99-4827  MORE PRESS RELEASE 
 
TRADE AND ENVIRO NMENT BULLETIN 
 
PRESS/TE/031 
8 November 1999 
 
WTO COMMITTEE ON TRADE AND ENVIRONMENT DISCUSSES SERVICES; 
RELATIONS BETWEEN IGOs AND NGOs;  THE TWO THEMATIC CLUSTERS;  AND 
ADOPTS 1999 REPORT AND SCHEDULE OF MEETINGS FOR 2000  
 At the WTO Committee on Trade and Environment's meeting on 12 October 1999, Members 
adopted the Report of the CTE's work in 1999.  The Chairman, Ambassador Istvàn Major (Hungary), 
presented this Report to the General Council at its meeting on 4 November 1999.  Members also 
adopted the CTE's work programme and schedule of meetings for 2000.  (See Trade and Environment 
Bulletin No. 30 ) 
 
 Members also addressed services and the envir onment;  relations between intergovernmental 
and non-governmental organizations;  and the them atic clusters of market access and the linkages 
between the multilateral environment and trade age ndas.  Members made statements on ways in 
which to strengthen relations with civil society;  the importance of performing environmental reviews 
at the national level;  the environmental effects of  removing subsidies in the agriculture, fisheries, 
forestry and environmental services sectors;  the ex port of domestically pr ohibited goods;  and the 
relationship between the Convention on Biologi cal Diversity and the TRIPS Agreement.   
The CTE extended intergovernmental observer st atus to the Islamic Development Bank and 
the Southeast Asian Fisheries Development Centre. 
A detailed report of the October meeting follows.  Papers referred to in this Bulletin can be 
accessed through the WTO web site, or upon requ est to the Trade and Environment Division. 
 PRESS/TE/031 
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99-4827  MORE Item 9 The work programme envisaged in the Decision on Trade in Services and the 
Environment 
The European Communities recalled its proposal  to the General Agreement on Trade and 
Services (GATS) on classification of the envi ronmental services sector in September 1999 
(S/CSC/W/25).  The EC proposed a new classification which preserved the UN Central Product Classification (CPC) system whilst addressing its shortc omings and reflecting economic realities.  The 
proposed classification comprised services which were "purely" environmental and excluded conceptual services such as desi gn, engineering, research and development and consulting services, 
which were classified elsewhere in the GATS.  Th e EC proposed that these services could be subject 
to a cluster negotiation, the result of which woul d be scheduled in the relevant GATS sectors other 
than environment.  Countries which were not prepar ed to take a commitment in an entire category 
(e.g. engineering services) could schedule commitme nts in a more limited area, like environmental 
engineering.  
Item10 Input to the relevant bodies in respect of  appropriate arrangements for relations with 
IGOs and NGOs referred to in WTO Article V 
The US said Members should work together to find ways of strength ening opportunities for 
the WTO to increase public support for its work.  Si nce trade liberalization had been begun under the 
GATT in 1947 there had been a growth in public inte rest in trade negotiations, particularly as work 
had expanded to issues which the public realized t ouched their daily lives.  This had strengthened 
interest by the public and private sectors in having opportunities to follow WTO activities and 
undertake a dialogue with government representatives in the WTO.   
The US, Canada and the EC referred to the WTO High Level Symposia on Trade and 
Environment and Trade and Development in March 1999 at which there had been a high level of 
participation from Governments and the NGO commun ity.  These symposia provided evidence of the 
value such exchanges can provide to the WTO.   
The EC and Canada also said that there was a need to improve public support and enhance 
transparency of the WTO, including in the CTE.  Canada felt that more s hould be done to build an 
understanding of these linkages, address these concerns , correct misperceptions and create confidence 
in the WTO and its processes.  The EC had increased  transparency in its process of policy-making, 
including in the preparations for the Seattle Minist erial Conference.  The EC  also supported the CTE's 
Information Sessions with Secretariats of Multilateral Environmental Agreements. 
As a practical step, Canada had proposed that  the WTO liberalize its document derestriction 
policy to help inform domestic constituencies in  a more open and timely manner and provide the 
means for constructive debate.  Canada also had proposed Member and Secretariat outreach initiatives 
to help clarify WTO work.  Enhancing the tr ansparency of the WTO Dispute Settlement 
Understanding would increase the confidence of a ll stakeholders in WTO dispute settlement.  
MARKET ACCESS Item 2  The relationship between environmenta l policies relevant to trade and environmental 
measures with significant trade effects and the provisions of the multilateral trading system  
 
The US and Canada recalled that the preamble to the WTO Agreement re ferred to achieving 
the goal of trade liberalization in conjunction with an overall commitment to sustainable development.  
Environmental reviews were an important way in  which to develop the necessary information to 
ensure that this occurred.  The US Government had made a commitment to perform a review in the 
context of a new round.  The EC said that it had decided on the methodology which would be used to PRESS/TE/031 
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MORE conduct a sustainability analysis of its position fo r the next round.  Canada  would conduct a national 
Strategic Environmental Assessment of the next ro und.  The US, Canada and the EC encouraged all 
Members to undertake environmental reviews and share these reviews in the CTE. 
 
One Member said that the Rio Declaration made it clear that environmental reviews were 
within the purview of national go vernments to perform as they deemed appropriate;  these reviews 
were a useful way for national governments to have  input from domestic stakeholders upon which to 
base their national positions.  Nevertheless, this was purely a national prerogative. 
 
Item 4 The provisions of the multilateral tradin g system with respect to the transparency of 
trade measures used for environmental purposes relating to products, including standards and technical regulations, packaging, labelling and recycling 
 
Following a proposal from the European Communitie s, the CTE agreed to derestrict the WTO 
Environmental Database (EDB) for 1998 (WT/CTE/W/ 118), which compiled the environment-related 
notifications under WTO Agreements.  The S ecretariat would update the EDB for 1999. 
Item 6 The effect of environmental measures on  market access, especially in relation to 
developing countries, in particular to  the least developed among them, and 
environmental benefits of removing trade restrictions and distortions 
 
Sectoral analysis 
Agriculture 
Canada commented on Brazil's paper (WT/C TE/W/109) on the effect of environmental 
measures and market access in the agricultural sect or.  Canada supported the key messages in the 
paper on the environmental benefits associated with  agricultural trade liberalization.  Brazil had 
reinforced the view that a major benefit of tr ade liberalization was the improved environmental 
stewardship facilitated by economic development.  Commenting on the concept of multifunctionality, 
an issue discussed in Brazil's paper, Canada ag reed that agriculture could provide many positive 
externalities, including environmental benefits, a nd thus did not question the multifunctional role of 
agriculture.  However, agricultural support, partic ularly support which was coupled with production, 
could lead to the intensification of agricultural production and associated environmental risk.   
Canada, the US and others shared Brazil's vi ew that countries should address their concerns 
related to multifunctionality in ways which met the Gr een Box criteria, i.e. Annex 2 of the Agreement 
on Agriculture, thereby ensuring that their objectiv es were met in a manner that did not distort 
production or trade or shift the burden to producers in other countries.  Australia, Argentina and Canada said that the best policies to address environmental objectives were those which were 
targeted, cost-effective, transpar ent, and decoupled from production and trade.  No country should be 
allowed under the rubric of multifunctionality to en courage policies in one country which damaged 
the environment in others.  New Zealand said that the large amount of resources spent on trade distorting measures in the agricultural sector, such  as export subsidies, could be better channelled 
towards other public priorities, such as environmental protection. 
Japan felt that environmental concerns shoul d be discussed in conjunction with trade 
liberalization.  Concerning Canada's statemen t, Japan recalled the discussions on decoupling and 
Green Box measures in the Committee on Agriculture;  the CTE should not be the place for agricultural negotiations. 
Australia and Argentina were among the delega tions which recalled that although the CTE 
was not the forum for agricultural negotiations, the CTE's role was to assess the environmental 
impacts of production and export-related subsidies a nd the contribution that the elimination of export PRESS/TE/031 
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MORE subsidies could make to improving environmental quality.  The US and Argentina said that free trade 
would contribute to a better allocation of resources and therefore lessen the demands of production on 
the environment if prices reflected the real costs of production;  this was not the case, primarily due to 
the fact that certain OECD countries subsidized production and exports.   
Guatemala, Costa Rica, Chile, South Africa,  Thailand, the Philippines, the US, and 
New Zealand noted the long-term and positive bene fits for trade, environment and sustainable 
development which would result from removing agricu ltural export subsidies.  The US, Argentina and 
others said that one of the major c ontributions of the next round of tr ade negotiations would be to deal 
with environmentally-damaging subsidies which wo uld yield a "win" for trade, a "win" for the 
environment and a "win" for development. 
Argentina referred to the FAO/Netherlands Conference on the Multifunctional Character of 
Agriculture and Land, held in Maastricht on 12- 17 September, the results of which would be 
circulated (WT/CTE/W/127).  At that meeting, it had been recognized that agriculture had some multifunctional benefits.  However, agricultural su bsidies which affected production, particularly 
export subsidies, increased rural poverty in develo ping countries, which was a key contributor to 
environmental degradation in  developing countries.   
 The EC, Poland and Korea said that a balanced approach should be followed in the 
discussions on the environmental eff ects of agricultural liberalization, taking into account the positive 
and negative effects.  The environmental impacts of trade liberalization were uncertain and the 
linkages were not automatic.  Switzerland, the EC a nd Korea said that subsidies could be justified 
when they addressed market failures and rewarded  positive externalities.  Switzerland said that as 
subsidies may also contribute to further environm ental harm, particularly in other countries, well-
targeted support mechanisms should be put in pl ace.  All forms of export subsidies should be 
discussed, including state trading and export credits. 
Korea and the EC said that there was a comp lex and dynamic relati onship between natural 
resources used in agriculture and the environment, which included biodiversi ty.  Korea felt that the 
CTE should consider the analysis conducted by other fora, including the OECD's Environmental 
Indicators, which allowed for the effects of agri cultural liberalization on the environment to be 
qualified so that agricultural liberalization could be analysed in a wider context.  
Fisheries 
 
The FAO introduced a background paper (WT/CTE/W/126) setting out its work on fishing 
capacity and subsidies.  As requ ested in the International Plan of Action for the Management of 
Fishing Capacity, FAO would assess the factors whic h contributed to overcap acity by the end of 
2000.  To this end, FAO looked forward to cooperatin g with other organizations, including the WTO.   
Members welcomed FAO's statement and paper.  Panama said that FAO had helped to 
illuminate the effects of subsidies on overcapacity in the fisheries sector.  Members also welcomed 
the adoption of the FAO Plan of Action, which Austra lia said indicated that subsidies were significant 
contributors to problems affecting the sustainab ility of global fisheries resources.  Chile and the 
Philippines said that subsidies had damaging eff ects on developing countries which were unable to 
subsidize their fisheries industry. 
Japan, Korea and the EC said that FAO had a clear mandate and competence in addressing 
marine resource conservation while taking into account  the relationship between subsidies, trade and 
sustainability in an integrated manner.  Building on the results of FAO's analysis and implementation 
of the Plan of Action by FAO Members, the WTO could define an area in which to contribute. PRESS/TE/031 
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MORE New Zealand, the US, Chile and others sai d that addressing overcapacity and fisheries 
subsidies which contributed to this problem w as urgent.  There was a potential "win-win-win" 
situation if fisheries subsidies were removed, whic h would be beneficial for sustainable development, 
trade and the environment.  New Zealand, the US, Argentina, Canada and others said that the WTO 
had an expertise to deal with this issue and th at fisheries subsidies should be addressed under the 
Agreement on Subsidies and Countervailing Measures (SCM Agreement).  
Japan said that the SCM Agreement did not cover the issue of how to ensure sustainable use 
of fisheries resources, nor did it shed light on how to assess the impacts of fishery subsides on global 
fisheries resources.  If fisheries subsidies were dea lt with in the WTO, Members may have to consider 
amending the existing SCM Agreement or establishing new rules.  Singling out fisheries subsidies 
would not lead to the fundamental solution to fisheries over-exploitation.  Thus, Japan had proposed to establish a separate group in the WTO on forestry and fishery products.
1   
Reference was also made to the proposals to the General Council in the preparatory process 
for the Seattle Ministerial Conference to establis h a group in the WTO to examine subsidies which 
contributed to overcapacity in the fisheries sector.2   
Members welcomed the Secretariat's paper on "GATT/WTO Rules on Subsidies and Aids 
Granted in the Fishing Industry" (WT/CTE/W/80/ Add.1), which presented an overview of possible 
subsidies relating to the fishing industry th at had been notified under Article 25 of the 
SCM Agreement.   
Korea said that this document illustrated the dive rsity and complexity of fisheries subsidies.  
A comprehensive analysis was necessary to give a co mplete picture of which elements contributed to 
the depletion of fisheries resources.3  Subsidies had also played a critical role in reshaping and 
revitalizing the fishing industry and fishing communi ties, rather than encouraging over-fishing.   
The EC said that its member States were partic ularly good in notifying their subsidies in an 
effort to enhance WTO transparency.  Other Member s were encouraged to do likewise.  The EC felt 
that the subsidy issue was one element in a bigger problem of resource management.  
Argentina recognized that open access to fish eries resources was a problem in terms of 
putting in place adequate resource management polic ies.  In addition to this management problem, 
there were also subsidies which encouraged fi shing activities by socializing production costs. 
Canada said that its notifications related to  the fisheries sector in general and were not 
programmes used to provide financial assistan ce to the harvesting of marine resources. 
Japan felt that there were numerous ex amples of "good" subsidies listed in 
WT/CTE/W/80/Add.1.  Certain subsidies contributed to  sustainability.  For example, certain subsidies 
were necessary to implement the provisions of th e UN Convention on the Law of the Sea to conserve 
and manage living marine resources, such as compensation for temporary cessation of fishing 
activities to allow for stock recovery.  
The US said that no one was arguing that all subs idies were "bad".  Those fisheries subsidies 
which contributed to overcapacity were of concer n.  This discussion was being held in the WTO 
because these subsidies caused probl ems for sustainable resource conservation and distorted trade. 
                                                      
1See Japan's proposal (WT/GC/W/221). 
2See proposals to the General Council by Icela nd (WT/GC/W/229), New Zealand (WT/GC/W/292);  
and Australia, Iceland, New Zealand, Norway, Pe ru, the Philippines and the US (WT/GC/W/303). 
3See Korea's proposal to the General Council for a separate negotiating group on fishery and forestry 
products (WT/GC/W/368). PRESS/TE/031 
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MORE New Zealand and Argentina were interested in more information from Japan on the types of 
matters the WTO could usefully discuss, i.e. what  is the "fundamental solution" and which were 
"good" subsidies.  New Zealand, the Philippines and Argentina noted that the majority of notifications 
related to the harvesting sector and appeared to contri bute directly to capacity building.  Almost all of 
the notified subsidies listed in the document were provided by developed countries.   
Forestry 
Japan recalled its proposal in the General Council to establish a separate group on forestry 
and fishery products (WT/GC/W/221), which were exha ustible natural resources that were renewable 
but can be depleted without proper management.  The negotiations on such products should examine 
all relevant factors in a comprehensive manner in order to establish a set of rules and disciplines 
which contribute to sustainable resource use thr ough the promotion of adequate resource conservation 
and management, and which were also fair and e quitable for both exporting and importing countries.   
Environmental services 
Canada said that further liberalization of tr ade in environmental goods and services would 
bring environmental benefits by lowering costs,  which would allow governments to improve the 
quality of basic environmental infrastructure and he lp promote sustainable development.  Since the 
inception of the APEC early voluntary sectoral liber alization initiative in 1997, Canada had led efforts 
to facilitate trade in environmental goods and servi ces by encouraging greater liberalization in this 
sector.  Canada hoped that improved classificatio n would lead to a better understanding of the 
Environmental Services sector that would, in tu rn, assist WTO Members in undertaking commitments 
in this sector in the upcoming negotiations in  the General Agreement on Trade in Services. 
General comments on Item 6 
One Member said that trade liberalization in c onjunction with the appropriate environmental 
policies could have environmental be nefits.  In this respect, market access was crucial for developing 
countries so that more resources were available fo r environmental protection.  Developing countries 
were concerned that if trade measures were taken on the basis of standards which were higher than 
international standards, this could lend itself to protectionism.  This would adversely affect market 
access opportunities of developing countries and their ability to put in place environmental policies. 
The US said that it was important that trade policies were complemented by environmental 
policies at the national level to ensure that trad e liberalization also contributed to environmental 
benefits.  WTO rules recognized the right of countries to set their own levels of protection, even if 
they were higher than those set by international st andards.  The WTO's role was to ensure against the 
various forms of protectionist actions. 
The International Trade Center (ITC) presented its recent publication, Implications of the 
WTO Agreements for International Tr ade in Environmental Industries , which was based on 
workshops with government departments, trade associations and the environmental industry in 
developing countries.  The ITC looked forward to  cooperating with the WTO to provide technical 
support to exporters of environmentally s ound technologies, products and services. PRESS/TE/031 
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MORE LINKAGES BETWEEN THE MULTILATERAL ENVIRONMENT AND TRADE AGENDAS 
Item 7 The issue of exports of domestically prohibited goods 
Egypt referred to a letter from the World Health  Organization to the WTO Secretariat, which 
highlighted the hazards related to mercury-based so aps and cosmetics, which were manufactured in 
European countries for export, mainly to developi ng countries, even though they were domestically 
prohibited in the country of origin.  Egypt request ed the EC to shed some light on this issue. 
The EC responded that the sale of these pr oducts was regulated within the EC under 
Cosmetics Directive No. 768 of 1976.  The EC had voluntarily subjected mercury-based products and 
a range of others to an interim prior informed con sent (PIC) procedure to regulate their export to third 
countries in advance of the PIC Convention entering into force. 
Item 8 The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual 
Property Rights 
Several Members made preliminary comments on the Secretariat's background document on 
"The Relationship between the Conve ntion on Biological Diversity (CBD) and the TRIPS Agreement:  
with a focus on Article 27.3(b)" (WT/CTE/W/125).   
ASEAN said that the relationship between the CBD and the TRIPS Agreement was important 
and the country case studies in WT/CTE/W/125 on the implementation of sui generis systems, as well 
as examples of legislation enacted to implement the CBD were useful. 
One Member felt that there was a fundament al incompatibility between the CBD and the 
TRIPS Agreement.  The CBD referred to comm unal and sovereign rights over the resources of 
countries.  The TRIPS Agreement referred to patent  and monopoly rights for individual firms.  There 
were some CBD provisions which may clash with the TRIPS Agreement:  (i) when patents were 
granted there was the problem of access to resources and sovereign control over resources if prior informed consent had not been obtained;  and (ii)  concerning the concept of benefit sharing, which 
was inscribed in the CBD, but not in the TRIPS Agreement.  WT/CTE/W/125 may give the 
impression that a country could provide for plant variety protection only through patents or UPOV.  
Four options had been set out in the Kenyan case study;  a country could either provide for plant 
variety protection through patents;  by putting in place systems set out in the UPOV Convention;  by implementing plant variety protection without joining UPOV;  or by devising a sui generis  system.  
The US said that although the CBD spoke of sovereign and indigenous communities' rights, 
while the TRIPS Agreements spoke of private rights,  this did not necessarily reflect that there was a 
fundamental incompatibility between the two Agreem ents.  The fact that under that CBD a country 
could control the resources which we re taken out of this country for use in research did not conflict 
with the TRIPS Agreement.  The TRIPS Agreemen t provided protection for firms which had used 
innovation to develop a new product.   
Switzerland agreed that there might be a conflict between the CBD and the 
TRIPS Agreement.  This was why a clarificati on of the WTO Agreements and MEAs should be a 
priority for the WTO.  The possibility that there might be a conflict was sufficient reason to work 
together to find a mechanism to deal w ith possible conflicts before they arose.PRESS/TE/031 
Page 9 
  END  
Canada said that the TRIPS Agreement was not inconsistent with the CBD.  Issues such as 
traditional knowledge, farmers' ri ghts and linkages between biodive rsity and intellectual property 
issues would require further development before th ey could be incorporated into international 
agreements.  Canada felt that WIPO was the primar y expert forum for discussions of the intellectual 
property aspects of these issues;  this would not pr eclude these issues from being raised in other fora, 
including the WTO.  Also, the provisions of TRIPS Article 27.3(b) would be reviewed in the TRIPS Council;  Canada did not see the need to alter the existing language of this provision. 
Argentina said that to focu s work on the complementarity between the CBD and the 
TRIPS Agreement, the Secretariat could provide an y examples of national legislation which had been 
notified under TRIPS Article 63 in fulfilment of th e obligations in Articles 15 and 16 of the CBD.   
Costa Rica said that after its Congress had reviewed its legislation to implement the 
TRIPS Agreement, Costa Rica would be pleased to make  a presentation on its biodiversity legislation. 
Report of the CTE for 1999 
Members adopted the Report of the CTE's wo rk in 1999 (WT/CTE/4), which the Chairman 
forwarded to the General Council at its meeting on 4 November and the CTE's work programme and 
schedule of meetings in 2000 (See Trade and Environment Bulletin No. 30 ).