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I. Introduction and General Topics



Trade and the Environment

T. Raney
Commodities and Trade Division



The purpose of this module is to summarize issues related to environment and international trade, and particularly in the context of the Agreement on Agriculture. This should assist countries in articulating their issues and concerns related to environment and trade in the next round.


6.1 Introduction

6.2 Main provisions of the GATT/WTO Agreements and Ministerial Decisions regarding trade and the environment

6.3 Developing country experiences and unresolved issues

6.4 Some issues for developing countries



The Preamble to the 1994 Marrakesh Agreement establishing the World Trade Organization (WTO) states that Members should conduct their trade and economic relations with the goals of raising standards of living, ensuring full employment, promoting a large and steadily growing volume of real income and effective demand, and expanding production and trade in goods and services, "while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development....". In contrast, the relevant passage in the original General Agreement on Tariffs and Trade (GATT 1947) simply called for "developing the full use of the resources of the world....". A comparison of these passages clearly illustrates the growing importance attached to environmental concerns within the world trading system.

WTO philosophy sees trade and environment as complementary goals...

The WTO's fundamental philosophy regarding the relationship between trade liberalization and environmental protection is that the two are complementary goals. With sound environmental policies in place, an open, equitable and non-discriminatory trading system can make a crucial contribution to national and international efforts to better protect and conserve environmental resources and promote sustainable development. This contribution is two-fold. First, a more open trading system can promote a more efficient allocation and use of environmental resources at national and global levels, by reducing the policy distortions that arise from inappropriate trade restrictions and subsidies. Second, by promoting income growth, a more open trading system can help create the economic resources necessary to combat what has become known as the "pollution of poverty"1.

Despite the general consensus within the WTO on these fundamental principles, considerable controversy surrounds the issue of agricultural trade and the environment. It is widely recognized that in a well-functioning market-based economy, prices register the relative scarcity of resources and consumer preferences (given their income), and serve to allocate resources efficiently among competing uses. However, the market alone cannot lead to an optimal resource allocation unless social as well as private costs and benefits are fully reflected in product prices. Because of its intimate linkages with the environment, agricultural production creates positive and negative environmental "externalities" that often are not reflected in market prices. Farmers may pay less than the full costs associated with their production if, for example, animal wastes from intensive livestock operations cause environmental damage that is borne by society as a whole rather than the individual producer. Similarly, farmers may receive less than the full value of the benefits created by their activities if, for example, terraced rice paddies provide environmental benefits such as flood control. Such "market failures" may result in inappropriate patterns of production unless a judicious mix of economic and environmental policies are used to correct them.

... but the challenge of balancing environmental policies and open trade remains

There are formidable challenges involved in identifying and measuring the environmental externalities associated with agriculture and in designing appropriate policy responses for them. In practice, policies adopted for one goal may themselves encourage a misallocation of agricultural resources, with environmentally damaging consequences (for example, input subsidies intended to promote food security may lead to the excessive use of the subsidized input). Such domestic "policy failures" in one country may have adverse consequences for other countries either by directly harming the environment or by distorting world price signals and causing a misallocation of resources at the global level. Furthermore, in the international arena, countries may attach different priorities and valuations to the environmental externalities associated with agricultural production, depending on factors such as their level of economic development, the structure of their agricultural system and the role of agriculture in their society. Given these complexities, the challenge for the WTO is to balance the legitimate environmental concerns of Members against the benefits deriving from an open, equitable and non-discriminatory international trading system.

This module covers the following aspects:


6.2.1 GATT/WTO principles regarding trade-related environmental measures

A number of GATT articles are of direct relevance to trade-related environmental issues, including first of all Articles I and III on non-discrimination. The GATT principle of non-discrimination has a fundamental bearing on the formulation and enforcement of environmental policies by WTO Members. Non-discrimination has two components: the most-favoured nation (MFN) clause contained in Article I and the national treatment clause contained in Article III. Under the MFN clause, WTO Members are bound to grant to the products of other Members treatment no less favourable than that accorded to the products of any other country. Thus no country is to give special trading advantages to another or to discriminate against it2. The national treatment clause means that once goods have entered a market, they must be treated no less favourably than equivalent domestically-produced goods. With respect to trade-related environmental issues, the principle of non-discrimination ensures that national environmental protection policies are not adopted with a view to arbitrarily discriminate between like products of foreign and domestic origin nor between like products imported from different trading partners. Thus, the principle of non-discrimination helps in preventing the use of environmental policies as disguised restrictions on international trade3.

Article XX gives Members the right to take measures to protect their environment…

The right of countries to adopt measures for the protection of the environment is affirmed in Article XX of the GATT on General Exceptions and in a number of provisions of the WTO Agreements. The basic articulation of this right is found in Article XX which states that nothing in the WTO Agreements may infringe upon the right of countries to adopt and enforce measures necessary for the protection of the life or health of humans, animals or plants4 and measures relating to the conservation of exhaustible natural resources5 subject to the conditions that such measures are not applied in a manner which would constitute arbitrary or unjustifiable discrimination between Members and are not used as a disguised restriction on international trade. A key component of the conditions under which such measures may be used is the principle of transparency. Towards this end, Members must ensure that their regulations are publicized in a reasonable manner and are explained and justified in terms of the relevant WTO provisions.

Other provisions of the WTO Agreements provide for more specific types of environmental protection. The precise formulations of these provisions differ slightly, but in general terms, such measures are subject to the following conditions:

… subject to certain conditions

6.2.2 Environmental provisions of the Agreement on Agriculture

The Agreement on Agriculture recognizes that commitments under the reform programme should take into consideration the non-trade concerns of Members, including the need to protect the environment6 . Further, Article 20 of the AoA calls for the continuation of the reform process, taking into account Members' non-trade concerns7 . The provisions under Article 6 on Domestic Support Commitments and Article 7 on General Disciplines on Domestic Support are the most relevant in giving effect to these commitments.

The disciplines on domestic agricultural support seek to quantify the domestic policies that distort agricultural trade, using the Aggregate Measure of Support (AMS), and gradually reduce the value of the AMS over time. Certain types of domestic support measures detailed in Annex 2 to the AoA were exempt from reduction commitments because they were considered to have little or no trade-distorting effects (see Module II.1 Domestic Support Measures). Several types of policies related to environmental management are included in these so-called "Green Box" policies8 .

The Green Box policies outlined in Annex 2 must be provided through a publicly funded government programme (including government revenue foregone) and must not have the effect of providing price support to producers. Four types of Green Box exemptions are related directly or indirectly to the environment:

Environment payments are included in Green Box exemptions in the AoA…

6.2.3 Other WTO Agreements related to trade and the environment

…but the environmental provisions of other WTO Agreements may impact more on agricultural trade

The General Agreement on Trade in Services (GATS) contains a General Exceptions clause in Article XIV similar to that in GATT Article XX discussed above. In addressing environmental concerns, the two Articles are identical. GATS Article XIV(b) allows WTO Members to adopt policy measures that are necessary to protect human, animal or plant life or health, even if they are inconsistent with the GATS, on the conditions that such measures must not result in arbitrary or unjustifiable discrimination and must not constitute a disguised restriction on international trade.

The Agreement on Technical Barriers to Trade recognizes that countries may enforce technical regulations and product standards that are necessary for the protection of the environment or for the life or health of humans, animals or plants. The Agreement on TBT applies to agriculture as well as manufactured goods, however it does not cover Sanitary and Phytosanitary measures, which are treated in the SPS Agreement. Broadly speaking, the TBT Agreement requires that such measures be supported by scientific evidence and be applied in a manner consistent with the principles of non-discrimination and transparency13 . Specifically, the TBT Agreement requires countries to ensure that products imported from any Member are treated no less favourably than similar products of national origin; that technical regulations are not prepared, adopted or applied with a view to nor with the effect of creating unnecessary obstacles to international trade; and that technical regulations are no more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create14 .

The Agreement on the Application of Sanitary and Phytosanitary Measures affirms the right of members to adopt measures necessary for the protection of human, animal or plant life or health subject to the requirements that such measures do not constitute arbitrary or unjustifiable discrimination between members or disguised barriers to trade15 . Such measures are to be applied only to the extent necessary to achieve the desired level of sanitary and phytosanitary protection and must not be maintained without sufficient scientific evidence. Members must ensure that their sanitary and phytosanitary measures are based on the relevant scientific evidence taking into account an assessment of risks and the relative cost effectiveness of alternative approaches to limiting risks16 . The SPS Agreement seeks to further the harmonization17 of sanitary and phytosanitary standards and affirms the principle of equivalence18 of different methods that can be demonstrated to provide the appropriate level of protection. Countries are pledged to provide technical assistance to other Members, especially developing countries, in adjusting to and complying with their sanitary and phytosanitary measures. In formulating such measures, countries are further committed to take into account the special needs of developing countries, particularly least developed countries, so as to maintain opportunities for their exports.

The Agreement on Trade-Related Aspects of Intellectual Property Rights allows countries to exclude an invention from patentability if the prevention of its commercial exploitation is necessary to protect the life or health of humans, animals or plants or to avoid serious prejudice to the environment. Specifically, Members may exclude from patentability plants and animals other than micro-organisms, and biological processes for the production of plants or animals other than micro-biological processes19 .

The Agreement on Subsidies and Countervailing Measures, which applies to subsidies other than those provided for in the Agreement on Agriculture, defines certain subsidies as "non-actionable" and exempts them from disciplines under the Agreement. Under Article 8 of the Agreement on non-actionable subsidies, government subsidies to industry are permitted under certain circumstances in order to compensate for the costs of compliance with new environmental legislation or regulations.

6.2.4 Ministerial Decisions on trade and the environment

In addition to the provisions of the GATT/WTO Agreements, which are legally binding on Members, two Ministerial Decisions were adopted during the Uruguay Round which address environmental issues. While Ministerial Decisions do not have the force of law, they serve as expressions of the general consensus of Members.

WTO Committee now the forum to consider trade and environment issues

The Ministerial Decision on Trade and Environment20 created the Committee on Trade and Environment (CTE) with the aim of making international trade policies and environmental policies mutually supportive. The CTE is open to all WTO Members. The Decision affirms that "there should not be, nor need be, any policy contradiction between upholding and safeguarding an open, non-discriminatory and equitable multilateral trading system on the one hand, and acting for the protection of the environment, and the promotion of sustainable development on the other...". The Decision limits the role of the WTO in coordinating trade and environmental policies to its "area of competence in trade policy and those trade-related aspects of environmental policies which may result in significant trade effects for its members."

The CTE was instructed to identify the relationship between trade measures and environmental measures, to assess the environmental benefits of removing trade restrictions and distortions, and to make appropriate recommendations regarding whether modifications of the provisions of the multilateral trading system are required to enhance the positive interactions between trade and the environment and to avoid the use of protectionist trade measures. The mandate of the CTE includes, inter alia, trade measures for environmental purposes, including those related to multilateral environmental agreements; charges and taxes for environmental purposes; and requirements for environmental purposes relating to products, including standards and technical regulations, packaging, labelling and recycling. Furthermore, the CTE was instructed to assess "the effect of environmental measures on market access, especially in relation to developing countries, in particular to the least developed among them..."

The Ministerial Decision on Trade in Services and the Environment21 further instructed the CTE to examine the relationship between environment and trade in services and to recommend whether any modification of GATS Article XIV on General Exceptions is needed to account for environmental measures.


Among the many issues surrounding agricultural trade and the environment, in the context of the WTO, are the following: (i) the impact of international trade and trade liberalization on the environment, (ii) difficulties associated with the Green Box exceptions for environmental programmes, (iii) the relationship between environmental agreements and the international trading system and (iv) trade problems created by the existence of disparate national regulatory systems and more generally the fear that trade regulations based on environmental considerations could be a form of disguised protectionism22 .

6.3.1 Agricultural trade liberalization and the environment

As noted above, agricultural trade liberalization and environmental protection can be complementary goals, if adequate environmental policies are put in place. Nevertheless, some WTO Members have argued that liberalization in the agricultural sector may have negative implications for the environment if environmentally "harmonious" production patterns are disrupted23 or if liberalization leads to an international "race to the bottom" in terms of environmental regulations. On the contrary, other WTO Members have argued that market liberalization is a crucial factor in correcting environmentally destructive production practices and in promoting the adoption of more rigorous environmental policies24 . Several WTO Members are required to conduct national environmental impact studies before entering into international trade agreements, and it has been proposed that the WTO consider conducting such an analysis of any future agreements.

6.3.2 Environmental Green Box exceptions

The AoA Green Box identifies domestic support measures that are exempt from reduction commitments and includes a variety of programmes related directly or indirectly to environmental protection25 . These exemptions are available to both developed and developing countries, but very few developing countries explicitly claimed them in their initial submissions on domestic supports. In fact, the submissions for most developing countries state simply that their domestic supports are exempt from reduction commitments, without specifying whether the exemption is based on the Green Box or on Special and Differential Treatment. Thus for most developing countries, it is not possible to determine whether they operate programmes that would qualify under environmental Green Box exceptions.

Developing countries make little use of Green Box exemptions for environmental policies…

Of the 99 developing countries (as classified by the WTO) that submitted supporting tables relating to commitments on domestic support, only 40 reported sufficient detail to enable an assessment of the types of domestic support provided. Of these, 36 claimed programmes that could be indirectly related to environmental protection, such as disaster relief, quarantine and inspection services and related research activities. Only 6 developing countries claimed direct environmental programmes, with soil conservation activities being the most frequently cited. In contrast, of the 13 developed countries that submitted supporting tables, 12 claimed Green Box exceptions for programmes indirectly related to the environment and, of these, 8 claimed direct environmental programmes26 .

The disparity between developed and developing countries in their usage of the environmental exemptions reflects the greater financial resources available for environmental programmes in developed countries and, perhaps, a higher priority given to environmental concerns. It may also reflect the lack of institutional capacity in many developing countries for the preparation of the necessary documentation under the AoA. Given the large number of developing countries for which detailed supporting tables are unavailable, it is possible that this analysis underestimates the prevalence of Green Box compatible environmental programmes in developing countries. Nevertheless, this disparity lends support to the fears expressed by many developing countries that the environmental exceptions to Article 6 mainly benefit the developed countries.

…so whether a flexible interpretation is in their interests should be discussed

There are several potential problems in the Green Box exemptions for environmental programmes. The first relates to the term "environmental" which is not defined in the AoA, and thus may lead to confusion as to what are considered valid environmental exceptions to Article 6. It is widely accepted, for instance, that an environmental payment that helps prevent soil erosion by retiring fragile land from production would be considered a valid exception. However, it is unclear whether a payment which helps to preserve the amenity value of a traditional agricultural landscape would be considered a valid environmental exception. Whether the environmental exceptions in the Green Box are meant to protect such rural agricultural environments or purely natural environments has not been resolved.

A concern for all Green Box policies regards how to assess and monitor the use of such policies to ensure that they have no more than a minimal effect on production and trade. The concept of "minimal effect" is not defined in the AoA. Subsidies of any type, including those given for environmental purposes, may provide advantages to domestic producers and have some effect on trade, at least in the long run. Thus the issue is to what extent and under which conditions environmental subsidies can be allowed and how their use can be evaluated with a view to limiting negative effects on trade and environment.

6.3.3 Environmental Agreements and the WTO

The WTO regards Multilateral Environmental Agreements (MEAs) as the preferred vehicle for handling transboundary environmental issues, at either the regional or global level, because unilateral solutions run the risk of arbitrary discrimination and disguised protectionism. The WTO argues that trade measures are not the most effective policy instrument to use in MEAs, although in certain cases they can play an important role, particularly where trade is directly linked to the environmental problem.

MEA trade provisions may conflict with WTO commitments

Disputes about WTO consistency may arise when an MEA requires its signatories to apply trade measures against non-signatories for failure to comply with the MEA. If some but not all WTO members are signatories of the MEA and the trade measures called for by the MEA are not also justified under the provisions of the WTO, such trade measures would violate the WTO principle of non-discrimination and would be actionable within the WTO dispute settlement process.

Of the some 200 MEAs currently in force, about 20 contain trade provisions, among them the Montreal Protocol on Substances that Deplete the Ozone Layer, the Basel Convention on the Movement of Hazardous Waste and the Convention on International Trade in Endangered Species (CITES). To date, no legal challenges have arisen within the WTO over trade provisions applied pursuant to an MEA. Trade sanctions imposed unilaterally on environmental grounds have been challenged and over-turned in the WTO, and the potential exists for friction related to the trade provisions of some MEAs.

One set of concerns relates to the role of the WTO in "dictating" the terms and conditions that may be negotiated in MEAs. According to this view, some environmental problems are so important and the risks associated with inaction or unilateral action so severe that the WTO should not restrict MEA negotiators in finding multilateral solutions to environmental problems - including the use of trade measures that are inconsistent with WTO principles. According to other views, the WTO already provides adequate scope for environmental protection, and the parties to MEAs should not be allowed to override the existing balance of WTO rights and obligations. In this regard, the WTO Secretariat has argued that "this issue cannot be taken lightly, since the obligations in question are those of non-discrimination, the absolute cornerstone of the WTO legal system, and the principal means of protecting the rights of weaker and poorer members of the multilateral trading system"27.

6.3.4 Divergent national standards

High standards in export markets may limit access

Technical regulations and product standards -including those applied for environmental purposes- are subject to the rules and disciplines of the TBT and SPS Agreements. As discussed above, countries may establish stricter environmental regulations and product standards than provided for in the relevant international standards if they are justified on scientific grounds and are neither discriminatory nor unnecessarily trade restrictive. More than 350 national environmental standards have been notified under the TBT Agreement, and some 1000 technical standards have been notified under the SPS Agreement (through 1998). Among these are national measures applied to implement MEAs such as the Montreal Protocol and CITES; import prohibitions on products or processes harmful to the environment; standards and regulations on air, water and noise pollution; energy and soil conservation measures, recycling requirements, plant and animal health standards, and so on. There are several issues of concern to developing countries in this area.

…either through higher compliance costs…

Compliance costs. The costs of compliance with the TBT and SPS standards applied in export markets is an issue of concern for developing countries, because compliance costs may be higher for them than for developed countries, placing them at a competitive disadvantage. The costs of compliance with the standards applied in export markets will reflect the degree to which these standards differ from those that prevail in the supplier's market. Because developing countries typically apply less rigorous technical standards than developed countries, they will face higher compliance costs in meeting the standards applied in developed-country export markets, even when such standards are strictly non-discriminatory28 . Further research has shown that environmental standards can be effective strategic policy instruments because they can be set such that the low cost producer optimally chooses not to comply, allowing the high cost producer to monopolize the standardized segment of the market29 . Thus, it is important for policymakers to consider how much scope there should be for the imposition of unilaterally determined standards - which could impact negatively on trading partners even when they are non-discriminatory - rather than internationally negotiated standards.

Production and processing methods. An issue that has arisen in the WTO is the extent to which trade restrictions may be imposed against the method used to produce goods, so-called "unrelated" production and processing methods (PPMs); that is, against PPMs that may generate negative production externalities but that do not affect the quality or safety of the final product30 . Thus, a regulation on the use or disposal of a pollutant that is released during the production process but which does not affect the product itself (such as regulations on the treatment of animal wastes) would be an unrelated PPM requirement. The WTO clearly allows countries to adopt trade measures regulating "product characteristics or their related processes and production methods"31 , but PPMs that are unrelated to the final product are not explicitly covered by the WTO Agreements32 .

Box 1: Dolphins and turtles in the WTO

Two trade disputes illustrate the significance of the unrelated PPM issue. The "tuna-dolphin" case, handled under the old GATT dispute settlement procedure, involved a dispute regarding a US ban on the importation of tuna caught with purse seine nets in the eastern Pacific Ocean. In this region, dolphins and tuna are often found together, and purse seine nets can trap dolphins as well as tuna. The US Marine Mammal Protection Act sets dolphin protection standards for the domestic American fishing fleet and required countries exporting tuna to the US to follow the dolphin protection standards set out in US law or face an import ban. The US argued that the ban was necessary and justified on the basis of GATT Article XX (b and g) which allow the use of trade measures for the protection of animal health and exhaustible natural resources. In 1991, Mexico and other countries challenged the US regulation. The dispute panel ruled that the US could not ban imports of tuna products from Mexico simply because Mexican regulations on the way the tuna was produced did not satisfy US regulations. The panel also ruled that the US could require "dolphin safe" labelling of tuna products, because such labels would apply equally to imported and domestic tuna.

More recently, the "turtle-shrimp" case involved US regulations aimed at protecting several endangered species of sea turtles. US regulations require all domestic shrimp trawl vessels to use approved Turtle Exclusion Devices (TEDs) where there is a likelihood that shrimp harvesting might threaten sea turtles. In 1991, the US imposed an import ban on shrimp from exporting nations that failed to achieve US certification regarding their shrimp harvesting methods. Essentially this certification required commercial vessels to use TEDs comparable to those used in the US, with exceptions for artisanal fisheries. The import ban was challenged by Malaysia, India, Pakistan and Thailand, who charged that the ban violated WTO rules and could not be justified under the General Exceptions in Article XX of GATT 1994. The final Appellate Report to the WTO Dispute Settlement Body found that the US import ban was within the scope of measures permitted under Article XX and that it qualified for provisional justification under Article XX(g) for the protection of exhaustible natural resources. Nevertheless, the Appellate Report found that the US measure failed to meet the requirements of the chapeau of Article XX33 and therefore could not be justified.

…through extension to production methods…

With respect to non-product related PPMs, the main problem in trade policy arises when an importing country wishes to impose unrelated PPM requirements on a production process that occurs outside its jurisdiction. Some countries may wish to impose PPM requirements on foreign producers either to "level the playing field" for their domestic producers who are required to comply with the PPM measures, or because they feel that this is the "right" policy to be pursued on environmental grounds. The key issue, from the perspective of the WTO, is whether one Member can use trade measures to enforce its own environmental preferences or requirements on others34 .

Some countries have suggested that trade measures should be used to enforce unrelated PPM requirements, particularly in cases where the production externality in question has transboundary or global environmental effects35 . In such cases it may be appropriate to seek international harmonization or mutual recognition of national standards, but harmonization may not always be possible or appropriate. Some observers regard a country's environmental regulatory system as an integral part of its comparative advantage and thus consider harmonization undesirable, particularly when there are no transboundary environmental effects associated with the PPM36 .

…or through discrimination in marketing

Eco-labelling. A related problem is that of eco-labelling, whereby special labels are used to indicate that a product conforms to certain environmental standards. Some eco-labelling systems are operated by national governments or regional groups, such as the Japanese Eco-Mark, the Canadian Environmental Choice and the Nordic Swan, while others are operated by consumer groups, industry associations or other non-governmental groups. The important issues for developing countries are whether such systems incorporate unrelated PPMs and whether they conform fully to the WTO principles of non-discrimination and transparency.

In order to provide a marketing advantage, the requirements for an eco-label must be more stringent than the usual standards for the product in question. Once an eco-labelled product gains wide consumer acceptance in a given market (estimated as a 30% market share), however, the requirement for the eco-label may become the de facto standard for the product37 . If the eco-label requirements are not in accordance with WTO principles, they may function as discriminatory trade measures.


The above analysis covers the main areas where debate is currently underway in the context of the environment and the WTO. For developing countries, the key issues that could arise in the next round of multilateral trade negotiations are as follows:


FAO. 1998. The Implications of the Uruguay Round Agreement on Agriculture for Developing Countries: A Training Manual, by S. Healy, R. Pearce & M. Stockbridge. Training Materials for Agricultural Planning No 41. Rome.

FAO. 1995. The Measurement of the Impact of Environmental Regulations on Trade, CCC:95/15. Rome.

GATT. 1994. The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts. Geneva, GATT Secretariat.

Mattoo, Asditya. 1996. Discriminatory Consequences of Non-Discriminatory Standards. World Trade Organization, No. TISD-96-001, Geneva.

OECD. 1998. Trade Measures in Multilateral Environmental Agreements: Synthesis Report of Three Case Studies, COM/ENV/TD(98)127/Final, Paris.

OECD. 1997. Eco-labelling: Actual Effects of Selected Programmes, OCDE/GD(97)105, Paris.

OECD. 1997. Processes and Production Methods (PPMs): Conceptual Framework and Considerations on Use of PPM-Based Trade Measures. OCDE/GD(97)137, Paris.

South Centre. 1998. The WTO Multilateral Trade Agenda and the South. Geneva.

WCED. 1987. Our Common Future. Oxford, Oxford University Press.

WTO. 1999. Environmental Effects of Trade Liberalization on Agriculture, Committee on Trade and Environment, Submission by Japan, WT/CTE/W/107, 15 February 1999. Geneva.

WTO. Supporting Tables Relating to Commitments on Agricultural Products in Part IV of the Schedules, G/AG/AGST/ATG.

WWF-World Wide Fund For Nature. 1998. Building Sustainable Trade: For People and the Environment.


1 WTO. "Environmental Benefits of Removing Trade Restrictions and Distortions" Committee on Trade and Environment, 7 November 1997, WT/CTE/W/67.

2 Important exceptions to the MFN principle include, inter alia, the provision of preferential market access for developing countries (GATT Articles XXXVI and XXXVII) and the formation of customs unions and free trade areas (GATT Article XXIV).

3 WTO. 1999. "Summary of the History of the Trade and Environment Debate in the WTO," Trade and Environment Division.

4 GATT. 1994. Article XX, Chapeau and Paragraph (b).

5 GATT. 1994. Article XX, Chapeau and Paragraph (g).

6 AoA, Chapeau, Paragraph 6.

7 AoA, Article 20, Paragraph (c).

8 "Green box" policies are those that are excluded from AMS calculations and reduction commitments. In this context, the term "green" does not refer to environmental issues, although some environmental policies are included in the "green box".

9 AoA, Annex 2, Paragraph 2 (a, b, e and g).

10 AoA, Annex 2, Paragraph 8.

11 AoA, Annex 2, Paragraph 12.

12 AoA, Annex 2, Paragraph 13.

13 Agreement on TBT, Chapeau.

14 Agreement on TBT, Article 2.

15 SPS Agreement, chapeau.

16 SPS Agreement, Article 5.

17 SPS Agreement, Article 3.

18 SPS Agreement, Article 4.

19 TRIPS Agreement, Section 5, Article 27.

20 GATT. 1994. The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts, p. 469. Geneva, GATT Secretariat.

21 GATT. 1994. The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts, p. 457. Geneva, GATT Secretariat.

22 FAO. 1995. The Measurement of the Impact of Environmental Regulations on Trade. CCP: 95/15. Rome.

23 See for example: WTO, "Environmental Effects of Trade Liberalization on Agriculture", Committee on Trade and Environment, Submission by Japan, WT/CTE/W/107, 15 February 1999; and "Environmental Effects of Trade Liberalization in the Agricultural Sector", Submission by Norway, WT/CTE/W/100, 8 January 1999.

24 See for example: WTO, "The Agriculture Sector: Environmental Benefits of Trade Liberalization", Submission by Brazil, WT/CTE/W/109, 16 February 1999; and "Trade Liberalization and the Environment: A Positive Agenda for Trade Reform", Submission by Australia, WT/CTE/W/105, 2 February 1999.

25 AoA, Article 6, Annex 2, Paragraphs 2 (a, b, e and g), 8 and 13 provide exceptions for programmes indirectly related to environmental protection, such as disaster relief, pest and disease control, and related research. Annex 2, Paragraph 12 provides for direct environmental programmes.

26 Supporting tables relating to commitments on agricultural products in Part IV of the Schedules. G/AG/AGST/1-4.

27 WTO website.

28 Henson, Spencer & Loader, Rupert. 1998. "Impact of sanitary and phytosanitary standards on developing countries and the role of the SPS Agreement" Centre for Food Economics Research, University of Reading.

29 Matoo, Asditya (1996).

30 South Centre. 1998. "The WTO Multilateral Trade Agenda and the South".

31 BT Agreement, Annex 1, Paragraph 1.

32 Except the products of prison labour, which may be regulated on the basis of GATT, Article XX (e).

33 The chapeau of Article XX states that such measures must not be "applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade...."

34 OECD. "PPMs: Conceptual Framework and Considerations on Use of PPM-Based Trade Measures", OCDE/GD(97)137.

35 Negotiators of the Montreal Protocol sought to restrict the import of products produced with but not containing controlled CFC substances, but this approach was rejected.

36 OECD. "PPMs: Conceptual Framework and Considerations on Use of PPM-Based Trade Measures", OCDE/GD(97)137.

37 OECD. "Eco-labelling: Actual Effects of Selected Programmes", OCDE/GD/(97) 105.

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