WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/CTE/W/115
25 June 1999
(99-2630)
Committee on Trade and Environment Original:  English/
anglais/
inglés
COMMUNICATION FROM THE SECRETARIAT FOR
THE VIENNA CONVENTION AND THE
MONTREAL PROTOCOL, UNEP
The attached background paper1 has been received from the Secretariat for the
Vienna Convention and the Montreal Protocol, UNEP.  It is being circulated to Members of the CTE
in preparation for the Committee Meeting on Trade and Environment to be held on 29-30 June 1999.
Comité du commerce et de l'environnement
COMMUNICATION DU SECRÉTARIAT DE LA CONVENTION DE VIENNE
POUR LA PROTECTION DE LA COUCHE D'OZONE
ET DU PROTOCOLE DE MONTRÉAL, PNUE
Le Secrétariat de la Convention de Vienne et du Protocole de Montréal, PNUE, a fait parvenir
au Secrétariat la note d'information ci-jointe1, qui est distribuée aux membres du Comité du commerce
et de l'environnement en vue de la réunion que le Comité tiendra les 29 et 30 juin 1999.
Comité de Comercio y Medio Ambiente
COMUNICACIÓN DE LA SECRETARÍA DEL
CONVENIO DE VIENA Y EL PROTOCOLO
DE MONTRAEL, PNUMA
Se ha recibido de la secretaría del Convenio  de Viena y el Protocolo de Montreal (PNUMA)
el siguiente documento de información1, que se distribuye a los miembros del Comité de Comercio y
Medio Ambiente para preparar la reunión sobre co mercio y medio ambiente que el Comité celebrará
los días 29 y 30 de junio de 1999.
                                                     
1 English only/En anglais seulement/En inglés solamente.WT/CTE/W/115
Page 2
TRADE RELATED DEVELOPMENTS IN THE MONTREAL PROTOCOL ON
SUBSTANCES THAT DEPLETE THE OZONE LAYER
K. Madhava Sarma
Executive Secretary
Secretariat for the Vienna Convention and
the Montreal Protocol, UNEP
TABLE OF CONTENTS
Subject Paragraph(s)
I. Montreal Protocol --------------------------------------------------------------------- 1-4
II. Trade Measures ------------------------------------------------------------------------ 5-9
III. New Substances------------------------------------------------------------------------ 10IV. Who and Why of the non-Parties--------------------------------------------------- 11-16V. Non-compliance Procedure---------------------------------------------------------- 17-18VI. Why Trade Measures ----------------------------------------------------------------- 19-21VII. Assistance to Developing Countries ----------------------------------------------- 22-28
VIII. Technology Transfer ------------------------------------------------------------------ 29
IX. Compatibility between GATT and the Protocol--------------------------------- 30-33
Annex I - Indicative List of categories of incremental costs of Developing
Countries met by the Multilateral Fund
Annex II - List of countries that have not ratified the Amendments/ProtocolWT/CTE/W/115
Page 3
I. MONTREAL PROTOCOL
1. The Montreal Protocol on Substances that Deplete the Ozone Layer has been arrived at in
1987 as a Protocol under Article 8 of the Vienna Convention for the Protection of the Ozone Layer,
1985.  The Protocol seeks to protect the ozone layer by phasing out global emissions of specifiedozone depleting substances on the basis of developments in scientific knowledge, taking into account
technical and economic considerations and bearing in mind the developmental needs of developing
countries.  The preamble of the Protocol specifically acknowledges the need for special provisions to
meet the needs of developing countries, including provisions for additional financial resources and
access to relevant technologies.
2. The Protocol of 1987 was acknowledged only to be the first step as only eight substances
were included as controlled substances and the control measures prescribed only sought to freeze orreduce consumption of these substances over a time period.  Article 6 of the Protocol provided for
assessment of the control measures at least every four years on the basis of available scientific,
environmental, technical and economic information.  Article 2, paragraph 9 provided for adjusting the
ozone depleting potentials and the control measures based on these assessments.  The adjustments are
binding on all Parties after a decision by a Meeting of the Parties with 2/3 majority vote of the Partiespresent and voting and representing a majority separately from the developing countries and from
other countries and six months after the communication of such adjustments by the Depositary of the
Protocol.  Article 9 of the Vienna Convention pr ovided for the procedure to amend the Protocol.
A. A
DJUSTMENTS AND AMENDMENTS TO THE PROTOCOL
3. Based on the assessments made by panels of experts established by the Parties in 1989, 1991
and 1994, the Parties have adjusted the control measures of substances already included in the list
through adjustments.  The Parties also included more substances and prescribed control measures for
them through amendments in 1990 (London Amendment) and 1992 (Copenhagen Amendment).
There were also adjustments and an amendment adopted in 1997 (Montreal Amendment) which
advanced the phase-out dates but no new substance was included.  The Montreal Amendment has notyet entered into force.  While the Montreal Protocol of 1987 controlled only eight substances, the
London Amendment added twelve more and the Copenhagen Amendment added 75 more.  Totally,
95 chemicals are controlled.
B. K
EY PROVISIONS OF THE PROTOCOL
4. As adjusted and amended, the Protocol provides for, inter alia :
- A timetable of phased reduction and phase out of the 95 ozone-depleting
substances (ODS) by Parties.  (Con trol measures of Articles 2A-2H);
- a grace period of ten years (more in some cases) for Parties, classified as
developing and consuming less than the specified per-capita quantities of
ODS, to observe the time-table of phase out (Article 5 Parties).  All the
countries of the Group of 77 (in 1989), China, Albania, South Africa, Georgia
and Moldova are classified as developing countries.
- a multilateral fund, contributed by non-Article 5 Parties, to meet the agreed
incremental costs of Article 5 Partie s for implementing the phase-out.  The
indicative list of agreed incremental costs is attached.  (Article 10).WT/CTE/W/115
Page 4
- mandate to parties to take “every practicable step” to transfer “the best
available, environmentally safe substitutes and related technologies” “under
fair and most favorable conditions”.  (Article 10A).
- control of trade with non-Parties (Article 4);
- reporting of data and information (Articles 7 and 9);
- making a non-compliance procedure (Article 8).
II. MEASURES OF THE PROTOCOL FOR CONTROL OF TRADE WITH NON-
PARTIES
5. The trade measures of the Protocol under Article 4 are directed against non-Parties.  These
measures are as follows:
(a) Control of trade in ODS with non-Parties
(i) Annex A substances:- import from non-Parties banned from January 1990 (Article 4, paragraph 1);
- export banned from January 1993 (Article 4, paragraph 2);
(ii) Annex B substances:
- Import and export banned from August 1993 for non-parties to the London
Amendment (Article 4, paragraphs 1 bis and 2 bis).
(iii) Annex C - Group II - HBFCs:
- Import and export banned from June 1995 for non-Parties to the Copenhagen
Amendment (Article 4, paragraphs 1 ter and 2 ter).
(iv) Annex C Group I (HCFCs), no restrictions as yet since it was felt by the
Parties that such restrictions may affect the phase out of CFCs (of muchhigher Ozone Depletion Potential than CFCs) since HCFCs are used
temporarily as substitutes for CFCs).
(b) Control of Trade in ODS products with non-Parties
- Import of products (listed in Annex D) containing Annex A substances
banned from May 1992 (Article 4 paragraph 3 and Decision 15 of the ThirdMeeting of the Parties, 1991);
- fifth Meeting of the Parties decided that it is not feasible to ban or restrict
trade in products made with, but not containing, Annex A substances (Article
4, paragraph 4 and Decision 17 of the Fifth Meeting);
- the Parties also decided that products containing Annex B and Annex C,
Group II, substances or products made with, but not containing the Annex C,
Group II substances will not be listed.  (Article 4, paragraphs 3 bis, 3 ter and 4ter and Decisions 12 of the Sixth Meeting and 18 of the Eighth Meeting).
(c) Exports of ODS-technologies:WT/CTE/W/115
Page 5
- Parties to discourage “to the fullest practicable extent,” export of technology
for producing of ODS (excepting HCFCs);
- no new subsidies, aid etc., for export to non-Parties of equipment or
technology to make ODS (excepting HCFCs);
- exception for equipment or technology to recycle ODS.
6. The Ninth Meeting of the Parties introduced, through the Montreal Amendment, inter alia ,
trade controls for methyl bromide (Annex E) with non Parties.  These controls are:
• Within one year of the date of entry of the Montreal Amendment each Party shall ban
the import of methyl bromide from any state not party to this Protocol.
• Commencing one year after the date of en try of the Montreal Protocol, each Party
shall ban the export of methyl bromide to any state not party to the Protocol.
• Each Party undertakes to the fullest practicable extent to discourage the export to any
non-Party of technology for producing or for utilizing methyl bromide.
• Each Party shall refrain from providing an y assistance for the export to non-parties of
any equipment or technology that would facilitate production of methyl bromide.
The Montreal Amendment has not yet entered into force.
A. MEASURES FOR CONTROL OF TRADE WITH PARTIES
7. The control measures of the Protocol which mandate phased reduction of the consumption of
ODS can be implemented only by Parties curbing imports from other Parties.  The parties adopted a
wide variety of restrictions on trade through policies and regulations.  These include:
- Agreements with industry to phase down imports;
- product labeling;
- licensing for ODS trade;
- duty reductions for ODS-substitutes and non-ODS technologies;
- excise taxes on ODS;
- quantitative restrictions, and bans on imports of ODS;
- total or partial bans on import of ODS products or technologies.
8. During the last few years, the developing country Parties wanted voluntary restraint by the
exporting Parties from exporting new or used CFC-using equipment such as refrigerators.  The
developing countries agreed that such exports created a demand for CFCs in their countries making it
difficult for them to cut down consumption of CFCs.  The Tenth Meeting of the Parties in 1998decided that a Party will inform the Secretariat of the ODS equipment it does not want imported into
its country (along with the declaration that it does not itself make such equipment).  The Secretariatwill communicate this list to all the Parties.  About ten Parties have so far informed the Secretariat on
this issue.  It is hoped that he exporting Parties will honour the wishes of the importing Parties.WT/CTE/W/115
Page 6
9. The Montreal Amendment has introduced some controls on trade with Parties.  Article 4A
prescribes that where a Party is unable to phase out its production on the mandated date (i.e. it is in
non-compliance) it shall ban the export of used, recycled and reclaimed substances over that for the
purpose of destruction.  This provision is intended to encourage countries to use their recycled
substances within their country and phase out production.  It is also intended to prevent illegal exportof virgin substances in the guise of used substances.  Article 4B of the Montreal Amendment
mandates implementation of a system for licensing import and export of the ozone depleting
substances, whether virgin or recycled.  This provision is intended to control illegal trade and to
enable countries to implement the control provisions of the Protocol.
III. NEW SUBSTANCES WITH OZONE DEPLETION POTENTIAL
10. The Protocol prescribes control measures for the 95 chemicals it lists in its annexes.
Recently, a concern has been raised about new ozone depleting substances being put in the market assubstitutes for CFCs.  Two such chemicals, N-Propyl bromide and chlorobromomethane, with some
ozone depleting potential are being marketed by a company as substitutes to HCFCs in the Solvents
Sector.  These substances have an ODP similar to that of CFCs which are permitted now as substitutes
for CFCs but which need to be phased out by the year 2030.  The Ninth and Tenth Meetings of the
Parties considered this issue and are very concerned about the possibility of the marketing of newODS not controlled by the Montreal Protocol.  They have sought advice of their Assessment Panels
and of the Legal Drafting Group on this issue.  The Eleventh Meeting of the Parties in December 1999
will consider this issue further.
IV. WHO ARE THE “NON-PARTIES”?
11. Under the procedure established by the Vienna Convention, an Amendment is binding on a
Party only if it ratifies that Amendment.  Hence, the control and trade measures for substances
included in a Protocol by an Amendment are applicable to a country only if that country has ratified
that Amendment.  At the moment 169 Parties have ratified the Vienna Convention, 168 the Montreal
Protocol, 129 the London amendment and 89 the Copenhagen Amendment.  The Montreal
Amendment has not yet entered into force.  13 Parties have so far ratified it.  It needs a total of 20ratifications to enter into force.  It has been prov ided in each Amendment that a country can ratify it
only if all the previous amendments are ratified.  In effect, the Montreal Protocol is actually three
separate Protocols i.e. the Montreal Protocol, the Montreal Protocol with the London Amendment and
the Montreal Protocol with the Copenhagen Amendm ent.  Soon there will be a fourth agreement i.e.
the Montreal Protocol with a Montreal Amendment.
12. Article 4 Paragraph 9 makes it clear that a Party that has not agreed to be bound by the control
measures for a substance is considered a non-Party for that substance.  Hence, 22 countries (whichhave not ratified the Montreal Protocol are non-Parties for all the 95 substances controlled by the
Protocol, 51 countries for the 87 (Annex B, C, and E) substances and 101 countries for the 75 (Annex
C and E) substances.
13. The list of Parties to the Protocol who are non-Parties to the Montreal Protocol, to the London
Amendment and to the Copenhagen Amendment is annexed along with the populations.
A. W
HY DO THE “NON-PARTIES ” NOT RATIFY THE PROTOCOL /AMENDMENTS ?
14. There are only 22 countries, which have not yet ratified the Montreal Protocol, and their total
population is less than 5% of the world’s population.  It is surmised that the consumption of these
countries of the ozone depleting substances will be insignificant and that their non-ratification is due
to instability in their Governments.  The non-Parties to the London Amendment are also smallconsumers of the controlled substances and their non-ratification may be due to long administrative
procedures.  The number of Parties who have not ratified the Copenhagen Amendment is, however,WT/CTE/W/115
Page 7
much larger.  It includes large countries such as China, Bangladesh, Philippines, India etc.  The reason
for non-ratification is not clear.  No Party has ever objected to the substance of the Amendment.
Many of these Parties also submit their data regularly for HCFCs and Methyl Bromide, which are
controlled by Copenhagen Amendment.  Some of these Parties have obtained the assistance of the
Multilateral Fund for Methyl Bromide projects after assuring that they will ratify the Amendmentsoon.
15. It is noteworthy that meetings of all the Parties to the Protocol through consensus approved
the Amendments to the Protocol.  No Government ever objected to the substance of any Amendment.
Indeed, many of the non-Parties periodically announce their intention to ratify it and explain the long
procedure in their countries for such ratification as an explanation for the delay.
16. Article 4, paragraph 8 of the Protocol specifies that the trade restrictions do not apply to a
non-Party if a Meeting of the Parties determines that the non-Party is in full compliance with thecontrol measures and has provided data to that effect; Colombia, Malta, Jordan, Poland and Turkey
were so determined to be in compliance in 1992-93 prior to their ratification of the
Protocol/Amendment, so that they coul d import the ODS for their requirements.
V. NON-COMPLIANCE PROCEDURE OF THE PROTOCOL
17. The Protocol’s non-Compliance Procedure has been elaborated by the Fourth Meeting of the
Parties in 1992 in accordance with Article 8 of the Montreal Protocol.  The Procedure establishes an
implementation committee of ten members, elected by the Meetings of the Parties each year, two each
from each of the five geographical regions.  The committee considers submissions by one Party
regarding another Party, by Secretariat or by a Party itself regarding its own implementation.  After
considering the submissions, the Implementation Committee would recommend appropriate action tothe Meeting of the Parties.  The measures, which could be taken in a case of non-compliance, include
assistance, caution or suspension of specified rights and privileges under the Protocol.  That the
measures for non-compliance include assistance, on the assumption that a Party’s non-compliance is
not deliberate but only due to its inability, is a novel provision introduced by the Parties to the
Montreal Protocol.
18. So far, only the case of the Russian Federation and other Republics of the former Soviet
Union are before the Committee for non-compliance, on the basis of the Secretariat’s report.  These
States are not classified as developing countries (excepting Georgia and Moldova) and hence are
expected to phase out production and consump tion of Annex A and Annex B substances by 1996.
These States have represented to the Meetings of the Parties that they are unable to comply with the
phase-out schedule due to the difficulties of their transition to a market economy and have promised
to comply by the end of the year 2000, if they are given adequate technical and financial assistance.The Meetings of the Parties considered these representations and, on recommendation by the
Implementation Committee have requested the Global Environment Facility to assist these Parties.
The GEF has so far given about US$110 million to these countries to assist their phase out.  There
have not been any cases of non-compliance with the trade provisions.
VI. WHY CONTROL TRADE WITH NON-PARTIES?  WHAT IS THE IMPACT?
19. While including trade measures in the Montreal Protocol, the Parties have always kept in
mind the provisions of GATT and consulted the GATT Secretariat, not surprisingly since there are
many members who are Parties to both the Treaties.  The trade measures with non-Parties were
considered essential to prevent CFC providers and producers of equipment containing CFCs moving
their capacity to a non-Party territory.  Initially at least, the CFCs were cheaper than their alternatives:it was considered that non-Parties would reap economic benefits and at the same time negate the
efforts of others to protect the ozone layer.  The trade restrictions do not apply, in accordance with
Article 4 paragraph 8, if a non-Party is in compliance with the Protocol.WT/CTE/W/115
Page 8
20. It is almost the universal consensus that the ozone depletion is occurring due to use of CFCs
and that ozone depletion would lead to adverse consequences for human health and environment in
general.  The objective of the Montreal Protocol is to eliminate the production and consumption of
CFCs.  Obviously, trade will increase the consumption negating the objectives of the Protocol.
Permitting a Party to trade freely with a non-Party, which does not act in conformity with the control
measures would go against the objectives of the Protocol.  The trade restrictions with non-Parties
acted as a penalty for staying outside the controls of the Montreal Protocol.  There is no doubt that
many countries who do not produce these substances acceded to the Protocol as, otherwise, they
would have lost access to the CFCs needed by them.  The preservation of the global resource of the
ozone layer is possible only with universal participation since the emission of CFCs from anywhere
causes damage to the ozone layer and the trade restrictions promoted the universal participation
A. WHY TRADE RESTRICTIONS BETWEEN PARTIES ?
21. The only trade restriction between Parties, a part  of the Montreal Amendment, is that a Party
which continues to produce CFCs in non-compliance with the Protocol shall ban the export of
recycled substances.  The logic of this provision is that the country which exports recycled substances
could instead use those recycled substances itself and reduce its production.  The exemption given to
recycled substances from control measures is intended to stop production soon and there is no reasonwhy a country should produce virgin substances in defiance of the control measures if it can use
recycled substances.  Another factor, which led to this provision, is that some companies may have
exported virgin substances in the guise of recycled substances. The provision is to help to curb such
illegal trade.  Illegal trade arises because there is still some demand for CFCs in the industrialized
countries for maintenance of the existing equipment and the developing countries are given a graceperiod of ten years for their phase-out schedule.  The Russian Federation also continues to produce in
non-compliance with the Protocol, on the plea of unsettled conditions.
VII. ASSISTANCE TO DEVELOPING COUNTRIES – THE FINANCIAL MECHANISM
22. It is also true to say that almost all the developing countries willingly joined the Protocol in
view of the grace period of ten years for implementing their control measures and in view of thefinancial mechanism and the Multilateral Fund established under Article 10 of the Montreal Protocol.
They understood that by being outside they will lose assistance from this Fund and, at the same time,
may be forced to change their technologies to CFC alternatives with their own money since the CFC
technologies are becoming obsolete throughout the world.  No country can maintain its CFC
technology in isolation without loss of trade opportunities due to consumer resistance.
A. T
HE MULTILATERAL FUND
23. The Multilateral Fund of the Protocol has functioned very effectively since 1991.  The Fund
has disbursed nearly US$900 million to 110 developing countries for the purpose of institutional
strengthening, training, project preparation, and impl ementation of investment projects.  The Fund has
the obligation to meet all the agreed incremental costs of developing countries for implementing the
control measures.  An indicative list of agreed incremental costs approved by the Fourth Meeting of
the Parties is enclosed.  As can be seen, the list is fairly comprehensive, compensating the industriesadequately for changing to ozone-friendly technologies.  The Fund meets the incremental costs of
technology transfer, training, the equipment needed and the installation costs for all industries
producing or using ODS.  The Fund has so far sanctioned more than two thousand projects to phase
out nearly 60% of the developing country consumption.
24. The Fund is administered by the Executive Committee of 14 members - 7 members from
developing countries and 7 from others.  Allocations to the Fund are approved by Meetings of the
Parties once in 3 years based on a study of the requirements of the Fund.  The contributions are
wholly from Parties who are not developing countries in proportion to their UN scale of contributions.WT/CTE/W/115
Page 9
The allocations so far have been as follows:
Period Amount (US Dollar Millions)
1991 - 1993 240
1994 - 1996 455
1997 - 1999 465
The allocation for the period 2000 - 2002 will be finalized by the Eleventh Meeting of the
Parties to be held in Beijing, China on 29 November - 3 December 1999.
25. The list of pledges to the Fund includes the Russian Federation and countries of the former
USSR that have not paid their contributions.  All the other countries i.e. industrialized countries are
paying their contributions promptly.  90% of the contributions due are being collected.
26. The fund operates through four implementing agencies, UNEP, UNDP, UNIDO and the
World Bank.  UNEP concentrates on preparation of country programmes, institutional strengthening
by establishing ozone focal points in each developing country, training, networking of the ozone focal
points and information exchange on expertise and technologies available.  The other three agencies
prepare investment projects and help the countries to implement them.
27. The functioning of the Multilateral Fund has resulted in establishment of the ozone focal
points in every country and in raising awareness among all the sections of countries such as industries
who need to change their technologies.  It is no ex aggeration to say that this effort to eliminate 95
chemicals through out the world is an unprecedented exercise, which is being successfully carried out.
28. More than 80% of the Parties regularly report their data on production and consumption of
these substances and the only countries who do not report data are the ones whose country
programmes are yet to be prepared.  The data from 1986 - 1997 shows that the developed countries
have reduced their consumption from one million tonnes in 1986 to about twenty thousand tonnes in
1997.  The CFC consumption of developing countries has increased about 11% over these eleven
years.  It has to be noted that the Protocol provides for increase of production and consumption ofdeveloping countries to meet their basic domestic needs without any limit up to 1999.  In the
developing countries the annual growth rate of population has been 2-3% and the economic growth
rate of many of these countries have been about 6-7% annually.  The products, which use CFCs like
refrigerators, air conditioners etc, have two digit grow th rates in most countries.  In spite of this, the
growth rate of CFC consumption in the developing countries as a whole has been negligible over the
past eleven years thanks to the work of the Multilateral Fund and transfer of alternative technologies.
VIII.  TECHNOLOGY TRANSFER
29. That nearly 2500 projects are under implementation in developing countries’ industries to
shift to non-ODS technologies shows that technology transfer has been mostly successful.  However,
there have been complaints from the Republic of Korea, India and China that the few companies who
hold the HFC 134A (an alternative to CFC) technolo gies stipulate unfavourable conditions such as
joint enterprises and market restrictions for the tr ansfer of technologies.  Some companies cite lax
intellectual property protection in the recipient countries as a reason for reluctance to transfer.  The
Protocol asks Parties to take “every practicable step” to transfer technologies but does not compel
such transfer.  The Executive Committee is considering the issue of how to promote technology
transfer in general.  In the abstract, the problem appears intractable but in practice, commercial
considerations win out.WT/CTE/W/115
Page 10
IX. COMPATIBILITY BETWEEN GATT AND THE TRADE PROVISIONS OF THE
PROTOCOL
30. The relationship between the provisions of GATT and trade provisions of the Montreal
Protocol has been discussed in many publications.  The following has raised the possibility of
inconsistency:
- The trade measures in Article 4 of the Protocol ban imports from non-Parties
to the Protocol who may be GATT Parties:  Similar restrictions are not
imposed on Parties, thus violating GATT Article I – “The most-favoured-
nation principle”;
- the restrictions on imports of products from non-parties violates GATT
Article III, “The national treatment principle”.
- Article XI of GATT on “General elimination of quantitative restrictions” is
also said to be violated by the provisions of the Montreal Protocol.
31. The answer by many experts to the charge of inconsistency is based on exceptions provided
by Article XX of GATT.  Article XX (b) provides for measures “necessary to protect human, animal
or plant life or health” and Article XX (g) provides for exceptions for measures “relating to
conservation of exhaustible natural resources if such measures are made effective in conjunction withrestrictions on domestic production or consumption”.  Many experts consider that the exceptions of
Article XX of GATT are applicable to the trade provisions of the Montreal Protocol for the following
reasons:
- The ozone layer is an exhaustible natural resource and its depletion adversely
affects human, animal and plant life and health.
- the Protocol has been based on international scientific assessment of what is
necessary to protect the ozone layer.  These assessments are backed by an
international consensus.
- free trade in ozone depleting substances increases production and
consumption of ozone depleting substances and affects the ozone layer.
- Article 4 exempts non-Parties from trade restrictions if they comply with the
control measures.
- the trade measures are but a part of an integrated set of policy instruments
used within the Protocol.
- there is no arbitrary and unjustifiable discrimination between countries where
same conditions prevail.
- the terms of the Protocol are fully transparent.
X. ARE THE TRADE MEASURES NECESSARY?
32. A question occasionally asked is whether economic instruments could have replaced the trade
measures.  The answer is in the negative for the following reasons:
- Many countries are inexperienced in efficient use of economic instruments;WT/CTE/W/115
Page 11
- many countries have controlled economies in varying degrees and economic
instruments of other countries have little effect on them;
- it would have taken a long time for any economic instrument to bring in non-
Party producers and consumers.  Th e unrestricted consumption of ODS of
such non-Parties would have made the ozone-depletion worse.  The trademeasures helped bring in almost all the countries.
- the word ‘necessary’ will have to be interpreted liberally in environmental
situations where the health of the entire planet is at stake.
XI. SOLUTIONS FOR INCOMPATIBILITY?
33. Many solutions have been suggested to make GATT “environment-friendly”:
- Amending GATT to include sustainability principles;
- amend GATT to extend the exemptions of Article XX to include trade
provisions of the environmental agreements;
- use the waiver clause (Article XXV).WT/CTE/W/115
Page 12
ANNEX I
INDICATIVE LIST OF CATEGORIES OF INCREMENTAL COSTS
(Extracted from Annex VIII of the Report of the 4th Meeting of the Parties)
1. The evaluation of requests for financing incremental costs of a given project shall take into
account the following general principles:
(a) The most cost-effective and efficient option should be chosen, taking into account the
national industrial strategy of the recipient party. It should be considered carefully to
what extent the infrastructure at present used for production of the controlled
substances could be put to alternative uses, thus resulting in decreased capitalabandonment, and how to avoid deindustrialization and loss of export revenues;
(b) consideration of project proposals for funding should involve the careful scrutiny of
cost items listed in an effort to ensure that there is no double counting;
(c) savings or benefits that will be gained at both the strategic and project levels during
the transition process should be taken into account on a case-by-case basis, accordingto criteria decided by the Parties and as elaborated in the guidelines of the Executive
Committee;
(d) the funding of incremental costs is intended as an incentive for early adoption of
ozone protecting technologies. In this respect the Executive Committee shall agree
which time scales for payment of incremental costs are appropriate in each sector.
2. Incremental costs that once agreed are to be met by the financial mechanism include those
listed below. If incremental costs other than those mentioned below are identified and quantified, a
decision as to whether they are to be met by the financial mechanism shall be taken by the Executive
Committee consistent with any criteria decided by the Parties and elaborated in the guidelines of the
Executive Committee. The incremental recurring costs apply only for a transition period to bedefined. The following list is indicated:
(a) Supply of substitutes
(i) Cost of conversion of existing production facilities:
• cost of patents and designs and incremental cost of royalties;
• capital cost of conversion;
• cost of retraining of personnel, as well as the cost of research to adapt
technology to local circumstances;
(ii) Costs arising from premature retirement or enforced idleness, taking into
account any guidance of the Executive Committee on appropriate cut-off
dates:
• of productive capacity previously used to produce substances controlled by
and/or amended or adjusted Protocol provisions; andWT/CTE/W/115
Page 13
• where such capacity is not replaced by converted or new capacity to produce
alternatives;
(iii) Cost of establishing new production facilities for substitutes of capacity
equivalent to capacity lost when plants are converted or scrapped, including:
• cost of patents and designs and incremental cost of royalties;
• capital cost;
• cost of training, as well as the cost of research to adapt technology to
circumstances;
(iv) Net operational cost, including the cost of raw materials;
(v) Cost of import of substitutes;
(b) Use in manufacturing as an intermediate good
(i) Cost of conversion of existing equipment and product manufacturing
facilities;
(ii) cost of patents and designs and incremental cost of royalties;
(iii) capital cost;
(iv) cost of retraining;
(v) cost of research and development;
(vi) operational cost, including the cost of raw materials except where otherwise
provided for;
(c) End-use
(i) Cost of premature modification or replacement of user equipment;
(ii) cost of collection, management, recycling, and, if cost effective, destruction
of ozone-depleting substances;
(iii) cost of providing technical assistance to reduce consumption and 
unintended emission of ozone-depleting substances.WT/CTE/W/115
Page 14
ANNEX II
Table I
Countries that have NOT Ratified the
London Amendment
Country Name Population
1. Benin 5742
2. Bosnia and Herzegovina 3700
3. Brunei Darussalam 314
4. Burundi 7145
5. Central African Republic 3478
6. Chad 6731
7. Dominican Republic 8098
8. El Salvador 6027
9. Ethiopia 58414
10. Fed. States of Micronesia 136
11. Gabon 1397
12. Georgia 5479
13. Guatemala 11241
14. Guyana 854
15. Honduras 5981
16. Kazakhstan 17437
17. Kiribati 84
18. Korea, Dem. People's Rep. of 24772
19. Lao People's Dem. Rep. 5309
20. Lesotho 2219
21. Libyan Arab Jamahiriya 5980
22. Madagascar 16221
23. Mauritania 2453
24. Moldova 4476
25. Nicaragua 4876
26. Nigeria 121773
27. Saint Lucia 148
28. Samoa 180
29. Solomon Islands 417
30. Sudan 30427
31. Suriname 437
32. Swaziland 929
33. Syrian Arab Republic 16220
34. Tonga 100
35. Trinidad and Tobago 1350
36. Tuvalu 10
37. United Arab Emirates 2028
38. Yemen 16065
39. Yugoslavia 10781
Total 409429WT/CTE/W/115
Page 15
Table II
Countries that have NOT Ratified the
Copenhagen Amendment
Country Name Population
1. Algeria 29205
2. Bahrain 608
3. Bangladesh 125898
4. Belarus 10107
5. Bulgaria 8686
6. China 1266838
7. Comoros 701
8. Congo 2815
9. Cote d'Ivoire 15722
10. Cyprus 757
11. Dominica 71
12. Fiji 808
13. Gambia 1190
14. Ghana 18504
15. Grenada 93
16. Guinea 7109
17. India 998056
18. Lebanon 3194
19. Maldives 280
20. Mali 11832
21. Malta 373
22. Monaco 33
23. Myanmar 49516
24. Namibia 1664
25. Nepal 23645
26. Niger 10119
27. Papua New Guinea 4602
28. Paraguay 5360
29. Peru 25153
30. Philippines 71775
31. Romania 22683
32. Russian Federation 146107
33. Senegal 9001
34. Singapore 2922
35. South Africa 44275
36. Tajikistan 6618
37. Tanzania, United Republic of 32277
38. Turkmenistan 4369
39. Uganda 23281
40. Ukraine 51140
41. Zambia 10231
Total 3047618WT/CTE/W/115
Page 16
Table III
Countries that have Not Ratified the
Montreal Protocol
Country Name Population
1. Afghanistan 22720
2. Albania 3509
3. Andorra 48
4. Angola 11865
5. Armenia 3690
6. Bhutan 1709
7. Cambodia 10808
8. Cape Verde 414
9. Djibouti 602
10. Eritrea 3850
11. Guinea-Bissau 1119
12. Haiti 7482
13. Holy See
14. Iraq 21674
15. Kyrgyzstan 4982
16. Oman 2434
17. Palau
18. Rwanda 8595
19. San Marino 26
20. Sao Tome & Principe 141
21. Sierra Leone 4839
22. Somalia 10099
TOTAL 120606WT/CTE/W/115
Page 17
Table IV
Countries that have Ratified the Montreal Protocol
Country Name Population
1. Algeria 29205
2. Antigua & Barbuda 67
3. Argentina 35405
4. Australia 18550
5. Austria 8053
6. Azerbaijan 7726
7. Bahamas 284
8. Bahrain 608
9. Bangladesh 125898
10. Barbados 264
11. Belarus 10107
12. Belgium 10174
13. Belize 227
14. Benin 5742
15. Bolivia 7774
16. Bosnia and Herzegovina 3700
17. Botswana 1577
18. Brazil 167046
19. Brunei Darussalam 314
20. Bulgaria 8686
21. Burkina Faso 10866
22. Burundi 7145
23. Cameroon 13998
24. Canada 30101
25. Central African Republic 3478
26. Chad 6731
27. Chile 14691
28. China 1266838
29. Colombia 36200
30. Comoros 701
31. Congo 2815
32. Congo, Dem. Republic of 46691
33. Costa Rica 3575
34. Cote d'Ivoire 15722
35. Croatia 4470
36. Cuba 11191
37. Cyprus 757
38. Czech Republic 10311
39. Denmark 5194
40. Dominica 71
41. Dominican Republic 8098
42. Ecuador 11937
43. Egypt 65445
44. El Salvador 6027
45. Estonia 1412
46. Ethiopia 58414
47. Fed. States of Micronesia 136
48. Fiji 808
49. Finland 5149
50. France 58433
51. Gabon 1397
52. Gambia 1190
53. Georgia 5479
Table IV (cont'd)WT/CTE/W/115
Page 18
Countries that have Ratified the Montreal Protocol
Country Name Population
54. Germany 81845
55. Ghana 18504
56. Greece 10512
57. Grenada 93
58. Guatemala 11241
59. Guinea 7109
60. Guyana 854
61. Honduras 5981
62. Hungary 10037
63. Iceland 274
64. India 998056
65. Indonesia 203631
66. Iran, Islamic Republic of 70136
67. Ireland 3577
68. Israel 5854
69. Italy 57268
70. Jamaica 2502
71. Japan 125958
72. Jordan 6033
73. Kazakhstan 17437
74. Kenya 30812
75. Kiribati 84
76. Korea, Dem. People's Republic of 24772
77. Korea, Republic of 46297
78. Kuwait 2130
79. Lao People's Democratic Republic 5309
80. Latvia 2501
81. Lebanon 3194
82. Lesotho 2219
83. Liberia 3347
84. Libyan Arab Jamahiriya 5980
85. Liechtenstein 32
86. Lithuania 3693
87. Luxembourg 418
88. Madagascar 16221
89. Malawi 11765
90. Malaysia 21450
91. Maldives 280
92. Mali 11832
93. Malta 373
94. Marshall Islands 59
95. Mauritania 2453
96. Mauritius 1154
97. Mexico 98995
98. Moldova 4476
99. Monaco 33
100. Mongolia 2558
101. Morocco 28615
102. Mozambique 17744
103. Myanmar 49516
104. Namibia 1664
105. Nepal 23645
106. Netherlands 15784
107. New Zealand 3690
Table IV (con't)WT/CTE/W/115
Page 19
Countries that have Ratified the Montreal Protocol
Country Name Population
108. Nicaragua 4876
109. Niger 10119
110. Nigeria 121773
111. Norway 4393
112. Pakistan 152984
113. Panama 2767
114. Papua New Guinea 4602
115. Paraguay 5360
116. Peru 25153
117. Philippines 71775
118. Poland 38605
119. Portugal 9812
120. Qatar 583
121. Romania 22683
122. Russian Federation 146107
123. Saint Kitts & Nevis 41
124. Saint Lucia 148
125. Saint Vincent and the Grenadines 115
126. Samoa 180
127. Saudi Arabia 19787
128. Senegal 9001
129. Seychelles 76
130. Singapore 2922
131. Slovakia 5420
132. Slovenia 1948
133. Solomon Islands 417
134. South Africa 44275
135. Spain 39779
136. Sri Lanka 19277
137. Sudan 30427
138. Suriname 437
139. Swaziland 929
140. Sweden 8901
141. Switzerland 7391
142. Syrian Arab Republic 16220
143. Tajikistan 6618
144. Tanzania, United Republic of 32277
145. Thailand 60681
146. The Former Yugoslav Republic of Macedonia 2216
147. Togo 4537
148. Tonga 100
149. Trinidad and Tobago 1350
150. Tunisia 9378
151. Turkey 65460
152. Turkmenistan 4369
153. Tuvalu 10
154. Uganda 23281
155. Ukraine 51140
156. United Arab Emirates 2028
157. United Kingdom 58743
158. USA 270537
159. Uruguay 3239
160. Uzbekistan 24354
161. Vanuatu 182
Table IV (con't)WT/CTE/W/115
Page 20
Countries that have Ratified the Montreal Protocol
Country Name Population
162. Venezuela 23242
163. Viet Nam 79400
164. Yemen 16065
165. Yugoslavia 10781
166. Zambia 10231
167. Zimbabwe 12012
Total 5,838,389
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