WORLD TRADE
ORGANIZATIONWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
3 June 2002
(02-3034)
Committee on Trade and Development
Committee on Trade and EnvironmentCommittee on Trade and Environment - Special SessionOriginal:  English
SUSTAINABILITY IMPACT ASSESSMENT
Communication from the European Communities
The following communication was received from the EC.  It contains a letter on progress on
Sustainability Impact Assessment (SIA) to Mike Moore (Annex I); the summary of a report outlining
the methodology to be applied (Annex II); the su mmary of a pilot case study applying broadly that
same methodology to certain food crops (Annex III).  While Annex II and III contain the full table of
contents of these two studies, only the summaries are reproduced to indicate their scope and detail.An information sheet outlining the case studies to be launched and carried out during the coming
years is contained in Annex IV.  Additional info rmation and the full documentation are available on
the WTO Website, and on the site (http://idpm.man.ac.uk/sia-trade).
_______________WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 2
ANNEX I
EUROPEAN COMMISSION
Permanent Delegation
to the International Organizations in Geneva
Head of Delegation
Geneva, 16 May 2002
g:\xne\rs02\65 -  700623
Dear Director-General,
As is already well known, the European Union is committed to carrying out independent and publicly
available assessments of the impact on sustainability objectives arising from trade liberalisation.  We
have just launched a multi-year programme to conduct such SIAs in respect of work under the Doha
Development Agenda.
The consortium working under contract for the Commission on this matter are running an independent
website ( http://idpm.man.ac.uk/sia-trade/ ) and are seeking to establish as broad as possible a
network of experts and interested officials working on SIA issues in the trade field.
As an indication of the framework for this exercise, I enclose the following documents:
• A report outlining the methodology to be applied;
• A pilot case study applying broadly that same methodology to certain food crops;
• An information sheet outlining the case studies to be launched and carried out during
the coming years.
We hope that the WTO can arrange for the fullest possible dissemination of these papers, and of this
letter, so that all interested parties are able to establish contact with those carrying out this work in
Europe.  In addition, I would request that at th e next appropriate occasion, the CTE and CTD take
opportunities to look at the work under way, and to exchange views on other similar exercises
underway elsewhere.
In the spirit of the DDA, we are open to assisting others who are interested in more detailed
discussion of SIA methodology or of sp ecific case studies.  It is also our hope that the WTO, both on
its own initiative and in co-operation with UNEP, will contribute to the development of capacity for
SIA approaches to policy-making as set out in the Doha declaration.
I am also sending a copy of these documents to Mr. Toepfer, Director, UNEP and to the Chairmen of
the Committee on Trade and Environment and of the Committee on Trade and Development.
Yours sincerely,
(Authorised by signature)
Carlo TROJAN
AmbassadorWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 3
ANNEX II
FURTHER DEVELOPMENT OF THE METHODOLOGY FOR
A SUSTAINABILITY IMPACT ASSESSMENT OF PROPOSED
WTO NEGOTIATIONS
FINAL REPORT TO THE EUROPEAN COMMISSION
Prepared by Colin Kirkpatrick and Norman Lee,
assisted by Johanna Curran, Jamie Franklin,
Clive George and Hisako Nomura
Institute for Development Policy and Management
University of Manchester
5 April 2002
This report was prepared with financial assistance from the Commission of the European
Communities.  The views expressed herein are those of the Contractor, and do not represent any
official view of the Commission.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 4
CONTENTS1
SUMMARY
A. INTRODUCTIONB. PROGRESS REPORT
B.1 Introduction
B.2 Development of Phase Three Methodology
B.3 Participation in Dialogue with Stakeholders
3.1 Consultative Meeting on Interim Report3.2 Website Update
3.3 International Network of SIA Experts
B.4 Participation in Policy Debate and Publications
C. SIA METHODOLOGY
C.1 Introduction
C.2 Main Stages in the Assessment Process
2.1 Introduction
2.2 Stage 1: Screening and Scoping Update
2.3 Stage 2: Detailed Assessment
2.4 Stage 3: Assessment of Alternative M and E Measures2.5 Stage 4: Monitoring and Post-Evaluation Proposals
C.3 Assessment Tools
3.1 Introduction
3.2 Checklists
3.2.1 Trade Measures3.2.2 Scenarios and Scenario Analysis
3.2.3 Country Groupings and Individual Country Analyses
3.2.4 Sustainability indicators and Significance Criteria
3.3 Assessment Methods
3.3.1 Causal Chain Analysis3.3.2 Other Assessment Methods (analytic methods,
modelling, statistical estimation, descriptive methods,
expert opinion)
3.4 Data Sources
3.5 Consultation Arrangements3.6 Assembling Case-Specific SIA Methodologies
REFERENCES
                                                     
1 As noted on the cover page, Annex II contains the full table of contents to indicate scope and detail of
the study while only the Summary is reproduced here.  The study in its entirety is available on the WTO Website, and on the site (http://idpm.man.ac.uk/sia-trade).WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 5
Annex 1   Comments received on Phase One and Phase Two Studies
Annex 2   Comments received on the Interim Report
Annex 3   Comments received on the Mid-Term ReportAnnex 4   Sources for Sustainability Indicator Definitions and DataAnnex 5   Examples of Information Sources for Modelling MethodsAnnex 6   Examples of Information Sources for Data-based MethodsAnnex 7   Examples of Information Sources for Descriptive Methods
Annex 8   Examples of Institutional Websites for Trade and SIA Information
Annex 9   Additional Information and Data Sources for Use in Phase Three StudiesAnnex 10 Using Sustainability Impact Assessments in Trade Negotiations
Figures
Figure 1 The assessment methodology cycle
Figure 2 A decision tree for use in constructing a case-specific SIA methodology
Tables
Table 1 Differences in the assessment stages between preliminary and full SIAs
Table 2 Scoping matrix for a measure included within the SIA of a proposed trade 
agreement
Table 3 Doha Ministerial Declaration and alternative mitigation and enhancing 
measures
Table 4 Core and second tier target and process sustainability indicatorsTable 5 Significance criteria and scoringWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 6
SUMMARY
The main objective of this contract is to devel op a methodology for use in Phase Three SIA studies of
ongoing and projected WTO trade negotiations, by building upon the findings of previouslycompleted (Phase One and Phase Two) studies for the European Commission (Kirkpatrick, Lee and
Morrissey, 1999; Kirkpatrick and Lee, 1999).  This is to be undertaken in ways that involve effective
dialogue with interested stakeholders and which help  to strengthen the existing international network
of SIA experts and their involvement in the SIA debate.
Three reports are to be delivered, of which the first (an Inception  report) was submitted to the
Commission at the beginning of October 2001 (Lee, Kirkpatrick et al, 2001).  The Mid-Term Report
was submitted at the beginning of February, 2002 (Kirkpatrick, Lee et al, 2002).  This Final Report  is
the third report.  Following an Introduction , it is divided into two main sections – B. Progress
Report  and C. SIA Methodology  – followed by a list of references and supporting annexes.
The Progress Report  summarises the work that has been undertaken on the contract, and its principal
outcomes, between the beginning of September 2001, when the project commenced, and the end of
March 2002 (see Sections B1-B4).  Progress is summarised, according to each of the constituent
objectives of the contract, under the following headings:
• Development of the Phase Three methodology : this SIA methodology is presented in the
second part of this report.
• Participation in dialogue with stakeholders : the planned meetings have taken place, the
dedicated SIA website has been established and updated.  Approximately 200 site visits permonth have been recorded.  Comments received on the inception and mid-term reports have been
taken into consideration in the preparation of this final report.
• International network of experts and publications : this network has been substantially
expanded over the period of review and currently contains180 experts.  Further development of
the network, and its activities, including the contractor’s participation in four conferences /workshops are presented.  Also, seven related publications, authored by the contractors, are listed.
The SIA Methodology  is described in Sections C1 – C3, supported by Annexes 1 – 10.  As required
by the contract, it is:
• refined and developed from the SIA methodolo gy described in the Phase One and Phase Two
reports;
• prepared in a concise form appropriate for use by a contractor for the Phase Three SIA study; and
• written in a form which is accessible to both trade and non-trade specialists.
Additionally, it has been prepared, taking into consideration such likely practical constraints as: the
limited availability of appropriate ‘on the shelf’ assessment tools; of appropriate, reliable data for use
with these tools; and likely limitations in time and resources for delivering assessments within the
relatively tight schedules of the trade negotiation process.
The main components of the Phase Three SIA methodology are outlined below but, before this, two
important features of the methodology as a whole are highlighted.
• The proposed methodology for full SIAs during Phase Three, and the existing methodology for
preliminary  SIAs during Phases One and Two, share the same underlying principles.  However,
they differ in their detailed requirements because they are applied at different stages in the
assessment and negotiation process (see Table 1 in Section C.2.1).  The main similarities andWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 7
differences between the proposed Phase Three methodology and the earlier Phase One and Two
methodology are indicated at various stages in Section C of this report.
• No single, standardised methodology is applicable in all circumstances, because of the diversity
of situations in which full SIAs will be applied.  The methodology package which is to be used –that is, the preferred combination of particular  methods, data and consultations – is likely to be
case-specific .  A simple ‘decision-tree’ analysis is proposed to assist in determining the most
appropriate methodology package in each case (see Figure 3 and section C.3.6).
The main components of the methodology are described and explained in two inter-related sections –
C2 and C3 – as indicated below.
C.2  Main Stages in the Assessment Process   This contains a summary of the purpose and main
tasks to be undertaken at each of the stages in the full assessment process.  These stages are: screening
and scoping update, detailed assessment, assessment of alternative mitigation and enhancing (M and
E) measures, and the formulation of monitoring a nd post-evaluation proposals.  These are explained
for both global and sectoral SIAs.  Cross references are also made to checklists, assessment methods,
data requirements and consultation arrangements, which are covered in more detail in Section C.3.
C.3  Assessment Tools   This section covers:
• Checklists: these relate to definitions or descriptions of: the trade measures to be assessed; the
scenarios and scenario analyses to be used; the country groupings and country analyses to beundertaken; and the sustainability indicators and significance criteria to be used (see section
C.3.2)
• Assessment methods: these include brief descriptions of different types of assessment methods
and guidance on their selection and use.  They include: causal chain analyses, analytic methods,
modelling, statistical estimation, descriptive methods and use of expert opinions (see sectionC.3.3)
• Data sources: this includes brief guidance on identifying data and information needs, different
sources of quantitative and qualitative information (international, national, local) and on
accessing, using and interpreting data (see section C.3.4)
• Consultation arrangements: this provides guidance on the role of consultation, both as an
assessment method and source of information, and as an integral component in different stages of
the SIA process (see section C.3.5)
As previously mentioned, Section C.6 also provides guidance on assembling methodologies,
comprising different elements of the above, on a case-specific basis (see Section C.3.6).  Additional
supporting information, relating to the proposed methodology, is contained in Annexes 4 to 9.
The SIA methodology which has been developed is intended to assist negotiators and other interested
stakeholders in the post-Doha, WTO trade negotiations.  Annex 10 provides a brief aide memoire  for
trade negotiators, which summarises the key purposes and uses of SIA in the negotiating process.
The main tasks that have been undertaken, during the period from the mid-term report review meeting
with Commission staff on 22 February up to the end of March 2002, are:
• finalisation of the Phase Three SIA methodology, taking into consideration the comments
received on the draft SIA methodology contained in the mid-term report;WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 8
• continuation of the other activities which are integral to this project i.e. participation in dialogue
with stakeholders, updating of the SIA web-site, and further strengthening of the internationalnetwork of SIA experts and other activities associated with this.
The mid-term report was made available on the IDPM website, following the meeting with the
European Commission on 22 February, and comments were invited upon it from civil society and
other stakeholders, by mid-March.  This has allowed their comments to be taken into consideration in
preparing this report.
A meeting will be held with the Commission’s Steering Committee on 24 April to discuss the
contents of the final report.  Also, a meeting with representatives of civil society and other interested
stakeholders, to discuss and comment upon the final report, will be held on 25 April 2002.
A number of the activities associated with the dissemination of findings and the promotion of the
international network of SIA experts will be continued as part of the Phase Three programme, which
commences with the completion of this final report.  It is proposed, however, that the Commissionshould consider whether certain other activities, which cannot be secured within the Phase Three
Framework Contract, should continue under separate provision.  These might include continued
participation in international meetings and discussions on issues relating to trade policy and
development, impact assessment and sustainable de velopment; consultations with non-EU negotiators
and WTO personnel, particularly in Geneva; dissemination of results in CD-Rom format; andpreparation of a SIA Guide, which would provide an easy to use manual on the use of the SIA
methodology.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 9
ANNEX III
SUSTAINABILITY IMPACT ASSESSMENT OF WTO NEGOTIATIONS
IN THE MAJOR FOOD CROPS SECTOR
Final Report
May 2002
Aaron Maltais, Måns Nilsson, Åsa Persson.
This report was prepared with financial assistance from the Commission of the European
Communities. The views expressed herein are those of the Contractor, and do not represent any
official view of the Commission.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 10
CONTENTS2
EXECUTIVE SUMMARY
1. INTRODUCTION
2. METHODOLOGY
2.1. T HEORETICAL BASIS
2.2. C ONCEPTUAL FRAMEWORK
3. SCENARIOS
3.1. I NITIAL SCENARIOS FOR THE SIA FOOD CROPS STUDY
3.2. S CENARIOS APPLIED IN THE SIA FOOD CROPS STUDY
3.3. A DDITIONAL SCENARIO ISSUES
4. WORLD WHEAT TRADE
4.1. O VERVIEW
4.2. P ROJECTIONS UNDER THE CURRENT TRADE REGIME - BASELINE
5. WORLD EDIBLE OIL CROPS TRADE5.1. O
VERVIEW
5.2. P ROJECTIONS UNDER THE CURRENT TRADE REGIME - BASELINE
6. ECONOMIC ASSESSMENTS OF LIBERALISATION
6.1. C HALLENGES IN INCORPORATING ECONOMIC MODELS INTO SIA METHODOLOGY
6.2. R EGIONAL ECONOMIC ANALYSIS
6.3. C ROP SPECIFIC ECONOMIC ANALYSIS
6.4. F OOD SECURITY ANALYSIS
7. INTRODUCTION TO PART II
8. SENEGAL CASE STUDY ANALYSIS
8.1. S IGNIFICANCE OF THE SENEGAL CASE STUDY
8.2. I NTRODUCTION
8.3. T RADE CONDITIONS
8.4. S USTAINABILITY CONDITIONS
8.4.1. Economic Considerations
8.4.2. Social Considerations
8.4.3. Environmental Considerations
8.5. K EY SUSTAINABILITY ISSUES
8.6. S ENEGAL SUSTAINABILITY IMPACT ASSESSMENT
                                                     
2 As noted on the cover page, Annex III contains the full table of contents to indicate scope and detail
of the study while only the Executive Summary is reproduced here.  The study in its entirety is available on theWTO Web site, and on the site (http://idpm.man.ac.uk/sia-trade).WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 11
8.6.1. Structure of economic incentives and opportunities
Baseline scenario
Liberalisation scenarioIntermediate scenario
8.6.2. Production System Characteristics
Baseline scenario
Liberalisation scenario
Intermediate scenario
8.6.3. Impacts on sustainability aspects
Baseline scenario
Liberalisation scenario
Intermediate scenario
8.7. P
OLICY RESPONSE / IMPLICATIONS
8.8. C ONCLUSIONS
9. EGYPT
9.1. S IGNIFICANCE OF THE EGYPT CASE
9.2. I NTRODUCTION
9.3. T RADE CONDITIONS
9.4. S USTAINABILITY CONDITIONS IN EGYPT
9.4.1. Economic considerations
9.4.2. Social Considerations
9.4.3. Environmental Considerations
9.5. K EY SUSTAINABILITY ISSUES
9.6. E GYPT SUSTAINABILITY IMPACT ASSESSMENT
9.6.1. Structure of economic incentives and opportunitiesBaseline scenario
Liberalisation scenario
Intermediate scenario
9.6.2. Production System Characteristics
Baseline scenario
Liberalisation scenario
Intermediate scenario
9.6.3. Impacts on sustainability aspects
Baseline scenario
Liberalisation scenarioWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 12
Intermediate scenario
9.7. P OLICY RESPONSE / IMPLICATIONS
9.8. C ONCLUSIONS
10. INDIA
10.1. S IGNIFICANCE OF THE INDIAN CASE STUDY
10.2. I NTRODUCTION
10.3. T RADE CONDITIONS
10.4. S USTAINABILITY CONDITIONS IN INDIA
10.4.1. Economic Considerations
10.4.2. Social Considerations10.4.3. Environmental Considerations
10.5. K
EY SUSTAINABILITY ISSUES
10.6. I NDIA SUSTAINABILITY IMPACT ASSESSMENT
10.6.1. Structure of economic incentives and opportunities
Baseline Scenario
Liberalisation Scenario
Intermediate Scenario
10.6.2. Production System Characteristics
Baseline Scenario
Liberalisation ScenarioIntermediate Scenario
10.6.3. Impacts on sustainability aspects.
Baseline Scenario
Liberalisation Scenario
Intermediate Scenario10.7. P
OLICY RESPONSE / IMPLICATIONS
10.8. C ONCLUSION
11. INDONESIA
11.1. S IGNIFICANCE OF THE INDONESIA CASE
11.2. I NTRODUCTION
11.3. T RADE CONDITIONS
11.4. S USTAINABILITY CONDITIONS IN INDONESIA
11.4.1. Economic Consideration
11.4.2. Social Considerations
11.4.3. Environmental ConsiderationsWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 13
11.5. K EY SUSTAINABILITY ISSUES .
11.6. I NDONESIA SUSTAINABILITY IMPACT ASSESSMENT
11.6.1. Structure of economic incentives and opportunities
Baseline scenario
Liberalisation scenario
Intermediate scenario
11.6.2. P RODUCTION SYSTEM CHARACTERISTICS
Baseline scenarioLiberalisation scenario
Intermediate scenario
11.6.3. Impacts on sustainability aspects
Baseline scenario
Liberalisation scenario
Intermediate scenario
11.7. P
OLICY RESPONSE / IMPLICATIONS
11.8. C ONCLUSIONS
12. ARGENTINA
12.1. S IGNIFICANCE OF THE ARGENTINEAN CASE
12.2. I NTRODUCTION
12.3. T RADE CONDITIONS
12.4. S USTAINABILITY CONDITIONS IN ARGENTINA
12.4.1. Economic Considerations12.4.2. S
OCIAL CONSIDERATIONS
12.4.3. Environmental Considerations12.5. K
EY SUSTAINABILITY ISSUES
12.6. A RGENTINA SUSTAINABILITY IMPACT ASSESSMENT
12.6.1. Structure of economic incentives and opportunitiesBaseline scenario
Liberalisation scenario
Intermediate scenario
12.6.2. Production System Characteristics
Baseline scenario
Liberalisation scenario
Intermediate scenario
12.6.3. Impacts on sustainability aspectsWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 14
Baseline scenario
Liberalisation scenario
Intermediate scenario12.7. P
OLICY RESPONSE / IMPLICATIONS
13. AUSTRALIA
13.1. S IGNIFICANCE OF THE AUSTRALIAN CASE
13.2. I NTRODUCTION
13.3. T RADE CONDITIONS
13.4. S USTAINABILITY CONDITIONS IN AUSTRALIA
13.4.1. E CONOMIC CONSIDERATIONS
13.4.2. S OCIAL CONSIDERATIONS
13.4.3. E NVIRONMENTAL CONSIDERATIONS
13.5. K EY SUSTAINABILITY ISSUES
13.6. A USTRALIA SUSTAINABILITY IMPACT ASSESSMENT
13.6.1. Structure of economic incentives and opportunitiesBaseline scenario
Liberalisation scenario
Intermediate scenario
13.6.2. Production System Characteristics
Baseline scenario
Liberalisation scenario
Intermediate scenario
13.6.3. Impacts on sustainability aspects
Baseline scenario
Liberalisation scenarioIntermediate scenario
13.7. P
OLICY RESPONSE / IMPLICATIONS
13.8. C ONCLUSIONS
14. USA
14.1. S IGNIFICANCE OF THE US CASE STUDY
14.2. I NTRODUCTION
14.3. T RADE CONDITIONS
14.4. S USTAINABILITY CONDITIONS IN THE US
14.4.1. Economic Considerations
14.4.2. Social ConsiderationsWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 15
14.4.3. Environmental Considerations
14.5. K EY SUSTAINABILITY ISSUES
14.6. U NITED STATES SUSTAINABILITY IMPACT ASSESSMENT
14.6.1. Structure of economic incentives and opportunitiesBaseline scenario
Liberalisation scenario
Intermediate scenario
14.6.2. Production System Characteristics
Baseline scenario
Liberalisation scenarioIntermediate scenario
14.6.3. Impacts on sustainability aspects
Baseline scenario
Liberalisation scenario
Intermediate scenario14.7. P
OLICY RESPONSE / IMPLICATIONS
14.8. C ONCLUSIONS
15. EUROPEAN UNION
15.1. S IGNIFICANCE OF THE EU CASE STUDY
15.2. I NTRODUCTION
15.3. T RADE CONDITIONS
15.4. S USTAINABILITY CONDITIONS IN THE EU
15.4.1. Economic considerations
15.4.2. Social considerations
15.4.3. Environmental considerations
15.5. K EY SUSTAINABILITY ISSUES
15.6. EU S USTAINABILITY IMPACT ASSESSMENT
15.6.1. Structure of economic incentives and opportunities
Baseline scenario
Liberalisation scenario
Intermediate scenario
15.6.2. Production system characteristics
Baseline scenario
Liberalisation scenario
Intermediate scenarioWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 16
15.6.3. Impacts on sustainability aspects
Baseline scenario
Liberalisation scenarioIntermediate scenario
15.7. P
OLICY IMPLICATIONS
16. CONCLUDING DISCUSSION OF RESULTS
16.1. SIA C ASE STUDIES
16.2. C HALLENGES ENCOUNTERED IN PERFORMANCE OF THE SECTORAL SIA
16.3. A DDITIONAL METHODOLOGICAL SUGGESTIONS
16.4. A DVICE ON SECTORAL INDICATORS
BIBLIOGRAPHY
APPENDIX 1WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 17
EXECUTIVE SUMMARY
Introduction
This final report for the Sustainability Impact Assessment of WTO negotiations on major food crops
provides the completed Sustainability Impact Assessment (SIA) results for the scenarios selected by
the Commission for this study. The main objective of this study is to apply SIA methodology in a
sectoral assessment of liberalisation of the food crops sector in WTO negotiations. In this study the
Stockholm Environment Institute (SEI) has applied SIA methodology in an assessment of 8 country
case studies for two specific food crops (wheat and edible oils crops) in three different scenarios. In
addition to the sectoral application of already de veloped SIA methodology, this study further develops
the SIA methodology with specific consideration of additions supportive of more context specific
sectoral SIAs.
This report consists of two parts. Part I begins  with a description of the methodological additions
developed for this study, and a description of the scenarios analysed. Three additional results areincluded in Part I: an overview of world trade in both the wheat and edible oils sub-sectors,
predictions of future trade patterns in the sub-sectors given current market conditions, and an analysis
of (strictly) economic modelling-based predictions on the effects of trade liberalisation on the food
crops sector. The analysis in Part I of this report provides the economic assessment and world market
related impact assessments, which act as initial drivers of change in the SIA methodologicalframework developed by SEI for this study.
Part II of the final report provides analyses of each of the country case studies selected by the
Commission for this SIA study. For each country case study the report establishes the trade conditions
and the sustainability conditions relevant to the agricultural sector in general and the food crop sub-sectors selected.  Completed SIAs are presented at the end of each country case study. Finally,
concluding remarks are made in regards to the country case studies, challenges encountered by the
Consultant in applying SIA methodology in country specific sectoral analysis, further methodological
suggestions, and advice on sector specific indicators for future studies.
The reader should keep in mind the scope and purpose of this report as laid out in the Terms of
Reference (see the Terms of Reference in Appendix 1 of this study). In depth SIAs for each country
case study would require partnerships with local experts and extensive consultations with local
stakeholders.  However, the resources dedicated to this study are limited and a main purpose of the
study is to perform a pilot sectoral SIA to te st and further develop the SIA methodology already
developed for the Commission. As such this report is a desk study of the potential sustainability
impacts and policy implications in each country case study. As is shown in this study, a more in-depthanalysis is required in many cases in order to adequately establish the complex relationships entailed
in SIA analysis. In particular, country case analyses will require local partnerships and participation in
future studies more extensive studies.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 18
KEY RESULTS FROM PART I
Methodology
The main methodological development in this study was the use of a conceptual framework  (see
Figure 1 ) to organize information and enhances our understanding of the generic cause-effect
relationships as we go from the proposed changes in the trade policy scenario to its sustainability
impacts. Following this conceptual framework the study deploys a transparent narrative of these sets
of issues and linkages and how they fit together in each case, based on expert interpretation of
existing country and sector studies from various sources, and supported to the extent available by
empirical data and modelling results.
Figure 1: Conceptual Framework for Sustainability Impact Assessment of Trade Negotiations
in the Agricultural Sector
The elements noted at each stage of the causal chain analysis are only examples and other issues may
be significant in each case. In order to ensure that SIAs for each country capture important
sustainability impacts, an overview of sustainability conditions in the sector including economic,
social and environmental considerations is performed at the outset of each case study. Combining this
approach with the original SIA methodology devel oped for the Commission by Colin Kirkpatrick andECONOMIC
STRUCTURE
SUSTAINABILITY
IMPACTSPRODUCTION
SYSTEM
TRADE REFORM
outcome and scenarioChanges in:
Tariff structures
Relative pricesTerms of tradeBusiness o
pportunit y
Changes in:
Tariffs
Export subsidiesDomesticsupport
Market access
Domestic agricultural policy
International support activitiesLand management
Conservation measures
Technology transferRural education
Taxes and incentivesChanges in:
Water quality/quantity
Land conversionSoil degradation
National income
Employment
Rural poverty/livelihoods
EqualityChanges in:
Production volumes
Production technologyCrop mixTransportation
Resource allocation
POLICY OPTIONS
exogenous domestic and
flanking measures in WTOWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 19
Norman Lee3 and SEI’s conceptual framework, a standardised layout for analysis was established for
each country case.
Each country case includes:
• Significance of the case-study
• Introduction of the country
• Trade Conditions
• Sustainability Conditions
o Economic Considerations
o Social Considerations
o Environmental Considerations
o Key sustainability issues
• Sustainability Impact Assessment
o Structure of economic incentives and opportunities
Baseline scenario
Liberalisation scenario
Intermediate scenario
o Production System Characteristics
Baseline scenario
Liberalisation scenario
Intermediate scenario
o Impacts on sustainability aspects
Baseline scenario
Liberalisation scenario
Intermediate scenario
o Policy response / implications
• Conclusions
Scenarios for the SIA food crops study
This study (as determined by the Commission) performs an SIA of liberalisation in the wheat/wheat
flour and edible oil crops (oilseeds and tropical oils) through WTO negotiations. Specific country case
studies were identified by the Commission and include:
 i. EU and US;
 ii. Australia / Argentina and Indonesia / Malaysia
 iii. Net Food Importer Developing countries; Egypt and Senegal;
 iv. India.
The Commission also determined the specific scenarios to be assessed in applying the SIA
methodology. These scenarios are represented in Table 1.
                                                     
3 Kirkpatrick Colin, Lee Norman. WTO New Round Sustainability Impact Assessment Study: Phase
One.  Manchester: Institute for Development Policy and Management and Environmental Impact Assessment
Centre, University of Manchester, 1999.  Kirkpatrick Colin, Lee Norman. WTO New Round Sustainability
Impact Assessment Study: Phase Two.  Manchester: Institute for Development Policy and Management and
Environmental Impact Assessment Centre, University of Manchester, 1999.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 20
Table 1: Original Scenarios
Baseline UR Scenario 1 Scenario 2 Scenario 3
Tariff -36% -10 % -30% -50%
Minimum (market)
access5% +2.5% +5% +7.5%
Domestic support
(AMS)-20% -10% -20% -30%
Exp. Subsidies -21% volume -10% -20% -30 %
-+/- % changes are related to the final UR agreement
Early on in the performance of this sectoral SIA it became apparent that it would not be possible to
implement the more detailed scenarios developed by the Commission for this study. Current broadmodelling efforts assessing the economic impacts of liberalisation do no provide accurate enough
results to make meaningful distinctions between the percentage changes noted in the original scenario
formulation. Nor do modelling exercises exist that are closely correlated to the selected food crop sub-
sectors and country case parameters. As a result, the Consultant reverted back to the original scenario
formulations established in the Phase Two SIA report, with some minor modifications:
/g216 The baseline scenario  entails no new agreement on agriculture but now assumes that the
URAA is fully implemented.
/g216 The intermediate scenario  is interpreted as comprising a more gradual approach to
liberalisation in the sector entailing less sign ificant impacts than in the full liberalisation
scenario, and as incorporating the EU negotiation objectives.  The objectives include:
• retention of blue and green boxes, possibly with some updating.
• improvements in market access through ongoing process of reducing trade barriers,
support for exports and for domestic agriculture subject to retention of boxes above.
• support for various non-trade concerns including the multifunctional role of
agriculture, food safety and quality, protection of the environment and animal
welfare.
• support for special and differential treatment of agriculture in developing countries,
including increased (duty-free) market access for the least developed countries.
4
/g216 The liberalisation scenario  assumes "general acceptance, within all country groups, of
comprehensive trade liberalisation in agricultural products and the removal of discriminatory
market practices in domestic markets. This would require elimination of all forms of exportsubsidies, domestic support measures and import duties"
5 and "that very limited, future
changes are made to mitigate adverse environmental and social impacts."6
                                                     
4 Kirkpatrick & Lee, 1999.
5 Kirkpatrick & Lee, 1999.
6 Kirkpatrick & Lee, 1999.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 21
KEY RESULTS FROM PART II
Case study results
Net food-importing developing countries
In Senegal and Egypt we see similar sustainability impacts with negative economic and social impacts
due to increasing wheat import bills. Food security problems for vulnerable groups, such as rural
women in the agricultural sector, stand out most prominently as negative social impacts. Small-scale
farmers are potentially impacted on several fronts including increased competition from international
markets, an inability to adequately improve productivity in an increasingly competitive domesticmarket, and commodity price/food security impacts. These multiple stresses are better addressed in
the Egypt case because domestic wheat production is an important feature of the country.  As rice is
not included in the scenarios the food security imp acts are not as strongly causally linked in the
Senegal case. In Senegal we see some negative environmental impacts due to increases of production
in the groundnut sector, as there is no indication that currently unsustainable farming practices will besignificantly affected by liberalisation. Conversely, negative environmental impacts are not causally
linked in the Egyptian case.
Net food-exporting developing countries
In Indonesia and Argentina we see positive economic impacts for both liberalisation scenarios. For
India the economic impacts are not conclusive. Importantly, economic impacts in India may depend
on India’s ability to meet domestic wheat demand in the future. The Indian case study shows that
there is some debate on this issue and that it is not currently know if India will meet these domestic
needs over the longer term.
Social impact results were somewhat more ambiguous for all net exporting developing countries.  In
Indonesia this result is due to clear conflicts between social groups associated with the palm oil sector.
An ambiguous result is thus due to some social groups gaining while others, particularly forest
dwelling indigenous groups, incur negative impacts. In all three cases it is also suggested that
vulnerable groups especially small-scale farmers and the rural poor in general may be negativelyaffected by liberalisation. These negative impacts may be more severe in the liberalisation scenario
due to problems in adjusting to more significant economic changes. Specific causal links were more
difficult to establish in the Argentina and Indian cases. India in particular demonstrates a great deal of
diversity between regions, although the potential for negative gender impacts is clear.
In terms of environmental impacts we see wide diversity in the results for these three country cases.
Indonesia demonstrates clear negative impacts on forests, especially in the liberalisation scenario, thatare directly causally linked in the assessment. Argentina shows no significant negative environmental
impacts in the short term and only potential impacts in the longer term due to increases of input use.
However, actual impacts will depend to a large extent on how domestic policy develops.  In the Indian
case the environmental impacts are poorly causally linked, resulting in more ambiguous results.
Net food exporting developed countries
In Australia, the USA and the EU there are positive economic impacts for all country case studies in
both liberalisation scenarios. In Australia positive impacts entail both positive overall welfare impacts
and positive impacts on producers. In the US and EU cases there are more divergent economic
impacts depending on context, as it noted below.
In Australia we see positive short-term social impacts due to positive economic impacts in the sub-
sectors. However, over the long-term there are risks of potential negative social impacts associatedWT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 22
with the adjustments needed to manage land degradation problems, particularly associated with dry-
land salinity issues. As a result, social impacts in the long run are more dependent on emerging
circumstances.  Negative environmental impacts are associated with production increases andproblems with dry-land salinity, and tend to also be more significant over the long run.
In the US, large farm households are expected to gain while intermediate farm households may face
some adjustment problems in an increasingly competitive market. As a result social impacts are
shown to be positive in the intermediate scenario and more ambiguous in the liberalisation scenario.
The intermediate scenario entails more opportunities to use domestic support measure to mitigate
negative impacts on intermediate farmers and to deal with environmental impacts of the sector.
In the EU we see similar impacts as in the US with positive economic impacts from liberalisation in
terms of general welfare and budgetary expenses, but in the EU there are clear negative impacts on
producers, particularly in the liberalisation scenario. This results in more context specific economic
impacts. Social impacts are expected to be more pos itive in the intermediate scenario as there is some
indication that the EU has a better-established agenda to address social and environmental impacts in
the agricultural sector. Ambiguous environmental im pacts are shown in the liberalisation scenario due
to predictions of production decreases. As has been noted in the EU case study, there are
environmental impacts associated with decreases in production and more regionally specific analysis
is required to establish the environmental effects of these production decreases.
Challenges encountered in performance of the sectoral SIA
In this sectoral application of SIA methodology some important difficulties were encountered that
should be considered in future sectoral SIAs. Two types of issues seem most prevalent. First, issues
associated with the specific parameters chosen for assessment, and second, methodological issues willbe addressed.
The choice of two crop sub-sectors for analysis in this study made it difficult in some country case
studies to adequately address key sustainability imp acts effectively. For example, in both the Senegal
and Indonesia cases an adequate assessment of food security would have to also include the rice
sector. In order to appropriately address sustainability impacts in country case studies it may be more
useful to examine the sector as a whole in a fewer number of cases than to only examine parts of asector in a greater number of cases.
As well, already completed modelling studies of the economic impacts of liberalisation in the
agricultural sector did not match the parameters and scenarios laid out by the Commission at the onset
of this study. This is true not only for the differences between the various original scenarios, but inrelation to the crop and country specific parameters. Unless significant resources are allocated to
actually performing independent economic modelling efforts, SIAs will have to be responsive to
existing research and this should be considered early on in the planning stage.
In general, the scope of sectoral SIAs needs to be carefully considered at the initial planning stages.
The SIA methodology already developed for the Commi ssion and used in this study acts well as a
framework for incorporating a wide range of economic, social, and environmental issues. However,
once sector and country-specific studies are attempted the data and analysis demands grow
exponentially. This study has gone some way to develop further methodological tools within the SIA
framework that can help to bridge the gap between macro-level policy analysis taking place inmainstream economic modelling exercises, and micro-level, field-type sustainability analysis at the
local levels. Nonetheless, much more detailed analys is is required to perform complete SIAs than was
possible in the scope of this study. Particularly for large countries/country groups with more complex
relationships in the agricultural sector, such as the Indian, US and EU cases, the level of analysis
possible in this study is not satisfactory.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 23
Bridging the gap between macro-level and micro-level analysis
At the methodological level, the key challenge for the next round of SIA assessments is to bridge the
gap between macro-level policy analysis at the national and international levels that is taking place in
mainstream economic modelling exercises, and the micro-level, field-type sustainability analysis at
the local levels that is taking place in anthropo logical and ecological research and project impact
studies.
This study has found that:
• Aggregated SIA studies tend to lose much critical information.
• Sustainability conditions and impacts are highly site-specific
• Economic assumptions underlyi ng economic modelling of lib eralisation impacts may not
hold in reality.
• Macro-level modelling and aggregated prediction exercises can only provide a framework
for discussion.
• There is a needed for case-specific info rmation to match with the production change
estimates.
• Local and regional case studies could be used  to represent certain type conditions in
different parts of the world.
• A regional hot-spots analysis of areas of hi gh value and risk may also be needed.
Given the level of detail required for country specific case studies the scope of SIAs and the resources
allocated to such studies need to be well matche d. Another option for consideration is to combine the
more aggregated approach used in the Kirkpatrick and Lee SIA methodology with country specific
cases.  Agricultural SIAs could be performed on country groups aggregated to: LDCs, net food
importing developing, net food exporting developing, net food importing developed (high and low
domestic support), and net food exporting developed (high and low domestic support).  Type case
studies could then be used to support, compare and assess the more theoretical results from
aggregated country groupings. It also seems feasible to aggregate country groups in similar ways forother sector assessments.WT/COMTD/W/99
WT/CTE/W/208
TN/TE/W/3
Page 24
ANNEX IV
Main feature of the SIA phase III work programme
Raw overall picture :
2002-2003 : overall preliminary SIA and 3 sector studies
2003-2004 : other sector studies
2005 : Overall full SIA
Work to be done in 2002-2003
Sectoral studies :
Because of lack of "explicit consensus" on the scope of DDA negotiations (Singapore issues and
implementation) and given the limited time available for the completion of the first set of sector SIA
studies (to be completed during the first 9/12 months period, so as to make an effective contribution to
ongoing negotiations), the Commission has decided to start the SIA of Phase III with sector studies.
For that purpose, the EU Commission in consultation w ith the Consultant decided to select the three
first sectors which are the following:
1. Environmental services  (with a special emphasis on water and waste treatment)
2. Market Access  (with a special emphasis on pharmaceuticals, Non-Ferrous Metals,
Textiles)
3. Competition
These three sectors should be studied during this specific agreement.
Overall Preliminary Assessment :
This qualified preliminary assessment will cover both DDA negotiation mandate and sectors which
could be included in the negotiation mandate after the 5th Ministerial (in particular implementation
and Singapore issues).
It should provide an overview of the potential major impacts on sustainability of all of the proposed
sectoral measures, taking into account potential impacts associated with inter-sectoral linkages.  This
is intended to assist in determining the more deta iled sectoral assessments to be undertaken in the
further stages of the study (2003-2004).
Timing and  budget
Inception report Midterm Report Final report Budget
Overall preliminary 15.07.2002 18.11.2002 17.03.2003 60.000 €
Environmental Services 17.06.2002 18.11.2002 17.03.2003
Market Access 17.06.2002 18.11.2002 17.03.2003
Competition 17.06.2002 18.11.2002 17.03.2003241.000 €
__________