institutions and other organisations.

Global Environmental Trade Study (GETS)

This initiative is established by the Yale Center for Environmental Law and Policy and the Institute for Agriculture and Trade Policy. The online journal GETS View contains several research articles on trade and the environment.

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