RESTRICTED
WORLD TRADE WT/CTE/W/79/Corr.1*
12March 1998
ORGANIZATION(98-1013)
Original: English Committee onTrade andEnvironment
MARKET ACCESS IMPACT OFECO-LABELLING
REQUIREMENTS
Note bytheSecretariat
Corrigendum
Paragraphs 30-38 inDocument WT/CTE/W/79 aretobereplaced withthefollowing:
E. TheOrganization forEconomic Co-operation andDevelopment
30. Inastudy entitled Eco-Labelling: Actual Effects ofSelected Programmes, theOECD
examines themarket, trade andenvironmental effects ofaselection ofeco-labelling programmes
operating inOECD countries.11These include: theEuropean Union (EU)Eco-label Award Scheme,
theNordic Swan, theSwedish Environmental Choice Programme, theCanadian Environmental
Choice Programme, theGerman BlueAngel, theGreen SealoftheUnited States (US), theJapanese
Eco-Mark, andtheFrench Norme Française(NF) Environment.
31. Ontheleveloftransparency andconsultation involved inthedesign ofeco-labelling schemes,
thestudy states thatalloftheschemes which itreviewed contain mechanisms fortransparency and
consultation. However, itreaches thefollowing conclusion intheirregard:
Once product groups have been selected bythedecision-making body, representatives of
various interest groups generally participate intheexpert group responsible forthe
development oftheeco-label criteria. Thedraftcriteria arethenavailable forpublic review
before thefinalcriteria areadopted bythedecision-making body. Lack ofconsideration
given tocomments provided onthedraft criteria hasbeen asource ofcriticism.
Furthermore, decision-making onthefinaleco-label criteria isgenerally notopentooutside
participation. While noexamples ofovert discrimination havebeenfound inthecourse ofthis
study, forpractical reasons, access toinformation andparticipation incriteria development
willbemore difficult forforeign producers without adomestic presence.
32. Thestudy notes thatthemore significant themarket impact ofeco-labelling schemes, the
greater theirpotential trade effect. With respect tomarket impact itstates that:
./.
11OECD (1997), Eco-Labelling: Actual Effects ofSelected Programmes ,OCDE/GD (97)105,Paris. The
study isavailable attheWTO forconsultation.
*English only.WT/CTE/W/79/Corr.1
Page2
...inpractice, dataconcerning themarket impact ofeco-labelled products isverydifficult
toobtain. Itisoften confidential commercial information inthehands ofindustry. Some
scattered anecdotal evidence shows thatsales have increased when aneco-label hasbeen
obtained, butthereisnostatistical dataingeneral toshow themarket power aneco-label may
confer onaproduct. Producers however continue toapply forandpayforeco-labels,
indicating thattheyhavesome market value. Also, itisdifficult toseparate outthemarket
impact oftheeco-label from other factors which influence aproduct 'smarket share.
33. Thestudy argues thateco-labelling schemes havebeenmore successful incountries orregions
which benefit from ahigh level ofconsumer environmental awareness. Environmental non-
governmental organizations, consumer groups andthemedia havecontributed toincreasing consumer
awareness ofenvironmentally preferable products; and,"Incertain cases, eco-labels have hada
significant impact onthemarket forspecific product categories (e.g.detergents inSweden)." Italso
states thateco-labelled products which aresuccessful often cover more than30percentofthemarket
share inaproduct category. "Eco-labels thennolonger selectively identify asub-set ofproducts
which areenvironmentally preferable toother products inthesame product category, buttendto
become adefacto voluntary standard."
34. TheOECD states thatoverall, eco-labelling hasonlybeenmoderately successful withthe
individual consumer. However, eco-labels mayhaveimportant market impact when retailers specify
thattheywant topurchase eco-labelled products, orwhen theybecome atoolforidentifying
environmentally preferable products forgovernment procurement (asinCanada 'sEnvironmental
Choice andJapan'sEco-Mark) andinstitutional purchasing (aswith Green SealEnvironmental
Partners andtheCanadian Environmental Choice Programme).
35. Itnotes thatproducers have been motivated toobtain eco-labels duetothefearoflosing
market share toeco-labelled competing products. However, eco-labels havealsobeenconsidered by
manufacturers tobeavaluable tooltocommunicate theenvironmental qualities andquality image of
theirproducts andcompanies.
36. With respect totrade effects, theOECD states that"Information gathered during thecourse
ofthisstudy, recognising datalimitations, didnotreveal hardevidence ofchanges intrade flows
arising from theselected eco-labelling programmes. However, fearsandconcerns havebeenvoiced
astopotential effects." Italsonotes that:
Eco-labelling schemes raiseparticular trade concerns when theyinclude production-related
criteria. Such criteria candiscriminate against imports when theyreflect exclusively the
environmental conditions andpreferences oftheimporting country, andtheeffects canbe
particularly acute fordeveloping countries andcountries heavily dependent onexports.
37. However, inexamining which oftheschemes reviewed include production-related criteria,
itconcludes thatonlyalimited number ofeco-labels include requirements exclusively related tothe
environmental effects which occur during theproduction phase. Forinstance, thestudy states that
theBlue Angel does notdevelop eco-labels forproducts which arethesource ofenvironmental
damage during theproduction phase. Itaddsthat"Noeco-labels forproducts ofparticular export
interest todeveloping countries hadbeendeveloped bytheBlueAngel previously."
38. Tominimize thepotential trade effect ofeco-labels, theOECD notes thatequivalency and
mutual recognition havebeenrecognized asuseful concepts. Attempts atequivalency andmutual
recognition havealready beenmade between Canada 'sEnvironmental Choice Programme andGreen
SealoftheUS.
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