RESTRICTEDWORLD TRADE
ORGANIZATIONWT/CTE/M/34
29 July 2003
(03-4021)
Committee on Trade and Environment
REPORT OF THE MEETING HELD ON 7 JULY 2003
Note by the Secretariat
I. ADOPTION OF THE AGENDA....................................................................................................... .........1
II. PARAGRAPH 32................................................................................................................ .........................1
A. G ENERAL ............................................................................................................................... .....................1
B. P ARAGRAPH 32(i) (M ARKET ACCESS )........................................................................................................6
1. Market Access ................................................................................................................ .......................6
2. Sector analysis ("win-win-win").............................................................................................. ..............6
(i) Forestry.................................................................................................................... .....................................6
(ii) Agriculture................................................................................................................ ....................................8
C. P ARAGRAPH 32(ii) (TRIPS) ................................................................................................................. ......9
D. P ARAGRAPH 32(iii) (L ABELLING )...............................................................................................................9
E. O THER ITEMS ............................................................................................................................... ............19
III. PARAGRA PH 33............................................................................................................... ........................19
IV. PARAGRAPH 51................................................................................................................ .......................19
V. ADOPTION OF THE CANCÚN REPORT ............................................................................................19VI. ADOPTION OF THE REPORT TO THE GENERAL COUNCIL ......................................................19VII. OTHER BUSINESS............................................................................................................. ......................22
1. The Committee on Trade and Environment (CTE Regular) met on 7 July 2003 under the
Chairmanship of Ambassador Peter Br ňo (Slovak Republic).
I. ADOPTION OF THE AGENDA
2. The agenda proposed in WTO/AIR/2129, dated 24 June 2003, was adopted.
II. PARAGRAPH 321
A. GENERAL
3. The representative of Canada introduced his delegation's proposal for a recommendation to
Ministers in Cancún.2  He recalled that Canada had originally raised this issue at the February 2003
meeting of the CTE Regular, and, at the April 2003 meeting, Canada had suggested that a specific
recommendation be included in the CTE Regular's Report to the 5th Ministerial Session in Cancún
("Cancún Report").  It was Canada's view that Mi nisters would have to make a decision at Cancún on
the future work of the CTE.  In the absence of recommendations or proposals from Members to
                                                     
1 Paragraph numbers refer to those of the Doha Ministerial Declaration ("DMD") unless otherwise indicated.
2 Canada's submission is contained in document Job(03)/105.WT/CTE/M/34
Page 2
Cancún, Ministers were likely to direct the CTE to continue with the Doha work programme.
Looking back, prior to Doha, the CTE had engaged over a period of several years in substantial
discussions of a number of important items.  However, since the Singapore Ministerial Conference,
there had been no report to Ministers on these discussions nor a review of the original terms of
reference.  In fact, several of the issues had, as a result of the Doha Declaration, been taken up inother WTO bodies.  This was a significant development which necessarily had implications for the
CTE's terms of reference.
4. An examination of the List of Documents
3 prepared by the Secretariat revealed that some
items on the CTE Regular agenda had generated a number of submissions and considerable
discussions.  However, Members had expressed little or no interest in several other agenda items.  For
example, on Item 3(a)4, there had been only one document prepared by the Secretariat in 1997 and no
submission by Members in nine years.  On Item 75, there were submissions by Members in the mid-
1990s, but very little interest had been expressed in recent years.  Similarly, on Item 96, while there
had been documents by the Secretariat and observers, there had been no submissions by Members.  In
Canada's view, more attention needed to be devoted to paragraphs 33 and 51 of the Doha Declaration
and a review of the existing terms of reference could include these activities as potential items on the
CTE's regular agenda.
5. The representative of Canada noted that he was open to provide Members with more
precision on the fourth line of the proposal, which read "at the next session of the Ministerial
Conference";  Canada would be quite willing to put in the wording "on the conclusions of this review
and, as appropriate, proposals for amended terms of reference", which would be slightly more precise.
6. The representative of Switzerland considered it important that CTE's work program follow
the evolution of the international agenda in the area of environment.  Key issues debated in other fora
deserved to be tackled in the CTE.  Such an exercise would just confirm and strengthen the relevance
of the CTE's work in the framework of the discussion on trade-related environmental issues.
However, Switzerland noted that under its understanding of Canada's proposal, the revision would not
include the three items of paragraph 32 because of the indication by Ministers of their particularimportance in the framework of the Doha Agenda.  Members could not go back on that decision and
Switzerland asked Canada to confirm this understanding.  Even if the proposed exercise could be
useful, Switzerland considered that Members should not devote too much time to it before the
Cancún Ministerial Conference.  It was the discussion of the content that was important.  To conclude,
Switzerland considered that Canada's proposal was interesting but the implications and details had to
be further clarified.
7. While the representative of the Philippines considered that Canada's proposal probably had
some merits for certain items, it was not appropriate for Ministers in Cancún to discuss this specific
proposal.  This was the responsibility of CTE Members and could be discussed in the CTE.
Moreover, as some issues were in common with the CTE Special Session the matter needed to be
thoroughly investigated.
8. The representative of the European Communities agreed that ever since CTE's original terms
of reference had been drafted, things had happened in the "real world";  this included the
World Summit on Sustainable Development (WSSD).  The European Communities' understanding of
this proposal, as the Swiss delegation had said, was that the Doha mandate would not be touched.  For
the European Communities, the main issue was timing because the proposal mandated the CTE to
report to the next session of the Ministerial Conference with a proposal of amended terms of
                                                     
3 See WT/CTE/INF/5/Rev.1, 5 February 2003, "List of Documents", Note by the Secretariat, Revision.
4 Item 3(a) deals with the relationship between the provision of the multilateral trading system and charges and taxes for
environmental purposes.
5 Item 7 deals with the issue of exports of domestically prohibited goods (DPGs).
6 Item 9 deals with the work terms of reference envisaged in the decision on Trade in Services and the Environment.WT/CTE/M/34
Page 3
reference.  The European Communities was still re flecting on that level of ambition considering that
Members needed to concentrate their efforts on the Doha Development Agenda negotiations.
Therefore, the European Communities would prefer a more forward-looking time perspective.
However, on the substance, and irrespective of timing, the case could be made that there was a need to
look at some issues in order to have a more focused and productive work in the CTE.
9. The representative of Norway was of the view that the discussions in the CTE based on its
current work programme had helped Members to gain greater understanding of the relationship
between trade and environment.  It had been a long time since the terms of reference were last revised
and Norway agreed with Canada that Members might benefit from reviewing the CTE's work
program in order for the CTE to remain a dynamic and relevant forum for discussion of trade and
environment issues.  Norway had some sympathy fo r the EC's comment regarding timing.  In general,
Norway considered that there might be a need for a more comprehensive discussion before Memberscould agree.
10. The representative of India agreed with Canada that there were some items on the work
programme on which the CTE could come to a conclusion.  However, India was opposed to the CTE
making a proposal to the Ministerial Conference for a mandate to work on an amendment its terms of
reference.  The CTE needed first to discuss what  changes were required and, based on such a
discussion, a decision could be made.  There was no need for the CTE to seek a new mandate from
the Ministerial Conference for that purpose.  The CTE already had a mandate and Terms of Reference
within which, if the CTE so decided, it could make a recommendation that no further work was
required on certain items.
11. The representative of Malaysia  agreed with the Philippines and India that there was neither a
need for reviewing the CTE's work programme nor for seeking a new mandate from Ministers in this
respect.  Although the agenda of the CTE had remained the same since 1995, Malaysia noted that
some of these issues might have received less attention than others simply because the CTE agenda
was very long and exhaustive.  Malaysia wished to hear more details on the basis for the Canadian
proposal which was very preliminary in nature.
12. The representative of Brazil was of the view that while the proposal had some merit, it was
not necessary for the CTE to engage in such a discussion for the moment.  In this regard, Brazil
agreed with Malaysia, the Philippines and India.  Moreover, Brazil noted that it was not appropriate
for the CTE to engage in an exercise of picking and choosing which elements were or were not
necessary for its work.  Members could nevertheless consider reverting to this issue at future meetings
and listen to more detail from Canada.  Brazil did not favour that the Cancún Report include any
recommendation.
13. The representative of Thailand considered, like others, that it was not the appropriate time to
look at this proposal.  The CTE work programme, with its ten items, included a wide range of issues
and covered all interests of Members.  The fact that some issues were not actively discussed did not
mean that it was not necessary to have these issues on the CTE agenda.  Furthermore, Thailand sought
further clarification from Canada on how this proposal related to paragraph 32 of the Doha mandate.Finally, Thailand recalled that it had opposed, at the informal meeting of the CTE on 30 June 2003, to
have a separate section on recommendations in the CTE Cancún Report.
14. The representative of Indonesia supported the statements made by representatives of
Thailand, Malaysia, the Philippines, Brazil and India.  It was also Indonesia's view that there was
more work that needed to be done before embarking on the issue proposed by Canada.  Indonesia didnot see the need for Ministers to dwell on this issue before there was a consensual decision in the CTE
whether or not to review the terms of reference.  Like others, Indonesia was hesitant to discuss the
issue any further before receiving more detail from Canada.WT/CTE/M/34
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15. The representative of Cuba shared the views expressed by other delegations regarding the fact
that the Canadian proposal had not been discussed sufficiently within the CTE.  At the moment, Cuba
needed time because some of the issues, which had not been discussed over the last few years, were of
interest to many Members, including Cuba.  I ndeed, such an exercise would require Members to
comment and decide which issues should remain on the list and which should not.  Cuba believed thatit would be premature for the Cancún Ministerial Conference to approve a recommendation that
would lay down guidelines for changing this work pr ogram.  Cuba joined in with what had been said
by the Philippines, namely that the CTE would have sufficient time after  Cancún to debate on this
issue.
16. The representative of China shared the views expressed by the previous speakers.  The work
programme of the CTE was something substantive; therefore, if there was any amendment to be
made, it needed full discussion and consensus.  On this basis, a decision or recommendation from theCTE might be submitted to higher level.  Second, even if consensus on this issue was possible at the
present time, in China's view, it was not necessary to put it to the Ministerial Conference.  Ministers
would have more substantive, important, and complex issues to deal with and would not have time to
address such a recommendation.  Therefore, China considered that a full discussion was needed on
this issue after  the Cancún Ministerial Conference.  Based on this discussion, Members would see
whether a consensus was possible, and, if there was a consensus, the CTE could put this issue to the
General Council rather than to the Ministerial Conference.
17. The representative of Ecuador believed that fo r the time being it would not be appropriate for
Canada's proposal to be considered in Cancún.  Nevertheless, Ecuador thought that Members should
start a discussion on substantive issues which, because they had not been touched upon since 1996,deserved a review.  While Canada's proposal might seem too ambitious at the current juncture, it
would be useful to examine CTE's work programme.
18. The representative of Argentina considered that it was premature for the CTE to embark on
an update of its work programme.  Argentina believed, as noted by China, that this was an important
issue which could be discussed later.  Argentina was of the view that because negotiations were beingcarried out in other bodies, which also involved issues of relevance to the CTE's work programme,
more certainty was needed regarding the results of these discussions and negotiations.
19. The representative of Chile shared some of the ideas in the Canadian proposal and considered
that the terms of reference of the CTE would have to be reviewed because some issues had not been
discussed for many years.  Chile agreed, however, with what had been said by many other
delegations, namely that the CTE should not issue a recommendation to Ministers at this point.
Furthermore, this proposal, as well as discussions held during this meeting of the CTE, should bereflected in the Cancún Report.  The report needed also to indicate the convergence of views on the
need to discuss the terms of reference of the CTE after the Cancún Ministerial Conference.
20. The representative of Japan expressed sympathy for the Canadian proposal which had pointed
out that there were a number of issues which had not been touched upon by the CTE for many years.
As the CTE needed some credibility in the outsi de world, there needed to be some mechanism of
reflection aimed at considering whether the CTE was actually responding to the needs of the "real
world" or not.  However, Japan also shared the view of other delegations that it might be a bit too
much to include this proposal as part of a recommendation to the Ministerial Conference.
Nevertheless, Japan was quite flexible on that point as in Japan's view the CTE needed to review its
terms of reference to see if the current items on the CTE agenda had the same value as when they hadbeen drafted, about ten years ago.
21. The representative of Egypt commented on the Chilean intervention that the Cancún Report
reflect in the body of the report a kind of "converge nce of views" on the need to review the terms ofWT/CTE/M/34
Page 5
reference of the CTE.  Egypt could not go along w ith this suggestion until Canada came with a very
complete proposal on which issues were to be added or deleted.
22. The representative of Kenya added its voice to those delegations that believed that the time
was not yet ripe to put the issue of the terms of reference of the CTE to the Ministerial Conference in
Cancún.  Kenya believed that there were many procedural and substantive issues that needed to beagreed upon and noted that one time-frame for the current discussions and negotiations went up to
January 2005.
23. The representative of Malaysia, responding to Chile's intervention, could not agree to the
review as such.  Nevertheless, Malaysia was prepared to hear more from Canada on the basis of its
proposal so that Members could discuss whether there was a necessity for a review in the first place.
24. The representative of Pakistan shared the view of Malaysia and Egypt.  While Canada's
proposal merited more discussion, Pakistan would rather discuss it at the next CTE meeting.
25. The representative of Brazil, like Malaysia, stressed that Brazil had not agreed on reviewing
the mandate, only that it would like to have more detail on the Canadian proposal.
26. The representative of  Korea shared the view of Canada on the necessity of reviewing the
CTE's work programme.  Korea considered that the proposal made by Chile was a very practical step
forward, therefore Korea joined Chile and Japan on this point.
27. The representative of Philippines, in response to Chile's proposal, said that there was
absolutely no convergence on the proposal of Canada and that there should not be any reference to
this in the Cancún Report.
28. The representative of Indonesia  supported what had just been said by the Philippines,
Malaysia, Pakistan and Egypt.  Indonesia was still questioning the basis for such a review, therefore,
to describe the discussion in terms of "convergence" was not correct.
29. The representative of Canada was surprised that such a procedural proposal could cause such
passion.  The purpose of Canada's proposal was only to get a review done.  After nine years, most
agendas were reviewed and there was nothing else in the WTO which was quite as static as the CTE's
work programme.  Since both the original Marrakesh agenda and the special Doha mandate camefrom Ministers, Canada's suggestion was that Ministers instruct Members to look at the CTE's agenda
in the next two years after Cancún, in order to suggest, presumably in 2005, what that new agenda
could be.  It could be a revised agenda or the exac tly same one, if that was what Members wanted.  It
was one way of getting Members to look at their own agenda.  Going from the comments made by
delegations, in some cases there was not even a willingness to look at this agenda.  These comments
seemed to imply that perfection was reached nine years ago, that nothing had changed since, and that
there was no reason to add or subtract, or to ever report on anything, and that Members could just goon and discuss forever.  Canada's proposal was to look at this agenda and consider whether it really
served Members' purposes.  Obviously the proposal did not reach a consensus.  But Members needed
to pursue discussion on this issue after Cancún, ex press views and forward these views to Ministers or
to the General Council.  Canada believed that the present agenda was not perfect and if it was, then
Members could confirm this perfection.
30. The Chairman noted the interest on the issue.  However, it was clear that it was premature to
forward any recommendation for Ministers in Cancún on this proposal.  Many Members had asked for
more detail and information on Canada's proposal.  The October meeting would probably be the
appropriate occasion to start such a discussion and the Chairman invited Canada to elaborate on this
proposal for the next meeting.  The conclusion was that there was no consensus on the proposal forrecommendation and that the CTE would continue its deliberation on this issue at a later stage.WT/CTE/M/34
Page 6
B. PARAGRAPH 32(i) (M ARKET ACCESS )
The effect of environmental measures on market access, especially in relation to
developing countries, in particular the least developed among them, and those
situations in which the elimination or redu ction of trade restrictions and distortions
would benefit trade, the environment and development.
1. Market Access
31. No developments have been reported with regard to this matter.
2. Sector analysis ("win-win-win")
(i) Forestry
32. The representative of Japan recalled that at the CTE meeting of June 2002 Japan had
submitted a document entitled "Issues on Forestry Products Trade and Environment"7.  In this
document, Japan had stressed that when addressing the issue of illegal logging it was important toexamine possible international approaches from a trade viewpoint as well as the implementation of
domestic measures.  It was also mentioned that discussions in other international fora needed be taken
into account.  Illegal logging was a major obstacle to the sustainable management of forests in each
country and to the development of the conservation of environment world-wide.
33. Since the G8 Summit held in Okinawa in 2000, Japan had underlined in various international
conferences how important it was to tackle the problems of illegal logging based on the principle that
illegally harvested timber should not be used.  The final report of the G8 on the Action Program on
Forests, which was submitted in June 2002, at the meeting of the Foreign Affairs Ministers of the G8
and discussed at the meeting of the G8 Summit, underlined the commitment of G8 members to fight
illegal logging.  In addition, the WSSD adopted in September 2002 the Plan of Implementation, whichreaffirmed the need to take in ternational actions against illega l logging, including forest law
enforcement and actions against illegal international trade in forest products.  Both the 2002 G8
Summit in Canada, and the WSSD acknowledged that  there was already an international consensus on
the need and importance to combat illegal logging and related trade, which was now at a stage of
implementation of specific measures.
34. On 24 June 2003, a "Joint Announcement" on the cooperation to combat illegal logging and
related trade was signed between Japan and Indonesia.  This Joint Announcement was signed for
Japan by the Minister of Foreign Affairs and the Minister of Agriculture, and, for Indonesia, by the
Minister of Forestry.  The Ministers of these countries also signed an "Action Plan" attached to this
declaration in the presence of the Japanese Prime Minister and the President of Indonesia.
35. Therefore, Japan wished to present the activities which were carried out in the context of this
Action Plan with the hope that such plans be develo ped in other regions;  this would enable Members
to contribute to sustainable forestry management and to the conservation of the global environment.
This Action Plan aimed at implementing bilateral cooperation between Japan and Indonesia in the
short-, medium-, and long-term.  The elements of this Action Plan consisted in:  (i) implementing in
Indonesia a mechanism to identify legally harvested from illegally harvested timber through the
cooperation between Japan and Indonesia;  (ii) studying possible measures relating to distribution andexport of illegally harvested timber;  and (iii) conducting monitoring of the implementation of the
mechanism with the participation of the civil society.  The restrictions on imports and other trade
measures related to illegally harvested timber would be reviewed taking into account the regulations
                                                     
7 WT/CTE/W/211, 11 June 2002, "Issues on Forestry Products Trade and Environment", Submission by Japan.WT/CTE/M/34
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already enforced.  The aim of the Joint Announcement was to insist on the principle of cooperation
between Japan and Indonesia in the combat of illegal logging.
36. Regarding the implementation of the activities of the Action Plan, Japan and Indonesia would
call upon various means such as:  (i) the financing of various projects by the International Tropical
Timber Organization (ITTO);  (ii) the bilateral cooperation between Japan and Indonesia;  (iii) thealignment with the activities of the partnership of the forest industries in Asia.  In order for the
Indonesian Government to restrict exports of illegally harvested timber and to enable the Japanese
Government to cooperate, it was essential to establish in Indonesia a mechanism providing for the
possibility of tracking the origin of illegal timber exports, monitoring all the stages of the process
from the logging to the export, with a view to detecting timber exports from a legal origin.  Japan
would present in the next regular meetings of the CTE the measures that would be taken in
accordance with the Joint Announcement and the Action Plan.
37. The representative of Malaysia  noted that the information provided by Japan represented a
useful area of cooperation between two countries.   As Malaysia had already stated in previous
interventions, this issue was more adequately dealt with bilaterally and in the relevant regional and
multilateral organizations.  Malaysia highlighted that the underlying economic reasons that gave rise
to this issue, such as poverty, needed also to be addressed, and the issue of a high tariffs on processedproducts should be looked at as well.
38. The representative of Indonesia stressed that the cooperation between Indonesia and Japan
showed the seriousness of both countries in addressing the issue of illegal logging.  Indonesia had also
signed a Memorandum of Understanding with the United Kingdom on cooperation to improve forest
law enforcement and governance and to combat illegal logging and international trade in illegallylogged timber and wood products.  Indonesia had done the same with Norway, Finland and had an
exchange of information on illegal logging and trading of tropical timber with China.
39. The representative of Brazil added her voice to what Malaysia said on the question of
sustainable timber harvesting.  Brazil believed that it was being dealt with appropriately in relevant
fora such as the ITTO and the United Nations Forum on Forest (UNFF).  For Brazil, there was noneed to discuss this issue in the WTO.  In addition to what Malaysia had stated, Brazil stressed that in
dealing with the issue of illegal international trade of timber, it was important to take into account the
demand side of the problem.  Brazil stressed the importance of financial technical assistance for
countries to implement their forest legislation.  Some countries, especially developing ones, had
appropriate legislation but unfortunately there was no means to implement them in a proper way.
40. The representative of Japan recalled that since the submission of his delegation's paper in
June 2002, some Members had asked Japan to clarify its intentions and approach.  As explained at
previous meetings, Japan sought a contribution from the WTO to fight illegal forestry exploitation.
Japan was aware of the fact that this problem depended on the national policy of each country and
Japan had no objection to other international fora discussing this issue.  The Japan/Indonesia
cooperation plan to combat illegal logging consiste d mainly in implementing, in an exporting country,
a mechanism to identify the legal or illegal origin of timber in cooperation with the importing country.
It also entailed the consideration of restrictive measures against the distribution and export of illegally
harvested timber.  The idea was to promote activities to fight illegal exploitation of timber on a
regional scale and then on a global scale, of course, subject to an understanding between Members.  It
was obvious that export restrictions and other trade measures concerning illegally harvested timber
had to be compatible with WTO rules.  It was important that the entire world contribute to the fightagainst illegal logging, including with trade measures.  Japan intended to make a positive contribution
in this direction.  Taking into account the opinions expressed by Members, Japan would contribute
more in-depth to the debate at future meetings of the CTE.WT/CTE/M/34
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(ii) Agriculture
41. The representative of Korea reiterated the position of his delegation on agriculture subsidies.
Agriculture had many other functions apart from simply providing food.  Many of those functions
were environmental in nature, such as the maintenance of landscape, preservation of biodiversity and
management of water resources.  Certain agricultural subsidies had positive effects on sustainabledevelopment by maintaining a certain level of agricultural production, especially in those countries
where agriculture was the primary land use, as was the case with Korea.  Korea considered that the
phasing out of all agriculture subsidies could undermine agriculture production in some countries and
thereby impair the environmental functions of agriculture.
42. The representative of the European Communities reiterated that a certain level of support in
agriculture was necessary to maintain a number of environmental benefits which could arise from
agricultural production.  The European Communities had made reference to objectives like themaintenance of agricultural landscape, land conservation, water resources management, preservation
of biodiversity, etc.  The European Communities stressed that the statement was purely intended to
dissipate any possible misunderstanding on this particular point.
43. The representative of the United States sensed with respect to the previous two references to
agriculture an effort to justify text in the draft Cancún Report.  The United States recalled the view
that it had expressed previously in the CTE, particularly under paragraph 51 of the Doha Declaration,
that a more market oriented agricultural system could foster innovation and efficiency allowing
Members to meet growing demand for food in an environmentally sustainable way.  Proposals for
agricultural reform, in particular the reduction and elimination of subsidies, could lead to more
sustainable resource use and production.
44. The representative of Brazil supported what had been said by the United States on agriculture.
45. The representative of Chile supported what the United States had said.  He recalled the
position of his delegation, namely that eliminating subsidies, which distorted trade and promoted
intensive agricultural practices, would have environmental benefits.
46. The representative of Czech Republic indicated that his delegation had consistently supported
the concept presented here by Korea and the European Communities and attached great importance to
it.
47. The representative of Ecuador stated that the issue of market access was very important to
Ecuador.  Under principle 11 of the Rio Declaration8, the implementation of environmental standards
should obviously not create unnecessary barriers to trade or incur additional costs for exporting
sectors.  However, Ecuador acknowledged that there were legitimate national and environmental
objectives, which often created additional costs for developing countries.  Regarding the sectoralaspect, Ecuador also believed that the elimination of subsidies in agriculture, fisheries, energy and
forestry would contribute to sustainable developm ent in that it would avoid distortions in price
leading to intensive use of natural resources and would allow for state income to be better distributed
in order to fight poverty, which was the main cause of environmental degradation.
48. The representative of Japan fully supported the European Communities' and Korea's
comment.  Agricultural non-trade concerns were of vital importance to developing and developed
country Members alike.  A one-size-fits-all approach would not be appropriate to address such
concerns;  the diversity of country situations needed to be sufficiently taken into account.
                                                     
8 Principle 11 reads as follows: "States shall enact effective environmental legislation.  Environmental standards, management
objectives and priorities should reflect the environmental and development context to which they apply.  Standards applied by s ome
countries may be inappropriate and of unwarranted economic and social cost to other countries, in particular developing countri es".WT/CTE/M/34
Page 9
49. The representative of Thailand supported the statement by the United States on agriculture.
Thailand's view was that most of the environmental degradation in developing countries was the result
of poverty.
50. The representative of New Zealand recalled that the purpose of this item of the CTE agenda,
when Ministers adopted it in 1996, was genuinely environmental.  The aim was to debate in the WTO
ways in which to support environmental objectives through a trade vehicle.  It was fair to say that
much of the work done in the early years of the CTE did indeed support that objective.  New Zealand
gave the example of the issue of fisheries subsidies, which had manifestly an environmental objective.
New Zealand feared that the discussion had degenerated into a game of ping-pong which was a proxy
for negotiations underway in the Doha mandated negotiating groups on agriculture and
non-agricultural market access.  New Zealand would prefer to focus, in this part of the agenda, on
those issues where there was a genuine environmental motivation and on how to achieve thatenvironmental purpose through trade instruments.
51. The representative of Australia supported New Zealand's comments.  The purpose behind this
item was well known.  The importance of agricultural trade liberalization to environment and to
development were issues which had been well enunciated by Ministers in Doha and in a number of
other fora.  Therefore, Australia also believed that there was a need to concentrate on the substance ofthe issue.  What had happened at this meeting was that a number of delegations stated, for the record,
a position which they realized at the last minute had not been adequately enunciated over the last two
years of discussion in the CTE.  The position of Australia and of a vast majority of Members had been
well and truly made known.
52. The representative of Hungary joined its voice to what had been said by the
European Communities and the Czech Republic to the effect that some agricultural subsidies served
environmental purposes.
C. PARAGRAPH 32(ii) (TRIPS)
The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS).
53. No developments have been reported with regard to this matter.
D. PARAGRAPH 32(iii) (L ABELLING )
Labelling for Environmental Purposes
54. The representative of the European Communities informed Members on a document prepared
in April/June 2003 by the Global Eco-labelling Network (GEN)9.  The document, which looked at all
the various aspects of eco-labelling, noted that the interests in new programs came largely from
developing countries.  In the conclusion part of this document, it was noted:  (i) that eco-labelling wasgrowing around the world, both in developed and developing countries; (ii) that the environmental
attributes of products had the potential to create trade opportunities particularly for goods aimed at
developed country markets regardless of the point of origin; and (iii) that there was a need to find
sustainable solutions instead of being overly preoccupied with the more negative aspects of the
debate.
55. The representative of the European Communities then went on to introduce a proposal for a
recommendation to Ministers on labelling.
10  He noted that the GEN document showed that the EC
                                                     
9 "Trade as an Environmental Policy Tool? Environment as a Trade Policy Tool?", Global Eco-labelling Network, June 2003.
The paper can be found at http://www.gen.gr.jp .
10 Document Job(03)/130.WT/CTE/M/34
Page 10
proposal on labelling actually corresponded to a need on the market-place and not only to what
Ministers had underlined at the WSSD on the role of  voluntary tools in promoting sustainable trade.
The European Communities made this point in order to reassure delegations that the EC proposal on
labelling was not another negotiating agenda and not another point under the single undertaking.
Rather, it was a practical solution to address what had been highlighted in an earlier EC submissionon eco-labelling
11, i.e. the need to have an in-depth discus sion on eco-labels, and in particular those
based on the life-cycle analysis (LCA).
56. In the proposed recommendation, the European Communities had provided some detail on
what such dedicated sessions could look at.  It was clear that a positive approach meant looking at:
(a) trade enhancement;  (b) trade creation;  (c) in crease of market opportunities;  (d) how to help
developing countries to cope with the ever growin g number of eco-labels;  and (e) how to ensure that
they were administered and run in a non-discriminatory WTO compatible or ISO compatible way.There was also an interesting point under sub-paragraph (iv) of the proposal on the question of mutual
recognition and equivalency.  The European Communities embed the whole work programme in the
ongoing work in the WTO to make sure that TBT colleagues brought in their technical expertise,
which they would deepen in a workshop to be held  in October 2003.  This would also make sure that
all programs, such as GEN and the relevant inte rnational organisations, such as UNCTAD and UNEP,
came in to support that work programme.  Concerning the EC proposed recommendation, Ministers
needed to send a political signal that a modern market needed this sort of work and that market access
could only be secured on a non-discriminatory and transparent basis if these issues were examined in-
depth within the WTO.
57. The representative of the Philippines asked first how the European Communities intended the
WTO to intervene in the non-governmental or private standard-setting process.  Moreover,
the Philippines noted that there was no fundamental agreement at present on whether the WTO
considered eco-labelling as compatible to its rules.  This issue had been discussed extensively in the
past by the CTE and the TBT Committee and no consensus had ever been reached on the WTO
compatibility of eco-labelling.  On the contrary, the Philippines felt that the debate so far had clearlypointed out that eco-labelling schemes, despite their voluntary nature, were not automatically
consistent with the WTO.  Second, the proposal implied that there was a recognition of the legitimacy
of the life-cycle approach in the WTO.  For the Philippines, the concept of LCA was closely linked to
the issue of non-product related processes and production methods (PPMs), which several
delegations, including the Philippines, believed was not within the scope of the WTO.
58. On the proposal by the European Communities for dedicated sessions, the Philippines needed
clarification on what was meant by "instruments to facilitate applications for eco-label fromcompanies in developing countries".  The Philippines foresaw that this would put onerous obligations
on exporters from developing countries for eco-labels with which they might not be able to comply.
While the proposal intended to improve market access for developing countries, it also denoted an
undertaking, or certain legal obligations, with respect to these measures.  With regard to sub-
paragraph (iii), in the Philippines' view, the TBT Agreement was adequate to gauge whether an eco-label scheme was being used as a protectionist tool or applied in a discriminatory manner;  there was
therefore no need to establish additional guidelines, especially for the private sector side.
The Philippines needed some clarification on the suggestion of the European Communities that the
CTE should "examine ways to increase … publicity for existing and new schemes".
59. The representative of Australia had questions similar to the ones raised by the Philippines.
Given the late submission of the recommendation, Australia had only had the opportunity for an
initial consideration of the paper.  To begin with, Australia recalled its previous position on whether
or not to have recommendations and nothing had changed in that regard.  Indeed, the lateness of this
                                                     
11 WT/CTE/W/225, 6 March 2003, "Labelling for Environmental Purposes", Submission by the European Communities under
Paragraph 32(iii).WT/CTE/M/34
Page 11
proposal made it very difficult for Australia to see how to do any justice to a proper discussion of the
issues it raised.  In terms of whether this was the right time and place for such a proposal, Australia
was concerned that the EC proposal had the potential to duplicate work underway in other fora, in
particular in the TBT Committee.  Australia drew Members' attention to the labelling learning event
scheduled after Cancún.12  Australia was not quite sure how the two activities would relate to one
another.  Australia's view was that the TBT Co mmittee was the appropriate forum to discuss issues
relating to labelling.
60. Concerning the substance of the proposal, Australia noted its focus on voluntary eco-labelling
schemes.  Australia questioned, however, the suggestion that this focus be narrowed to LCA;
especially since many Members in the CTE, including Australia and the Philippines, had raised
concerns about the meaning and implications of LCA.  Australia noted the comment at the end of the
proposal that the work programme was without prejudice to other issues, including mandatorylabelling;  This was not particularly reassuring.  Australia also had some questions about the reference
to paragraph 15 of the WSSD Plan of Implementation
13 on sustainable consumption and production
patterns, which referred, in fact, to voluntary, effective, transparent, verifiable, non-misleading and
non-discriminatory consumer information tools.  Any study, in Australia's view, that was referenced
to the WSSD Plan of Implementation would therefore need to look at consumer information tools as a
whole rather than just labelling alone.  Australia had listened to the introduction by the
European Communities on how its proposal corresponded to the needs of the market-place and
believed that Members needed to look at it in a much more holistic fashion, including other consumer
information tools.
61. The proposal made certain assumptions which Australia questioned.  For example, the
proposal opened with the words "in order to enhance the mutual supportiveness of trade, environment
and development policies ...".  This assumed that eco-labelling schemes achieved environmental
objectives and assisted Members' trading based on their comparative advantage.  Australia considered
that there was a need to examine whether this wa s in fact the case before embarking on such a work
program.  The wording in paragraph 3 of the proposal, which read: "in view of the role of voluntaryeco-labelling schemes as market-based tools to promote more sustainable production and
consumption patterns", also made assumptions.  The role of these schemes needed to be distinguished
from their objectives; and other fora were analysing whether the role that these schemes were playing
in reality matched their objectives.  This same assumption was made in sub-paragraph (i) of the paper.
Concerning the suggestion, contained in sub-paragraph (i), that the CTE aim at identifying
instruments to facilitate applications for eco-labe ls from companies located in developing countries,
Australia noted that the TBT Agreement had obligations in relation to the development andimplementation of standards  (Code of Good Prac tice for the Preparation, Adoption and Application
of Standards, Annex 3 of the TBT Agreement).  Therefore, Australia questioned whether the EC
paper was proposing to duplicate work which was taking place elsewhere.  Australia would continue
to examine the more specific proposals made in sub-paragraphs (ii), (iii) and (iv).  Australia's initial
thoughts were that there were some interesting suggestions but there was a need to avoid duplicationwith work that was going on elsewhere.
62. In conclusion, Australia's initial reaction to the proposal for three dedicated meetings was that
this might be going too far on the specifics before there having been an opportunity to discuss the
proposal in detail.  Moreover, it was not clear to Australia why there should be three meetings on this
issue and how this would match with work under the other areas of paragraph 32.
63. The representative of Canada found the European Communities' proposal useful and
constructive for the work in the CTE on voluntary eco-labelling programs.  Whether or not the CTE
received further direction from Ministers at Cancún on this item, Canada believed this submission
                                                     
12 The TBT learning event on labelling will held on 21-22 October 2003.
13 See WT/COMTD/W/106/Rev.1, WT/CTE/W/220/Rev.1, 20 December 2002, "Report of the World Summit on Sustainable
Development", Note by the Secretariat, Revision.WT/CTE/M/34
Page 12
could be a useful basis for discussion in the CTE after Cancún, and noted that the proposed work was
focussed on voluntary eco-labelling programs without prejudice to other types of environmental
labelling programs.  Canada also supported ongoing work in the TBT Committee to develop a
program for a learning event on labelling and believed that the work in the TBT Committee and in the
CTE could and should be complementary and mutually beneficial.  However, Canada noted that there
did not seem to be a proposal for a focus on eco-labelling in the TBT learning event.  Therefore, those
delegations interested in this issue should push on that item.  Labelling fell under the disciplines of the
TBT Agreement and Canada continued to encourage a dialogue between the CTE and the
TBT Committee, including on voluntary schemes.  Canada had one specific comment on sub-
paragraph (ii) of the European Communities' proposal:  all Members, not just developing countries,
would benefit from the fullest possible access to the definition and operation of such schemes.
Finally, Canada drew Members' attention to its communication on labelling14, which had been
previously circulated in the TBT Committee.  Since this document was discussed at a previous
meeting of the CTE, Canada had requested the Secretariat to circulate it in the CTE.
64. The representative of Brazil considered that the EC proposal presented an unnecessary
duplication of work conducted in the TBT Committee.  Brazil stressed that the TBT Committee had
agreed on a learning event on labelling to be held in October 2003.  This event would be theappropriate moment to discuss and to enhance understanding on the issue of labelling.  Moreover,
Brazil's position was that the TBT Agreement al ready encompassed labelling for environmental
purposes.  Brazil reiterated its position that it did not favour recommendations to be presented to
Ministers in Cancún.  On the proposal itself, Brazil could not agree to three dedicated sessions in the
CTE;  it was not clear to Brazil why labelling should be treated differently in relation to other itemsunder paragraph 32, such as the relation between the TRIPS Agreement and the CBD.  Regarding the
sub-paragraphs of the proposal, Brazil was still considering them but its comments would be in line
with those of the Philippines and Australia.
65. The representative of Switzerland entirely supported the EC proposed recommendation.  In
light of the increasing number of initiatives on eco-labelling, and the trade-related aspects of these,
Switzerland believed that it was essential to continue the dialogue, particularly on LCA.  Devoting a
number of meetings to this subject was a good way of ensuring this.  Switzerland was also of the view
that the elements provided by the European Communities for the work programme were relevant,
particularly in terms of the environmental dimension of eco-labelling.  There was room to find
solutions to the difficulties and needs faced by developing countries.  Moreover, there was a need to
encourage transparency, cooperation and coordination at different levels and between different
WTO Committees, as well as with other international organizations.  This would enable Members tobenefit from the expertise available and avoid duplication.  As suggested by the European
Communities, Switzerland agreed that efforts be focussed for the time being on voluntary
eco-labelling, which today represented the major part of eco-labelling initiatives.  This would not,
however, prejudge possible discussions in the future on mandatory eco-labelling.
66. The representative of Thailand agreed with the statements made by the Philippines, Australia
and Brazil.  Thailand did not see the need for Ministers to take a decision on this issue considering
their heavy workload and that this issue was in any case on the agenda of the CTE.  Thailand agreed
with Australia on the need to avoid duplicating work taking place in the TBT Committee;  it was the
TBT Committee that had the expertise and the competence to discuss eco-labelling as a whole.  In
addition, there was to be a TBT workshop on the subject and Members could therefore wait for theresult of that event.  Thailand nevertheless saw merit in the proposal of the European Communities in
respect of sub-paragraph (iv) on mutual recognition and equivalency agreement for eco-labelling
schemes.
                                                     
14 WT/CTE/W/229, 23 June 2003 "Labelling and Requirements of the Agreement on Technical Barriers to Trade (TBT):
Framework for Informal, Structured Discussions", Communication from Canada. This document was originally circulated in the
TBT Committee under the symbol G/TBT/W/174/Rev.1.WT/CTE/M/34
Page 13
67. The representative of China stressed the need for more time to consider the implications of
the EC proposal, particularly for developing countries, before giving an official position on the
proposal.  It was noted that eco-labelling was a co mplex issue which had been discussed at length.
The issue was also related to the work of the TBT Committee, the Committee on Agriculture as well
as the Committee on Trade and Development (CTD).  Moreover, there was some relevance to thework of UNEP and ISO.  China further stressed that the workload in the area of trade and
environment was already very heavy and that it was not appropriate to add to it if Members wanted to
complete the negotiations by 1 January 2005.  The proposals put forward in the context of the CTE
Special Session also needed to be considered.  Cons idering the above, the decision to put this issue to
Ministers was premature.
68. The representative of Hong Kong, China shared a number of concerns expressed by
the Philippines, Australia, Brazil and Thailand namely:  (i) the duplication of work with the
TBT Committee (which was the appropriate forum to di scuss the issue);  (ii) the LCA approach;  and,
(iii) the need for dedicated sessions since the CTE had already been entrusted by Ministers in Doha to
address this issue under paragraph 32.
69. The representative of Cuba indicated that there was no reason for the debate on labelling to be
individualised in dedicated sessions.  There were other fora to deal with these issues and, in any case,
it was already on the agenda.  Like others, Cuba considered that such an approach was an unnecessary
duplication of work.  Moreover, Cuba was concerned with the LCA concept and preferred that this
type of analysis was not undertaken.  Cuba stressed the difficulties small delegations had with respect
to the burden of work.  The proposal to have dedicated sessions would mean an additional burden for
Cuba.  Therefore, Cuba supported those de legations who were against forwarding the
recommendation to Cancún.
70. The representative of the United States noted that since this proposal was tabled very late,
Members could not expect to reach a consensus on any possible recommendation of this nature at the
current meeting.  A number of other delegations, including Australia, the Philippines, and Brazil, had
made points that reflected the United States' fundamental view on these issues and which theUnited States had also expressed in previous di scussions under paragraph 32.  The United States
believed that eco-labelling would be most appropriately and meaningfully addressed in the
TBT Committee, particularly in the context of the Third Triennial Review, which was currently
underway.  There were no particular  characteristics of eco-labelling, including their potential trade
restrictiveness, that were not present in other types of labelling programs and that raised concerns that
could not be adequately addressed under the disciplines of the TBT Agreement.  In fact, continuing
attempts to single out eco-labelling beyond the Doha mandate, could only further contribute to themisperception that these schemes were somehow unique.  Like other delegations, the United States
was concerned by the focus on LCA in voluntary labelling schemes.  The United States was also
surprised by the ambitiousness of the suggested three  dedicated sessions.  Finally, the United States
was concerned with the expectation that the CTE would intensify work on this issue and even
anticipate recommendations for more future action rather than wrapping up this work underparagraph 32(iii).
71. The representative of Japan considered the European Communities' proposal to be a good
one.  The issue was of high interest to the society, industry and consumers.  As had been pointed out
by Japan on a number of occasions, consumers' and industries' concerns on environmentally friendly
products were increasing and this tendency was not limited to developed countries.  For reasons ofmarket share, it was increasingly important for developing countries.  Therefore, the CTE needed to
continue the discussion.  Japan wondered, as other delegations had, why the European Communities
highlighted only eco-labelling schemes based on LCA.   Japan's industry had questioned – with regard
to paragraph 32(iii) – the scope of the term "labelling requirements for environmental purposes".  The
industry was concerned with the relationship of WTO rules with Type II eco-labelling schemes.  Withregard to the proposed dedicated sessions, while Japan considered that such session could be useful,WT/CTE/M/34
Page 14
three such sessions could be too burdensome for the CTE.  One possible idea would be to have
regional dedicated seminars since, as pointed out by the European Communities, the major
beneficiaries were developing countries.
72. The representative of the Czech Republic fully supported the EC proposal to organize
dedicated sessions and engage in a positive dialogue among Members on voluntary eco-labelling
schemes.  This would be a useful first step to reach improvement on labelling requirements for
environmental purposes – which was in the interest of all Members.  Further, while the
Czech Republic agreed that the TBT Committee had technical expertise on the subject matter, he had
a problem in limiting the discussion of labelling for environmental  purposes to that Committee.
73. The representative of Indonesia noted that after hearing statements from many delegations,
including the Philippines, Thailand, Australia, Hong Kong China, Brazil, Cuba and the United States,
it was evident that there was no consensus to take action in the CTE.  The TBT Committee was theright Committee to address this issue.  Indonesia stressed the need to avoid duplication.  As had been
mentioned by Thailand, there were various activities undertaken in the TBT Committee on labelling
which would be appropriate enough.  Moreover, the work burden for small delegations needed to be
considered.  On substance, there had been no conclusion on the discussion of the issue of LCA or
PPMs;  much needed to be done and Members we re not likely to come up with any recommendation
referring to this issue.  On the role of volunt ary eco-labelling schemes as a market-based tool to
promote more sustainable production and consumption patterns, Indonesia understood that the issue
was quite important in line with what was stipulated in Agenda 21 and the WSSD Plan of
Implementation.  However, Indonesia stressed that voluntary eco-labelling schemes were not the only
tools to promote sustainable production and consump tion patterns, there were other ways to do this.
Indonesia referred, for instance, to the question of adequate financing.   As Indonesia's concerns on
the issue of eco-labelling were clear, and had already been reflected, the representative of Indonesia
stressed the fact that there was no need for Ministers to address the issue if consensus had not been
reached.
74. The representative of Poland was of the opinion that the EC proposal was realistic and well
drafted and he shared Canada's view that it was useful and constructive.  The issue of eco-labelling
was very important and the discussion on this topic needed to continue.  Poland considered that this
proposal was a good and proper way to fulfil the CTE's obligation under the Doha mandate.
75. The representative of Malaysia shared the concerns of many delegations including the
Philippines, Australia, Thailand, Brazil, Indonesia and Cuba on the EC proposal.  Malaysia did not
support any recommendation to Ministers regarding dedicated sessions as suggested by the
European Communities.  Like other delegations, Malaysia questioned the basis for an approachfocused on LCA and, like the Philippines, noted the links to non-product related PPMs.  Labelling
requirements, even those for environmental purposes, were part of technical regulations and
standards;  if there were problems with the implementation of environment labelling schemes, it
would be preferable to deal with them under issues related to transparency, conformity assessment
and good regulatory practices.  These were being adequately dealt with in the TBT Committee andduplication needed to be avoided.  Malaysia agreed with the United States that the work in the CTE
should be wrapped up in this respect.
76. The representative of Cyprus expressed his delegation full support for the EC proposal.
77. The representative of Nicaragua supported what Brazil, Cuba, the Philippines, China and the
United States had stated.  Nicaragua believed that the TBT Committee was the appropriate forum to
deal with eco-labelling;  duplication needed to be avoided.  Regarding dedicated sessions, Nicaragua
generally felt that it was important to disseminate information but did not believe that it was
appropriate to have these sessions as part of the programme of work of the CTE.  Regarding the focus
on LCA, Nicaragua considered that this issue needed to be approached in a way which would allowWT/CTE/M/34
Page 15
for a broad coverage of the interests of all WTO Members.  Finally, Nicaragua did not favour that this
issue be tackled specifically within the CTE.  If that were to be the case, it would also be important to
address the issue of the use of criteria other than the LCA, which were more comprehensive, and
which also took into account the different approaches that already existed.
78. The representative of India, considering the views expressed by India and other delegations
on the legal status of voluntary eco-labelling schemes based on LCA, was concerned about the focus
on such schemes.  India was also concerned with the proposal for dedicated sessions.  There were
many different sessions in the CTE:  there was the "regular session", the "special session", the
"information exchange sessions", and now a proposal for "dedicated sessions".  It could be difficult
for a number of delegations to cover all these sessions.  The first element proposed by the
European Communities was about fostering trade and environmentally friendly products from
developing countries.  India would welcom e further work by UNCTAD, UNEP and other
organizations on this issue.  The second element was about technical assistance to developing
countries, designing eco-labelling schemes, participation in international standardization process,
information about eco-labelling schemes and difficulties in applying eco-labels in the export market.
Again, India welcomed the continuation of this ty pe of work in UNCTAD and other organizations
such as UNEP and the International Trade Centre (ITC).  However, India did not see what role couldbe played by the CTE in this regard.  The third element proposed by the European Communities
related to ensuring that eco-labelling schemes were developed and administered in a non-protectionist,
non-discriminatory, transparent and participatory way,  in particular examining the ways to increase
transparency and publicity of schemes.  This was an important issue.  India recalled that the
TBT Committee had taken a decision about notification of voluntary schemes during its first triennialreview.  That decision had played an important role in bringing transparency in eco-labelling
schemes.  India believed that the TBT Committee could continue to discuss this issue.  The fourth
element was about mutual recognition and equivalency agreements.  India had also been highlighting
this issue for quite some time.  However, being vo luntary schemes, the work on this issue had mainly
to be done at the bilateral level.  Nevertheless,  the TBT Committee could further discuss this issue.The European Communities had raised important i ssues with regard to voluntary eco-labelling
schemes.  India believed that the TBT Committee could further work on this and there was no need
for any duplicity of work with the CTE in this regard.  India did not think that there was a need for the
CTE to make a recommendation on these issues to the Ministerial Conference or to seek political
guidance from Ministers.
79. The representative of Korea was sympathetic to the EC proposal and believed that CTE work
needed to add value to the relevant ongoing work  in the WTO.  The relationship between the LCA
and the non-product related PPMs was not clear and there were concerns related to this approach.
Korea understood that these concerns arose from the assumption that adopting the EC proposal might
lead to a de facto  recognition by the WTO on the non-product related PPM principle.  In light of this,
and as a practical step forward, Korea suggested that the concept of LCA be deleted from the
EC proposal.  Korea was also of the view that it would be much easier to have a consensus in the CTEif the proposal was simplified, thus providing only general direction to the work on voluntary
labelling.  Finally, Korea emphasized the importance of transparency, mutual recognition and capacity
building in respect of labelling schemes in developing countries.
80. The representative of Ecuador expressed concern on the scope of a life-cycle based approach.
Ecuador did not understand the reason for focussing on eco-labelling as the other paragraph 32 issues
might be of equal importance to a number of countries.  Therefore, Ecuador considered that it was
inappropriate to forward this as a recommendation to Ministers in Cancún.
81. The representative of Egypt said his concerns had been reflected by other delegations.  For
Egypt, this ongoing debate was very much related to the Canadian proposal on the review of the
CTE's work program.  Egypt considered that when starting that exercise, this item should be the firstone to be re-visited, deleted and conferred totally to the TBT Committee.WT/CTE/M/34
Page 16
82. The representative of Colombia was of the view that the proposal would lead to a duplication
of work with the TBT Committee.  For small delegations from developing countries, like Colombia,
this would also mean a duplication of work and effort for the officials concerned.  Therefore,
Colombia did not think that it was necessary to devote three sessions to this issue and was not able to
support this recommendation to Ministers.
83. The representative of Canada pointed out that there was no discussion in the TBT Committee
on eco-labelling, although Members kept talking about overlap.  Even when Members could have had
it on the agenda of the TBT learning event, it was not done.  Therefore, Members needed not to
worry; it was a CTE issue.  The TBT Committee did not want to take it away from the CTE.  In fact,
the TBT Committee should be helping the CTE, but it was not.  Canada believed that among all items
on the CTE agenda it was the least likely item to come off it.
84. The representative of Argentina shared many of the concerns expressed by other delegations,
including the Philippines, namely that it was not advisable to forward a recommendation from
Ministers in Cancún nor was it possible to dedicate three sessions to the detriment of other points in
paragraph 32.  Argentina considered that the balance needed to be maintained.  Concerning the
concept of LCA, Argentina had major concerns and would need time to consider it as it involved
crucial issues in international trade, such as elemen ts not related to the characteristics of the product.
In response to Canada's statement, Argentina stressed that what the TBT Committee had agreed to
was an informal meeting, a learning event, to addr ess all the issues connected to labelling, including
environmental labelling.  There was nothing that precluded the subject of environmental labelling to
be included in the learning event.  This event was organized on the basis of proposals from Members.
Members had decided and discussed which was the most appropriate forum for the discussion of thisissue and Argentina shared the view of many delegations that the TBT Committee was the best forum.
Discussions in the TBT Committee would be much more productive and enlightening than if they
were held in the CTE.  Similarly, concerning paragraph 32(ii) and the relationship between the CBD
and the TRIPS Agreement, many delegations thought that this issue would be best addressed in the
TRIPS Council.
85. The representative of Hungary  did not consider that Members discussing eco-labelling in the
CTE was a duplication of work.  Hungary had a pr oblem with the association of environmental
purposes with pure technical understanding of technical barriers to trade.  Hungary welcomed the
EC submission and supported all items and issues included in it.
86. The representative of Mexico, reacting to Canada's statement, noted that the issue of
eco-labelling was an issue of interest to all Members.   There was an interest to ensure that these types
of measures were not translated in technical barriers to trade, and that Members complied with therules of transparency.  Several delegations had referred to the Third Triennial Review of that
Agreement.  If no formal contribution had been made in the TBT Committee, this was the full
responsibility of Members.  Therefore, the fact that the issue had not been considered specifically was
really dependent on Members.  Eco-labelling was part of the general subject of labelling, which was
part of technical regulations.  Mexico felt that there should be no distinction between technicalregulations on labelling and labelling for safety or other concerns.  Therefore, the TBT Committee
and the TBT Agreement granted sufficient space to address this issue and to avoid that any technical
regulation - not just eco-labelling regulations - constituted unnecessary barriers to international trade.
On the learning event, Mexico considered that there was the possibility of approaching the subject of
environmental labelling and addressing it.  In fact, there were a number of examples in theprogramme of this event which would make it possible to address some of the concerns of Members
in this respect.  In conclusion, Mexico believed that there should not be an overlap between the work
of both Committees.
87. The representative of the European Communitie s recalled that only two weeks earlier the
European Commission had received a letter from European business asking for negotiations on thisWT/CTE/M/34
Page 17
very subject.  Therefore, this was not something that the European Communities had simply invented
- it was an issue of importance to the business commun ity.  It seemed that all delegations needed a bit
more time to reflect on what was actually proposed.  The representative of the European Communities
questioned whether the proposal was really something which was so incompatible with Members'
own agenda.  He failed to understand how delegations  could argue that this issue needed to be taken
off the agenda if, at the same time, Ministers in Doha had agreed to give a particular focus to it.  It
was not without reason that this issue had been singled out.  Some delegations even failed to see why
this issue was unique.  However, there certainly seemed to be a demand, formulated in the
Doha Declaration, to look at this in a specific way, and that was exactly what was proposed:  to focus
the CTE's work on this particular item.  The European Communities did not understand how it could
be claimed that this was a duplication of work since delegations were opposed to an eco-labelling
window in the TBT learning event and, as Canada had pointed out, this would not be a main focus of
the Triennial Review.  For the European Communities, those delegations that did not want to discuss
this issue in the CTE were in a sort of negative coherence.  In the CTE, Members had a mandate,
which they needed to fulfil.
88. On the Philippine point, to the effect that  the European Communities were intruding into
purely private initiatives, there was a slight misunderstanding.  It was not so that all voluntarylabelling initiatives were private;  and even if th ey were private, the TBT Agreement had something to
say about the operation of private labelling schemes.  There was also a question of what was meant by
the word "instruments" in the first sub-paragraph.  Th is could be, for example, an instrument to foster
participation of developing countries by giving them reduced fees for certification or access to labels.
Australia had said that this issue should be de alt with in the TBT Committee.  However, the
European Communities recalled that Australia was one of the delegations that did not want to address
this topic in the TBT Committee either.  Regardin g the WSSD focus on consumer information tools,
the European Communities would not be against further expansion of what was covered.  But as far as
could be seen on the market, it was basically labelling which was assuming that role, but there might
be other means.
89. The European Communities welcomed the comments from Canada, which had put some of
the points into perspective.  The European Communities agreed that it was not only developing
countries who would benefit from the optimal operation of some of these schemes.  There were a
number of comments from Brazil and others about singling out this issue from labelling.  The
European Communities believed that the mandate spoke for itself;  moreover, if one looked at
notifications, it was particularly interesting to see how many related to labelling as such and how
many related to eco-labelling.  It showed that there was a real demand for this particular item.  Thequestion of LCA and whether that was an adequate focus of work had been put forward by some
delegations.  The European Communities drew Members' attention to a GEN document
15 which
actually did look at the meaning of LCA and what criteria were usually used to define LCA.  This
preliminary study showed that only 10 per cent of the criteria were actually non-product related
PPMs.  LCA was hence broader and that was the reason why a debate was needed.  This was not justthe "back door" for PPMs as some delegations feared.
90. The European Communities welcomed the comments from Japan, and in particular the idea to
use regional seminars as a way to focus on the window of capacity building.  Regional seminars were
sometimes more efficient than bringing people to Geneva, or bilateral work.  Indonesia made some
comments about linking this to financing and the WSSD in a broader context - a point which was well
taken.  On technical assistance, the European Communities concurred with India which had
mentioned work going on in UNEP and other organiza tions.  However, these organizations could not
do the job on their own.  What the trade community wanted was that the WTO, which was the only
organization that administered rules, had a say in that discussion.
                                                     
15 Footnote 9, supra .WT/CTE/M/34
Page 18
91. The European Communities recalled that Australia, for example, had gone through great
trouble to bring to Members' attention a APEC wo rkshop in order to make Members aware of the fact
that there was an agreement among countries on a Chairman's statement, which excluded negotiations
on eco-labelling.  The European Communities had, in fact, lowered its ambition and was asking for
something rather modest, i.e., a number of dedicated sessions.  For those who believed that there weretoo many different kinds of sessions, it was pointed out that in other Committees, there were
dedicated sessions on top of special sessions and regular sessions.  This was therefore nothing new.
The European Communities had tried to take into ac count many of these concerns by actually going
back from the position it held before the Doha Ministerial Conference where it wanted a number of
issues to be negotiated , including eco-labelling.  The result of Doha was an enhanced work program.
In other WTO Committees, the European Communities had constantly reacted quite positively to
similarly focused work.  The European Communities appealed to other delegations to step back andsee how all this fitted into a broader context and then reconsider whether the way forward proposed
by the European Communities was not a way to please everybody.
92. The representative of Australia reacted to the comments from the European Communities and
those of Canada on the issue of the TBT learning event.  Australia's understanding was that it was up
to Members to bring forward case studies if they wanted to do so.  In fact, one or two delegations
were planning to put forward case studies which included eco-labelling.  Australia believed that the
suggestion that there was an unwillingness to disc uss this issue in the TBT Committee was incorrect.
Moreover, the labelling learning event was the most appropriate way to look at all the issues that
arose.  It was up to Members to bring issues forward.
93. The representative of the United States wished to follow-up on a point made with respect to
the Doha Ministerial mandate and the direction to Members to discuss these issues in a focussed
manner.  The representative of the United States sensed a suggestion by the European Communities
that Members might not have followed through with that mandate.  He wished to clarify that in the
view of the United States, Members had been proceeding with that mandate.  While the mandate was
associated with particular demandeurs, the US delegation had taken an active part in the discussion.But this was relatively difficult because papers from some of the demandeurs themselves arrived late.
However, the continuing references to the TBT Committee and comments that these were issues that
were most appropriately addressed in that forum and under that Agreement reflected the conviction of
the United States.  In fact, it seemed that many other delegations were similarly of the view that there
were no unique characteristics to eco-labelling that would suggest a particular approach, or would
suggest that the TBT Agreement was not sufficient .  While the United States had come into this
discussion with an open mind and a readiness to be convinced that there might be some uniquecharacteristics, there was certainly no commitment in the Doha Declaration that Members should be
so convinced.  And, as a result of these discussions, the United States continued to question whether
there were characteristics of eco-labelling that warranted intensification of the work program beyond
the Fifth Ministerial.
94. The representative of Egypt noted that Members did have a clear mandate from Ministers to
discuss this issue in paragraph 32.  But whether negotiating under paragraph 31, or discussing under
paragraph 32, this did not specifically mean that the best place to deal with the issue was the CTE –
either in special or regular session.  For example, in the case of environmental goods and services,
Members had agreed, in the Special Session, to confer the topic to the services negotiations and to the
non-agricultural market access negotiations.
95. The representative of the European Communities acknowledged that his delegation was quite
late in submitting the proposal and hoped that when Members had had more time to consider, that
their reflection would be more nuanced.  On the mandate, the European Communities pointed out that
there was a big difference between paragraph 31 – where there was no Committee ascribed to doing a
negotiation on environmental goods and services – and the instruction in paragraph 32 where the CTEhad explicit instructions.WT/CTE/M/34
Page 19
96. The Chairman concluded the item by noting that there was no consensus on forwarding the
proposed recommendation by the European Communities to Ministers in Cancún.
E. OTHER ITEMS
97. No developments have been reported with regard to this matter.
III. PARAGRAPH 33
98. No developments have been reported with regard to this matter.
IV. PARAGRAPH 51
99. No developments have been reported with regard to this matter.
V. ADOPTION OF THE CANCÚN REPORT
100. The Chairman recalled that the process to develop this report had been a long one.  It started
even before his time, under the Chairmanship of Ambassador Demiralp, of Turkey.  Members had had
the opportunity to discuss this report at several m eetings and comment orally, as well as in writing.
More recently, on 30 June 2003, the Chairman held an informal meeting during which Members had
the possibility to express their concerns and comments on a second draft.  These comments had been
given full consideration.  Therefore, in the Chairman 's view, the final version reflected the appropriate
balance of views.  It was entirely factual in content and reflected discussions held under paragraphs 32
and 33 between Doha and the current meeting.  He noted that it was, of course, difficult to makeeverybody perfectly happy.  However, the Chairman believed that there had been enough opportunity
for debate.  In his view, the report, as it currently stood, reflected all concerns in a way which was
carefully balanced.  Therefore, the CTE had now come to the point where the report needed to be
adopted.  With this in mind, the Chairman formally put the report for adoption.
101. The CTE adopted the Report to the 5
th Session of the WTO Ministerial Conference in Cancún
pursuant to paragraphs 32 and 33 of the Doha Ministerial Declaration.  The document was
subsequently circulated as WT/CTE/8.
VI. ADOPTION OF THE REPORT TO THE GENERAL COUNCIL
102. The Chairman noted that in addition to the sp ecific reporting requirement in paragraphs 32
and 33, the CTE, like all other Committees, also had to prepare a report to the General Council.  The
draft of this report was contained in WT/CTE/W/230.  It was basically an update of the CTE's last
Annual Report.  It included one paragraph on each meeting held in 2003.  The Chairman recalled that
at the April 2003 meeting, he had suggested that the Secretariat briefly summarized the CTE Regular's
activities under paragraph 51 in this report.  This was now contained in paragraph 6 of the draft report
to the General Council.  He asked the Secretariat to read out the suggested text of paragraph 5 of the
report (concerning the current meeting) and he then put it to Members for adoption.
103. The representative of Australia agreed that this report represented a factual account of the
activities carried out by the CTE in 2003.  However, Australia had one comment on paragraph 6 of
this draft report concerning the sectoral briefings by the Secretariat, and in particular on agriculture.
Australia noted that the second sentence of this summary of the briefing on Agriculture paraphrased a
sentence used by the Secretariat in paragraph 5 of its presentation on Agriculture.16  This sentence in
the Secretariat's presentation read: "the debate has been about what are the appropriate and effectiveinstruments to achieve these objectives, and it is in this regard that there are differing views".
                                                     
16 WT/CTE/GEN/8, 18 February 2003, "Environmental Issues Raised in the Agriculture Negotiations", Statement by
Mr. Frank Wolter  at the Regular Session of the Committee on Trade and Environment of 14 February 2003, Paragraph 51.WT/CTE/M/34
Page 20
However, the summary in the draft report, unlike the presentation, failed to put this sentence into
context.  The Secretariat's presentation went on to discuss the differing views about the environmental
impact of trade distorting agricultural policies.  The connection between the debate on instruments
and these differing views was clearly spelt out in the conclusion to the presentation by the
Secretariat.17  Thus, Australia wished to add to this summary in paragraph 6 of the report "and it is in
this regard that there are differing views about the environmental impact of trade distorting agriculture
policies".  This picked up language directly from paragraphs 5 and 6 of the Secretariat's presentation
on Agriculture.18  Australia raised this issue simply to ensu re that the report reflected more accurately
the Secretariat's presentation and hoped this small change would be acceptable to Members.
104. The representative of the European Communities found the report, as it stood, agreeable.  The
European Communities noted that in these reports there seemed sometimes to be a slight
misunderstanding about how many delegations were represented when the European Communitiesspoke.  It was not "one Member", but rather 15 Members.  While the European Communities did not
want to re-open the text for fear of re-opening the debate, the European Communities wished to make
the comment for the record.  This might be a soluti on for Australia, i.e. to simply ensure that its
comment was on the record.
105. The representative of the United States supported the change proposed by Australia;  it was
quite a useful point, which clearly provided a more accurate context for those discussions.  However,
the United States said that the section on paragraph 51 stood out from the rest of the text of the draft
report, which was sequential in describing meetings.  The United States would be content as an
alternative to have a further distilled version of this paragraph to simply note that Secretariat reports
were provided.  Therefore, the United States could either go with Australia's suggestion, which didseem to reflect more accurately those discussions, or alternatively go for a reference to paragraph 51
that was simply mentioning those particular documents.
106. The representative of Brazil made a minor suggestion on the reference to paragraph 32 to the
effect that the whole title of paragraph 32(i) and 32(ii) be spelt out.  Moreover, Brazil supported
Australia' proposal on agriculture.  The United Stat es had also made a very useful suggestion and
Brazil would be flexible on that.
107. The representative of Korea was not in a position to accept Australia's proposal on agriculture
for the same reason stated by the European Communities.  Korea supported the text as it was.
108. The representative of Colombia considered that the report submitted by the
Agriculture Division was rather well balanced since it presented the different views that were being
negotiated.  Therefore, Colombia supported the proposal from Australia to supplement this paragraph.
But Colombia was also flexible on the US proposal to dilute this paragraph even more.
109. The representative of Australia stressed that the proposed language was not meant to be
provocative but more to accurately provide context for what was there.  In the interest of moving
forward, Australia would be happy to take up the suggestion by the United States of merely
referencing the presentations by the Secretariat instead of including the textual summary.
110. The representative of the European Communities considered it a pity to forego an opportunity
to give some flavour of the debate in the report to the General Council.  The European Communities
had argued, like other delegations, for a long time that paragraph 51 should be a substantive part of
the CTE's work.  Since this paragraph only touched upon the environmental aspects of the various
discussions, it was very clear that there was no language of differing views on subsidies in this report.
The purpose, as could be seen from paragraph 6 (b), (c) and (d), was not to rehash the agriculture
                                                     
17 Ibid.
18 Ibid.WT/CTE/M/34
Page 21
negotiations but to highlight the environmental content of the debate.  Therefore, the
European Communities was perfectly happy with the text, and was not in favour of taking out any
substance.
111. The representative of the United States viewed paragraph 51 as very important in terms of the
Doha Mandate and had made that clear throughout the discussions in the CTE.  In fact, the
United States had been frustrated at times that there did not seem to be a similar commitment on the
part of a number of delegations.  That said, paragraph 51 had been selectively treated in terms of the
time that had been devoted to it compared to paragraphs 32 and 33.  Therefore, the United States
believed that it might be best to simply reference these Secretariat reports rather than trying to
selectively take out from those reports.  Moreov er, it would seem to solve an immediate problem
regarding the Australian suggestion without prejudicing in any respect the views of various
delegations on this particular negotiation.
112. The representative of Argentina also considered that paragraph 51 was important and
considered that the Secretariat presentations were well balanced.  Argentina understood that it was
difficult to summarize all sorts of shades of meaning and interpretation.  Argentina believed that the
European Communities was right in the sense that this could perhaps give an idea of what the tone
was.  However, to have an idea of the tone of the report, nothing was better than reading the actual
report.  Therefore, Argentina agreed with the United States' proposal to just reference, and not to open
up the debate on the reports, which had already been submitted and did not arouse any discussion.
113. The representative of Chile supported the US proposal and, as Argentina said, noted that what
was going to be reflected here were reports from Directors of the respective divisions regarding the
debate in particular areas.  Therefore, Chile did not see the need to go into details.  Like theEuropean Communities, the United States and Argentina, Chile felt that paragraph 51 was important.
However, Members had just received reports and had not had a substantive discussion.
114. The representative of Canada indicated that Canada could have taken the report as it was and
could also accept the Australian proposal.  Canada believed that the US approach had merit.
However, by just referring to the documents from the Secretariat, Members would lose the flavour ofthe subsequent discussion;  if that route was followed, there would be a need to make a cross-
reference to the meetings where discussions had taken place.
115. The representative of Thailand gave high importance to paragraph 51 where both the
environment and development aspects of the negotiation were stated.  Thailand did not recall that, in
the CTD, there was a discussion on how to report on this aspect to the General Council.  Thailand
believed that since there was no substantial discussion on this issue in the past, it was more
appropriate, as suggested by the United States, to just quote the reports of the Secretariat.
116. The representative of Chinese Taipei added his voice to the views expressed by Korea, Japan
and the European Communities.
117. The Chairman recalled that Members had agreed to include a few paragraphs on paragraph 51
in his report to the General Council at the last meeting, in April 2003.  The attempted text was simply
a report with some flavour of what was going on elsewhere.  As a compromise text, the Chairmanproposed to strike out the second sentence and replace it by the following text, taken from paragraph 5
of the Agriculture report: "The debate was about what were the appropriate and effective instruments
to achieves these objectives and it was in this regard that there were different views".
19  There were no
objections to this modification.
118. The CTE adopted its Report to the Genera l Council, as contained in WT/CTE/9.
                                                     
19 WT/CTE/GEN/8, op. cit.WT/CTE/M/34
Page 22
VII. OTHER BUSINESS
119. The representative of the European Commun ities drew Members' attention to an event
entitled "A Sustainable Trade Day", which Commissioner Lamy would host on 9 September 2003 in
Cancún.  The objective was to hold a debate on the situation after the WSSD, and following one and a
half years of WTO negotiations.  The seminar would be broader than the Doha Development Agenda,covering issues such as private public partnerships, corporate social responsibility and sustainability
impact assessment.  It would engage policy makers, Ministers, civil society and academia.  The
European Communities encouraged delegations to share this information with their capitals and with
those who had an interest.  On a separate point, the European Communities announced an event
organized by the European Services Forum on the st ate of play on environmental services from the
European industries' point of view.  The event would take place on 8 July 2003 in the WTO.
120. In conclusion of the meeting, the Chairman thanked delegations for their constructive
approach, which had allowed the CTE to adopt two important documents: the mandated report to
Ministers in Cancún on paragraphs 32 and 33 and the CTE's Report to the General Council.  The
report to Cancún was a particularly significant milestone as the last such substantive report was the
Singapore Report (1996).
121. Finally, the Chairman recalled that the next meeting of the CTE Regular would be held on
28-29 October 2003 , followed on 30-31 October by the CTE Special Session.
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