The WTO and the Environment

December 7, 1999 |

Environmental issues figured prominently in last week's street protests in Seattle. Some of them stem from legitimate concerns over the World Trade Organization's attitude toward the environment. But the remedy advocated by many of the protesters -- destroying the WTO -- is unjustified and could set back the cause of improving respect for the environment.

Before discussing specific WTO-related environmental issues, we should note that environmental protection need not be a casualty of expanded trade. In fact, expanded trade and the growth it creates can actually improve environmental protection. Numerous studies have shown that rising incomes almost always improve environmental protection; the simple truth is that the desperately poor have little or no interest in protecting the environment and, thus, often destroy rain forests, kill off endangered species and increase pollution in their desperate effort to stay alive. Recognizing this reality, one of the fundamental documents of the global environmental movement, known as the Brundtland Report, specifically endorses efforts to improve economic growth as a tool for protecting the environment.

As the Brundtland Report also recognizes, however, growth should be tied to policies that ensure environmental protection. This creates a potential WTO conflict. Since protectionist measures are often falsely represented as environmental measures, the WTO is often forced to evaluate environmental claims in the context of trade disputes. In practice, this means striking a balance between trade liberalization concerns and environmental or health objectives. Allowing any measure billed as protecting the environment to bypass WTO scrutiny would invite abuse and ultimately damage the credibility of true environmental measures.

However, the WTO may have gone too far in the other direction. In a recent example that gained much attention, a WTO panel ruled against U.S. laws limiting shrimp imports from countries that did not protect sea turtles with so-called turtle excluders. The initial panel decision was almost scandalous in its disregard for environmental interests. A review improved the initial decision in many respects but still found against the U.S. law and set a high standard for imposing sanctions to protect sea turtles.

Criticism of this and other panel decisions is likely increased by the WTO's penchant for secrecy, and its refusal to accept sufficient input from environmental and other non-governmental groups. Further, although conflicts are still only theoretical, there are potential clashes between the WTO and various multilateral environmental agreements that employ trade limits and sanctions to promote internationally agreed objectives, like the protection of endangered species.

These problems could be largely remedied through the following achievable list of environmental amendments to the WTO.

* Expand allowable exceptions to the WTO. The WTO already allows for some exceptions, but these could be expanded to exempt restrictions imposed by the U.S. Endangered Species Act along with similar foreign statutes. The United States should recognize, however, that expanding such exceptions would have costs. For example, the European Union would likely argue that its ban on meat imports from animals given artificial growth hormones is broadly similar to U.S. protection of sea turtles and, in a negotiation, the United States cannot simply dictate the outcome.

* Improve transparency. Opening WTO proceedings would go a long way to ease environmentalists' suspicions. A combination of opening more WTO dispute- settlement panel deliberations, providing more formal opportunities for environmental input, and perhaps creating a WTO office charged with creating a formal link between the WTO and environmental groups could go far to ease suspicions and perhaps improve the quality of environmental analysis in dispute settlement panel deliberations.

* Grandfather existing multilateral environmental agreements. In order to avoid conflict between the WTO and multilateral environmental agreements, the Convention on International Trade in Endangered Species and similar accords could be specifically exempted from the WTO.

These changes would not address all potential WTO/environment conflicts, but they would go a long way toward a solution. Importantly, all these changes can be accomplished without doing serious violence to the trade liberalization objectives of the WTO.

Expanded trade and enhanced environmental protection can go hand-in-hand. It would be a mistake for environmentalists to lose sight of this and allow themselves to be exploited by groups whose interests are in protectionism, not environmental protection.

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