WORLD TRADE  
ORGANIZATION  RESTICTED 
WT/CTE/M/53 
27 January 2012 
 (12-0546) 
Committee on Trade and Environment  
  
 
REPORT OF THE MEETING HELD ON 14 NOVEMBER 2011 
 
Note by the Secretariat
1 
The Committee on Trade and Environment (CTE Regular) met on 14 November 2011, 
chaired by Ambassador Hiswani Harun (Malaysia).  The Committee adopted the agenda, 
WTO/AIR/3822, issued on 13 October 2011.  A revised  draft annotated agenda was circulated in 
document JOB/TE/24/Rev.1, dated 10 November 2011.  The latest list of documents of the 
Committee was circulated on 3 November 201 1 in document WT/CTE/INF/5/Rev.10.  A 
communication from the Basel Convention and the Ro tterdam Convention Secretariat concerning the 
renewal of their observer status request w as circulated on 11 November 2011 in document 
WT/CTE/COM/15.  The report of the last formal C TE meeting held on 6 July 2011 is contained in 
WT/CTE/M/52, dated 6 September 2011.   
_______________ 
 
I.  PARAGRAPH 32 .................................................................................................................. .... 2 
A.  PARAGRAPH 32(I) (ENVIRONMENTAL REQUIREMENTS AND MARKET ACCESS ) ........................ 2  
1.  First part of Paragraph 32(i) on "Environmental Requirements and Market 
Access" ....................................................................................................................... ................ 2  
2.  Second part of Paragraph 32(i) on "S ectoral Analysis" (win-win-win) ............................... 6  
B.  PARAGRAPH 32(II) (TRIPS) ........................................................................................................ 9  
C.  PARAGRAPH 32(III) (LABELLING ) ............................................................................................. 10  
D.  OTHER ITEMS ON THE CTE  AGENDA  ........................................................................................ 11  
1.  Item 1 ........................................................................................................................ ............... 11  
2.  Item 3(a) ..................................................................................................................... .............. 12  
II.  PARAGRAPH 33 .................................................................................................................. .. 13 
III. PARAGRAPH 51 .................................................................................................................. .. 13 
IV.  OTHER BUSINESS ................................................................................................................  13 
V.  DATE OF NEXT MEETING ................................................................................................ 13  
 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO. WT/CTE/M/53 
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  I. PARAGRAPH 32  
A. P
ARAGRAPH 32(I) (ENVIRONMENTAL REQUIREMENTS AND MARKET ACCESS ) 
"The effect of environmental measures on market  access, especially in relation to developing 
countries, in particular the least-developed am ong them, and those situations in which the 
elimination or reduction of trade restric tions and distortions would benefit trade, the 
environment and development. " 
 
1. First part of Paragraph 32(i) on "Envir onmental Requirements and Market Access" 
1. The Chair recalled that in response to the interest expressed by a number of delegations on the 
effectiveness, challenges and po ssible trade impacts of carbon footprint and labelling schemes, the 
CTE had held an Information Session on Pro duct Carbon Footprint and Labelling Schemes on 
17 February 2010.  Several Members (the United Kingdom, New Zealand, Chile and the Republic of 
Korea) had shared their domestic experiences relate d to eco-labelling at meetings of the CTE since 
2010.  She invited Members to continue to share thei r experience with the CTE in relation to (i) the 
development of any new national carbon footprint schemes, and (ii) the implementation by their 
producers and exporters of such schemes.   
2. The representative of New Zealand informed th e CTE about several recent developments in 
the area of carbon footprinting, including the release in October 2011 of two new international 
standards prepared by the World Resources Institu te and the World Business Council for Sustainable 
Development.  First, the "GHG Protocol Corporat e Value Chain (Scope 3) Standard" would account 
for emissions across the value chain at the corporate level, and help companies identify effective ways 
to reduce greenhouse gas (GHG) emissions at the indivi dual product level.  Users of this new standard 
could account for emissions from 15 categories of Scope 3 activities.  Second, the "GHG Protocol Product Life Cycle Accounting and Reporting Sta ndard" would help understand the full life cycle 
emissions of a product and identify GHG reduction opportunities.     
3. Another interesting development was the c onclusion of the UK PAS 2050 review and the 
issuance of a new updated version thereof.  PAS 2050  had been the first carbon footprint standard to 
be published and developed by the British Standards Institute (BSI), the Department for Environment, 
Food & Rural Affairs (DEFRA) and the Carbon Trust in  2008.  The objectives of the review were to 
clarify any areas of ambiguity;  take account of ad vances in knowledge since its publication;  enhance 
the level of take-up and applica tion;  and align the methodology w ith other international standards 
being developed.  Key changes in the revised ve rsion included the following:  (i) provision for the 
development and application of sector specific rul es or "supplementary requirements" to recognize the 
benefits of greater specificity at a sector or pr oduct level and improve c onsistent application of 
PAS 2050 within those specific sectors and products ;  (ii) inclusion of GHG emissions from biogenic 
sources to be in line with the approach taken in  the GHG Protocol Product Standard and ISO 14067;  
(iii) greater clarity on the treatment of recyclable material;  (iv) broadening of the definition of land 
use beyond agriculture (e.g. industrial);  and (v) changes to the approach for determining emissions 
where there was limited traceability of products.  
4. Third, the representative of New Zealand explained that ISO 14067 was still under 
development and expected to be completed and p ublished by the end of 2013.  New Zealand had 
participated in all three of these international pr ocesses, providing technical input and expertise drawn 
from its domestic efforts to develop GHG foot printing methodologies for primary products.  
New Zealand continued to support the objective of de veloping international, scientifically robust and 
transparent standards in the area of carbon footprin ting.  Such international standards had to underpin 
any public or private sector standards or eco-l abels using carbon footprinting methodologies in order 
to minimise the potential for trade distortions.  WT/CTE/M/53 
 Page 3 
 
 
  5. The representative of the European Union su pported the usefulness of carbon accounting 
initiatives.  He noted that European citizens' intere st in climate change issues had rapidly increased 
and driven public and private efforts to provide information on carbon footprint.  The European Union 
was of the view that these initiatives had opened up new economic opportunities.  Moreover, it had 
started working on the development of a harmon ized European methodology for environmental 
footprinting in products and or ganizations, which was likely to also include GHG emissions.  The 
objective was to facilitate the assessment, benc hmarking and display of the environmental 
performance of products, services and companies.  This  work would be completed by the end of 2012. 
6. The representative of the Kingdom of Saudi Arabia  highlighted the concerns of his delegation 
on carbon footprinting standards and labelling schemes.  As indicated in previous meetings, such 
schemes could be used as disguised restrictions to trade and impose burdensome and costly 
requirements for developing country Members, th us impeding their access to important export 
markets.  An assessment of carbon footprinting based  on the basis of lifecycle was not appropriate as 
it would raise concerns in relation to processes and production methods (PPMs) and WTO rules.  Any 
environmental standards, including voluntary carbon f ootprinting schemes had to be consistent with 
relevant WTO rules, such as the Agreement on Technical Barriers to Trade (TBT).   
7. The representative of the Dominican Republic  recognized the importance of eco-labelling 
schemes to access new markets.  In face of great er consumer awareness of the production process of 
goods, it would be useful to favour a transparent a nd participative process in the development of new 
standards.  For this purpose, the Dominican Republic  was an active participant in the Global Organic 
Market Access (GOMA) project, led by the Food and Agriculture Organization (FAO), the 
United Nations Conference on Trade and Developm ent (UNCTAD) and the International Federation 
of Organic Agriculture Movements (IFOAM).  The Do minican Republic was of the view that it would 
be useful to receive information from UNCTAD on this topic.  She noted that even though the 
certification of organic products was voluntary, it was de facto  mandatory in order to access an 
exportation market.  There were also difficulties re garding the assessment of the carbon footprint of 
organic products, such as the absence of harmonization in calculation methodologies.  Furthermore, 
countries had to provide training to producers to  help them implement the methodology and it was 
necessary to contract external and specialized compan ies to carry out evaluations.    It was important 
to ensure that eco-labelling did not become a barrier to trade or be utilized for protectionist purposes. 
8. The representative of Argentina was of the view  that the focus of the discussion on carbon 
footprint schemes in the CTE should be on their consequences on market access, particularly for 
developing country Members.  Members who had shar ed their national experiences could also explain 
how their schemes contributed to sustainable de velopment and how potential negative impacts on 
exports of developing country Members could be avoided.   
9. Argentina raised a number of concerns in relati on to carbon footprint schemes.  First, the part 
of the lifecycle of the product that was taken in to account when measuring GHG emissions varied 
from scheme to scheme.  Second, carbon footprin t certificates were mostly being awarded to 
agricultural projects, fishing products and raw mate rials, which had a greater impact on developing 
countries.  Third, there was a lack of transparen cy in the development process of carbon footprint 
methodologies, greater participation of developing country Members needed to be ensured.  Fourth, 
the certification process for these schemes was a costly  and complex exercise, particularly for small 
and medium-sized enterprises (SMEs) in devel oping countries.  As ma ny developing country 
Members did not have national certificating agencies, most of them needed to contract the work out to 
foreign agencies, which added to the cost burden.  In  addition, often, certifica tion needed to take place 
in the importing country.  Fifth, certain initiatives related to climate change mitigation, such as food 
miles or "buy local" schemes, did not have a scientif ic basis.  Many studies had shown that foodstuffs 
produced locally, as compared to foodstuffs imported from geographically distant countries, did not WT/CTE/M/53 
Page 4  
 
  necessarily produce less GHG emissions.  In this re gard, carbon footprint could adversely affect 
countries that were geographically di stant from their main markets.   
10. In order to prevent  carbon labelling footprints from becoming a disguised restriction on trade, 
Argentina suggested that the development of car bon footprint methodologies be the result of a 
transparent process taking place in internationall y recognized institutions and ensuring the full 
participation of developing countries.  It was also important to harmonize at the international level the 
calculation of a carbon footprint, taking into account work carried out by international organizations, 
WTO Members and non-governmental organizations.  In  addition, such schemes had to be consistent 
with WTO rules and reflect the special and differential treatment (S&D) and the common but differentiated responsibility principles.  Finally, Argentina noted that developed country Members 
needed to transfer the necessary financial resour ces, technology and capacity-building to developing 
country Members to allow them to prepare their own carbon inventories, both at sectoral and national 
levels.   
11. The representative of India recalled that at th e last meeting of the CTE he had mentioned 
some of the difficulties related to the calculation of carbon footprint.  Carbon embedded in a product 
would be much higher if account was taken of the entire lifecycle of a product rather than focused 
only on the emissions generated during the production process.  India remained concerned about the 
development of these schemes and the effects on mark et access.  Furthermore, he noted that carbon 
footprint schemes raised the issue of PPMs and that WTO disciplines did not allow taxation on the basis of the manufacturing process.  In his view, it was difficult to argue that a product became 
"unlike", and therefore justify pref erential treatment, on the basis of different methods of production.  
For example, steel retained its physical characteris tics, regardless of the energy used to manufacture 
it, whether it was derived from nuclear power, coal or renewable energy.  Therefore, he questioned 
how it would be possible to make a distinction on the basis of PPMs, given that custom authorities 
assessed a product on the basis of its tariff classification, and not its manufacturing process.  
12. Difficulties with the issue of PPMs included th e following:  the conformity assessment of 
PPM-based standards could only be evaluated at the site of produc tion, which made this type of 
assessment an expensive exercise;  PPM-based regula tions compelled producers to use less efficient 
or costly technologies;  product distinctions on the basis of PPMs undercut the principle of comparative advantage; and if distinctions  based on environmental PPMs were accepted, 
discrimination between different products based on soci al considerations would also arise. Therefore, 
this type of PPMs adversely affected the market access opportunities of developing country Members.  
To conclude, the representative of India listed the following concerns with carbon footprint schemes:  
their proliferation;  the lack of transparency and the non-participation of stakeholders in their 
development;  the adverse effects on SMEs in deve loping country Members;  the cost of conformity 
assessment;  and the possibility of  using these schemes as a disguised restriction on international 
trade.     
13. The representative of Cuba reiterated its positi on that countries implementing carbon footprint 
initiatives were mostly developed country Members.   The main underlying problem continued to be 
the divergent methods used for calculating emissions  and the limited options for developing countries 
to fulfil the criteria set by these measures, thereby giving rise to de facto  technical barriers to trade.  
Discussions on this issue had already been broad-ra nging, both in the CTE and the TBT Committee.   
A whole range of difficulties had already been flagged by other Members, such as the lack of 
transparency, the complexity of the methodology,  and the lack of developing country Members' 
participation in the development process.  More over, the proliferation of carbon footprint labelling 
and measuring schemes made it difficult for deve loping country Members to access markets in 
developed country Members.  The products subj ect to these eco-labelli ng measures, such as 
agricultural products, were sometimes key export pr oducts for developing country Members.  Cuba 
reiterated their objection to the proliferation of priv ate standards that restricted the export capacity of  WT/CTE/M/53 
 Page 5 
 
 
  developing country Members.  Cuba considered it important to analyse the range of difficulties face 
by developing country Members and to elabor ate programmes to help address these difficulties. 
14. The representative of Mexico endorsed some of th e concerns raised by previous delegations.  
Mexico was concerned that these measures become disguised restrictions on international trade and 
have an impact on producers from developing country  Members.  Mexico was also concerned with 
the methodologies used for determining the carbon footprint and their lack of transparency. 
15. The representative of the United States reiterated the interest of her delegation in discussing 
carbon footprint labelling, in particular since some governments were considering implementing 
mandatory carbon footprinting measures.  From th e United States' perspective, these governments' 
mandatory measures were the only kind that would stri ctly fit under the mandate of Paragraph 32(i) of 
the Doha Ministerial Declaration (DMD) since, in  the WTO, environmental measures were generally 
understood to not include voluntary private standards.   Thus, she suggested having a more coherent 
discussion that would involve the broader set of concerns that Members had been raising.   
16. The representative of South Africa noted that  even where eco-labelling schemes presented 
opportunities for producers and exporters of first m ove advantage, they also presented significant 
barriers to trade for SMEs in exporting developing country Members.  Moreover, the implementation 
of eco-labelling schemes had a compliance cost on producing industries.  South African producers and exporters also experienced specific difficulties related to the multiplicity of carbon footprint 
methodologies as well as the non-uniform assessmen t of the same carbon footprint of their other 
exports.  Hence, South Africa was concerned with  the use of these measures, which could hinder 
market access for developing country Member s and their legitimate growth strategies.   
17. The representative of the International Trade Center (ITC) informed the CTE on its Trade, 
Climate Change and Environment Programme (TCC EP), funded by the Government of Denmark.  
The objective was to strengthen the competitiveness  of developing countries in environmental 
markets and to overcome barriers that might resu lt from environment-related standards. The TCCEP 
provided capacity building support for export development in sustainability markets and the 
publication of market studies and analysis.  Currently , work was carried out in the fields of organic 
agriculture, natural products, climate change, and ille gal trade in wildlife.  In relation to climate 
change, the TCCEP assisted SMEs and trade su pport institutions in developing countries in 
understanding new market requirements on carbon produc t standards.  ITC was finalizing a guide on 
product carbon footprinting standards to assist exporte rs and make it easier for them to understand the 
processes, improve their environmental performan ce and ultimately reduce the costs for their 
business. The Guide presented a typology of pr oduct carbon footprinting (PCF) schemes, including 
examples of international, public and private initia tives;  the steps involved in calculating PCF;  key 
methodological aspects;  issues particularly important  for developing countries;  and an overview of 
potential mitigation measures.  The TCCEP had scheduled a workshop on the subject in 
December 2011 in Kenya with a particular focus on mitigation and the East African agricultural 
sector.  Finally, she informed the CTE on an IT C initiative on sustainability standards, called 
"Standards Map".2  With funding from Germany and Switzer land, ITC had built an online database 
drawing together information on a wide range of su stainability standards, including those in relation 
to climate change.  The database was available free of charge to users from developing countries.   
18. The representative of the International Organi zation for Standardization (ISO) expressed the 
view that it was appropriate to develop a good aut horitative international standard and that it was 
important that developing countries had the oppor tunity to participate in the elaboration of 
methodologies.  ISO informed the CTE that the development of ISO 14067 was progressing well in 
                                                      
2 See http://www.standardsmap.org/en/   WT/CTE/M/53 
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  spite of being a very contentious subject.  ISO expe cted to publish an international standard by the 
end of 2012, and encouraged developi ng countries to get involved.    
19. The representative of United Nations Envi ronmental Programme (UNEP) brought to the 
attention of the CTE some recent activities.  Sh e announced the release of the UNEP report entitled 
"Towards a Green Economy: Pathways to Sustaina ble Development and Poverty Eradication", which 
focused on specific economic sectors and their green economy potential (i.e. forestry, fisheries, 
agriculture, water, cities, transport, waste, manufac turing, building, tourism and renewable energy).  
The role of international trade in transitioning  to a green economy was addressed in the enabling 
conditions chapter of that report.3  She also informed the Committe e of the joint report by UNCTAD, 
the United Nations Department of  Economic and Social Affairs (U NDESA), and UNEP, entitled "The 
Transition to a Green Economy: Benefits, Challe nges and Risks from a Sustainable Development 
Perspective".  The report, prepared by a panel of independent experts offere d a range of perspectives 
on macroeconomic policy, trade, investment a nd technology issues, and assessed the challenges, 
opportunities and risks for developing countries in the context of green economy.4  UNEP had also 
collaborated with UNCTAD and the German Agen cy for International Co-operation (GIZ) on a 
Biotrade and Green Economy Initiative, organizing a biotrade week in June 2011 in Kathmandu 
(Nepal), a three-country project active in Nepal, Peru and Namibia.5  Finally, UNEP was involved in 
organizing side events in the Rio+20 regional pr eparatory processes.  The objective of these events 
was to provide a multi-stakeholder platform for discussing the region-specific concerns and 
opportunities related to trade and green economy.6   
20. The representative of the European Union emph asized two important elements that were 
brought up by the representative of the Dominican Republic, namely transparency and assistance.  
The European Union encouraged exchanges in the CTE and other forums to promote transparency 
and raise public awareness.  As for technical assist ance, the European Union was pleased to hear from 
some of the observers - notably ITC - that techni cal assistance was already being provided and that 
new projects funded by donors were being developed.  The European Union suggested pursuing and 
supporting further these processes. 
2. Second part of Paragraph 32(i) on "Sectoral Analysis" (win-win-win) 
21. The Chair recalled that the debate in the CTE on situations in which the elimination or 
reduction of trade restrictions and distortions woul d benefit trade, the environment and development 
("win-win-win" situations) focused on topics, such as, inter alia , energy, forestry, agriculture and 
fishery subsidies.  She invited Members to shar e their national experience in this regard.   
22. The representative of Australia reminded the C TE that the United Nations General Assembly 
had declared 2011 to be the International Year of Forests with a view to raising awareness on 
sustainable management, conservation and sustainable development of all types of forests.  Australia 
had committed to promoting sustainable forestry in itiatives and to keeping up with the goals of the 
International Year of Forests.  The Australian G overnment had undertaken steps to address the global 
problem of illegal logging and had prepared legislati on – the Illegal Logging Prohibition Bill – to be 
introduced into the Australian Parliament by the e nd of 2011.  This initiative would assist Australia in 
its endeavours to promote global trad e in legally logged products.   
                                                      
3 See http://www.unep.org/greeneconomy/  
4 See http://www.uncsd2012.org/rio20/content/ documents/Green%20Economy_full%20report.pdf  
5 See http://www.unep.org/greeneconomy/AdvisorySe rvices/CapacityBuildingforBiotradeinNepal/ta  
bid/56094/Default.aspx  
6 See http://ictsd.org/i/events/dialogues/116096/   WT/CTE/M/53 
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  23. Illegal logging was recognised as a significant global problem due to its impact on forest 
degradation, climate change, and loss of habitat and community livelihoods in developing timber-
producing countries.  The global economic cost of illegal logging was estimated at US$46 billion a 
year approximately, whilst global social and envi ronmental costs were estimated to be close to 
US$60.5 billion per year.7  Australia imported approximately A$4.4 billion of timber products per 
annum (excluding furniture), or 0.034 per cent of  global production.  Around A$400 million of these 
imports were suspected to be illegally logged timber. 
24. In 2007, Australia's government committed to work with regional governments and industry 
to:  build capacity within regional governments to  prevent illegal harvesting;  develop and support 
certification schemes for timber and timber products sold in Australia;  identify illegally logged 
timber and restrict its import into Australia;  and re quire disclosure at point of sale of species, country 
of origin and any certification.  During Australia 's 2010 election, the government had announced that 
it would implement new legislation to restrict the im portation of illegally logged timber products into 
Australia.  The illegal logging legislation would requ ire a due diligence test to be undertaken on all 
timber products, both imported and domestically sourced, entering the Australian market.   
25. In March 2011, the Minister for Agriculture, Fi sheries and Forestry had referred an exposure 
draft and explanatory memorandum of the Ille gal Logging Prohibition Bill 2011 to the Senate 
Standing Committee on Rural Affairs and Transport for public inquiry.  The Senate Committee had 
released its report in June 2011 outlining a number  of recommendations for amending the Bill.  The 
recommendations included simplifying the administra tion requirements of the Bill relating to industry 
in order to reduce complexity and associated complian ce costs;  a declaration of the legality of timber 
products requirement at the border, and additional a uditing, reporting and publishing requirements.  
The Senate Committee report had also recommended that the government take steps to align the 
legislation with measures being implemented by the United States and the European Union.  Following its revision, the Australian Government  intended to introduce the Illegal Logging 
Prohibition Bill to the parliament in 2011.  
26. With the introduction of measures from consumer  countries (i.e. Australia, the United States 
and the European Union) for legally verified  timber products, producer and value added export 
countries were increasingly responding to new mark et requirements, which would ultimately require 
improvements in the assurance of legality system s.  Robust and transparent timber legality 
verification systems, or a range of other mechanis ms, were expected to contribute to a reduction in 
illegal logging, a major driver of deforestati on.  Reducing illegal logging also required the 
improvement of forest governance including, for est law enforcement, land tenure and ownership, 
forestry decision support systems, forest asset valu ation, licensing and sustainable forest management, 
among others.  Australia would con tinue its bilateral cooperation with  its Asia Pacific neighbours as 
part of its multi-faceted approach to combat illegal logging and promote trade in legally logged timber 
products.  Australia had signed bila teral agreements with China, Indonesia and Papua New Guinea to 
include cooperation arrangements for combating illegal logging and promoting sustainable forest 
management.  Australia would continue to collabor ate with other countries in its region to promote 
legal and sustainable forest management in support of its legislation.  Australia welcomed the recent 
process led by the United States and Indonesia to establish the Asia-Pacific Economic Cooperation (APEC) Experts Group on Illegal Logging and Associat ed Trade, which would enhance the efforts of 
member economies to take concrete steps to comb at illegal logging and associated trade;  promote 
trade in legally harvested forest products;  and support capacity building activities in member 
economies.   
27. Australia also welcomed the opportunity to work  with other countries in multilateral forums 
that focused on forest-related objectives in order to promote legal and sustainable forest management 
                                                      
7 http://www.thecie.com.au/conte nt/news/Illegal_logging.pdf    WT/CTE/M/53 
Page 8  
 
  and associated trade, including the United Nations  Forum on Forests, the FAO and its Asia Pacific 
Forestry Commission, and the International Tropical Timber Organization.
8  Australia suggested that 
the WTO Secretariat invite representatives from these international organisations to brief the CTE on 
their activities associated with the In ternational Year of Forests at the next meeting.  Australia also 
offered to provide an update on developments con cerning its Illegal Logging Prohibition Bill after its 
passage through the Australian parliament.  
28. The representative of New Zealand shared some information on New Zealand's own 
experience in combating trade in illegally logged fo restry products.  In global terms, New Zealand 
was a small market for imported timber and wood products.  In the year ending March 2010, imports 
had represented only about 1 per cent of New Z ealand's sawn timber consumption (i.e. 38'000 m3).  
Studies estimated that approximately 13 per cent of imported sawn timber in New Zealand was of 
questionable legality, representing onl y 0.13 per cent of domestic consumption.  In the New Zealand 
context, kwila was the main species  of concern with regard to its legality.  As an extremely durable 
hard wood, kwila was mainly used in decking or imported as solid pre-fabricated outdoor furniture.  
Given the small size of its market, New Zeala nd sought to tailor an approach to illegal logging 
through a voluntary industry-led approach.  At the end of 2009, the New Zealand Government agreed 
on an illegal logging policy, which was a package of domestic, bilateral a nd multilateral actions.  
Domestic actions included supporting a voluntary indus try approach to verify legality in the first 
instance, and also included the possibility of linki ng with Australia's scheme to address illegal timber 
imports.  She clarified that work on this element of the package was pending, but progress on all other elements of the illegal logging policy had been made. 
29. Following consumer awareness raising activ ities in 2010, and protest action from 
environmental NGOs, New Zealand's major importers and retailers of tropical timber had voluntarily 
ceased importing and selling timber without third part y verification of legality since September 2011.  
This voluntary move by the New Zealand Imported Tropical Timber Group (NZITTG) was significant, as it accounted for over 80 per cent of the importation and sale of tropical timber on New 
Zealand's market.  This initiative had substantially reduced the risk that illegally logged timber would 
enter New Zealand.  As a major forestry exporter,  New Zealand had to expl ain how its comprehensive 
regulatory framework covering plan tation forestry provided assurance of the legality of its own 
forestry exports - necessary to satisfy importers' due diligence pr ocesses.  New Zealand forestry 
industry was working to develop clear and consis tent explanatory materials for this purpose. 
30. The representative of the United States welcom ed the information provided by Australia on 
promoting trade in legally logged products.  The United States supported national and international 
efforts to address problems with illegal logging and associated trade.  The United States was working 
cooperatively with other Members on this in th e APEC, as well as through bilateral channels. 
31. The representative of India requested further cl arification on due diligence tests.  India 
explained that small scale exporters  bought goods from the open market  that would have undergone a 
number of changes before entering the market.  He wondered whether and how a merchant exporter 
could have a certificate stating that the exported wood had not been illegally logged.  He requested 
further light on how exporters would meet these re quirements, how Australian customs would carry 
out diligence tests on imported goods, and whether imports without a certificate would be prohibited. 
                                                      
8 http://www.daff.gov.au/for estry/international/fora    WT/CTE/M/53 
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  32. The representative of the European Union expressed his delegation's overall support for 
domestic policies addressing the problem of illegal loggi ng and related trade as this was an important 
environmental, as well as social and economic matter.   Illegal logging was a cause of deforestation, it 
deprived governments of revenues, and affected the livelihood and resources of forest communities.   
33. The European Union had an active policy in this area and supported the fight of illegal 
logging and associated trade th rough the so-called Forest La w Enforcement, Governance and 
Trade (FLEGT) Action Plan.  The European Union legal framework adopted in 2005 allowed for the 
control of timber entering the European Union fr om countries that took part in the bilateral 
FLEGT voluntary partnership agreements.  The European Union had signed or ratified such 
agreements with Ghana, Cameroon and Congo, and was in the process of signing such agreements 
with Liberia, Central African Republic and Indon esia, and carrying out negotiations with Malaysia, 
Viet Nam, Gabon and the Democratic Republic of the Congo.  A new timber regulation, adopted in 
October 2010, prohibited placing illegal timber and tim ber products on the internal market of the 
European Union.  The implementing regulation should be in place by June 2012.  The European Union representative also emphasized the need to push for international cooperation.  
34. The representative of the Philippi nes asked whether Australia's legislation would create new 
restrictions.  He was concerned that there could be  unintended impacts on legitimate exports.  He also 
questioned how this topic fitted in this part of the agenda of the CTE and how it related to the 
elimination or reduction of trad e restrictions and distortions. 
35. The representative of Saudi Arabia noted that he did not see how the issue raised would fit 
into discussions under the second part of paragraph 32(i) of the DMD on sectoral analysis. 
36. The representative of India questioned how Aust ralia's objective fitted into the debate under 
this agenda item.  While the issue raised would definitely benefit the environment, India wondered 
whether this would lead to trade and development bene fits and to a "triple-win" or rather to a "win-
loss" situation.  Due to monetary constraints,  small exporters in many countries would purchase 
directly from the open market and not from the source .  India requested further light on the acquisition 
of a certificate, requirements imposed by the impor ting country and on ways to address restrictions. 
37. The representative of Australia explained that Au stralia had brought this topic to the CTE's 
attention because it had not been discussed for some time and due to recent developments in their own 
political landscape.  In Australia's view, the proposed legislation promoted trade of legal timber rather 
than restricted illegal timber, which would bene fit trade, the environment and development.  
Discussions on illegal logging had taken place under Para graph 32(i) in the past.  She explained that 
the legislation was still in the process of developmen t and assured that further details on due diligence 
requirements and further requirements would be provi ded once the legislation was passed.  There was 
an Exposure Draft Bill published for public comme nt, industry and stakeholder involvement, which 
had gone into a Senate Standing Committee for enquiry (i.e. the Committee on Rural Affairs and 
Transport).  A number of reports as well as the Exposure Draft were publicly available.    
B. PARAGRAPH 32(II) (TRIPS) 
"The relevant provisions of the Agreemen t on Trade-Related Aspects of Intellectual 
Property Rights." 
38. No statements from delegations were  made under this agenda item.  WT/CTE/M/53 
Page 10  
 
  C. P
ARAGRAPH 32(III) (LABELLING ) 
"Labelling for Environmental Purposes" 
39. The Chair recalled that at the February 2010 me eting of the CTE, the representative of the 
European Union had suggested looking into ma rket opportunities that eco-labelling schemes could 
create and identify specifics of how producers and exporters could actually seize these opportunities.  
So far, four Members (New Zealand, Chile, Singap ore, and Chinese Taipei) had shared their domestic 
experiences with the CTE.  She noted that sever al other Members had put in place domestic eco-
labelling schemes and renewed the invitation to  Members to share their experiences with 
environment-related labelling schemes. 
40. The representative of Canada provided a br ief update on developmen ts in Canada in 
sustainable forest management certification.  Governments in Canada supported third party 
certification to demonstrate the rigour of Canada's fo rest management laws.  She drew the attention of 
the CTE to three standards currently used in Cana da: (i) the forest management standards of the 
Canadian Standards Association;  (ii) the For est Stewardship Council;  and (iii) the Sustainable 
Forestry Initiative.  She pointed out that dema nd for certified forest products had continued to 
increase globally, as purchasers were seeking to ensure the sustainability and legality of their supply.  
As a result, there had been an in crease in the development of sustai nable procurement policies in the 
public and private sectors.  Potential for trade restrictions existed where policies did not have 
internationally agreed criteria and indicators of sust ainability as their basis, and due to the lack of 
consistency and utilisation or appli cation of regional, national and in ternational standards.  As new 
forest-based products were introduced into the marketplace, consistency would become more 
important.  Canada offered to deli ver a presentation on this topic at a future meeting of the CTE if 
Members were interested in more information on  the potential impact of demands for forest 
certification on market access.  
41. The representative of Argentina pointed out th e difficulties of eco-labelling in relation to 
transparency, compliance and implementation, par ticularly for developing countries and SMEs.  
Three main issues had to be taken into account.  Fi rst, eco-labelling that had an impact on the market 
access of developing countries by creating requirements that were costly and difficult to implement needed to be avoided.  The development of sta ndards and labelling had to be consistent with the 
TBT Code of Good Practice (Annex 3 of the TBT Ag reement).  Second, the proliferation of eco-
labelling and private standards was worrying.  Alth ough voluntary, private standards were becoming a 
de facto  requirement for access to markets, limiti ng access of developing country products and 
undermining the role of states as regulators of in ternational trade.  Third, the wide diversity of 
labelling schemes was a problem.  As an example, in  the European Union, various national eco-labels 
existed in addition to European Union-wide eco-label s, which could lead to confusion and a lack of 
consumer confidence.  The multiplicity of labels requi red exporters to carry out a series of audits to 
ensure that all requirements were met.  Argentin a suggested that the development process of labelling 
schemes be broadened to include a ffected stakeholders and developi ng countries.  Labelling should be 
consistent with WTO rules, developed in a transp arent and inclusive way, scientifically based, have 
true environmental benefits, and ta ke into account the specificities of developing countries.       
42. The representative of India recalled that the European Union had proposed to focus a 
discussion on labelling issues on ways to use eco-labelling in favour of market access.  This would 
include discussions on various elements, including how  to enable developing country producers to 
qualify for eco-labels in export market s, to effectively participate in the international standardization 
process, and how to best ensure that government al eco-labelling schemes were developed in a non-
protectionist and non-discriminatory manner.  Some Members had requested the European Union to submit a written proposal for di scussion in the CTE.  India supported the sharing of national 
experiences and welcomed further presentations by Members.    WT/CTE/M/53 
 Page 11 
 
 
  43. The representative of the United States said that she had found past presentations on domestic 
eco-labelling schemes to be useful and informative and welcomed any updates that delegations chose 
to provide.  She noted that Members' interest in this agenda had receded over the years, which was 
partly due to the fact that eco-labelling was also  being discussed in the TBT Committee.        
44. The representative of South Africa recognized th at some Members' eco-labelling schemes 
could present opportunities for producers and exporters .  However, she noted that these also presented 
significant barriers to trade for many developing countries, specifically for SMEs in exporting developing countries, and could lead to the impos ition of compliance costs on producing industries.   
45. The representative of the European Union reca lled their position on the positive role of eco-
labelling in creating market opportunities while s upporting producers that took advantage of the 
demand for more sustainable product patterns.  The Eu ropean Union noted that very few countries, in 
particular developing countries, had introduced  governmental eco-labelling initiatives.  The 
European Union suggested that Members engage more  in the debate and shar e positive information on 
how different eco-labelling schemes could work in a complementary fashion in different countries, and how producers, particularly developing c ountry producers, could benefit from commercial 
opportunities.  The European Union hoped that other Members would present their experience and 
eventually envisage a stocktaking exercise.   
D. O
THER ITEMS ON THE CTE  AGENDA  
1. Item 1  
"The relationship between the provisions of the multilateral trading system and trade 
measures for environmental purposes, including those pursuant to multilateral environmental 
agreements." 
 
(a) Presentation by the Secretariat of the Convention on Biological Diversity 
46. The representative of the Convention on Biological Diversity (CBD) provided the CTE with 
an overview of the tenth meeting of the Conference of the Parties to the Convention (COP-10) and the 
fifth meeting of the Meeting of the Parties to the Cartagena Protocol on Biosafety. He started his 
presentation by briefly introducing the Strategic Plan  for Biodiversity 2011-2020 adopted at COP-10.  
The Strategic Plan was the overarching framework fo r all work on biodiversity to halt its loss and to 
ensure that eco-systems were resilient, provide d essential services, and linked to human wellbeing and 
poverty eradication.  The Plan contained five goals with a total of 20 so-called "Aichi Biodiversity 
Targets", some of which were relevant to trade.   The Nagoya-Kuala Lumpur Supplementary Protocol 
on Liability and Redress to the Cartagena Protocol  on Biosafety intended to contribute to the 
conservation and sustainable use of biodiversity by means of international rules and procedures.  To 
date, this Protocol had been signed by 36 Parties to the Cartagena Protocol on Biosafety.   
47. The representative of the CBD then turned to the Nagoya Protocol on Access to Genetic 
Resources and the Fair and Equitable Sharing of  Benefits Arising from their Utilization to the 
Convention on Biological Diversity (the "Nagoya Protocol").  On 8 November 2011, 66 Parties had 
signed the Protocol.  An intergovernmental comm ittee for the Nagoya Protocol had held its first 
meeting in June 2011 and woul d have its next meeting prior to COP-11 in April 2012. 
48. He explained that the Protocol aimed to provide a legal framework to articulate the "quid pro 
quo" that underpinned the access and benefit-shari ng provisions of the CBD, i.e. the provisions of 
access to genetic resources in exchange for provi ding a fair and equitable share of the benefits 
resulting from their utilization.  In addition, user s and providers had to reach an agreement on 
mutually agreed terms (MAT) on the fair and equitabl e sharing of benefits that may result from their WT/CTE/M/53 
Page 12  
 
  use.  The Protocol was adopted with a view to provide for legal certainty and transparency for 
providers and users.  It was important for providers to  the extent that it ensured the sharing of benefits 
once genetic resources left the provider country, an d prevented misappropriatio n of genetic resources 
and associated traditional knowledge.  For users, there was a need for legal certainty and transparency 
with regard to clear procedures for access to genetic resources.  Genetic resources covered by the 
Protocol were those within the scope of Article 15 of the CBD as well as the benefits arising from the 
utilization of such resources.  Access to genetic r esources was subject to the prior informed consent 
(PIC) of the provider country.  Provider comp anies were obliged to establish access measures 
providing legal certainty, clarity and transparency, and issue a permit or equivalent proving that 
PIC was obtained and MAT established.  Parties to the Protocol were obliged to take measures to 
ensure the sharing of benefits in a fair and equitable manner, subject to MAT.   
49. With regard to compliance, parties were obliged  to encourage users and providers to include 
provisions in the MAT to cover dispute resolution an d to take effective measures regarding access to 
justice and utilization of mechanisms on mutual rec ognition and enforcement.  Parties to the Protocol 
were obliged to take measures to monitor th e utilization of genetic resources, including the 
designation of effective checkpoints for the collec tion of information at any stage of research, 
development, innovation, pre-commercialization or  commercialization.  Once PIC and MAT were 
provided, a permit - the certificate of compliance - w ould be notified to a Clearing House Mechanism.  
A permit notified and made public constituted an international certificate of compliance.     
50. As indigenous and local communities had helped  preserve and maintain biodiversity over 
centuries, traditional knowledge related to biologi cal resources could be an important source of 
information for identifying new uses of genetic re sources.  The Protocol aimed to ensure that 
indigenous local communities obtained a fair and e quitable share of benefits from the use of their 
traditional knowledge.   
51. The Chair drew Members' attention to a briefing note prepared by the Secretariat of the 
United Nations Conference on Climate Change (U NFCCC) on the sessions of its Ad Hoc Working 
Groups held in Panama in October 2011 and the preparations for Durban.  The note had been 
circulated ahead of the CTE meeting in document WT/CTE/GEN/22. 
52. The representative of Singapore took note of the report by the UNFCCC on the state of play 
in climate change negotiations.  He considered it useful to be kept informed on discussions at the 
UNFCCC in view of the interface between the two sets of discussions.     
2. Item 3(a) 
"The relationship between the provisions of  the multilateral trading system and charges and 
taxes for environmental purposes."  
53. The representative of Australia informed Members on the very recent passage in the 
Australian Parliament of a landmar k environmental legislation, the Clean Energy Future Package.  
The Package comprised 18 Bills, which were passed by  the Lower House of Australia's Parliament on 
12 October 2011 and by the Upper House on 8 Nove mber 2011.  It represented an important 
economic reform underpinning a rapid scaling up of Australia's contribution to climate change 
mitigation and was a clear expression of the Au stralian Government's commitment to addressing 
climate change and meeting the targets agreed at Copenhagen and Cancún.  A key goal of the Clean 
Energy Future Package was the reduction by 80 pe r cent of Australia's carbon emissions by 2050 on 
2000 levels.  The Clean Energy Future Pack age would generate opportunities to reduce 
GHG emissions, promote the development and use of renewable energy, improve energy efficiency and encourage carbon storage in the farming sector.  The central reform was an economy wide price 
on carbon, with a carbon pricing mechanism applying to  up to 500 of Australia's largest emitters from  WT/CTE/M/53 
 Page 13 
 
 
  2012.  There would be a fixed price on carbon of $A23 per tonne of carbon dioxide equivalent from 
1 July 2012, with a transition to a market price from 2015. 
54. The Package included transitional assistance targ eted at companies that were high emitters 
but constrained in their capacity to pass through co sts.  The most emission-intensive activities would 
receive assistance to cover 94.5 per cent of industr y average carbon costs in the first year of the 
carbon price, with less emission-intensive activities to receive assistance to cover 66 per cent of 
industry average carbon costs.  Assistance would be reduced by 1.3 per cent each year to encourage 
industry to reduce emissions. 
55. A key priority under the Package was promoting the development of, and linking into, 
international emissions trading markets.  Aust ralia was canvassing opportunities for linking in with 
the New Zealand and European Union markets a nd would also look to engage with emerging 
emission trading schemes to encourage further credible linking opportunities.  The Australian Government viewed this strong domestic action as a part of Australia's global responsibility and 
continued to uphold the important principle of mutual supportiveness of trade and environment 
policies.  Australia remained committed to interna tional forums as key to climate change mitigation 
and would continue to take an  active role in promoting multilateral climate change responses.
9   
II. PARAGRAPH 33  
"We recognize the importance of technical assi stance and capacity building in the field of 
trade and environment to developing countries, in particular the least-developed among them.  
We also encourage that expertise and experience be shared with Members wishing to perform 
environmental reviews at the national level." 
56. There were no statements from de legations under this paragraph.  
III. PARAGRAPH 51  
"The Committee on Trade and Development and the Committee on Trade and Environment 
shall, within their respective mandates, each act as a forum to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the 
objective of having sustainable devel opment appropriately reflected." 
57. There were no statements from de legations under this paragraph.  
IV. OTHER BUSINESS 
58. The representative of Norway presented a white pa per prepared by the Norwegian Ministry of 
Foreign Affairs entitled "Towards greener developm ent: A coherent environmental and development 
policy" which examined the environmental and de velopment policy instruments that promote green 
development strategies.  Norway underlined the need to support access for developing countries to 
capital, expertise and technology to further sustai nable economic growth and implementation of green 
development strategies based on low emissions and su stainable development of natural resources.   
V. DATE OF NEXT MEETING 
59. The next meeting of the Committee was exp ected to be in the spring of 2012.  
__________  
                                                      
9 Further information on Australia's Clean Energy Future Packag e can be found at 
www.cleanenergyfuture.gov.au