RESTRICTED
WORLD TRADE WT/CTE/W/37
23July1996
ORGANIZATION(96-2906)
Original: English Committee onTrade andEnvironment
ENVIRONMENTAL REVIEW OFTRADE AGREEMENTS
ATTHE NATIONAL LEVEL
Communication from theUnited States
1. Theuseofenvironmental reviews (alsoreferred toasenvironmental impact statements) is
widely accepted asanimportant toolatthenational levelineconomic planning anddevelopment.
Environmental reviews arerequired bylawinmany countries oftheworld, andimplemented asa
matter ofpolicy bymultilateral development banks. Principle 17oftheRioDeclaration provides
that"[e]nvironmental impact assessment, asanational instrument, shallbeundertaken for
proposed activities thatarelikely tohaveasignificant adverse impact ontheenvironment andare
subject toadecision ofacompetent national authority".
2. Ingeneral, environmental reviews areanalytical documents tohelpinform thepublic and
decision makers about potential positive andnegative environmental effects ofmajor proposed
actions likely tohavesignificant environmental implications. Environmental reviews alsotypically
identify potential mitigation measures andreasonable alternatives tominimize oravoid negative
environmental effects. Public input andinvolvement arekeytoeachofthese elements. Inmany
countries, theenvironmental reviews concept isbeing applied tothedevelopment ofstrategic plans
andprogrammes. (SeeUnited Nations Economic Commission report "Application of
Environmental Impact Assessment Principles toPolicies, Plans andProgrammes"
ECE/ENVWA/27).
3. Inthese ways, environmental reviews promote informed decision- aking andhelpensure
thattheactivities ofpeople andnations areinharmony withtheenvironment andfulfil other
economic anddevelopment needs oftheirsocieties. They canprovide abasis forresolving
environmental concerns andreaching agreement tocarry outactivities serving important national
purposes while continuing toprotect theenvironment.
4. Environmental review oftrade agreements isincreasingly being endorsed byinternational
organizations. Building upon recommendations inAgenda 21,theSecond Session ofthe
Commission onSustainable Development (CSD) inMay1994 noted theimportance ofdeveloping
aframework tofacilitate theassessment oftheenvironmental effects oftrade. TheThird Session
oftheCSD in1995 called forfurther work inthisarea, andstated thattheCommission:
"...encourages Governments todevelop orstrengthen processes toassess the
environmental effects oftrade policies ...andpromote transparency andopenness tothe
public inthese processes".
5. AUnited Nations Environment Programme (UNEP) adhocExperts Workshop on
Environmental Assessments ofTrade Policy in1995 developed areport summarizing recent
experience inthisareawithrecommendations forfurther work onmethodology development.
./.WT/CTE/W/37
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6. TheOrganization forEconomic Cooperation andDevelopment (OECD) Council, in1993,
alsohasrecommended, among other things, thatitsMember Governments examine orreview
trade policies andagreements withpotentially significant environmental effects, andcarry- ut
follow-up activities toensure potential environmental effects areaddressed. TheOECD Joint
Session ofTrade andEnvironment Experts hassubsequently prepared apaper addressing the
methodology forconducting suchexaminations andreviews.
7. Practical experience withenvironmental reviews fortrade agreements hasbeenacquired
bysome countries. InNorth America, forexample, theUSandCanada completed assessments
ontheenvironmental effects oftheNorth American FreeTrade Agreement (NAFTA). TheUS
review wasinitiated prior tonegotiation, andcontained recommendations tonegotiators asthe
agreement wasdeveloped. Italsoprovided information toUSpolicy makers infurther developing
bilateral environmental cooperation work withMexico, andincreating anewenvironmental
cooperation agreement between Canada, Mexico andtheUS.These three countries alsoare
working onaretrospective study oftheenvironmental effects ofNAFTA under theterms ofthe
environmental cooperation agreement. TheUSalsoprepared anassessment oftheUruguay
Round oftheGeneral Agreement onTariffs andTrade (GATT). Wealsounderstand thatother
countries/entities haveprepared environmental reviews orassessments oftrade agreements or
actions.
8. Although work iscontinuing onmethodological issues, theinternational experience todate
hasshown thevalue ofseveral areas ofbasic analysis: describing theproposed trade agreement,
particularly initsenvironmental context; identification ofpotential direct andindirect impacts,
including bothpositive andnegative effects; andidentification ofmeasures oractions which
negotiators andpolicy makers canconsider toavoid negative and/or enhance positive
environmental effects.
9. Potential environmental issues thathavebeenidentified andaddressed include those
identified inWT/CTE/W/1. These include potential indirect effects related tochanges inthe
structure andscale ofeconomic activities resulting from trade andinvestment liberalization,
especially where trade occurs intheabsence ofenvironmental costinternalization intheprice of
traded products.
10. Environmental reviews alsohavehelped toidentify potential cooperative measures which
canbetaken outside theframework ofatrade agreement toaddress identified environmental
issues: i.e.,so-called parallel efforts topromote sound environmental policies intandem with
trade liberalization policies, insupport ofsustainable development. Thislatter approach has
offered anespecially promising pathtohelpassure thateconomic integration isenvironmentally
sustainable. Environmental reviews canalsohelptodevelop astrategy toaddress regional-scale
environmental impacts duetoincreased economic activity related totrade liberalization, for
example inborder areas.
11. Inviewoftherecommendations byinternational bodies andtheexperience which hasbeen
gained onenvironmental assessment ingeneral andfortrade agreements inparticular, noted
above, CTE Ministers should recommend thatnational governments carry outenvironmental
reviews oftrade agreements likely tohavesignificant environmental effects, aspartoftheprocess
ofdeveloping suchagreements, taking intoaccount thepoints noted above. Ministers might
further recommend thatMembers beinvited toprovide copies ofsuchreviews anddocuments
relating tomethodology forreviews totheSecretariat forreference byMembers.