RESTRICTED
WORLD TRADE WT/CTE/W/79
9March 1998
ORGANIZATION(98-0962)
Committee onTrade andEnvironment
MARKET ACCESS IMPACT OFECO-LABELLING
REQUIREMENTS
Note bytheSecretariat
I. INTRODUCTION
1. ThisNote responds totherequest bytheCommittee onTrade andEnvironment (CTE) for
informationonthemarketaccessimpactofeco-labellingrequirements.PreviousNotesbytheSecretariat
onthissubject include: (1)Packaging andLabelling Requirements ,dated 14June1993(TRE/W/12);
and(2)TheEffects ofEnvironmental Measures onMarket Access, Especially inRelation toDeveloping
Countries, InParticular totheLeast Developed Among Them,dated 26March 1996(WT/CTE/W/26).
2. Theconclusions ofrecent studies conducted byinternational organizations oneco-labelling
anditsmarket access effects arepresented inthisNote. These organizations include:
(i) theEconomic andSocial Commission forAsiaandthePacific (ESCAP);
(ii) theInternational Trade Centre (ITC);
(iii) theOrganisation forEconomic Co-operation andDevelopment (OECD);
(iv) theUnited Nations Conference onTrade andDevelopment (UNCTAD); and
(v) theUnited Nations Industrial Development Organization (UNIDO).
3. Anupdate oftheSecretariat Noteentitled Eco-Labelling: Overview ofCurrent Work inVarious
International Fora,dated 15April 1997 (WT/CTE/W/45), iscontained inanAnnex tothisNote.
II. ENVIRONMENTAL LABELS: ANOVERVIEW
4. Environmental labelling hasbeendefined as"theuseoflabels inorder toinform consumers
thatalabelled product ismoreenvironmentally friendly relative tootherproducts inthesamecategory."1
TheInternational Organization forStandardization (ISO) hasclassified environmental labels into
three categories:2
(i) TypeIenvironmentallabelsarevoluntary,multiplecriteria-basedthird-partypractitioner
programmes thataward labels claiming overall environmental preference ofaproduct
within aparticular product category based onlifecycle considerations.
1UNEP (1997), Criteria inEnvironmental Labelling: AComparative Analysis ofEnvironmental Criteria
inSelected Labelling Schemes ,Environment andTrade (No. 13).
2ISO(1997), Business PlanofISO/Technical Committee 207/Sub-Committee 3,Environmental Labelling .WT/CTE/W/79
Page2
(ii) TypeIIenvironmentallabelsconsistofinformativeenvironmentalself-declarationclaims.
Such claims aremade without third-party certification bymanufacturers, importers,
distributors, retailers oranyone elselikely tobenefit from them.
(iii) Type IIIenvironmental labels arequantified product information labels based upon
independent verification using preset indices.3
5. Theterm"eco-labels" generally refers toType Ienvironmental labels. Eco-labels areusually
designed toachieve fourpolicy goals: (a)improve thesaleorimage ofalabelled product; (b)raise
theenvironmental awareness ofconsumers; (c)provide accurate andtimely information forconsumers
tomake informed judgements; and(d)direct manufacturers toaccount fortheenvironmental impact
oftheirproducts.
6. Increasingly, theyarebeing based onanenvironmental policy making toolknown aslife-cycle
assessment (LCA). According toISO,LCA isdefined as:4
Asystematic toolofassessing theenvironmental impacts associated withaproduct orservice
system to:build aninventory ofinputs oroutputs; make aqualitative evaluation ofthose
inputsandoutputs;andidentifythemostsignificantaspectsofthesystemrelativetotheobjective
ofthestudy. LCA considers theenvironmental impact along thecontinuum ofaproduct 'slife
(i.e.cradle-to-grave)fromrawmaterialsacquisitiontoproduction,useanddisposal.Thegeneral
categories ofenvironmental impacts toconsider include resource depletion, human health, and
ecological consequences.
7. TheUnitedNationsEnvironmentProgram(UNEP)notesthattodate,mosteco-labellingschemes
havenotusedcomprehensive LCA. Rather, labels havebeenawarded onthebasisofalimited number
ofenvironmental criteria considered bynational authorities tobethemostimportant withregards to
3IntheSummary Report oftheWorkshop onLife-Cycle Management andTrade ,organized bytheOECD
from 20-21 July1993, environmental labels were alsodefined:
Multi-Issue Voluntary Labels provide environmental information ontheoverall environmental quality
orcharacteristics ofaproduct. They aregenerally administered bygovernment-supported bodies, but
arevoluntary (examples ofthem include Germany 'sBlue Angel, theNordic White Swan, Canada 's
Environmental Choice, etc.). They correspond toISO'sType Ilabels.
Single-Issue Voluntary Labels provide environmental information ononeaspect ofaproduct andare
usually placed ontheproduct bythemanufacturer orretailer. They include labels suchas:"organically-
grown", "energy-efficient", "ozone-friendly", and"recycled-content". They correspond toISO'sType
IIlabels.
Single-Issue Mandatory Labels provide environmental information ononeaspect ofaproduct andare
required bygovernments. These labels frequently take theform ofnegative warnings, such as
"flammab le"and"eco-toxic",orindicatepositiveenvironmentalcharacteristic,suchas"biodegradable".
They correspond toISO'sType IIIlabels.
According totheOECD, itisthefirstcategory ofenvironmental labels thatisreferred toas'eco-labels '.
4ISO/Technical Committee 207/Sub-Committee 5(1995), Environmental Management -LifeCycle
Assessment -Principles andGuidelines .WT/CTE/W/79
Page3
theenvironmental effects ofparticular products. However, theoverall trend ineco-labelling istoapply
thecradle-to-grave approach.5
8. Thedesign ofeco-labelling schemes involves three different stages. Thefirststage isthatof
product selection. Such selection isusually undertaken byacommittee composed ofrepresentatives
fromgovernments, scientific, environmental andreligious communities, consumer groups, tradeunions
andindustry. During theproduct selection stage, anassessment ismade oftheenvironmental impact
oftheproduct. Thesecond stage isthatofcriteria determination. Atechnical committee establishes
thecriteria thatproducts havetomeet toobtain thelabel. Thethird andfinalstage, involves the
inspectionandlicensingofapplicants,aswellassupervisionoftheoverallimplementationofthelabelling
scheme.
9. Theoverridingaimofeco-labellingschemesistodistinguishcertainbrandsormakesofproducts
having significantly lessadverse environmental impact than others intheir product category.
Eco-labelling canonlybeeffective ifaccepted andusedasamarketing tooltoincrease salesorimprove
product orcompany image. Thisinturnrelies onconsumer awareness thatsome products arebetter
orworse fortheenvironment thanothers. While theintention ofeco-labelling schemes isnotto
discriminate between products perse,theynecessarily differentiate between products because only
inthiswaycantheyidentify theenvironmentally preferred products inaproduct category.
II. CONCLUSIONS OFRECENT STUDIES
A. TheEconomic andSocial Commission forAsiaandthePacific
10. Inareport ontheTrade Effects ofEco-Labelling ,ESCAP published theproceeding ofaseminar
oneco-labelling heldinBangkok, Thailand, from17-18 February 1997. Inaddition todiscussing the
market access implications ofeco-labelling fortheexports oftheESCAP region, thereport contains
country casestudies ontheeco-labelling schemes ofIndia, Indonesia andSingapore. Onmarket access,
thereport states that:
Market access effects ofeco-labels onthemainimporting partners ofAsiavaried significantly
from country tocountry andfrom product toproduct. Although documented evidence that
developing countries hadbeenadversely affected byeco-labelling wasnotavailable, labour-
intensive exports ofSouth Asia, andtimber-based exports ofSouth-East Asia hadbeen
particularly sensitive toeco-labelling. Itwasalsoevident thatthemultifarious eco-labelling
schemes wereasource ofuncertainty andconfusion toexporters withimplicit increased cost
effects. Asonlyafewexporters hadobtained eco-labels, itwasdifficult toobtain empirical
estimates onthecostsofadjusting production processes toeco-labels. Nevertheless, therewas
increasing evidence thatsmall andmedium-scale exporters were more severely affected by
environmental requirements thanlarger exporters.
11. Other findings ofthereport maybesummarized asfollows. Based onevidence fromvarious
country casestudies, ESCAP states thattheadditional costswhich producers incur tomeeteco-labelling
requirements vary. Following thebanofcertain types ofdyes, known asAZO dyes, inGermany in
1996, textiles companies inThailand switched toAZO-free substitutes withadditional costs of
5to20percentoftotalcost. Itstates thatthiswasoflimited concern tolargecompanies, butofsome
impact onsmall ones. Incontrast, theleather andtextiles sectors inIndia wereseverely affected by
5UNEP (1997), Criteria inEnvironmental Labelling: AComparative Analysis ofEnvironmental Criteria
inSelected Labelling Schemes ,Environment andTrade (No. 13).WT/CTE/W/79
Page4
thebansonpentachlorophenol andAZO dyes. Access toeco-friendly substitutes wasaproblem as
domestically available alternatives wereeither incompatible withexisting processes ofproduction or
inappropriate intheirexisting form. Large companies reported adjustment costs of8to10percent,
while small companies reported costs ofbetween 15to20percent.
12. Thestudy notes thatapproximately 15percentofexports fromtheESCAP region toOECD
markets areenvironmentally sensitive.6ForSouth Asian countries theshare is30percent, which
isthelargest intheESCAP region. Thisitstates, suggests thatSouth Asian countries mayrequire
particularassistanceincomplyingwithenvironmentalmeasuresinexportmarkets(includingeco-labels).
13. ESCAP states thattransparency isneeded toensure thattheinterests ofdeveloping countries
aretaken intoaccount intheeco-labelling schemes ofdeveloped countries. Italsostates thatmutual
recognition should bepursued between developed anddeveloping countries, sothatdeveloping countries
benefitfromtheirowncertificationinfrastructureandreducethecostsofobtainingeco-labels.7However,
further study oftheconcept isrequired.
14. Thestudy alsoargues thateco-labels maycreate newexport opportunities forenvironmentally
friendly products. Anumber ofinitiatives havealready beenundertaken intheESCAP region todevelop
environmentally preferable "green" products. Anexample isgiven ofChina 'scomprehensive plan
forthedevelopment oforganic foods.
15. Thestudy alsonotes thatanumber ofeco-labelling schemes have beenestablished inthe
ESCAP region. However, according tothestudy, thesemaybeviewed asaresponse totheproliferation
ofsimilar schemes indeveloped countries, andthepressure fromenvironmental andconsumer groups.
Schemes existin,forinstance, India, theRepublic ofKorea, andSingapore. China, Indonesia and
Thailand arealsoactively establishing theirowneco-labelling schemes.
6Nospecific definition isprovided oftheterm"environmentally sensitive" inthestudy, butitcangenerally
betaken tomean products which either areorcanbeexpected tobecome thesubject ofenvironmental regulations
(including eco-labelling schemes).
7Theconcepts ofequivalency andmutual recognition have been defined byUNEP asfollows:
Equivalencydenotestheideathat"whencomparableenvironmentalobjectivescanbeachievedindifferent
ways, taking intoaccount thespecific environmental conditions ofeachcountry, different criteria can
beaccepted asabasis forawarding eco-labels." Theconcept ofequivalency canbeapplied in
twocircumstances.First,whennoeco-labellingprogramme existsintheexportingcountry,theimporting
country could accept compliance withcertain environmental requirements intheexporting country as
"equivalent" tocompliance withcriteria established under theimporting country 'sowneco-labelling
programme. Secondly, ifbothcountries have aneco-labelling scheme inoperation, theconcept of
"equivalent" standards could serve asabasis formutual recognition ofeco-labelling schemes
(SeeUNEP, 1997).
TheGlobal Eco-Labelling Network (GEN), anon-profit association ofeco-labelling organizations with
amembership of14eco-labelling organizations from Europe, Asia, andNorth andSouth America, explores,
amongst other things, thepotential forequivalency andmutual recognition agreements.
ISO'ssub-committee 3isdeveloping standards forenvironmental labels, establishing theprinciples to
beadhered tointheirdesign. Sub-committee 5isdeveloping standards forhowLCA istobeconducted. Their
workcouldcontributetomoreeasilydeterminingtheequivalencyofenvironmentalobjectives,andleadtoincreased
mutual recognition agreements.WT/CTE/W/79
Page5
B. TheInternational Trade Centre
16. TheITCorganizedaWorkshoponEco-labellingandOtherEnvironmentalQualityRequirements
fortheTrade ofDeveloping Countries inTextiles andClothing from 20-23 June1995 inGeneva.
Inareport entitled Eco-Labelling andOther Environmental Quality Requirements inTextiles and
Clothing; Implications forDeveloping Countries ,theoutcome oftheworkshop issummarized andsome
ofthepapers presented attheworkshop included (these donotnecessarily represent theviews ofITC).8
17. Thesummary begins withthefollowing general statement:
Itwashighlighted thatquality improvement andquality assurance efforts undertaken by
developing country exporters should include environmental protection improvements related
toproducts andtheirpackaging andassociated production methods, since thetotalquality
management approach encompasses theimperative tosatisfy both consumer needs and
expectations ontheonehandandenvironmental protection needs ontheother.
18. TheWorkshopnotedthatinmanydevelopingcountriesforwhomtextilesandclothingconstitute
asignificant portion oftheirexports, bothgovernment andindustry representatives areconcerned about
thefastchanging environmental regulations thataffect international tradeintextiles andclothing. The
following concerns arenoted inthereport:
Problems regarding eco-labels themselves included thefactthatthere wasamultiplicity of
schemes, thatthecriteria didnothaveacommon range, thateco-labelling schemes didnot
takeintoaccount thetypeofparticular environmental andlabour conditions ofindividual
developing countries, thatsome schemes lacked credibility andthatthesetting ofstandards
wasbeing rushed.
Problems fordeveloping countries included thelackoflocalinfrastructure fortesting, auditing
andverification procedures andthecostliness ofsuchprocedure; thelackoftechnical know-how
indeveloping countries which willtaketimetodevelop; thedifficulty ofcontrolling thevarious
stages ofthelife-cycle ofaproduct, especially indecentralized processes; thefactthatsmall
andmedium industries were more affected bythehighadditional costs ofusing socalled
environmentally friendly inputs imported fromdeveloped countries. Furthermore, quality may
beaffected byenvironmentally friendly substitutes which haveabearing onenvironmental
performance. Indeed, competitiveness maybeaffected byhigher costsincurred incompliance
withrequirements.
19. Attheworkshop, itwasstated thateco-labels could bemore ofacommercial andmarketing
toolrather thananenvironmental one.There areinstances where consumer health isnotdirectly affected
byinputs which eco-labels attempt toregulate. Itwasalsostated thatlittleattention hasthusfarbeen
given totheenvironmental problems involved intheprocesses ofconsumption anddisposal.
20. Finally, thefollowing concern wasalsoraised:
Other areas ofconcern were thatincertain cases, there isanextra-territorial application of
environmental priorities ofdeveloped importing countries ondeveloping supplier countries,
andthatthere areother mechanisms, rather thaneco-labels thatmaybemore appropriate for
securing environmental performance.
8ITC(UNCTAD/WTO) (1996), Eco-Labelling andOther Environmental Quality Requirements inTextiles
andClothing. Implications forDeveloping Countries ,Trade andDevelopment Services.WT/CTE/W/79
Page6
21. Anumber ofrecommendations emerged fromtheworkshop, including, forinstance promoting
dialogue between developing anddeveloped countries, having developing countries participate inthe
setting ofcriteria andstandards, providing developing countries withtechnical assistance toimprove
theirenvironmental performance, increasing harmonization andthemutual recognition ofeco-labelling
schemes, etc.
C. TheUnited Nations Conference onTrade andDevelopment
22. Thetwomostrecent UNCTAD reports oneco-labelling include: (1)International Cooperation
onEco-Labelling andEco-Certification Programmes andMarket Opportunities forEnvironmentally
FriendlyProducts,and(2)Trade,EnvironmentandDevelopment;AspectsofEstablishingandOperating
Eco-Labelling Programmes .9Inthereportonmarketopportunities,thefollowingconclusionisreached:
With respect toeco-labelling, thereport shows that, despite being directed primarily at
environmental objectives, there isnevertheless concern thateco-labelling programmes may
attimes discriminate against foreign producers because oftheways inwhich theyoperate and
mayineffect actasanon-tariff barrier totrade. Thecoexistence ofdifferent eco-labelling
schemes maycompound problems forforeign producers, inparticular exporters indeveloping
countries, whohavetoobtain information toadjust totherequirements ofdifferent markets
iftheywanttoqualify foraneco-label.
Thecosts ofadjustment fordeveloping country firms thatwishtocomply witheco-labelling
criteria maybesignificant. Fordeveloping country producers, thecosts involved intheuse
ofspecific chemicals andother rawmaterials, capital investment, aswellastesting and
verification tendtobeparticularly relevant. Designing andproducing aproduct thatcomplies
with eco-criteria may beparticularly costly forsmall-scale producers. Inaddition,
process-related criteria, which tendtobebased onenvironmental andtechnological conditions
intheimporting country, may imply high costs forforeign producers andmay be
environmentally inappropriate inthecontext oftheirlocalconditions.
23. Thereport notes thatthetransparency ofeco-labelling schemes iskeyfordeveloping countries,
andthatequivalency andmutual recognition arealsointheirinterest. UNCTAD distinguishes between
product-related andprocess-related eco-labelling criteria. Itargues thatbecause product-related criteria
address theimpacts ofaproduct ontheenvironment oftheimporting country (consumption anddisposal
phases), thescope forestablishing equivalent product-related criteria willbelimited. Ontheother
hand, because process-related criteria mayaddress environmental problems experienced intheexporting
country alone, greater scope exists foraccepting asequivalent environmental criteria thatreflect the
environmental condition andpriorities oftheexporting country. Equivalency andmutual recognition
would make compliance witheco-labelling requirements easier fordeveloping countries.
24. UNCTAD alsostates thatmutual recognition tends tobeeasier between countries which have
comparable levels ofdevelopment andwhich arealready involved intrade agreements. Incountries
withdifferentlevelsofeconomicdevelopment,eco-labelsmaybebasedonsubstantiallydifferentcriteria,
renderingmutualrecognitionmoredifficult.Insuchcases,UNCTADarguesthattheinitialharmonization
ofcertain technical regulations, suchastesting andinspection methods, would benecessary toachieve
mutual recognition.
9UNCTAD(1994),InternationalCooperationonEco-LabellingandEco-CertificationProgrammesandMarket
Opportunities forEnvironmentally Friendly Products, Trade andDevelopment Board, 6October ;and,UNCTAD
(1995),Trade,EnvironmentandDevelopment:AspectsofEstablishingandOperatingEco-LabellingProgrammes,
Trade andDevelopment Board, 28March.WT/CTE/W/79
Page7
25. Onexport opportunities forenvironmentally-friendly products, thereport notes "that there
maybetrading opportunities forenvironmentally-friendly products fromdeveloping countries. Their
environmental claims must, however, becredible." Thestrategies which developing countries may
usetosubstantiate theirenvironmental claims areidentified andinclude: giving therightsignals to
theirimporters regarding theircommitment toenvironmental issues atthefirm, andusing thirdparty
certification schemes topromote theirexports.
26. Inthesecond report oneco-labelling, similar conclusions arereached. However, thereport
addresses theproblems faced bySMEs ingreater detail. Itstates thattheymayencounter particular
difficulties incomplying withenvironmental standards, andmeeting therequirements ofeco-labels
forthefollowing reasons:
(a) SMEs maylackaccess totheinformation, technology andcapital needed tocomply
witheco-labels;
(b) Limited economies ofscale inSMEs mayrender certain investments unprofitable;
(c) Small industrial sitescanbeconstrained bythelackofphysical space needed toinstal
environmental facilities (e.g.facilities forwastewater treatment);
(d) SMEs maybeunable toensure thattherawmaterials theyuseareproduced in
accordance withthecriteria setbytheeco-labels;
(e) SMEs maybeunable topurchase therawmaterials needed tocomply withthelabels
atcompetitive prices; and
(f) Testing andverification requirements associated witheco-labels mayinvolve coststoo
highforSMEs toassume.
27. Thereport examines three sectors ofexport interest todeveloping countries: paper, textiles,
andclothing andfootwear. Itstates that"most sectoral studies point outthatmeeting theeco-criteria
forcertain products would havesignificant effects oncompetitiveness, particularly forsmall firms."
D. TheUnited Nations Industrial Development Organization
28. Inasurvey ontheImplications ofInternational Standards forQuality andEnvironmental
Management Systems ,conducted byUNIDO (incooperation withISOandtheITC), theeffects of
environmental labels ontradeareaddressed.10Thesurvey isbased ontheresponse of351respondents
from 63developing countries andcountries witheconomies intransition tostandard questionnaires.
Respondents arefrom (a)government departments, national standardizing bodies, certification and
accreditation bodies; and,from (b)industry associations, chambers ofcommerce, andcommercial
enterprises.
29. Thesurvey reaches thefollowing conclusion:
Since respondents hardly haveanyexperience withforeign labels, onethirdofthemisunable
toassess theeffects ofdifferent national eco-labels onexport opportunities. Oneinfive
(20percent)respondentsfromcompaniesandbusinessassociationsconsidersnationaleco-labels
toimpair exports, whereas halfofthem denythat. Small andmedium sized companies are
reported tobelessaffected thanlarger enterprises are.Incomparison tothat,afargreater
number ofinstitutional respondents (53percent)areoftheopinion thatdifferent national labels
hinder trade opportunities, those from South andEastAsiabeing particularly pessimistic on
thisissue. Differences intheperceived threat totradealsomayreflect thebroader perspective
10UNIDO, ISOandITC(1997), Implications ofInternational Standards forQuality andEnvironmental
Management Systems, Survey Results, October.WT/CTE/W/79
Page8
thatrespondents fromgovernment departments, standards bodies, certification andaccreditation
bodies have.
E. TheOrganization forEconomic Co-operation andDevelopment
30. IntheCase Study onEco-Labelling Schemes, theOECD examines themarket, trade and
environmental effects ofaselection ofeco-labelling programmes operating inOECD countries.11These
include: theEuropean Union (EU) Eco-label Award Scheme, theNordic Swan, theSwedish
Environmental Choice Programme, theCanadian Environmental Choice Programme, theGerman Blue
Angel, theGreen SealoftheUnited States (US), theJapanese Eco-Mark, andtheFrench Norme
Francaise (NF) Environment.
31. Ontheleveloftransparency andconsultation involved inthedesign ofeco-labelling schemes,
thestudy states thatalloftheschemes which itreviewed contain mechanisms fortransparency and
consultation. However, itreaches thefollowing conclusion intheirregard:
Onceproduct groups havebeenselected bythedecision-making body, representatives ofvarious
interest groups generally participate intheexpert group responsible forthedevelopment of
eco-label criteria. Thedraftcriteria arethenavailable forpublic review before thefinalcriteria
areadoptedbythedecision-makingbody.Thedecisiononthefinaleco-labelcriteriaisgenerally
notopen tooutside participation andthelackofconsideration given tocomments provided
onthedraftcriteria hasbeenthesource ofcriticism. While noexamples ofovertdiscrimination
havebeenfound inthecourse ofthisstudy, forpractical reasons, access toinformation and
participation incriteria development willbemore difficult forforeign producers which are
notrepresented domestically.
32. Thestudy notesthatthemoresignificant themarket impact ofeco-labelling schemes, thegreater
theirtrade effect. With respect tomarket impact itstates that:
Inpractice, dataconcerning themarket impact ofeco-labelled products isdifficult toobtain.
Itisoftenconfidential information inthehands ofindustry. Some scattered anecdotal evidence
shows thatsaleshaveincreased when aneco-label hasbeenobtained, butthereisnostatistical
dataingeneral toshow themarket power aneco-label mayconfer onaproduct. Producers
however continue toapply forandpayforeco-labels, indicating thattheyhavesome market
value. Also, itisdifficult toseparate outtheimpact onthemarket oftheeco-label inisolation
from other factors which mayalsoinfluence themarket share ofproducts.
33. Thestudy argues thateco-labelling schemes havebeenmore successful incountries orregions
whichbenefitfromahighlevelofconsumerenvironmentalawareness.Environmentalnon-governmental
organizations, consumer groups andthemedia havecontributed toincreasing consumer awareness of
environmentally preferable products; and,"incertain cases, eco-labels havehadasignificant impact
onthemarket forspecific product categories (e.g.detergents inSweden)." Also, aseco-labels continue
tobeawarded toagrowing portion ofthemarket inparticular product categories (e.g.30percent),
eco-labelled products could become thenorm, andinfluence themarket access ofnon-eco-labelled
products.
34. TheOECD states thatoverall, eco-labelling hasonlybeenmoderately successful withthe
individual consumer. However, eco-labels mayhaveimportant market impact when retailers specify
11OECD (1997), Case Study onEco-Labelling Schemes ,Joint Session ofTrade andEnvironmental Experts,
Paris, 12-13 February.WT/CTE/W/79
Page9
thattheywant topurchase eco-labelled products, orwhen theybecome atoolforidentifying
environmentally preferable products forgovernment procurement (asinCanada 'sEnvironmental Choice
andJapan'sEco-Mark) andinstitutional purchasing (aswithGreen SealEnvironmental Partners).
35. Producers havebeenmotivated toobtain eco-labels duetothefearoflosing market share to
eco-labelled competing products, andthedesire tomaintain competitive advantage. However, eco-labels
havealsobeenconsidered bymanufacturers tobeavaluable tooltocommunicate theenvironmental
qualities oftheirproducts andcompanies, toimprove theirimage.
36. Withrespect totrade effects, theOECD states that"thisstudy hasnotrevealed hardevidence
oftrade effects arising from eco-labelling." However, italsonotes that:
Eco-labelling schemes raiseparticular trade concerns when theyinclude production-related
criteria. Such criteria candiscriminate against imports when theyreflect exclusively the
environmental conditions andpreferences oftheimporting country, particularly fordeveloping
countries andcountries depending heavily onexports.
37. However, inexamining which oftheschemes reviewed include production-related criteria,
itconcludes thatonlyalimited number ofeco-labels include requirements exclusively related tothe
environmental effects which occur during theproduction phase. Itaddsthatfeweco-labels inthe
schemes reviewed, havebeendeveloped forproducts ofspecific export interest todeveloping countries.
38. Tominimize thepotential tradeeffect ofeco-labels, thestudy states thatequivalency andmutual
recognition playanimportant role. Attempts atequivalency andmutual recognition havealready been
made between Canada 'sEnvironmental Choice Programme andGreen SealoftheUS,andthrough
bilateralcooperationbetweenTerraChoiceEnvironmentalServices(theprivateconsultancyfirmrunning
Canada 'sEnvironmental Choice Programme) andtheGreen Mark Programme implementation body
inTaiwanWT/CTE/W/79
Page10
ANNEX
Update of"Eco-Labelling: Overview ofCurrent Work inVarious International Fora"
(WT/CTE/W/45)
A. TheCodex Alimentarius Commission
TheCodex Alimentarius Commission, which hadprepared Draft Guidelines fortheProduction,
Processing, Labelling andMarketing ofOrganically Produced Foods ,expects theGuidelines tobe
discussed inthenextmeeting oftheCodex Committee onFood Labelling inMay1998.
B. TheEconomic andSocial Commission forAsiaandthePacific
TheEconomic andSocial Commission forAsiaandthePacific (ESCAP) hasproduced a
1997 report entitled theTrade Effects ofEco-Labelling ,which contains theproceedings ofaseminar
heldinBangkok, Thailand, from17-18 February 1997. Theobjective oftheseminar wastheexchange
ofexperiences andsharing ofinformation among ESCAP countries thathaveoperational eco-labelling
schemes inplace orwhich areintheprocess ofestablishing them. Theconclusions ofthereport are
presented insection III(A)ofthisNote.
C. TheInternational Organization forStandardization
TheInternationalOrganizationforStandardization's(ISO)TechnicalCommittee207iscontinuing
itswork onenvironmental management. Sub-committee 3(SC3)oftheTechnical Committee has
beenexamining theissueofenvironmental labelling, andsub-committee 5(SC5)theissueoflifecycle
assessment.
ISOstandards passthrough anumber ofstages priortopublication. These include theWorking
Draft (WD), Committee Draft (CD), Draft International Standard (DIS), Final Draft International
Standard (FDIS), andapproval andpublication stages. AttheDISstage, standards aresubmitted to
ISOMembers foravote. AttheFDIS stage, thestandards thataresubmitted foravote, arealsomade
public.
Twoofthestandards thatSC3hadbeenworking on,ISO14022 (Environmental Labels and
Declarations -Self-Declaration Environmental Claims -Environmental Labelling Symbols) and14023
(Environmental Labels andDeclarations -Self-Declaration Environmental Claims -Testing and
Verification Methodologies) havenowbeenincorporated intoISO14021 (Environmental Labels and
Declarations -Self-Declaration Claims -Terms andDefinitions). Thefollowing isalistofSC3
standards currently being developed, andoftheofthestages ofpreparation thattheyareat.
(i) ISO14020 Environmental Labels andDeclarations -Basic Principles (changed
from CDtoFDIS stage);
(ii) ISO14021 Environmental Labels andDeclarations -Self-Declaration Claims -
Terms andDefinitions (remains atDISstage); and
(iii) ISO14024 Environmental Labels andDeclarations -Environmental Labelling
Type I-Guiding Principles andProcedures (changed fromCDtoDIS
stage)WT/CTE/W/79
Page11
Thefollowing isalistofSC5standards andofthestages ofpreparation thattheyareat:
(i) ISO14040 Environmental Management -LifeCycle Assessment -Principles and
Guidelines (remains atFDIS stage);
(ii) ISO14041 Environmental Management -LifeCycle Assessment -Inventory
Analysis (changed from CDtoFDIS stage);
(iii) ISO14042 EnvironmentalManagement-LifeCycleAssessment-LifeCycleImpact
Assessment (remains atCDstage); and
(iv) ISO14043 Environmental Management -LifeCycle Assessment- LifeCycle
Improvement Assessment (remains atCDstage)
D. TheUnited Nations Industrial Development Organization
TheUnited Nations Industrial Development Organization, which hadprepared aSurvey ofthe
Trade Implications ofInternational Standards forQuality andEnvironmental Management Systems
(ISO9000/14000 Series) ,willorganize three conferences in1998 inLatin America, Africa andAsia
(tentatively scheduled forJune, September, andOctober) todiscuss theresults ofthesurvey, andidentify
theneeds forassistance.
__________