98-3196                                                                                                                                    MORE  
 
 
 
PRESS RELEASE 
 
 
 
          PRESS/TE/025 
          13 August 1998             
WTO COMMITTEE ON TRADE AND THE ENVIRONMENT INVITES MEA  
SECRETARIATS TO INFORMATION SESSION, AND DISCUSSES ITEMS 
RELATED TO THE LINKAGES BETWEEN THE MULTILATERAL 
ENVIRONMENT AND TRADE AGENDAS 
 
 The Committee on Trade and Environment (CTE) met on 23-24 July 1998 under the 
chairmanship of Ambassador C.M. See of Singapore.  
 The CTE invited Secretariats of several mu ltilateral environmental agreements (MEAs) and 
UNEP to an information session to increase Members' awareness of trade-related developments in 
environmental fora.  Members welcomed the MEA pr esentations and background papers prepared for 
this session, which had contributed to an unders tanding of the core environment principles and 
approaches underlying the development of MEAs.  MEA Information Sessions were valuable in 
enhancing domestic polic y coordination on trade and environment issues. 
  In relation to the linkages between the multila teral environment and trade agendas, Members 
focused on four items of the work programme.  There was discussion of the relationship between 
MEAs and the WTO, including with respect to dispute settlement;  the export of domestically 
prohibited goods (DPGs);  and aspects of the WTO Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS), including its relationship to the Convention on Biological Diversity.  New papers were presented on issues relevant to the TRIPS Agreement.   Discussion was also held on eco-labelling, the environmental effects of removing trade distortions and environmental services.  The EC in formed CTE Members of its communication to the 
WTO General Council in July on a high level meeting on trade and environment. 
  This Bulletin summarizes the discussions in the C TE at the July meeting.  Papers referred to 
in this Bulletin can be obtained upon request to the Trade and Environment Division of the WTO 
Secretariat or accessed through the WTO web site. 
TRADE AND ENVIRO NMENT BULLETIN PRESS/TE/025 
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MORE LINKAGES BETWEEN THE MULTILATERAL ENVIRONMENT AND TRADE AGENDAS 
 Items 1& 5: The relationship between the provisions of the multilateral trading system and 
trade measures for environmental pur poses, including those pursuant to 
multilateral environmental agreements;  and the relationship between the 
dispute settlement mechanisms in the multilateral trading system and those 
found in MEAs 
 
 Members welcomed the presentations and backgr ound document prepared for the Information 
Session with multilateral environmental agreements (MEAs).
1  It was important to build on this 
information exchange to enhance domestic coor dination on issues relevant to both WTO and 
environmental negotiations and ag reements.  Knowledge from experi ence gained was an invaluable 
input to the future development of MEAs. This  was illustrated, several Members said, by the 
successful negotiation of the PIC Convention, and th e recent developments in the Basel Convention.  
 Some Members said that the Information Session ha d reinforced the need for trade officials to 
be involved in MEA negotiations, and for greater invol vement of environment officials in the CTE.  
As most WTO Members were also Parties to ke y MEAs, a coherent appr oach should be taken by 
national officials in both fora.  Although particip ation from environmental agencies in the CTE was 
increasing, the US and others felt that improvement s could be made in this regard.  Much more 
needed to be done on the MEA side of the equation, the US said.  
 Reference was made to the importance of invol ving trade officials in the negotiations on a 
Biosafety Protocol to the Convention on Biological Diversity, given its potentially significant trade 
effects.  Australia said the key issue would be to ensure that importing Parties had sufficient 
information to focus resources on areas of the greatest environmental risk, while not providing additional trade barriers (or pretexts for trade restrictions), nor discouraging safe biotechnology development. 
 Several Members, including Argentina, Ca nada, Japan and others, referred to UNEP's 
statement (WT/CTE/W/94).  Although it may be di fficult for the CTE to respond to all of the 
questions posed by UNEP, Argentina said a possible response would be to define the measures which 
were clearly WTO-incompatible.  Brazil felt that if the MEA measure were the outcome of a consensus-based multilateral effort, then it should be  considered WTO-consistent as it was probably 
part of a specific package of measures necessary to address a particular environmental concern. 
 Many Members, including Norway, Turkey, and others, said that the development of MEAs 
as an effective way of solving global environmen tal problems would likely reduce the resort to 
unilateral and extrajurisdictional measures.  A numb er of WTO panels attached importance to whether 
international cooperation had been sought, for exam ple through an MEA, before a trade restrictive 
measure was used. 
 The EC commented that after having heard the MEA presentations, it was relevant to ask why 
the MEA issue had been so divisive.  Although th e general atmosphere in the CTE had improved, it 
was also clear that there had been a certain geographical  divide in the deliberations prior to Singapore.  
                                                      
1 The following Secretariats contributed background papers to the MEA Information Session:  UNEP 
(WT/CTE/W/94);  the UN Framework Convention on C limate Change (WT/CTE/W/74 );  UNEP Chemicals on 
the Convention on the Prior Informed Consent (PIC) Proc edure for Certain Hazardous Chemicals and Pesticides 
in International Trade and the negotiations for a global treaty on Persistent Organic Pollutants (POPs) 
(WT/CTE/W/91);  the UN Economic Commission for Europe on its POPs Protocol (WT/CTE/W/88);  the Basel 
Convention on the Transboundary Movement of Hazardous Wastes and Their Disposal (WT/CTE/W/90);  the Convention on Biological Diversity (WT/CTE/W/92);  the International Tropical Timber Organization 
(WT/CTE/W/89);  the Intergovernmental Forum on Forests (WT/CTE/W/84);  and the International 
Commission on the Conservation of Atlantic Tunas (WT/CTE/W/87).  PRESS/TE/025 
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MORE This divide might still be having an impact on the CTE's work on MEAs.  There was a sense, the EC 
said, that positions in the CTE were determined by the perception that trade provisions in MEAs were 
detrimental to developing countries.  In fact, th e EC and the US said, several trade-related MEAs, 
including the Basel Convention, the PIC Conven tion and the Biosafety Protocol responded to 
legitimate concerns of developing countries.  
 Noting that trade measures could have a role to play in environmental protection, Brazil and 
others said that these measures had varying effects in  different developing count ries.  In this regard, 
while the ban on transboundary movements of hazar dous wastes was useful in the context of some 
developing countries, it could be detrimental to othe rs which had the capacity to manage waste.  The 
fact that this specific measure was the result of  a consensus-based multilateral process made it easier 
from the Brazilian perspective. 
 Since the CTE has been established, and par ticularly in the lead up to the 1996 Singapore 
Ministerial, the relationship between the WTO a nd MEAs has been extensively discussed.  The 1996 
Report of the CTE the Singapore Ministerial Conferen ce sets out the wide range of views and papers 
contributed by Members on ways to address this issue.  Several Members commented on this relationship with reference to the approaches which have been put forward in the CTE. 
 One point which was noted by Members who s poke on this item was that WTO rules already 
provide considerable scope for accommodating the u se of trade measures necessary for environmental 
purposes.  This has been confirmed by the inte rpretation given to Article XX in WTO dispute 
settlement.  WTO rules have not prevented the formulation and implementation of appropriate 
multilateral measures to promote environmental pr otection, including where they encompass trade 
measures, as has been demonstrated  by the absence of any challenge to trade measures in MEAs.   
 Switzerland felt that doubts remained, however, in the mind of negotiators when they were 
considering if it were necessary to introduce provision s to authorize Parties to take trade measures to 
meet MEA objectives.  These doubts should be addressed.  
 Canada said its views on item 1 were based on the framework it had set out in June 1996 
advocating that the WTO develop a "principles and cr iteria" approach to MEAs to guide international 
negotiators contemplating the use of trade measur es in an MEA.  Canada had proposed the following 
qualifying principles for MEAs:  (i) the MEA is open to all countries;  (ii) the MEA reflects broad-based international support;  (iii)  the provisions specifically authorizing trade measures should be 
drafted as precisely as possible;  (iv) trade with non-parties to the MEA is permitted on the same basis 
as Parties when non-parties provide environmental prot ection equivalent to that required by the MEA;  
and (v) negotiators have explicitly considered the criteria developed by the WTO for the use of trade 
measures in MEAs.   
 Canada had also suggested that MEA negotiators  use the following criteria in determining the 
need for trade provisions:  (i) trade measures are chosen only when effective and when other 
alternative measures are considered  to be ineffective in achieving the environmental objective, or 
have proven to be ineffective without accompanying  trade measures;  (ii) trade measures should not 
be more trade-restrictive than necessary to achieve  the environmental objective concerned;  and (iii) 
the trade measures chosen should not constitute arbitr ary or unjustifiable discrimination.  Canada had 
used these guidelines in developing its  negotiating positions for new MEAs.  
 After the Singapore Ministerial Conference, Canada said, the CTE had reflected further on the 
means that a formal accommodation of MEA trade measures could take.  The practical issue of how to accommodate MEA trade measures without passi ng judgement, through application of some 
principles and criteria, arose in all scenarios.  This “passing judgement” aspect was not acceptable 
from an environmental policy perspective, given the im plicit hierarchy of international legal systems.  
From a trade policy perspective, WTO Members we re unlikely to renounce formally their WTO rights PRESS/TE/025 
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MORE in the context of any such obligation without some form of “passing judgement”.  The spectrum of 
options ranged from the waiver, or explicit passing of judgement by the WTO on MEAs, to a criteria-
free formal amendment or understanding of Artic le XX, which amounted to formal renouncing of 
WTO rights.  Any negotiation with respect to Article XX ran the risk of a result more restrictive than 
the status quo , which provided, as expressed in the 1996 Re port of the CTE, considerable flexibility 
and would continue to evolve through WTO panels .  Concern from a trade law perspective was not 
that trade law will somehow be undermined by MEAs , rather, that protectionist interests will use 
otherwise legitimate MEA instruments to thwart tr ade, thereby bringing both trade law and MEAs 
into disrepute;  in the case of the WTO for cha llenging ostensibly environmental measures, and for 
MEAs by being so abused. 
 Canada's felt that it was highly unlikely that the CTE, or the WTO itself, would be able to 
agree to any formal accommodation in the medium-t erm. It was not simply a question of political 
will, but rather the difficulty in reaching a balanced  and credible result acceptable to all.  Canada 
asked whether a more practical “soft” approach shou ld be taken in the development of a statement on 
the interaction between MEAs and the WTO.  Su ch an interim solution should allow the CTE to 
deliver a strong policy message in a relatively less time-intensive and polarized negotiating process.  
Such a statement would build on the language in th e 1996 Report of the CTE, recent developments in 
WTO jurisprudence, and an improved understanding of the linkages between trade and environment. 
Such an approach would not necessarily preclude work on a more formal approach at a later stage, but 
would allow earlier and more balanced results within a credible timeframe. 
 While it would not be useful to return to  a detailed discussion of specific proposals, New 
Zealand said that work should reflect on the common principles and considerations which 
underpinned several approaches, even if the speci fic details of each proposal varied.  Evolving 
jurisprudence on GATT Article XX should also be c onsidered.  While it remain ed the case that there 
had not yet been a WTO dispute that specifically re lated to MEA measures, the possibility of such a 
case in future should not be discounted.  There ha d been an increase in the references to trade 
measures in existing MEAs and in those treaties s till under negotiation, which underlined the need to 
continue work to develop a more coordinate d approach to avoid potential conflicts.   
 Turkey said the quantity of the work and variety of views indicated how sensitive and 
important this issue was to CTE work.  One way to  avoid potential conflicts  and make MEAs and the 
WTO mutually supportive was to improve participation in MEAs. 
 Norway said that the main task under this Item was to clarify how two sets of legal 
commitments (WTO rules and MEAs) were complementary so that conflicts were prevented.  There 
were basically two options:  (i) rely on evolving jurisprudence (the status quo );  or (ii) devise 
solutions to accommodate MEA trade measures in th e WTO.  Norway reiterated its suggestion to 
focus on specific issues, such as the relationshi p between MEA Parties and non-parties, non-product 
related production and process met hods, specificity of trade measur es, and participation in MEAs. 
 Korea felt that since the Singapore Ministerial, the CTE had not devoted sufficient time to 
exploring the methodology through which to furt her discussions.  The differentiated approach, 
proposed by New Zealand and Korea, could be u sed as the basis for exploring mutually supportive 
interaction between trade and environment.  This approach would allow the use of trade measures in 
defined circumstances to advance environmenta l objectives where these were necessary, whilst 
ensuring that such measures were not used for protectionist purposes.   
 New Zealand said its proposal for a differen tiated approach (WT/CTE/W/20), based on the 
specificity of the measure involved and whether it was applied between Pa rties and non-parties, 
proposed the elaboration of an understanding which would clarify the application of WTO provisions 
to MEA trade measures.  In the longer term, such an understanding would assist both environment and trade negotiators in ensuring that th eir respective systems were compatible.   PRESS/TE/025 
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MORE  The EC, Switzerland, Japan and others consid ered that the links between WTO rules and 
MEA trade measures should remain a priority for the CTE.  It was essential to develop a framework to 
define the status of trade measures taken pursuant to MEAs in order to ensure a more harmonious 
relationship between MEAs and the WTO.   
 The EC said the methodology of the differentiate d approach had been used in a general way 
throughout CTE work.  Doubts, however, remained in terms of the substantive criteria which had 
been proposed for each of the situations identif ied on the basis of the differentiated approach. 
 Switzerland said it was not up to a trade forum,  such as the CTE, to criticize trade-related 
provisions authorized in MEAs to achieve their environmental objectives.  They provisions existed and had been widely adopted by the international community.  The WTO should concentrate on avoiding that these trade measures, taken in conform ity with an MEA, were applied for protectionist 
purposes.  The question on which to focus was not on whether these MEA provisions were in 
conformity with WTO rules, but on how MEA Parti es implemented these provisions.  It was at this 
stage that the risk of misuse of environmental objectives pursued by MEAs became greater.  The 
purpose and objective of the chapeau, according to th e Appellate Body in the Hormone Report, was to 
prevent the abuse of Article XX exceptions.  The more precise the obligations on MEA Parties, the 
lower the risk of MEA objectives being circumvented for other purposes.  This was why Switzerland's 
proposal for a "coherence clause" (20 May 1996) was restricted to specific trade measures in MEAs.  
Although the differentiated approach had interesti ng theoretical aspects, due to its complexity, it 
would not help to solve the problem.  Canada's sugges tions offered an interesting short term solution.   
 Developing a set of criteria for trade measures in MEAs, Japan suggested, was a possible 
response to UNEP's statement at the MEA Informa tion Session that the CTE should clarify its view 
on MEA trade measures which were WTO-compatible.  In this regard, Japan's  proposal on guidelines 
for MEAs (WT/CTE/W/31) could be further devel oped by introducing the differentiated approach, 
and include criteria such as:  (i) that the MEA has the clear objective of environmental protection;  (ii) that the MEA has a universal nature in light of its objective, including parties with relevant trade 
interests;  (iii) that the MEA trade measures have been negotiated re flecting knowledge of 
environmental experts and are necessary to achieve its objective;  and (iv) that MEA Parties have 
agreed to introduce trade measures.  Japan suggest ed focusing the discussions on concrete examples. 
 While item 5 has been largely subsumed by item 1, several Members, including Canada, New 
Zealand and Korea, noted some relevant aspects.  Korea said that progress on item 5 was related to 
item 1, and could not be expected for now given th e stalemate under item 1.  As indicated in the 1996 
Report of the CTE (para 178), if a dispute arose be tween WTO Members, Parties to an MEA, over the 
use of trade measures they were applying between  themselves pursuant to an MEA, they should 
consider trying to resolve it through MEA. 
 New Zealand and Canada we re among the Members who s upported the development of 
effective compliance regimes in MEAs which were  more appropriate than dispute settlement and 
would reduce the potential risk for disputes either within MEAs or the undesirable bringing of MEA-
related disputes to the WTO.  Canada said that while the dispute settlement provisions in trade 
agreements had been frequently used, there were  no instances where similar MEA provisions had 
been used.  This was mainly because the WTO-type dispute se ttlement did not offer the most 
appropriate approach to ensure ME A implementation.  The impact of an MEA Party's failure to live 
up to its MEA obligations was often diffused acros s all Parties and undermin ed the collective action 
agreed upon to achieve environmental goals.  MEA negotiators were coming to recognize that the 
objective of environmental protection was better achieved through the cooperative approaches of 
compliance regimes.  New Zeal and suggested that MEA Secretariats with functioning non-
compliance procedures could keep the CTE informed on their operation. PRESS/TE/025 
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MORE  Korea, Egypt, Turkey, Argentina, and others  said that a balanced package of measures, 
including technology and financial transfer and capacity building, was necessary to achieve MEA 
objectives.  This was illustrated by the Montreal Protocol and the Kyoto Protocol.  Egypt said that although it would be difficult to address the range  of such measures in the WTO, promoting 
technology transfer and improving market access s hould be addressed.  One Member commented that 
whilst technical assistance related to the closure of  some ozone depleting s ubstance producing units in 
developing countries was available under the Montre al Protocol, slow progress on technology transfer 
on fair and most favourable terms was impeding environmental progress. 
 Turkey said that not all MEA trade measures ra ised consistency issues, and when they did, 
their effects were not to the same extent.  An an alysis of the effects and effectiveness of trade 
measures used to achieve MEA objectives would be useful.  Korea said that effectiveness of the 
intended measures should be carefully reviewed not only in MEAs, but in the WTO. Australia asked 
the Secretariat to follow-up on any quantitative estim ates of the impact of MEA provisions on trade 
flows, whether from an overall perspective, or in relation to specific trade measures. 
 The EC, Argentina and others said that it might  be useful to examine case law on other WTO 
provisions, for example related to the treatment of the precautionary principle in the Appellate Body's 
Report on Hormones.  Concerning discussion of the relevant trade principles for the environment and 
vice versa , the contribution of one Member (23 July 1996)  was recalled;  the CTE had discussed these 
principles, including the precautionary principle. 
 Rather than the time-consuming and divisive search for a formal accommodation of MEAs, 
Canada suggested that more atten tion could be devoted, either in the CTE or the TBT Committee, to 
the standards, labelling and other concerns identifie d by Members at the 1998 Ministerial Conference.  
Clearly, a real but uncomfortable issue was non- product related process and production methods 
(PPMs).  As Canada had noted in the TBT Commi ttee concerning labelling of genetically modified 
organisms, there was a need to address the policy ch allenge of labels concer ning how products were 
produced and not just their final characteristics. 
Item 7:  The issue of the export of domestically prohibited goods 
 Members welcomed a new Secretariat paper (WT/CTE/W/73) on the product coverage of 
international instruments which addressed dome stically prohibited goods (DPGs).  The paper 
illustrated the wealth of activity in other internati onal fora which had the relevant expertise to deal 
with DPGs.  The EC said it was willing to endorse the idea put forward by many developing countries to re-establish a DPG notification system in the WTO.  Lack of a precise definition of DPGs would compromise such a notification procedure.  Egypt supported using the format for DPG notifications 
which had been used in the GATT.  The US said th at any frustrations relating to work on DPGs may 
stem from the fact that the WTO was not as well placed as other organizations to deal with this issue.   
Item 8: The relevant provisions of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights 
 One Member contributed two new papers on issues relevant to the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRI PS).  The first paper addressed the need for the 
CTE to examine and recommend measures to rec oncile the TRIPS Agreement with respect to 
technology and products specifically mandated in ME As;  the second paper suggested that provision 
for prior informed consent in the TRIPS Agreem ent was required to implement benefit sharing 
pursuant to the Convention on Biological Diversity (CBD).   
 Commenting on the first paper, the US noted the role that patent protection played in 
encouraging the development of e nvironmentally-friendly pr oducts, and considered  that this paper's 
proposals would reduce patent protection for such pr oducts leading to a deterioration of the quality  PRESS/TE/025 
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MORE and quantity of products available.   Another way to view the issue, the US said, was to ask whether 
increasing patent protection should be considered to  spur the development of environmentally sound 
technologies and products.  More generally, intellect ual property (IP) protection had a positive effect 
on a country's domestic market and export income .  Factors most directly affecting technology 
transfer and trade (e.g., investment climate,  import laws and regula tions, marketing approval 
procedures) had not been mentioned in the paper, but needed to be analysed.  The paper asserted that 
problems may occur in MEA implementation because of "virtual standards", where there were various 
substitute products available, but the market grav itated towards one of them.  However, evidence had 
not been presented to support the existence of such  standards.  Moreover, since MEA standards were 
negotiated, a country had an opportunity during the negotiation to point out if there were only one 
product that would meet a standard under considera tion, allowing an agreement on a standard that 
could be satisfied by a variety of products or technologies. 
 With respect to the second paper, the US comme nted that the CBD did not require Parties to 
demand that patent applicants disclose the country of origin for biological source materials.  The 
question of prior informed consent, although a goal of the CBD, was unrelated to the patent process, 
particularly as research in this area was not always the subject of a patent application.  This paper 
proposed to design a sui generis  intellectual property system for lo cal, contemporary innovations, but 
had not made a case that this was necessary.  Cont emporary innovations, whethe r made by individuals 
with traditional lifestyles or university researchers, ma y be patentable if they were new, useful and 
contained an inventive step.  The paper also sugg ested that the negotiation of the TRIPS Agreement 
had been concluded before the CBD, and, thus, the TRIPS Agreement needed to be reviewed in light 
of Article 16.5 of the CBD.  However, the Urugua y Round negotiations had not  been concluded until 
December 1993, and significant changes were made , including to the TRIPS Agreement.  As the CBD 
had been concluded in June 1992, Members had been  aware of the CBD in forming their positions on 
the TRIPS Agreement. 
 One Member, responding to comments on its firs t paper, said that a specific problem existed 
in several countries with respect to at least one technology which was being phased-out under an 
MEA;  future MEAs could have similar obligations.  It would be useful to obtain empirical evidence 
on technology transfer in this respect.  As the CB D contained an obligation to share benefits, this 
Member's second paper suggested that the way to do so was through prior informed consent and the 
relevant provisions of the TRIPS Agreement to  ensure mutual compatibility between these two 
agreements.  It was reiterated that substantive ch anges had not been made to the TRIPS Agreement 
prior to the CBD's conclusion. 
 Several Members, including Korea, ASEAN, and the EC, said that implementation of the 
TRIPS Agreement was important in order to promote technological innovation.  The EC said that an 
efficient IP system provided incentives for research  and development and, thus, for EST generation 
and transfer.  Noting that access to, and transfer of environmentally sound technologies (ESTs) was 
essential for environmental protection, Korea and ot hers supported Japan's suggestion for the CTE to 
analyse whether concrete problems existed in this  respect.  The US said that, while Members' 
contributions of case studies may illuminate issues , examples should also take into account other 
factors impacting on technology transfer, such as investment climate and regulatory regimes.  
 The relationship between the CBD and the TRIPS Agreement was the focus of many 
Members' statements on this item.  The TRIPS Agreement sets out minimum standards for IP protection and allows WTO Members to adapt and extend the IP system, including to develop 
supplementary forms of protection to meet the polic y goals in the CBD in accordance with their own 
domestic policy settings.  
 Several Members, including Norway, Australia , Canada, and Korea, noted the importance of 
ensuring consistency between the CBD and the TRI PS Agreement.  Many Members said that issues 
related to the CBD's objectives could be addressed  through existing instruments and remedies under PRESS/TE/025 
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MORE the TRIPS Agreement, domestic legislation and WIPO.  ASEAN said that, while the WTO would 
create greater disciplines and a more conducive environm ent to the development of trade, it also had a 
responsibility to promote sustainable development.  In this respect, it was necessary for the WTO and 
CBD Secretariats to exchange information to ensure consistency between these two agreements, 
bearing in mind the review of Article 27 of the TRIPS Agreement. 
 Australia said that better use and greater unde rstanding of the full possibilities of the existing 
IP system had the potential to achieve productive outco mes, consistent with the aims of both the CBD 
and the TRIPS Agreement.  Australia set out an illustrative list of issues, including practicalities of 
licensing and contract law in relation to traditi onal knowledge and genetic resources owned by or 
under the custodianship of indigenous and local comm unities;  use of trade mark law, and geographic 
indications to facilitate market recognition and fair  trade in goods related to indigenous and local 
traditions;  use of the law of confidentiality and undisclosed information to protect indigenous and 
local knowledge;  exploration of the application of existing copyright principles to a wider range of 
beneficiaries and subject-matter;  use of industri al design protection;  and recognition of new plant 
varieties developed in indigenous and local communities.   
 Practical examples to illustrate the comp atibility between the TRIPS Agreement and 
biodiversity conservation were called for by sever al Members, including the EC and Australia. 
 Norway said it was important to maintain the flexibility in the TRIPS Agreement relating to 
living materials, which were qualitatively different  from products which had traditionally been given 
protection.  Ethical considerations were involved,  and possible links between IPRs and biodiversity 
loss had not been explored.  Criteria for what constitu ted an inventive step vis-à-vis a discovery were 
unclear.  The contrast between IP regimes for the m odern industrial sector and the lack of protection 
for traditional knowledge was seen by some countries as representing unequitable benefit sharing.  
Polarization between providers of genetic mate rial and the sectors benefiting from protection, 
particularly for agricultural genetic resources, could make it more difficult to agree on common 
strategies to conserve and sustainably manage biodiversity. 
 One aspect addressed by several Members was the relationship between the knowledge, 
innovations and practices of indi genous and local communities and the promotion of environmental 
objectives, particularly under the CBD.  Australia sai d that the starting point for analysing this issue 
was an understanding of how existing IP systems ma y be used to protect this knowledge so as to 
provide incentives for biodiversity conservation and promote equitable benefit sharing.  Work was 
necessary to improve the practical understanding of the potential of existing IP rights to increase the 
benefits that can accrue to indigenous communitie s. Practical options for providing protection of 
indigenous knowledge and biod iversity included training indigenous communities in licensing 
agreements to negotiate mutually agreeable terms for the use of their knowledge or genetic resources. 
 Several Members, including Korea, Australia and Canada, welcomed the relevant work being 
undertaken in WIPO and the CBD to identify inn ovative approaches to IP systems by holders of 
indigenous knowledge and innovations.  Members also welcomed the decision of the Conference of 
the Parties to the CBD, at its fourth meeting in Bratislava in May 1998, to establish an ad hoc  working 
group on Article 8(j), which deals with traditional knowledge, innovations and practices.  This work 
should proceed with a full understanding of th e IP system and the TRIPS Agreement.  
 The EC said that patent protection was not an  obstacle to access to traditional knowledge.  
Inventions, not discoveries, were patentable.  No velty and inventive steps were preconditions for 
patent protection.  Indigenous knowledge may be the foundation upon which a novel patentable 
product or process was developed and, for some reason, the existing patent system would not 
safeguard the interests of this knowledge.  In this case, acknowledgement of, and compensation for 
the invention could be achieved on a contractual basis amongst interested parties outside the IP 
system.  A contractual approach allowed fo r flexible solutions on a case-by-case basis.   PRESS/TE/025 
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MORE  One Member had doubts that acknowledgement or compensation could be achieved for 
biodiversity use outside the IP system.  The CBD had started work, as would WIPO, to examine possible solutions in this area.  Unless rights holders had the obligati on to state the source of origin, 
how would indigenous communities be aware of how their traditional knowledge was used, or be able 
to pursue benefit sharing.  In this respect, the WTO and the CBD should exchange ideas on the 
compatibility of the TRIPS Agreement and the CBD. 
 ASEAN suggested that, in preparation for the 1999 review of the TRIPS Agreement, the CTE 
examine:  (i) how to more precisely define term s such as "plants", "animals", "mico-organisms", 
"biological processes", "plant varieties" and an "effective sui generis  system" in the context of TRIPS 
Article 27.3(b);  (ii) the implementation of TRI PS Article 66.2, which calle d upon developed country 
Members to provide incentives to enterprises and ins titutions to promote technology transfer to LDCs;  
(iii) an assessment as to whether the economic  incentives for biodiversity conservation and 
sustainable use allowed for in the TRIPS Agreemen t were sufficient;  and (iv) the compatibility of 
CBD and WTO provisions.   
 Colombia referred to the Andean Decision 39 1 on access to genetic resources, submitted to 
the CTE at a previous meeting.  The TRIPS Ag reement should help to guarantee that national 
legislation adopted in accordance with nationa l environmental policies and based on MEAs was 
respected by third parties.  For inventions linke d to living organisms, the TRIPS Agreement should 
require that patent applications indicate the orig ins of the samples and reference to whether living 
organisms had been extracted in accordance with the norms of the country of origin.  If indigenous 
knowledge were involved, there should be a certifi cate of compliance with the requirements in the 
country of origin.  These requirements may refer to  the need for prior informed consent through an 
access contract to exploit genetic resources.  The pate nt should not be granted if the patentee had not 
complied with these provisions.  Such a process woul d guarantee, through the TRIPS Agreement, that 
these regulations would be respected by WTO Members. 
 Canada cited a concrete example which it had raised at the SPS Committee meeting in June 
1998 on the potential conflict between some proposals in the negotiations for a Biosafety Protocol and 
WTO disciplines.  The issue of "farmers' rights" had arisen also in the FAO discussions in June 1998 
on the International Undertaking on Plant Genetic Resources, which coul d have implications for IPRs.  
Canada was willing to recognize the contribution of fa rmers and the need to protect, consistent with 
national legislation and internati onal agreements, their ability to keep, use, exchange, share and 
market seeds and other plant materials.  However, this did not provide a basis for recognition of an 
international form of farmers' rights. 
 WIPO said its work in 1998-99 on emerging IP  issues related to trade and environment, 
specifically on biological diversity and biotechnology, would include the convening of a working group to study IP aspects of biotechnology and the implementation of the CBD;  regional seminars on 
biotechnology patenting;  on-site documentation pr ojects of traditional knowledge relevant to the 
conservation and sustainable use of biodiversity,  in cooperation with UNEP;  and a study on the 
impact of IP on technology transfer under 9 MEAs .  WIPO invited contributions from governments, 
industry representatives, NGOs and MEA Secr etariats on experiences in this field. 
Item 3(b): The relationship between the provisions of the multilateral trading system and 
requirements for environmental purposes relating to products, including standards and technical regulations, packaging, labelling and recycling 
  Canada recalled that during the Trade Policy Review (TPR) of one Member in April 1998, 
Canada had enquired abou t this country's Eco-Mark Type I eco-labelling programme.  The CTE had 
benefited from the national experiences of Cana da's forestry national experience paper, 
WT/CTE/W/81-G/TBT/W/61, Colombia's paper on cut flowers, WT/CTE/W/76-G/TBT/W/60, and Brazil's statements on leather and forest product labels.  Responses to  Canada's questions in the TPR PRESS/TE/025 
Page 10  
MORE would be helpful to further appreciate developing country concerns, including on the use of process 
and production criteria in the development of prod uct criteria, and on the criteria development and 
approval process used for the Eco-Mark.  Canada  encouraged further experience sharing on eco-
labelling to enhance an understanding of the various approaches used. 
 In response to Canada, one Member said that  details on criteria development and criteria in 
the approval process as well as the other issues raised would be provided at the next meeting of the 
CTE which addressed this item.   
 ASEAN and Canada expressed concern that the Dutch initiative to label all forest products 
was not trade-neutral, and asked the EC to up-date the CTE in this regard.  The EC responded that the 
Netherlands had transmitted the draft law on la belling to the Commission, which was assessing its 
compatibility with internal standards.  The EC al so provided Members with information on its revised 
Web Site on eco-labelling, which could be acce ssed at:  http://europa.eu.int/ecolabel.   
Item 6: The effect of environmental measures on market access, especially in relation to 
developing countries, in particular to the least developed among them, and environmental benefits of removing trade restrictions and distortions 
 The EC submitted a paper (WT/CTE/W/83) c ontaining its comments on the Secretariat's 
document on the environmental benefits of re moving trade restrictions and distortions 
(WT/CTE/W/67).
2  Brazil presented a set of principles on environmental protection and sustainable 
development which were a voluntary initiative of th e Brazilian National Confederation of Industry 
(WT/CTE/W/93). 
Agriculture 
 Norway said that market-based mechanisms coul d not lead to optimal resource allocation if 
prices did not fully reflect a product's costs and be nefits and took into account society's preferences 
for public goods, including agricultural landscape, biodi versity and viability of ru ral areas.  External 
costs and benefits of agricultural pro duction were taken into account through the polluter pays 
principle  (PPP), related to negative pr oduction externalities, and the provider gets principle  (PGP), 
dealing with positive production externalities.  As the application of the PPP increased the costs of 
agricultural production, compensation should be a llowed.  As the PGP implied compensation to 
providers of a public environmen tal good, support coupled to agricultural production was the most 
efficient approach.  The WTO should allow coun tries to apply these principles to protect the 
environment and maximize welfare.  These issues were set out in detail in the paper Norway had 
presented to the Committee on Agriculture and woul d present to the CTE at its October meeting. 
 Norway questioned whether agricultural trade liberalization would generally be 
environmentally beneficial based on the hypoth esis that environmental problems were less 
pronounced in countries with low levels of agricu ltural support and that a shift in production to low-
support countries would result in an overall reducti on in environmental degradation.  Norway had a 
consumption of pesticides per hectare of arable la nd that was less than half the OECD average and 
one fifth selected low-support countries.  The extent  of agricultural environmental problems varied 
according to natural conditions, farmi ng methods, and domestic policies.   
 Japan said that trade liberalization may n eed to be accompanied by environmental and 
resource management policies and that attention should be given to the positive environmental 
externalities associated with  agricultural practices.   
                                                      
2 For a detailed discussion of the Secretariat's document see Trade and Environment Bulletin  No.23.  PRESS/TE/025 
 Page 11 
  
END  Argentina said that it had circulated a pape r in the Committee on Agriculture, which would 
also be circulated in the CTE (WT/CTE/W/97).  This paper referred to market and policy failures 
which did not permit prices to reflect the full cost s of agricultural production.  Argentina was not 
arguing that free trade was a guarantee of environmen tal protection, but that removing subsidies was a 
necessary first step to ensuring prices moved to wards reflecting the full costs of production. 
Environmental services 
 Reference was made to UNCTAD's Expert Meeting on Environmental Services on 20-22 
July.  The US said that this meeting had encour aged the WTO to pursue further liberalization in 
environmental services in the forthcoming GATS negotiations in recognition of the fact that 
liberalization in this sector could provide "win-win " situations.  Governments were invited to take 
steps, including through IPR protection, to improve their capacity to absorb ESTs and adapt them to 
local conditions.  The US felt that the UNCTAD meeting had been useful and commended its 
documents and conclusions fo r Members' consideration. 
Forestry 
 Canada said that the presentations at the ME A Information Session by the International 
Tropical Timber Organization (ITTO) and the Interg overnmental Forum on Forests (IFF) were helpful 
in demonstrating the linkages between internationa l forestry processes and WTO work.  The Canadian 
forestry national experience paper (WT/CTE/W/81-G/TBT/W/61) would also be circulated as a contribution to the IFF meeting in August in Ge neva to contribute to improved understanding of the 
issues.  Canada supported the view of the ITTO and IFF that standards, certification and labelling 
schemes must not discriminate between tropical and temperate wood and wood products.  As there 
was a potential for trade discrimination, there w as a role for WTO Members to clarify existing 
disciplines, so that these standards furthered sustainable forest management while being trade-neutral.  
Canada welcomed further discussion of these issu es in either the CTE or the TBT Committee. 
 Canada and ASEAN noted the EC's reference, at the MEA Information Session, to the fact 
that access to its GSP scheme fo r forest products was conditional on ITTO adherenc e and asked for 
clarification in this regard.  The EC responded th at products from sustainably managed forests could 
obtain additional preferences under its GSP scheme. 
 Following a suggestion by Canada, Members agre ed to invite the Intergovernmental Forum 
on Forests to the 26-28 October meeting to brief the CTE on its discussions. 
Item 9: The work programme envisaged in the Decision on Trade in Services and the 
Environment 
 Japan welcomed the Secretariat document on e nvironmental services prepared for the Council 
for Trade in Services, and asked Me mbers to review it in the context of CTE work on the relationship 
between services and the environment.  Liberaliza tion of environmental services should be promoted 
as a means to enhance environmental protection and quality of life. 
Other Matters 
 The EC informed the CTE of its communication on a high level meeting on trade and 
environment (WT/L/273) to the WTO General Council at  its meeting on 15-16 July 1998, which built 
on the EC's proposal at the 19-20 March 1998 meeti ng of the CTE to strengthen the dialogue between 
top level trade and environment policymakers.  
 The CTE expressed its appreciation for the cont ributions of Mr. Andrew Griffith (Canada) 
and Mr. Gary Sampson (WTO Secretariat) to the work on trade and environment.