98-1946  MORE  
TRADE AND ENVIRONMENT BULLETIN 
 
 
PRESS/TE/23 
14 May 1998 
 
WTO COMMITTEE ON TRADE AND ENVIRONMENT ADOPTS ITS WORK 
PROGRAMME FOR 1998, AGREES TO DEVELOP A WTO ENVIRONMENTAL 
DATABASE, AND DISCUSSES ECO-LABELLING AND THE  
ENVIRONMENTAL BENEFITS OF SECTORAL  
TRADE LIBERALIZATION  
 The Committee on Trade and Environment (CTE) met on 19-20 March 1998 under the 
chairmanship of Ambassador Chak Mun See of Singapore. 
 The CTE adopted its work programme and schedule of meetings for 1998 (issued in Trade 
and Environment Bulletin No. 22 ), and addressed the items on its wo rk programme related to market 
access, including a sectoral analysis of the environmental benefits of removing trade restrictions and 
distortions. 
 Discussions were enhanced by Members' presen tations of their national experiences.  Canada 
presented a new paper entitled Forests:  A National Experience ;  Colombia contributed a new paper 
on The Colombian Flower Sector and Eco-l abelling and its Market Access Impact .  Presentations of 
national experiences also were made by New Zealand on the environmental benefits of agricultural 
liberalization and by Brazil on sustainable soya  plantations, ethanol fuel and eco-labelling 
programmes for leather and forest products. 
 The CTE agreed to develop a WTO environm ental database covering environment-related 
notifications under WTO Agreements. 
 Observer status was extended to the World Intellectual Property Organization. 
 A detailed report of the March meeting of the CTE follows. PRESS/TE/23 
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  MORE Work programme and schedule of meetings for 1998 
 The CTE adopted its work programme and sch edule of meetings for 1998.  The Chairman, 
Ambassador Chak Mun See of Singapore, said hi s general objectives for the Committee this year 
were to further the analysis of the work programme  and continue to broade n participation in support 
of this analysis by inviting multilateral envir onmental agreements (MEAs) to brief the CTE. 
 The Chairman, on behalf of the CTE, congratul ated the Secretariat on its organization of the 
NGO Symposium on Trade, Environment and Sust ainable Development on 17-18 March, which had 
been attended by approximately 150 non-governmental organizati ons (NGOs).  The Symposium had 
provided a unique opportunity for NGOs and repre sentatives of international organizations to discuss 
informally their views with WTO Members. 
 All aspects of trade and environment, the EC said, should be brought into the mainstream of 
WTO work.  Before the 1999 WTO Ministerial, it would be useful to strengthen the dialogue between 
top-level trade and environment policymakers and advance the process by which discussions in the 
CTE are relevant to broader WTO decisionmaking.  Norway said that trade and environment would 
receive increasing attention due to the upcoming Mini sterial Conferences, at which point the role of 
the CTE may need to be reworked and discussion of future negotiations would need to consider 
environmental aspects. 
Item 6  The effects 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 
 Discussion of this item was devoted to a sectoral analysis of the environmental benefits of 
removing trade restrictions and distortions.  Members focused on the following sectors:  agriculture, energy, fisheries, forestry, non-ferrous metals, textiles and clothing, leather, and environmental 
services.  To serve as a starting point from which to  develop this sectoral analysis, several Members 
had contributed papers and the Secretariat had prepared a bac kground document on the environmental 
benefits of sectoral trade liberalization.  Th e Secretariat's document, WT/CTE/W/67 and its 
addendum, can be accessed at http://www.wto.org/ddf/ep/public.html. 
Agriculture 
 Many Members felt the analysis of the agricultural sector in WT/CTE/W/67 was balanced.  
An important result which could emerge from the CTE, the US said, would be to have a more 
informed debate on the relationship between removi ng trade restrictions and distortions in the 
agricultural sector and environmental improvements.  Ensuring that growth and sustainable development are compatible requires that prices of  agricultural products reflect their cost of 
production.  The first step would be to identify and eliminate policy distortions which affected 
international agricultural prices.  Without corr ect prices, it was difficult to determine the 
environmental effects of trade distorting policies. 
 Japan, Norway, Korea and the EC  said that a comprehensive analysis of this issue should 
include both positive and negative environmental effect s of agricultural trade liberalization and take 
into account that environmental impacts varied broadly by sector and country.  WT/CTE/W/67 could 
have given more attention to the positive extern alities associated with the multifunctional role of 
agriculture.  The OECD Agricultural Ministers ha d addressed the role of agriculture, noting that 
well-targeted policy measures would enable agriculture to contribute to the vi ability of rural areas and 
address environmental issues, while enhancing efficient and sustainable resource use.  PRESS/TE/23 
Page 4  
 
MORE  It was suggested that the CTE should identify agricultural trade policy reforms which could 
contribute to environmental improvements.  Re moving subsidies in the agricultural sector, many 
Members said, had a contribution to make in this regard.  Australia, Argentina and New Zealand said 
that agriculture was by far the most heavily subs idized sector.  Despite the increasing importance of 
direct payments in the agricultural sector, the great er part of assistance remained in the form of 
commodity-based price support which directly incr eased prices and production in the countries 
concerned, Australia and Argentina said.  Tariffs  and export subsidies compounded the impact these 
measures had on international markets. 
 Distortions to international prices caused by agricultural subsidies, many Members said, 
contributed to environmental problems.  For th is reason, many countries which had previously 
protected their agricultural communities through the use of subsidies and other measures had 
reformed their policies.  Many of the adverse environmental effects associated with current 
agricultural support should be reduced as support leve ls were reduced, such as the concentration of 
production regionally and the promotion of less su stainable methods of production, particularly 
through the overuse of fertilizers.  Developed countries were the only ones that could heavily 
subsidize production and exports, Arge ntina said, citing figures to exemplify the situation.  According 
to the OECD, in 1987 the level of agricultural support in OECD countries was about US$280 billion 
and was concentrated in a few OECD countries. 
 Subsidies could also encourage new invest ments in the agricultural sector and prevent 
investment elsewhere, Argentina said, such as in developing countries where agricultural production 
was less intensive and where poverty was primarily responsible for environmental degradation.  If 
subsidization continued, ASEAN, Argentina and othe rs said, developing countries would be less able 
to introduce environmental reforms. 
 Switzerland expressed concern over the use of th e term subsidy in the agricultural section of 
WT/CTE/W/67 which considered subsidies systematically to be the source of the problem;  certain forms of internal support could be  environmentally beneficial, such  as Switzerland's policies to reduce 
the use of chemical fertilizers. 
 Several Members, including Argentina, the US , New Zealand, and Australia, said that there 
was a need to look at the environmental bene fits which could arise from agricultural trade 
liberalization.  The negotiations which would take place in the WTO Agreement on Agriculture after 
1999 would offer an opportunity in this regard;  fu rther removing agricultural subsidies would be an 
important area of work in future discussions.  The US  said that there were also other agricultural trade 
distortions which deserved attention, including high tariffs and certain practices of state trading 
enterprises. 
 Improvements in market access opportunities w as a central issue on the agricultural trade 
reform agenda.  A yardstick for assessing the success of future agricultural negotiations, Australia 
said, must be whether they would enhance oppor tunities for agricultural exporting countries to 
increase their export earnings while adopting sustai nable resource management policies, including 
greater opportunities to diversify economic activities. 
 New Zealand presented its national experience w ith agricultural trade liberalization whereby 
unsustainable agricultural policies had been refo rmed beginning in the mid-1980's.  These policy 
reforms had resulted in important environmental be nefits, such as less intensive production systems, 
less fertilizer use, less energy use in productio n, less specialization of production and less 
monoculture cultivation. PRESS/TE/23 
Page 5 
 
 
MORE  Brazil presented its national experience with soya plantations.  The use of sustainable 
production methods in soya plantations in Brazil had permitted an increase in soya yield while 
reducing soil erosion, agro-chemical pollution, car bon emissions, and herbicide and pesticide use. 
 The US and others recalled that the CTE was at an  analytical stage of its work;  the first step 
had been taken with respect to liberalizing agricu ltural trade and it was now possible to determine the 
impacts, such as had been set out in New Zeala nd's national experience.  National experiences of 
those countries which had suggested that trade liber alization could lead to adverse environmental 
effects would also be useful. 
Energy 
 Brazil presented its national experience with th e use of ethanol fuel.  In response to the oil 
crises of the mid-1970s, Brazil had created a National Alcohol Programme to promote the use of 
ethanol, a renewable resource, which had several e nvironmental benefits, particularly related to 
reducing greenhouse gas emissions in support of th e UN Climate Change Convention.  Similar to 
other energy sources (petroleum, coal, natural gas and electric power), ethanol faced high tariffs.  
Reducing tariffs and eliminating trade distortions on ethanol would improve market access for this 
cleaner energy source. 
 Discussions addressed the environmental bene fits of removing trade restrictions and 
distortions in the energy sector, particularly subs idies related to fossil fuels.  The EC said that 
although removing subsidies for some energy sources, such as coal, could bring automatic environmental benefits, other accompanying measures were often necessary to internalize environmental costs in energy prices, such as ta xation.  The transfer of environmentally sound 
technologies to promote efficient energy use also should  be examined, the EC said. 
 Several Members, including the EC, Morocco  and Canada, referred to the UN Climate 
Change Convention and the importance of addressi ng global environmental problems resulting from 
the use of fossil fuels.  Canada expressed concern over the scale of coal subsidies in some countries.  
One of the contributions of the Kyoto Protocol would be the extent to which it would send out a 
global signal in favour of lower carbon energy sources;  subsidies could mask such market signals. 
Fisheries 
 Members welcomed a new Secretariat paper on WTO rules on subsidies in the fishing 
industry.  New Zealand, supported by Argentina, th e US, Canada, Australia and others, proposed that 
this document be derestricted. 
 Many Members noted the contribution removing fisheries subsidies could make to reducing 
the pressure on fisheries resources.  Members sa id that WT/CTE/W/67 accurately described the 
situation in global fisheries.  Overexploitation of fisheries resources and overcapacity of fishing fleets 
were major problems in the fisheries sector.  Fi shing industry subsidies encouraged the use of 
fisheries resources above normal economic rates of e xploitation.  Inflated re turns encouraged excess 
capacity and overfishing particularly in poorly managed fisheries.  These supply distortions placed a 
downward pressure on world seafood prices.  Depressed  prices affected the ability of developing 
countries in particular to achieve economic return s from their fisheries resources.  In addition to 
competition from subsidized industries, developing countries faced tariff escalation for fish products, 
Morocco and others noted. 
 Contributions from international organizations  working in the fisheries area, such as the 
OECD, FAO and the CSD, would be welcome, Members said.  In APEC, Japan and New Zealand had 
co-sponsored a study of different types of fisher ies subsidies, their policy objectives and seek to PRESS/TE/23 
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MORE analyze their relationship with the WTO Agreem ent on Subsidies and Countervailing Measures.  A 
proposal also would be put forward to APEC Ministers in June 1998 that APEC Members voluntarily remove all prohibited subsidies and ensure that non-actionable subsidies conformed with WTO rules. 
 Members said that the CTE should not miss the opportunity to advance environmental 
benefits which would result from further trade liber alization in the fisheries sector.  Although the 
WTO's capacity to act to improve fisheries management was limited to its area of competence, 
subsidies reduction would allow for more effici ent resource use which would reduce pressures on 
fisheries resources.  Australia, New Zealand and ot hers said that although some carefully designed 
subsidies aimed at improving the ecological sustaina bility of fishing activities, these subsidies were 
overshadowed by those that main tained fishing overcapacity. 
 The contribution of eliminating trade restric tions to sustainable fisheries was difficult to 
isolate relative to numerous other factors affecting this sector, several Members said.  Fisheries conservation could not be achieved only by reduc ing subsidies given that the main cause of 
overexploitation was a lack of sustainable fisheri es management.  Korea, Japan and Norway said a 
distinction between different forms of subsidies should be made and their net impacts analyzed.  
Certain subsidies could have positive environmen tal impacts by reducing fleet capacity, retraining 
fishermen, enhancing fish stocks, promoting vessel s and fishing license buy-backs, Canada said.  To 
improve the situation in global fisheries, all factors should be considered comprehensively. 
 The OECD said it was studying government financial transfers and their affect on the 
transition to responsible fisheries;  the relations hip between these transfers and trade was not yet a 
subject of this analysis.  The FAO said it was exam ining fisheries subsidies in developing countries.  
In April, Japan would sponsor a working group on fishing overcapacity and in June the FAO 
Committee on Fisheries would organize a meeting on fish trade, including trade and environment issues. 
Forestry 
 Canada presented a new paper on its experience with certification, standards and labelling in 
the forestry sector, WT/CTE/W/81-G/TBT/W/61, issued as a joint CTE-TBT document.1  Canada 
supported mainstreaming relevant  environment issues in the WTO and thus looked forward to 
discussion of standards and labelling issues raised in its paper also in the TBT Committee.  Canada's paper set out several voluntary instruments whic h had been developed to respond to customer 
interests on resource management and product pro duction aspects of lumber and paper production.  
Given the impact that certification, standards and la bels could have on market access, there was a real 
concern that inappropriate requirements for so me of these instruments could undermine market 
access.  Canada hoped that others would share their national experiences in dealing with issues related 
to standards and labelling to fu rther understand the trade implications of these instruments of 
environmental policy. 
 Based on Canada's experience with standards and labelling, the paper set out some policy 
considerations and issues releva nt to reducing trade concerns.  First, an open and transparent 
development process provided assurance to all stake holders that the results reflected a balance of 
interests;  multi-stakeholder input facilitated reac hing national consensus.  Publication of work 
programmes and comment periods provided transpar ency for comment for both domestic and foreign 
interested parties.  Second, credible, impartial audit processes were crucial.  This required that 
standards be as clear, precise and consistent in a pplication as possible.  Canada also noted the 
                                                      
1At the request of Canada, this document is unrest ricted.  Copies are availa ble upon request to the 
Trade and Environment Division, WTO Secretariat or can be accessed at 
http://www.wto.org/ddf/ep/public.html. PRESS/TE/23 
Page 7 
 
 
MORE possibility of certification and labelling approach es to use common methodology and the need for 
equivalency.  Generally, trade pr oblems will be reduced if all appr oaches to standards and labelling 
take into account local forest management conditi ons in the producing countries and if they are 
developed in an open and transparent manner. 
 Members thanked Canada for contributing its national experience in the forestry sector.  
New Zealand said it faced similar challenges to tr ade in forest products and several New Zealand 
forestry firms were working towards complying with ISO 14000.  New Zealand was concerned that 
buyer groups which had a policy to only purchase certain certified products, noted in Canada and 
Colombia's papers, could distort markets and impact  negatively on market access.  Equivalency was a 
tool which could alleviate such concerns, many Me mbers noted, an issue which would be explored as 
part of the TBT Triennial Review work programme. 
 Egypt and others did not agree that non-produc t-related labelling, par ticularly related to 
process and production methods, was covered by the TB T Agreement as suggested in Canada's paper. 
 Although trade was not the cause of deforestation, many Members said, removing trade 
restrictions and distortions affecting the forestry sector could provide a means to address deforestation 
problems and support international efforts to achieve sustainable forest management.  Australia said 
the following policies warranted examination in rela tion to the forestry sector:  (i) tariff escalation, 
which reduced the trade revenues ga ined by countries dependent on forestry exports and limited their 
opportunities to diversify production;  (ii) export restrictions aimed at addressing forestry conservation concerns or encourag ing domestic processing industries;  (iii) stumpage fees and timber 
felling charges;  and (iv) initiatives aimed at in fluencing consumer markets and demand, including 
eco-labelling schemes or recycled content requirements. 
 Many Members, including Japan and the EC, sai d that trade liberalization in the forestry 
sector could result in environmental degradation if forests were not sustainably managed.  In this 
respect, the EC and Ecuador were among the Member s who referred to the importance of correctly 
pricing forest resources.  The basic premise of WT/CTE/W/67 is that in well-functioning 
market-based economies, prices register the relative scarcity of resources and consumer preferences.  
However, market mechanisms are not able to regi ster the scarcity of forest resources or account for 
non-wood services, such as its value for carbon storage.  Prices are not able to reflect the optimal use 
of forest resources as some of the benefits did not accrue to private owners, the present generation or 
solely to the country where the forest resources ar e situated.  It would be thus important, the EC 
suggested, to examine under which conditions cer tification and labelling could contribute to 
alleviating market failures in forestry.  Accordi ng to the EC, the Intergovernmental Panel on Forest 
principles for certification schemes have been desi gned to ensure that certification and labelling do 
not constitute trade barriers. 
 ASEAN said that given the absence of an inte rnationally agreed definition of sustainable 
forest management, efforts to ensure that for estry products only came from sustainably managed 
forests could impede market access.  Tariff escalati on for forest products in importing countries acted 
as a deterrent to producer countries, particularly developing countries, to diversify into higher value-
added forestry products, and had negative effects on sustainable forest management.  ASEAN saw the 
need for export controls in this sector to reduce pr essure to harvest forests.  In response to ASEAN, 
the EC said there was a proposal by the Dutch Par liament to label timber products, which would be 
submitted to the Commission for its compatibility to be  checked with EC legislation and international 
obligations. 
 Switzerland said the analysis of the forestry  sector in WT/CTE/W/67 was lacking.  The 
complexity of the impact of measures such as subsidies or certification of forestry products made it difficult to arrive at conclusions.  Income growth  would only lead to environmental benefits if PRESS/TE/23 
Page 8  
 
MORE additional income was invested in forest management, which was the case only if national policies for 
sustainable forestry management were implemented.  The direct impact of the elimination of trade distortions on environmental quality was limited in the forestry sector, particularly as tariffs were 
already low. 
Non-ferrous metals 
 Canada said there were economic and environmenta l benefits of recycling non-ferrous metals.  
Many countries will require increasing amounts of non -ferrous metal commodities to enable them to 
develop infrastructure to support modernization, partic ularly developing countries.  As such, recycling 
materials can play an important role in maki ng these commodities available at reasonable prices. 
Textiles and clothing 
 Several Members, including ASEAN and Pakistan, said the quantitative restrictions 
maintained under the Multilateral Fibre Arrangement (MFA) were significant trade distortions in this 
sector, which had a major impact on developing country  exports, particularly small and medium-sized 
enterprises (SMEs).  These distortions had direct imp acts on developing countries' attempts to benefit 
from trade liberalization and to devote more resour ces to sustainable development.  MFA phase out, 
thus, would result in the elimination of an importa nt category of restrictions many Members said.  
However, the removal of quantitative restrictions was limited to a few items, and the bulk of these 
restrictions would only be removed at the e nd of the transition period, one Member said. 
 The EC and Egypt said that WT/CTE/W/67 refe rred mainly to cotton;  the inclusion of 
synthetic fibres and wool w ould have resulted in a more balanced coverage of this sector.  Egypt said 
that without technical assistance to support a switc h to environmentally friendly technology, removing 
subsidies would be detrimen tal to Egypt's cotton sector. 
 Several Members, including the US, said this sect or could be environmentally stressful;  thus, 
as liberalization was occurring there may be a need  for complementary measures to ensure that the 
environment did not suffer as a result.  Hong Kong, China said investment was an important issue as 
the use of more environmentally sound technolog ies had not materialized following textile trade 
liberalization. 
Leather 
 Members who spoke on this sector, including Brazil, said trade liberalization in the leather 
sector could lead to the diffusion of cleaner t echnologies throughout its stages of manufacturing and 
to technological innovation to treat industrial residua ls.  It was suggested that this sector should be 
discussed further and consider the importance of th e transfer of environmentally sound technologies, 
particularly for SMEs, to lessen the envi ronmental impact of leather production. 
Environmental services 
 Several Members, including the EC and the US , said work should continue on this sector as 
concrete results could be achieved.  Canada said it was pursuing trade liberalization in environmental 
goods and services in APEC and was interested in pursuing such an initiative in the WTO. 
 The US said that NGOs at the Symposium had referred to this sector as one in which an 
important contribution could be made by the WTO.   Potential environmental benefits from removing 
trade restrictions and distortions in this area, such as the broader availability of environmental 
services, lower prices through increased competition between domestic and foreign suppliers should PRESS/TE/23 
Page 9 
 
 
MORE be further analyzed, the EC said.  Norway sai d access to cheaper environmentally sound goods, 
services and technologies would facilitate the im plementation of environmental policies. 
General comments on Item 6 
 The environmental benefits resulting from the remo val of trade restrictions and distortions is a 
complex issue due to the many factors which have to be taken into account.  All Members welcomed 
the contribution of the exchange of views from a sectoral perspective and the attempt by the 
Secretariat to address the complexity of the subject in WT/CTE/W/67. 
 Members welcomed the derestriction of WT/C TE/W/67, which had contributed to discussions 
at the NGO Symposium.  The document collated a large amount of existing information on trade-related economic policies and tr ends, environmental policies and conditions and analyzed the 
linkages, Australia said.  Its conclusions about th e clarity of these linkages varied, as they should 
according to the sector and associated complexities.  The document pointed to a variety of natural 
resource based sectors where there is a considerable weight of opinion pointin g to the potential that 
reform of trade policies had to provide developmental and envi ronmental benefits. 
 The discussions raised a number of issues which are important when considering how to 
maximize the level of certainty about the environmen tal results of trade reform, such as efficiency in 
policy design, improving the monitoring and assessment of environmental factors, and the overall need for environment and related policies to interna lize environmental costs.  Building the capacity of 
national governments to deal with th is would be vital, Australia said. 
 Trade liberalization is not the primary cause of environmental degradation, nor are trade 
instruments the first best policy for addressing envir onmental problems.  Nevertheless, the removal of 
trade restrictions and distortions, many Members said, is a first step towards achieving sustainable 
development.  An important qualification is that sustainable development must be based first and 
foremost on sustainable management practices;  a ppropriate environmental policies are needed above 
all at the national level, if the full benefits of tr ade liberalization are to be realized.  Importantly, 
several Members noted that trade policies are not a substitute for well-designed, appropriate 
environmental policies to solving environmenta l problems related to resource management.   
 Several Members, including Australia and Ne w Zealand, said that the CTE should focus on 
agriculture and fisheries as well as other natural resource based sectors where the market distortions 
were greatest and where the identification by the CTE of particular trade policy reforms had the greatest potential to deliver environmental and economic  benefits.  Turkey suggested that new sectors 
could be included in the assessment.  Pakistan sai d there was a positive relationship between trade 
liberalization and increasing per capita incomes;  this linear relationship may not hold in all cases 
unless supplemented by other measures, incl uding technology and financial transfer. 
 Norway, Korea, Switzerland and Japan said that a more comprehensive analysis was 
necessary to take into account the positive and negative  environmental effects of trade liberalization.  
Account needed to be taken, for example, of th e multifunctions of agriculture, including biodiversity, 
landscape and flood and soil prevention.  The EC and Switzerland said that the removal of trade 
restrictions was rarely synonymous with unambi guous improvements in environmental quality;  there 
may be positive environmental effects but these were not automatic.   
 New Zealand and the US were among the Members which said that there were many 
complementarities between trade liberalization and environmental benefits.  The WTO should not be 
reluctant to look at reform and to consider change , particularly given the complementarities identified 
between reform and environmental benefits.  To the extent are as are identified in which it was PRESS/TE/23 
Page 10  
 
MORE particularly important to have complementary polici es, it would be important to help governments to 
identify these policies, as opposed to fi nding reasons not to liberalize. 
 Switzerland found the use of the term subsid ies problematic throughout the Secretariat's 
document.  WTO Members had acknowledged that, if certain conditions were fulfilled, some 
subsidies were legitimate policy instruments. 
 Cuba, on behalf of Bolivia, Cuba, El Salv ador, Honduras and the Dominican Republic, said 
that Agenda 21  highlighted that the achievement of sustai nable development called for the solution of 
environmental problems as a whole.  Since envir onmental problems are global in nature, efforts to 
solve them should be shared in accordance with th e level of development of each country.  Although 
developing countries were trying to adopt higher st andards of environmental protection, Cuba said, 
they should not be considered in th e same manner as developed countries. 
 Argentina said that, as was recognized in Principl e 16 of the Rio Declaration, to be able to 
implement sustainable production polic ies, prices had to reflect the private costs of production and the 
environmental externalities caused during a product's lifecycle.  Policies implemented by some OECD 
countries that subsidized production and exports de pressed international prices and prevented the 
implementation of environmental policies which in corporated environmental externalities.  These 
subsidies gave rise to local and global negativ e environmental effects and should be removed. 
Item 2  The relationship between environmental policies relevant to trade and environmental 
measures with significant trade effects a nd the provisions of the multilateral trading 
system 
 The EC said that it had commissioned a study on environmental reviews of trade measures 
and agreements, to be finalized in 1998, to deve lop a methodology of options to implement the OECD 
guidelines on environmental reviews of trade measu res and agreements in the EC.  The EC would 
keep Members informed of the progress on this initiative. 
 The US said the discussion on market access  issues had highlighted the role that 
environmental reviews could play to ensure co mplementarity between trade and environmental 
policies.  The US hoped that other Members would present their experience with reviews. 
Item 3(b) The relationship between the provisions of the multilateral trading system and 
requirements for environmental purposes re lating to products, including standards 
and technical regulations, packaging, labelling and recycling 
 Colombia presented a new paper on the Colomb ian flower sector and eco-labelling and its 
impact on market access (WT/CTE/W/76-G/TBT/W/60), issued as a joint CTE-TBT document.2  
Concern for the management, conservation and sustai nable use of water resources used in production 
schemes in the Colombian flower sector had le d to a sustainable management initiative, the 
FLORVERDE programme.  Despite this effort toward s environmental protection, Colombia's flower 
sector had encountered difficulties with market acce ss due to the fact that private organizations in 
certain importing countries had promoted a campa ign to denigrate Colombian flowers.  These 
organizations had developed eco-labelling schem es on unacceptable conditions for Colombian 
exporters;  they were discriminatory and their costs were high. 
                                                      
2At the request of Colombia, this document is derest ricted.  Copies are availa ble upon request to the 
Trade and Environment Division, WTO Secretariat or can be accessed at 
http://www.wto.org/ddf/ep/public.html. PRESS/TE/23 
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MORE  Colombia said its experience in the flower se ctor and Canada's experience in the forestry 
sector highlighted that eco-labels could have mark et access impacts.  The CTE should develop a clear 
position on this issue so as to avoid the prolifera tion of private eco-labels without common standards 
and the creation of market distortions.  Eco-labe lling programmes should be subject to the provisions 
of the TBT Code of Good Practice and the WTO should further mutual re cognition and equivalence 
with respect to eco-labelling. 
 Members thanked Colombia for contributing its national experience illustrating the trade 
impact of eco-labels.  Ecuador said its flower sector had adapted to increasing costs and different local conditions relating to eco-labelling in importing c ountries similar to those set out by Colombia. 
 Brazil contributed its national experience w ith voluntary eco-labelling in the leather and 
forestry sectors.  Brazil's Association on Technical Standards was developing criteria for labelling 
leather and footwear products and the CERFLOR labelling program would certify the origin of 
Brazilian forest-based raw materials based on ISO 14001 and other factors, such as biodiversity 
conservation and the sustainab ility of forestry resources. 
 Several Members commented on the use of eco-labelling as an instrument of environmental 
policy.  The US said that eco-labelling was a valuab le tool to achieve envi ronmental goals and to 
provide consumer information.  The EC said th at it would be difficult to imagine a less trade 
restrictive alternative as eco-labelling schemes are voluntary and rely on the market mechanism of 
consumer choice.  Many Members commented on the need to ensure that eco-labelling standards and 
schemes are voluntary, transparent, market-based and i nvolve all relevant parties.  The EC said that 
information on its initiatives to make the EC eco-l abelling scheme more transparent was available on 
the EC website. 
 Work is ongoing in various international fora in the field of eco-labelling and packaging.  The 
Secretariat had prepared overviews of studies wh ich had been completed recently on eco-packaging 
and the market access impact of eco-labelling requi rements.  Korea, Pakistan and Egypt said that 
these studies indicated that eco-labelling requirements were costly and could impede market access.  
In some cases, these requirements represented 5 to 20 per cent of additional costs on exported 
products, which placed a burden on developing countr y exporters, particularly SMEs.  Egypt set out 
several recommendations for eco-labelli ng:  (a) that developing countries be allowed to participate in 
the setting of criteria and standards to ensure that their interests are taken into account;  (b) developing 
countries be provided with technical assistance to improve environmenta l performance;  and (c) 
harmonization and mutual recognition be facilitated, while ensuring that one country's standards were 
not imposed on another for recognition to be accorded. 
 Colombia, Pakistan, Hong Kong China, Korea a nd others said that the key way to minimize 
the negative trade effects of eco-labelling is to ensu re transparency in the processing and application 
of eco-labels, that interested parties could partic ipate in their development; and the development of 
equivalency and mutual recognition.  Pakistan said that if there were effective participation of 
developing countries, sufficient technology tran sfer, and credit lines for developing country 
producers, developing countries might be able to  adhere to these schemes.  ASEAN said that the 
absence of an agreed international definition of wh at constituted sustainable forest management could 
result in eco-labelling being used as a trade discriminatory tool. 
 Canada said the discussion had illustrated that  eco-labelling was a real issue for many 
Members.  The issue was how to deal with eco-labelling programmes and their potential to 
discriminate between equally valid approaches to  improving environmental performance.  Canada 
noted that all presentations demonstrated the balanc e between environment and trade policy concerns.  
Following paragraph 185 of the 1996 Report of the C TE, Canada thanked New Zealand and Japan for 
having their eco-labelling programme accept the TBT Code of Good Practice.  PRESS/TE/23 
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   Item 4  The provisions of the multilateral trading system with respect to the transparency of 
trade measures used for environmental purposes and environmental measures and 
requirements which have significant trade effects 
 The CTE agreed to develop a WTO Envi ronmental Database on environment-related 
notifications under WTO Agreements, which would be updated annually by the Secretariat.  The 
Chairman said he would consult on a US proposal to derestrict the Secretariat document, prepared for 
this meeting, which contained a review of envi ronment-related notifications in the WTO in 1997.
 
END