RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/TE/R/9 
16 July 2004 
 (04-3061) 
Committee on Trade and Environment 
Special Session  
 
  
SUMMARY REPORT ON THE NINTH MEETING OF THE COMMITTEE 
ON TRADE AND ENVIRONMENT IN SPECIAL SESSION 
 
22 JUNE 2004 
 
Note by the Secretariat
 
 
 
1. The Committee on Trade and Environment Special Session (CTESS) held its ninth meeting 
on 22 June 2004 on the basis of the agenda set out in the convening airgram, WTO/AIR/2315. 
I. PARAGRAPH 31 (I) - WTO RULES AN D SPECIFIC TRADE OBLIGATIONS IN 
MEAS 
2. Two new submissions were tabled under Paragr aph 31(i):  document TN/TE/W/40 by the 
United States (US);  and document TN/TE/W/41 by Ch inese Taipei, which was a response to the last 
submission by the European Co mmunities (EC) under this item.1 
Submission by the United States  
3. The representative of the United States  indicated that the US was ready to move forward on 
the substance of these negotiations in light of the consensus that had emerged on having the CTESS 
proceed on the basis of fact and experience.  The US’ new submission built on its previous paper 
under this paragraph, document TN/TE/W/20.  It focussed on the US' practical experience in the 
negotiation and implementation of specific tr ade obligations (STOs) in three multilateral 
environmental agreements (MEAs): the Convention on International Trade in Endangered Species 
(CITES), the Stockholm Convention on Persistent Organic Pollutants (POPs), and the Rotterdam 
Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides 
in International Trade (PIC).  The submission underscored the importance of national coordination, 
transparency, and accountability in negotiation and im plementation, and made a number of practical 
observations on export restrictions in particular.  In doing so, it identified the wide variety of STOs 
that existed, and demonstrated that even a sub-set of STOs – namely, export restrictions - could vary 
in design in several important respects.  For instance, they could differ in their purpose, in their role 
within the MEAs, in the procedures and criteria by wh ich they evolved, and in their level of clarity. 
4. The submission identified the practical features of  export restrictions that contributed to the 
achievement of MEA objectives, and which furthe red the mutually supportive relationship between 
MEAs and the WTO.  Those design and implementation features included the careful design of export 
restrictions so as to target specific environmental problems;  the existence of science-based 
procedures for the adjustment of these restrictions in  light of advances in knowledge;  the existence of 
procedures for changing the scope of the export restrictions over time, that were both inclusive and appropriately flexible;  and the clar ity and transparency of export restrictions.  The US believed that 
                                                     
 
1 The last EC submission under Paragraph 31(i) was circulated as document TN/TE/W/39. TN/TE/R/9 
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 the MEA-WTO relationship was working well.  This was especially true where trade and environment 
experts had collaborated both nationally and internationa lly.  It was not surprising, therefore, that no 
formal disputes had arisen with respect to the STOs addressed in the US submission. 
5. A number of delegations shared the view of the US that the CTESS needed to proceed on the 
basis of a practical approach, in which national experiences would be shared.  These included the 
representatives of India
, Australia , Hong Kong, China , Korea , Argentina , Indonesia , and Brazil . 
6. The representative of India  welcomed the US observation that policy coordination at the 
national level in negotiating and implementing ST Os was a contributing factor to the mutual 
supportiveness of the WTO and MEAs.  India also welcomed the conclusion that the export 
restrictions examined in the US submissi on did not generate trade concerns.   
7. The representative of Australia  believed that the US submission highlighted how simple 
communication tools could be instrumental to the sensible negotiation and implementation of 
commitments.  Such procedures could helpfully avoid potential conflicts between the WTO and 
MEAs.  Australia had its own domestic coordination measures.  While these measures differed from 
those used by the US, Australia was struck by certa in similarities in the US and Australian domestic 
coordination processes.  These included extensive interdepartmental coordination at the federal level 
at each stage of a negotiation, as well as efforts to keep all stakeholders fully abreast of developments. 
Australia believed that the transparency and accoun tability provided by such coordination was key to 
enabling WTO rules and MEAs to live in harmony.   While Australia had yet to examine the export 
restrictions discussed in the US paper, it believed the references to the need for transparency, science-
based decision-making, and the careful design of rest rictions to target specific environment problems, 
to be sensible.  The US had mentioned that its su bmission would help participants enter a new phase 
in the negotiations, and this merited serious consideration. 
8. The representative of Hong Kong, China  drew attention to the fact that Hong Kong, China 
had itself submitted its national experience in April 2003.  He agreed with the US that, in general, the 
MEA-WTO relationship was working well, and that national coordination was important.  The US 
observation that export restrictions did not generate  trade concerns when th ey met certain conditions 
was useful.  
9. The representative of Korea  believed that the CTESS had made valuable progress in 
identifying STOs in various MEAs.  While it had not arrived at an agreed list of STOs, the end-goal of 
the negotiations was not the list itself, in any case, but the clarification and establishment of the proper 
relationship between STOs and WTO rules.  Thus, it was necessary for participants to examine their 
national experiences, and the US submission could act as a model for this exercise.  The submission 
had found that the WTO-MEA relationship was wo rking well.  Of course, a more comprehensive 
examination of STOs in a broader range of MEAs  would be necessary to reach a more definitive 
conclusion;  hence the need for a further sharing of national experiences. 
10. The representative of Canada  believed that the US paper had brought a new element to the 
discussion - the sharing of national experiences.  Th e US had focussed on export restrictions, which 
was a useful approach, and which could eventually be expanded to other types of STOs.  It allowed 
participants to see the commonality and differ ences among three key MEAs containing export 
restrictions.  The paper demonstrated the importance of coordinating negotiating positions and the 
subsequent implementation of MEAs, the inter-agenc y process that was required to ensure that a 
country had a coherent pos ition and that conflict wa s avoided, as well as the importance of sound 
science.  Canada wished to point out that in the Stockholm and Rotterdam Conventions, a consensus 
vote was required for the addition of substances, and that that type of voting meant that it was unlikely 
for a conflictual situation to arise.  CITES also had a mechanism in place for the addition of products 
to its various annexes.  As the Stockholm and Rotterdam Conventions, as well as the  TN/TE/R/9 
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 Biosafety Protocol, had entered into force, Canada w ondered if they could be invited to the CTESS to 
share their experience. 
11. The representative of Switzerland  welcomed the emphasis placed in the US paper on the 
importance of national coordination.  This had improv ed over the years. Switzerland in particular was 
coordinated and had always included an environment official in its delegation to the CTESS.  With 
respect to the comment made in the US paper that there have been no WTO-MEA conflicts to date, 
Switzerland hoped that this would remain the case .  However, negotiators could not anticipate how 
measures would be implemented.  Of course, it could be argued that if there were coordination at the 
implementation stage as well, than problems would not arise.  However, Switzerland believed that 
problems could indeed occur, and that the CTESS needed to go beyond the sharing of national experiences.  Both the Stockholm and Rotterdam Conve ntions had only just entered into force.  Thus, 
it was too early to tell whether problems would arise in their regard.  Of co urse, Switzerland hoped 
that none would, but it believed that it was import ant to prepare for such an eventuality.  The 
Vienna Convention itself addressed possible conflicts, which showed that implementation problems 
could indeed arise.  Therefore, the US paper, while  interesting, covered only part of the discussion. 
12. The representative of Japan
 welcomed the US paper, but indicated that his delegation required 
more time for its examination.  Japan would refl ect on how the paper could link to the Japanese 
position, and how it could lead to a concrete end product - perhaps non-binding guidelines or an 
interpretative note.  Japan wondered why the US had focussed on export restrictions in particular. 
13. The representative of the European Communities  welcomed the sharing of the US’ national 
experience, since such sharing could help delegations  learn from each other.  However, after having 
read the paper, the EC wondered “what next.”  Ho w would the paper help participants decide the 
WTO-MEA relationship, and where should the line be drawn in that relationship?  In paragraph 22 of 
the US paper, certain features of export restrictions had been laid out.  For the EC, these were features 
which had to be decided in the MEAs, and which the WTO had to accept.  But where would the line 
be drawn between export interests and species co nservation under CITES, for instance?  A mere 
sharing of a national experience would not answer th at.  Therefore, it would be important to consider 
the guiding principles behind the national experiences, which should be the next step. 
14. The representative of Venezuela  indicated that his country was committed to undertaking the 
national coordination suggested in the US paper, since a new Venezuelan co nstitution had established 
certain environmental rights for the first time in Venezuelan history.  Venezuela was now attempting 
such coordination, and had organized a national workshop in Venezuela from 5-7 May to prepare for 
CTESS negotiations.  The workshop was at tended by CITES, the Rotterdam and the 
Stockholm Conventions.  Venezuela was a member of CITES, and had been actively involved in the 
negotiation of the Rotterdam and Stockholm Conventio ns, which it hoped to be able to ratify as soon 
as possible.  Therefore, Venezuela viewed nation al coordination as being of vital importance, but 
wished to draw the attention of the US to the fact that there could be no comparison between a developed and a developing country in this regard.  There would be a need for special and differential 
(S&D) treatment, for technical assistance and cap acity building so as to strengthen coordination 
between the institutions of the developing world. 
15. The representative of Argentina
 believed that national coordinati on would be vital to ensure a 
mutually supportive relationship between trade and the environment, and to avoid potential conflicts 
between MEAs and WTO rules.  The EC had raised a pertinent question, asking what the underlying 
principle would be for the WTO-MEA relationship.  Argentina believed that that principle had to be 
that of coordination at the national and international levels in order to avoid conflicts.  That was why 
the US paper had been very interesting.  Furthe rmore, Argentina underlined that the sharing of 
national experiences by Members could not be replaced by the sharing of experiences by MEA 
Secretariats. TN/TE/R/9 
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 16. The representative of New Zealand
 agreed with the emphasis placed in the US paper on the 
importance of national coordination.  This was a key precondition to ensuring policy coherence in this 
area, and it was such procedural and process featur es that New Zealand hoped the CTESS could focus 
on.  As Venezuela had pointed out, there would be a real capacity building dimension to this work.  
New Zealand agreed that the WTO-MEA relationship appeared to be workin g well.  However, the 
CTESS was not yet at the point where it could conclude that both regimes lived in perfect harmony.  
The US had itself noted that its paper was limited to particular STOs in three MEAs.  Therefore, there 
was a need to continue discussing national experien ces, both the positive and the problematic.  This 
could answer the EC’s question of “what next.”  If delegations could identify problems, then that 
would help to determine the next steps.  The representative of Indonesia  agreed that the national 
coordination was vital to avoiding MEA-WTO conflicts, and that the identification of concrete problems would be valuable to CTESS discussions. 
17. The representative of Chinese Taipei
 commented on the US view that it was not surprising 
that WTO-MEA conflicts had not arisen.  While Chinese Taipei hoped that this would continue to be 
the case, this did not indicate that no conflicts coul d arise in future.  One of the purposes of these 
negotiations was to identify potential conflicts an d to provide mechanisms for avoiding them.  It 
shared Korea’s view that a more comprehensive examination of STOs in MEAs would be required to 
draw conclusions, and agreed with Switzerland that domestic implementation would need to be 
looked at more closely. 
18. The representative of Nigeria  thanked the US for its submission, welcoming the idea of 
greater national coordination. 
19. The representative of CITES  felt that much of the description of national and international 
coordination in the US paper was recognizable.  Many countries had similar procedures and 
mechanisms in place to prepare for CITES meetings.  In terms of implementation, all the 166 parties 
to CITES had management and scientific authorities, and coordination at the national level had always 
been quite important.  It was noteworthy, however, that in the last five to six years, CITES had not 
been involved in commercially important species .  However, with CITES slowly moving into 
commercial fish and timber species, the size of th e various delegations attending CITES meetings had 
tended to double. Delegations had been seeking reinforcement from their fisheries and trade 
representatives, and not just their scientists.   
20. Commenting on paragraph 22 of the US paper,  CITES indicated that the Convention had 
developed numerous measures whic h were not found in the Convention itself, but rather in the 
resolutions and decisions of the Conference of Parties (COP) and its Standing Committee.  When 
scientific committees found that a species was unsu stainably exploited, and that a country had not 
taken the measures which the international scientific community had found necessary, the 
Standing Committee could recommend that impor ting countries suspend trade with the exporting 
country until compliance was achieved.  Similar mechanisms existed for countries that had 
insufficient legislation;  for coun tries that failed to submit annual  reports on their trade after three 
years;  and, in general, for the non-implementation of  CITES by a party.  There were also measures in 
CITES that provided positive incen tives, rather than sanctions, fo r compliance.  In terms of the 
criteria for the listing of species, these had been around for some time.  However, species had never 
been listed for commercial reasons;  rather, refusals  to list species had sometimes been commercially 
motivated. 
21. On paragraph 24 of the US paper, CITES underlined that it was also possible for non-parties, 
as well as observers, to participate in CITES meetings.  In fact, there were more non-governmental 
representatives in CITES than there were gove rnmental. CITES tried to ensure balanced 
representation at its meetings by funding developing  country participants, so that all countries were 
represented by at least one administrative officer and a scientist.  TN/TE/R/9 
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 22. CITES decisions were not taken by consensus, but by a two-thirds majority vote with the 
possibility for objection, or of a reservation, at a later point.  The transparency of CITES measures 
and existing implementation mechanisms were described in paragraph 27 of the US paper.  The 
appendices to the Convention were readily available, and the CITES had an up to date web site with 
information on trade restrictions (www.cites.org).  The CITES Secretariat was located in Geneva and 
was therefore able to organize briefing sessions for Geneva-based delegations.  One such session 
would be organized in September, prior to the CO P 13 in Bangkok.  Delegations were invited to the 
Bangkok COP, which would take place from 2-14 October 2004. 
23. The representative of the United States  indicated that while the US had suggested a new phase 
in its paper, its paper built on the work conducted in  the CTESS over the past two years.  It was based 
on the ideas that Australia had offered on a phased approach;  on the approach that Hong Kong, China 
had pursued in its submission;  and on the numerous submissions received on examples of STOs.  
These included submissions from India, Chinese Taipei, Malaysia, Korea, and a number of other 
delegations.  The US felt that the EC paper, submitted  at the last meeting, had distracted delegations 
from the practical and analytical approach.  An e xperience-based approach would be far more fruitful 
in furthering the Paragraph 31 (i) mandate than a more abstract and generic discussion.  New Zealand 
raised an important point, which was that an experience-based approach would help the CTESS gauge 
whether there were problems that needed  to be addressed in these negotiations. 
24. With respect to Japan’s question, the US explained that export restrictions offered a useful 
point of comparison, both because there were considerable differences in their features, and because 
they appeared to be the most common form of ST Os in MEAs.  The US echoed the Argentinean view 
that Members' experiences could not be replaced by Secretariat experiences.  Ultimately, this had to 
be an assessment made by a Member, so the US lo oked forward to submissions on the experiences of 
others.  
Submission by Chinese Taipei  
25. The representative of Chinese Taipei  commented on the global governance principles 
proposed by the EC in document TN/TE/W/39.  On the EC's suggestion that disputes between two parties to an MEA be settled in the MEA, even when WTO Members, Chinese Taipei believed that 
this could lead WTO Members to deviate from  their obligations under Article 23 of the 
Dispute Settlement Understanding (DSU).  The Ar ticle called upon WTO Members to abide by the 
rules and procedures of the DSU.  Chinese Taipei believed that Members had the right to resort to the 
WTO dispute settlement mechanism when  trade measures were involved. 
26. With respect to the EC’s interpretation of the Gasoline case, Chinese Taipei wished to point 
out that the paragraph from which the EC had drawn related to whether Article 31 of the 
Vienna Convention could be considered to form part of public international law.  Thus, the term 
“public international law” only referred to interna tional law in the context of  treaty interpretation.  
Chinese Taipei was concerned that the so-called “deference principle” could prejudice the rights of a non-party to an MEA.  It would also be against the spirit of Article 3.2 of the DSU, which stated that 
the recommendations and rulings of the Disput e Settlement Body (DSB) could not add to, or 
diminish, the rights and obligations provided in the covered Agreements.  
27. In paragraphs 12 to 14 of the EC submission, the EC had used the term “relationship between 
WTO and MEA rules,” rather than the “relationshi p between existing WTO rules and the STOs set 
out in MEAs,” as mandated by the Doha Declaration.  While the EC submission was helpful in 
providing a broader perspective on the relationship be tween these two sets of rules, part of the EC’s 
global governance principles either ran counter to existing WTO rules, such as the DSU, or prejudiced 
the rights of WTO Members that were not party to MEAs. TN/TE/R/9 
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 28. The representative of the European Communities
 was pleased that there were some common 
ideas in the paper submitted by Chinese Taipei.   Pa ragraph 5 of the paper pointed to the value of the 
multilateral approach, which the EC believed in. The EC had tried to emphasize the need for 
coordination between the WTO and MEAs, which to ok the discussion beyond Paragraph 31(i) and 
into 31(ii).  Its intention was not to overlook the role  of the WTO in devising multilateral solutions.  It 
was undoubted that multilateral solutions were not the exclusive terrain of MEAs.  The WTO, within 
the boundary of its competence, also had a role to  play, but the issue under discussion in the CTESS 
was how to create a balance in the event of a conflict. 
29. With respect to multilateral environmental policy being made w ithin MEAs, and the 
suggestion that this could deviate from Article 23 of the DSU, such deviation was certainly not what 
the EC had in mind.  While DSU rights should not be curtailed, it would be useful for WTO Members 
to agree by consensus that MEAs should handle environmental disputes.  Trade and environmental 
disputes could of course be linked, but the basic objective was to ensure that trade issues would be 
handled by trade experts, and environmental issues by environmental experts.  In the 1996 report of 
the CTE, Members had already agreed to making a first attempt at addressing MEA conflicts in the 
MEAs themselves.  This did not diminish WTO rights and obligations, but was simple, practical advice, that was agreed to at the time.    
30. With respect to the EC’s interpretation of the Gasoline case, the EC was not trying to 
reinterpret or renegotiate what the Panel and th e Appellate Body had said.  Rather, it was simply 
clarifying the background for some jurisprudence.  The Shrimp-Turtle  case had itself referred to 
MEAs.  The EC was simply trying to emphasize that the WTO did not operate in clinical isolation.  If any delegation were of the view that it did, then there would be a problem.   
31. In terms of referring to “the relationship between existing WTO rules and the STOs in 
MEAs” as Chinese Taipei suggested, and the concern that the EC paper exceeded the mandate, the EC 
was simply trying to identify the principles which underlied the WTO-MEA relationship.  The 
experience-based approach suggested by the US was useful, but lessons would ultimately have to be drawn from the experiences presented to the CTESS.   The EC did not invent the global governance principles that it had proposed, and participants had to examine the sources from which the EC had 
quoted.  However, the EC reassured delegations that  it was not opposed to an analytical debate, and 
that the only reason it had not commented on the US paper was because it had not had sufficient time 
to consider it.   
32. With respect to the comment made by some delegations at the last meeting that the EC could 
not draw on the Singapore Report, the EC held that various issues addressed in that report continued 
to be relevant today, even though the Report was negotiated against a broader mandate.  For the EC, 
the Singapore Report constituted an international “ acquis ,” from which the EC did not wish these 
negotiations to regress.  On the issue of governance  principles being premature at this stage, the EC 
believed that it was important to reflect on outcomes.  It did not have a ready-made answer to this mandate, and believed that ideas could flow from Paragraph 31(ii) that could influence the overall 
debate.  These could include practical steps for governance, such as better information flow.  With 
respect to the fears raised at the last meeting ab out the potential renegotiation of the Rio Principles, 
the EC indicated that that was not its intention.   Rather, the EC wanted a practical, real-world, 
application of those principles.   
33. The representative of Venezuela
 agreed with Chinese Taipei that the concept of global 
governance could be subject to many different interpretations, and that there was no universal 
consensus on what it meant.  It also agreed wi th paragraph 5 of the Chinese Taipean paper that 
multilateral solutions to environmen tal problems were important, but that it was equally important not 
to underestimate the role of the WTO.   While so me delegations believed that environmental policy 
should be set by the United Nations, and trade policy by the WTO, it was important for these trade  TN/TE/R/9 
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 and environment negotiations to examine the concept of sustainable development in the context of the 
WTO.  In response to the EC, Venezuela explai ned that it was not seeking to renegotiate the 
Rio Principles.  Rather, Venezuela wanted to link the Rio Principles to the WTO, and to make them 
effective and consistent with its rules. 
34. The representative of the United States  agreed with Chinese Taipei that the EC paper 
expanded on the mandate of the Committee.  In partic ular, the US registered its disagreement with the 
EC's characterization of the Gasoline case.  The US pointed out that several delegations had expressed 
similar concerns at the last meeting of the CTESS and had included:  India, Egypt, the Philippines, 
and Australia. The representatives of Brazil , India and the Philippines  agreed that the EC had 
misinterpreted the Gasoline  case.  While the Appellate Body ha d indicated that the WTO could draw 
on the customary rules of interp retation of public international la w (the Vienna Convention), it had 
not stated that WTO rules could be interpreted in light of MEAs. 
35. The representative of Norway  found that the EC submission had been timely and relevant, 
seeing it as a complement, rather than a substitute, fo r the analytical discussion.  There was no way to 
determine whether the EC approach was premature, other than by trying it out.  As the EC had pointed out, it was difficult to foresee the conclusion of these negotiations.  At the last meeting, there seemed to be widespread agreement amongst Memb ers that unilateral action should be avoided and 
that MEAs offered a viable, multilate ral, alternative.  Furthermore, there was support for a division of 
responsibilities between the WTO and MEA regimes, whereby each regime would be responsible for 
issues falling within its primary area of competen ce.  Potential interlinka ges between the WTO and 
MEA regimes demanded close co-operation at both the national and international levels in order to enhance mutual supportiveness, as the US pointed out. 
36. At the last meeting, a number of delegati ons had raised concerns about the notion of 
deference.  Chinese Taipei had argued that the principle could be applied indiscriminately, leaving 
great scope for interpretation.  Norway believed that it was up to MEA parties to define the objectives 
of their agreements, and the tools to use, but that in that process consideration had to be given to WTO rules so that mutual supportiveness could be enhanced.   
37. Chinese Taipei had previously referred to the commitments undertaken under the 
Montreal Protocol that affected non-parties.  No rway believed that the expanding membership of 
various MEAs was itself solving this problem, and that membership was expanding as a result of 
supportive measures, as well as an increased awareness of the environmental objectives of various 
accords.  Chinese Taipei had also wondered whet her the effective dispute settlement mechanism of 
the WTO would entice parties to settle their disputes in the WTO.  Norway noted that there had been 
no MEA disputes in the WTO to date, not even between a party and a non-party to an MEA.  
Countries that joined an MEA were unlikely to tu rn around and challenge these agreements in the 
WTO, and Norway expected that disputes between ME A parties would continue to be settled in future 
within the MEAs.  However, nothing could, of course, prevent a Member from bringing an MEA dispute to the WTO. 
38. At the last meeting, Canada had suggested that  it be would useful to identify the link between 
the analytical approach and the governance principles.  An issue that had been raised in these 
discussions was the lack of knowledge among WTO an d MEA negotiators of the essential features of 
each other’s agreements.  Moreover, much had been said about the need for greater information flow. Therefore, a practical link could be to develop a ma nual by the WTO and MEA Secretariats that could 
assist trade and environment negotiators, as well as  developing countries.  In terms of the WTO and 
MEA regimes being equal bodies of international law, a practical outcome could be the granting of 
observer status on a reciprocal basis in both fora .  Therefore, the points raised by the EC could 
usefully overlap with the analytical  discussion that was taking place. TN/TE/R/9 
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 39. The representative of Egypt
 commented on the EC’s description of the Singapore Report as 
an international “ acquis .”  Egypt did not wish to either exagge rate or diminish the importance of this 
Report.  While it did recognize that the Report had been agreed, some delegations had registered 
certain reservations on some of parts of it.  Beyond being a report of the CTE, the Report had no other 
legal status in the WTO. 
40. The representative of India  shared Chinese Taipei’s view that, in the event of a trade dispute 
between WTO Members that were MEA parties, th e right of WTO Members to resort to the WTO 
dispute settlement mechanism had to remain intact, so as to preserve the rights and obligations of 
Members under the covered Agreements. 
41. The representative of Switzerland  commented on the issue of “clin ical isolation,” arguing that 
the Shrimp-Turtle  case had shed even greater light on the Ap pellate Body’s interpretation of this term.  
For instance, in interpreting GATT Article XX(g), the Appellate Body stated that these words had to 
be read by treaty interpreters in light of the c ontemporary concerns of the community of nations on 
the protection and conservation of the environment.  It added that, while Article XX had not been 
modified in the Uruguay Round, the Preamble of the WTO Agreement showed that the signatories to that Agreement were, in 1994, fully aware of the importance and legitimacy of environmental protection.  Furthermore, in interpreting the term s “exhaustible” and “natural resources,” it found it 
pertinent that modern international conventions an d declarations had assumed that natural resources 
embraced both living and non-living resources, an d had mentioned the United Nations Convention on 
the Law of the Sea.  In interpreting the term "e xhaustible,” the Appellate Body also referred to 
CITES, stating that the exhaustibility of sea turtles was very difficult to controvert since all of the 
seven recognized species of sea turtles involved in the dispute had been listed in Appendix 1 of that 
Agreement.  Therefore, WTO rules were cer tainly not read in “clinical isolation.” 
42. Switzerland supported paragraph 14 of the Chinese Taipean paper, which stated that the fact 
there had been no conflict did not preclude conflic ts from arising in future. The CTESS needed to 
develop a mechanism for avoiding such conflicts.  In terms of possible outcomes, Switzerland was 
convinced that there was a need to pursue both an analytical and a conceptual approach.  Thus, the US, EC and Chinese Taipean papers had all made usef ul contributions to the discussion.  A sharing of 
national experiences would not, on its own, deliver results.  
43. The representative of Australia
 believed that the Chinese Taipei’s response to the EC 
demonstrated the need to return to a more prac tical, analytical approach, and had also shown the 
dangers of a conceptual discussion taking the CTESS outside its mandate.  Au stralia continued to be 
concerned about the EC’s selective use of the Gasoline  jurisprudence.  It welcomed paragraph 5 of 
Chinese Taipei’s paper, on the need for multilateral solutions to environmental problems, and 
paragraph 8, which stated that trade measures for environmental purposes should not constitute a 
means of arbitrary or unjustifiable discrimi nation or restriction on international trade. 
44. The representative of Brazil  agreed with Chinese Taipei that global governance principles fell 
outside the mandate.  Brazil supported the statement that environmental problems were best addressed 
in a multilateral framework, and that coordination between trade and environm ent officials would be 
vital.  Technical assistance would also be impor tant for developing countries in that regard. 
45. The representative of Ecuador  welcomed paragraph 12 of Chinese Taipei’s paper, which 
stated that trade measures for environmental purposes should not act as arbitrary or unjustified 
restriction on international trade, which was in conf ormity with the Rio Principles.  Ecuador believed 
that to bring the abstract concept of “global governance” to the WTO, would complicate the 
negotiations.  TN/TE/R/9 
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 46. The representative of Chile  echoed Switzerland’s view that bot h the analytical and conceptual 
approaches were mutually supportive. On the issue of clinical isolation, while the US and the EC held 
opposing views, the correct interpretation of th e Appellate Body's remarks was somewhere in 
between. Switzerland’s views on the Shrimp-Turtle  case, with which Chile agreed, shed light on the 
correct interpretation. Neverthe less, Chile asked both Switzerland and Norway to clarify how a 
discussion of concepts that fell outside the mandate, such as those suggested by the EC, could aid the 
CTESS in complying with its mandate.  With respect  to Venezuela’s comments on the Rio Principles, 
Chile enquired about how these principles, and the principles of international environmental law, 
could be made binding in the WTO. 
47. The representative of Venezuela  responded by quoting the summary report of the last CTESS 
meeting, in which it was stated that: "The represen tative of Venezuela asked if the EC intended to 
negotiate global governance principles in the CTESS.  There was no real consistency in the principles 
which the paper referred to [TN/TE/W/39], and no clear desire to negotiate.  For instance, the 
Rio Principle of common but differentiated responsi bility had been mentioned, but was the EC willing 
to give that principle binding force in the WTO?”  In addition the summary report stated that "the representatives of Australia and Cuba put the same  question to the EC.” Therefore, there was no 
contradiction in the Venezuelan position.  In  document TN/TE/W/39, the EC had referred to 
numerous principles, and Venezuela simply wondered what the EC intended to do with them in the 
WTO.  Would it give them binding force, was the question.  Venezuela never suggested that the EC 
should “renegotiate them.”  Venezuela would not agree to that, but just wanted to have these 
principles reconfirmed.  The representative of Cuba
 also put the same question to the EC. 
48. The representative of New Zealand  commented on the issue of “clinical isolation,” wondering 
whether the supposedly conflicting views that had been  expressed at this meeting could be reconciled.  
Applying the customary principles of treaty interp retation, and in particul ar Article 31 of the 
Vienna Convention, required that context be take n into account when interpreting treaty provisions, 
and this was what the Appellate Body had done in the Shrimp-Turtle  case, when it was interpreting 
words such as "exhaustible natural resources".  Equally, it was worth recalling what the Appellate 
Body had said in the Hormones case, which was that while the precautionary principle was certainly 
relevant, it could not be used to override the clear terms of a treaty.  So, perhaps, this was one way to 
reconcile the two cases that had been mentioned – other bodies of law could provide context, but 
could not override the terms of a treaty.  Anothe r rule of customary in ternational law was the 
presumption against conflict between internationa l treaties, and a preference for the harmonious 
interpretation of international tr eaties.  This rule could be relevant to these negotiations. 
49. The representative of Korea  recognized that requiring the WT O Panels and Appellate Body to 
use the substantive provisions of MEAs in interpreting WTO rules raised a range of legal problems, especially for WTO Members that were not parties to an MEA.  At the same time, however, Korea 
had certain reservations with regard to the notio n that Panels and the Appellate Body could not 
consider MEAs in interpreting WTO rules.  Korea believed that, in certain instances, MEA could be 
regarded as part of public international law, and co uld be taken into account.  A relevant factor would 
be the extent of the MEA’s acceptance globally. 
50. The representative of Switzerland
 responded to Chile’s question by stating that not all of the 
concepts in the EC paper should pose a problem to Members, in particular the one on mutual 
supportiveness.  Switzerland reminded delegations that the concept of “mutual supportiveness” was 
itself embodied in the Paragraph 31 mandate. With  respect to the Rio Principles, Switzerland 
wondered if it had correctly understood Venezuela’ s intervention.  Had Venezuela meant that these 
principles should be reconfirmed and made bindin g in the WTO?  That could be an interesting 
proposition.  The representative of Venezuela  stated that he had simply enquired if the EC was willing 
to give the principle of common but differentiated responsibility binding force in WTO.  The WTO 
had a similar concept in its rules, that of S&D treatment. TN/TE/R/9 
Page 10  
 
 51. The representative of the European Communities
 asked Members to examine the Shrimp-
Turtle  dispute, prior to arguing that MEAs could not be taken into account in interpreting WTO rules.  
With respect to the coverage of governance principles  by the mandate, the EC did not believe that it 
would be constructive to continue debating what fell within the mandate and what did not.  The EC 
could itself argue that the mandate did not call for the sharing of national experiences, or of going 
down to country level, but the EC had never made this point.  It was important to focus on the 
substantive issues at hand.  The EC disagreed that global governance would be too complicated to 
discuss, as Ecuador suggested.  On the question raised by Venezuela, the EC explained that it was not 
trying to make the Rio Principles applicable in the WTO, since that would make no sense, but that it 
had simply mentioned them since they were part of the backdrop against which these negotiations 
were taking place.  It would be willing to discuss these Principles further. 
52. The representative of Colombia  presented her country’s position on various aspects of the 
mandate.  On “MEAs,” Colombia be lieved that the term multilateral meant that a substantial number 
of countries had to have joined an agreement, as proof of the importance of its environmental 
objectives.  Furthermore, the agreement would have to have been negotiated under the auspices of the 
United Nations or one of its specialized agencies and to have entered into force.  The MEA would 
have to be open to all countries, including those wh ich did not participate in its negotiation.  As set 
out in the Vienna Convention, all annexes and amen dments to an MEA would have to be treated as 
integral parts of an MEA.  Thus, STOs within th ose annexes and amendments would need to be taken 
into account by the CTESS.   
53. With respect to “STOs,” Colombia agreed with the views that had been previously expressed 
by Argentina and India.  STOs had to be compulsory  and expressly mentioned in the text of an MEA. 
Colombia argued that Article 4.2.(d) of the Basel Convention, which required parties to take the 
necessary steps to ensure that the transboundary movement of hazardous waste was compatible with 
sound environmental management, had to be considered an STO.  Discretionary measures, on the 
other hand, could not qualify as STOs.  However, as  Canada had previously stated, an STO could be 
contained in a combination of articles, which wh en read together, would lead to an STO.  
Furthermore, STOs should not be limited to those mentioned in the main text of an MEA, as this 
would unnecessarily limit the mandate, and only narr owly interpret the results of the World Summit 
on Sustainable Development (WSSD).  With respec t to STOs contained in COP decisions, these 
would require further discussion.  The negotiations should look at the MEAs that had entered into 
force, such as CITES, the Montreal Protocol, th e Basel Convention, and the Convention on Biological 
Diversity (CBD).  
54. The Chairman  thanked delegations for their interventio ns, encouraging them to continue to 
submit their national experiences in the negotia tion and implementation of STOs in MEAs.  
II. PARAGRAPH 31 (II) – INFORMATION EXCHANGE AND CRITERIA FOR THE 
GRANTING OF OBSERVER STATUS 
55. The representative of the European Communities  indicated that the EC proposal under this 
item, document TN/TE/W/39, remained on the table.  It showed how global governance could 
translate into concrete outcomes, such  as greater information exchange.   
56. The representative of Canada  was pleased that the Chairman had reminded delegations at the 
last meeting of the ideas that had been captured by Ambassador Yolanda Bike in her report to the 
Trade Negotiations Committee (TN/TE/7 ).   These ideas were excelle nt, and continued to provide a 
valuable basis for discussions.  Canada believed th at the participation of MEA Secretariats in WTO 
Committees was an efficient form of  information flow.  At this meeting, Canada wished to focus on 
electronic means of communication.  The Internet provided a tremendous opportunity for the sharing 
of information, for reaching people around the worl d, and for networking.  However, web sites did  TN/TE/R/9 
 Page 11 
 
 
 have certain shortcomings.  They required time an d money, regular updating, and their proliferation 
made it difficult to sort through us eful and relevant information.  Canada encouraged delegations to 
make use of existing web sites for formal and informal information exchange.  A recent example of a 
new web site was that of the International Centre for Trade and Sustainable Development 
(www.trade-environment.org), which issued the Bridges  publication.  Its strength lay in the range of 
web sites to which it was linked. Canada was pleased to have been able to provide financial support 
for this web site, and would welcome the WTO Secret ariat informing Members of other useful sites. 
III. PARAGRAPH 31 (III) – ENVI RONMENTAL GOODS AND SERVICES 
57. Two room documents were circulated under Pa ragraph 31(iii):  one by Chinese Taipei, 
entitled Proposed Initial List of Environmental Goods;   and one by Canada, entitled The Use of 
Detailed Categories in CTESS Discussions  on the Liberalization of Environmental Goods . 
Furthermore, China delivered an oral statement unde r this item, which was subsequently circulated as 
CTESS document TN/TE/W/42. 
58. The Chairman  began by reporting on the outcome of th e informal consultations which he had 
convened on 2 June 2004 on the structure of work on environmental goods.  At the meeting, delegations were consulted on two specific issues :  (1) whether they would be prepared to begin 
submitting specific examples of products to be ad dressed in the environmental goods negotiations, 
and to have these examples proceed in tandem with the definitional discussions;  and (2) whether they 
had any specific ideas on how non-tariff barriers (N TB) could be addressed.  On the first of these 
issues, it was the Chairman’s sense that most delegations seemed relatively comfortable in pursuing a 
two-track approach.  One, would be to submit speci fic examples of products to be addressed in the 
negotiations;  and, two, would be to continue ex amining criteria and definitions for the identification 
of environmental goods.  The two approaches would complement each other.  The Chairman 
explained that he had encouraged delegations to submit specific examples of products so that 
discussions could become more concrete.  With re spect to NTBs, it was the Chairman’s sense that 
most delegations felt that it was premature to discus s these barriers, and that work in the Negotiating 
Group on Non-Agricultural Market Access (NAMA) fi rst had to progress, in order to provide the 
general context within which the  CTESS could operate.  
59. The representative of Chinese Taipei
 explained that the lack of an internationally agreed 
definition of environmental goods was a proble m for delegations aiming at a potential trade 
liberalization initiative in this area.  However, this  was not to say that negotiations could not proceed 
in the absence of a definition;  they could.  Chinese Taipei had decided to circulate its list of 
environmental goods in response to the Chairman's informal consultations.  Its list consisted of 70 
environmental goods in the category of pollution control equipment, which was an area that most 
Members agreed should be included in the negotiations.  This was the area on which Chinese Taipei 
believed that the CTESS ought to concentrate its ef forts in compiling the final list.  The successful 
completion of a core list would be a realistic target  at this interim stage of negotiations, and could 
provide momentum for future work  on the complementary list.   
60. The products for pollution prevention and contro l on the Chinese Taip ean list fell into the 
following categories:  air pollution control, wa stewater management, solid/hazardous waste 
management, remediati on/clean-up of soil and water, noise/vibration abatement, and 
monitoring/analysis and assessment.  Chinese Taipei did not intend its list to serve as the sole basis 
for negotiations;  it simply wanted the inclusio n of the products that it was suggesting.  The 
Chinese Taipean list was intended to be part of a broader list towards which other Members would 
contribute. 
61. The representative of China  believed that it was important to determine the scope of the term 
“environmental goods,” and that efforts should be made to avoid controversial definitions based on TN/TE/R/9 
Page 12  
 
 multiple end-use, clean technology or process an d production methods (PPMs).  China favoured the 
pursuit of “top-down” and “bottom-up” approaches in parallel.  It called for the development of a 
"common" and a "development" list of environmental goods.  
62. The "common list" would comprise the specific  product lines on which there was consensus 
that they constituted environmental goods.  These products had to reflect the interests of both 
developed and developing countries, although priority had to be given to products of export interest to 
developing countries in order to enhance their e xport capacity.  For products on the common list, 
Members would commit themselves to reducing or  eliminating tariffs and NTBs.  The specific 
modality for trade liberalization, however, wo uld have to be determined by NAMA. The 
"development list” would be a list for S&D treatmen t, which would emanate from the common list.  
In the development list, developing and least-developed country Members would select some of the 
products contained on the common list for fewer commitments.  This would reflect the principle of 
less than full reciprocity, taking into account the vulnerability of certa in environmental goods 
industries.  China stressed the importance of co mbining tariff reduction with the transfer of 
technology to developing countries in this area.   
63. The representative from Canada
 believed that setting out certain product categories could 
facilitate discussions on environmen tal goods.  Ideally, an initial list of categories should be decided 
on an objective basis, so that discussions would not get bogged down in definitional issues.  The 
categories which Canada proposed were the ones employed by the Asia Pacific Economic 
Cooperation forum (APEC) and were also derived fr om the broader definition of the environmental 
industry formulated by the Organization for Economic Cooperation and Development (OECD), that covered goods, services and technologies. These ca tegories could prove useful in cataloguing the 
often technical items whose purpose or function wa s not evident from a six-digit level Harmonized 
System (HS) description.  Canada realized that some Members may not view these categories as 
sufficient (i.e. as including all the products of export interest to them);  as allowing for all goods that 
provided a sufficient envi ronmental benefit;  as providing enough  room for environmentally friendly 
products;  or as being too permissive in its inclusion of categories that may bring multiple end-use products into the picture.  With respect to th e latter, some Members may favour the inclusion of 
products based on the predominant end-use criterion, as Canada did, and as had been done in APEC. 
64. Canada noted that the US, in document TN/TE/ W/38, had suggested "clean technology" as a 
category.  Canada interpreted this as a reference to goods embodying such technologies.  It welcomed 
other Members' ideas on categories, and the iden tification of specific products by developing 
countries, as opposed to definitions.  It felt that  an invitation to the World Customs Organization 
(WCO) to speak on the HS in relation to envi ronmental goods could also be useful.    
65. The Chairman
 thanked Chinese Taipei, China and Canada for their contributions, and for 
initiating a more concrete discussi on.  He reiterated his request to  delegations to begin submitting 
specific examples of products. 
66. The representative of the United States  agreed that negotiations on modalities, including S&D 
treatment, were best conducted in NAMA.  However, the CTESS could add value on the definitional 
aspect of the negotiations.  Seve ral delegations had enquired about the products that would be 
included on the lists proposed by the US, and the US wished to clarify that it was flexible and was not 
wedded to any particular approach.  It simply wanted to help discussions gain momentum.  
67. The US submission, tabled both in NAMA and the CTESS, was intended to be a way forward 
on the complex modality question.  The framework suggested in the US paper allowed for some 
flexibility in defining environmental goods through the use of a core and a complementary list.  By 
suggesting two lists, the US had hoped to accommodate the variety of views that had been expressed 
under Paragraph 31 (iii).  However, further discussi ons were needed in both NAMA and the CTESS,  TN/TE/R/9 
 Page 13 
 
 
 before the modalities could be de cided.  Several delegations had noted that they wished to see 
additional sub-categories of goods, as well as new goods  added.  The US was open to suggestions and 
encouraged delegations to come forward with their ideas.  However, it hoped that delegations would 
think practically when proposing environmental goods, or even criteria for nominating goods.  There 
were certain criteria on which the HS did not differentiate;  for example, on non-product PPM-based 
distinctions.   
68. Some Members continued to be concerned that the environmental goods negotiations, and the 
US proposal in particular, would benefit develope d countries only.  The US proposal intentionally 
provided scope for a flexible definition of enviro nmental goods.  Accordingly, it was difficult to say 
at the outset that these sectoral negotiations repres ented the interests of any one group of countries, 
except for those countries which chose to participat e.  The US had referred to APEC and OECD work 
on environmental goods because these prior efforts could be useful in informing this undertaking.  For 
example, as has been noted by several Memb ers, APEC had found it impractical to identify 
environmental goods by anything other than an HS  number, because of the difficulty in implementing 
the results.  The reference to APEC's work was not m eant to preclude new lists or approaches. In fact, 
the US welcomed reviewing the lists of other Me mbers, and congratulated Chinese Taipei on its 
submission. 
69. The US noted the contribution of the United Nations Conference on Trade and Development 
(UNCTAD) Expert Meeting on environmental goods and services that was held in July 2003.  
UNCTAD's statistics neatly summarized trade patter ns on environmental goods, as defined by the 
OECD and APEC.  UNCTAD had clearly pointed out th at developing countries had export interests 
in this sector, as identified in the OECD and APEC lists.  For example, several developing countries 
were net exporters of goods on both the APEC and OECD lists, such as ethanol which was exported 
by Argentina, Bolivia, Brazil and Guatemala.  Another example was hydraulic turbines, from Nigeria 
and Swaziland.  UNCTAD also pointed out that many  environmental goods were basic intermediate 
goods, such as chemicals, filters, pumps, valves, and so on.  Not all goods on the APEC and OECD 
lists were high-tech in nature, such as filters and valves.  Most of the goods that were amongst developing countries' top environmental goods expo rts were also among their top environmental 
goods imports.  In addition, UNCTAD reported that there may be potential for increased south-south 
trade in environmental goods.  The US also welcomed  the contribution of China, but feared that its 
suggestion could lower the level of ambition.  It reminded Members that Ministers had singled out 
this sector precisely because the economic gain of lib eralization was only part of the equation.  Trade 
liberalization in environmental goods and servic es would have direct environmental benefits. 
70. The representative of Korea
 commented, on a preliminary basis, on Chinese Taipei's paper.  
Korea and Chinese Taipei agreed on a number of issues.  For instance, both believed that aiming for too broad a scope in these negotiations could result in delays and make agreem ent more difficult.  The 
negotiations stood a better chance of success if Members aimed at a list that could be easily agreed and implemented.  Korea preferred to focus on pr oducts whose end-use was clearly environmental, 
such as products for pollution control, remediation and prevention.  These had been the types of 
products addressed by Chinese Taipei.  It di d not wish to include products based on PPMs, 
considering the absence of internationally recognized standards. It indicated that it would reflect 
seriously on Canada's suggestion, and on the need to look at product categories.  The US suggestion 
could also be explored as a way forward.  It we lcomed inviting the WCO and the OECD to the next 
meeting. 
71. The representative of the European Communities
 indicated that the EC remained committed 
to a successful outcome in these negotiations.  A solid environmental rationale would be needed to 
justify the deeper cuts that were made in this area , in particular for domestic constituencies.   The EC 
believed that MEAs, the WSSD, and the numerous international initia tives that had resulted from 
Johannesburg, such as the Rene wable Energy Coalition and European Union Water Initiative, had TN/TE/R/9 
Page 14  
 
 attracted attention.  Increased investment in clea n water and sanitation, in clean energy, technology 
transfer, and trade facilitation in en vironmental goods and services, ha d all gained in importance. It 
was on the latter issue, in particular, that the WTO could contribute. 
72. The negotiations had to result in a balanc ed outcome, with Members gaining on the 
environmental and trade fronts.  It would be importa nt in that regard to identify products of export 
interest to developing countries.  With the contribu tions of Chinese Taipei, China, and Korea's oral 
statement, the CTESS was certainly moving in the right direction.  However, it would be important to 
assess the proposals that had emerged from a bottom- up process against the overall environmental 
objectives of the negotiations.   
73. The modalities for trade liberalization in this sector would need to be addressed in NAMA, 
but it was important for the CTESS to ensure th at this sector would be given due importance. 
Paragraph 31(iii) provided a clear mandate for deeper  trade liberalization by all WTO Members in this 
area.  It was too early for Members to decide on the US proposal at this stage, since it would be 
important for the NAMA modalities to evolve first.  The CTESS' focus at this stage had to be on the 
identification of environmental goods.  NTBs could be addressed once a list of environmental goods emerged. 
74. In terms of identifying environmental goods, the EC believed that certain principles needed to 
be considered prior to discussing categories. The definition would need to take into account 
international and national environmental priorities.  Pollution prevention, re duction of resource use, 
and waste minimization were all examples that could be drawn from Agenda 21 and the WSSD Plan 
of Action.  Some MEAs, as well as the Millennium  Development Goals, could also provide guidance 
in identifying environmental goods.  The EC agreed with the US and Korea that the negotiations had 
to be kept as simple as possible, and in that se nse, inviting the WCO to examine realistic possibilities 
was a good idea.   
75. In terms of categories, the EC believed that po llution control and resource management were 
appropriate ones.  These covered the categories wh ich the Canadians and the others had advanced.  A 
more difficult category to explore was that of goods with a low environmental impact.  UNCTAD had recently produced a definition suggesting that environmental goods were goods "which caused 
significantly less 'environmental harm' than alternativ e products that served the same purpose".  That 
was an interesting concept, and included goods made of renewable materials, and products whose use 
minimized environmental impact.  Some of the items which the EC wanted to see under this category 
would be of particular interest to developing countries.  As this was a difficult category to address, the 
EC simply wanted to encourage additional debate  on it.  Certain objective parameters could 
eventually be looked at in the selection of goods , and included product com position;  the renewable 
character of components;  environmental performance, such as energy consumption, efficiency, 
recycleability and bio-degradability.  Certain goods could also be defined through standards or 
certification. 
76. The representative of Turkey
 indicated that his country attached great importance to this 
component of the negotiations, and found that a clea r definition of environmental goods would be an 
essential step towards the development of modalities in this area.  In principle, Turkey was of the 
view that a single, comprehensive, and agreed list of environmental goods for tariff reduction or 
elimination, would maximize positive outcomes for the environment and for trade. Turkey had no 
objection to using the OECD, APEC, Japanese or Chinese Taipean lists as a basis for the WTO list.   
Although Turkey clearly favoured developing a single list, it also recognized that the US proposal 
offered a useful alternative.  The year 2010 would be an appropriate deadline for the elimination of 
tariffs on the core list.  NTBs could be addres sed after the environmenta l goods were identified.  TN/TE/R/9 
 Page 15 
 
 
 77. The representative of Norway  believed that the ultimate goal of the WTO should be to 
develop one balanced list, which would comprise pr oducts of interest to all Members.  A two-list 
approach could, as the EC mentioned at the last meeting, lead to a minimal agreed list and a long 
complementary one.  However, the US proposal was pragmatic, in the sense that it would allow the 
negotiations to proceed on the products on which there was no consensus.  The OECD and APEC lists 
were a good starting-point.  
78. However, difficulties would arise if clean techno logy were to be included.  Clean technology 
was highly important in developing sustainable production patterns, but as several delegations pointed 
out, it was an evolving concept which would require a regular updating of any product identification.  
Another challenge was the issue of  multiple use.  At the last meeting, a number of developing 
countries had asked for a balanced list to be deve loped that would include organically produced goods 
and sustainable forestry products, which were based on PPMs.  Norway had been reluctant to include 
PPMs because of the conflict that earlier discussions had raised.  However, it was important to 
address the interests of developi ng countries, and Norway would be willing to work with the PPM 
criterion.  After all, these negotiations were not about the closing of markets vis-à-vis  certain PPMs, 
but their opening.  Norway supported inviting the OECD to present its work. 
79. The representative of Switzerland  understood Chinese Taipei's list to be a request for the 
inclusion of certain products on the core list.  Switzer land would need further clarification, therefore, 
on the criteria behind the list.  It also enquired about the reason for which Chinese Taipei had 
excluded the six-digit chapter mentioned in the OECD list.  Was Chinese Taipei of the opinion that 
only those products that had been explicitly me ntioned could be included in the core list?  
Furthermore, why had products in the areas of water supply, water purification, renewable energy, 
and recycling been excluded?    
80. Switzerland supported the EC on th e need to first agree on global environmental objectives, 
such as those set out in the Johannesburg Plan of  Implementation.  There was a need for a logical 
starting-point, and Switzerland looked forward to an EC paper in this area.  It also welcomed the categories mentioned by Canada, which could be  used once agreement was reached on global 
environmental goals.  It was pleased that the Canadi an categories went beyond end-of-pipe treatment.  
On the US paper, Switzerland wondered about the number of Members that would be needed for an 
agreement on a complementary list, and about the relationship between the core and complementary 
lists. 
81. The representative of Nicaragua
 believed that the Chinese Ta ipean list demonstrated how 
difficult it was for developing countries to identify goods in which they had an export advantage.  The 
US had rightly pointed out that Central American countries could have an advantage in ethanol, and 
products which were not high-tech, and it would be important to reflect these interests in the 
negotiations.  Nicaragua favoured the employment of the end-use criterion as opposed to PPMs.  
Furthermore, this was not the appropriate time to address organic products, since the discussion had 
not sufficiently matured.  Nicaragua wondered whether the PPM criterion had been used by Chinese Taipei.  It saw the Canadian categories as interesting and as requiring further reflection. 
82. The representative of New Zealand
 believed that there was an emerging consensus that it 
would be useful to first focus on a core list, a co nsensus list, and to consider the US proposal on a 
complementary list as a backdrop, in the event that consensus could not be achieved.  New Zealand agreed with Canada that focus on concrete produ cts within certain categories would assist the 
discussions, and the Canadian categories provided a good starting-point.  In fact, it was only on the 
basis of product-specific work that the CTESS coul d grapple with practical considerations, such as 
dual use and tariff classification.  New Zealand reiterated its call for delegations to explain why they 
believed the products they were suggesting were e nvironmental.  New Zealand was hesitant about the 
idea of agreeing to global environmental goals or objectives as a starting-point for negotiations, since TN/TE/R/9 
Page 16  
 
 this could lead to a loss of momentum.  It suppor ted the invitation of the WCO and the OECD to the 
next meeting. 
83. The representative of Malaysia
 indicated that Malaysia was open to the US, Chinese Taipean 
and Canadian proposals, but that any list would have to reflect developed and developing country 
interests.  The APEC list could be used as a star ting-point, since it was based on end-use criteria.  
However, there were some products on the APEC list which Malaysia did not support, and it would be 
important to preserve the right to opt out on certain products, such as those with a dual use.  It would 
also be important to be able to exclude sensitive sectors that were vital for a country's industrial 
development. Like other developing countries,  Malaysia found it difficult to identify its 
environmental goods due to capacity constraints. 
84. The representative of Venezuela  endorsed the statement by Chinese Taipei, as well as the link 
that China established between environmental goods and the concept of S&D treatment.  S&D 
treatment would be an admission of the trade and e nvironmental reality of de veloping countries, as 
well as of their developmental needs.  Venezuel a welcomed the suggestion that further lists be 
submitted, and reminded delegations that it had suppo rted the Qatari list.  Like Nicaragua, Venezuela 
did not wish to see the PPM criterion used, and pref erred a focus on end-use.  It also suggested that 
UNCTAD be invited to the next meet ing to brief the CTESS on its work in this area, and called for 
further consideration to be given to the circulation the UNCTAD Report of the Expert Meeting on 
Dimensions of Environmental Goods and Services and Trade Development , which one delegation had 
opposed.  The representative of Brazil  supported Venezuela's statement on UNCTAD. 
85. The representative of Kenya  enquired about the way in which the Chinese Taipean list would 
contribute to addressing developmental needs.  Kenya had promised to submit its own list, but had 
found the exercise difficult.  It supported the Canadian idea of discussing categories, and of inviting 
the WCO.  In response to the various comments made about organic products, Kenya wondered how 
these products could be addressed in  the negotiations in light of the objections that had been made.  
This question also related to eco-system products.  The Chairman  encouraged Kenya to submit its 
own list of goods, indicating that no category of products had been definitively ruled out by the CTESS. 
86. The representative of Ecuador
 believed that these negotiations should contribute to 
sustainable development as the EC had pointed ou t, and should reflect the interests of developing 
countries.  Technical assistance would be needed by developing countries.  Ecuador believed that the 
modalities of the negotiations would need to be de termined by NAMA, and that it was too early to 
decide on the US proposal.  It endorsed the invitation of UNCTAD. 
87. The representative of Chile  commented on the issue of the Chinese list potentially lowering 
Members' ambitions.  Chile believed that this woul d depend on the size of the common list, and how 
easy it would be to deviate from it.  The same would be true for the core and the complementary list. 
This was an issue of nego tiating modalities, which was a subject th at needed to be left to NAMA.  
Chile wondered whether China and the US believed that the CTESS had a role to play in defining the rate of liberalization.  Furthermore, it did not sh are the EC's view that the Paragraph 31(iii) mandate 
meant that deeper cuts would have to be made.  Pa ragraph 16 of the Doha Declaration did not say so 
either.  Chile found Kenya's suggestion that Members explain the environmental and developmental 
benefits of the products they proposed to be useful , and also requested that the tariff and NTBs that 
they imposed, and which they faced in export markets be stated.   It endorsed the invitation of the 
WCO. 
88. The representative of the United States
 responded to Switzerland's questions, explaining that 
the number of Members that would need to agree to the complementary list would be linked to the 
discussion in NAMA on "critical mass."  Therefore, it w ould be too early to tell at this stage the exact  TN/TE/R/9 
 Page 17 
 
 
 number that would be required.  On the relationshi p between the core and complementary list, the US 
reiterated that its paper had been intended to st imulate discussion and that it was flexible.  The 
concept of a complementary list was totally dependent on the core list, and if the negotiations proved 
that there was no need for a complementary list, then that would be acceptable to the US.  The 
complementary list would only be useful if consensus on a definitive list could not be reached.    
89. The US shared New Zealand's concerns with respect to the EC proposal of agreeing on 
principles and global environmental objectives.  Wh ile it would be important for delegations to justify 
the products that they proposed, it would not be constructive to spend time debating principles.  In 
response to Chile's comments on the level of amb ition, the US indicated that it would withhold 
judgement until greater detail was provided.  With respect to the UNCTAD "Report of the Expert Meeting on Dimensions of Environmental Goods and Services and Trade Development," the US 
agreed to its circulation.  
90. The representative of th e European Communities
 clarified that the EC did, in fact, encourage 
the submission of lists, but that it was simply trying to ensure that there would be an environmentally 
friendly outcome.  
91. The representative of China  explained that it would too early at this stage to worry about 
lowering the level of ambition, and that that level would depend on the willingness of Members to 
engage.  China simply hoped that its proposal would provide developing and least-developed 
countries with greater flexibility.   
92. The representative of Chinese Taipei  responded to Switzerland questions by explaining that 
the main criterion used in the Chinese Taipean list had been that of obvious pollution control.  
Chinese Taipei had also checked its records on imports and exports, and had found a large trade 
balance on the products which it had included in its  list.  With respect to the OECD categories, it 
explained that there was no difference between t hose categories and its submission, but that it was 
simply by chance that no products on water supply or water purification had been included.  
Chinese Taipei did not insist on its list being gi ven a particular weight in the negotiations;  its 
objective was simply to help discussions advance.  In response to Kenya's question, it argued that the 
liberalization of environmental goods would be helpfu l for everyone.  It also supported the invitation 
of the WCO. 
93. The representative of UNCTAD  indicated that UNCTAD had kept close touch with the 
WCO, in particular in the run-up to its Expert Meeting on environmental goods and services.  In 
particular, UNCTAD had contacted the Committee on the HS, since it felt that some of the criteria 
that had been raised for the identification of environmental goods could raise difficult customs 
classification issues.  UNCTAD's concerns were confirmed.  The criteria of predominant end-use, 
PPMs, environmental performance, and sustainabl e materials, would all be very difficult to 
operationalize from a customs point of view.  That  was the reason that APEC had decided to follow 
the HS.   
94. The WCO had also indicated that the HS could only capture environmental goods that could 
be identified on the basis of objective criteria when presented at customs.  This could involve 
definitions or references to certain  characteristics of the goods in question, but could not be based on 
end-use criteria, on labelling, or on the use of cer tificates.  The WCO had indicated that it would be 
prepared to provide technical advice on the possib ility of classifying environmental goods separately 
in the HS, if requested by the WTO or one of its Members.  This would fac ilitate the implementation 
of an international agreement on environmental goods.  The WTO could also present amendments to 
the HS.  It could do so by contacting the WCO Secretariat, the Chairperson or one or more of the 
contracting parties, and suggest that a good be included under the HS.  However, the HS was revised 
in cycles, and the deadline for amendments to the current system had been in June 2003.  TN/TE/R/9 
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 Furthermore, there was a time lag between the a doption of amendments and their implementation, 
which took two and a half years.  Therefore, amendm ents adopted at the end of June 2003 would only 
become operational in a number of years.  In othe r words, this negotiating process was stuck with the 
old HS. 
95. The Chairman
 indicated that the WCO, UNCTAD and th e OECD would all be invited to the 
next CTESS meeting to brief the Committee on their work on environmental goods, and indicated that 
the UNCTAD "Report of the Expert Meeting on Di mensions of Environmental Goods and Services 
and Trade Development" would be circulated to participants.  
IV. OTHER BUSINESS  
96. The representative of Japan  called on the International Trop ical Timber Organization (ITTO) 
to be reinvited to the CTESS.  It regretted that while the ITTO had been previously invited to the 
Committee, it could no longer be invited.  The representative of Malaysia  responded that its 
government continued to harbour the same set of reservations towards the ITTO. 
97. The CTESS  agreed to renew the ad hoc invitations issued for this meeting, to the next 
meeting of the CTESS.  It also agreed to invite the Secretariats of the Rotterdam and 
Stockholm Conventions, since they had entered into force.   
98. The next meeting of the CTESS would take place on 12-13 October 2004 . 
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