WORLD TRADE
ORGANIZATIONWT/CTE/W/219
14 October 2002
(02-5542)
Committee on Trade and Environment Original:  English
LABELLING FOR ENVIRONMENT PURPOSES1
Submission by Switzerland
I. WHY THE ISSUE OF "ECO-LABELLING" IS OF IMPORTANCE
1. At the Ministerial Conference in Doha, the Committee on Trade and Environment (CTE) has
been instructed, in pursuing work on all items on its agenda within its current terms of reference2, to
give particular attention to labelling requirements for environmental purposes. It has also been
recorded in the Doha Declaration that work on this  issue should include the identification of any need
to clarify relevant WTO rules.
2. Furthermore, the Committee has been assigned to report to the Fifth Session of the Ministerial
Conference, and make recommendations, where appropriate, with respect to future action, including
the desirability of negotiations.
3. Ministers have also agreed that the outcome of this work shall be compatible with the open
and non-discriminatory nature of the multilateral trading system, shall not add to or diminish the
rights and obligations of Members under existing WTO agreements, in particular the Agreement on
the Application of Sanitary and Phytosanitary Measures, nor alter the balance of these rights and
obligations, and will take into account the needs of developing and least-developed countries.
4. Although the subject has been a standing issue on the agenda of the Committee and thus
many contributions have been made, work in the CTE on labelling for environmental purposes has not
yet been approached in a systematic manner. Often the argument, that questions related to labellingshould be addressed by the TBT Committee, has inhibited initiation of substantial work within the
CTE.
5. The Doha Declaration, however, clearly assigns the task of progressing work on
environmental labelling to the CTE. While close collaboration with the TBT Committee in certain
areas should be sought, the CTE for its own part should commence discussions on environmentallabelling without delay.
                                                     
1 This paper was previously issued as Job(02)140, dated 4 October 2002.
2 Within their Decision on Trade and Environment, which has been adopted at the meeting of the
Uruguay Round Trade Negotiations Committee in Marrakesh on 14 April 1994 ministers have directed the first
meeting of the General Council to establish the Commi ttee on trade and environment that, within its terms of
reference, and with the aim of making international trade and environmental policies mutually supportive, theCommittee will initially address matters, in relation to which any relevant issue may be raised. One of theseissues is the relationship between the provisions of the multilateral trading system and requirements forenvironmental purposes relating to products, including standards and technical regulations, packaging, labellingand recycling. Since its establishment the CTE has been discussing the issue of "eco-labelling" under Item 3 of
its work programme.WT/CTE/W/219
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6. Indeed, the importance of "eco-labelling" on the national as well as on the international level
is increasing. In many countries consumer’s concerns with the state of the environment is on the rise.
In parallel to this concern, awareness of the relationship between consumption patterns and
sustainable or unsustainable production is growing. Thus, consumers intending to actively contribute
to sustainable production through their individual consumption demand information about theenvironmental impact of the product they purchase,  allowing them to make an informed choice.
7. It increasingly appears that consumers in most industrialised societies are willing to pay
higher prices for products that are more environmentally friendly than others, especially if other
factors like quality are more or less the same. The difficulty they face, however, is being in a position
to make reliably informed choices due to lack of comprehensive information. In this context, "eco-
labels" are a potentially attractive way of simultaneously informing consumers about the
environmental impact of their purchasing decisions and providing producers with a means ofachieving a market place preference and possibly a price premium as a result of making verifiable
improvements in sustainable production techniques.
8. As such, "eco-labels" represent a sound alternative to other policy instruments (such as setting
of mandatory product or production/processing requirements/standards). In this spirit, governments as
well as private stakeholders are developing or have already developed policies, including "eco-labelling" schemes, which promote sustainable consumption patterns.
9. Predominantly, "eco-labelling" schemes set criteria so that only a small percentage of
products in a product category can obtain the "eco-label". The label is thus awarded to the most
environmental friendly products within its category only. In practice, "eco-labelled" products which
are successful (e.g. environmental friendly recycling paper) often cover a large part of the marketshare within a product category. “Eco-labels” then no longer selectively identify a sub-set of products
which are environmentally preferable to other products in the same product category, but tend to
become a de facto product standard. If the product concerned is highly traded, the "eco-label" may
constitute a barrier to competing in the market place as regards foreign products which do not
conform to the "eco-label" criteria. The same may apply when retailers wish to carry a majority of"eco-labelled" products. This situation is of special significance, if the product category concerned is
of specific interest to developing county exports.
10. A study carried out by the OECD in 1997 on the impact of "eco-labelling" schemes to trade
3
has, however, revealed that the information gathered  during the course of the study did not show hard
evidence of changes in trade flows arising from the selected "eco-labelling" programmes.
Nevertheless, fears and concerns have been voiced as to potential effects.
11. Given the fact that various existing "eco-labelling" schemes are based on a life cycle
assessment (LCA), which also includes process and production criteria, an international proliferation
of labelling schemes may inhibit the same product  from obtaining the "eco-label" in different
countries. This restriction to the national level is partly due to the non-homogeneity of environmental
concerns and the public role in "eco-labelling" schemes. It follows that primarily the resulting
divergences between different schemes are leading to trade tensions. In order to address theseconcerns, attention could be drawn to instruments, such as harmonization, equivalence and mutual
recognition.
                                                     
3 OCDE/GD/(97)105 Eco-labelling: Actual  effects of selected programmes.WT/CTE/W/219
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II. WHAT SHOULD BE UNDERTAKEN BY THE COMMITTEE ON TRADE AND
ENVIRONMENT
12. The task given to the Committee on Trade and Environment by way of the Doha Declaration
is to pursue its work with particular attention to the issue of environmental labelling, to report to the
next ministerial meeting on the progress and to make, as appropriate, recommendations on thenecessary action to be taken. In order to arrive at a comprehensive report for the next ministerial
meeting, Switzerland suggests that the Committee approaches discussions in a structured way and
examines the following aspects with regard to environmental labelling:
(a) definition of "eco-labelling";
(b) identification and analysis of specific trade issues related to environmental labelling
schemes;
(c) conclusions and decision on the necessary action to be taken.
A. D
EFINITION OF "ECO-LABELLING "
13. For the purpose of identification and analysis of specific trade effects caused by "eco-
labelling" schemes it is important to first of all focus on the definition. In its note WT/CTE/W/79,
dating from 1998, the Secretariat has offered a definition drawn from UNEP: "Environmentallabelling: The use of labels in order to inform consumers that a labelled product is more
environmentally friendly relative to other products in the same category".
14. This definition, determined by the objective underlying environmental labelling schemes has
been confirmed by the Communication from the International Standardisation Organisation (ISO)
4,
which states:  "The overall goal of environmental labels and declarations can be stated as follows:through communication of verifiable and accurate information – that is not misleading – on
environmental aspects of products and services, to encourage the demand for and supply of those
products and services that have a less negative impact on the environment, thereby stimulating the
potential for market-driven continuous environmental improvement."
ISO has furthermore classified three types of labelling schemes:
ISO 14024:1999 Type I environmental labelling -- Principles and proceduresISO 14021:1999 Self-declared environmental claims (Type II environmental labelling)ISO/TR 14025:2000 Type III environmental declarations
(ISO 14020:2000 Environmental labels and declarations -- General principles)
15. Switzerland is of the view, that through a common understanding on the qualifying elements
of "eco-labelling" schemes when referring to such schemes within WTO discussions could be
facilitated significantly. In this context it would be of utmost interest whether the term "eco-labelling"is limited to labelling schemes which are voluntary in nature or whether mandatory environmental
labelling schemes are also included in the "eco-labelling" notion.
                                                     
4 WT/CTE/W/114WT/CTE/W/219
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16. Notwithstanding any conclusion on the definition, it must be noted that the Doha mandate
relates to labelling requirements for environmental purposes . It is, therefore, Switzerland’s view, that
subsequent discussions within the CTE may not be limited to voluntary "eco-labelling" schemes but
should also include mandatory labelling schemes.
B. IDENTIFICATION AND ANALYSIS OF SPECIFIC TRADE ISSUES IN RELATION TO ENVIRONMENTAL
LABELLING SCHEMES
17. In its note, dated 29 June 20005, the Secretariat has provided the Committee with an overview
of the most important environmental labels as well as with a compilation of notifications relating to
environmental labelling schemes which have been submitted in the framework of the TBT
transparency provisions. This overview illustrates the proliferation of existing labelling schemes for
environmental purposes.
18. Labelling issues have also been subject to numerous discussions within the formal sessions of
the TBT Committee under the agenda item on implementation and administration of the Agreement.
Switzerland is of the opinion that a compilation of the environmental labelling issues, which have
formally been raised within th e TBT Committee, could provide some indication on the nature of the
trade issues involved. Such compilation could be added to by contributions of Members who arewilling to share specific experiences in this matter.
19. In this context, Switzerland believes it to be most interesting and beneficial, if contributions
by Members not only focus on specific trade problems relating to environmental labelling, but also
provide examples of specific initiatives for trade facilitation and/or promotion with respect to
environmental friendly products (e.g. co-operation programmes for organically produced cotton) thatare subject to a environmental labelling scheme.
C. C
ONCLUSIONS AND DECISION ON THE NE CESSARY ACTION TO BE TAKEN
20. The analysis of the specific trade issues wi th regard to environmental labelling schemes
should involve an assessment of the relevant WTO rules. Based on the conclusions of this process theCommittee should make any recommendations whether further action should be undertaken, as
requested by the Doha mandate. Hence, future work should, as necessary, address any incoherencies
or open questions that have been identified in the analytical process and could also cover issues
related to implementation of the relevant provisions (non-discrimination, transparency, equivalence
etc.).
III. NEXT STEPS / WAY FORWARD
21. In the interest of fulfilling the Committee’s assignment drawn from the Doha declaration
Switzerland suggests that the CTE initiates work on th e core issues related to environmental labelling
without further delay. Future work should be conducted in a structured manner and involve, as
necessary and appropriate, TBT experts. Furthermore, the work should take into account work
undertaken by other WTO fora on labelling.  With respect to the items to be addressed in theframework of CTE discussions, Switzerland proposes to examine the aspects outlined above (see
paragraph 12).
                                                     
5 WT/CTE/W/150WT/CTE/W/219
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22. To this end, the Committee may wish to ask the Secretariat for an update of its previous
papers, that is WT/CTE/W/1506 and WT/CTE/W/797. Additionally, a compilation8 of the specific
trade issues relating to environmental labelling which have been raised under the agenda item
"administration and implementation of the TBT Agreement" could be mandated to the Secretariat.
Any supplementary contributions (e.g. examples on specific trade issues and on individual tradefacilitating initiatives) from member countries could be sought as these are illustrative for future
discussions.
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6 The update should cover the section comprising the overview on the most important environmental
labelling schemes and the section on TBT notifications relating to environmental labelling.
7 The update should provide an overview on the definition of "eco-labelling".
8 This compilation could be drawn from the minutes of the TBT Committee (Statements on
Implementation and Administration of the Agreement).