Politics

WTO AND SUSTAINABLE DEVELOPMENT
John C. Dernbach

The U.S. should articulate a positive and compelling vision of what sustainable development would mean for the world's nations and integrate that vision into its domestic and foreign policy, including its trade policy. The United States should exercise that leadership in the WTO and other forums.

U.S. Leadership in the WTO

The WTO needs to be part of the effort to achieve sustainable development, not part of the problem. The United States should exercise leadership in the WTO to achieve the following outcomes. Although many of the examples relate to environment, these recommendations also apply to labor, health, and other aspects of sustainable development.

Elimination of Subsidies That Contribute to Unsustainable Development. WTO parties should phase out subsidies for environmentally unsustainable activities, including subsidies that contribute to fisheries overcapacity. The elimination of such fishing subsidies has been proposed by New Zealand, Iceland, and the United States.

The parties should find other ways to apply the WTO's legal authority concerning subsidies to support sustainable development. For example, it is widely recognized that the use of fossil fuels is subsidized by governments in ways that often increase their use and that the use of fossil fuels contributes to global warming. The Kyoto Protocol specifically identifies elimination of national subsidies as one means of achieving greenhouse gas reductions. Subsidies for fossil fuels distort the prices charged for those fuels and create substantial economic distortions in the debate over the cost of Kyoto Protocol compliance.

Consideration of Sustainable Development in New Trade Agreements. No trade-related agreement should be negotiated or allowed to go into effect unless a sustainable development impact assessment is first prepared and subjected to public review. The assessment should describe the impact of the proposed agreement on the environment, on social development and human rights (including labor), on peace and security, and on national governance that is supportive of those goals. The assessment should also describe alternatives to the proposed agreement, including alternatives relating to the special situation of developing countries, and particularly the least developed countries.

Integration of Sustainable Development Goals into New Trade Agreements. No trade-related agreement should be allowed to go into effect unless the parties are satisfied, after public review, that the agreement would actually further not just economic development but also environmental protection, social development and human rights, peace and security, and supportive national governance. It is not enough to consider the effects on these goals. Trade agreements should actually further these goals, or at least not interfere with them. Procedural reforms to WTO's Committee on Trade and Environment will not achieve this result.

The parties should also find additional ways to make GATT and multilateral environmental agreements mutually supportive. When negotiations relating to a particular economic sector begin, for example, and there is no multilateral environmental agreement in place concerning that sector, there should be preliminary discussion on whether it would be appropriate to have multilateral environmental standards and procedures applicable to that sector. (These standards would include process and production methods.) Environmental ministries should participate directly in such discussions. If so, then those standards could be negotiated at the same time as, or perhaps even as part of, the trade discussions for that sector. Such negotiations should also include appropriate standards and financial or technical assistance for developing countries.

The standards should include air pollution, water pollution, sanitation, and drinking water--environmental problems that developing countries experience more severely and immediately than most other environmental problems. These problems generally are also not directly covered by multilateral environmental agreements. The quid pro quo for increased trade, in short, should be progress in addressing such problems and assistance by developed countries in doing so.

Integration of Sustainable Development Goals into Existing Trade Agreements. Where trade agreements already exist (e.g., for products), the parties should facilitate the negotiation of international agreements concerning process and production agreements relating to products. These agreements should include, but not necessarily be limited to, extended producer responsibility, ecolabeling, and the greening of public purchasing. These agreements also should apply to air pollution, water pollution, and similar problems experienced severely by developing countries, and should include appropriate assistance. The WTO agreements should also be amended, or interpreted by the parties, to provide a more balanced test for the availability of the Article XX(b) and XX(g) exemptions for measures to protect "human, animal or plant life or health" or conserve "exhaustible natural resources." In addition, the WTO agreements should expressly protect domestic actions taken pursuant to multilateral agreements and allow unilateral actions where necessary to protect the national interest.

U.S. Leadership in Other Forums

Many of the changes required to make trade supportive of environmental and social goals cannot be achieved by WTO alone. Unless the United States exercises leadership for sustainable development in all relevant international and domestic forums, it will continue to miss many opportunities to improve the environmental and social effects of trade.

Greater Assistance to Developing Countries for Sustainable Development. The Earth Summit bargain between developed and developing countries was that developed countries would provide financial and technical assistance to developing countries to help developing countries achieve environmental and social goals. The developed countries have not kept that bargain. Developed countries (including the U.S.) need to increase official development assistance, to assist technical and governmental capacity building, and to provide access to environmental technology and know-how on preferential terms. Creative means of financing this assistance should also be seriously considered (e.g., debt for environmental and health protection swaps, or a small tax on global trade and capital flows).

Creation of International Institution for Sustainable Development Comparable to WTO. There is no organization equal in influence to the World Trade Organization concerning the environmental aspects of sustainable development. Such an institution should thus be created, probably by combining existing organizations (e.g., Commission on Sustainable Development, U.N. Environment Programme, secretariats of various multilateral environmental agreements). The consolidation of environmental organizations would be in addition to the integration of environment into existing WTO operations.

Domestic Efforts to Achieve Sustainable Development. The U.S. and other developed countries must demonstrate by their own domestic actions, including actions concerning trade, that sustainable development provides better quality of life for their citizens and for succeeding generations.

John C. Dernbach is Associate Professor of Law at Widener University Law School. He has written extensively in the areas of administrative law, environmental law, international law, and sustainability and the law.


Sources for More Information

Center for International Environmental Law Email: cielus@igc.apc.org

Friends of the Earth Website: http://www.foe.org

Institute for Agriculture and Trade Policy Website: http://www.iatp.org/iatp

National Wildlife Federation Website: http://www.nwf.org/international/trade

Nautilus Institute for Security and Sustainable Development Email: lzarsky@nautilus.org Website: http://www.nautilus.org

Worldwatch Institute Website: http://www.worldwatch.org

World Resources Institute Website: http://www.wri.org./wri/governance/iffe.html

Trade and Environment Database Website: http://www.american.edu/projects/mandala/TED/ted.htm

International Centre for Trade and Sustainable Development Website: http://www.ictsd.org


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