WORLD TRADE  
ORGANIZATION  WT/CTE/GEN/8/Suppl.1 
5 October 2005 
 
 (05-4450) 
Committee on Trade and Environment  
  
 
ENVIRONMENTAL ISSUES RAISED IN  THE AGRICULTURE NEGOTIATIONS 
 
Statement by Mr. Frank Wolter
1 
 
Paragraph 51   
 
Supplement  
  A. N
EGOTIATIONS ON AGRICULTURE : MANDATE AND NEGOTIATING PROCESS  
 
1. The negotiations on agriculture were launche d in March 2000 in accordance with Article 20 
of the Agreement on Agriculture.  Article 20 mandat es negotiations to continue the reform process, 
taking into account, inter alia , non-trade concerns, special and differential treatment to developing 
country Members, the objective to establish a fair and market-oriented agricultural trading system, 
and the other objectives and concerns mentioned in the Preamble to the Agre ement.  The need to 
protect the environment is one of the non-trade concerns explicitly mentioned in the Preamble. 
 
2. The Doha Ministerial Declaration put the ne gotiations on a new footing.  Under the Doha 
mandate Members committed themselves to compre hensive negotiations "aimed at substantial 
improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions  in trade-distorting domestic support.   [...] Special and differential 
treatment for developing countries shall be an integr al part of all elements of the negotiations and 
shall be embodied in the Schedules of concessions and commitments and as appropriate in the rules 
and disciplines to be negotiated so as to be operati onally effective and to enable developing countries 
to effectively take account of their developm ent needs, including food security and rural 
development".  Furthermore, Mi nisters confirmed that non-trade concerns would be taken into 
account in the negotiations as provided for in the Agreement on Agriculture. 
 3. Throughout the agriculture negotiations,  e nvironmental issues have been discussed as a non-
trade concern.  Many Members have presented views and tabled proposals on this subject.  Essentially, the debate has not centred on the qu estion whether non-trade concerns such as the 
protection of the environment are legitimate policy ob jectives – this view is widely shared– but rather 
the debate has been centred around what the approp riate and effective instruments are, to achieve 
these objectives.  It may also be worthwhile notin g that in the context of the discussions on these 
matters, several developing countries have made th e point that their non-trade concerns are of a 
fundamentally different dimension th an those of developed countries. 
 
4. During the first two years of the nego tiations, March 2000 to March 2002, Members 
submitted to the Committee on Agriculture, either individually or as co-sponsors, various proposals 
outlining their aspirations for the negotiations, includ ing with respect environment related policies.  
These proposals were the subject of in-depth discussi on within the Committee.  Many of the non-trade 
concerns raised during this period, which include d those relating to environmental policies, were 
discussed in the context of possible modifications to  Annex 2 of the Agreement on Agriculture, the so 
                                                     
 
1 Director of the WTO Agriculture and Commodities Division. WT/CTE/GEN/8/Suppl.1 
Page 2  
 
 called 'Green Box', and Article 6.2 which provi des for developing countries, exemptions from 
reduction commitments for certain programmes.   5. During the period from March 2002 and the orig inal deadline for an agreement on modalities, 
31 March 2003 as mandated by the Doha Declaration,  these proposals and others like them covering 
all issues raised under the agriculture negotiations, were continuously narrowe d down and refined.  A 
survey of the specific proposals di scussed over this period is contained in the Overview Paper on the 
negotiations (TN/AG/6).    6. The failure to agree on modalities by th e original deadline and the pending Cancun 
Ministerial Conference saw a change on negotiating structure.  Rather than seeking an agreement on 
precise modalities in a single step, Members decided to  work through an intermediary stage and began 
negotiating the basis of a 'framework'.  The inte ntion of the framework was to provide further 
precision to the Doha mandate and a basis for the negotiation of full modalities.  This meant that 
negotiators took a step back from some of the fi ner details of the negotiations and focused their 
attention on reaching an agreement on key over-arching issues.  
 7. Though various issues, for example, non-trad e concerns, were no longer necessarily the main 
focus of discussions, they remained nonetheless firm ly on the table.  Furthermore, these issues 
remained important in how Members approached the negotiations and how they responded to new 
ideas and proposals.  As a result of the change in  negotiating focus, the nature of the discussions 
surrounding the Green Box, which, as I mentione d earlier encompassed many of the non-trade 
concerns that have been raised in the negotiati ons, went from specific textual changes to the Green 
Box to more general language regarding the need  for the Green Box to retain the fundamental 
principle that it be non, or at most, minimally trade distorting.  In the aftermath of the Cancun Ministerial Conference, the basis of the negotiati ng structure remained firmly on building for a 
framework agreement.   
 8. Eventually agreed at the end of July 2004, the Agreed Framework notes that non-trade 
concerns, as referred to in the Doha Declaration w ill be taken into account in the negotiations.  With 
respect to the Green Box, Members agreed that the "Green Box criteri a will be reviewed and clarified 
with a view to ensuring that Green Box measures have no, or at most minimal, trade-distorting effects 
or effects on production.  Such a review and clarifi cation will need to ensure that the basic concepts, 
principles and effectiveness of the Green Box remain  and take due account of non-trade concerns".  
 9. Since the Framework was agreed, and in th e lead-up towards the Hong Kong Ministerial 
Conference, negotiators have begun to re-focus thei r attention towards resolving some of the more 
specific issues that remain on the negotiating table.  The aim of Hong Kong is, of course, to agree on  
modalities.  B. E
NVIRONMENTAL IMPACT OF PROTECTION AND TRADE -DISTORTING SUPPORT IN 
AGRICULTURE  
 
10. In terms of the actual environment policy rela ted discussions, the role of protection and trade-
distorting support featured prominently.  Although many Members recognize that agricultural production can have both positive and negative eff ects on the environment, there are, however, 
different views about the environmental impact  of trade-distorting agricultural policies. 
 
11. A number of developed and developing Members have emphasized that trade and 
environmental protection are mutually reinforcing, and that reducing trade distortions improves the environment through its positive impact on resource u se.  In their view, protection and trade-distorting 
domestic support policies encourage environmentally harmful agricultural practices such as intensive 
farming, including high use of fertilizers and pest icides.  The result is resource degradation and  WT/CTE/GEN/8/Suppl.1 
 Page 3 
 
 
 environmental stress, such as adverse effects on the ground water, the soil and biodiversity.  
Furthermore these Members note that trade-distorti ng support, including export subsidies, can also 
have negative environmental effect s in third countries, particularly developing countries, because 
these measures drive down international prices and in crease their volatility.  As a result, returns from 
agriculture in developing countries are lower than otherwise, thus exacerbating poverty and making it 
even more difficult for farmers in these countries to  move towards environmentally more sustainable 
practices.  These Members have therefore advocated for a reduction in protection and trade-distorting 
agricultural support as a way of simultaneously ad vancing trade, development and environmental 
objectives.   
12. Other Members have highlighted the positive e nvironmental effects of agriculture, including 
land conservation, management of water resources,  preservation of biodiversity and habitats and 
maintaining the landscape.  In their view, a certa in level of trade-distorting domestic support is 
necessary to maintain agricultural production, especi ally in areas with low agricultural potential, and 
thus ensure provision of the positive environmental externalities.  These Members hold that for them 
to achieve their objectives regarding non-trade con cerns such as the protection of the environment, 
they also need an appropriate level of border protection as a flanking instrument.    C. S
PECIFIC POLICY PROPOSALS  
 
13. With respect to how Members believe environm ental policies should actually be dealt with in 
the negotiations and the Agreement on Agriculture , the discussions on non-trade concerns, including 
environmental concerns, have as I mentioned earlier, tended to fall under the domestic support 
umbrella, and specifically, the Green Box and Article 6. 2.  This should not come as any great surprise, 
as paragraph 12 of Annex 2 (the Green Box) allows  Members to provide direct (support) payments 
under environmental or conserva tion programmes that fulfil certain conditions, such as these 
payments being a part of a clearly-defined governme nt programme and are limited to the extra costs 
involved in complying with the programme.  Furt hermore, paragraph 2 of  Annex 2 also allows 
support for research in connection with envi ronmental programmes to be provided.  
 
14. Several specific proposals, which mainly date back to the pre-31 March 2003 modalities 
period of the negotiations as a result of the change  of negotiating structure mentioned earlier, have 
been made concerning environmental policies under pa ragraph 12 of Annex 2.  While some countries 
have proposed to keep paragraph 12 as is, others would like to fine-tune some of the wording to 
ensure that support provided under environmental programmes is not related to the volume of 
production.  Indeed these two particular argume nts have been raised in discussions since the 
Framework text was agreed.   
15. Another Member proposed that payments also be allowed to compensate for the provision of 
environmental benefits if these are clearly defined in national legislation.  There have also been 
proposals to include landscape payments or animal welfare payments in this chapter of the Green 
Box.  
 
16. Paragraph 13 of Annex 2 covers payments under regional assistance programmes.  One 
Members has proposed establishing criteria for defi ning a particular region as disadvantaged.  
According to this proposal, Members would be given flexibility to provide support to such regions to 
maintain and improve traditional production system s and the environment.  Other Members prefer 
maintaining paragraph 13 as is, or have proposed  changes not related to the environment. 
 
17. In addition to the existing provisions, one Member has proposed adding a new category of 
measures to be exempt from reduction commitments unde r the Green Box.  This category consists of 
payments to compensate for extra costs accruing fro m higher production standards.  Eligibility of such 
payments would be determined as part of a cl early-defined government programme designed to 
address non-producer concerns such as consumer and societal demands and be dependent on the 
fulfilment of specific conditions related to pro duction methods or input.  Although environmental WT/CTE/GEN/8/Suppl.1 
Page 4  
 
 standards are not specifically mentioned in this pr oposal, they would presumably be covered by such 
a paragraph.  Others are opposed to incl uding such an exception in the Green Box. 
 18. Although not specifically related to environmen tal policies, some Members have proposed to 
cap overall Green Box expenditures.  This would affect all types of support programmes available 
under Green Box support, including the ability to provide payments  under environmental 
programmes.  Others have called for such  a cap for developed countries only.   
 19. With respect to Article 6.2 of the Agre ement on Agriculture, which exempts developing 
countries from reduction commitments (which would otherwise be applicable) for certain domestic 
support measures, several proposal s to extend the list of such exempted measures, including a 
proposal to include support measures which are essential to encourage conservation measures in 
developing countries.  20. While much has been made of environmental concerns being raised and discussed within the 
context of the Green Box, some Members have also  linked the ability to protect the environment to 
further liberalisation of market access.  In this c ontext, some Members have noted that the existence 
of preferential market access has made available additional export earnings (which would not have 
otherwise been available) to preference receiving countries and thereby providing these countries with a greater level of income with which to help pr otect the environment.  On the other hand, some 
developing countries have noted that increased market  access, particularly for products of interest to 
developing countries, would not only provide developing countries with  the ability to increase income 
levels, but would also help to improve investment  levels, infrastructure and production processes.  All 
of this they argue would help to im prove and protect the environment.   
 21. Other countries have, however, noted that with  already low levels of market access protection 
and vulnerable agricultural sectors, further liberalisati on particularly at a rapid pace, would put further 
strain on their already fragile eco-systems.   D. C
ONCLUSION  
 22. Throughout the negotiations on agriculture, environmental issues have been part of the 
discussions on non-trade concerns. While Members gene rally share the view that  the protection of the 
environment is a legitimate policy objective, there continue to be differences in views about the 
appropriate instruments to achieve this objective.  A number of Members consider that targeted, 
transparent and non-, or no more than minimally, tr ade-distorting measures are the effective tools. 
Many of them see the reduction of trade-distorti ng support and border protection as having an overall  
positive effect on the environment. Some other Member s argue that they need trade-distorting support 
and border protection to achieve their non-trad e objectives, including the protection of the 
environment. There is, however, broad consensus th at the environmental-related provisions of the 
Green Box should be maintained.   
__________