RESTRICTEDWORLD TRADE
ORGANIZATIONWT/CTE/M/23
5 April 2000
(00-1375)
Committee on Trade and Environment
REPORT OF THE MEETING HELD ON 29 FEBRUARY - 1 MARCH 2000
Note by the Secretariat
1. The Committee on Trade and Environment (CTE) met on 29 February - 1 March 2000 under
the Chairmanship of Ambassador István Major (Hungary).  The agenda in WTO/AIR/1234 was
adopted.
MARKET ACCESS CLUSTER
Item 2 The relationship between environmental policies relevant to trade and environmental
measures with significant trade effects and the provisions of the multilateral trading
system
2. The observer of the OECD presented the rapp orteur's report of the OECD workshop on
methodologies for the environmental assessment of trade liberalization agreements, held in Paris
on 26-27 October 1999, with the participation of approximately 90 representatives from governments,
international organizations, NGOs and academia (WT/CTE/W/133).  The workshop had covered the
lessons learned from past environmental reviews;  current initiatives for assessments of tradeliberalization agreements;  sectoral approaches to assessments of agriculture, manufacturing, services
and forests;  case studies of assessments for natural resource sectors in Chile and Uganda;  use of
models as a tool for environmental assessments;  the regulatory effects of environmental regulations
and standards;  and participation of civil society.  Although there had not been any formal
conclusions, several main points had been identified.  As environmental assessments were at an early
stage, work was needed to develop and improve data and methodologies.  The final section of the
rapporteur's report, which set out a list of proposals for action, identified gaps in currentmethodologies, including the need to develop methodologies to assess the environmental impacts of
the GATS and investment provisions in trade agreements.  It had also been considered important to
increase capacity building in developing countries to facilitate the carrying out of reviews.  It had
been considered premature to develop multilatera l guidelines on environmental assessment of trade
agreements.  It was considered, however, useful to set out best practices and common views onapproaches of countries undertaking assessments.  Copies of the published proceedings of the
workshop could be consulted by interested delegations at the WTO Secretariat.  The OECD Joint
Working Party on Trade and Environment will be sharing experiences on assessments;  and there
would be a meeting in March, hosted by Ecuador, on sustainability assessments, organized by the
World Wide Fund for Nature and Fundacion Futuro Latino Americano.
3. The representative of the United States said that his delegation had made presentations on its
activities to carry out environmental reviews,  such as for NAFTA and the Uruguay Round.  In
November 1999, the US had prepared a study of the economic and environmental effects of the
proposed accelerated tariff liberalization (ATL) initiative for forest products.  This report concluded
that the ATL initiative was not likely to have a distinguishable impact on aggregate US timberharvests compared to what would be the case in the absence of this initiative, and minimal impact to
aggregate global timber harvest levels.  This report could be consulted at the Secretariat and on the
USTR website (www.ustr.gov).  Building on the experience gained in carrying out this and other
reports, in November 1999 President Clinton issued an Executive Order (also available on the USTRWT/CTE/M/23
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website), which committed the US Government to assess the environmental impacts of future trade
agreements, including through written reviews of environmentally significant trade agreements.  This
Executive Order institutionalized the integration of  environmental issues in the negotiating process.
The review had to be taken sufficiently early in th e process to inform the development of negotiating
positions, although this was not a precondition for the tabling of negotiating proposals.  USTR and theWhite House Council on Environmental Quality (C EQ) were jointly developing guidelines to
implement this Executive Order with the participation of foreign policy, environmental and economic
agencies.  The goal was to issue final guidelines by mid-2000.  USTR and CEQ requested public
comment on general issues to be addressed in the guidelines, including such issues as the appropriate
timing and process for conducting a written review, and methodologies for assessing environmental
impacts in the context of trade negotiations.  The US would keep the CTE informed of developments.
4. The representative of Canada said that her delegation was committed to integrating
sustainable development into domestic and foreign policy.  One instrument for promoting such policy
coherence, on a national or international level, was the environmental review of non-environmental
policies and programmes.  The purpose of an environmental review was to inform policy makers, in
advance of final decision making, of the environmental consequences of policy actions, and of options
available to address them.  Canada had begun a three phase national environmental review process ofcertain WTO Agreements and post-Uruguay Round de velopments in preparation for the next WTO
negotiations.  The first phase was completed in November 1999, prior to the Seattle Ministerial, and
concluded with the release of Canada's Retrospective Analysis of the 1994 Environmental Review of
the Uruguay Round, which was available on the Department of Foreign Affairs and International
Trade website (www.dfait-maeci.gc.ca, under Trade Negotiations and Agreements ).  The second
phase, the Environmental Review Framework, to be concluded at the end of 2000, will incorporate
public comments on the Retrospective Analysis into a methodology for the review.  The third phase,
the Environmental Review itself, will apply th e Framework or methodology to WTO negotiations.
5. The Retrospective Analysis evaluated the accuracy of the findings of Canada's 1994 review.
Each of the WTO Agreements assessed in the 1994 Review had been examined, and two new sectionshad been added to review CTE work and the recent environment-related trade disputes involving
GATT Article XX.  The Retrospective, like the 1994 Review, focused on the "regulatory effects" of
the Uruguay Round and did not estimate the actual physical environmental impacts of the
Uruguay Round.  The 1994 Review concluded that "the trade liberalizing effect of
the Uruguay Round will promote the more efficient allocation and use of resources and thereby
contribute to an increase in production and incomes, and to a lessening of demands on the
environment".  This conclusion was based on the assertion that Canada would retain the right toregulate for environmental protection.  The Retrospective concluded that Canada, as other WTO
Members, retained the right to maintain stro ng environmental policies and regulations.  The
Retrospective also examined two WTO disputes of  an environmental nature involving GATT Article
XX to illustrate the nature of a rules-based system and the importance assigned to fair and consistent
application of domestic environmental protection measures.  Some commentators argued that thesecases limit the right of countries to enact environmental legislation.  The Retrospective noted that the
decisions do not question the right of WTO Members to establish and implement environmental
protection measures, but underscore that such measur es must be WTO-consistent.  The Retrospective
also noted that the WTO had made arrangements for effective cooperation with other
intergovernmental organizations, and to consult and cooperate with NGOs.  It noted that the CTE hademerged as the key institutional element within the WTO to explore comprehensively the trade and
environment nexus.
6. Canada was in Phase 2, developing the Framework to be applied to future trade liberalization
efforts.  This Framework, developed in consultation with stakeholders, will adopt a broader approach
than the Retrospective Analysis.  Methods, tools and criteria will be developed to determine theprobability and significance of sectoral environmental effects of the agreements under negotation.
This review will assist Canadian negotiators in ta king environmental concerns into consideration inWT/CTE/M/23
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future trade negotiations.  It would be useful for Members performing environmental reviews to share
their national experience regarding methodologies and findings with the CTE.  In this respect, Canada
requested the Secretariat to prepare a factual paper summarizing national approaches to assessing the
environmental impact of trade liberalization.
7. The representative of the European Communities said that, in mid-1999, the EC awarded a
contract to carry out a Sustainability Impact Assessment (SIA) to a consortium from the University of
Manchester to assess the impact of future WTO negotiations on global sustainability.  There was a
considerable body of work on economic and environm ental assessments, but little encompassing other
elements of sustainable development.  During Phase One of the SIA (June-September 1999), the
Contractors carried out a literature review of im pact assessment methodologies, and examined cases
where these techniques had been used.  The Contra ctors developed a SIA methodology to be used in
Phase Two, which would be a broad qualitative assessment of the proposed negotiations (September-November 1999).  The SIA methodology used a core group of sustainability indicators to measure the
impact that further liberalization and changes in rule-making may have on sustainability.  These
indicators were balanced between economic, environmental and social and included average real
income;  employment;  net fixed capital formation, equity and poverty;  health and education;  gender
inequality;  environmental quality;  biodiversity and other natural resource stocks.
8. Phase One was a screening exercise to determine which measures required SIA, as they were
likely to have significant impacts.  In Phase Two, the Contractors had used their methodology to make
a preliminary assessment of the sustainable impact of the New Round.  The Contractors concluded
that trade liberalization in all areas was likely to have some impact and all areas should thus be
subject to a preliminary SIA.  An assessment was then be made based on three scenarios incorporatingthe EU's proposals:  "baseline" (the current situation, assuming implementation of the Uruguay Round
commitments);  "intermediate" (some further liberalization);  and "liberalization" (more ambitious
proposals for liberalization).  This allowed the Contractors to test a series of possible activities, and
provided guidance about those areas where attention should be paid to ensure a sustainable outcome.
The Phase Two report made it clear that results varied depending on the sector, region and timescale.The assessment found that trade liberalization had a broadly, but not universally, positive impact on
economic growth, with nuances between regions and over time.  This was consistent with the results
of the economic analysis carried out for the Commission.  Trade liberalization also had a generally
significant potential impact on sustainable development, in its social and environmental components.
The Phase Two report had ideas for mitigating and enhancing measures to enhance the impact of the
New Round on sustainability, i.e. the action that should be taken in addition to what was negotiated to
mitigate harmful effects and exploit positive impacts.  Such measures included proposals related tocapacity building, and environmental or other policy developments outside the WTO.
9. The EC was preparing to let a contract for Phase Three of the SIA, to begin in late 2000.  As
the agenda for further negotiations had yet to be determined, details about the scope and nature of
Phase Three had to be finalized.  Given the mandated negotiations in the agriculture and services
sectors, these are two of the sectors that will be assessed.  The future study will likely also focus onthose sectors where there may be a significant impact on sustainability, and where negotiations were
likely.  There may be refinements of the SIA methodology to integrate studies in progress, and
adjustments to the scenarios, as detail emerged on the proposals for negotiations.  The EC will
continue in Phase Three with the public consultation process initiated at the start of the SIA, including
the Council, EP, NGOs, business and consumer groups, and trade unions.  Information on this projectwas available on the DG Trade website;  interested parties could provide input to the Contractors'
e-mail address, who also had a website on the SIA, which had received 2,500 "hits".
1
                                                     
1DG Trade web site: http://www.cc.cec:8082/comm/trade/2000_round/sia.htm ;  Manchester University
website: http://fs2.idpm.man.ac.uk/sia/;  and e-mail:chk@man.ac.uk.WT/CTE/M/23
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10. The representative of Norway recalled that the objective of sustainable development was set
out in the WTO preamble.  Thus, the WTO should, in negotiations and its regular work, take into
account trade and environmental concerns, as well as developing country interests.  Sustainability
assessment studies may be a useful tool in this regard.  Such studies provided information that enabled
the environmental consequence and effects on developing countries of activities in the WTO mandateto be gauged.  Such information could help WTO Members shape national views that promoted
sustainable development.  Sustainability assessment studies/environmental reviews were a relatively
new area.  Valuable work had been done in the OECD to develop methodologies;  UNEP and
UNCTAD had undertaken a series of case studies.  In the preparation for the Seattle Ministerial
Conference, Norway had suggested that environmental reviews of further trade liberalization be
carried out.  To ensure that horizontal issues were properly considered, it was proposed that
international organizations, including UNEP, UNCTAD and FAO, be invited to provide contributions.
11. In Norway, environmental analyses were being conducted for the fishing, agricultural and
transport services sectors;  additional sectors may be included later.  The external research institutions
undertaking the sector analysis were expected to be finished by June 2000.  Norway intended to
present its analysis at upcoming CTE meetings.  The process was transparent and open, involving all
relevant Ministries and consultation with NGOs.  The OECD methodologies for environmentalreviews and environmental indicators formed the basis for the sectoral analyses.  The researchers will
scrutinize local, regional and global environmental implications of further trade liberalization via the
product, technology, scale, structural and regulato ry effects.  Environmental indicators included
factors such as climatic change, ozone layer depletion, acidification and waste.  Norway was pleased
to learn that other WTO Members were conducting sustainability assessments, and hoped that otherswould do the same.  Norway recognized that natio nal authorities were responsible for such work
being carried out and that there were capacity problems in many countries.  Therefore, bearing in
mind the usefulness of work to promote sustainable development, Norway was prepared to enter into
talks with interested countries on such cooperation projects.
12. The representative of Argentina said it would be useful to categorize trade policies and
measures, without necessarily referring to specific national policies, and determine the environmental
effects of these categories of measures.  The WTO's goal was to liberalize trade.  This goal could be
strengthened by finding additional reasons to libera lize trade.  Thus, it would be helpful if existing
trade restrictions and distortions were categorized by measures and their environmental impact
analysed.  There were environmental advantages of trade liberalization, basically related to the ability
to correct market prices to reflect the real cost of production.  When this was the case, free trade
would foster more efficient production, which woul d in turn decrease the demand on the environment
and the environmental impact of production.  If this were the case, free trade would be not only
compatible, but beneficial for the environment.  Many existing trade policies distorted trade and
thereby distorted prices, which led to environmental stress.  Although Argentina felt that sharing
national experiences on environmental assessments may be useful, these studies could be used to
strengthen existing national trade policies and WTO negotiating positions, which may not necessarilybe beneficial for the environment or the trading system.  An assessment methodology that identified
categories of measures, instead of national policies per se , could give a new impulse to CTE work.
13. The representative of India recalled the Rio principle that environmental assessment was
solely the prerogative of Governments to undertake at the national level.  India was willing to go
along with an exercise confined to the sharing of information, but anything which went beyond this
would be a matter of concern.  Concerning met hodologies for environmental assessments, India was
concerned about any move to develop a multilateral instrument in this area.  This would be
unacceptable to India.  India was interested to hear other Members' views on the proposal for the
Secretariat to prepare a background note on environmental assessments.
14. The representative of Hong Kong, China support ed India's statement given that this issue
should be approached with caution.  Hong Kong, China felt that although Members were welcome toWT/CTE/M/23
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share their national experiences on environmental assessment, any step which surpassed the factual
exchange of information would be cause for concern.  He wondered if there would be any value added
for the Secretariat to prepare a summary of the various national environmental assessments carried out
to date, given that Members were free to share these assessments on their own initiative in the CTE.
15. The representative of Malaysia shared India and Hong Kong, China's concerns.  At this stage,
there need not be any Secretariat papers, and discussions should continue to be Member-driven.
Environmental assessments should be undertaken at the national level, if a Government felt it
necessary in the context of the domestic processes, and if financial resources were available.  Besides,
as the CTE had an analytical mandate, it was inappropriate to consider any multilateral disciplines in
this respect.  There was no "one size fits all" approach to environmental assessments.
16. The representative of Mexico drew attention to the diversity of approaches and methodologies
demonstrating that there were different ways of carrying out environmental assessments, which were
all equally valid or equally imperfect.  Mexico shared the concerns expressed by India, Hong Kong,
China, and Malaysia.  This type of exercise did not presuppose that, at a certain stage, multilateral
guidelines would be established for environmental assessments.  It was not a matter of whether it
would be premature to develop multilateral guidelin es, as noted in the OECD report, but whether it
would be advisable to do so.  Mexico did not see how the development of approaches andmethodologies for environmental assessments would assist trade negotiations.  Whether trade
liberalization was good or bad for the environment would depend on the circumstances that existed in
a given geographic area.  Mexico inquired as to what would have been the result if a negative
environmental impact had been identified by the US or Canada, for example, in their environmental
assessments.  Mexico did not think that the US would have withdrawn its accelerated tariffliberalization forestry initiative, or that Canada would have renegotiated the Uruguay Round
Agreements.  It was up to each Member to decide whether or not to carry out an environmental
assessment.  Mexico supported the proposal for the Secretariat to compile national experiences
undertaken on environmental assessments, on the understanding that no conclusions would be drawn.
17. The representative of the Czech Republic informed Members that in 2000 the Czech Ministry
of the Environment initiated, with funding of approximately 500,000 Czech crowns, an environmental
assessment of trade agreements and a trade assessment of environmental agreements.  The OECD
workshop had contributed greatly to this exercise.  The Czech Republic welcomed the proposals from
Canada and Norway to share experiences in undert aking reviews, which would increase the capacity
of countries, such as the Czech Republic, to carry out such reviews.
18. The representative of Japan said that as Japan had not yet decided to undertake environmental
assessments, it would be useful to learn from other countries' experiences.  Japan supported the
proposal for the Secretariat to compile national experiences with environmental assessments, in
cooperation with other relevant intergovernmental organizations.  Japan understood the concerns
raised by several countries, but felt that a Secretariat note would contribute to the discussions.
19. The representative of Brazil, in recalling the goal of the WTO to promote trade liberalization,
said that her delegation supported Argentina's suggestion to focus the assessment on trade policies
that led to trade distortions, and assess their envir onmental impacts.  It would be difficult for one
methodology used in an environmental assessment to fit all sectors, countries and regions.  Therefore,
at this stage, Members should exchange national experiences.  As developing countries did not have
sufficient financial resources to carry out environmental assessments, Brazil emphasized that
technical assistance would be necessary.
20. The representative of the United States said that environmental reviews were an exercise to be
carried out at the national level.  There was no "one size fits all" approach.  It was an interesting
endeavour to figure out the best way to carry out such reviews, and for the US this was still a work in
progress.  The US found it useful to share information on experiences as this would assist countries inWT/CTE/M/23
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determining the best way to carry out assessments in  their national context.  Mexico had raised an
interesting question as to what would have happened if a review of the forest ATL had found the
possibility of adverse environmental impacts of trade liberalization.  It was difficult to speak
hypothetically, but it would not be the instinct of the US to hold back on trade liberalization.
However, the US would look into how to proceed to make both the trade and environmental aspectsmutually supportive.  If it were found that liberalization might cause stress on the domestic
environment, the US would re-examine its systems for dealing with these stresses to see if they
needed reinforcement.  If it were found that there might be international problems, the US might look
for ways in which to reinforce cooperative efforts that were ongoing in the forestry and other sectors.
The answer should not be immediately to think in  terms of not liberalizing.  However, it was
important to be vigilant of the environmental implications of trade liberalization, so that progress
could be made to achieve sustainable development.  In any event, progress should not be made on oneaspect at the expense of the other.  The US supported the proposal for the Secretariat to prepare a
paper to reflect national experiences in undertaking environmental assessments.  This paper would be
a useful step towards addressing technical assistance, a matter of concern for developing countries
raised by Brazil.  One way to provide technical assistance was to share information on experiences.
UNCTAD and UNEP were also undertaking work to help developing countries performenvironmental assessments.  The US was interested in other ideas for technical assistance in this area.
21. The representative of Australia said the CTE should be used as a forum to share information
on national environmental assessments, and to exam ine environmental issues raised by trade reform.
Australia suggested that the concept introduced by Argentina be taken up as part of a "building
blocks" approach, based around national governments doing work and disseminating it in the CTE.This approach had much to recommend it, given the political and methodologies uncertainties in this
area.  Discussion of national assessments of the environmental/sustainability ramifications of trade
policy reforms was an important topic and a logical extension of the CTE's overall work.  Work was
under way in several bodies to explore ways of doing environmental/sustainability assessments,
including technical aspects of such assessments.  This work should be monitored to see if there wereinsights that may contribute to CTE work.  Australia welcomed Members sharing with the CTE their
studies and methodologies.  A variety of methodologi cal approaches were used to assess and forecast
the environmental ramifications of changes in economic activity brought about by changes in trade
policies.  While these approaches were marked by their potential usefulness as indicators and foci for
debate and consideration of policy reform, there were also limitations.
22. Australia had established processes that incorporated consultation between government
agencies to ensure that negotiating positions taken in fora, such as the WTO, reflected the "whole ofgovernment" positions, and allowed environmental i ssues raised in a trade policy context to be
identified, studied, and factored into negotiating positions.  Australia also had regular consultative
processes on sustainable development, including specifically 'trade and environment' and 'trade and
development' issues, which provided an avenue for environmental concerns held by the community to
be factored into policy development.  There was al so a legal requirement for national interest analysis
of treaty-level outcomes to be submitted to a parliamentary committee for review at the
pre-ratification stage, which included environmental/sustainability factors.  Integration of developing
country perspectives involved environmental assessme nts of trade agreements being integrated into a
broader assessment of the implications of trade negotiations for sustainable development, especially
for natural resource sectors that were important to developing countries, and had significant tradedistortions that should be incorporated in WTO negotiations.  Exploration of an appropriate approach
to sustainability assessment in these areas will be vital.  Australia had explored the integration of
trade, environment and development perspectives in its paper on "Trade liberalisation and the
environment:  A positive agenda for trade reform" (WT/CTE/W/105).
23. It was agreed that the Secretariat would prepare a factual compilation of the various
approaches to environmental assessments at the national level prepared to date.WT/CTE/M/23
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Item 3(b) The relationship between the provisions of the multilateral trading system and the
requirements for environmental purposes relating to products, including standards
and technical regulations, packaging, labelling and recycling
24. The representative of Japan said that measures, such as eco-labels, were effective policy tools
to encourage the use of environmentally sound products and services, while ensuring that such
measures were not used as disguised protectionism.  It was also necessary to identify the relationship
between eco-labels and the TBT Agreement.  As information on standards should be available to all
exporters and producers, coordination between standardizing bodies should be enhanced by
exchanging information and setting up a national contact point.  Analysis on the market access
impacts of eco-labels indicated that environmental measures were not major obstacles to developing
country market access.  Case studies on the impact of eco-labelling should be conducted to illustratewhich types of eco-labelling schemes were desirable.  In Japan, the Eco-mark programme had been
carried out by the Japan Environmental Associat ion (JEA).  Following the recently adopted ISO
standards for Type I eco-labelling (ISO 14024), in November 1999 the process to develop
environmental criteria for the Eco-mark was amended to allow for public review and participation by
industry, consumers, and academia, so that the programme could be operated more transparently.  TheJEA was a member of the Global Eco-labelling Network (GEN), and contributed to the international
harmonization of eco-labelling criteria, with a view to establishing mutual certification.  The
Eco-mark had been notified to the ISO, according to Annex 3 of the TBT Agreement.
25. The representative of the European Communities expressed an interest in having some input
from the Secretariat, as some stage, with respect to the compatibility of eco-labelling schemes with
the TBT Agreement, given the newly adopted ISO stan dards.  The EC felt that the existence of the
ISO standards was not only influential, but could also provide greater policy clarity with respect to
whether to put in place schemes, and how these schemes would fit under the TBT Agreement.
26. The representative of Canada said that this topic reflected the reality and concerns faced by
many companies in many sectors in a range of developed and developing countries.  Canada
suggested that the Secretariat should update work in WT/CTE/W/101-G/TBT/W/103, on the market
access effects of eco-labelling programmes.  Canada highlighted the utility of sharing national
experiences with eco-labelling programmes in the CTE, such as the contributions on cut flowers by
Colombia and on the forestry sector by Canada.  There was a clear link between discussions on eco-
labelling in the CTE and issues raised in the TBT Committee.  Canada drew attention to the proposals
for action from the fourth, and concluding, session of the Intergovernmental Forum on Forests.  One
of the proposals for action called for: "further cooperative work on voluntary certification and/orlabelling schemes in line with the recommendations of the Intergovernmental Panel on Forests, while
seeking to enhance their international comparability  and considering their equivalence, taking into
account the diversity of national and regional situations, and to ensure adequate transparency and non-
discrimination in the design and operation of such schemes and are consistent with international
obligations, so as to promote sustainable forest management and not to lead to unjustifiable obstaclesto market access."  Canada felt there was merit in undertaking additional work in various forums,
including the WTO, to promote equivalency of voluntary standards, and to examine the potential role
of voluntary standards to be non-tariff barriers to trade.
27. The representative of India said that labelling was one of the issues on an open-ended list for
the second Trienniel Review of the TBT Agre ement.  The TBT Committee had been mandated to
conclude this review by the end of 2000.  India supported the request to study the market access
impacts of eco-labelling, as these programmes had market access effects, particularly for developing
countries.  India believed that if eco-labels were based on non-product related process and production
methods, which was the case for many eco-labels, these labels were not consistent with WTO rules.WT/CTE/M/23
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28. It was agreed that the Secretariat should update WT/CTE/W/101-G/TBT/W/103, on the
market access effects of eco-labelling.  The Secretariat invited Members to bring to its attention any
studies that could contribute to this update.
Item 4 The provisions of the multilateral tradin g system with respect to the transparency of
trade measures used for environmental purposes and environmental measures and
requirements which have significant trade effects
29. The representative of Japan requested the Secretariat to prepare an annotated list of CTE
documents classified by Item of the work programme.  Japan would appreciate if the Secretariat
would keep Members informed of work undertaken in other international organizations, and continue
to provide annotated bibliographies of literature of relevance.  Japan felt CTE documents should be
derestricted to the greatest extent possible.  For example, Members' contributions should be issued asunrestricted, unless otherwise indicated by that Member.  The CTE should also consider a shorter
timeframe than six months for document derestriction, keeping in mind the General Council
procedures in this respect.
30. The representative of Mexico said that annotated bibliographies were useful, but requested
that there be an introductory note stating that th e information contained did not necessarily mean that
the WTO or its Members shared the views of these publications.
31. The Secretariat said that it had periodically prepared bibliographies of recent papers related to
the CTE's work for the information of Members, such as the annotated bibliography of recent
information on trade-related developments in MEAs (WT/CTE/W/129).  The Secretariat invited
suggestions from Members on literature, which had been found to be particularly useful, and said itwould take into account Mexico's comments in this respect.  The Secretariat would circulate a list of
CTE documents prepared to date (WT/CTE/INF/2) .  The General Council procedures on document
derestriction set out that any document containing publicly available information was to be issued as
unrestricted.  For example, the 1999 Environmental Database, which was a compilation of publicly
available WTO notifications, would be unrestricted.
Item 6 The effect of environmental measures on market access, especially in relation to
developing countries, in particular to the least developed among them, and
environmental benefits of removing trade restrictions and distortions
Sectoral analysis
Fisheries
32. The representative of Iceland presented his delegation's proposal in WT/CTE/W/132 for the
Secretariat to update the fisheries chapter of the Secretariat's document on the "Environmental
benefits of removing trade restrictions and dist ortions" (WT/CTE/W/67), dated 7 November 1997.  As
part of the update, the Secretariat should conduct a factual study on the impacts of subsidies on
fisheries.  The Secretariat study could, inter alia,  focus on the effects of subsidies on:  (a) trade and
trade distortions in the fishing sector;  (b) fisheries management;  (c) overcapacity and overfishing;and (d) environmental impacts of fisheries.  Th e Secretariat should cooperate closely with FAO,
regional fisheries management organizations and other organizations that could submit material for
the study.  This would be a factual study that compiled available information.  This study should also
take into account the importance of the fisheries sector for developing and least developed countries,
and the effect of subsidies on their socio-economic development.
33. The representative of New Zealand said that his delegation, building on the momentum
achieved in this area, had recently commissioned research to deepen the understanding of the
relationship between fisheries subsidies, trade, development and the environment.  A summary of theWT/CTE/M/23
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results of this analysis was set out in WT/CTE/W/134.  It was clear from the trade statistics quoted in
paragraphs 2 to 5 that nearly all countries had some interest in the fisheries sector, whether as an
exporter, importer or a consumer of fish products.  New Zealand's work had focussed on the issue of
financial transfers generally, rather than the effects of different categories of financial transfers.
New Zealand's research aimed to review the levels and types of government transfers provided toglobal fisheries, as a starting point for more in-depth work in this area.  Estimates of governmental
support related to fisheries provided by three major players in the fisheries sector in 1996 had been set
out in the paper, specifically in Annex 1.  To a large extent, New Zealand had used data and material
from existing analyses, particularly that prepared by Mr. Milazzo as part of his study for the World
Bank.
34. Against the background of earlier CTE debates on the relative significance and prevalence of
so-called "positive" and "negative" subsidies, it was worth noting that New Zealand's research tendedto show that the category of subsidies aimed at reducing overcapacity appeared to be relatively small.
Also included in New Zealand's paper was a brief round-up of recent work on fisheries subsidization
underway in other international fora, specifical ly the OECD, FAO and APEC.  In a recent UNEP
publication, the "young people of the world" had drawn attention to environmental problems facing
marine and coastal areas, including the problems posed by overfishing and overcapacity.New Zealand welcomed Members' comments on its paper, and encouraged others to share their
analyses and national experiences in the fisheries sector.  New Zealand felt that it was through the
exchange of detailed information that the CTE could understand the issues underlying the discussion
of fisheries subsidies and could consider issues related to WTO rules in this area.  New Zealand also
welcomed Iceland's proposal in WT/CTE/W/132, which contained a useful summary of WTOdiscussions on, and underlined the importance of, CTE work in this area.
35. The observer of the FAO presented an update of FAO fisheries-related activities in relation to
the implementation of the International Plan of Action for the Management of Fishing Capacity, set
out in WT/CTE/W/135.  FAO was in the process of drawing up technical guidelines for the
management of fishing capacity, which should be published in mid-2000. FAO was also initiating astudy on the identification of factors contributing to overcapacity and unsustainability, that will be
complemented by the outcome of the work undertaken on related issues, such as illegal, unreported
and unregulated (IUU) fishing, fisheries management, and fisheries subsidies.  FAO would also aim to
provide increased support to Member states to promote sustainable fisheries, particularly to
implement the Plan of Action.  The FAO work plan on the role of subsidies in relation to fisheries
resource sustainability and trade in fish and fish products included the preparation of several related
studies to be reviewed by an Expert Consultation to be held in Rome, from 28 Novemberto 1 December 2000.  A report with findings, conclusions and recommendations will be submitted at
the 24th Session of the FAO Committee on Fisheries (COFI).
36. The observer of the OECD said that the OECD had initiated a study in 1997 to review
government financial transfers in OECD Member countries, and to assess the impact of these transfers
on fisheries resource sustainability.  The study had involved information collection and analysis, withthe participation of approximately 24 Member countri es and the EC.  OECD countries had been asked
to provide information on government financial transfers, fishing capacity, and the status of fish
stocks.  The analysis had been conducted to determine the relationship between:  (i) transfers and the
capacity and activities of fishing fleets;  (ii) fishing capacity and the possible effects on fish stocks.
The scope of the study was limited to government financial transfers and their effects on resourcesustainability and fish stocks in OECD countries.  Effects of other types of transfers had not been
explored, such as the effect of transfer-induced changes on trade flows;  on investment;  and on high
sea stocks and stocks in other countries' exclusive economic zones.
37. There were different types of subsidies, such as government support to fisheries
infrastructure, management, research, and enforcement;  access to other countries' waters;decommissioning of vessels and license retirement;  investment and modernization;  income supportWT/CTE/M/23
Page 10
and unemployment insurance;  taxation exemptions;  and improved economic performance.  The
results of this study would be finalized at the OECD Fisheries Committee meeting on 20-22 March.
The fisheries study illustrated that fisheries subsidies were generally lower, also as a percentage, in
comparison to the agricultural sector.  Support to producers that could encourage the expansion of
production capacity was significantly lower than support to general services (i.e. management,research and enforcement).  The OECD also was embarking on a study on market liberalization to
describe global fish markets, and examine tariff and non-tariff barriers to trade in fish and fish
products, as well as cross border investments in this sector.  The possible effects of government
financial transfers to the fisheries sector on fisheries trade would also be included.
38. The representative of Argentina asked whether the OECD's assessment included foregone
revenues, which stemmed from uncollected tariffs as a result of the exchange of preferential market
access for access to fisheries resources.  Many access agreements provided foreign fishing fleets withaccess to the economic zones of developing countries, including preferential access for fish from these
zones.  This preferential access meant low or no tariffs.  It also meant revenue foregone for the
country providing the access as part of the agreement that opened up the possibility for foreign vessels
to capture fish in the economic zones of developing countries.  The observer of the OECD responded
that, in principle, it would be preferable to include the type of support Argentina had mentioned, but
that the actual OECD figures did not include them .  For some countries, the data included direct
payments for access to third countries' economic zones.
39. The representative of Egypt asked the FAO to outline the main elements of the programme it
was developing to assist developing countries to implement the Plan of Action.  Egypt welcomed the
FAO's initiative, in cooperation with Japan, to organize workshops for developing countries.  Theobserver of the FAO responded that the programme was undergoing formulation and details in this
regard will be made available in the near future.
40. The representative of the European Communities asked the OECD and FAO when their
respective studies related to fisheries subsidies would be available.  The observer of the OECD
responded that, if agreement were reached at the OECD Committee on Fisheries at its 20-22 March
meeting, the OECD study could be published by mid-2000.  The observer of the FAO responded that
the timeframe established in the Fisheries Department for the presentation of its study to Membercountries was February 2001, at the 24th Session of the FAO Fisheries Committee.
41. The representative of Australia welcomed the initiatives taken by Iceland and New Zealand to
progress activity on subsidies that contributed adversely to global fisheries' sustainability.  The
proposed work programme demonstrated that there was a clear role for the WTO in complementing
the efforts underway in other fora, particularly the FAO.  It was critical to understand the level ofproduction and trade in fisheries products and trends over the last two decades.  Australia thanked
New Zealand for its continuing efforts to ensure that the CTE had up to date information by tabling
WT/CTE/W/134.  Australia welcomed New Zealand's analytical work highlighting the importance of
trade in fisheries products, and noted that about 40 per cent of production was traded;  a significant
number of countries were involved in this trade;  and developing countries were net exporters andaccount for about 50 per cent of total exports.  Estimates of the size of subsidies provided by the EC,
US and Japan in WT/CTE/W/134, and the estimated  breakdown down of these subsidies into various
categories was of particular interest.  Conservation subsidies formed only a small part of total
subsidies provided, although Australia recognized that at least some of the resource rent category
could comprise expenditures, which contributed to improved fisheries management.  Given that the
size of the transfers identified, particularly for the EC and US, were significant, Australia believed
that this resource rent category should be investigated further.  The cross-sectoral category also
included some significant funding and included subsidies that may not be "fisheries subsidies" in the
sense that they were not given directly to the fishing industry or aimed at fishing activities.  This was
a useful reminder of the importance of keeping an open mind as to which subsidies may contribute toexcess fisheries capacity and overfishing, and that it was important, not to narrowly define the scopeWT/CTE/M/23
Page 11
of future work on this issue.  Australia noted, in  particular from WT/CTE/W/126, that the FAO would
undertake a review of fisheries subsidies to clarify concepts and review analytical difficulties and
alternative approaches for the measurement and assessment of the impact of subsidies on trade and
sustainability.  The conceptual issues were important.  The limitations of existing studies were
differences in categorizing subsidies.  Categorization was important in helping to:  (i) identifysubsidies;  (ii) assess their impact on production, trade and the environment;  and (iii) develop
adequate measurement tools.
42. Australia supported Iceland's proposal in pa ragraph 9 of WT/CTE/W/132.  A Secretariat
factual paper based on previous analysis of the effects of subsidies on fisheries management,
overcapacity and overfishing, and environmental impacts of fisheries, would help provide the
necessary analytical underpinning for future discussions.  Given the international interest and diverse
sources of activity on this issue, an update on research recently published in other international fora,including the FAO and OECD, would also be useful for all CTE Members.  Australia welcomed the
commitment in the proposal to ensure ongoing communications with other relevant agencies.
Australia also welcomed the proposal's reference to the needs of developing and least developed
countries.  This was one issue where there was great potential for "win-win-win" synergies in trade
reform of benefits for economic growth, development and the environment.  As noted inNew Zealand's paper, developing countries accounted for approximately half the value of total
exports.  Subsidies which affected the fisheries sector raised important development as well as
environment issues, as trade in fisheries products was a significant source of foreign exchange for
many developing countries.  Ensuring that developing countries can compete fairly in international
fisheries trade was essential to promote the goal of sustainable development in relation to the fisheriessector.
43. The representative of Thailand enquired as to whether Iceland would consider expanding its
initiative in the fisheries sector to the agricultural sector.  While Thailand recognized that fisheries
subsidies could lead to overcapacity in fisheries and overfishing, some subsidies promoted fisheries
sustainability.  Fisheries subsidies and fisheries management could not be dealt with separately.Thailand understood that the elimination or reduction of fisheries subsidies was aimed at those related
to the harvesting of transboundary, straddling, highly migratory and high seas stocks, which were
significantly overfished.  Thailand asked Iceland to confirm whether this understanding was correct.
The fisheries sector played an important role in the socio-economic development in most developing
countries.  In certain conditions, flexibility concerning fisheries subsidies in developing countries was
unavoidable, particularly the needs of artisanal and off-shore fisheries.  Thailand's understanding was
that these types of subsidies were excluded from Iceland's proposed study.  Thailand supportedIceland's proposal in WT/CTE/W/132 for the Secretariat to conduct a factual study on the impact of
fisheries subsidies, and suggested that this study include the value and form of fisheries subsidies, and
the effects of fisheries subsidies on the socio-economic development of developing countries.
44. The representative of Peru said that different studies illustrated that subsidies that contributed
to overfishing and overcapacity had negative impacts on trade in fish and fish products, as well as on
the sustainability of fisheries resources.  It was thus necessary to continue discussions on this matter
in the WTO.  Peru supported Iceland's proposal to update the fisheries section in WT/CTE/W/67, with
emphasis on the importance of this sector for many developing countries and LDCs.
45. The representative of Chile supported Iceland's proposal in WT/CTE/W/132, as a basis on
which to examine eliminating fisheries subsidies, which undermined fisheries sustainability.  This
study should not duplicate FAO work, and should focus on trade distortions and be based on the fact
that trade liberalization was essential for sustainable development.  As Chile noted in Seattle,
eliminating fisheries subsidies could also be approached through the Subsidies Committee.  Chile felt
New Zealand's paper made a valuable contribution to CTE discussions in this area.WT/CTE/M/23
Page 12
46. The representative of the European Communitie s felt that this was an area where the WTO
could make a contribution to environmental protection.  Fair and full developing country participation
in fisheries trade should be a key objective of a fu ture round.  The issue was how to deal with these
issues in the CTE at this stage.  The EC wished to pursue this aim in a broad negotiating context.  The
EC welcomed FAO and OECD work, and endorsed the need for concepts under discussion in relationto the fisheries sector to be clear.  Thailand and Argentina's comments demonstrated that differences
of opinion existed as to what the CTE should be discussing.  In this respect, when OECD work
emerged in mid-2000, there would be much more data on which to base the CTE's discussion.  With
respect to New Zealand's reference to momentum in this area, and Iceland's reference to the Seattle
texts, it was clear since Seattle, that attempts to take part of what any given delegation liked in the
Seattle discussions and re-inject this text into WTO work would break, rather than build momentum.
The EC was keen to get on with this debate based on more detailed work.  There was no point in theSecretariat producing a compilation on the eve of the appearance of major new work in other fora.
The EC felt New Zealand's paper may not be as complete an analysis as some of the other studies that
would emerge.  For example, data on the EU  showed an amount of US$124 million as aid to
shipbuilding under the category of cross sectoral aid.  Further research would have established that
EU rules for shipbuilding explicitly excluded aid for the construction of fisheries vessels.  The EC feltthat the WTO should look at the economics of this sector of human activity. Preferential access for
fish, which implied revenue foregone for the importing government, but which created access to
resources for its own industry, was part of the economics of this sector.  Concerning Argentina's
comment, it would be difficult to quantify revenue fo regone and consider it to be an advantage for the
exporting industry.  Concerning other aspects which were more directly trade-related and could beaddressed by negotiations, it was necessary to look at the framework of the Subsidies Agreement.
47. The representative of Hong Kong China suppo rted Iceland's proposal for a factual study on
the impact of subsidies in the fisheries sector.  New Zealand's paper had contributed to the CTE's
analysis on how the removal of trade distorting measures, including subsidies, may benefit the
environment.  Hong Kong, China saw merit in the "win-win" arguments in New Zealand's paper, andexpressed support for future analytical work in this respect.  The SCM Agreement already provided
certain disciplines for non-agricultural subsidies, and notifications of fisheries-related subsidies had
been made, as required under that Agreement.  It was appropriate to identify possible gaps in the
SCM Agreement in relation to fisheries subsidies, before considering the need for additional rules in
this sector.  Hong Kong, China felt that the APEC  study, noted in New Zealand's paper, was a step in
this direction, and looked forward to the results of this study.
48. The representative of Norway said that government transfers to the fisheries sector in many
cases contributed to overcapacity and overexploitation.  However, fisheries subsidies were only one of
several elements that may have a negative impact on sustainable development of the fisheries sector.
Lack of fisheries management regimes, along w ith rapid technological development, had been an
unfortunate combination resulting in unsustainable development of fisheries resources and excess
fishing capacity over the past decades.  Nevertheless, a responsible management regime had beenintroduced in many economic zones.  Eliminating subsidies that contributed to overcapacity will have
several positive effects;  it will provide for a more sustainable management system;  accommodate a
higher output from fisheries resources on a global scale;  and have a positive economic effect on
efficiency and economic performance, as well as trade.  Support that contributed to overcapacity may
include direct payments (income support) based on levels of catches or number of vessels, and costreducing transfers, such as tax exemptions or interest support on capital.  Norway recognized that
government transfers may contribute to ensure sustainability of fisheries and the aquatic ecosystem.
Expenditures on general services, such as fisheries management and research, were positive.  Certain
subsidies may also contribute to reduce overcapacity, such as transfers to withdrawal of excess
capacity through decommissioning schemes, or to ease transition to other work for fishermen.  It wasimportant, in a global perspective, that such incentives did not facilitate any transfer of excess
capacity from one area to another, by relocating the problem of excess capacity.WT/CTE/M/23
Page 13
49. Norway supported Iceland's proposal for the Secretariat to update the fisheries chapter of
WT/CTE/W/67.  Norway felt that work on fisheries subsidies in the FAO and OECD was important,
and supported the EC's comments on the need for CTE discussion to be based on precise information.
A more comprehensive picture of fisheries subsidies was needed as a basis for reducing
environmentally damaging fisheries subsidies on a global basis.  The aquaculture sector had brought anew dimension into the dynamics in the fisheries sector on a national and global level.  Figures from
the FAO from 1997 showed that aquaculture production, as a percentage of total global production,
had increased from 13 per cent in 1990, to 23 per cent in 1997.  Norway's aquaculture sector
represented 40 per cent of total export value from fish trade in 1999.  The growing importance of the
aquaculture sector had to be included when discussing fisheries issues.  Aquaculture may ease
pressure on fish stocks and represent a positive environmental effect.
50. The representative of the Philippines said that  fisheries subsidies were receiving increased
attention in various international organizations.  The FAO Plan of Action included a call for the
elimination of all factors, including subsidies, wh ich led to excess fishing capacity.  The Philippines
suggested that the OECD fisheries study include market price support, which was trade distorting.
The Philippines agreed with Norway that effective fisheries management was a fundamental
requirement for sustainable fisheries.  Sustainabl e management also involved effective reform of
fisheries subsidies.  New Zealand's paper illustrated the wide discrepancy in fisheries subsidies
between developed and developing countries.  The magnitude of fisheries subsidies in developed
countries was cause for alarm in view of their ne gative effects on sustainable development, including
trade competitiveness, productivity, and resource conservation in developing countries.  This concern
was made more relevant by the fact that there were almost no fisheries subsidies in developingcountries.  The Philippines supported the proposal to review the state of fisheries subsidization and to
identify subsidies that distorted trade and led to environmental degradation, in order to work towards
their elimination. As set out in Iceland's paper and noted by Thailand, the vital role of the fisheries
sector in the developmental strategies of deve loping countries should also be kept in mind.
51. The representative of Japan said that the FAO was identifying all the factors that contributed
to overexploitation of fisheries resources.  Japan would contribute to further progress, so that the
WTO could take into account this work in the next round of comprehensive negotiations.  Japan
wished to wait for the FAO study.  Japan did not object to Iceland's proposal for a factual Secretariat
study on fisheries subsidies, if this entailed a collection of available information.  Japan wondered
how the Secretariat could take into account the importance of the fisheries sector in developing
countries through the collection of information.  Japan noted that much of New Zealand's paper had
been based on a World Bank study.  As Japan noted in the General Council in September 1999, thatstudy represented the opinion of an individual, not the World Bank, and had many problems,
including rough estimates or "guesstimates".  Some figures for Japan were incorrect, e.g., the study
indicated that Japan had US$245 million foreign access subsidies, but Japan had none.  Japan felt that
any future work should not be based upon this World Bank study.  Japan would like to obtain the
paper by Mr. McLeod in order to better analyse New Zealand's paper.  Japan would make moredetailed comments on Iceland and New Zealand's papers at the CTE's next meeting.  Japan felt that
subsidies other than "good" subsidies were not necessarily "bad", and could be "neutral".  Japan felt
that government expenditure to ensure sustainable use of fisheries resources, such as enforcement and
research, was necessary and not a subsidy.  This category should be excluded from the fisheries study.
Japan noted that a combination of "bad" subsidies and the lack of appropriate fisheries managementwas likely to cause overexploitation of fisheries resources.
52. The representative of Canada recognized the threat that overcapacity in the fish harvesting
sector posed to the sustainability of marine resources.  Canada had been involved in the ongoing work
in international fora, including  the FAO, the OECD and the Asia Pacific Economic Cooperation
forum, relating to financial assistance to the fisheries sector.  Canada's role in the FAO Plan of Actiondemonstrated its commitment to controlling global fishing capacity.  Canada encouraged Members to
participate in, and lend their support to, ongoing work in these fora, the results of which would help toWT/CTE/M/23
Page 14
understand this issue and to support future WTO discussions on the possible need for new disciplines
in this area.  Canada recognized that the sustainability of fish stocks can be adversely affected by
subsidies that encourage excessive capacity in the fish harvesting sector;  such subsidies should be
eliminated.  As noted in New Zealand's paper, certain subsidies, such as the Canadian federal licence
retirement programme and assistance to displaced workers, can be an effective tool to reduce fishingcapacity and pressure on marine resources.  Canada felt that the elimination of subsidies that
contributed to overcapacity should be addressed in the context of broad-based negotiations on
improvements to subsidy disciplines under the WTO Agreement on Subsidies and Countervailing
Measures, rather than on a sector-by-sector basis.   Concerning Iceland's proposal for a Secretariat
study, Canada did not wish to detract from, or duplicate ongoing work in the FAO and the OECD.
53. The representative of Hungary supported the OECD's work on fisheries subsidies and felt that
it would be better to wait until the OECD study had been completed, so that its findings could be
included in any Secretariat work on fisheries.
54. The representative of Malaysia supported Iceland's proposal for the Secretariat to update the
fisheries section of WT/CTE/W/67.  Malaysia welcomed the EC and Japan's clarification of data, as it
was important to have correct statistics when em barking on any future negotiations in this area.
Malaysia thanked Norway for its comments on the contribution of aquaculture to sustainabledevelopment.  As noted by Thailand and the Philippines, work in this area should also take into
account socio-economic aspects, which were particularly relevant to developing countries.  Malaysia
inquired as to why price support measures had not been included in the OECD and FAO studies, and
whether there were plans to include this aspect.
55. The representative of the United States supported Iceland's proposal for the Secretariat to
update the fisheries section of WT/CTE/W/67, including Thailand's suggestion to include the
development dimension.  Thailand's suggestion would help respond to Japan's question as to how the
development dimension fits into the analysis.  In conducting a survey of existing work in this area, the
Secretariat could pay attention to work on the development dimension.  Although the FAO and OECD
studies would make an important contribution, the US did not feel that it was necessary to wait untilthese studies had been completed.  The Secretariat should draw on the work being undertaken in
different forums.  There should not be any presumption that all subsidies were "bad".  Japan was
correct to note that subsidies could have "good", "bad" or "neutral" effects on fisheries management.
The CTE should avoid any simplistic approaches, and consider which types of subsidies led to
overcapacity in this sector. Fisheries data would benefit from further elaboration and clarification.
The US was willing to make a contribution in this regard.  As noted in New Zealand's paper, there
were a few countries that accounted for the majority of fisheries subsidies.  These Members couldprovide information to the CTE on the types and amounts of subsidies to deepen the understanding of
the issues.  Although some of this information would be provided through notifications to the
Subsidies Committee, some information went beyond the definition of subsidies in the
SCM Agreement and could be expanded upon.  The US welcomed that the EC and Japan had
provided information on their practices;  this could be done in a systemic manner to inform the CTEdebate.
56. The representative of Mexico reaffirmed that the elimination of subsidies was beneficial not
only for the environment, but for trade, particularly for developing countries.  Mexico recalled that the
paragraph on fisheries included in Iceland's paper, containing the Chairman's text from the
Seattle Ministerial Conference, had not been agreed and should be bracketed.  Mexico considered thatsubsidies were not "good" or "bad", but that they were either allowed or prohibited under WTO rules.
It was not necessary to enter into value judgements in this respect.  It was not for the CTE to define
whether a certain type of subsidy were "good" or "bad ".  Mexico did not care to enter into an exercise
of characterizing subsidies in the CTE;  this should be taken up in the Subsidies Committee.  Work in
other organizations in this area should not be duplicated.  Mexico supported Iceland's proposal toupdate the fisheries section of WT/CTE/W/67, with the reservation that this study be a factual update,WT/CTE/M/23
Page 15
not a revision.  With respect to Thailand's proposal to include the socio-economic aspects of fisheries
subsidies, Mexico reiterated that social issues were not part of the WTO or the CTE's mandate.
57. The representative of India expressed his delegation's interest in this subject, although its
position was still evolving.  India supported Thailand's proposal to include the socio-economic
implications of fisheries subsidies in developing countries.  India looked forward to contributing to
work in this area.
58. The representative of Argentina supported Iceland's request in WT/CTE/W/132 for a
Secretariat update on fisheries subsidies.  This would enable the CTE to move forward in an area that
demonstrated that trade liberalization promoted environmental protection and conservation.
Eliminating fisheries subsidies also had advantages for developing countries with artisanal fisheries
that suffered from competition from high sea fleets, which received subsidies from countries that had
the means to subsidize their fleets.  New Zealand and Iceland's papers noted the objective ofpromoting the responsible use of economic incentives for the exploitation of natural resources.  The
point was not to say that these incentives, in this case subsidies, were "bad" per se .  It was necessary
for the CTE to analyse their impact on sustaina ble development, particularly the sustainable
exploitation of fisheries resources.  According to the WTO rules on subsidies, foregone revenue
should also be considered a subsidy.  Tariff reductions offered as part of the "payment" to accede to aMember's exclusive economic zone should also be considered a subsidy since they were a foregone
revenue of the importing country.  This foregone revenue was normally part of access agreements
signed between developed and developing countries.  Developing countries provided preferential
access to their markets and consequently paid lower fees to developing countries that provided access
to their fisheries.  Fees collected by developing countries could be used to monitor the capture andimplement fisheries legislation.  Instead, preferential market access was mainly for the benefit of the
fishing fleet.  Consequently, he asked New Zealand whether foregone revenue, often covered in
access agreements, was included in the data in its paper.
59. Argentina supported Mexico's comments on classification of subsidies.  However, the point
was not whether subsidies were "bad" or "good", but the CTE's mandate, which was to analyse theenvironmental benefits of removing trade restrictions and distortions.  The CTE should contribute to
increasing the compatibility between trade liberaliz ation and environmental protection by identifying
which trade restrictions and distortions had a negative environmental impact.  Concerning the EC's
comment that all trade liberalization agreements involved foregone government revenue, Argentina
felt that in this case it was just one government provided preferential access to its market in exchange
for the exploitation of natural resources.  Foregone revenue was a subsidy under the WTO definition.
Argentina stressed that this practice also had consequences for resource management in the
developing country involved in a fisheries access agreement.
60. The representative of Switzerland said that while fisheries may not be one of the most
sensitive issues for his delegation, CTE work and Members' approach to this work was important,
independent of the specific topic.  Switzerland noted with concern the statement that the CTE should
not discuss whether subsidies were "good" or "bad", but whether subsidies were permitted underWTO rules.  The CTE's task was to better understand, through analysis and discussion, the
interrelationship between trade and environment.  The CTE should analyze trade measures, such as
trade liberalization or measures limiting trade, to determine if they promoted the goals in the preamble
of the WTO Agreement.  Trade liberalization was not in itself a goal of the WTO;  it was the means to
reach these goals.  The CTE's task was to analyse subsidies, for example, in order to determinewhether they were "good" or "bad" with respect to advancing these goals.
61. The representative of New Zealand thanked Members for their comments on his delegation's
paper.  The message emanating from the discussions was that Members were interested in accurate
information on the current situation in this area.  Although its paper had been based on the 1998
World Bank study, New Zealand was refining this analysis as information became available, such asWT/CTE/M/23
Page 16
from the FAO and OECD.  In response to Argentina, he  said that categories of subsidies in the Annex
to New Zealand's paper followed closely those in  the 1998 World Bank study.  In terms of budgeted
financial transfers and foreign fishing activities, the data referred to direct budgetary assistance.  The
concept of foregone revenue may be difficult to assess, for example in relation to various tariff
preferences that may be part of a package deal regarding access to the zone of a coastal state.  Itwould be useful to hear from the OECD on the extent to which this issue has been examined in the
OECD study.  Concerning the EC's comment on the figure on shipbuilding in the comparative chart in
New Zealand's paper, it was helpful to have such comments.  New Zealand would look into this issue,
but he inquired as to whether the EC Directive was focused only on assistance directed specifically to
the fisheries sector in the shipbuilding area, or was more general.  Concerning Japan's comments on
the relatively small percentage of "good" subsidies, the percentage referred to in New Zealand's paper
related to subsidies aimed at reducing overcapacity, and not to other categories.  In past CTEdiscussions, reference had been made to national initiatives aimed at reducing overcapacity.  Mexico
was correct in noting that it was difficult to make value judgements that could be collectively shared
by CTE Members.  Based on information on the nature of financial transfers in the fisheries sector,
Members would be better placed to assess which categories were relevant to WTO work, given the
WTO's focus on trade-related effects of subsidization.  New Zealand supported Iceland's proposal forthe Secretariat to update the fisheries section of WT/CTE/W/67.
62. The representative of Iceland said that the support for his delegation's proposal illustrated the
interest in the CTE in this area.  Iceland felt th at Thailand's suggestions to include the development
dimension was valuable.  The issue of fisheries subsidies had received growing attention in various
international organizations, including FAO, OECD, CSD and APEC, as well as the CTE.  While it
was known that fisheries subsidies promoted ov ercapacity and thereby encouraged overfishing,
distorted trade and undermined sustainable development, there was a lack of accurate assessments on
the nature and extent of global fisheries subsidies, and their implications, especially for trade.  Such
factual analysis was important to advance an understanding of the negative implications of fisheries
subsidies and to facilitate negotiations in this area.  New Zealand's paper contributed to filling theinformation gap, and demonstrated the need for a comprehensive factual analysis of fisheries
subsidies in the WTO.  Iceland welcomed New Zealand's invitation to others to share their analysis
and national experiences.
63. The Chairman noted the desire of Members to continue discussions in the CTE on fisheries
subsidies.  In this respect, it would be useful if the studies under preparation in the FAO and the
OECD could be made available to the CTE so as to fully inform the discussions.  Duplication of work
with other intergovernmental organizations should be avoided.
64. It was agreed that the Secretariat would update the fisheries section of WT/CTE/W/67 for
the 24-25 October meeting of the CTE, in cooperation with other intergovernmental organizations and
taking into account the development dimension.
Agriculture
65. The representative of Argentina presented the results of an FAO/Netherlands Conference on
the Multifunctional Character of Agriculture and Land, in Maastricht, on 12-17 September 1999
(WT/CTE/W/127).  This report reflected the efforts of participating experts to analyse the concept of
multifunctionality in agriculture, particularly to determine how it could be promoted through trade
policy.  Argentina felt that the concept of multifunctionality did not add to Article 20 of the
Agreement on Agriculture;  it was similar to sustainable development and rural development inAgenda 21 .  During the preparations for the Seattle Ministerial Conference, several countries had
refered to the concept of multifunctionality and commented on how trade policies could promote it.
Multifunctionality established a clear link between environmental objectives and trade policies.  As
noted in the Maastricht report, all human activities are multifunctional, including agriculture.  The
importance of targeted, transparent, cost-effective policies that did not distort production and tradeWT/CTE/M/23
Page 17
had been confirmed in the report.  The Maastricht Conference had recognized that there were different
perceptions on definitions, scope, utility, value added and coverage of the concept of
multifunctionality.  Agriculture had multiple functions in the context of sustainable development and
rural development.  The Maastricht report noted the importance of ensuring that policy measures did
not unfairly limit market access, particularly for developing countries.  Given previous statements inthe CTE that agriculture had functions beyond producing food and fibre, which should be pursued for
their social benefit, this report was useful in determining how these objectives should be pursued.
66. The representative of Australia welcomed Argentina's circulation of the Chairman's report of
the Maastricht Conference, which offered insights for the consideration of agricultural sustainability
and land use, and a perspective on its current place in relation to development issues and the
international policy environment.  These perspectives provided guidance to the CTE on Item 6 and
agricultural issues.  The report noted the relevance of Agenda 21  and the World Food Summit plan.
There was agreement amongst the seminar participants on a number of important ideas, which were
worth highlighting:  a "range" of appropriate policies can be used to promote sustainable agriculture
and rural development, which should be "targeted, cost-effective, transparent and ... not distort
production and trade";  a coherent analytical framework should be developed for measuring
economic, environmental and social costs and benefits of the interlinkages, taking into accountdifferent circumstances in regions;  there was a need for intensified cooperation between regions in
the world in achieving sustainable agriculture, es pecially in the field of institution building,
information sharing, technology transfer, capacity bui lding and market access;  there was a need for a
"fair and market-oriented agricultural trading system and the avoidance of unjustifiable trade barriers,
which together with other policies will facilitate the further integration of agricultural andenvironmental policies so as to make them mutually supportive";  there was the necessity to "ensure
that policy  measures do not unfairly limit market access nor distort markets for food and agricultural
exports", particularly for developing countries.  The report also identified an array of policies at the
national, regional and international level that would assist countries to improve sustainability.
Australia recommended that Members take note of this report, as a reminder of the importance of thisarea to developing countries.  This report could also be taken into account in consideration of policy
efficiency and effectiveness.
67. The representative of Switzerland said that the Chairman's report of the Maastricht
Conference addressed issues of interest to the CTE concerning agriculture.  The report summarized
aspects of the multifunctional character of agriculture and noted that agriculture could contribute to
societal welfare.  The report acknowledged that the goal of agriculture was not only to produce food,
but to fulfil other objectives, and underlined the importance of targeted and transparent policies toreach these objectives.  Given its multifunctional character, agriculture contributed to the policy
objectives of rural development and decentralized settlement of the territory;  public goods or positive
externalities provided by farmers, such as envi ronmental services, natural resource and landscape
management;  food security, food safety and food quality;  preservation of cultural heritage, including
regional specific knowledge on landscaping and farming methods.  Agricultural multifunctionalityalso played a role in combatting global hunger and promoting sustainable development.  These policy
objectives, which varied between countries and regions, clarified that environmental aspects were
only one element of the multifunctional character of agriculture.  Although the benefits of agriculture
were not limited to producing food, a liberalized agricultural market would honour only this aspect.
68. In order to maintain incentives for benefits of agriculture that were not reflected in the market
price of agricultural products, such as social or ecological benefits, specific measures should be
adopted.  Studies discussed in the CTE had clarified that some measures adopted for this goal may be
ineffective, or even harmful, by rewarding negative externalities, such as accelerated natural resource
depletion and environmental degradation.  Support measures that were linked to input and output
levels could lead to resource misallocation, promoting inefficient production and environmentaldepletion.  Specific production methods produced certain positive environmental externalities, which
were not compensated for by the market.  It might be helpful to develop criteria to distinguishWT/CTE/M/23
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beneficial from harmful measures.  The issue of the multilateral verification of such criteria and their
application also should be discussed.  Switzerland agreed that trade liberalization, if accompanied by
sound environmental policies, can play a key role in the promotion of sustainable development.  Trade
liberalization was a means to achieve global welfare;  this goal can only be reached through a range of
measures, which should be verifiable.  This was the goal of the forthcoming agricultural negotiations.This approach would prevent "lose-lose" scenarios,  and enable "win-win-win" situations, with gains
for trade, development and environment.
69. The representative of New Zealand considered the Maastricht report relevant to CTE work,
and had supported this report in other fora, such as the Commission on Sustainable Development.
Members' attention was drawn to several points in the report:  that "all human activities are
multifunctional", thereby belying the argument that agriculture was "unique" in this regard.  Set
directly alongside references to the "non-food functions of agriculture" was the importance of
"targeted, transparent and cost-effective policies that do not distort production and trade."  There was
also a reference to "the need for a fair and market-oriented agricultural trading system and the
avoidance of unjustifiable trade barriers, which together with other policies will facilitate the further
integration of agricultural and environmental policies so as to make them mutually supportive".
New Zealand's opinion of the "multifunctionality" concept was strengthened by these outcomes.  As acountry that relied heavily on agricultural exports, but also on income from eco-tourism, New Zealand
placed great emphasis on the mutually supportive nature of agriculture and environment, as referred to
in paragraph 20 of the report.  Policies to protect the environment or promote sustainable management
practices in agriculture should be directed specifically to, and limited in scope by that objective, to
ensure that the most effective means to achieve the objective was used.  Policies to pursueenvironmental objectives must also be decoupled from production because policies involving
payments coupled to production, encouraged farmers to expand production.  This may lead to
increasing livestock intensity, increasing the arable area or intensifying input use, which were more
likely to harm the environment.
70. New Zealand felt that under the Green Box of the Agreement on Agriculture, there was ample
scope for decoupled support to be paid to farmers to pursue landscape, environmental, socio-
economic and other "multifunctionality"-related goals in a non-trade distorting manner.  As the
Maastricht report noted, agriculture was not unique in providing multiple functions.  While
governments were free to design their domestic policies to support the multiple functions of
agriculture, they should not be permitted to pass the costs of their policy choices onto the rest of the
world through trade-distorting practices.  New Zealand thanked Argentina for submitting the
Maastricht report, which had made a valuable contribution to the CTE's discussions.
71. The representative of the European Communities welcomed the tabling of the Maastricht
report, which represented the Chairman's conclusions.  This report confirmed the importance of the
discussions in an area subject to the negotiations under the WTO's built-in agenda, and an open
approach to papers that could stimulate the debate.
72. The representative of South Africa felt the Maastricht report was relevant to the CTE's work
and underscored important aspects of the concept of multifunctionality.  Concerning the
multifunctional character of agriculture, the report made the point that so far there was no
internationally agreed definition of this concept.  Even when addressing non-food functions of
agriculture, the report noted that policies should distort production and trade in agriculture.
73. The representative of Norway believed that the various food and non-food functions of
agriculture were important dimensions to take into account in policy design and implementation.
Norway's views were well known through its four papers in the Committee on Agriculture.  For all
practical purposes, the concepts of multifunctionality and non-trade concerns were identical.  Non-
trade concerns were explicitly contained in the Agreement on Agriculture.  Multifunctionality had
been explicitly referred to in the 1996 World Food Summit Plan of Action, and by AgriculturalWT/CTE/M/23
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Ministers at the OECD 1999 Ministerial.  Norway agreed with the EC that the Maastricht report
represented the Chairman's conclusions.
74. The representative of Uruguay said that the Maastricht report was relevant to the CTE's
discussions.  This report reflected the conclusions reached by the Chairman of the Conference,
Mr. Hans Alders, which had been negotiated with the participants.
75. The representative of Costa Rica said the Maastricht report was a useful basis for CTE
discussions.  As noted in the report, there were examples of successful ways of implementing
sustainable agriculture and rural development that did not distort trade and harm the environment.
76. The representative of Japan said that the con cept of multifunctionality had been recognized in
the OECD and the FAO.  Japan's position on this concept was well known.  As agriculture varied
according to the specific conditions in each country, it was not possible to single out only one
standard to regulate agriculture.  The multifunctionality of agriculture was closely related toagricultural production, and policy intervention could not be completely decoupled from production.
77. The representative of the United States appr eciated Argentina's submission of the Maastricht
report.  The US supported the Chairman's conclusions in the report.  The issue was not whether, but
how countries pursued the multifunctional character of agriculture.  There were many risks of
pursuing multifunctional benefits in a way that undercut the efforts of other countries to achievesustainable development and sustainable agriculture.  The Green Box of the Agreement on
Agriculture provided ample scope for countries to pursue the multifunctional benefits of agriculture.
78. The representative of Canada thanked Argentina for submitting the Chairman's report on the
Maastricht Conference and associated her delegation with the comments made by Australia,
New Zealand, South Africa, Uruguay and the US.
79. The representative of Brazil said that the Maastricht report reaffirmed the objectives of the
Cairns Group.  Agricultural multifunctionality should not be pursued in a way that was trade
distorting.  Brazil felt that there were different types of subsidies.  Each country would like to give
subsidies to areas in which it was not so competitive, and to liberalize sectors in which it was
competitive.  For example, while some countries may wish to liberalize the fisheries sector, they didnot wish to liberalize the agriculture sector.  Policy coherence should be pursued with respect to the
consideration of subsidies.  Multifunctionality applied to all economic sectors of human activity.
80. The representative of the Philippines said that the multifunctional character of agriculture
should not be used as a justification to put in place trade distorting measures.
81. The representative of Hong Kong, China felt that discussions on agriculture should be seen in
context.  The CTE was not the Committee on Agriculture.  It was necessary to reflect on how the
concept of agricultural multifunctionality can contribute to trade liberalization, environmentalprotection and sustainable development.
82. The representative of Argentina felt that the Maastricht Conference provided an opportunity
to discuss the concept of multifunctionality prior to Seattle.  Progress had only been possible once it
had been agreed to assume that participants were discussing in good faith a concept that was not going
to be used as a cover for old protectionist practices and subsidies.  Although this report had been madeunder the Chairman's responsibility, it was a good reflection of what had been discussed.  For
fisheries, overcapacity of fishing fleets was the issue, whereas in agriculture, the main trade and
environmental problem was overproduction.  Overcapacity and overproduction had similar causes
related to economic incentives.  The consequences were also similar.  Overproduction was related to
the accumulation of massive stocks that were dumped onto international markets, competing unfairlywith developing countries, but also generating price distortions that made developing countryWT/CTE/M/23
Page 20
producers particularly face a difficult choice:  either reduce production costs or leave the market.  This
prevented producers from implementing sound environmental practices, and governments from
enforcing adequate environmental regulations.
Environmental Services
83. The observer of the ITC said that the environment-related activities of the ITC concentrated
on assisting recipient country exporters and importers to adapt to the challenges and opportunities
emerging from the greening of international markets.  In 1997, ITC had conducted research on the
implications of the WTO Agreements for environmental industry exporters from developing
countries.  At the October 1999 CTE meeting, the ITC made available its publication on "Implications
of the WTO Agreements for International Trade in Environmental Industries".  To increase awareness
among developing country exporters of liberaliza tion in the environmental industry sector, the ITC
organized Business Roundtables in several developing countries, including India, Thailand, Pakistan,Malaysia and the Philippines, with participation from over 400 representatives of the environmental
industry, governments, and NGOs.
84. Based on the positive response to these roundtables, the ITC was finalizing a proposal for
cooperation with the WTO Secretariat to launch a project on "Market Prospects for Environmental
Industries from Developing Countries and Economies in Transition".  The aim was to further thepossibility of achieving "win-win-win" opportunities  for trade, environment and development, which
could flow from removing trade restrictions and distortions in environmental technologies and
services.  The project's objectives were:  (i) to examine the extent to which trade barriers exist in the
environmental industry, particularly in developing countries;  (ii) to strengthen developing country
capacity to develop their environmental industry through the participation of small and medium-sizedindustries in developing and developed countries;  and (iii) to explore opportunities in emerging,
liberalized global markets for environmental technologies, products and services, including through
joint ventures.  The private sector had a key role to play with respect to transfer of environmentally
sound technologies, which would be facilitated by liberalization.  The main outputs of the project
would be to:  (i) develop country and regional profiles on the export potential of environmentalindustries;  identify possible trade barriers;   organize a series of workshops for developing country
government officials and industry representatives;   and prepare a WTO-ITC publication on global
environmental technologies, services and product markets.  Given the CTE’s discussion to explore
"win-win-win" situations, the ITC felt this initiative may be timely and useful, and would be pleased
to discuss the project proposal with interested delegations.
General comments
85. The representative of Canada said that it was unfortunate that the Article 8 provisions for
certain environmental subsidies had lapsed under the terms of the Agreement on Subsidies and
Countervailing Measures (SCM).  This was a step backwards in efforts to make progress on
categorising subsidies as either trade distorting or non-trade distorting, and to further refine WTO
rights and disciplines.  It may also raise broader questions about the ability of the SCM Agreement toaccommodate environmental concerns.  The research and development provisions of Article 8 were
important to address environmental objectives.  A key challenge for governments was to encourage
research on new technologies to address environmental problems.  Canada supported efforts to
reinstate Article 8 of the SCM Agreement, as well as other provisions, which had terminated
on 31 December 1999.  This should be a priority for the SCM Committee.
86. The representative of India said that discussions had focused on one aspect of market access,
namely removing trade restrictions and distortions.  There were two other aspects:  (i) safeguarding
existing market access of developing countries;  and (ii) granting additional market access to
developing countries.  It had been well recognized that if developing countries were to put in place
better environmental protection, they needed financial resources, which should be available to themWT/CTE/M/23
Page 21
through increased market access.  For example, if a particular firm in a developing country were faced
with trade restrictions for a product it was exporting if this product did not meet the importing
country's environmental standards, the resulting situation was the opposite of what was intended, i.e.
that firm was deprived of crucial resources, and the chance of this firm meeting those environmental
standards would be nullified.  Indian firms had faced such barriers.  At a minimum, existing marketaccess for developing country exports should be safeguarded.  Otherwise, the ability of developing
countries to provide for environmental protection would be undermined.  Additional market access
should be made available to developing countries to enhance their potential to deal with
environmental concerns.  India said it intended to submit a paper in this regard.
OTHER ITEMS
Items 1 & 5 The relationship between the provisions of the multilateral trading system and trade
measures for environmental purpose, including those pursuant to MEAs;  and the
relationship between dispute settlement mechanisms in the multilateral trading system
and those found in MEAs
87. The representative of Canada appreciated the Secretariat's notes on recent developments in
the Montreal Protocol and the Basel Convention (WT/CTE/W/130);  and the Conventions on Prior
Informed Consent Convention (PIC) and Persistent Organic Pollutants (POPs) (WT/CTE/W/128);  as
well as the annotated bibliography on selected literature on the use of trade measures in MEAs
(WT/CTE/W/129).  Based on the concerns it had expressed, Canada also appreciated the corrigendum
to WT/CTE/W/130.  Canada recalled its position on the relationship between the provisions of the
multilateral trading system and trade measures in MEAs.  Canada remained of the view that the WTO
should be a proactive organization that fostered a legal environment based on rules and predictability.In this respect, clarification of the relationship between WTO rules and trade measures in MEAs
would be an effective way to avoid the perception of potential conflict.  Canada felt that a principles
and criteria approach to MEAs could assist WTO panels in assessing the MEA trade measures and
international negotiators contemplating the use of trade measures in an MEA.  Canada was
undertaking further work on how the MEA-WTO relationship might be clarified, based on theprinciples and criteria approach, the results of which Canada would provide for the 5-6 July CTE
meeting.
88. The representative of the European Communities welcomed the conclusion of the
Cartagena Protocol on Biosafety, which contributed to strengthening the body of international
environmental law and marked a small, but significan t step forward in integrating and balancing trade
and development.  The relationship between the Protocol and other international agreements had been
settled in what could be characterized as a softened version of the PIC Convention's preambularlanguage, which emphasized mutual supportiveness and had not attempted to change rights and
obligations under existing agreements.  The Protocol was not subordinated to other international
agreements.  The EC welcomed the precautionary element in the Protocol.  This was the first time that
international environmental law had explicitly recognized the precautionary principle, and made it an
operational article in an MEA.  The EC had recently adopted a document on how to implementprecaution in EC law, which was available with the Secretariat for consultation.  When MEAs would
be discussed at the July CTE meeting, the EC may come back to the issue of precaution.  If the EC's
paper on the precautionary principle was read from a trade perspective, there were many reassuring
principles related to aspects recognized in the WTO, such as proportionality, science and
objectiveness.
89. The representative of the United States welcomed the adoption of the Cartagena Protocol on
Biosafety, which would provide for the environmental objectives of the Protocol to be met, while not
unduly interfering with international trade.  It may in fact provide additional confidence in genetically
modified products.  The US did not consider the language in the Protocol to be a softened version of
the PIC Convention, but language that was tailored to the Protocol.  The key aspect was that theWT/CTE/M/23
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language made the point that the Protocol was not intended to change the rights and obligations under
the WTO.  Discussion during the negotiations on precaution revolved around which kind of controls
to insert to ensure against abuse of a concept th at was still in its infancy.  Work was needed to
articulate how to implement this concept.  US fish eries experts had noted that the Protocol was not the
first effort to operationalize the precautionary principle;  fisheries agreements had done so in the past.
90. The representative of Australia said that the adoption of the Cartagena Protocol on Biosafety
was a significant development, which Australia looked forward to discussing at the July CTE
meeting.  As the Protocol's provisions required careful consideration, Australia's comments reflected
some preliminary observations.  As one of the wo rld's most biologically diverse countries with a
significant dependence on the agriculture sector, Australia had particular interests in the Protocol.
Australia noted the affirmation in the Protocol's preamble that trade and environment agreements
should be mutually supportive, with a view to achieving sustainable development.  This and otheraspects of the preamble were consistent with the principle that those countries which will be a Party to
both the Protocol and the WTO could, and should, implement their commitments under each
agreement in ways fully consistent with the other.  Articles 10 and 11 of the Protocol recognized the
need to address situations where there was a lack of scientific certainty, due to insufficient relevant
scientific information.  Such situations were al so explicitly recognized and catered for in the
SPS Agreement.  Ensuring that there was coherence between international legal regimes was an
important means of advancing the goal of sustainable development.
Item 7 The issue of the export of domestically prohibited goods
91. The representative of Egypt recalled that, at the 12 October CTE meeting, her delegation had
raised the issue of the export of domestically prohibited cosmetics and soaps containing mercury,
manufactured in European countries for marketing ma inly in developing countries.  Information in
this regard had been provided in a letter to the WTO from the World Health Organization.  Egypt had
also been provided with a study on this matter from the WHO prepared by an NGO, Anamed.  Egypt
referred to its bilateral discussions with the EC on this matter, and hoped that the EC would provide
the CTE with supplementary information, which E gypt would forward to it s capital for follow-up.
92. The representative of Nigeria associated his delegation with Egypt's statement.
93. The representative of the European Communities said that the issue of soaps containing
mercury was an interesting case study of domestically prohibited goods.  Although current EC
legislation had prohibited the sale in the EC of such products since 1976, it did not ban their
manufacture or export.  Since 1992, however, exporters were required to notify the importing country
of the intention to export.  The EC added that, wh en checking the EC companies cited as exporting
mercury soaps, virtually all were found to no longer exist, or to have ceased production of the goodsin question.  The EC understood that the PIC Conven tion did not cover such exports.  The EC felt that
the issue of the export of domestically prohibited goods could be further explored in the CTE.
Item 8 The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual
Property Rights
94. The representative of Costa Rica presented her delegation's Biodiversity Law as a
contribution of its national experience related to discussions under this Item.  This Law had also been
referred to in WT/CTE/W/125.  This Law was under review in the Constitutional Court of Costa Rica.
Costa Rica, together with 157 other countries participating in the Earth Summit, had signed the
Convention on Biological Diversity (CBD) in 1992.  In signing the CBD, Costa Rica assumed
international obligations in an effort to reduce the ra te of depletion of the earth's biodiversity.  Costa
Rica shared the CBD's objectives, namely the conservation of biodiversity, the sustainable use of its
components, and the fair and equitable sharing of the benefits arising out of the utilization of genetic
resources.  The CBD considered that to achieve these goals it was necessary to guarantee access toWT/CTE/M/23
Page 23
genetic resources, to encourage transfer of relevant technologies, taking into account rights over those
resources and technologies, and to ensure funding.  Costa Rica's Biodiversity Law had been adopted
pursuant to its commitments under the CBD.  The Biodiversity Law, No. 7788 of 30 April 1998,
published in the Official Gazette ("La Gaceta") No. 101 of 27 May 1998, came into force as of that
date.  The Law defined biodiversity as the variability among living organisms from all sources,including those found in terrestrial, aerial, marine and aquatic ecosystems, or in other ecological
complexes.  The term covered diversity within species, as well as between species and the ecosystems
of which they form part.  For the purposes of this Law, the definition of biodiversity included
intangible elements, such as knowledge, innovation and traditional practice, both individual and
collective, with current or potential value associated with biochemical and genetic resources, whether
or not protected by intellectual property regimes or sui generis  registration systems.
95. The purpose of the Law was to conserve biodiversity and maintain the sustainable use of
resources, as well as to distribute fairly the derived benefits and costs.  To that end, Costa Rica shall
exercise full and exclusive sovereignty over elements of its biodiversity.  Article 10 contained the
following objectives of the Law:  (i) to integrate the conservation and sustainable use of the elements
of biodiversity into the development of social, cultural, economic and environmental policies;  (ii) to
promote the active participation of all sectors of society in the conservation and ecologicallysustainable use of biodiversity, in order to achieve social, economic and cultural sustainability;  (iii) to
regulate access and thereby facilitate the equitable distribution of the social, environmental and
economic benefits to all sectors of society, with special attention to local communities and indigenous
peoples;  (iv) to improve the administrative framework for effective and efficient management of the
elements of biodiversity;  (v) to recognize and compensate the knowledge, practices and innovationsof indigenous peoples and local communities for the conservation and ecologically sustainable use of
the elements of biodiversity;  (vi) to recognize the rights arising from the contribution of scientific
knowledge to the conservation and ecologically sustainable use of the elements of biodiversity;  (vii)
to promote access to the elements of biodiversity a nd associated technology transfer;  (viii) to foster
international and regional cooperation for the conservation, ecologically sustainable use anddistribution of the benefits derived from biodiversity, especially in frontier areas or areas of shared
resources;  (ix) to promote the adoption of incen tives to and compensation for environmental services
for the conservation, and sustainable use of the elements of biodiversity;  and (x) to establish a system
of conservation of biodiversity which achieves coordination among the private sector, citizens and the
State, in order to guarantee implementation of the Law.
96. The Biodiversity Law contained ten chapters.  Chapter I set out the Law's general provisions.
Chapter II set out the efficient management of the elements of biodiversity, whereby the Ministry ofthe Environment and Energy shall coordinate the administrative functions involved in managing and
conserving biodiversity through the National Biodiversity Management Commission (CONAGEBIO),
with support from a technical office and the National Conservation Area Scheme (SINAC).
CONAGEBIO would formulate national policies on th e conservation, ecologically sustainable use,
and restoration of biodiversity, subject to the requir ements of the CBD and other relevant international
treaties, as well as national interests.  The Commission's membership was comprised of a
representative from the Ministry of the Environment and Energy;  Ministry of Agriculture;  Ministry
of Health;  the National Conservation Area Scheme;  the Institute of Fisheries and Aquaculture; the
Foreign Trade Ministry; the National Peasant Farmers' Association; the National Indigenous People's
Association;  the National Council of Rectors;  the Federation for Environmental Protection;  and theUnion of Private Enterprise Associations.
97. Chapter III provided that, in order to avoid and prevent present or future damage or injury to
human, animal or plant health or to the integrity of ecosystems, the Law shall establish mechanisms
and procedures for access to the elements of biodiversity, for purposes of research, development,
production, application, release or introduction of genetically modified or exotic organisms.  Theserules were still being drafted.  Chapter IV laid down rules on the conservation and sustainable use of
ecosystems and species to enable the competent aut horities to adopt suitable technical standards andWT/CTE/M/23
Page 24
introduce conservation mechanisms such as environmental legislation and evaluations, impact
assessment studies and environmental audits, authorizations, environmental licences and incentives.
98. Chapter V laid down the basic requirements for access to genetic and biochemical elements
and protection of associated knowledge, namely:  (i ) prior informed consent by the representatives of
the place to which access is granted;  (ii) endorsement of such prior informed consent by theTechnical Office of the Commission;  (iii) terms for technology transfer and equitable distribution of
any profits agreed in the authorizations, agreements  and licences, as well as the type of protection of
associated knowledge required by the representatives of the place to which access is granted;  (iv)
definition of the ways in which such activities will contribute to the conservation of species and
ecosystems;  and (v) appointment of a resident legal representative in Costa Rica in the case of natural
or legal persons domiciled abroad.  Access permit was required for any programme of research or
bioprospecting on genetic or biochemical components of biodiversity intended to be carried out onCosta Rican territory. As regards IPRs, decisions that had a bearing on biodiversity must be consistent
with the objectives of the Law.
99. Chapter VII established regulations on envi ronmental impact assessments, specifically
regarding the submission of assessments, guidelines for their preparation, environmental auditing and
other rules.  Under Chapter VIII, concerning rules on incentives, the Ministry of the Environment and
Energy and the other public entities, in cooperation with the private sector, including civil society
organizations, shall promote investments for the sustainable utilization and conservation of
biodiversity.  Chapter IX contained regulations on administrative procedures, judicial proceedings in
administrative matters or matters relating to agrarian jurisdiction (in disputes between individuals
which involve no administrative measure or measure relating to public land), and administrative orcriminal penalties for offences defined in the Criminal Code and special legislation.  A noteworthy
feature of these rules was the public right of action, which entitled any individual to institute
administrative or judicial proceedings for the defence and protection of biodiversity.
100. On 18 September 1998, the Office of the Attorney-G eneral of the Republic of Costa Rica had
instituted proceedings in the Constitutional Court to establish the unconstitutionality of certain articlesof the Biodiversity Law.  The Office of the Attorney-General considered that the Law granted greater
powers to CONAGEBIO and SINAC, with regard to their establishment, nature and functions, than
was permissible for a decentralized body, thereby in fringing constitutional principles governing the
powers of the Executive.  It also questioned the financial administration of CONAGEBIO and
SINAC.  As a result of these pending proceedings, neither of the two bodies was able to issue final
decisions or receive funding, which hampered the Law's application.  The Law will also be subject to
certain amendments to improve the compatibility of obligations under the CBD and the TRIPsAgreement.  No draft text had been formally submitted as yet, but some of the points that will be
subject to review concerned IPR protection, particularly the form and limits of protection and
licences.  These possible amendments will be examined by the Executive, farmers, indigenous groups,
business associations, environmental groups, the academic community, and civil society.
101. The representative of Thailand, on behalf of Indonesia, Malaysia, the Philippines and
Thailand, commented on plant variety protection.  As indicated in paragraphs 11 to 16 of
WT/CTE/W/125, the International Undertaking on Plant Genetic Resources recognized the
importance of farmers' and plant breeders' rights.  States had the sovereign right over their genetic
resources and to recognize farmers' rights, including the fair and equitable sharing of the benefits
arising out of the utilisation of genetic resources.  These rights were not protected in UPOV 1991.While Thailand recognized the compatibility of both the International Undertaking and the CBD,
there were areas where the TRIPS Agreement and the CBD were incompatible.  The
TRIPs Agreement dealt with patents of new plant varieties and monopoly rights of individual firms.
In this particular area, the TRIPs Agreement did not recognize the concept of fair and equitable
sharing of benefits.  Thailand believed that TRIPs Article 27.3(b) should explicitly recognize States'sovereign rights over their resources, as well as the rights of indigenous communities and farmers.WT/CTE/M/23
Page 25
Article 27.3(b) stipulated that WTO Members shall provide for the protection of plant varieties either
by patents, or by effective sui generis  system, or by any combination thereof.  Thailand felt that
Article 27.3(b) must remain open for each Member to choose a patent system, and that this was an
appropriate regulatory mechanism to ensure protection of a State's sovereign right.  Thailand thanked
those Members who had provided information on their sui generis  systems based on the UPOV
model, and the Secretariat for preparing WT/CTE/W/125 in response to ASEAN's request.  Thailand
asked for a clarification from the FAO on paragraph 16 of WT/CTE/W/125, concerning the progress
of the International Undertaking on Plant Genetic Resources.  He asked whether the revised text of the
Undertaking would become a legally-binding in strument, and what were the advantages and
disadvantages of this Undertaking being a stand-alone text, or a protocol to the CBD.
102. The representative of the European Communities said Costa Rica’s presentation of its
Biodiversity Law contributed to deepening the CTE's understanding.  Costa Rica's approach to take
legal measures to control access to its genetic resources was a productive route for biodiversity-rich
countries to follow.  It was another issue, however, whether this right should be emphasized as part of
the TRIPs Agreement, or whether the TRIPs Agreement should set out aspects with which Members
all agreed.  The EC felt that there was no conflict between the CBD and the TRIPs Agreement.  The
fair and equitable objective was accommodated within the TRIPs Agreement.
103. The representative of India said that the first part of this Item dealt with access to, and transfer
and dissemination of technology.  In WT/CTE/W/66, India had set out why this aspect constituted
market access as discussed under Item 6.  India had proposed that in cases where environmentally
sound technologies and products (EST&Ps) were mandated by national or international laws, these
should be provided on fair and most favourable terms to developing countries.  India endorsedThailand's statement on the relationship between the TRIPs Agreement and the CBD.  India noted that
paragraph 23 of WT/CTE/W/125 set out that, out of 18 Members who had responded to the
information collection exercise on systems that were maintained to address Article 27.3(b), 17
followed the UPOV model, aside from the US and Korea who had patent systems in place.  This may
create the incorrect impression that Article 27.3(b) needs to be implemented either through patents ora UPOV system.  The information collection exercise also was confined to developed countries.
India's interpretation of a sui generis  system was that it was one of a kind, unique, and was tailored to
meet the particularities of a developing country.
104. The representative of Norway said that the role  of the multilateral trading system in achieving
sustainable development should be a starting point when this Item was discussed.  All relevant
multilateral agreements should contribute to this goal and be mutually supportive.  The issue of
mutual supportiveness was an underlying theme in WT/CTE/W/125, which discussed the linkagesbetween the CBD and the TRIPs Agreement, and presented case studies of sui generis  IPR systems
and CBD legislation.  The CBD aimed at the conservation of biodiversity, the sustainable use of its
components, and the fair and equitable sharing of benefits arising from the use of genetic resources.
These were crucial goals to ensure sustainable production and sustainable development.  To
implement the CBD, constructive North-South c ooperation was needed.  Compatibility should be
ensured between measures to implement the TRIPs Agreement and the CBD.  One important issue
before the CTE was whether the TRIPs Agreement allo wed sufficient flexibility for countries to enact
measures for effective CBD implementation.
105. Consideration of CBD-TRIPs interlinkages was under way in the TRIPs Council.  At the last
meeting of the TRIPs Council, Norway stated that it maintained a restrictive attitude as regards
patents on plants and animals, and on cells which can develop into plants and animals.  Norway found
it preferable not to alter the delicately balanced text of TRIPs Article 27.3(b).  There should be
sufficient flexibility for Parties when implementing sui generis options for plant variety protection,
and no explicit reference to any other  international agreement in this field was needed.  Compatibility
between the CBD and the TRIPs Agreement must be ensured with regard to benefit sharing.Proposals to incorporate a provision in the TRIPs Agreement, which required disclosure of the originWT/CTE/M/23
Page 26
of genetic resources and associated knowledge, should be seriously considered.  Norway felt TRIPs-
CBD should not be viewed in isolation from general trade-environment issues, and was related to the
debate on the relationship between the WTO and MEAs.  If CBD provisions were considered relevant
when implementing the TRIPs Agreement, the same logic should be followed when looking at the
relationship between MEA provisions and WTO rules in general.  The debate on TRIPs-CBDstrengthened the view that environmental reviews were helpful when conducting trade negotiations, to
avoid conflicts and achieve mutual supportiveness of legal instruments in trade and environment.
106. The representative of the United States said that his delegation did not see any conflict
between the TRIPs Agreement and the CBD.  No one had presented a case indicating that there were
CBD obligations that could not be met because of  the TRIPs Agreement.  Suggestions that the
TRIPs Agreement be changed to support CBD objectives were unsubstantiated.  Although any
Member could think of ways in which to change WTO rules to support other worthwhile objectives,this was not the same as saying that because ways of using trade rules to complement efforts of other
international bodies could be contemplated, that the failure to do so suggested there was a conflict.
107. The representative of Brazil said that the CBD and the TRIPs Agreement should be mutually
supportive.  For biodiversity rich countries, such as Brazil, it was important to implement CBD
provisions, and to incorporate the relevant provisions into the TRIPs Agreement.  In the context of thereview of Article 27.3(b), additional elements had been proposed for inclusion, such as access to
genetic resources, and the protection of traditional knowledge.
Item 10 Input to the relevant Bodies in respect of appropriate arrangements for relations with
intergovernmental and non-governmental organizations referred to in Article V of the
WTO
108. The representative of the United States appreciated the Secretariat's work to improve the
WTO website pages on trade and environment, as set out in WT/CTE/W/131.  The WTO website was
useful in capital in responding to the increasing number of questions on the WTO.  The best way to
combat misunderstandings about the WTO was through information.  The US welcomed efforts underway in the General Council to explore ways of improving the WTO's image, and its relations with
civil society.  Progress in this area was critical to maintain public support for WTO work.
109. The representative of Norway said that the improvement of the WTO website was important,
and the Secretariat's efforts in this regard were appreciated.  It was important to enhance information
on the WTO.  Norway was contributing constructively to work in this regard in the General Council.
110. The representative of Canada welcomed the Secretariat's improvements to the WTO website;
a well-designed website was an indispensable tool of communication.  It was important to make
available reports of WTO symposia and linkages to other relevant sites.  It should also be easier for
users to obtain derestricted WTO documents.  Canada welcomed the announcement of enhanced
cooperation between the UNEP and WTO Secretariats that was made at Seattle.  This kind of closer
cooperation complemented, at the international level, the efforts Canada and others were making to
promote greater cooperation between trade policy and environmental officials at the national level toensure that trade liberalization and sustainable deve lopment continue to be mutually supportive.  It
also began to respond to the need for greater in stitutional coherence between the WTO and the UN
system, which Canada strongly advocated. Canada looked forward to the General Council discussions
on transparency of WTO operations.  Canada had proposed allocating a portion of the WTO regular
budget to fund outreach initiatives;  circulating as unrestricted documents Secretariat working papers,Members' formal contributions, draft meeting agendas and minutes, when available in all WTO
official languages;  and pursuing efforts to increasing transparency in the dispute settlement process.
Past NGO symposia on trade and environment provided an opportunity to promote a mutual
understanding among groups with varied outlooks on these issues.  Canada would welcome a similarWT/CTE/M/23
Page 27
event to be held later this year, perhaps back-t o-back with the July and October CTE meetings.
Canada supported the Secretariat's plans to hold regional seminars on trade and environment.
111. The representatives of Japan and Australia  supported the Secretariat's continued efforts to
improve the WTO website and to hold regional seminars and NGO symposia.
112. The representatives of Costa Rica and Peru  said that it would be important to hold a regional
seminar on trade and environment in Latin America, and hoped Members would make financial
contributions so this seminar can take place.
113. The representative of the European Communities enquired how the Secretariat determined
which documents to put on the website, and which linkages to make to other websites.
114. The Secretariat said that the improvements to the website pages on trade and environment
were part of a broader Secretariat exercise to re-design and re-organize the WTO Internet site as a
whole, so that it is better placed to meet th e needs of its growing number of users.  The main
objectives were to adjust to the increasing amount of material available on the site;  to make the site
easier to navigate;  and to make the content easier to understand for the general public.  The
documents available on the trade and environment pages were derestricted CTE working papers.
Links from the WTO website to other relevant websites were being considered, such as to work in
UNEP and UNCTAD on trade and environment.  Input from delegations would assist the Secretariat
to continuously update the website.  The Secretariat had received several informal requests from
delegations for regional seminars on trade and environment.  Seven regional seminars on trade and
environment in the WTO were planned for 2000, with the participation of other relevant international
organizations, such as UNEP and UNCTAD.  Attention will be given to issues of interest to the
respective region in which the seminar was held.  For each of the seminars, an invitation will beextended to two representatives from each of the co untries invited, so as to include a representative
from the Ministry of either Trade or Foreign Affairs, and from the Ministry of Environment.
Amongst the seminars under consideration, at this stage, was one for English speaking African
countries in South Africa in April, and one for Mediterranean countries in Malta in May.  Further
seminars would be dependent on financial contributions from Members.
MEA Information Sessions
115. It was agreed that the CTE would hold two Information Sessions with Secretariats of
multilateral environmental agreements (MEAs) releva nt to its work, back-to-back with the CTE's
meetings on 5-6 July and 24-25 October.  The following representatives will be invited to participate
at the 5th July MEA Information Session:  the Convention on Biological Diversity on the
Cartagena Protocol on Biosafety;  the Climate Change Convention on the Kyoto Protocol;  the
International Commission for the Conservation of Atlantic Tunas (ICCAT);  the Convention for the
Conservation of Antarctic Marine Living Resour ces (CCAMLR); and the Convention on International
Trade in Endangered Species of Wild Flora and Fauna (CITES).  The following representatives will
be invited to the 24th October MEA Information Session: the Basel Convention on the Control of
Transboundary Movements of Hazardous Wastes and their Disposal; the UNEP Chemicals Secretariat
on the Prior Informed Consent (PIC) and Persiste nt Organic Pollutants (POPs) Conventions; the
Montreal Protocol on Substances that Deplete the Ozone Layer;  the Intergovernmental Forum on
Forests (IFF); and the International Tropical Timber Organization (ITTO).
116. The Chairman said UNEP, as a CTE observer, would be present at both Information Sessions.
As requested by Members, the Compliance and Enforcement Unit of UNEP will be invited to give a
presentation on the Working Group of Experts on Compliance and Enforcement of EnvironmentalConventions at one of the MEA Information Sessions.  Flexibility will be necessary with respect to
the organization of these two sessions, based on the availability of the MEA Secretariats.  The
Chairman informed Members of the database on the use of trade measures in MEAs, which theWT/CTE/M/23
Page 28
Secretariat, in cooperation with the MEA Secretariats, planned to present as background information
for the July Information Session.
117. The observer of UNEP presented its programme on trade and environment, which is set out in
WT/CTE/W/137;  and presented the UNEP-UNCTAD Task Force on Capacity Building on Trade,
Environment and Development, which is contained in WT/CTE/W/138.
118. The observer of UNCTAD reported on UNCTAD X, held in Bangkok
on 12-19 February 2000;  the intersessional mee ting of the Commission on Sustainable Development
(CSD), held in New York on 22 - 25 February 2000;  and UNCTAD capacity building activities.
UNCTAD X, which focused on development strategies in the context of globalization, adopted the
Bangkok Declaration and Plan of Action.  The Plan of Action set out a mandate for UNCTAD’s work
for the next four years to promote the integration of developing countries in the world economy (see
Annex).  UNCTAD was in the process of translating the Plan of Action into a work programme ofintergovernmental work, research and technical assistance.  At UNCTAD X, UNEP and UNCTAD
launched a joint Task Force on Capacity Building on Trade, Environment and Development.
UNCTAD also was implementing a project with the Foundation for International Environmental Law
and Development to strengthen capacity on trade and environment in ten developing countries,
financed by the UK Department for International Development.  With the support of the CanadianInternational Development Research Centre, UNCTAD was initiating a project on environment and
SPS measures and trade, so as to strengthen developing country capacity to meet environmental
standards.  UNCTAD was participating in the WTO regional seminars on trade and environment.
2  In
preparation for the Eighth Session of the CSD, 24 April – 4 May, the intersessional Ad Hoc Working
Group on Finance, Trade, Investment and Economic Growth, under the co-chairship of
Mr. Ahmed Ihab Gamaleldin (Egypt) and Mr. Choi-Seok-Young (Korea), produced a Co-Chairs'
summary of the discussions and possible elements for CSD draft decisions in these areas.3  Advance
unedited copies were available for Members' consideration;  these decisions touched on issues of
interest to the CTE.  CSD-8 will also prepare for the ten-year review, in 2002, of progress since the
UNCED.
119. The representative of Japan appreciated the efforts by UNEP and UNCTAD, and stressed the
importance of capacity building for developing countries on trade and environment.  The CTE should
give inputs to international and national aid agenci es on how to offer appropriate assistance in the area
of trade and environment, including related to eco-labelling, the export of domestically prohibited
goods and TRIPs.  Japan proposed that the Secretariat present a paper with relevant international
organization, such as UNEP and UNCTAD, regardin g technical assistance on trade and environment.
Chairman's concluding remarks
120. The Chairman, reflecting on work in the CTE in 1999, said that the Committee had continued
to make an important analytical contribution to work on trade and environment, which served to
deepen Members' understanding of all the items on the CTE's agenda and built confidence among
Members.  Progress also had been made in buildin g coherence with, and broadening participation in
CTE work with respect to other intergovernmental organizations.  The MEA Information Session atthe July 1999 meeting had made a valuable contribu tion to increasing the awareness of trade-related
developments in multilateral environmental agreements.  The CTE also benefitted from the
High Level NGO Symposium on Trade and En vironment in March 1999, which included
over 800 participants, many from developing countries.  The Chairman thanked delegations for their
continued cooperation and active participation, which had facilitated his work as Chairman, and wasconfident that this harmonious environment would continue throughout the Committee's deliberations
this year.
                                                     
2See http://www.unctad.org/trade_env/index.htm.
3See the Report of the Secretary General (E/CN.17/2000/4).WT/CTE/M/23
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121. The CTE expressed its appreciation for the excellent guidance provided by
Ambassador István Major throughout his Chairmanship of the Committee, and for the motivated and
intellectual contribution of Mr. Hector Torres (Argentina) since the outset of discussions in the CTE.
122. The CTE welcomed Ambassador Biké (Gabon) to the Chair of the Committee.WT/CTE/M/23
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Annex
PLAN OF ACTION4
II.  UNCTAD’s ENGAGEMENT
C.  International Trade
(x) Trade and environment
146. UNCTAD’s work, in cooperation with other relevant organizations, should focus on helping
to ensure balance in the trade and environment debate by highlighting issues of concern to developingcountries and strengthening the development dimension.  This in turn would require special attention
being paid to the following areas of work:
• Identifying policies to address major constraints faced by many developing countries in
responding to environmental challenges, such as lack of technical, financial, institutional and
supply capacities, taking into account the environmental and developmental conditions of eachcountry;
• Enhancing understanding of the economic and social implications of trade measures for
environmental purposes for countries at different levels of development, including the effects ofenvironmental requirements on developing countries’ exports;
• Identifying specific capacity-building needs of developing countries and promoting a broad
programme of capacity-building on trade, environment and development.
147. UNCTAD should also, in full cooperation with other relevant organizations, in particular and
where appropriate WIPO and WHO, promote analysis and consensus building with a view to
identifying issues that could yield potential benefits to developing countries, including the linkbetween public health and development.  This should focus on:
• An examination of the economic and developmental implications of multilateral environment
agreements and identification of ways to promote the effective implementation and use ofenabling measures to achieve global environmental objectives;
• Examining ways to promote the indigenous development and transfer of environmentally sound
technologies (ESTs) to developing countries, including through the implementation of relevantprovisions in the TRIPs Agreement, for example articles 7 and 66.2 of that Agreement, in order to
contribute to the promotion of technological i nnovation and to the transfer and dissemination of
technology to the mutual advantage of producers and users of technological knowledge in a
manner conducive to social and economic welfare and to a balance of rights and obligations;
• Taking into account the objectives and provisions of the Convention on Biological Diversity and
the TRIPS Agreement, studying ways to protect traditional knowledge, innovations and practices
of local and indigenous communities and enhance cooperation on research and development on
technologies associated with the sustainable use of biological resources;
• Examining the potential trade and developmental effects and opportunities of environmental
measures, taking into account the concerns of developing countries, particularly as regardspotential effects on small and medium-sized enterprises;
                                                     
4TD/386, 18 February 2000.WT/CTE/M/23
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• Supporting developing countries’ efforts in promoting production of and trading opportunities for
environmentally preferable products;
• Ways to promote and support investment and trade contributing to trade and sustainable
development, inter alia  in biological resources, such as the Biotrade Initiative;
• Examining ways and means to address developing country concerns in the area of exports of
domestically prohibited goods;
• Strengthening the importance of adequately valuin g natural resources with a view to enhancing
the competitiveness of goods and services generated by those resources;
• Helping developing countries in enhancing understa nding of the trade, environmental, including
biodiversity, and developmental implications of biotechnologies;
• Supporting R&D capacity-building and legal and regulatory systems, in support of the work
programme of the United Nations Commission on Science and Technology for Development;
and
• Continuing its work as task manager on trade and sustainable development for the United Nations
Commission on Sustainable Development.
__________