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WTO-CANCUN: Green Agenda Hidden in Investment Talks

Gustavo Capdevila* - Tierramérica

GENEVA, Sep 10 2003 (IPS) - Although “green” issues will be most noted for their absence at the WTO ministerial conference in Cancun this week, conservationist groups fear that talks will be initiated on new regulations for international investment, which could challenge the existing trade rules that protect the environment.

The draft of the final declaration being discussed in Mexico by the trade ministers from the World Trade Organisation’s 146 member states hardly mentions the environment.

The draft declaration remits the assessment of the few achievements of the WTO’s Trade and Environment Committee to the next ministerial conference, though no date has been set.

The environmental issues will have a “low profile” in the Caribbean resort city of Cancun, said Stephen J. Porter, managing attorney at the Centre for International Environmental Law (CIEL), based in Washington.

But a big concern about the WTO discussions Sep. 10 to 14 is the intention of some countries to launch investment talks, which could lead to the weakening of policies protecting public health, the environment and workers’ rights, he told Tierramérica.

Even though it is not part of the mandate for WTO negotiations on environment, precedents like the North American Free Trade Agreement (NAFTA) “have proven to be quite problematic in terms of giving companies a tool to push for a deregulatory agenda challenging environment and public health regulations.”

CIEL and other organisations sent a letter to U.S. Trade Representative Robert Zoellick pointing out that in Chapter 11 of NAFTA, an accord involving Canada, Mexico and the United States, it is evident that investment rules can undermine the ability of democratic governments to adopt policies in the public interest.

Both Canada and Mexico have lost investment-related lawsuits that involved environmental protection demands, while the United States has faced substantial challenges to its environmental policies, according to the statement.

In Cancun, the world’s trade ministers “should resist pressure by the European Union to address new issues,” including investment rules, says Tom Crompton, head of trade policy at the World Wildlife Fund (WWF).

“Quite clearly, the WTO lacks the openness, inclusiveness and know-how to tackle such issues,” Crompton said in the lead-up to the ministerial meeting.

Meanwhile, debate in the Trade and Environment Committee will be frozen until the conclusion of the meet in Cancun, which is to produce a new mandate or reaffirm the guidelines and timeframe.

The previous WTO ministerial conference, held in November 2001 in Doha, Qatar, set Jan. 1, 2005 as the deadline for negotiations on clarifying the relationship between WTO rules and the trade obligations established by the Multilateral Agreements on Environment (MEAs).

This involves, for example, the Montreal Protocol on substances that deplete the ozone layer, the Convention on Biological Diversity, and the Convention on International Trade in Endangered Species (CITES).

Other MEAs include the Basel Convention on the international movement of toxic waste, and the United Nations Framework Convention on Climate Change, and its Kyoto Protocol, aimed at curbing emissions of greenhouse gases.

Debate on MEAs was left pending because the EU wants to establish clear definitions of related concepts, while other countries, like Australia, propose a case-by-case approach.

The mandate of the Doha ministerial conference calls for exchanging information between the WTO and the MEA secretariats, establishing criteria for granting observer status to other international organisations, and the liberalisation of trade in environmental goods and services.

During nearly two years of talks, the EU promoted the idea of an agreement to grant permanent observer status to the UN Conference on Trade and Development (UNCTAD), and the UN Environment Program.

But the initiative ran into opposition, particularly from the developing countries.

The same fate met a watered-down version that was limited to inviting the secretariats to take part in the special sessions of the Trade and Environment Committee, in operation since the WTO entered into force in January 1995.

Some countries, notably China, Egypt, Indonesia, Malaysia and the Philippines, said these invitations could be interpreted as permanent, and therefore much like “observer” status.

The multilateral organisations try to avoid defining the nature of “observer” because it could create conflicts in other forums.

Uruguayan diplomat Carlos Pérez del Castillo, chairman of the WTO General Council and director of the talks leading up to the Cancun meet, told Tierramérica that the Europeans aim to include the term “observer”, because it implies permanent status.

As it stands, international governmental organisations can attend the committee’s session only if they receive “special” invitations.

Pérez del Castillo surmised that the European proposal could be resolved in Cancun “if some term can be found” that does not institutionalise the concept of observers.

Peter Carl, the European Commission’s director-general for trade, is confident that an agreement can be reached to continue inviting UNCTAD and UNEP to the Trade and Environment Committee’s special sessions.

“I cannot imagine that the ministers could possibly disagree” on this matter, said Carl.

The committee failed to make progress on any of the rest of the issues in the Doha mandate.

Negotiations on liberalising trade in environmental goods – such as air filters and catalytic converters – were shifted to the WTO group on market access for non-agricultural products, taking up the matter of industrial tariffs.

As for environmental services – for example, waste management consulting – it was agreed that the debate will continue in the next special sessions of the council on trade in services.

The exchange of information between the WTO and the secretariats of the environmental treaties has not been mentioned by the member states, as they consider that this occurs in practice. But no one wants to institutionalise the process.

(*Gustavo Capdevila is an IPS correspondent. Originally published Sep. 6 by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme.)