RESTRICTED  
WORLD TRADE  WT/CTE/M/13  
 22 November 1996  
ORGANIZATION  
 (96-4982)  
Committee on Trade and Environment  
 
 
 
 
 REPORT OF THE MEETINGS HELD ON 30 OCTOBER AND 6 -8 NOVEMBER 1996  
 
 Note by the Secretariat  
 
 
1. The Committee on Trade and Environment met on 30 October and 6 -8 November 1996 under 
the chairmanship of Ambassador Juan Carlos Sánchez Arnau of Argentina.  The agendas contained 
respectively in WT O/AIR/476 and WT O/AIR/485 were adopted.  
 
2. The CTE adopted  its Report to the Singapore Ministerial Conference (the "Report") contained 
in WT O/CTE/W/40.  
 
3. The Chairman  made a statement that the document the CTE had adopted was the Report of a 
Committee established by a Ministerial Decision and, as such, did not modify the rights and obligations 
of any WTO Member under the WTO Agreements.   
 
4. The Chairman said that one of the salient aspects of the Report was that it provided continuity 
for the WTO's work on trade and environment.  With respect to future CTE work, reference had been 
made in the Report to the need to continue work on several Items, particularly in the area of exports of  
domestically prohibited goods (DPGs) which, for some delegations, was an issue that would need to be 
given special emphasis.  
 
5. Many delegations expressed their appreciation to the Chairman and the Secretariat for their 
contributi on to the preparation of the Report.  
 
6. The representative of Nigeria  said the CTE's work had been complex and difficult, which had 
been reflected in drafting the Report.  For Nigeria and several of the few countries, relative to t he full 
WTO membership, which had participated actively in the debate on trade and environment, this was 
uncharted territory.  Consistently, Nigeria had expressed the view that the debate had not been 
sufficiently broadened to include more countries to ens ure diversity of perspectives and analysis.  Several 
of the Items, issues, and proposals were new.  As the CTE's work had progressed, Nigeria had 
emphasized that its policy on Items of the work programme was at a preliminary stage and was subject to 
finali zation.  Nigeria's policy development had been guided by:  (i) the global objective to protect the 
environment;  (ii) the goal of trade liberalization;  (iii) the need to make trade and environmental policies 
mutually supportive;  and (iv) the necessity of  establishing a constructive relationship with other CTE 
Members on the basis of cooperation and consensus and on the understanding that the Report did not 
create new legal obligations and commitments, but represented the initial stages of the development of an 
international consensus on complex issues for which the goals of multilateral action were accepted while 
the methods would be subject to negotiation.  Against this background, Nigeria was part of the consensus, 
which was not unanimity, to adopt the R eport.  
 
7. Nigeria had substantive and procedural concerns and reservations on paragraphs 14, 40, 41, 171, 
173, 174, 176 -179, 197, and particularly with respect to Section III of Item 7 on DPGs, specifically 
paragraphs 202, 203 and  204.  Nigeria had been concerned throughout the CTE's discussion and in 
drafting the Report that the WTO in general and some countries in particular laboured under the charge WT/CTE/M/13  
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of environmental insensitivity.  Item 7 on DPGs remained of particular importanc e to Nigeria.  Nigeria 
had presented a proposal on DPGs based on:  (i) increased transparency;  (ii) technical assistance;  and 
(iii) the concept of "joint responsibility of exporters and importers of DPGs".  This concept had been 
proposed to ensure that e xporters and importers shared responsibility and to ensure particularly for the 
latter, inter alia , the avoidance of the extra -territoriality of exporter action.  In the final analysis, all 
countries must retain a degree of responsibility for what they dec ided to import.  Nigeria regretted the 
opposition to the inclusion of this concept by three CTE Members and also regretted that other key CTE 
Members had not shown environmental sensitivity equal to that expressed on other Items.  In the 
absence of consens us, the concept of "joint responsibility" had not been included in the Report.  
Nonetheless, Nigeria would continue to seek consensus on this element in the context of the CTE's future 
work programme.  Nigeria had joined in the consensus to adopt the Repor t on the understanding that 
the CTE would continue to further work on DPGs.   
 
8. The representative of Korea  said the Report was a good basis for further work in the CTE.  The 
CTE had made significant progress in identifying the re lationship between trade and environment in the 
framework of WTO rules.  The Report was a package deal which represented a fair balance from all 
points of views and was a fair reflection of CTE work to date.  Even though there were many areas which 
fell be low Korea's expectations, Korea had joined the consensus to adopt it as it was.  Korea felt the text 
on Item 1 struck a balance between liberal thinking and conservative approaches, which sent the message 
that the WTO had been tackling the complex issues r elated to trade and environment in pursuit of 
sustainable development.  However, it was unfortunate that the analytical methodology referred to as the 
"differentiated approach" had not been retained in Section III, although several delegations supported th is 
methodology as useful for further work.  Korea hoped further work would be guided by this 
methodology.  Paragraph 197 represented a concession for Korea.  The text on Item 6, which was of 
importance to Korea, had been drafted in a balanced manner;  this  balance was fragile and should be 
preserved.  Further work under this Item should be based on analytical work and empirical evidence, 
taking into account country -specific conditions and without prejudice to specific sectors or specific 
distortive measures .  Korea also attached significance to Item 8 and felt the agreement which had been 
reached could serve as a basis for further work.  Korea hoped the Report would constitute the basis for 
the CTE to broaden and deepen its analysis on all Items and took not e of the Chairman's statement on 
the character of the Report.  
 
9. The representative of Norway  said the Report was a package deal which Norway had accepted, 
although without enthusiasm.  Although Norway would have preferred the deletion of paragraph 185, it 
had joined the consensus on the understanding that the content of this paragraph did not hav e any legal 
implications and did not prejudge discussions in the TBT Committee.  
 
10. The representative of Mexico  said that the discussion on trade and environment which was 
reflected in the Report would enable Ministers at the Minis terial Conference to gain insight into the 
various issues for which common, but also diverging views existed among Members.  The Report was 
not a document which had been negotiated with a view to contractual undertakings;  it had no legal 
implications conc erning the substantial or procedural rights and obligations of WTO  Members, either 
collectively or individually under the WTO Agreement and it did not prejudge Members' positions with 
respect to future CTE work.  Consequently, no element in the Report coul d be used as a basis for action 
under the Dispute Settlement Understanding (DSU).  As such, Mexico would have preferred not to have 
included paragraph 178.  The DSU as well as other WTO Agreements provided for rights to invoke the 
DSU which could not be ch anged in any fora other than the WTO.  Matters which were WTO -related 
should be dealt with in the WTO;  those which were not within the WTO's competence should be dealt 
with outside the WTO.  In cases where there was a possibility to resort to one or anoth er fora, there shall 
be freedom of choice;  there was no relationship in terms of lex specialis  or lex posterior  concerning 
which fora prevailed.  
 
11. The representative of Singapore, on behalf of ASEAN , said the CTE had made substan tial 
progress in clarifying trade and environment issues, which was reflected in the Report.  ASEAN 
considered that the Report would serve as a basis for further work and was not a legal document.  It was 
a political message directed not only at the enviro nmental constituency but also, more importantly, to the           WT/CTE/M/13  
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trade constituency considering that this debate had taken place in a trade organization.  As stated by the 
Chairman upon the Report's adoption, the conclusions and recommendations contained therein sh ould 
not in any way infringe on the rights and obligations undertaken in the WTO, nor prejudice Members' 
positions on Items on the CTE work programme.  ASEAN had several concerns, particularly on Items 
1 and 5, and 3(b).  In order to be constructive and no t to block consensus, ASEAN had made significant 
accommodations on these Items, for example concerning paragraphs 173(ii), 178 and 183.  
Furthermore, there had been no agreed definition of an MEA and views related to MEAs would be 
subject to such a definit ion.  The CTE had a role to play in clarifying the complexities inherent in the 
trade and environment interface after the Singapore Ministerial Conference, such as ensuring 
environmental concerns were not used for protectionist purposes.  The outcome of th e CTE process 
should ensure multilateral cooperation to address transboundary environmental problems and guard 
against the use of extra -jurisdictional application of environmental laws.  In analysing the Report, ASEAN 
saw a lack of reference to the develop ment dimension, which it would continue to emphasize in future 
work as this aspect was one which needed to be taken into account in any discussion on trade and 
environment.  In endorsing the Report, particularly paragraph 219, ASEAN emphasized the importan ce 
of the Report being sent to the Ministerial Conference through the General Council.     
 
12. The representative of the European Communities  welcomed the fact that the Report had been 
adopted and would be submitted to the General C ouncil.  The EC had always considered the work in 
the CTE to be a priority for Singapore and had demonstrated its commitment to a positive result and its 
high level of ambition and expectations not only in the run up to the Ministerial Conference, but 
throughout the CTE's work.  Since the outset, the EC had taken the position that the CTE represented 
the appropriate forum to achieve a better understanding of the relationship between trade and 
environment, to promote a positive interaction between the two an d to accommodate legitimate 
environmental concerns in the WTO.  In particular, the EC had attached importance to the issue of the 
relationship between the WTO and MEAs.  With a view to establishing a framework for this 
relationship, the EC had tabled a pro posal whereby trade measures taken pursuant to MEAs would 
benefit from special treatment under WTO provisions.  The proposal had been guided by the 
assumption that the WTO should be supportive of action at the multilateral level for environmental 
protectio n.  Some had described the EC's approach as creating an "environmental window" in the WTO, 
a definition which the EC liked.  However, it had proved impossible, so far, to find consensus on such 
ideas as well as on other delicate issues on the CTE's agenda and, thus, the EC found the Report fell short 
of its high ambitions.   
 
13. Despite its disappointment, the EC was ready to go along with the Report's adoption, without 
which two years of work in the CTE would have gone unreported an d the complexity of the matters being 
addressed would not have been presented in such a comprehensive form to the public.  The Report 
contained elements of value which demonstrated that the WTO was not closed to further exploration of 
how to enhance the re lationship between trade and environment.  The Report constituted a clear basis 
for further work and was certainly not the end of the story.  In this respect, the EC was able to endorse 
the Report because it considered that, although it fell below the leve l of the EC's expectations, it did not 
prejudge the EC's positions for the next round of negotiations.  The EC understood the sensitivity of 
many elements of the Report for many delegations because the same critical elements were also sensitive 
for the EC.   However, controversial issues could be addressed further in future work.  The Report 
represented a delicate balance;  so delicate that the EC had had to evaluate carefully whether to accept 
the package.  In this respect, many Members of the EC had been r eluctant to accept it.  However, to 
have reopened the Report would have meant almost certainly that this delicate balance would have 
vanished and all possibility of agreement would have disappeared for the foreseeable future.  
 
14. The representative of Japan  welcomed the adoption of the Report, particularly Section III which 
contained important, positive messages to send to Ministers in Singapore  concerning WTO work on 
trade and environment, including the recognition of the need for m utual respect between the WTO and 
MEAs, the importance of promoting a dialogue between them, and continuing work on eco -labelling.  
Like other delegations, although Japan had not been satisfied with some elements of the Report and 
would come back with its views and discuss the issues, not only on  Item 6 but on Item 1 for example, it WT/CTE/M/13  
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had joined the consensus to adopt the Report so as to be in a position to build on the Report and deal 
with the unresolved issues after Singapore.  The CTE should address its w ork programme after 
Singapore with a sharpened focus.  Japan gave a high priority to reducing the potential for conflict 
between the WTO and MEAs and enhancing the positive interface between them, for which further work 
was needed.  
 
15. The representative of the United States  said his delegation had decided, after careful and 
sometimes difficult internal deliberations, not to stand in the way of the consensus to adopt the Report. 
All delegations, including representatives in capitals, had laboured long and hard over these issu es, and 
the US appreciated the effort that had gone into this product.  While the Report made some valuable 
contributions, the US expressed its disappointment that the CTE had not advanced significantly the 
understanding of environmental concerns.  The US did not concur with certain of the Report's 
conclusions.  With respect to paragraph 169, the US noted its understanding that the reference to 
governments' ability "to establish their national environmental standards in accordance with their 
respective envi ronmental and developmental conditions, needs and priorities" was of course not intended 
to be a restatement or reinterpretation of Principles 2 and/or 11 of the Rio Declaration and Principle 21 
of the Stockholm Declaration.  In particular, the US would be  concerned if this language were to be read 
as expressing the view that governments did not have the corresponding responsibility, as stated in Rio 
Principle 2, to ensure that activities within their jurisdiction or control did not cause damage to the 
environment of other States or of areas beyond the limits of their national jurisdiction. Any such reading, 
would be a serious backtracking, not only from the commitments of Rio but also from Stockholm and 
one with which it could not concur.  
 
16. The US did not agree with the assessment contained in Paragraph 174(i) that "there is no clear 
indication for the time being of when or how they [trade measures in MEAs] may be needed or used in 
the future".  This contradicted recent negotiations  of both the Biosafety Protocol to the Biodiversity 
Convention and the Convention on Prior Informed Consent for Toxic Chemicals and Pesticides where 
trade measures to achieve the environmental objectives of these MEAs were under consideration.  With 
respec t to Paragraph 174(iii), the US' view was that "mutual respect" for "technical and policy" expertise 
included the important concept of respect for the environmental expertise of MEA negotiators in 
determining when trade measures may be needed in MEAs.  Par ticularly important to the US was that, 
as noted in paragraph 178, while WTO  Members had the right to bring disputes to the WTO dispute 
settlement mechanism, they could agree to bring such disputes elsewhere or not to bring them at all.  For 
example, the U S saw no legal reason why WTO Members, who were also Parties of an MEA, could not 
agree, for disputes involving MEA provisions, to foreswear recourse to WTO dispute settlement in favour 
of settling the dispute within an MEA's provisions.  The US would take  strong issue with an argument to 
the contrary.  With respect to the discussion of further work under Item  6 in paragraph 199, while the 
CTE had expressed the need to examine how the implementation of environmental measures may result 
in disguised restrict ions on trade, the US had not intended that further work become a wide ranging 
investigation into all manner of environmental measures.  Like others, the US found some parts of the 
Report to its liking and others not.  For example, the US regretted that th e CTE had not yet been 
prepared to state that "WTO rules should not hamper the ability of MEAs to achieve their environmental 
objectives."  Nonetheless, the US appreciated the work that this document represented and looked 
forward to continued collective e fforts to build a constructive policy relationship between trade, 
environment and sustainable development.  
 
17. The representative of Morocco  said that the Report was not ideal but his delegation was satisfied.  
The Report was a soun d basis for future CTE work to resolve several sensitive issues, such as the export 
of DPGs.  Morocco accepted the Chairman's statement that the Report did not infringe on WTO 
Members' rights and obligations under the WTO Agreements.  
18. The representative of India  said the Report was a delicately balanced text which contained 
elements of interest to different Members.  As was natural in any negotiations, there was some 
disappointment amongst all delegations about not getting all thei r ideas incorporated, to the desired 
extent, in the Report.  Nevertheless, like all other delegations and in the spirit of cooperation, India had 
gone along with the consensus in adopting this Report.  He clarified India's understanding that the term 
"Mult ilateral Environmental Agreement" had not been defined anywhere.  India had consistently stated           WT/CTE/M/13  
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that, in this context, the term should cover only those MEAs which had the following elements:  (i)  it 
should have been negotiated under the aegis of the Unite d Nations or its specialized agencies;  (ii) its 
procedures should stipulate that participation in the negotiation was open to all countries;  (iii) there must 
have been effective participation in the negotiations by countries belonging to different geogra phical 
regions and by countries at different stages of economic and social development;  and (iv) the MEA's 
procedures should provide for accession of countries which were not original members, on terms that 
were equitable to those of its original members.   These elements were contained in India's non -paper on 
Item 1.  India read the Report based on this understanding of an "MEA".  
 
19. India had consistently taken the stand that no provision in the WTO Agreement needed to be 
changed o r interpreted in any manner other than that which was already available in the jurisprudence in 
order to accommodate genuine environmental concerns;  paragraph 174(ii) confirmed this point.  India 
was concerned that there should not be any hierarchy establ ished between the dispute settlement 
mechanism under the WTO and those under MEAs.  India's understanding was that paragraph 178 was 
a statement of "best endeavour," which encouraged WTO Members to consider trying to resolve their 
differences through avail able MEA dispute settlement mechanisms provided they were perceived to be 
efficacious enough for this purpose, without in any manner questioning or diluting WTO Members' rights 
with regard to dispute settlement.  The Report provided scope for all WTO  Membe rs to pursue Items 
of particular interest to them in a future work programme within the CTE's original mandate and terms 
of reference as set out in the Ministerial Decision of April  1994.  India was proceeding on the basis that 
the Report to the Ministeria l Conference through the General Council was a Report by the Committee 
as mandated by a Marrakesh Ministerial Decision and that it was not a legal agreement creating new rights 
or obligations.  India's understanding also was that the Report could not be us ed in part or its entirety in 
any dispute settlement process or any other legal instruments that might be developed subsequently.  
 
20. The representative of Hong Kong  supported the adoption of the Report, which represented a 
balanced  outcome.  The Report would not modify WTO Members' rights and obligations. Delegations' 
ability to reach a consensus on such a complex subject area where views were evidently divergent had 
reconfirmed the WTO's role as an effective negotiating forum.  Hon g Kong hoped this same spirit of 
cooperation would be reflected in other areas of WTO work, especially areas where conclusions and 
recommendations for the Ministerial Conference had yet to be determined.  Hong Kong felt CTE 
discussions had contributed to e nhancing the available information on the nature of environmental issues, 
especially on the nature and relationship of WTO rules to trade -related environmental measures.  
Transparency in WTO had no limitations and was a means and not an end to solving prob lems related 
to trade -related environmental measures.  In future, the CTE would have the opportunity to examine a 
database on trade -related environmental measures which the Secretariat would establish according to 
paragraph 192 of the Report and the CTE co uld reexamine the issue of compliance gaps which had been 
identified.  
 
21. The representative of Canada  said the process had been difficult as the CTE had been dealing 
with complex issues and much of the process had been educative.  Speaking on behalf of the Point de 
Jour Group, he said that in the end it was the willingness of all delegations which had res ulted in a 
reasonable compromise which would serve as a basis for future CTE work.  
 
22. The representative of Argentina  said his delegation found the Report to be somewhat 
unsatisfactory and that this might be the greatest merit of t he Report as all delegations seemed to be equally 
unsatisfied.   
 
23. The representative of Australia  said that as the Report represented two years of examination of 
complex issues, it was understandable that it reflected the difficu lty of achieving the sort of consensus 
which some delegations had wanted.  Although the Report fell below Australia's expectations, it was 
balanced and provided a basis for further WTO work in this area.  
 
24. The representative of New Zealand  said the CTE had made some progress towards clarifying the 
relationship between the provisions of the multilateral trading system and trade measures for WT/CTE/M/13  
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environmental purposes, including those pursuant to MEAs.  However, New  Zealand was disappoin ted 
that more substantive results had not been achieved.  Nevertheless, the Report contained some important 
messages, one of which was to highlight to the public the complexity of the issues discussed.  New 
Zealand looked forward to substantive conclusions  emerging from future CTE discussions.  
 
25. The representative of Cuba  said that although his delegation would have liked some of the issues 
in the Report to have been expressed differently, Cuba had joined the consensus for its adop tion because 
it represented an acceptable outcome.  As stated by the Chairman, Cuba's understanding was that the 
Report would not infringe on WTO Members' rights and obligations.  
 
26. The representative of Egypt  said the Report repre sented a balanced result.  Egypt considered 
that Section III was a political statement issued largely to address the environmental community, and, as 
had been asserted by several delegations and the Chairman, the text neither in part nor in its entirety 
would be considered by panels or by any other legal instruments that were developed subsequently.  This 
applied particularly to paragraph  174(ii).  
 
27. The representative of Switzerland  joined the consensus with little enthusiasm.  Nev ertheless, the 
Report was a sound basis for future work.  Switzerland had participated actively in CTE discussions and 
would continue to do so in the future.  
 
28. The representative of Colombia, on behalf of Colombia and Venezuela , welcomed the 
Chairman's statement on the legal status of the Report and shared the comments made by Mexico on the 
consistency and scope of the DSU regarding WTO Members' rights and obligations.