WORLD TRADE
ORGANIZATIONWT/CTE/GEN/8
18 February 2003
(03-1020)
Committee on Trade and Environment
ENVIRONMENTAL ISSUES RAISED IN THE AGRICULTURE NEGOTIATIONS
Statement by Mr. Frank Wolter1 at the Regular Session
of the Committee on Trade and Environment of 14 February 2003
Paragraph 51
A. NEGOTIATIONS ON AGRICULTURE : MANDATE AND NEGOTIATING PROCESS
1. The negotiations on agriculture were launched in March 2000 in accordance with Article 20
of the Agreement on Agriculture, following a three-years Process of Analysis and Information
Exchange conducted in the Committee on Agriculture. Article 20 mandates negotiations to continue
the reform process, taking into account, inter alia, non-trade concerns, special and differentialtreatment to developing country Members, and the objective to establish a fair and market-oriented
agricultural trading system, and the other objectives and concerns mentioned in the Preamble to the
Agreement.  The need to protect the environment is one of the non-trade concerns explicitly
mentioned in the Preamble. During the first phase of the negotiations (March 2000-March 2001) an
unprecedented total of 121 participants presented, either individually or as co-sponsors, proposals forconsideration by the Committee on Agriculture, Special Session. The second phase (March 2001-
March 2002) was devoted to in-depth discussions of these proposals and further inputs submitted by
participants.
2. The Doha Ministerial Declaration put the nego tiations on a new footing. Under the Doha
mandate Members committed themselves to comprehensive negotiations aimed at substantial
improvements in market access; reductions of, with a view to phasing out, all forms of export
subsidies; and substantial reductions in trade-distorting domestic support.  Special and differentialtreatment for developing countries is to be an integral part of all elements of these negotiations and is
to be embodied in the Schedules of concessions and commitments and as appropriate in the rules and
disciplines to be negotiated so as to be operationally effective and to enable developing countries to
take account of their development needs, including food security and rural development.
Furthermore, Ministers confirmed that non-trade concerns would be taken into account in thenegotiations as provided for in the Agreement on Agriculture.
3. Finally, Ministers agreed on a timeframe for the agriculture negotiations: modalities for the
further commitments, including provisions for special and differential treatment, are to be established
no later than 31 March 2003.  Participants are to submit comprehensive draft Schedules of
commitments based on these modalities no later than the  Cancún Ministerial Conference.  Theagriculture negotiations are to conclude as part of the negotiating agenda as a whole, by 1 January
2005.
B. N
ON-TRADE CONCERNS
4. Starting with the Analysis and Information Exchange Process and continuing throughout the
different phases of the agriculture negotiations, Members have discussed environmental issues as a
                                                     
1 Director of the WTO Agriculture and Commodities Division.WT/CTE/GEN/8
Page 2
non-trade concern. Many  Members have presented views and tabled proposals on the subject.  Other
non-trade concerns raised in the negotiations include food security, livelihood security, poverty
alleviation, rural development, food safety and animal welfare. A survey of the specific proposals that
have been tabled is contained in the  Overview Paper on the negotiations (TN/AG/6, 18 December
2002, refers).
5. In the negotiations, the debate of these matters has essentially  not centred on the question
whether non-trade concerns such as the protection of the environment are legitimate policy objectives.
The view that they  are is widely shared. Rather, the debate has been about what are the appropriate
and effective instruments to achieve these objectives, and it is in this regard that  there are differing
views. It may also be worthwhile noting that in the context of the discussions on these matters, several
developing countries have made the point that their non-trade concerns are of a fundamentally
different dimension than those of developed countries.
C. ENVIRONMENTAL IMPACT OF PROTECTION AND TRADE -DISTORTING SUPPORT IN
AGRICULTURE
6. In the environment-related discussions, the role of protection and trade-distorting support has
featured prominently. Many Members recognize that agricultural production can have both positive
and negative effects on the environment.  There are, however, different views about the environmentalimpact of trade-distorting agricultural policies.
7. A number of developed and developing Members have emphasized that trade and
environmental protection are mutually reinforcing, and that reducing trade distortions improves the
environment through its positive impact on resource use. In their view, protection and trade-distorting
domestic support policies encourage environmentally harmful agricultural practices such as intensivefarming, including  high use of fertilizers and pesticides. The result is resource degradation and
environmental stress, such as adverse effects on the ground water, the soil and biodiversity.
Furthermore these Members note that trade-distorting support, including export subsidies, can also
have negative environmental effects in third countries, particularly developing countries, because
these measures drive down international prices and increase their volatility. As a result, returns fromagriculture in developing countries are lower than otherwise, thus exacerbating poverty and making it
even more  difficult for farmers in these countries  to move towards environmentally more sustainable
practices.  These Members therefore advocate reducing protection and trade-distorting agricultural
support as a way of simultaneously advancing trade, development and environmental objectives.
8. Other Members have highlighted the positive environmental effects of agriculture, including
land conservation, management of water resources, preservation of biodiversity and habitats and
maintaining the landscape.  In their view, a certain level of trade-distorting domestic support isnecessary to maintain agricultural production, especi ally in areas with low agricultural potential, and
thus ensure provision of the positive environmental externalities. These Members hold that for them
to achieve their objectives regarding non-trade concerns such as the protection of the environment,
they also need an appropriate level of border protection as a flanking instrument.
9. Another issue raised in the negotiations is Article 6.2 of the Agreement on Agriculture. This
Article exempts in the case of developing countri es certain domestic support measures from reduction
commitments which would otherwise be applicable. There have been several proposals to extend the
list of such exempted measures, including a proposal to include support measures which are essential
to encourage conservation measures in developing countries.
10. Finally, it should be noted that in the context of unilateral reforms, some  Members are
currently considering the possibility, or reform steps, to make domestic support subject to cross-
compliance with environmental criteria.WT/CTE/GEN/8
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D. GREEN BOX
11. Under the Agreement on Agriculture, trade-distorting domestic support that exceeds  de
minimis levels is subject to reduction commitments; this is referred to as Amber-Box support.
However, direct payments under production-limiting programmes, although trade-distorting as well,
are  exempt from reduction commitments (Blue Box). Domestic support with no, or at most minimal,trade-distorting effects or effects on production,  so-called Green Box support, can be provided by
governments as they see fit, provided that the criteria defining Green Box measures are complied
with. These criteria are specified in Annex 2 of the Agreement on Agriculture.
12. The Green Box covers a wide range of pr ogrammes and measures, from a variety of
government service programmes to a variety of targeted direct payments to producers. The Green Box
includes, for example, support for research in connection with environmental programmes as well as
direct payments under environmental programmes th at fulfil certain conditions, such as that the
payments are part of a clearly-defined government programme and are limited to the extra costs
involved in complying with the programme (paragraph 12 of Annex 2 of the Agreement on
Agriculture).
13. In the negotiations, some Members have proposed to cap overall Green Box expenditures.
This would affect all types of Green Box support, including payments under environmentalprogrammes.  Others have called for such a cap for developed countries only. Still others are opposed
to establishing any limits for Green Box expenditures. As for measures that aim at protecting the
environment, it has been proposed that such measures should be accommodated in the Agreement on
Agriculture and should be well targeted, transparent and implemented in no more than minimally
trade-distorting ways.
14. Several specific proposals have been made concerning paragraph 12 of Annex 2, i.e. the
Green Box, on environmental payments. While some countries have proposed to keep paragraph 12 as
is, others would like to fine-tune some of the wording to ensure that support provided under
environmental programmes is not related to the volume of production. Another Member has  proposed
that payments also be allowed to compensate for th e provision of environmental benefits if these are
clearly defined in national legislation. There are  also proposals to include landscape payments or
animal welfare payments in this chapter of the Green Box.
15. Paragraph 13 of the Green Box covers payments under regional assistance programmes.  One
Members has proposed establishing criteria for defining a particular region as disadvantaged.
According to this proposal, Members would be given flexibility to provide support to such regions to
maintain and improve traditional production systems and the environment. Other Members prefer
maintaining paragraph 13 as is, or have proposed changes not related to the environment.
16. In addition to the existing provisions, one Member has proposed adding a new category of
measures to be exempt from reduction commitments under the Green Box.  This category consists of
payments to compensate for extra costs accruing from higher production standards.  Eligibility of such
payments would be determined as part of a clearly-defined government programme designed to
address non-producer concerns such as consumer  and societal demands and be dependent on the
fulfilment of specific conditions related to production methods or input.  Although environmental
standards are not specifically mentioned in this proposal, they would presumably be covered by such
a paragraph. Others are opposed to including such an exception in the Green Box.
E. L
ABELLING
17. Several Members have noted that consumers are increasingly demanding information on
agricultural products, especially foodstuffs.  The information demanded included the characteristics of
agricultural products, their performance, or proc esses and production methods - often related to foodWT/CTE/GEN/8
Page 4
safety, but also to environmental and other concerns. In the view of these Members, the least trade-
restrictive way of providing such information is thr ough labelling. In this regard, it has been proposed
that  Members should clarify through a common understanding the criteria and guidelines for the
implementation of mandatory labelling requirements in respect of food and other agricultural
products.
18. Other Members are of the view that labelling and consumer information are outside the
mandate of the agriculture negotiations.  They consider that mandatory labelling should be addressed
in other fora, including the TBT Committee.
F. CONCLUSION
19. Throughout the negotiations on agriculture, environmental issues have been part of the
discussions on non-trade concerns. While Members generally share the view that the protection of the
environment is a legitimate policy objective, there continue to be differences in views about theappropriate instruments to achieve this objective. A number of Members consider that targeted,
transparent and non-, or no more than minimally, trade-distorting measures are the effective tools.
Many of them see the reduction of trade-distorting support and border protection as having an overall
positive effect on the environment. Some other Members argue that they need trade-distorting support
and border protection to achieve their non-trade objectives, including the protection of theenvironment. There is, however, broad consensus that the environmental-related provisions of the
Green Box should be maintained. This, along with the proposal to include support measures which are
essential to encourage conservation measures in developing countries, is also reflected in the first
draft of the modalities for the further commitments  prepared by the Chairman of the negotiations on
agriculture and issued just two days ago (JOB(03)/23, dated 12 February 2003).
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