./.WORLD TRADE
ORGANIZATIONWT/GC/W/358
12 October 1999
(99-4298)
General Council Original:  English/
French
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Canadian Approach to Trade and Environment in the New WTO Round
Communication from Canada
The following communication, dated 4 October, has been received from the Permanent
Mission of Canada.
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General approach
1. As set out in the Preamble to the WTO Agreement, Canada believes that sustainable
development is an important objective for the WTO.
2. Mutually supportive trade and environmental policies are essential to ensuring that the next
set of WTO negotiations will contribute to the achievement of sustainable development.
Nevertheless, mutually consistent policies and rules do not happen automatically, but require
consultation, coordination and a willingness to seek creative solutions to difficult issues.  We must
ensure that trade policies support sustainable development and do not restrict legitimate actions to
protect and preserve the environment and, at the same time, make certain that environmental policiesare developed and implemented in the least trade restrictive manner necessary to accomplish the
policy objective.
3. The WTO Committee on Trade and Environment (CTE) has carried out a useful ongoing
discussion of the relationship between trade and environmental protection which has improved our
understanding of trade and environment issues.  The CTE should continue this discussion.  It shouldalso apply the understanding gained during these discussions by serving as a focal point for the
integration of environmental considerations in th e WTO negotiations without coming to conclusions
or negotiating the issues.  Each negotiating group s hould take environmental issues into consideration
to make certain that liberalized trade is consistent with, and supportive of, the achievement of
sustainable development (i.e. “mainstreaming”).
4. The success of the GATT and the WTO has heightened public awareness of the linkages
between multilateral trade agreements and domestic interests.  Openness and consultation are
fundamental to Canadian trade and environment policy.  Canada and a number of other WTO
Members are engaged in a broad range of domestic stakeholder consultations and support further
outreach efforts by the WTO.  Increased transparency of WTO operations, including more outreachby the Secretariat, will help maintain and build publ ic support for the multilateral trading system.  In
this regard, Canada also believes that WTO Members have a responsibility to inform their domestic
stakeholders with respect to the WTO negotiations and provide adequate opportunities for
consultation.WT/GC/W/358
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5. Canada is committed to integrating sustainable development into domestic and foreign policy.
The environmental review of policies and programmes, known as Strategic Environmental
Assessment, is an important decision-making tool for promoting sustainable development.  Canada
will conduct a national Strategic Environmental Assessment of the upcoming round of multilateral
trade negotiations at the WTO.  We believe it would be useful for Members undertakingenvironmental assessments of the new round to exchange information on their approaches and their
findings with other WTO Members.  The benefit of this information exchange would be to highlight
possible environmental impacts of the upcoming negotiations, both positive and negative, without
focussing on specific countries.  Another benefit would be to avoid duplication of activity between
various countries and maximize the use of scarce resources.  Information exchange could also be
useful in increasing policy coordination between trade and environment ministries in both developed
and developing countries.
Specific policy issues
6. Canada supports further work to clarify the relationship between WTO rules and trade
measures in multilateral environmental agreements (MEAs).  Although to date no MEA trade
measures have been challenged in the WTO, and WTO jurisprudence has developed considerably onthis issue in recent years, legal uncertainty still exists and it would be prudent, for both environmental
and trade reasons, to address this question.  A “principles and criteria” approach which would clarify
existing WTO rules, possibly incorporated in some  form of interpretative or ministerial statement,
would assist both WTO panels in assessing the legitimacy of MEA trade measures and international
MEA negotiators in contemplating the appropriate use of trade measures in particular MEAs.
7. Canada also believes it may be useful to consider, in the appropriate fora, whether relevant
multilateral trade disciplines could be strengthen ed to take into account the increasing use of
voluntary international standards based on life cycle considerations.  Canada’s focus on ecolabelling,
certification and standards issues reflects the reality and concerns of many companies, in many
sectors, as demonstrated in international discussions on how these issues affect developed anddeveloping countries’ trade in a variety of goods.
8. It is important to recognize that trade liberalization fosters economic growth for both
developed and developing countries.  The wealth generated by improving market access for
developing countries increases their ability to adopt policies which will achieve economic
development, greater social equity and enhanced environmental protection.  Work to capture potential
synergies between trade liberalization, development and environmental protection during the next
WTO negotiations is essential to the achievement of sustainable development.
9. Identifying the synergies between trade liberalization and improved environmental protection
in a variety of sectors can contribute to the ac hievement of sustainable development.  Widespread
trade distorting subsidies in the agricultural sector, particularly export subsidies, have been shown to
yield negative environmental consequences.  Subsidies to the fishing sector that contribute to
overcapacity and undermine the sustainable use of marine resources can also be trade distorting.  Inthe forest sector, trade distortions created by the application of higher tariffs to value-added products
impact on the ability of affected exporting countries to manage their forests sustainably.  Further
liberalization of trade in environmental goods and services would also enhance the ability of countries
around the world to deal with environmental challenges.  In these, and other sectors, removing or
reducing trade distorting measures can lead to greater environmental protection.
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