RESTRICTEDWORLD TRADE
ORGANIZATIONTN/TE/R/3
31 October 2002
(02-6023)
Committee on Trade and Environment
Special Session
SUMMARY REPORT ON THE THIRD MEETING OF THE COMMITTEE
ON TRADE AND ENVIRONMENT SPECIAL SESSION
10-11 OCTOBER 2002
Note by the Secretariat1
1. The Special Session of the Committee on Trade and Environment (CTE) held its third
meeting on 10-11 October 2002 on the basis of the agenda set out in the convening airgram(WTO/AIR/1899).  Ambassador Yolande Biké of the Republic of Gabon chaired the meeting.
I. ORGANIZATION OF THE MEA INFORMATION SESSION
2. The Chairperson briefed participants on the progress made in the organization of the MEA
Information Session on paragraph 31 (ii) of the Doha Ministerial Declaration (DMD), to be held
on 12 November 2002.  She indicated that letters of invitation had been sent to the United NationsEnvironment Programme (UNEP), a nd the following 13 organizations:
• The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes
and their Disposal (Basel Convention);
• the Convention on Biological Diversit y (CBD) and its Biosafety Protocol;
• the Commission for the Conservation of Anta rctic Marine Living Resources (CCAMLR);
• the Convention on International Trad e in Endangered Species (CITES);
• the International Commission for the Conservation of Atlantic Tunas (ICCAT);
• the United Nations Forum on Forests (UNFF);
• the International Tropical Timber Organization (ITTO);
• the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol);
• the Rotterdam Convention on the Prior Info rmed Consent (PIC) Procedure for Certain
Hazardous Chemicals and Pesticides in International Trade;
• the Stockholm Convention on Persistent Organic Pollutants (POPs);
• the United Nations Convention on the Law of the Sea (UNCLOS);
• the United Nations Framework Convention on Climate Change (UNFCCC); and
• the United Nations Fish Stocks  Agreement (UN Fish Stocks).
3. Positive responses were received from:  (1) the Basel Convention, (2) the CBD, (3) the ITTO,
(4) the PIC Convention, (5) the POPs Convention, (6) the UNFCCC, and (7) UNEP.  The following
organizations responded negatively:  (1) the CCAMLR, (2) the CITES, (3) the Montreal Protocol,
(4) the UNCLOS, and (5) the UN Fish Stocks Agreement.  Responses were still awaited from ICCAT
and the UNFF.
                                                     
1 This document has been prepared under the Secr etariat's own responsibility  and without prejudice to
the positions of Members and to their rights and obligations under the WTO.TN/TE/R/3
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II. PARAGRAPH 31(i) – WTO RULES AND SPECIFIC TRADE OBLIGATIONS IN
MEAS2
4. The Chairperson indicated that five new documents had been submitted under this agenda
item, namely:  (1) TN/TE/W/9 from Saudi Arabia, (2) TN/TE/W/10 from Japan, (3) TN/TE/W/11
from Chinese Taipei, (4) TN/TE/W/12 from New Zealand, and (5) TN/TE/W/13 from Korea.  Thesefive delegations presented their papers.  The following are the statements they made that went beyond
the issues already addressed in their submissions.
Presentation/Discussion of New Submissions
5. The representative of Saudi Arabia appealed to the CTESS to address the policy distortions in
Organization for Economic Cooperation and Devel opment (OECD) countries in the energy sector
which violated WTO rules.  The representatives of Oman and Qatar  supported Saudi Arabia, with
Qatar also expressing its support for the approach proposed by Australia for work under paragraph 31
(i).
6. The representative of Japan believed that the Japanese submission differed from the
European Communities' (EC) on a number of points.  While some delegations saw the Japanese paper
as jumping to conclusions, and as potentially prejudging the outcome of the negotiations, Japan did
not believe that the scope of the CTESS' work  should be limited prematurely.  A number of
delegations had been in favour of a "bottom-up" approach in which different MEAs and the specific
trade obligations (STOs) they contained would be examined, but Japan did not see the "bottom-up"
and "top-down" approaches as being mutually exclusive.  It recognized the utility of the bottom-up
approach, and of the Secretariat Note WT/CTE/W/160/Rev.1, entitled Matrix on Trade Measures
Pursuant to Selected MEAs , but believed that that approach woul d eventually lead participants to the
conclusion that a conceptual underpinning was necessary.  On the way forward, Japan signalled that it
was open to the Australian approach, provided that others remained open to conceptual issues also
being raised if the need for them arose.
7. The representative of Chinese Taipei recognized the importance of improved policy
coherence between trade and environmental policy-makers at both the national and international
levels, and called for a step-by-step approach for the work of the CTESS.  He reiterated one of the
central messages of document TN/TE/W/11, that there should be no automatic presumption of
conformity between MEAs trade provisions and WTO rules.
8. The representative of New Zealand explained that the aim of his delegation's paper was to
shift the focus of discussions beyond issues of scope and definition, towards MEA provisions and
WTO rules.  While the Secretariat Matrix had been used as basis for the New Zealand paper, New
Zealand was aware that that document had not been prepared with the paragraph 31 (i) mandate inmind.  The Matrix addressed all trade obligations in MEAs, and not just STOs, and New Zealand was
therefore hoping that delegations would identify the provisions in the Matrix they considered STOs.
The New Zealand paper did not address the trade provisions contained in the subsidiary instruments
of MEAs which was due to the fact that the paper was based on the Secretariat Matrix.  With respect
to the relevant WTO rules mentioned in the paper,  these had been drawn from OECD studies.  While
there was potentially a broader set of WTO rules that could be relevant, the OECD had chosen those
that were most likely to come into play.
                                                     
2 The following documents had been previously circulated under this agenda item:  (1) Secretariat
document TN/TE/S/1 on MEAs  and WTO Rules; Proposals Made in the CTE from 1995-2002 ;  and documents
(2) TN/TE/W/1 from the EC; (3) TN/TE/W/2 from  Argentina; (4) TN/TE/W/4 from Switzerland;
and (5) TN/TE/W/7 from Australia.TN/TE/R/3
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9. The representative of Korea explained that Korea had tabled its proposal in light of the
support which the Australian approach had received at the last meeting.  Its proposal had also been
based on the Secretariat Matrix.  Korea wondered whether decisions of the Conference of Parties
(COP) of MEAs constituted STOs. Some MEAs did not specify the trade measures that their parties
had to implement, and simply left matters to their COPs.
10. The representative of Australia argued that the relationship between STOs in MEAs and
WTO rules was part of the broader issue of the effects of trade on the environment.  Important
developments had taken place on this broader issue at the World Summit on Sustainable Development
(WSSD), where a clear signal had been sent that trade and environment objectives were not
incompatible, and that policies and actions taken to pursue them could and should be mutually
supportive.  The WSSD outcome had been a positive reaffirmation of current WTO rules and their
mutually supportive relationship with MEAs.  At WSSD, developing countries delivered a strongmessage that enhancing trade opportunities through the opening of markets and subsidy reduction was
key for sustainable development.  Numerous non-governmental organizations (NGOs) had also
conveyed the message that intensive agricultural production had negative environmental effects.  This
was the broader context for these negotiations that Australia wanted participants to be aware of.
11. His delegation was encouraged by the support expressed for the three-phased Australian
approach.   Australia believed that a structured process would be necessary for the negotiations to
progress, and welcomed the New Zealand and Korean papers which could be used to commence
phase one of the Australian approach.  The New Zealand paper drew the attention of the CTESS to the
work conducted by the OECD.  While that work provided a much broader assessment of "trade
measures", it was useful in that it indicated that a body of work already existed from which STOscould be drawn.
12. Australia believed that the Japanese paper confused STOs with governmental trade measures
and failed to address the applicability of WTO rules.  It prejudged the outcome of the negotiations and
went well beyond the mandate.  It wondered how Japan's suggestion of a "rebuttable presumption of
conformity" would be consistent with the clear instructions from Ministers not to add to or diminishrights and obligations.  That such a change could be done through an interpretative decision was
highly questionable.  Australia called upon the CTESS to proceed on the basis of the three-phased
Australian approach, and to see if the exercise would show a need for a broader conceptual approach.
13. The representative of the EC welcomed the Japanese paper which shared much common
ground with the EC's.  The paper demonstrated that the conceptual approach was not an ill-defined
one, but was one that looked at concepts in relation to the real world.  However, it could benefit from
some clarification.  On the definition of an MEA, th e idea that MEAs had to be agreements that were
open to countries that shared "the environmental objective of the agreement" was not entirely clear.
For the EC, an MEA had to be open to any country affected by or contributing to its environmental
objective.  The EC recognized the conceptual taxonomy of STOs in the paper, but believed that the
examples provided needed to be carefully examined.  It felt that most MEAs could fall under several
of the categories suggested by Japan.  With respect to the rebuttable presumption of conformity, Japanhad suggested that trade measures be deemed to be WTO compatible if they met a number of new
requirements to be introduced.  The EC needed to see whether that implied new WTO obligations
rather than a real rebuttable presumption.  On the reference made in the paper to the Vienna
Convention and to the principle of Lex Posterior , the EC believed that if that principle was going to
be looked at, then the principle of  Lex Specialis  would also need to be addressed.
14. The EC needed to reflect further on the Saudi Arabian contribution, which could also fall
under paragraph 31 (iii) of the Doha Ministerial Declaration (DMD) and the non-tariff barriers (NTB)
aspect of the market access negotiations.  The paper from Chinese Taipei sought to review the WTO
consistency of MEAs, which the EC saw as th e wrong starting-point for discussions sinceTN/TE/R/3
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inconsistency could not be assumed. "Mutual supportiveness" was the working assumption of
international law.  This underlined the need to only look at the Secretariat Matrix and the real world
on the basis of a conceptual framework.  The CTE SS could not drift into the renegotiation of MEAs.
The EC welcomed the factual information in the New Zealand paper, despite the fact that New
Zealand had not undertaken an exhaustive analysis of the issues at stake under the mandate.Responding to Korea, it explained that it was operating on the assumption that an STO may not be
found in the articles of an MEA, but could be in its annexes or amendments.  The concepts of
"obligation de résultat" and "obligation de comportement" concerned the EC, since they implied that
the desirable level of specificity of an STO would itself have to be extremely specific.  The EC called
for further discussion on this.
15. The representative of Norway believed that th e objective of the negotiations was to continue
to enhance the mutual supportiveness between trade and environment as called for by the WSSD.  He
cautioned against any renegotiation of the Doha mandate, which had to do with the "applicability of
existing WTO rules."  In being limited to the applic ability of those rules, the mandate excluded the
way in which the rules were implemented.  Norway  did not want the negotiations to venture into
interpreting MEAs, which only MEA governing bodies could do.  It believed that conflicts between
parties to an MEA would be settled within the dispute settlement mechanisms of the MEAs, and
would not reach WTO.  It recommended that the CTESS not waste time in defining MEAs, since the
mandate had to do with STOs in MEAs, and not with MEAs more generally.  While Australia and
Argentina seemed to suggest that MEAs needed to be categorized based on whether they contained
STOs, Norway was opposed this idea because:  (1) the categorization of MEAs fell outside the
mandate; and (2) it would be impossible to categorize all MEAs, some of which would inevitably fallinto a grey zone, as had been demonstrated by the EC and Japanese papers.
16. It argued that the information provided by MEAs to the regular CTE and the Secretariat
Matrix provided a sufficient basis for the definition of STOs.  Governmental experience acquired
through the negotiation of MEAs could also help in the definition.  Norway found the New Zealand
paper to be helpful raw material, and the EC and Japanese papers to be thoughtful contributions.  TheJapanese paper had clearly demonstrated that there was no need to categorize MEAs when attempting
to classify STOs.  Norway suggested that once the CTESS had clarified STOs, it could look at the
applicability of WTO rules.  It would need to dr aw on the Vienna Convention on the Law of Treaties,
as well as on public international law in order to so.  The negotiations could reaffirm the mutually
supportive relationship between existing WTO rules and STOs in MEAs, and the fact that there was
no hierarchy between them.
17. The representative of Brazil believed that one of the main conclusions of WSSD was that
sustainable development could be pursued without resort to trade restrictive measures, and that trade
liberalization could bring about significant environmental benefits.  The Summit had called for
preserving the "integrity" of both trade and environmental regimes, which meant that there should be
no hierarchy between the two bodies of international law.  Brazil welcomed the New Zealand paper,
which raised interesting issues:  for instance, Brazil was a party to the Basel Convention, but a non-party to its ban amendment, and wondered where that left it vis-à-vis  the paragraph 31 (i) mandate.
The paper enumerated a number of trade provisions in the three MEAs it examined, and Brazil
wondered which of those constituted STOs.  It drew a number of conclusions from the paper:  first,
that certain WTO provisions were relevant to MEAs, such as General Agreement on Tariffs and Trade
(GATT) Articles I, III, XI, XX, and in some instances the Agreement on Technical Barriers to Trade(TBT);  second, that in most cases it was essential for the relevant provisions to be examined in
conjunction with Article XX; third, that trade measures in MEAs reflected different environmental,
economic and social factors, and given their different nature a "one-size fits all" approach would be
difficult;  and fourth, that it was difficult to foresee an MEA conflict that could not be settled within
the MEA itself.  Brazil supported New Zealand's recommendation that Members exchange theirexperience on the implementation of trade provisions in MEAs.TN/TE/R/3
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18. Brazil found Chinese Taipei's definition of an MEA to be problematic.  It wondered if three
countries getting together and signing an environmen tal agreement which others did not wish to join,
constituted an MEA.  Japan had argued that MEAs needed to have the participation of a substantial
number of countries, which was a definition that Brazil preferred.  It agreed with Chinese Taipei that
there should be no automatic presumption of conformity of STOs with WTO rules, but disagreed thatan interpretative decision was needed since that prejudged the outcome of negotiations.  On the
Japanese paper, Brazil wondered (1) what the difference was between the different categories of trade
measures, (2) how the paper differed from the EC's, and (3) how Japan could argue that a binding
interpretative understanding was required, when it had acknowledged that it was difficult to
categorize STOs.  It questioned what the understanding would cover in that case.
19. The representative of Chile agreed with Japan that non-trade measures, such as increased
cooperation, could be more effective in achieving environmental objectives than trade restrictions.
Unilateral measures ran the risk of creating arbitrary or unjustifiable discrimination and of acting as
disguised restrictions on international trade.  He agreed with Japan that regional environmental
agreements (REAs), as well as agreements which had not yet entered into force, had to be covered by
the mandate. Japan's classification of trade measures was not far removed from the EC's.  However,
Chile was of the view that the less binding a trade measure under an MEA, the more difficult it wouldbe to accept it as WTO-consistent.  Therefore, it argued that the second category of trade measures
proposed by Japan fell outside the mandate.
20. Chile shared Chinese Taipei's view that it was important to maintain coordination between
trade and environment officials at the national level.   With respect to Chinese Taipei's argument that
there should be no automatic presumption of conform ity, Chile wondered if this referred to both the
necessity and implementation of a measure, or to implementation alone.  Chile did not rule out the
automatic presumption of conformity as an outcome from these negotiations, but believed that such a
presumption could not cover the "implementation" of a measure.  The implementation of a measure
would always remain subject to the requirements of the chapeau of GATT Article XX.
21. Chile saw Korea's question on COP decisions as valid.  MEAs were increasingly limiting
themselves to the creation of a general framework of rules, while leaving specific rights and
obligations to be defined by their COPs.  Chile believed that the mandate only covered STOs set out
in MEAs, and not those subsequently developed th rough MEA institutional frameworks.  It supported
the New Zealand paper, and wanted to start phase one of the Australian approach.
22. The representative of Cuba supported the way in which STOs had been defined in the
Argentinian paper.  It was more appropriate to decide on the MEAs that were relevant to the
negotiations than to actually try to define them.  It agreed with paragraph 10 of the Japanese paperwhich stated that it was the scope of the term MEAs that needed clarification.  Nevertheless, it
preferred the criteria which India had used in its non-paper to the CTE (23 July 1996) and which was
included in document TN/TE/S/1.  India had argued that an MEA was an agreement:  (1) negotiated
under the aegis of the United Nations or a specialized agency (such as UNEP); (2) whose procedures
were open participation to all countries, (3) in which countries belonging to different geographicallocations, and at different stages of economic and social development, had effectively participated;
and (4) which provided for the accession of countries which were not original members on equitable
terms.  It supported the three-phased approach in the Australian paper, and argued that both
Switzerland and Chinese Taipei had prematurely ventured into the outcome of the negotiations.
23. The representative of Hong Kong, China supported the Australian approach, and welcomed
the New Zealand paper from which STOs needed to be extracted.  He shared the Korean paper's
interpretation of an STO.  Both the Korean and New Zealand papers demonstrated the challenges
involved in identifying STOs (such as in deciding  how to treat COP decisions), and in drawing the
boundary between party/party and the party/non-party conflicts.  With respect to the latter, the NewTN/TE/R/3
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Zealand paper had demonstrated the gap which existed between the number of countries that had
ratified MEAs, and those that had ratified their subsidiary instruments.  Hong Kong, China believed
that categories (3) and (4) of the Japanese paper fell outside the mandate, but also wondered how
category (2) measures, which were a "potential means" of achieving an environmental objective,
could be considered STOs. Chinese Taipei stated that STOs were measures that were "required,expected or legally binding pursuant to an MEA" constituted an STO.  But Hong Kong, China found
the term "expected" to be much too loose.  The paper had also raised the issue of WTO non-parties,
which would need to be addressed by the CTESS.
24. The representative of Canada welcomed the results of the WSSD.  He believed that the two
approaches before the CTESS on the paragraph 31 (i) mandate could inform and complement each
other.  The negotiations had to reinforce the multilateral trading system and international
environmental governance both individually and collectively, without making countries reluctant tojoin MEAs.  The more explicit a provision in an MEA, and the less discretion a party had in its
application, the more it could be considered an STO.  However, it would be insufficient to solely
examine the trade provisions in an MEA.  The co ntext of MEA obligations had be taken into account,
and included other MEA provisions and COP deci sions.  Similarly, the CTESS' examination of
relevant WTO rules had to extend beyond GATT Article XX and the General Agreement on Trade inServices (GATS) Article XIV.
25. While some participants were of the view that it was unnecessary to define MEAs since the
negotiations only dealt with party/party conflicts, others believed this was important so the
negotiations would not have unintended impacts on the party/non-party relationship in future.  For
Canada, it was a given that an MEA (1) had to have environmental protection as its primary objective,and (2) had to be open to all countries with an interest in the agreement and which could benefit from
its terms.  While this was "loose," Canada did not want too restrictive a definition.  On the submission
from Chinese Taipei, Canada insisted that the mandate clearly precluded party/non-party issues.  It
suggested that the outcome of the negotiations say that it was limited in application to WTO Members
that were parties to an MEA.  It agreed with Japan that there were different kinds of STOs, and thatdifferent types of obligations did not necessarily have the same relationship to WTO rules.  It
welcomed the New Zealand and Korean papers which pursued the Australian approach, but needed to
examine further the table in Korea's submission.  It asked that MEAs that had not yet come into force,
such as the Biosafety Protocol, be included in the discussions.
26. The representative of India reiterated his support for the Australian approach.  He supported
Chinese Taipei's definition of STOs which was similar to Argentina's.  However, he felt that its
definition of an MEA, which stated that an MEA had to be an agreement open to participation by any
non-party, was too wide.  It would allow an agreem ent with only few parties to be considered an
MEA.  The definition of an MEA in the Japanese paper was unclear, and India wondered what the
phrase "taking into account works including those under the aegis of the United Nations or its
specialized agencies" meant.  Together with Singapore, India questioned how the "substantial
number" of countries criterion set out by Japan would be measured.  India and Singapore also found
the definition of STOs in the Japanese paper to be much too broad.  Trade measures which were not
explicitly provided for in an MEA could not be considered STOs.  They argued that the Japanese
paper prejudged the outcome of the negotiations.  The representative of Singapore added that the
submission from Chinese Taipei had similarly prejudged the outcome.  While the "bottom-up" and"top-down" approaches were not mutually exclusive and could be pursued in tandem, he wished tofocus work at this stage on the identification of the STOs.
27. The representative of Venezuela supported Saudi Arabia's submission, in particular paragraph
20 of the paper which stated that, according to the International Energy Agency's (IEA) calculations,
5.5% of the coal produced by IEA member countries received state aid.  This was especially the case
in Japan, Germany, Turkey, Spain and France.  The removal of coal subsidies was necessary in orderTN/TE/R/3
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to provide an incentive for the development of alternative fuels.  Saudi Arabia had correctly argued
that measures taken pursuant to the UNFCCC should not be discriminatory nor hamper international
trade.  Article 2.3 of the Kyoto Protocol stated that parties pledged to reduce to a minimum the
negative impact of measures taken to combat climat e change on international trade.  He believed that
some OECD countries had their environmental priorities wrong in this area.
28. The representatives of Argentina shared Australia's belief that trade and environmental
policies could complement each other, and that genuine care for the environment had to take the form
of the removal of harmful subsidies, whether in the agricultural, fisheries or energy sectors.  He
believed that all those calling for a presumption of conformity between WTO rules and STOs in
MEAs were mistakenly taking conflict as their assumption.  There was no conflict, however, between
trade and the environment, since trade liberalizatio n led to the efficient allocation of resources.  He
considered some of the new submissions to have prejudged the outcome of negotiations, arguing thata problem had to be identified prior to a solution being sought.  This was the approach being followed
in other areas of negotiations (such as in agriculture).  He disagreed with Japan's definition of STOs,
which included non-obligatory measures, and believed that these fell outside the mandate.  In
pursuing their "obligation de résultat," States had an obligation to continue to respect all their treaty
obligations.  Nothing under international law justified a country violating one legal regime in order topursue another.  He believed that the presumption of conformity suggested by Japan needed to be
considered further since it entailed a reversal of the burden of proof.  Such a reversal fell outside the
mandate.
29. Argentina found the Korean paper's definition of an STO to be useful, but disagreed with
Korea's incorporation of MEAs that had not yet entered into force.  It failed to understand how a legalobligation could exist under an agreement that had not yet entered into force.  The word "existing" in
the paragraph 31 (i) mandate referred to both WTO rules and STOs, and implied that the MEAs had to
have entered into force in order to be considered.
30. The representative of United States (US) expressed his support for the Australian approach.
He drew the attention of participants to a number of conceptual points:  (1) that the MEA-WTO
relationship was working well, (2) that the paragraph 31 (i) mandate was a limited one, only
applicable to STOs set out in MEAs and which required parties to apply particular measures, (3) that
it was important during the course of the negotiations to broadly maintain the integrity of both sets of
international instruments, and (4) that there was no substitute for effective domestic coordination
between MEA and WTO policy-makers, and that it was at the national level that policy-makers had
the responsibility to implement their different obligations consistently.  He agreed with Canada that it
was important not to create a disincentive for countries to join MEAs.  The US was willing to engagein a discussion of the Secretariat Matrix, and had already found six of the Agreements which it
contained to include STOs: CITES, the Montreal Protocol, the Basel Convention, the PIC Convention,
the POPs Convention, and the Biosafety Protocol.
31. The US supported Chinese Taipei's call for national coordination and for a step-by-step
approach.  However,  Chinese Taipei's submi ssion had prematurely jumped to the outcome of
negotiations.  On footnote 5 of the submission, the US pointed out that it had been amongst the
delegations that had argued against an automatic presumption of conformity.  In paragraph 2, while a
reference had been made to certain inconsistencies between international trade and international
environmental law, the US did not believe that such inconsistencies existed.  Japan's submission had
also jumped to the outcome of negotiations.  The US believed that it was neither useful nor productiveto define the term MEA in the abstract.  Paragraph 15 of the Japanese submission had referred to a
link between paragraphs 31 (i) and 31 (ii) of the mandate, which was a connection that the US also
saw.  However, Japan had raised the linkage in the context of party-party consultations, while the
paragraph 31 (ii) mandate had to do with MEA Secretariats and WTO bodies.  On the Saudi ArabianTN/TE/R/3
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paper, the US indicated that it failed to see a connection between that paper and the paragraph 31 (i)
mandate.
32. The representative of Indonesia supported the Australian approach, and believed that the
CTESS could not deal with paragraph 31 (i) negotiations prior to clarifying the terms STOs and
MEAs.  The Japanese paper had demonstrated that it was not easy to define STOs, which was whycriteria first had to be set for what would be considered an STO.  Many MEAs had been negotiated on
the basis of the principle of common but differentiated responsibility, and that this principle had to be
taken into account in clarifying STOs.  Indonesia cautioned against considering all agreements with
an environmental objective to be MEAs.  Agreements that could be considered MEAs were those that
(1) were negotiated under the auspices of the United Nations, (2) had a large membership, and (3)
which were open to all countries that shared their environmental objectives.  It was important not to
prejudge the outcome of the negotiations.  To ensure compatibility between WTO rules and MEAs,consideration to WTO rules had to be given by MEAs at an early stage (such as in the drafting of new
agreements).  Thus, Indonesia supported further dialogue between the WTO and MEAs, as well as
national coordination.  It argued that while trade measures could contribute to the environmental
objectives of MEAs, for developing countries, financial assistance, capacity building and technology
transfer would remain key.
33. The representative of China argued that existing GATT/WTO rules provided sufficient scope
for environmental protection.  While there was a danger of conflict between STOs in MEAs and WTO
rules, it did not have to be exaggerated.  China believed that the Australian approach was the most
suited to addressing the mandate during the preparatory phase.  It welcomed Argentina's definition of
an MEA, and believed that the Korean and New Zealand papers provided a useful basis fordiscussions.
34. The representatives of Mexico and Pakistan
 argued that the suggestion made in the Japanese
paper for a binding interpretative Understanding was tantamount to a stretching of the Doha mandate.
They supported the Australian approach.  The representative of Paraguay also supported the
Australian approach, and argued that measures taken for environmental protection should not
constitute an additional burden on developing countries.  The representative of Pakistan requested the
Secretariat to prepare a compendium of all the papers submitted to the CTESS.
35. The representative of Thailand believed that MEAs had to be agreements that were open to
all, which precluded REAs.  He agreed with Argentina that MEAs had to be universal, but believed
that the criteria for universality needed to be discussed.  The criteria could include the number of
parties to an MEA, the number of parties from specific regions, or both.  Thailand believed that the
CTESS could discuss MEAs that had not yet entered into force. It supported the definition of STOs inthe Argentinian and Korean papers.  Measures which countries implemented at their discretion fell
outside the mandate.  It believed that Japan had prejudged the outcome of negotiations, and called on
the CTESS to pursue the Australian approach.
36. The representative of Kenya indicated that Kenya had ratified the Kyoto Protocol, and
welcomed the call in the Saudi Arabian paper for the removal of coal subsidies.  However, he
wondered how the lowering of taxes on petroleum would allow greenhouse gas (GHG) emission
targets to be met, given that most GHG emission in OECD countries emanated from oil.  Kenya
believed that renewable energy was the answer to climate change.  On the Chinese Taipei and
Japanese submissions, Kenya cautioned against the expansion of WTO jurisdiction to MEA processes
and policy determinations.  It argued that the WTO should not exceed its mandate.  The rebuttablepresumption suggested by Japan did not fall within the scope of the mandate.  Kenya wished to hear
from the proponents how the interests of developing countries would be taken into account in the
negotiations, and called for technical assistance to be provided.TN/TE/R/3
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37. The representative of Egypt argued that the submission from New Zealand should have cited
the TBT Agreement as a set of WTO rules relevant to the Basel Convention, since the Convention
contained packaging and labelling requirements.  MEA and WTO rules relevant to the transfer of
technology also had to be mentioned.  On the paper from Chinese Taipei, Egypt believed that an
attempt first had to be made at resolving MEA dis putes within MEAs, prior to resorting to the WTO's
dispute settlement mechanism.  On paragraph 16 of the Japanese paper which said that few disputes
had arisen between WTO rules and MEAs, Egypt called for concrete examples.
38. The representative of Kuwait endorsed the Australian approach, and agreed with Argentina's
definition of an MEA, which only included agreements that had entered into force.  Several countries
that had ratified the Kyoto Protocol had begun implementing it without awaiting its entry into force,
which was a concern.  The term "existing" in paragraph 31 (i) was intended to mean that only those
MEAs that had entered into force could be covered by the mandate.  Kuwait supported Saudi Arabia,arguing that the UNFCCC was one of the most significant international agreements negotiated to date
in terms of socio-economic and environmental impact.  The Kyoto Protocol would have a serious
impact on trade once in force.  Its provisions were vague and did not specify what countries had to do
in order to comply.  While some countries preferred to use fiscal policy to fulfill their climate change
obligations, such as taxes and subsidies, Kuwait favoured a command and control approach.
39. The representative of the Philippines argued that STOs were a logical starting point for
negotiations and that the New Zealand and Korean papers provided a useful basis for discussions.  In
being based on the ordinary meaning of words, the Korean approach was extremely pragmatic.
Participants would eventually have to identify WTO rules relevant to STOs, as done by New Zealand,
and discuss the relationship between them.  The Japanese paper had jumped to the outcome of thenegotiations, and a shift in the burden of proof would constitute a change in rights and obligations.  It
believed that the WTO should not overstep its mandate by passing judgement on areas outside its
competence, or become a global government.
40. The representative of Switzerland argued that to suggest that the work of the CTESS needed
to go through phases was to ignore the fact that trade and environment issues had been discussed in
the regular CTE for years.  Switzerland was not opposed to discussing the specifics of MEAs, and
welcomed the New Zealand paper.  It considered the discussion of STOs to be important, and
believed that two different categories of measures were covered by the term:  (1) compulsory trade
measures explicitly foreseen in the MEAs.  For exam ple, if a party to CITES were to prohibit trade in
a plant in CITES Annex I, such a prohibition had be considered an STO and to be covered by the
mandate; and (2) other measures which were relevant to and necessary in fulfilling the objective of an
MEA, such as fiscal measures, taxes or standards.  It referred participants to Article 2 (I) of the KyotoProtocol, arguing that if an Annex 1 party to the Protocol
  (Annex 1 countries were countries with an
obligation to reduce GHG emissions) prohibited the importation and use of certain air filters because
they failed to meet national GHG emissions standards, the measure had to be considered an STO.  It
was an "obligation de résultat" contributing to the objective of the Protocol.  This was a similar line of
argument to Japan's, except that Switzerland's second category of trade measures was broader.  It notonly covered the "obligation de résultat," but also specified the domains in which those obligations
could be undertaken (such as in the fiscal area).
41. Switzerland continued to support the two principles of non-hierarchy and mutual
supportiveness and deference.  The need for mutual supportiveness between WTO rules and MEAs
had been confirmed at the WSSD.  The third principle which Switzerland supported was that of thereversal of the burden of proof, which was linked to the automatic presumption of conformity.  WTO
Members would no longer have to prove that restrictive trade measures taken pursuant to MEAs fell
within the scope of GATT Article XX.  However, the presumption of conformity would clearly
require that countries exercise care in including trade measures in MEAs, so as to avoid arbitrary or
unjustifiable discrimination or disguised protectionism.  The fourth principle which SwitzerlandTN/TE/R/3
Page 10
advocated was that of contestable implementation.  WTO Members could contest in the WTO the way
in which certain measures had been implemented.  The burden of proof, however, would fall on the
plaintiffs and not on the defendants since the presumption of conformity would immediately lead the
trade measures to be deemed consistent with WTO rules.  Therefore, Panels would not need to
examine the necessity of those measures, and would limit their scrutiny to the manner in which theywere implemented.  This would no longer constitute a conflict between WTO rules and MEAs, but
one between WTO rules and national measures. Switzerland was convinced that an interpretative
decision was the best way forward on this mandate.  It wanted to see these issues addressed by WTO
Members, rather than by Panels or the Appellate Body.
Specific Questions and Answers
42. The representative of Australia wondered if in the example given by Switzerland on the
Kyoto Protocol, the trade measure that was cited would be considered an STO and be covered by the
interpretative note that Switzerland proposed.  He questioned if the Swiss proposal would allow
country A to impose a tariff surcharge over and above the rate bound in its WTO schedule.  If the
tariff surcharge was imposed by country A on coal, oil or uranium, he wondered if the onus would be
on countries B, C, D, or E that were affected by the surcharge to prove that it was inconsistent with
the chapeau of Article XX.  That would contrast sharply with country A demonstrating theconsistency of its measure with WTO rules, which was the current balance of WTO rights and
obligations.  The reversal of the burden of proof constituted a fundamental change in that balance, as
Argentina had itself said.  On the Japanese paper, Australia enquired if the tariff surcharge in question
would be deemed to be consistent with WTO rules.   It wondered if Japan was suggesting that country
A could have absolutely no recourse to the WTO's dispute settlement mechanism to challenge themeasure.
43. The representative of Switzerland indicated that Switzerland was indeed thinking of the
reversal of the burden of proof.  However, it only saw such a change as being procedural in nature.  It
did not alter the balance of rights and obligations.  Switzerland believed that if a country took a
measure pursuant to an MEA, that country should expect all its WTO partners to operate on theassumption that that measure was consistent with WTO rules.  If other Members believed that the
measure caused them injury or was disproportionate to the objective it was trying to achieve, other
aspects of the WTO machinery could come into play.
44. The representative of Japan believed that the Kyoto Protocol was not a good example to take,
since Japan was still deciding on how to classify its trade measures.  However, if the measure referred
to by Australia fell under Japan's second category of trade measures, the rebuttable presumption of
conformity would apply.  That did not mean that there would be a reversal in the burden of proofhowever.  It would be up to country A to prov e that its measure fulfilled the two conditions
enumerated in paragraph 14 of Japan's submission (those conditions were: (1) that the trade measure
be based on science and that it be reasonably related to the objective of the MEA; and (2) that the
scope of trade measure be proportional to the MEA objectives).
45. The representative of Australia wondered whether Switzerland would consider the following
scenario as involving only a procedural change:  Australia obtains from Japan a tariff binding on coal
in exchange for certain concessions which Australia makes, but following the entry into force of the
Kyoto Protocol, Japan decides to raise that tariff.  Australia asked, if according to the Swiss proposal,
it would be up to Australia to convince a Panel that the measure was inconsistent with WTO rules,
and if such a change on current practice could simply be called "procedural." Such a change in rightsand obligations could not be accepted.  Australia also felt that the answer provided by Japan did not
square with what had been stated in the Japanese submission.  There Japan had called for a rebuttable
presumption of conformity that left the challengin g country with no rights under WTO.  With respect
to the comment made by Switzerland on trade and environment discussions having taken place forTN/TE/R/3
Page 11
many years in WTO, Australia believed that the context of those discussions had completely changed
since participants were today engaged in negotiations, and that other subjects, such as agriculture, had
been on the table longer.
46. The representative of Switzerland argued that in the situation which Australia described,
countries B, C, D or E could have recourse to the dispute settlement mechanism of WTO, or could
plead non-violation, in which case they would be compensated for the concessions nullified by the
legitimate measure taken by country A.  The representative of Japan explained that Australia was
reading paragraph 14 of the Japanese paper in a manner that had not been intended by its authors.Japan did not wish to limit the rights of WTO Members to challenge measures taken pursuant to
MEAs, nor did it suggest a reversal in the burden of proof.  Japan was arguing that if country A
succeeded in demonstrating to the WTO that it had fulfilled the two conditions set out in paragraph 14
of the Japanese paper, then its measure would be presumed to be consistent with WTO rules.
Concluding Remarks by Authors of New Submissions
47. The representative of Saudi Arabia argued that his paper was extremely relevant to the
paragraph 31 (i) mandate, since the mandate had to do with STOs in MEAs. Saudi Arabia wished to
pursue its concerns under this particular section of the DMD because it wanted them addressed in the
negotiations.  Paragraph 32 issues were not in negotiations, and a report on them would still have todrafted for the next Ministerial Conference.  In reaction to Kenya's comments, Saudi Arabia clarified
that it was not asking for lower of taxes on petroleum, rather it was calling for taxes to be based on the
carbon content of specific fuels.  It reiterated its support for the Australian approach.
48. The representative of Japan explained that Japan did not wish to prejudge the outcome of
negotiations, it simply wished to advance certain ideas for discussion.  With respect to criticisms
made of the "top-down" approach, he explained that conceptual issues would necessarily arise in the
course of negotiations.  One example of this was when the Korea's question on how COP decisions
would be considered.  This was a conceptual issue which had to be addressed in order to identify
STOs.  In response to other comments made on Japan's submission, he indicated that while the
definition of MEAs in the Japanese paper could be clarified, Japan's intention was to capture thoseagreements that allowed all interested parties to participate, which reflected the different interests
involved, and which were global in nature.  On the difference between the Japanese and EC proposals,
there were significant differences, such as in the definition of an MEA and the classification of STOs.
Japan only proposed automatic WTO consistency for the first category of trade measures addressed in
its submission, and not for the others like the EC.  On the link between paragraphs 31 (i) and (ii) of
the mandate, Japan was simply suggesting better coordination between MEA Secretariats and the
WTO.  In response to the request for specific examples of MEA-WTO disputes, Japan was only awareof the "swordfish case".  Finally, Japan pointed out to Saudi Arabia that it had abandoned its coal
subsidies.
49. The representative of Chinese Taipei explained that STOs provided for in MEAs could simply
not be presumed to be in conformity with WTO rules since parties to MEAs did not always implement
their obligations on the basis of the most-favoured principle (MFN) principle.  With respect to thecomment from Egypt on disputes first being settled in MEAs, his delegation did not object to that but
wished to keep the choice of dispute settlement mechanisms open.
50. The representative of Korea indicated that the Korean paper did not propose any outcome
because it felt it was much too soon.  He explained that Korea had attempted to use a pragmatic
methodology in its submissions to illustrate some of the concrete issues involved in the mandate.
With respect to its criteria for "specificity," Ko rea recognized that the paper constituted only one
approach and was open to other alternatives.TN/TE/R/3
Page 12
 Structure of Future Work
51. The representative of New Zealand called on the CTESS to structure its discussions under
paragraph 31 (i).  He urged the proponents to identify the MEAs that contained STOs in the same way
as the US had done, while recognizing that certain participants (such as Japan) would be looking at
sub-categories of STOs as opposed to lists.  He believed that such a process would not rule out adefinitional approach, or the feeding of other elements into the negotiations, but would simply
structure work under this part of the mandate.
52. The representative of the EC did not believe that a rigid sequencing of the work of the CTESS
under this agenda item would be manageable;  it would only lead to procedural roadblocks.  The EC
preferred to pursue a "modular approach" that would involve the examination of a number of different
modules or elements.  The first module  was that of "scope or definition," and could involve clarifying
terms such as STOs and MEAs, as well as the boundary between procedural and substantive changes(which would determine when a suggested outcome w ould begin to constitute a change in the balance
of rights and obligations).  Chinese Taipei had also raised the issue of the involvement of different
WTO Members in MEAs.  For the EC, which was not formally part of CITES, for instance, this was
an important issue. While a broad range of MEAs needed to be looked at, the EC could support the
use of the Secretariat Matrix as a starting-point for discussions.  The second module  was that of WTO
principles, such as ones that had emerged in WTO di spute settlement rulings, or in WTO discussions.
An example included the concept of mutual supportiveness and deference.  The third module  was that
of dialogue with MEA Secretariats and UNEP. WTO Members could not preclude contributions from
organizations which were themselves the subject of the mandate.  The fourth module  was that of
options.  In exactly the same manner as the EC did not consider the argument that there was noproblem in the WTO-MEA relationship to be a prejudgement of the outcome, it did not consider any
of the conceptual proposals tabled to date to be a prejudgement either.  It did not see the outcome as
having to be a solution to a problem, since the word "problem" was not actually in the mandate.
53. The representative of Australia supported the New Zealand suggestion and called upon the
CTESS to identify STOs in a core set of MEAs on which everybody could agree. Australia was
willing to start this exercise on the basis of the six MEAs identified by the US.  The representative of
the Philippines supported Australia but reminded delegations of his previous call for negotiating
guidelines to be developed prior to the negotiating phase.  The representative of Canada supported the
suggestion of examining the initial set of six MEAs, despite the fact that some of them had not yet
entered into force (such as the Biosafety Protocol).  His delegation believed that it would be
unfortunate to exclude the Biosafety Protocol from discussions when its trade provisions had been the
subject of much debate.  Canada hoped that these negotiations would give guidance to MEAnegotiators in the negotiation of future MEAs.  The WSSD had given direction to at least one new set
of negotiations, which was in the area of biodiversity, access to genetic resources and benefit-sharing.
54. The representatives of Kuwait, Saudi Arabia
 and Venezuela  argued that if the mandate was
going to be confined to a certain set of MEAs, the UNFCCC and the Kyoto Protocol had to be
included.
55. The representative of the US supported Australia, but indicated that it was best to start with
the identification of STOs, while leaving the identifi cation of relevant WTO rules for later.  The six
MEAs proposed by the US were not intended to be exhaustive, but were simply a starting-point.  He
was willing to discuss the Secretariat Matrix more broadly.  He felt that the EC modules could breed
confusion instead of structure.  Finally, he indicated that it did not see the UNFCCC as containing anySTOs.TN/TE/R/3
Page 13
56. The representative of Argentina felt that the two approaches on the table were not mutually
exclusive.  While Argentina was not opposed to the us e of the Secretariat Matrix as a reference, it did
not feel it could form the basis of the CTESS' work.
57. The representative of Switzerland indicated that he would not be opposed to the New Zealand
suggestion, provided that a parallel study of principles and parameters governing the WTO-MEA
relationship could be undertaken.  The representative of Japan agreed that the Secretariat Matrix could
be taken as a starting-point, provided that it was only a starting-point and that other elements could bebrought into the discussion.  However, the Matrix was not sufficiently detailed.  The representative of
Norway welcomed the New Zealand suggestion, and agreed that it was important to structure the
debate.  In order to do so, he called for definitions or initial criteria to be developed to enable theCTESS to know what it was addressing.  Exampl es of STOs could be given in the process.
Chairperson's Conclusion58. The Chairperson was pleased that a total of ten documents had been discussed under this
agenda item to date.  This had made for an extremely rich debate.  It was clear that the CTESS was
still in a preparatory phase, and that it was the preparatory phase that had allowed such a rich
discussion to take place.  However, she recognized that some participants were now calling for greater
structure to be given to the CTESS' work under this part of the mandate, which was a valid call.
59. She felt that it was clear that a number of different elements could form the basis of work
under the mandate.  It was also clear that the different approaches before the CTESS were not
mutually exclusive.  Several delegations had themselv es pointed this out.  However, she noted that an
interesting suggestion by a participant had emerged on how the CTESS' work under this agenda item
could be carried forward.  The participant had suggested that the Special Session focus on theidentification of STOs in relevant MEAs, highligh ting that such focus would not preclude conceptual
issues.  In fact, she noted that a number of participants had already started a preliminary identification
of STOs.  She hoped that participants could reflect on this proposal, and indicated that she would call
for informal consultations.
60. Finally, she confirmed that the Secretariat would indeed prepare a compendium of the
different proposals submitted to the CTESS by the its first meeting in 2003.  The document would
allow the CTESS to take stock of the full range of proposals made.
III. PARAGRAPH 31(ii) – INFORMATION EXCHANGE & CRITERIA FOR
OBSERVER STATUS
3
61. The Chairperson indicated that only one new document had been tabled under this agenda
item, document TN/TE/W/15 from the EC.  At this meeting, a total of four delegations supported the
call for early action on this part of the mandate, namely the EC, the US , New Zealand  and Japan .
62. The representative of the EC stated that the WSSD had demonstrated the importance of this
part of the mandate.  He believed the EC submission to be entirely consistent with that of the US
(TN/TE/W/5).  While the submission referred to a "core" set of MEAs (i.e. those MEAs that had
previously taken part in the work of the regular CT E), the EC did not wish to create a sub-category of
MEAs.
                                                     
3 The following documents had been previously circulated under this agenda item:  (1) Secretariat
document TN/TE/S/2 on Existing Forms of Cooperation and Information Exchange between UNEP/MEAs and
the WTO ;  and documents (2) TN/TE/W/5 from the US.TN/TE/R/3
Page 14
63. With respect to the first part of paragraph 31 (ii), the EC proposed that the information
exchange that had taken place in an experimental  and informal fashion between the WTO, MEA and
UNEP Secretariats be recognized for the success that it was, and be regularized.  Other WTO
Committees also had to be attentive to networking w ith MEAs.  On observer status, the EC called for
early action.  It proposed that, pending a definitive decision by the General Council and the TradeNegotiations Committee (TNC), the CTESS should wo rk with appropriate bodies in WTO towards
the granting of ad hoc observer status to UNEP and MEAs in the regular CTE and its Special Session
("observers en bloc").   This was necessary for the legitimacy of the work which the WTO was
conducting under this mandate.  The representatives of Nigeria and Chinese Taipei
 supported the EC
on this point.  Chinese Taipei also stated that ad hoc observer status could be granted to MEAs thathad not yet entered into force in the CTE and its Special Session.  The representative of Canada called
upon the CTESS to permit observers to attend, just as they were in the Agriculture and Services
negotiating groups, while the representative of Australia argued in favour of relevant MEAs being
granted observer status to the CTESS upon request.
64. With respect to a longer-term solution to the observer status question, the EC called for a
strong presumption to be established in the WTO in favour of prompt and positive decisions on MEA
and UNEP observers.  He called upon the Chairperson of the CTESS  to consult with UNEP and thecore MEAs referred to in the EC submission on the different WTO bodies they could contribute to.
65. The representative of the US clarified a number of points with respect to the US proposal
(TN/TE/W/5).  First, while the proposal was not one on coordination at the national level, the US saw
the proposal as going hand-in-hand with previous efforts by the WTO Secretariat, UNEP and others to
create more opportunities for trade and environment officials to interact and coordinate their policy-making responsibilities.  Second, the US saw a formalized process for information sessions suggested
in its paper as nonetheless allowing for some flexibility.  For example, such sessions could take place
more frequently than just once per annum.  Third, the new procedures which the US paper suggested
should be developed for observer status were ones that had to be consistent with Annex 3 of the Rules
of Procedure for the General Council and Ministerial Conferences.  The US explained that the newprocedures would not prejudice any future action by the General Council or the TNC to address the
observer status question horizontally.  It also indicated that it was pleased to hear that the EC was
looking for early action in this area.
66. The representative of Australia welcomed various aspects of the US paper, such as its call for
more regular information exchange, and for two- way information flow between environment and
trade officials at the national level, and not just between Secretariat staff.  He also welcomed the
recent initiative by the WTO Secretariat in conducti ng side-events at the COPs of MEAs.  Australia
found the US proposal for document exchange and indexing of official documents by Secretariats to
be logical and to complement national level cooperation.  It called for trade and environmental
officials to share documents in order to ensure consistency in national positions.
67. Australia also welcomed the EC paper and supported its suggestion for more formal MEA
Information Sessions, for those Sessions to be topic-driven, for the continuation of WTO side-eventsat MEAs, and for the continued involvement of MEAs in WTO regional seminars.  However, it
questioned the suggestion made in the EC paper for MEA Secretariats to debate emerging trade-
related issues with WTO Members in the CTE, since that seemed to exceed the competence of those
Secretariats.  It failed to understand why the paper suggested that only MEA Secretariats could play a
role in selecting topics for Information Sessions. The representative of Cuba shared this concern.
Australia indicated that it would reflect further on the proposal made by the EC to involve NGOs and
institutions with expertise in Information Sessions.  The suggestion made in the EC paper thatInformation Sessions be held biannually seemed somewhat excessive but would also be reflected
upon.  The representative of Kenya believed that the involvement of NGOs in Information Session
fell outside the mandate.TN/TE/R/3
Page 15
68. On observer status, Australia indicated that it had long supported the granting of such status
in the CTE and that it would continue to do so.  Observership was an issue which was at present
before the TNC, but Australia saw logic in MEA S ecretariats being closely involved in CTESS work.
However, it could not agree with the assumption in the EC paper that previous attendance at
Information Sessions by MEA Secretariats in the CTE could somehow become a criterion fordetermining the "competence" and "direct interest" of MEAs.  The EC paper also referred in many
instances to the "granting" of observer status or the issuing of invitations, without reference to the
nature of existing rules on the matter, which operated on a request basis.  Despite these comments,
however, Australia was in favour of relevant MEAs  being granted observer status in the CTESS upon
request.  It believed that the US paper provided an appropriate course of action in that respect.
69. The representative of Cuba stated that since the issue of observer status was currently before
the General Council, she failed to understand why the EC was calling upon the Chairperson of the
CTESS to conduct consultations on the matter.  In addition, the December 2002 date proposed for
these consultations in the EC paper was much too soon.  The representative of Argentina concurred
with the delegations that stated that the observer status issue had to be resolved by theGeneral Council.  He called upon the CTESS to examine how existing forms of cooperation and
information exchange between the WTO and MEAs could be taken further.  More informationsessions could held, they could be held in other fora within WTO, or joint events or projects could be
organized by the WTO and MEA Secretariats without either Secretariat exceeding its mandate.
70. The representative of Canada agreed with the EC and US papers that it would be useful to
develop a more formal structure for Information Sessions, and that there would be value-added to
focussing on specific questions when those Sessions were organized.  He noted that the mandatereferred to information exchange between MEA Secretariats and WTO "Committees" in plural, which
suggested that there was a need to discuss the WTO bodies that this mandate included.  A preliminary
list could include:  the Committee on Trade and Development (CTD), the Committee on Agriculture,
the Committee on TBT, the Committee on Sanitary and Phytosanitary Measures (CSPS), and the
Council on the Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) and theCouncil for Trade in Services (Services Council).  It wondered if the MEA Information Session to be
held on 12 November 2002 could contribute to identifying the WTO bodies of interest to MEAs.
Mechanisms for information exchange, other than the ones used in the CTE, could also be explored.
The representative argued that information which could be usefully exchanged between the WTO and
MEAs included: schedules of meetings, summaries of discussions, research and analysis in areas of
common interest, databases, as well as information on technical assistance and capacity building
activities.
71. He argued that observer status could contribute to information exchange, and that the granting
of such status was therefore the most important aspect of the paragraph 31 (ii) mandate.  Criteria
would need to be developed to determine what constituted an MEA.  Such criteria would only
exclusively be used to decide on observership requests.  The criteria could include that the
agreements:  (1) have environmental protection or natural resource conservation as their primaryobjective; (2) be open to all countries wanting to participate; (3) have broad participation across
developed-developing countries and geographic lines (as appropriate to their environmental
objective); and (4) have an area of activities or environmental objectives relevant to the WTO
Committee to which the request for observer status was being made.  Canada argued that UNEP
should be given special consideration in the bodies in which it applied, and expressed its support forthe request made by the Montreal Protocol in the regular CTE, and which met all four of the afore-
mentioned criteria.
72. The representative of Malaysia argued that three issues had to be explored:  (1) the nature of
the information being exchanged, (2) the procedures involved in the exchange, and (3) the frequency
of the exchange.  He did not think that restricted documents fell under the mandate since paragraph 31TN/TE/R/3
Page 16
(ii) did not state that absolutely all informatio n needed to be exchanged.  He took note of the
procedures set out in the US submission for information exchange.  With respect to the frequency of
information exchange, Malaysia was of the view that it would not be useful to set numerical targets
for the number of Information Sessions to be held.  The Sessions could be held when the need for
them arose.  The representative of Brazil indicated that her delegation attached great importance to
this part of the mandate, and together with the representative of Nigeria shared the breakdown of
issues proposed by Malaysia.
73. Brazil and New Zealand  argued that to the extent that there were concerns about potential
problems in the WTO-MEA relationship, a more st ructured arrangement for information exchange
would be a basic element in any response.  Since the WSSD had called for called for greater
cooperation on trade, environment and development between the WTO, the United Nations
Conference on Trade and Development (UNCTAD), the United Nations Development Programme(UNDP) and UNEP, Brazil believed the information exchange could extend beyond trade and
environment and into development.  On observer status, Brazil was flexible.  It offered only apreliminary comment on the EC paper, stating that while the suggestion that it made on the WTO
Secretariat's participation at COPs was useful, it wondered how the WTO Secretariat could cope with
such demands.  The representative of Cuba shared this concern.
74. The representatives of New Zealand and Japan  indicated that they needed to reflect further on
the specific elements raised in the EC paper, but th at they could in general support the direction which
it took.  Both delegations saw the issue of observer status as being critical for the CTESS' work under
this mandate, and supported the EC and US suggestions for an early decision on this matter.
75. The representative of Venezuela believed that the WSSD had reinforced the need to ensure
mutual supportiveness between the multilateral trading system and MEAs, in a manner consistent
with the objective of sustainable development.  Venezuela argued that since information would be
exchanged between the WTO and MEAs on the basis of the Doha Development Agenda (DDA), the
WTO Director-General needed to explain what this te rm referred to exactly.  With respect to the issue
of observer status, Venezuela reiterated the requirement that MEAs be asked to present scientificstudies when requested to do so by delegations.  Such studies would identify the countries that were
doing the most damage to the environment.
76. The representative of Chinese Taipei agreed wi th several of the proposals contained in the EC
paper.  He argued that the interface between the WTO and MEAs should extend beyond mere
information exchange, and into the creation of fora to debate issues of concern.  Institutions and
NGOs with expertise on the issues being addressed could also be invited to participate.
77. The representative of Egypt commented on paragraph 9 of the EC paper which stated that the
transfer of technology could be linked to DDA paragraph 31 (iii).  He argued that the transfer of
technology was also linked to paragraph 31 (i), since such transfer was an STO.  The word "shall" had
been employed in numerous provisions calling for the technology transfer under MEAs.  On observer
status, Egypt favoured a flexible approach that would not be limited to MEAs.
78. The representative of the US  stated that (1) he did not believe that restricted documents fell
outside the mandate, (2) he believed that the call made in the US paper for Information Sessions to
occur annually was modest and consistent with existing practices, and that (3) while the question of
observer status was being addressed by the TNC and the General Council, he believed that the CTESS
still had a role to play, otherwise the paragraph 31 (ii) mandate would be an empty one.  The
representative of the EC agreed with the US that the CTESS had a role to play, and called upon
delegations not to hide behind procedural issues to block progress.  He argued that consultations by
the Chairperson could illuminate the CTESS on the different WTO fora that were of interest to MEAs.TN/TE/R/3
Page 17
79. The Chairperson thanked participants for their contributions, and indicated that she would
reflect on the request made for her to consult wi th MEAs.  She looked forward to the 12 November
MEA Information Session.
IV. PARAGRAPH 31(iii) – ENVIRONMENTAL GOODS AND SERVICES4
Introductory Remarks by Chairperson
80. The Chairperson briefed the Committee on the three decisions taken by the Negotiating
Group on Non-Agricultural Market Access (NGMA), relevant to the CTESS' work on environmental
goods.5 These decisions included that:
(1)  The Chair of NGMA would keep the Chair of the CTESS informed of the ongoing
discussions in NGMA on environmental goods on a more formalized basis.  The
Chair of the NGMA would also report to NGMA on any information of relevance
provided to him by the Chair of the CTESS;
(2)  papers relating to environmental issues submitted in NGMA should also be submitted
to the CTESS to enhance transparency; and
(3)  the Secretariat in the Market Access Division would circulate the lists of
environmental goods produced by Asia-Pacific Economic Cooperation forum
(APEC) and the OECD.
81. The Chairperson also indicated that the she had held consultations with Ambassador Girard,
Chairman of NGMA, and Ambassador Jara, Chairman of the Council for Trade in Services Special
Session (CTSSS), to avoid any unnecessary duplication of work under paragraph 31 (iii) of the DMD.
82. Ambassadors Girard and Jara had welcomed the CTESS' view that the negotiations on
environmental goods and services should be conducted in NGMA and the CTSSS.
Ambassador Girard was briefed on the role that some participants wanted the CTESS to play in
clarifying the concept of environmental goods.  These views had been expressed by the CTESS at its
first meeting, on which Ambassador Biké had reported to the TNC that:
On paragraph 31 (iii), there was broad support for the idea that the negotiations on
environmental goods and services be conducted in the Council for Trade in Services
Special Session and the Negotiating Group on Market Access for Non-Agricultural
Products.  However, some participants called on the CTE Special Session to clarify
the concept of environmental goods.  One of them argued that those goods could
include ones that were agricultural in nature, and together with another participant
requested the Special Session to keep track of the work undertaken in the Committee
on Agriculture Special Session.  Other participants responded that while they wouldnot be opposed to definitions being developed in the CTE Special Session, they
could not accept any sequencing between this work and that of the Negotiating
Group on Market Access.  Finally, there appeared to be broad support for the idea
that the CTE Special Session monitor developments in other negotiating groups on
paragraph 31 (iii) (TN/TE/1, paragraph 9).
83. The Chairperson  reported that it was felt in the consultations that it would be advisable for
the CTESS to reciprocate the information exchange that had been agreed to in the NGMA (decision
                                                     
4 The following document had been previously circulated under this agenda item:  document
TN/TE/W/6 from New Zealand.
5 The decisions are contained in document TN/MA/4.TN/TE/R/3
Page 18
(2) above). She had agreed to encourage participants to circulate relevant CTESS submissions on
environmental goods to the NGMA.
84. With respect to the monitoring role that would be carried out by the CTESS, the consultations
demonstrated that this task would best be undertaken when the negotiations in the NGMA and CTSSS
had had more of a chance to progress.
Discussion of Documents
85. The Chairperson then indicated that two new documents had been received under this agenda
item, documents TN/TE/W/8 from the US and TN/TE/W/14 from Qatar.  At this meeting, a number
of delegations opposed the use of the process and production method (PPM) criterion in the
identification of environmental goods.  They included:  the US, Hong Kong, China , Singapore , Brazil ,
India, Australia , New Zealand , Argentina , Canada  and Indonesia .
86. The representative of the US supported the Chairperson's encouragement that all papers
relating to environmental goods be submitted both to NGMA and to the CTESS.  He highlighted the
important work already accomplished on environm ental goods by both APEC and OECD.  The APEC
list of environmental goods continued to reflect key environmental goods, and would be a key
starting-point (rather than an end-point) for discussions.  He re-emphasized the US view that the
negotiation of modalities, commitments and concessions on market access for environmental goodsand services should take place in the NGMA and the CTSSS.  Nevertheless, there could be an
appropriate monitoring role for the CTESS.  The CTESS could look at the complimentarily of
environmental goods and services and their interface.  He reiterated that the US would not be
supportive of broadening the definition of environmental goods using the PPM criterion, and
reminded participants that certain issues could be taken up under paragraph 32 (i) of the DMD.
87. The representative of Qatar explained that the Qatari submission was intended to contribute to
a potential list of environmental goods, and related specifically to energy efficient technologies.  Such
technologies were well recognized in numerous UN conventions, such the UNFCCC.  He explained
that the significant increases in energy efficiency due to the utilization of natural gas combined-cycle
systems resulted in lower fuel consumption and reduced emissions.  He argued that any list ofenvironmental goods would have to be dynamic rather than static in order to keep pace with
technological change.   He believed the New Zeal and proposal (TN/TE/W/6) could provide a basis for
CTESS discussions.  The representative of Oman supported the Qatari paper.
88. The representatives of Hong Kong, China and Singapore  shared the US view that a list of
environmental goods could be drafted, and together w ith Brazil agreed that the work of APEC and the
OECD could be useful, and that the PPM criterion would be unhelpful.  The representatives of
Argentina and India  also agreed that the PPM criterion should not be used, but India  wondered how
the problem of multiple end-use would be overcome if the end-use criterion were to be employed.
The representative of China agreed with the use of APEC list a starting-point, but emphasized the
importance of technical assistance for developing countries.
89. The representative of Australia welcomed the US paper and its focus on end-use criteria.  He
indicated that Australia was supportive of "voluntary, WTO-consistent, market-driven efforts," in this
area as recognized at the WSSD, but noted that this term was loosely used and open to a range of
abuses.  In addition, Australia recognized that governments could play a role in assisting consumer
decision-making, however this was not the same as heavy-handed trade distorting regulation.  On
environmentally sustainable production, Australia argued that this outcome would not be delivered
solely through the negotiations, but would occur main ly through Members' efforts to implement sound
domestic policies and programmes and domestic economic instruments where appropriate.  He argued
that all environmentally like-products should benefit from the negotiations, and that efforts underTN/TE/R/3
Page 19
paragraph 31 (iii) to create new tariff categories based on PPMs with protectionist outcomes would
not serve Members' economic, social or environmental interests.  Furthermore, any attempt to amend
WTO rights and obligations through these negotiations would be contrary to paragraph 32 of the
DMD.
90. The representative of New Zealand supported the US suggestion to not use the PPM criterion
in these negotiations.  Given the statements made at this meeting, however, he did not believe this was
going to be a real issue.  He agreed with Australia that there were other ways of promoting trade in
environmentally friendly products.  With respect to list of environmental goods, the CTESS now
needed to look at how and when this could be drawn up, given the tight calendar of CTESS and
NGMA meetings next year.  The representative of Singapore also indicated that it was important to
examine the NTB part of the mandate.
91. The representative of Argentina welcomed the consultations undertaken by the Chair and the
set-up reached to avoid the duplication of work.  Along a similar line, the representative of Canada
welcomed the Chairperson's remarks on how CTESS work could add value to the work of NGMA.
Canada also believed that the OECD and APEC wo rk was a useful contribution to negotiations on
environmental goods.  He shared the concerns of other delegations on the inclusion of
environmentally supportive products and sustainable materials or production characteristics in adefinition of environmental goods.  He favoured a definition based on predominant end-use, as
reflected in the APEC list.  That did not mean however that Canada was closed to other ideas or
proposals.  For some products, he felt that non-tariff barriers were more important to address.  He
welcomed the Qatari submission, and looked forward to further clarifications from Qatar on the
product specifications of the technologies it mentioned, particularly their goods and servicescomponents.
92. The representative of Indonesia agreed with the Chairperson that the NGMA and the CTSSS
were the appropriate fora for negotiations.  He stated that prior to embarking on paragraph 31 (iii)
negotiations, participants needed to have a clear idea of what the term "environmental goods and
services" included.  A definition could be developed in stages, with criteria first being drawn up.  Forinstance, it should be agreed that the definition would be product, instead of process, oriented and
should be scientifically measurable.  Once a definition was achieved, a list of environmental goods
and services could be developed.  He cautioned against any hasty drafting of such a list since
domestic consultations with relevant stakeholders was necessary.
93. The representative of Kenya agreed that it could still be necessary for the CTESS to develop a
definition of environmental goods.  The practical implication of conducting paragraph 31 (iii)
negotiations in NGMA would be that paragraph 16 of the DMD would then apply to them.  Thatparagraph stated that negotiations had to refer in particular to products of export interest to developing
countries, had to take full account of the special needs and interests of developing and least-developed
countries (LDCs), and required less than full reciprocity in reduction commitments from them.  As
such the APEC and OECD lists might not reflect  the needs of developing and least-developed
countries (LDCs), who would eventu ally need of capacity building to identify the goods of export
interest to them.
94. The representative of Venezuela agreed that it was important to prepare a list of
environmental goods, and that the APEC and OECD list s could be used as a basis.  However, it would
be important to have scientific certainty that the goods included on the list would help the
environment, and there UNEP could come to the aid of the CTESS.  He supported Kenya's commentson developing country interests.
95. The representative of the EC supported the Chairperson's effort to coordinate work under this
agenda item and her consultations.  He did not believe that the CTESS could be the forum in whichTN/TE/R/3
Page 20
final decisions on the definition of environmental goods could be taken, but certainly believed that the
Committee had a role to play in discussing the mandate from an environmental angle.  He saw the
suggestion made to use APEC work as a starting-point as useful, but indicated that his delegation
would be open to other concepts and approaches.
96. The representative of Switzerland welcomed the consultations which the Chair had conducted
and the exchange of information that had been agreed to between NGMA and the CTESS.  He agreed
with the US that the APEC/OECD wo rk could be a good starting-point for work in this area, and that
a list of environmental goods could be usefully developed.  However, such a list could contain goods
whose function was the protection and management of the environment.  Switzerland shared other
delegations' concerns about the use of the PPM criterion.  Nevertheless, it indicated that it was open to
other approaches, such as ones that considered product characteristics during consumption or
disposal.  It also welcomed the Qatari paper, in particular in so far as it contributed to reducedgreenhouse gas (GHG) emissions.
97. The representative of Brazil supported the suggestion made in the US paper of inviting a
member of the OECD Secretariat to brief the WTO on OECD work in this area, and expressed an
interest in being briefed in the CTESS on negotiations in environmental services.  Along a similar
line, the representative of Nigeria wondered if the Secretariat could brief the CTESS on work
undertaken in the NGMA and the CTSSS, as his delegation could not keep abreast of developments in
all fora.
98. The representative of the US responded to the comment raised by New Zealand on difficulties
that could be involved in agreeing on a list, by stating that the discussion held at this meeting tended
towards a less rigid notion of an agreement on a common list by a certain time.  Also responding tocomments made, the representative of Qatar cautioned against establishing a distinction between
product end-use and PPMs, arguing that energy had to  do with processes of production.  In addition,
he wondered if the end-use criterion could take account of the entire energy life-cycle of a product.
He concluded by saying that it was important to realize that energy equipment were part of a system,
and that it would become necessary to look at integrated systems under this part of the mandate.
99. The Chairperson thanked participants for their contributions, and said that she would explore
the possibility of organizing Secretariat briefings to the CTESS on environmental goods and services
negotiations.
V. OTHER BUSINESS
Requests for Observer Status and Meeting Date for Next Year
100. The Chairperson informed participants of the requests made for observer status in CTESS,
which included requests from:  (1) the African, Ca ribbean and Pacific Group of States (ACP Group),
(2) the International Monetary Fund (IMF), (3) th e OECD, and  (4) UNEP, on its own behalf, and on
behalf of the MEAs with observer status in the regular CTE.  While she recognized that the TNC and
the General Council were dealing with the question of observer status, she urged participants had to
make every effort to resolve this matter speedily since it affected the work of the CTESS, which had a
mandate asking it to address precisely this question.
101. The Chairperson also informed participants of the dates of the first meeting of the CTE and of
its Special Session next year.  The regular CT E would meet from 4-5 February 2003, and would be
followed by the Special Session from 6-7 February since alternative dates would be hard to find.
102. The representative of the EC requested that a new Secretariat document be prepared on
observer status in other negotiating groups.  The representative of Canada expressed concern over aTN/TE/R/3
Page 21
potential clash between the meeting dates of the CT E/CTESS announced by the Chair and those of the
UNEP Governing Council and the Commission on Sustainable Development.
103. The Chairperson indicated that the Secretariat would indeed prepare the new document
requested by the EC, and confirmed that the new meeting dates she had announced.
Technical Assistance104. The Chairperson informed participants that nine Members had identified trade and
environment as a priority area for technical assistance in response to the letter sent by Mr. Mike
Moore to all delegations on 28 June 2002.  She drew the attention of participants to document
WT/CTE/W/216 which had been circulated in the re gular CTE, and which summarized the technical
assistance activities provided by the Secretariat in the trade and environment area in 2002.
105. With respect to technical assistance in 2003, she explained that the Committee on Trade and
Development (CTD) was still discussing the Technical Assistance Plan for 2003 and which wascontained in document WT/COMTD/W/104/Add.1.  She urged participants to examine the trade and
environment activities contained on pages 50-51 of the document, indicating that the Plan would be
discussed once again on 11 November 2002.
106. The representative of India agreed with the Chairperson that technical assistance was an
important matter, and that the legal content of technical assistance activities would be important to
examine so that the legal implications of the different proposals made in the CTESS could be better
understood by all.  The representative of Venezuela thanked the Chairperson, indicating that he had
taken good note of the 11 November date for the discussion of the Technical Assistance Plan.  Therepresentative of Kenya indicated that technical assistance matters were key to the negotiations, and
wondered if delegations could still submit requests for assistance that went beyond the two priority
areas they had been asked to identify.
107. The representative of the US indicated that it  was the CTD that was the appropriate forum for
the discussion of technical assistance matters, and that paragraph 33 of the DMD fell within the
mandate of the regular CTE and not its Special Session.
108. The representative of the EC believed that the CTESS could have a different perspective on
the question of technical assistance than the regular CTE or even the CTD, and welcomed the remarks
by the Chair.  He indicated that the EC would be willing to discuss technical assistance concerns in
almost any format or forum in WTO, and that his delegation would be willing to circulate an informal
document on the trade and environment technical assistance activities that the EC thought could be
useful in light of the DDA.
109. The Chairperson indicated that while she reco gnized that paragraph 33 fell within the
mandate of the regular CTE, she believed that the needs of the trade and environment negotiations had
been forgotten when this paragraph was drafted.  She felt that legal technical assistance would
increasingly become necessary as the negotiations progressed.
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