GREEN TRADE AND THE WTO

By Pascal Lamy Reprint | | Print |

This column is available for visitors to the IPS website only for reading. Reproduction in print or electronic media is prohibited. Media interested in republishing may contact romacol@ips.org.

GENEVA, Feb 2 2007 (IPS) - Sustainable development should be the cornerstone of our approach to globalisation and of the global governance architecture that we create, writes Pascal Lamy, Director-General of the World Trade Organisation (WTO). In this article, Lamy writes that the Doha Round of trade negotiations contains a promise to the environment to allow for a more efficient allocation of resources including natural ones on a global scale through a continued reduction of obstacles to trade (tariffs and subsidies). But it also includes a promise to ensure greater harmony between the WTO and Multilateral Environmental Agreements (MEAs): a promise to tear down the barriers to trade in clean technologies and services; as well as a promise to reduce the environmentally-harmful agricultural subsidies. The world must forge ahead with these negotiations as fast as it possibly can. Not because the negotiations are going to save the world\’s environment. But because they are the very modest start that the international community has agreed to make to address environmental challenges through the prism of trade. A failure of these negotiations would strengthen the hand of all those who argue that economic growth should proceed unchecked, that economic growth is supreme and need not take account of the environment. Trade, and indeed the WTO, must be made to deliver sustainable development. They are starting to.

Today, as we face environmental challenges of an unprecedented magnitude, like climate change, there is little doubt that Gaia will indeed react and that humankind may suffer the consequences.

In 1987, when the Brundtland Report coined the term “sustainable development”, many of us saw it as one option. The other option was business as usual. Twenty years later no one can argue that sustainable development is a choice anymore. It has become a must. Sustainable development should be the cornerstone of our approach to globalisation and of the global governance architecture that we create.

When the World Trade Organisation (WTO) was established back in 1995, sustainable development was placed at the heart of its founding charter. Governments vetoed the type of trade that is premised on the depletion of natural resources. Rather, they called for their sustainable use. They went further in their pledge to pursue a sustainable development path by launching environmental negotiations in the Doha Round. This is the first time in the history of multilateral trade talks that such negotiations have been started.

There are many different ways to look at globalisation. Some see it as an economic phenomenon, driven by a greater flow of goods, services, and capital between countries. In this definition, the WTO plays a central part. Others see it as a technological phenomenon, driven by the revolution that we have witnessed in information technology, and so on. The one certain element in all of this is that the world has become inter-connected to the point that today it is impossible for a country to live and prosper in isolation from the rest of the world.

Clearly, globalisation is a phenomenon that requires careful management. By connecting people from opposite ends of the planet, globalisation offers tremendous potential, but it also has drawbacks. As goods, services, and people cross borders, so does pollution, for example. The management of globalisation would allow us to capture its benefits, while avoiding its downside. There is no doubt that the world needs more effective “global governance” at a level that transcends national boundaries. Our institutions of global governance must therefore be strengthened. This applies to the WTO, and to all other international institutions, which should complement each other.

Trade, no doubt, leads to a more efficient allocation of resources on a global scale, and the Doha Round of trade negotiations contains a promise to the environment. A promise to allow for a more efficient allocation of resources including natural ones on a global scale through a continued reduction of obstacles to trade (tariffs and subsidies). But it also includes a promise to ensure greater harmony between the WTO and Multilateral Environmental Agreements (MEAs): a promise to tear down the barriers that stand in the way of trade in clean technologies and services; as well as a promise to reduce the environmentally-harmful agricultural subsidies that are leading to overproduction and harmful fisheries subsidies which are encouraging over-fishing and depleting the world’s fish stock.

The world must forge ahead with these negotiations as fast as it possibly can. Not because the negotiations are going to save the world’s environment. But because they are the very modest start that the international community has agreed to make to address environmental challenges through the prism of trade. A failure of these negotiations would strengthen the hand of all those who argue that economic growth should proceed unchecked, that economic growth is supreme and need not take account of the environment. Trade, and indeed the WTO, must be made to deliver sustainable development. They are starting to.

The contribution of the Doha Round to the environment is but a drop in the bucket in terms of the solutions required to address the world’s environmental problems. But it is a necessary drop, so that governments are encouraged to begin looking at the bucket as a whole. A sustainable development strategy, linking all international actors, must become our goal. We must not wait for Gaia to react!. (END/COPYRIGHT IPS)