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The need to ensure that trade and environment policies are mutually supportive is more pressing today than ever before. Successful integration of these policies requires a good understanding of the complex links between trade and our environment.
Trade and the environment are related at the most basic level, because all economic activity is based on the environment – whether because all basic inputs are sourced from nature (metals, minerals, forests and fisheries) or because the energy needed to process them is derived from the environment. The waste produced at the end of most tradeable goods’ life cycle is also absorbed by the environment. The environment affects trade, in turn, because exporters often have to respond to consumer demand for ‘green’ or ‘greener’ goods.
Two distinct bodies of international law govern trade and the environment. Trade law is governed by the World Trade Organisation, regional, and bilateral trade agreements. Environmental law is set out in various multilateral environmental agreements – some of these you can read about in the links from this page.
Key elements of the work being done to line up trade and environment considerations include:A “win-win-win” agenda is one that delivers simultaneous benefits to trade, environment and development objectives. An example of this is New Zealand’s interest in seeing the removal of trade-distorting practices in areas like agriculture, fisheries, and energy.
New Zealand is engaged in the issue of worldwide fish subsidies. Some subsidies can lead to overfishing, which means that some fisheries are exploited unsustainably. These subsidies disadvantage developing countries that are heavily dependent on fisheries for export revenue. Foreign subsidies also make New Zealand fish seem expensive compared to “subsidised” fish on supermarket shelves overseas. New Zealand is an active player in WTO discussions about fish subsidies – a good result would be an example of a ‘win-win-win’ outcome as it would remove subsidies so reducing incentives to overfish, enabling developing countries to compete on world fisheries markets, and reducing distortions in the international fisheries trade.
So far there are different views about what constitutes an environmental good or service. Some countries believe that the only true ‘environmental’ goods and services are those which have a direct, positive impact on the environment – something like a filter that reduces emissions from a factory smokestack. But others think that any good produced in an environmentally sound manner – regardless of its end use – is an environmental good.
The reduction or elimination of trade barriers to environmental goods and services would deliver important benefits to the environment sector – including New Zealand’s environment industry. Progress on reducing these barriers depends on parallel negotiations underway in the WTO Council for Trade in Services, and others in the WTO Negotiating Group on Non-Agricultural Market Access. If you are a New Zealand environmental exporter, MFAT would like to hear from you about the perceived obstacles and opportunities thrown up by the multilateral trading regime. This will help us advance New Zealand’s interests in this area. Please use the contacts at the top of this page to get in touch with us.
Opinions are divided in the WTO over how to handle the issue of labelling for environmental purposes. Some see government-sanctioned eco-labelling schemes as a vital way of promoting informed consumer choices and sustainable outcomes. Others suspect that such schemes would lead to heavy compliance costs for businesses, and could be used by countries as a way of protecting their own producers from foreign competition. They argue that eco-labelling is fine, but should be governed by the marketplace, not by international trade law. Labelling issues have so far mainly been discussed in the WTO’s Committee on Technical Barriers to Trade. New Zealand supports the Committee’s ongoing efforts to encourage transparency and non-discrimination in labelling schemes, which in turn helps consumers to make informed choices.
As part of the WTO’s Doha Development Agenda, countries are looking at ways to make trade interests and the environment mutually supportive. This work is carried out primarily by the WTO Committee on Trade and Environment (the CTE) supported by the Negotiating Group on Rules, and the Negotiating Group on Non-agricultural Market Access.
Key issues for negotiation in the CTE between now and January 2005 include:
The reduction of tariff and non-tariff barriers to environmental goods and services. Tariffs are taxes on imports imposed as they cross the border. Non-tariff barriers include things like labelling requirements, standards or specifications that make it expensive to get imports onto foreign shelves.
