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Harnessing Trade for Sustainable Development and a Green Economy

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In 1992 the United Nations convened a landmark conference in Rio de Janeiro which set the tone and ambition for global policy on development and environment for the years to come. The results of the United Nations Conference on Environment and Development, popularly known as the Earth Summit, were reaffirmed in Johannesburg in 2002 at the World Summit on Sustainable Development. Global leaders will reconvene in Rio in 2012 at the United Nations Conference on Sustainable Development (Rio+20). They will consider progress made since the two earlier meetings, assess remaining challenges, and reset the world on a path towards sustainable development. Part II of this brochure offers a set of messages on sustainable development and trade that may be pronounced at the Rio+20 Conference. Part III looks at the workings of the WTO and how the multilateral trading system supports countries’ efforts to realize sustainable development and a green economy. Part IV examines the contribution of trade to sustainable development. Part V refers to green economy measures and discusses how WTO rules and monitoring mechanisms help ensure such measures are not disguised protectionism. Part VI looks at WTO efforts to help developing countries maximize the benefits of participation in international trade. And Part VII discusses the contribution to sustainable development that can be made through a successful completion of the Doha Round.

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ISBN 978-92-870-3806-7


Harnessing trade for sustainable
development and a green economy




© World Trade Organization, 2011.


Photo credits:


Cover:


Cover top left: iStockphoto/© Peeter Viisimaa


Cover top right: iStockphoto/© Pablo del Rio


Cover centre: © Andreas Krappweis


Cover bottom left: Ruslan Dashinsky


Cover bottom right: ssuaphoto


Inside:


P3: © Siegfried Modola/IRIN


P5: iStockphoto/© Klaas Lingbeek-van Kranen


P7: Wikimedia/@ Tatmouss


P8:iStockphoto/© Alija


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World Trade Organization


The World Trade Organization (WTO) is the international body dealing with the global rules of trade between


nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible, with


a level playing field for all its members. The WTO aims to place developing countries’ needs and interests


at the heart of its work programme. Sustainable development is an objective of the WTO, as reflected in the


Preamble of the Marrakesh Agreement Establishing the WTO.


Rio+20 Conference


The United Nations Conference on Sustainable Development (commonly known as Rio+20) is taking place in


Brazil in June 2012. The objectives of the Conference are to secure renewed political commitment for sustainable


development, assess progress to date and remaining gaps in the implementation of the outcomes of the major


summits on sustainable development, and address new and emerging challenges.


The Rio+20 Conference will have two themes: a green economy in the context of sustainable development


and poverty eradication; and the institutional framework for sustainable development.


Earlier conferences


The first United Nations Conference on Environment and Development was held in Rio de Janeiro in 1992. It


adopted a set of Principles in the Rio Declaration on Environment and Development and a comprehensive plan


of action, Agenda 21, to be implemented globally, nationally and locally.


The World Summit on Sustainable Development was held in Johannesburg in 2002. It renewed the global


commitment to sustainable development and agreed a Plan of Implementation to build on the achievements of


the previous ten years and to advance the remaining Rio goals.


Sustainable development


The 1992 Rio Conference followed on from work undertaken by the World Commission on Environment


and Development (known as the Brundtland Commission). In its 1987 report, Our Common Future, the


Commission defined sustainable development as “development that meets the needs of the present without


compromising the ability of future generations to meet their own needs”.


This document has been prepared under the WTO Secretariat’s own responsibility and without prejudice to the
positions of WTO members and to their rights and obligations under the WTO.




1


I. Introduction


In 1992 the United Nations convened a landmark conference in Rio de
Janeiro which set the tone and ambition for global policy on development
and environment for the years to come. The results of the United Nations
Conference on Environment and Development, popularly known as the Earth
Summit, were reaffirmed in Johannesburg in 2002 at the World Summit on
Sustainable Development.


Global leaders will reconvene in Rio in 2012 at the United Nations Conference
on Sustainable Development (Rio+20). They will consider progress made
since the two earlier meetings, assess remaining challenges, and reset the
world on a path towards sustainable development.


International trade is a key component of sustainable
development. This was recognized by both the Rio and
Johannesburg conferences. Trade helps achieve a more
efficient allocation of scarce resources. And it makes it
easier for countries, rich and poor, to access environmental
goods, services and technologies.


While the world has changed in fundamental ways over
the last two decades, and faces challenges both old
and new, furthering mutual supportiveness between
sustainable development and trade remains vital.


There have been important achievements in the multilateral
trade arena with implications for the sustainable
development agenda. The World Trade Organization
(WTO) came into existence in 1995 with new agreements
and a wider coverage of trade policies and measures and
an emphasis on sustainable development.


The WTO offers a powerful supporting framework
for sustainable development and a green economy. It
provides an enabling environment through its objectives,
institutions and monitoring of potential trade protectionism,
enforcement mechanism, toolbox of rules, and growing
case law in the environment area.


WTO rules seek to achieve a crucial balance: on the one
hand they support the right of WTO members to take


measures to advance legitimate goals, such as protection
of the environment, and, on the other hand, they ensure
such measures are not applied arbitrarily and are not
disguised protectionism.


Sustainable development is an objective of the Doha
Round, the latest multilateral round of negotiations to
further open up world trade. The negotiations can help
remove environmentally harmful trade-distortionary
measures and promote greater access to environmental
goods and services at a cheaper cost.


Part II of this brochure offers a set of messages on
sustainable development and trade that may be pronounced
at the Rio+20 Conference. Part III looks at the workings of
the WTO and how the multilateral trading system supports
countries’ efforts to realize sustainable development and
a green economy. Part IV examines the contribution of
trade to sustainable development. Part V refers to green
economy measures and discusses how WTO rules and
monitoring mechanisms help ensure such measures are
not disguised protectionism. Part VI looks at WTO efforts
to help developing countries maximize the benefits of
participation in international trade. And Part VII discusses
the contribution to sustainable development that can be
made through a successful completion of the Doha Round.




2


II. Proposedkeypronouncementstobemadebythe
Rio+20Conference


The Rio+20 Conference is a crucial opportunity for the international community to
reaffirm its shared commitment to an open international trading system, resisting trade
protectionism, supporting developing countries’ participation in trade, and supporting the
Doha Development Agenda.


In the view of the WTO Secretariat, the Rio+20 Conference should affirm commitment to:


» promote an open and equitable rules-based multilateral trading system that is non-
discriminatory and predictable and benefits all countries in the pursuit of sustainable
development


» ensure that measures with a trade impact taken for environmental purposes do not
constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction
on international trade


» utilize WTO mechanisms for monitoring and surveillance of national measures with
trade impacts, including green economy measures, so as to enhance understanding
and dialogue and avoid risk of trade tensions


» promote an international trading system that takes account of the needs of developing
countries, including by ensuring that trade capacity-building initiatives assist developing
countries in capturing the benefits from trade in their transition to a green economy


» support the successful conclusion of the Doha Round as a powerful contribution to
the sustainable development vision.


It is important to increase transparency on trade-related
measures adopted for green economy goals and also
to lend support as developing countries adapt their


economies to green challenges and opportunities. In
both cases, countries can use the tools and initiatives
developed in the multilateral trading system of the WTO.




3


On the development side, WTO rules typically include
provisions giving special rights to developing countries.
Such rights include measures to increase trading
opportunities for developing countries and allowing
certain flexibilities in their commitments.


On the environment side, WTO agreements provide
policy space for members to adopt trade-related
measures for legitimate objectives such as the protection
of the environment (see Box 1). In certain circumstances,
members may be permitted to sidestep basic WTO rules.
At the same time, this room for manoeuvre in setting
policy is subject to conditions to prevent members taking
measures with hidden protectionist intent.


III. Aframeworkforadvancingsustainabledevelopment


The multilateral trading system of the WTO supports WTO members in their efforts to realize
the sustainable development vision and to tackle environmental challenges.


WTO rules seek to achieve a crucial balance: on the one hand, they support the right of
members to take measures to advance legitimate goals such as protection of the environment;
and, on the other hand, they ensure such measures are not applied arbitrarily and are not
disguised protectionism.


The WTO’s objectives, institutions, monitoring of trade policies and protectionist risks,
enforcement mechanism, toolbox of rules, and growing jurisprudence in the environment
area represent a crucial enabling framework.


A multilateral trading system that supports sustainable
development is more important than ever. The system helps
governments open their economies in a system of global
trade rules. For more than 60 years, governments have
carefully built up this multilateral framework to ensure that
trade relations are fair and countries do not discriminate
against each other. The system has done what it was
intended to do – save governments from resorting to the
sort of tit-for-tat policies that helped bring about economic
ruin in the Great Depression of the last century.


Objectives


The WTO recognizes that open trade is not an end in
itself. It is tied to crucially important human values and
welfare goals captured in the WTO’s founding document,
the Marrakesh Agreement Establishing the WTO. Among
these goals are raising living standards, ensuring full
employment, using the world’s resources sustainably, and
protecting the environment.


WTO members thus established at the outset an explicit
link between sustainable development and disciplined
trade opening – in order to ensure that market opening
goes hand-in-hand with environmental and social
objectives.


Systemofrules


A stable and predictable system for international trade
is beneficial for promoting investment, innovation and
technological change – all of which are vital for sustainable
development and the transition to a green economy. In this
regard, the fundamental principles of non-discrimination
and transparency, which underpin all WTO agreements,
offer a framework for ensuring predictability and fair
implementation of measures that address environmental
concerns.


Tea picking picture




4


may cover draft measures being considered under the
banner of a green economy. The transparency that these
notifications provide is central to WTO goals of ensuring
as much certainty and predictability in trade as possible,
monitoring the implementation of members’ obligations
and enabling members to take action if measures have a
negative impact on trade.


Institutionsandmonitoring
mechanisms


The WTO is a repository for trade policy information. WTO
members are committed to provide their trading partners
with information on their trade and trade-related policies
through periodic notifications. Many of these notifications


Box1. WTOdisciplinesrelevanttotheenvironment


There is always the concern that certain measures taken to achieve environmental protection goals may, by their
nature, restrict trade and thereby impact on the WTO rights of other members. This is why exceptions such as
GATT Article XX are important (the General Agreement on Tariffs and Trade is the core WTO agreement relating to
trade in goods). GATT Article XX on General Exceptions lays out a number of specific instances in which members’
trade measures may be exempted from GATT rules that would otherwise have applied. The provision seeks, among
other things, to ensure that environmental measures are not applied arbitrarily and are not used as disguised
protectionism.


Rules such as the WTO Agreement on Technical Barriers to Trade (which deals with technical requirements)
and the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (dealing with food safety
and animal and plant health) provide scope for WTO members to put in place regulatory measures to protect the
environment and advance a green economy, while at the same time imposing disciplines to ensure such measures
are not unnecessary restrictions on international trade.


The WTO Agreement on Subsidies and Countervailing Measures seeks to prevent members from providing
subsidies that distort international trade. Provided certain basic disciplines are respected, the agreement leaves
members with policy space for, among other things, supporting the deployment and diffusion of green technologies.


The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides a framework
for applying the intellectual property system to promote access to and dissemination of green technologies, and
provides policy space to promote public interest in sectors of vital importance to socio-economic and technological
development, as well as specific incentives for technology transfer and exclusions of environmentally damaging
technologies from intellectual property (IP) protection.


The plurilateral WTO Agreement on Government Procurement aims at opening up procurement markets to
international competition on a transparent and non-discriminatory basis. Under the agreement, parties and their
procuring entities may prepare, adopt or apply technical specifications aimed at promoting green procurement.


In the 2001 WTO Doha Ministerial Declaration, Ministers recognized that “…under WTO rules no country should
be prevented from taking measures for the protection of human, animal or plant life or health, or of the environment
at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which
would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions
prevail, or a disguised restriction on international trade, and are otherwise in accordance with the provisions of the
WTO Agreements.” (The language, which is drawn from GATT Article XX, can also be found in Principle 12 of the
Rio Declaration: “Trade policy measures for environmental purposes should not constitute a means of arbitrary
or unjustifiable discrimination or a disguised restriction on international trade.” It is present as well in Article 3.5
of the UN Framework Convention on Climate Change: “Measures taken to combat climate change, including
unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction
on international trade.”)




5


The jurisprudence confirms that WTO rules allow for the
addressing of environmental concerns and provide for
an appropriate balance between, on the one hand, the
right of members to take regulatory measures, including
trade restrictions, to achieve legitimate policy objectives
and, on the other hand, the rights of other members under
basic WTO disciplines.


Tradeopening


Greater trade openness leads to a more efficient allocation
of natural resources. Trade stimulates growth and raises
income levels which over time can help increase demand
for a better environment. Trade can also improve access
to green goods, services and technologies needed to
reduce pollution and energy use, or help develop them.
The current Doha Round of trade talks would further
strengthen the contribution of trade to sustainable
development and green economy objectives.


WTO members routinely use regular bodies of the WTO
to address concerns about measures that are being
developed. This means members have an opportunity
to review measures at an early stage, before they are
entrenched and become difficult to change. In many
cases, this has made it possible to resolve or defuse
trade concerns between members, thus avoiding formal
dispute proceedings.


The WTO is also a platform for members to exchange
views on important issues relating to trade, assess
whether existing arrangements need to be revisited,
and analyse policy challenges facing the international
community. Non-confrontational deliberation has helped
WTO members to understand and influence environmental
and developmental issues and concerns, and ensure that
measures adopted under the banner of a green economy
do not restrict trade unnecessarily.


Under the Trade Policy Review Mechanism, WTO
members carry out periodic collective assessments of
each member’s trade policies and practices, including
assessment of the consistency of these policies with the
broad principles of non-discrimination and predictability
that underlie the WTO. These exercises promote greater
transparency in, and understanding of, members’ trade
policies, practices and measures, including many that
relate directly to a green economy and sustainable
development.


WTO institutions include committees dealing specifically
with trade and development and trade and environment,
as well as committees dealing with different areas of non-
tariff measures, such as technical regulations, subsidies,
intellectual property and government procurement.
Services and agricultural sectors are also covered.


EnforcementmechanismandWTO
jurisprudence


WTO rules are enforced through a legally binding dispute
settlement mechanism, backed up by WTO case law.
The jurisprudence shows how environmental issues
are integral to the system of trade rules. Since the entry
into force of the WTO in 1995, the Dispute Settlement
Body has dealt with a number of environment-related
measures. Such measures have sought to achieve a
variety of policy objectives – from conservation of sea
turtles from incidental capture in commercial fishing
to the protection of human health from risks posed by
asbestos or used tyres.




6


Sustainabledevelopmentinthe
multilateraltradingsystem


The objective of sustainable development is emphasized
in the WTO’s founding charter, the Marrakesh Agreement
Establishing the WTO (see Box 3).


In a separate 1994 Decision on Trade and Environment,
Ministers also addressed sustainable development. They
acknowledged the outcomes from Rio. They stated 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


IV. Contributionoftradetosustainabledevelopment


ProposedRio+20message


Reaffirm commitment to promote an open and equitable rules-based multilateral trading
system that is non-discriminatory and predictable and benefits all countries in the pursuit of
sustainable development.


Sustainable development and open trade go hand-in-hand and the multilateral trading system
helps create the enabling environment for countries to realize the sustainable development
and green economy vision.


RioandJohannesburg


The contribution of trade to sustainable development was
recognised in Rio in 1992 and Johannesburg in 2002.


Principle 12 of the Rio Declaration emphasized the
importance of open trade and of avoiding trade
protectionism, while Agenda 21 committed governments
to promote an open, non-discriminatory and equitable
multilateral trading system (see Box 2).


The Johannesburg Plan of Implementation reiterated key
messages from Rio and urged support for a successful
completion of the work programme contained in the
WTO’s 2001 Doha Ministerial Declaration.


Box2. UNpronouncementsontradeandsustainabledevelopment


“States should cooperate to promote a supportive and open international economic system that would lead to
economic growth and sustainable development in all countries, to better address the problems of environmental
degradation. Trade policy measures for environmental purposes should not constitute a means of arbitrary
or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with
environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental
measures addressing transboundary or global environmental problems should, as far as possible, be based on an
international consensus.”


Rio Declaration (Principle 12)


“Governments should continue to strive to meet the following objectives: (a) To promote an open, non-discriminatory
and equitable multilateral trading system that will enable all countries - in particular, the developing countries -
to improve their economic structures and improve the standard of living of their populations through sustained
economic development; (b) To improve access to markets for exports of developing countries;… (d) To promote
and support policies, domestic and international, that make economic growth and environmental protection
mutually supportive.”


Agenda 21 (Chapter 2, paragraph 2.9)


“…This will require urgent action at all levels to: (a) Continue to promote open, equitable, rules-based, predictable
and non-discriminatory multilateral trading and financial systems that benefit all countries in the pursuit of
sustainable development. Support the successful completion of the work programme contained in the Doha
Ministerial Declaration...”


Plan of Implementation of the 2002 World Summit on Sustainable Development (paragraph 47)




7


recovery possible: an economy that is more open is more
resilient because it is less constrained by the limits of
domestic demand.


Trade plays a key role in helping the environment, in part
because it serves as a channel for green technology
transfer. Openness to trade provides access at lower cost
to a greater variety of imported goods and services involving
environmentally friendly technologies. It also increases
the size of the markets for producers of final goods and
suppliers of components, thus raising the returns from
innovation for those involved in the production networks
involving green goods. The ability to market innovations
globally makes it possible to increase specialization and
provides incentive to produce green goods requiring
intensive research. These benefits of more open trade
highlight the importance of the Doha Round negotiations
which aim, among other things, to reduce barriers to trade
in environmental goods and services.


environment and the promotion of sustainable development
on the other. Ministers also decided to establish a WTO
Committee on Trade and Environment, which promotes
international governance on sustainable development by
identifying the relationship between trade measures and
environmental measures.


At the WTO’s Fourth Ministerial Conference in Doha
in 2001, WTO members strongly reaffirmed their
commitment to sustainable development. In launching the
Doha Development Agenda negotiations, members asked
both the Committee on Trade and Development and the
Committee on Trade and Environment to act as forums
to identify and debate developmental and environmental
aspects of the negotiations, so sustainable development
could be appropriately reflected.


Tradeandgrowth


Trade openness leads to a more efficient use of resources
and stimulates growth and income levels. This supports
conservation, sustainability and efforts to eradicate poverty.


Trade promotes production efficiency via specialization,
exploitation of economies of scale, technology transfer,
and enhanced competition. Openness helps countries
compete by not only offering new opportunities for sales
(i.e. exports), but also making available to producers the
widest range of inputs at the highest quality and lowest
prices (i.e. imports). While the link between trade, growth
and sustainable development is clear, different studies
present varying perspectives of the extent to which trade
openness impacts growth.


While openness to trade exposes countries to
developments in other economies, including the risk
of trade and financial contagion, it also makes faster


Box3. WTOpronouncementsontradeandsustainabledevelopment


“The Parties to this Agreement, Recognizing that their relations in the field of trade and economic endeavour
should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily
growing volume of real income and effective demand, and expanding the production of 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,”


Marrakesh Agreement Establishing the World Trade Organization (Preamble)


“We strongly reaffirm our commitment to the objective of sustainable development, as stated in the Preamble
to the Marrakesh Agreement. We are convinced that 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.”


Doha Ministerial Declaration (paragraph 6)


awaiting picture




8


Moreover, higher incomes associated with trade opening
can increase the general public’s demand for a cleaner
environment. Increased incomes give people greater
opportunity to improve their lives, for instance by making
the quality of their environment better. In addition, demand
for an improved environment can provide incentives for
firms to improve production technologies, adopt greener
production methods, and develop greener products and
services.


For rising income to lead to improvements in the
environment, governments must respond to the public’s
demand with the appropriate policy framework.


Developingcountries


Agenda 21 put special emphasis on promoting an
international trading system that takes account of the
needs of developing countries. One of the WTO’s basic
aims is to ensure developing countries get the trade
opportunities that will enable them to grow and develop,
thus helping in the fight against poverty (see Part VI).


Trade openness has already helped developing countries
play a bigger role in the global economy. From 1990
onwards, the volume of exports from developing countries
grew considerably faster than exports from developed
countries, as did the share of developing countries’
exports in the value of total world exports. Trade between
developing countries, South-South trade, also increased.


Box4. “Tradecanbeafriend,andnotafoe,ofconservation.”


“…In a world without artificial economic borders, goods can come and go. Trade can take place freely. In that
world, a country with an arid climate need not use its scarce water resources to grow water intensive crops that
it can instead import. Because of trade, it can save its precious little water. Similarly, in that world, a country with
limited access to the sea need not deplete its fish stock to feed its population. Because of trade, it can import fish
for its food supply, and manage its own fisheries sustainably. Trade can allow for a more efficient allocation of all
resources, including the natural. Contrary to the perception of some members of the public, it can be a friend, and
not a foe, of conservation.”


WTO Director-General Lamy speech to the 2005 WTO Symposium on Trade and Sustainable Development




9


of soil, wildlife and natural habitats. Many countries have
relied on government support to foster innovation and the
deployment of green technologies. Public procurement
is also increasingly used by governments to promote
environmental objectives.


Green economy measures, such as those that foster a
low carbon economy or promote sustainable forestry, are
increasingly complex. Moreover, these internal measures
may affect international trade, for example by segmenting
markets or shielding local producers from international
competition. This is why many stakeholders have
expressed concern that a green economy could be used
to justify or disguise trade protectionism.


The rules and transparency mechanisms of the multilateral
trading system can make a key contribution to minimize the
risk of tensions and to ensure that open trade continues
to support efforts to bring about a green economy.


V. Greeneconomymeasuresandguardingagainst
tradeprotectionism


ProposedRio+20messages


Reaffirm commitment to ensure that measures with a trade impact taken for environmental
purposes do not constitute a means of arbitrary or unjustifiable discrimination or a disguised
restriction on international trade.


Affirm commitment to utilize WTO mechanisms for monitoring and surveillance of national
measures with trade impacts, including green economy measures, so as to enhance
understanding and dialogue and avoid risk of trade tensions.


WTO rules give space for countries to pursue legitimate environmental objectives. At the
same time, such space is disciplined by specific conditions aimed at ensuring measures are
not applied arbitrarily and are not disguised protectionism. The WTO provides its members
with a unique platform to monitor, explore, discuss, understand and influence green measures
with trade impacts.


Principle 12 of the Rio Declaration expresses the
international community’s resolve that trade measures
with an environmental purpose should not be disguised
restrictions on international trade. Many countries are
concerned that the transition to a green economy may
lead to an increase in the use of measures that could
adversely affect trade.


The transition to a green economy requires the right
enabling environment. There is no “one-size-fits-all”
prescription to create the appropriate policy environment.
Countries will take different approaches in designing
policies to shift to a green economy, depending on their
policy settings and institutions, level of development
and resource endowments, and particular environmental
challenges they face. A common consideration is to
ensure that green economy measures are cost effective
and promote new ways of addressing environmental
problems through innovation.


Among the wide range of measures to promote the
transition to a green economy, some countries have
used market mechanisms such as taxes and tradable
permit schemes to put a price on pollution or on the
over-exploitation of natural resources. These instruments
have helped guide consumers and producers towards
decisions that result in less pollution or waste or a slower
depletion of natural resources. And they have given firms
incentives to find innovative ways of tackling environmental
challenges.


Countries have also relied on environmental requirements
to improve the use of resources and to reduce pollutants
– by setting technical specifications to improve energy
efficiency or emissions performance, minimize waste,
improve forestry management, or enhance the protection




10


Priceandmarketmechanisms


Besides technical requirements, countries increasingly
are using, or contemplating the use of, price and market
mechanisms such as taxes and tradable permits to reduce
pollution, waste, and resource depletion. Environmental
taxes and tradable permits take the market price of an
economic activity and add the external cost that the activity
imposes on society through environmental damage; this
influences the behaviour that causes the environmental
damage as directly as possible. In this way, environmental
taxes and tradable permits can guide consumers and
producers towards decisions that result in less pollution
or waste, or slower depletion of resources.


Environmental taxes are taxes levied directly on pollution
and other environmentally harmful activities or on the
sale of goods associated with them. Tradable permit
schemes have been used mostly to tackle air pollution
from emissions (such as sulphur dioxide, nitrogen oxides
or greenhouse gases), but are also found in areas such as
water management, fisheries conservation and agriculture
nutrients.


The design of environmental taxes and trading schemes
has far-reaching implications for the cost to participants,
the impact on trade, and effectiveness in terms of helping
the environment. The extent to which price and market
mechanisms affect international trade depends, among
other things, on the impact of these instruments on
production costs and on the prevailing market structure.


The imposition at the domestic level of a price on
environmental damage can raise concerns that polluting
industries will relocate to countries with less strict
environmental regulations. To minimize this risk, ways
to adjust the environmental cost at the border have
been debated. However, such adjustments would need
to avoid adverse impacts on international trade without
undermining the intended environmental benefits of the
taxes and trading schemes.


Several WTO disciplines may come into play if a green
tax, trading scheme or related adjustments affect
international trade. These may include key disciplines
of the GATT and WTO agreements relating to non-
discrimination (i.e. GATT Article I on most-favoured-
nation treatment and Article III on national treatment),
elimination of quantitative restrictions (GATT Article XI)
and disciplines on technical barriers to trade (discussed
above). For example, the national treatment principle
may be particularly relevant when an environmental tax is
applied differently to domestic and foreign producers; the
most-favoured-nation principle may be relevant where an
environmental tax is applied differently to producers from
various exporting countries.


GreeneconomymeasuresandWTO
rules


Environmentalrequirements


Environmental requirements aim to improve the use of
resources and reduce pollution by setting specifications for
products and production methods. They cover objectives
such as energy efficiency, emissions performance, waste
minimization and recycling, forestry management, and
soil, wildlife and natural habitat protection. Because
environmental requirements set specified targets,
they provide greater certainty about outcomes for the
environment.


The type of environmental requirement used depends
on the desired environmental outcome, the level
of governmental involvement and the availability of
technological solutions to address specific problems.
There are countless examples of environmental
requirements in both developed and developing
countries – in the form of product and production
method specifications, voluntary and mandatory
requirements, specific characteristic and performance-
level requirements, labelling requirements and conformity
assessment procedures. Typically, environmental
requirements are based on process and production
methods, including life cycle analysis. New types of
initiatives that are often voluntary have also emerged
in response to consumer concerns, such as food miles
programmes and carbon footprint labelling schemes.


Environmental requirements may affect international
trade, especially if they are used to shield domestic
producers from international competition, or when they
are discriminatory. As countries continue efforts to “green”
their economies, environmental requirements increasingly
will become significant determinants of access to foreign
markets. The design of the measures, how transparent
they are, and issues related to their harmonization or
recognition can all give rise to concern.


The key WTO instrument governing environmental
regulations and standards is the Agreement on Technical
Barriers to Trade (TBT Agreement). The TBT Agreement
aims to balance concerns related to the trade impact
of environmental and other requirements against the
wider public policy goals these requirements serve.
The Agreement sets out rules to ensure such measures
are non-discriminatory and do not create unnecessary
obstacles to international trade. It also urges WTO
members to use international standards as a basis for
their own regulations and standards, in recognition of the
fact that environmental requirements can create trade
barriers when they differ from country to country.




11


Government support for green goods and technologies
may affect the price and production of such goods. Such
policies reduce production costs, leading to lower prices.
These may make it harder for other countries’ exporters to
compete in the subsidizing country, or make the exports
of the subsidizing country more competitive abroad.
Some countries may also support domestic firms with the
installation of more environmentally friendly technologies,
thus enabling these firms to maintain international
competitiveness. Unlike support linked to production,
government support for consumption will not affect
international trade provided that it does not distinguish
between domestic and imported goods or services.


The key WTO instrument governing support programmes
is the Agreement on Subsidies and Countervailing
Measures (SCM Agreement). In addition, the WTO
Agreement on Agriculture contains a category of
permissible green subsidies, known as Green Box, which
could allow countries to pursue green economy policies in
agriculture. The SCM Agreement aims to strike a balance
between the concern that domestic industries should
not be put at an unfair disadvantage by competition from
foreign goods benefiting from government subsidies,
and the concern that countervailing measures to offset
those subsidies should not themselves be obstacles
to fair trade. The rules of the SCM Agreement define
the concept of “subsidy”, establish the conditions under
which WTO members can use subsidies, and regulate the
remedies (countervailing duties) that may be taken against
subsidized imports. Provided certain rules are respected,
the Agreement leaves members room to encourage green
technologies.


GATT Article XX on General Exceptions sets out a number
of specific instances in which WTO members may be
exempted from GATT rules, subject to certain conditions
being fulfilled.


Supportprogrammes


Most governments use support programmes, besides
environmental requirements and price and market
mechanisms, to encourage the transition to a green
economy. Governments grant support to encourage a
switch towards activities that cause less pollution, or
to promote the development and deployment of green
technologies. Renewable energy is increasingly important
in green government support programmes. Apart from
renewable energy, green government support is also geared
towards industrial pollution control, sustainable agriculture
and forestry, water and soil protection, efficient use of
energy and natural resources, and waste management.


The support can take several forms and there are
countless examples in both developed and developing
countries. Governments may provide financial assistance
through non-repayable grants, preferential credit and loan
guarantees. They may provide preferential tax treatment,
or adopt price support measures such as feed-in tariffs (a
regulated minimum price that must be paid for renewable
energy fed into the national electricity grid by private
independent producers) to secure preferential prices for
environmentally sound practices and industries. Green
support may be targeted at any stage of the production
process – from support for research and development
of green technologies to support for firms’ output
and producers’ incomes. Governments often support
consumer demand for environmental goods and services.


Key policy instrument Key objective Key WTO agreement


Environmental requirements
e.g. product and production specifications,
voluntary and mandatory, characteristics and
performance level, labelling and conformity
assessment


Improve resource use and reduce
pollutants, e.g. for energy efficiency,
waste minimization, forestry
management


Technical Barriers to
Trade Agreement


Price and market mechanisms
e.g. environmental taxes, trading schemes


Internalize environmental costs, e.g.
for greenhouse gas emissions


General Agreement
on Tariffs and Trade


Support programmes
e.g. R&D, fiscal, price and investment
measures


Promote development and deployment
of environmentally friendly technologies


Subsidies and
Countervailing
Measures Agreement


Green procurement
e.g. adoption of technical specifications
and evaluation criteria that promote the
procurement of environmentally friendly
goods and services


Promote sustainable consumption
and production through use of public
purchasing


Government
Procurement
Agreement


GreeneconomymeasuresandrelevantWTOrules




12


and performance, conformity assessment procedures,
labelling requirements, and requirements linked to bans.
These measures target key areas of a green economy,
including soil, air and water pollution abatement,
conservation of wild fauna and flora, energy efficiency and
conservation, waste reduction and management.


The WTO’s contribution to transparency goes beyond the
exchange of information. Full transparency also requires
an understanding of what is being notified. This is where
the WTO’s unique system of “peer review” in committees
and other bodies comes into play. These deliberations
provide a transparency forum that helps WTO members
avoid trade disputes.


The experience with technical requirements is again
a good example of how the WTO helps ensure that
requirements to support a green economy do not create
unnecessary obstacles to trade. Between 1995 and mid-
2011, around one-fifth of the 317 specific trade concerns
raised by WTO members in the TBT Committee were
about measures related to the environment. Concerns
are typically about whether the design or application of
a particular measure creates an unnecessary barrier to
trade, the need for more clarification about the aim of a
measure, and the use of international standards. Concerns
also cover measures related to pollution, collection and
recycling, eco-design and packaging.


WTO tools can be used to monitor national measures
with trade impacts, including green economy policies,
so as to improve understanding and dialogue and avoid
trade tensions. The WTO’s surveillance tools have been
particularly useful in recent years. When the financial
and economic crisis erupted in 2008, many worried
that the kind of protectionism that triggered the Great
Depression would emerge again. Thanks in large measure
to the multilateral trading system which provides both the
foundation for countries to maintain their commitment to
open trade and a platform to ensure transparency in trade
policy developments, protectionist pressures have so far
been largely held in check.


At the end of 2008, the WTO set up a system to
monitor trade measures taken during the crisis by G-20
economies. This monitoring mechanism has proven to be
a highly useful transparency tool and bolstered political
resolve to resist protectionism. For example, the most
recent report (October 2011) indicates that during the
2008-09 global crisis, G-20 economies were for the
most part able to resist protectionist pressures, but
their collective commitment is being tested by weaker
economic growth, high unemployment and fiscal austerity.
These WTO monitoring mechanisms could be utilized to
focus on green economy measures with trade impacts, so
as to enhance understanding and dialogue and avoid risk
of trade tensions.


Greenprocurement


Green public procurement is increasingly used by
governments to promote environmental policies. Public
authorities use their purchasing power actively to
encourage the production and use of environmentally
friendly goods and services. As government procurement
accounts for a large share of economic activity, about 15-
20 per cent of GDP on average in both developed and
developing economies, public entities that adopt green
procurement policies can make an important contribution
to sustainable consumption and production.


The main WTO rules governing government procurement
are laid down in the WTO Agreement on Government
Procurement (GPA) which provides disciplines on non-
discrimination and transparency in procurement of
covered goods and services by designated governmental
entities. Participation in the GPA, a plurilateral agreement
within the WTO framework that applies only to parties that
have accepted the Agreement, provides legal guarantees
of access to the parties’ covered government procurement
markets by the goods, services and suppliers of all parties.
The forthcoming revision of the text of the Agreement
will explicitly state, for greater certainty, that parties and
their procuring entities may prepare, adopt or apply
technical specifications to promote the conservation of
natural resources or protect the environment. Parties may
also evaluate offers received based on environmental
characteristics set out in notices or tender documentation.


Transparency,monitoringand
surveillancemechanismsoftheWTO


Several WTO agreements require WTO members to
inform each other about new or forthcoming trade-related
measures, including agreements addressing technical
requirements, sanitary and phytosanitary measures,
subsidies and agriculture. The value of the WTO’s
transparency platform for a green economy is particularly
evident in the TBT Agreement, under which members
must share information on any draft mandatory technical
regulation and conformity assessment procedure that
may have an impact on trade, by notifying the WTO. The
notification process is an important tool to help members
obtain information about measures contemplated by
others under a green economy banner, before these
measures result in negative trade consequences.


To illustrate the wide scope of the transparency exercise,
between the establishment of the WTO in 1995 and
mid-2011, approximately 13,500 notifications were
submitted to the TBT Committee by developing and
developed countries alike. Of these, around 18 per
cent were about measures related to the environment,
in particular requirements on product characteristics




13


system, strengthen their institutional capacities to deal
with all the challenges emerging from such obligations,
and derive significant benefits from the trading system.


Products delivered by the WTO include general technical
assistance and training (e.g. e-Training courses, Geneva-
based and regional trade policy courses), specialized and
advanced technical assistance (e.g. Geneva-based as well
as national and regional technical assistance activities)
and academic support for training and capacity-building.
In addition, the particular needs of LDCs are addressed
through, among other things, the WTO Reference
Centres programme and the “Geneva Week” initiative
(which supports those WTO members and observers that
do not have representation in Geneva).


Activities frequently have trade and environment
components, focusing on such aspects as environmental
requirements and market access, the relationship between
the WTO and multilateral environmental agreements


VI. Maximisingthebenefitsofthemultilateraltradingsystem
fordevelopingcountries


ProposedRio+20message


Reaffirm commitment to promote an international trading system that takes account of
the needs of developing countries, including by ensuring that trade capacity-building
initiatives assist developing countries in capturing the benefits from trade in their transition to
a green economy.


The WTO provides a framework for trade-related capacity-building in developing countries
through initiatives such as the Enhanced Integrated Framework and the Standards and
Trade Development Facility. Through the over-arching Aid for Trade initiative, the WTO seeks
to mobilize support for developing and least-developed countries (LDCs) so that they can
overcome supply-side and trade-related infrastructure constraints and benefit from enhanced
market access opportunities.


The Rio process confirmed that trade can be a powerful
engine for economic growth, poverty reduction and
sustainable development. But it also recognized that
harnessing its power is often difficult for many developing
countries. To address this problem, Agenda 21 called for
an international trading system that takes account of the
needs of developing countries.


It is widely recognized that market access opportunities
alone are not enough for some countries. Many developing
countries do not have the capacity to take advantage of
new market access opportunities.


The WTO gives developing country members extensive
trade-related technical assistance and helps them build
capacity to take advantage of trade opportunities. The
WTO is also a leading player in a range of trade-related
international capacity-building initiatives.


WTO membership has increased from 123 members
in 1995 to comprise 153 members (as of end October
2011), representing almost 95 per cent of global trade.
Around two-thirds of WTO members are developing
countries.


Technicalassistanceandcapacity-
building


WTO Ministerial Conferences in 2001 and 2005
confirmed that technical assistance and capacity-building,
including training, are core elements of the development
dimension of the multilateral trading system.


The WTO Secretariat has substantially enhanced its
capacity to design and deliver an effective programme of
technical assistance and capacity-building over the past
decade, enabling WTO members to better understand
their rights and obligations within the multilateral trading




14


Aid for Trade implementation lies in the hands of developing
countries, regional economic communities and their
development partners. It is multi-faceted, encompassing
a diverse range of delivery mechanisms and development
partner organizations including, among others, bilateral
donors, international financial institutions (including the
World Bank Group and regional development banks)
and multilateral agencies. No new mechanism was
established to deliver Aid for Trade. Instead, the focus is
on making existing mechanisms work better. Aid for Trade
flows reached US$ 40 billion in 2009 – a 60 per cent
increase in real terms since 2005.


EnhancedIntegratedFramework


The Enhanced Integrated Framework (EIF) for trade-
related assistance to least-developed countries is a multi-
donor programme that supports LDCs to become more
active players in the multilateral trading system.


The EIF, under the global Aid for Trade framework,
supports Agenda 21 through its trade and development
partnership, with countries in the driving seat on sustainable
development. Working in 47 countries in Africa, Asia
and the Pacific, the EIF helps LDCs to build national
institutional and technical capacity to trade on their own
terms, contributing to lifting communities out of poverty.
EIF countries, in collaboration with development partners
and international partner agencies (the International
Monetary Fund, the International Trade Centre, the
United Nations Conference on Trade and Development,
the United Nations Development Programme, the World
Bank and the WTO, plus the United Nations Industrial
Development Organization), the private sector and civil
society, are strengthening their institutional and supply-
side capacity to create future prosperity for local people.


(MEAs), environmental goods and services, and fisheries
subsidies. The WTO also regularly engages in outreach to
developing countries through events of MEA secretariats.


The WTO’s capacity-building is based on country needs
and coherence with activities of other international
organizations. Current initiatives include Aid for Trade, the
Enhanced Integrated Framework, and the Standards and
Trade Development Facility.


AidforTrade


Aid for Trade aims to help developing countries, particularly
LDCs, develop the trade-related skills and infrastructure
needed to implement and benefit from WTO agreements
and expand their trade.


The Aid for Trade initiative directly supports the Agenda
21 call for the integration of developing countries into
the international trading system. The initiative has raised
awareness about the support that developing countries
need to overcome the barriers constraining their ability to
benefit from trade expansion.


The WTO’s role in Aid for Trade involves advocacy,
analysis and debate, using its convening power and
monitoring function to mobilize Aid for Trade financing, to
highlight the needs of its members and observers, and
to showcase effective implementation, including through
regular reviews. The WTO works closely with a variety of
actors, including developing countries and LDCs, regional
organizations, multilateral development banks, bilateral
donors, the International Trade Centre, the OECD, and
a broad range of United Nations (UN) agencies. The
WTO’s implementing work in Aid for Trade is through its
technical assistance and capacity-building activities.


Box5. AidforTrade


“We need to listen to the development community and make the case why trade is important for economic
growth. We can do a better job of explaining why Aid for Trade can support broader policy objectives like poverty
alleviation, social welfare, food security, gender empowerment, climate change adaptation, energy generation and
sustainable development. In so doing, we will be promoting deeper coherence within the initiative and with the
broader international context.


Equally though, we must not lose sight of the fact that in making the case for Aid for Trade, we are really making the
argument for the multilateral trading system. Aid for Trade is all about logging on to this world-wide trading system.”


WTO Director-General Pascal Lamy closing remarks, 2011 Third Global Review of Aid for Trade




15


and recommendations as a means to improve their
human, animal and plant health status, and ability to
gain and maintain access to markets. Improved SPS
capacity in developing countries supports sustainable
economic growth, poverty reduction, food security and
environmental protection.


The STDF’s mandate is to increase awareness about the
importance of SPS capacity-building, mobilize resources,
strengthen collaboration, identify and disseminate
good practice, and provide support and funding for
the development and implementation of projects that
promote compliance with international SPS requirements.
Some 40 per cent of the STDF’s project resources
are devoted to LDCs and other low-income countries.
The STDF was established in 2002 by the Food and
Agriculture Organization of the United Nations (FAO), the
World Organisation for Animal Health (OIE), the World
Bank, the World Health Organization (WHO) and the
WTO. The Facility is committed to the Paris Principles
on Aid Effectiveness and to achieving the Millennium
Development Goals.


The EIF works through tools including the Diagnostic
Trade Integration Study (DTIS) and the Action Matrix of
priority areas to address national supply-side blockages to
trade, including issues around trade and the environment.
To take forward these priorities, the EIF works on building
local capacity and developing projects in support of the
trade mainstreaming agenda. Putting in place the right
trade foundations, the EIF supports countries in driving
targeted projects on the ground, focusing on results and
impact that leads to more businesses, higher incomes
and stronger livelihoods. It also takes into account
issues on sustainable land management and an inclusive
community approach, involving local farmers, traders and
entrepreneurs, that respects the environment in line with
Agenda 21.


StandardsandTradeDevelopmentFacility


The Standards and Trade Development Facility (STDF) is
a global partnership that supports developing countries
in building their capacity to implement international
sanitary and phytosanitary (SPS) standards, guidelines




16


and open markets will improve efficiency of resource
use. The Round also addresses issues of concern to
developing countries as well as specific environmental
and green economy objectives comprehensively, including
through the removal of trade barriers and distortions and
promotion of green goods and services.


The following section gives examples of how the Doha
Round negotiations offer real potential for ensuring that
the WTO’s trade liberalization mission and rules help
to address environmental problems as well as advance
development goals.


Dohanegotiations


Tradeandenvironment


The trade and environment negotiations target three key
areas: liberalization of environmental goods and services;
negotiations on the relationship between multilateral
environmental agreements (MEAs) and the WTO; and
fisheries subsidies.


Environmental goods and services


A major focus of work has been on liberalizing trade in goods
and services that can benefit the environment – goods like
solar panels and solar water heaters, hydropower turbines


VII.DohaRound


ProposedRio+20message


Affirm support for the successful conclusion of the Doha Round as a powerful contribution to
the sustainable development vision.


Sustainable development permeates all aspects of the Doha Round. There are specific trade
and environment negotiations and environmentally harmful trade distortionary measures are
also being addressed. Other aspects of the negotiations, ranging across agriculture, industrial
goods, services and trade facilitation also support the vision of sustainable development and
a green economy.


At Johannesburg, leaders recognized the need for action
at all levels to support the successful completion of the
work programme contained in the 2001 Doha Ministerial
Declaration. While WTO members presently are
considering possible next steps in the Doha Development
Agenda negotiations, potential gains for sustainable
development remain clear.


DohaRoundandsustainable
development


At the WTO’s Fourth Ministerial Conference in Doha in
2001, Ministers recognized that international trade can
play a major role in the promotion of economic development
and the alleviation of poverty. Acknowledging that the
majority of WTO members are developing countries,
Ministers agreed to continue making positive efforts to
ensure developing countries, and especially LDCs, secure
a share in the growth of world trade commensurate with
their development needs. Developing countries’ needs
and interests are thus at the heart of the Doha work
programme.


A successful outcome of the Doha Round will greatly
support sustainable development. Further tariff reductions
and strengthening of the rules will help all WTO members
reap maximum gains from trade. A more level playing field


Box6. Environmentalgoodsandservices


The Intergovernmental Panel on Climate Change (IPCC) has identified a range of mitigation and adaptation
technologies that can assist in the challenge of climate change. Many of these technologies involve products being
discussed in the WTO trade and environment negotiations. Some examples include landfill liners for methane
collection, wind hydropower turbines, solar water heaters, and tanks for the production of biogas. Lowering barriers
to trade in these types of products will reduce their price and make them more accessible. Increased competition
will foster technological innovation in areas related to protection of the environment and climate change.




17


Fisheries subsidies


The fisheries chapter of the Doha Round demonstrates
how the trade and environmental agendas can meet, as
eliminating trade distortions can help conserve the natural
resource. In the negotiations, WTO members are aiming to
clarify and improve WTO disciplines on fisheries subsidies,
taking into account the importance of this sector to
developing countries. The mandate reflects the increasing
attention being paid in many international forums to the
grave problems of overcapacity and overfishing in today’s
modern fisheries fleets, and the role that subsidies
could play in contributing to those problems. While the
negotiations are on-going (for example, members have very
different views as to whether, and if so which, subsidies
in fact contribute to overcapacity and overfishing, and
what sorts of disciplines should apply to different kinds
of subsidies), multilateral disciplines could help ensure
the sustainability of fish stocks so all countries, including
fishing-dependent developing countries, can have long-
term access to a reliable supply of fisheries resources.


Othernegotiatingareas


Agriculture


Agriculture has traditionally been a highly protected sector
in some countries. While agriculture makes a significant
contribution to the economies of many countries, including
a large number of developing countries, many of the
world’s agricultural producers are disadvantaged in the
world trading environment because of high tariff barriers
and competition from other producers that receive high


and equipment for biogas production, and services like
environmental consulting or soil conservation services
and nature and landscape protection services. Removing
tariff and non-tariff barriers in these areas can improve
access to products and services which directly impact on
the protection of air, water and soil, and conservation of
natural resources.


By reducing barriers to trade in environmental goods
and services, the negotiations could improve access to
a broader range of cheaper and more efficient goods
and services that can help meet environmental goals.
Increasing the use of environmental goods and services
can yield a range of benefits, including reduced air and
water pollution, resource conservation and improved
energy efficiency.


Market opening in these sectors can also be a powerful
tool for economic development by generating economic
growth and employment and helping spread the valuable
skills and technology embedded in such goods and
services.


The WTO and multilateral environmental
agreements


As part of their work on trade and environment, WTO
members are negotiating ways to ensure a harmonious
co-existence between WTO rules and specific trade
obligations in various agreements that have been
negotiated multilaterally to protect the environment.
There are over 250 multilateral environmental agreements
(MEAs) currently in force and around 20 include trade
provisions (such as bans, licensing requirements, and
notification, packaging or labelling requirements).


WTO members have long recognized the need for
“coherence” among international institutions in addressing
global environmental challenges. While there has been no
conflict between trade and environmental regimes – and
the WTO’s Appellate Body has repeatedly confirmed
that the WTO can take other bodies of international
law into account when interpreting its own rules – the
negotiations on the WTO-MEA relationship provide a
unique opportunity for creating synergies between the
trade and environment agendas at the international level.
In this regard, the WTO’s work is directly relevant to
Rio Principle 12 which, among other things, expresses
the preference of nations that environmental measures
addressing transboundary or global environmental
problems should, as far as possible, be based on
international consensus.




18


Services


Services – such as transport, finance, telecoms and
law – have become the most dynamic segment of
international trade and opening services markets can
provide many new opportunities to both developed and
developing countries. The Doha mandate instructs that
the services negotiations shall be conducted with a view
to promoting the economic growth of all trading partners
and the development of developing countries and LDCs.
In the negotiations, developing countries have voiced
their interests in several sectors and modes of supply,
in particular cross-border supply and the temporary
movement of professionals across borders. From an
environmental perspective, services activities may have
both negative and positive impacts. Examples of negative
environmental impacts may include contamination arising
from transportation or over-use of natural resources
caused by mass tourism. On the other hand, various
services activities aim to protect the environment and
prevent or remedy pollution, such as treatment of waste
water and remediation of soil, water and air.


Trade facilitation


The WTO’s commitment to supporting the international
community’s work on sustainable development and
poverty reduction also takes the form of cutting distortive
red tape. The aim of the trade facilitation negotiations is
to make transactions more efficient by making it easier to


levels of domestic or export-related support. Not only are
efficient agricultural producers deprived of the development
benefits of trade, but over-production in certain parts of
the world due to production-linked subsidies can have
negative environmental effects. A reduction in protection
and support can therefore lead to important gains for both
developed and developing country agricultural producers,
including environmental benefits.


In the agriculture negotiations, WTO members are
committed to achieve substantial cuts in tariff barriers
and trade-distorting domestic support. They have also
already agreed as part of the overall package to eliminate
agricultural export subsidies. The negotiations could
therefore have a profound impact. They would lead
to a more efficient allocation of global resources and
production. They would increase trade opportunities
for developing countries with competitive agricultural
sectors, and this could lead to important income gains for
these countries. In addition, LDCs would enjoy significant
improvements in market access for their agricultural
products, in particular from the implementation of a duty-
free, quota-free decision taken by members in 2005.


Many existing and newly emerging forms of subsidies
in the agriculture sector can result in damage to the
environment by encouraging a faster pace of land
conversion, loss of forests and loss of biological diversity.
It is critical for sustainable development that as part of the
agriculture negotiations, members persevere in tackling
these harmful subsidies.


Industrial goods


Important market access opportunities can be expected
for developed and developing countries in the non-
agricultural area. Trade in industrial products accounts
for more than 90 per cent of world trade in goods and
encompasses some key products of export interest to
many developing countries. Thanks to previous rounds
of trade negotiations, tariffs in developed countries on
industrial products are today on average relatively low.
However, this average can sometimes hide remaining
high tariffs on products in which developing countries
have a particular stake. Also, the reduction of non-tariff
barriers (NTBs) that affect international trade has been
considered important. In on-going negotiations in the area
of NTBs, countries are, among other things, considering
ways of increasing the transparency of such measures
(for example, by improving on existing notification
procedures and finding ways of further enhancing the
use of international standards). A reduction in both tariffs
and non-tariff barriers to industrial trade could provide
important export opportunities for developing countries,
helping them in their goals for growth, poverty alleviation
and sustainable development.




19


Special and differential treatment


WTO members have been undertaking a review of all
special and differential treatment (S&D) provisions for
developing countries in the WTO agreements, with a view
to making them more precise, operational and effective.
For trade – and trade liberalization – to deliver economic
growth and development, the constraints that prevent
poorer countries from integrating into the international
trading system must be addressed. Developing countries
continue to negotiate S&D in different areas of the
Doha Round negotiations. A positive outcome to the
negotiations under the S&D work programme would play
an important role in providing developing countries and
LDCs with further flexibilities in their multilateral trade
obligations. It would allow a more development-oriented
integration into the multilateral trading system and help
them reach their development goals, including sustainable
development.


Least-developed countries


Ministers in Doha recognized that the integration of
LDCs into the multilateral trading system requires
meaningful market access, support for the diversification
of their production and export base, and trade-related
technical assistance. Since the adoption of the Doha
Development Agenda, the Sub-Committee on LDCs
has been implementing a work programme for LDCs.
Activities carried out under this programme are giving
WTO members a better understanding of the trade
and development challenges of LDCs and contributing
towards the goals of poverty alleviation and sustainable
development in LDCs. One important aspect of the Sub-
Committee’s work is to regularly review the market access


move, release and clear goods across borders. Simplifying
border procedures would allow for a better allocation of
scarce resources and result in important efficiency gains.
Governments would then be able to dedicate more
resources to other development goals, both in terms of
manpower and with respect to their financial investments.
There would also be a significant decrease in trade
transaction costs. The work on trade facilitation could also
increase government revenue by enhancing transparency,
reducing corruption and boosting legitimate trade.


OtherareasofWTOworkrelatedtosustainable
development


In addition to the specific negotiations launched in Doha
in 2001, Ministers also mandated work under the Doha
Development Agenda in other trade-related areas that
have an impact on sustainable development and a green
economy.


WTO Committee on Trade and Environment


Through the Doha Development Agenda, sustainable
development has become a standing item on the agenda
of the WTO’s Committee on Trade and Environment. The
Committee has been looking at the subject sector by
sector, especially in the following areas of the negotiations:
agriculture, market access for non-agricultural products,
rules, services, fisheries subsidies and environmental
goods and services. The Committee also looks at a
range of issues relevant to environmental requirements
and market access, including environmental taxes and
labelling, and sustainability aspects of trade in sectors
such as forestry and energy.


Working Group on Trade and Transfer of
Technology


In the global economy, technology and innovation help
producers to achieve economies of scale and better
product quality, improve competitiveness and increase
their share of niche markets. No country can move up
the development ladder without having built a sound
technological base. Pursuant to a mandate contained
in the Doha Ministerial Declaration, the WTO Working
Group on Trade and Transfer of Technology is examining
the relationship between trade and transfer of technology,
while also considering steps that might be taken within
the WTO’s mandate to increase flows of technology
to developing countries. Considerable analytical work
has been undertaken. Recommendations that the
Working Group may come up with could have immense
development potential, and help put developing countries
on the path to sustainable development.




20


conditions of LDC exports. Greater market opening
creates opportunities for increased trade and investment,
bringing in technology, resources and other benefits that
contribute to sustainable development in LDCs.


Small economies


Small economies face particular challenges. The main
concerns of the small vulnerable economies (SVEs)
relate to what they consider is their high vulnerability,
concentration of exports in a few products, high
transportation costs to reach their main markets, and
a general lack of capacity. SVEs would like to receive
treatment comparable to that extended to weaker and
vulnerable members of the WTO. A work programme on
small economies was launched with a mandate provided
in the Doha Ministerial Declaration, with the objective to
“frame responses to the trade-related issues identified
for the fuller integration of small, vulnerable economies
into the multilateral trading system, and not to create a
sub-category of WTO Members.” The SVEs have made
various proposals to the Doha negotiating groups and
have also made proposals for decisions by regular bodies
of the WTO.


TRIPS and the Convention on Biological Diversity


The Doha Ministerial Declaration called on negotiators
to look at the relationship between the Trade-related
Aspects of Intellectual Property Rights (TRIPS)
Agreement and the Convention on Biological Diversity
(CBD). This work is to be guided by the public policy
objectives and principles set out in the TRIPS Agreement
and taking fully into account the development dimension.
Work is taking place on proposed amendments to the
TRIPS Agreement that would link the CBD principles
of prior informed consent and equitable sharing of
benefits. This amendment, which proposes a disclosure
mechanism, has been opposed by several members,
who advocate instead the use of the contract system and
other measures to achieve the same ends.




© World Trade Organization, 2011.


Photo credits:


Cover:


Cover top left: iStockphoto/© Peeter Viisimaa


Cover top right: iStockphoto/© Pablo del Rio


Cover centre: © Andreas Krappweis


Cover bottom left: Ruslan Dashinsky


Cover bottom right: ssuaphoto


Inside:


P3: © Siegfried Modola/IRIN


P5: iStockphoto/© Klaas Lingbeek-van Kranen


P7: Wikimedia/@ Tatmouss


P8:iStockphoto/© Alija


P9: © Andreas Krappweis


P13: © René De Gilde


P17: iStockphoto/© Bartosz Hadyniak


P18: iStockphoto/© GKCRN


P19: iStockphoto/© hohl


World Trade Organization


The World Trade Organization (WTO) is the international body dealing with the global rules of trade between


nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible, with


a level playing field for all its members. The WTO aims to place developing countries’ needs and interests


at the heart of its work programme. Sustainable development is an objective of the WTO, as reflected in the


Preamble of the Marrakesh Agreement Establishing the WTO.


Rio+20 Conference


The United Nations Conference on Sustainable Development (commonly known as Rio+20) is taking place in


Brazil from 4 to 6 June 2012. The objectives of the Conference are to secure renewed political commitment for


sustainable development, assess progress to date and remaining gaps in the implementation of the outcomes


of the major summits on sustainable development, and address new and emerging challenges.


The Rio+20 Conference will have two themes: a green economy in the context of sustainable development


and poverty eradication; and the institutional framework for sustainable development.


Earlier conferences


The first United Nations Conference on Environment and Development was held in Rio de Janeiro in 1992. It


adopted a set of Principles in the Rio Declaration on Environment and Development and a comprehensive plan


of action, Agenda 21, to be implemented globally, nationally and locally.


The World Summit on Sustainable Development was held in Johannesburg in 2002. It renewed the global


commitment to sustainable development and agreed a Plan of Implementation to build on the achievements of


the previous ten years and to advance the remaining Rio goals.


Sustainable development


The 1992 Rio Conference followed on from work undertaken by the World Commission on Environment


and Development (known as the Brundtland Commission). In its 1987 report, Our Common Future, the


Commission defined sustainable development as “development that meets the needs of the present without


compromising the ability of future generations to meet their own needs”.


This document has been prepared under the WTO Secretariat’s own responsibility and without prejudice to the
positions of WTO members and to their rights and obligations under the WTO.




World Trade Organization
Centre William Rappard
Rue de Lausanne 154
CH-1211 Geneva 21
Switzerland


Tel: +41 (0)22 739 51 11
Fax: +41 (0)22 731 42 06
email: enquiries@wto.org
Website: www.wto.org 9 789287 038067


ISBN 978-92-870-3806-7


Harnessing trade for sustainable
development and a green economy




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