The WTO came into existence in 1995 and the Committee on Trade and Environment was established as per a decision adopted during the Uruguay Round. Its main aim was to identify the relationship between trade and environment to promote sustainable development. The agenda was an extension of the General Agreement on Tariffs and Trade (GATT) 1991.
Its preamble includes:
(a) The Agreement on Technical Barriers to Trade (TBS) and the application of sanitary and Phytosanitary (SPS) Measures;
(b) It also recognised the importance of furnishing technical assistance to developing country members; and
(c) Transfer of Technology.
(1) Technical Barriers to Trade (ТВТ):
A technical regulation is defined in the TBT Agreement as “Document which lays down product characteristics or their related processes and production methods. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, and its process.”
Technical regulation includes green marketing, eco-labelling and general principles of environmental management and auditing systems. These approaches will help the multinational corporations in maintaining environmental quality in developed and developing countries.
(2) Agreement on Sanitary and Phytosanitary Measures (SPS):
Sanitary or phyto-sanitary measures include all relevant laws, decrees, regulations, requirements and procedures including, inter alia, end product criteria; processes and production methods, testing, inspection, certification, relevant requirements associated with the transport of animals or plants, methods of risk assessment packaging and labelling requirements directly related to food safety.
In case importable goods are deemed to be using environmentally damaging inputs to plant, animal or human health or, are not adequately certified as ecologically safe, countries are well within their rights to invoke unilateral trade restrictions. For example, under TBT a country can restrict/reject imports which do not carry appropriate environmental certification or labels. On the other-hand, under the SPS, if the level of pesticide residue or genetically modified organism is higher than stipulated tolerance level, imports can be banned.
(3) General Agreement on Trade in Services (GATS):
According to WTO Committee on Trade and Environment (CTE), GATS contains a commitment to progressive liberalisation and to increasing the participation of developing countries. It will improve the environmental protection in these countries. The environmental services include sewerage services, refuse disposal services and sanitation services. Further sub-classification includes cleaning of exhaust gases, noise abatement services, and landscape protection services.
Moreover, various factors that might restrict international trade in environmental services include restrictions arising from the qualification and licensing requirements with respect to professional, environmental service providers such as environmental engineers, consultants and auditors, foreign investment rules, discrimination in taxation and with respect to tax incentives and discrimination with respect to access to benefits and amenities in the workplace.
(4) The Doha Development Agenda:
After the pronounced failure of WTO members to agree upon an agenda for further multilateral trade negotiations at the Seattle Ministerial Meeting of 1999, a new round of multilateral trade negotiations was initiated at the WTO’s Fourth Ministerial Conference in Doha, Qatar in November 2001.
The 4th WTO Ministerial Conference ended and contrary to many predictions, members did manage to put together a declaration in the true WTO tradition of give and take consensus while some may argue that most of the statements in various declarations are innocuous and ambiguous, which will lead to different interpretations and new problems related to developing countries.
According to the Doha Development Agenda, the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, and acting for the protection of the environment and the promotion of sustainable development can and must be mutually supportive.
The Doha Development Agenda has created a new debate in the WTO. It has created new opportunities for environmental community to influence the trading system. It stresses on to implement a programme on eco-labelling. While vaguely worded, this refers to the need to agree on the range of standard norms and rules that underlie the market or the consumer’s ability to favour products that meet given environmental criteria. This has been controversial in the past, largely because of the fear that environmental standards would be used in a discriminatory manner.
The Doha Development Agenda removes this illusion by stating, “The sustainable development community should agree on a strong upgrading of efforts to develop and apply a mutually compatible set of environmental standards, to favour standards that are non-discriminatory and support sustainable development and to build capacity for developing countries to participate in the standard setting process.”
The Agenda stresses to enhance the mutual supportiveness of trade, environment and development with a view to achieving sustainable development through actions at all levels.
(a) Establish and strengthen existing trade and cooperation agreements, consistent with the multilateral trading system with a view to achieving sustainable development.
(b) Support voluntary WTO compatible market based initiative for the creation and expansion of domestic and international markets for environmentally friendly goods and services including organic products which maximize environmental and developmental benefits through, interalia, capacity-building and technical assistance to developing countries.