RESTRICTEDWORLD TRADE
ORGANIZATIONTN/TE/R/2
25 July 2002
(02-3685)
Committee on Trade and Environment
Special Session
SUMMARY REPORT ON THE SECOND MEETING OF THE COMMITTEE
ON TRADE AND ENVIRONMENT SPECIAL SESSION
11-12 JUNE 2002
Note by the Secretariat1
1. The Special Session of the Committee on Trade and Environment (CTE) held its second
meeting on 11-12 June 2002 on the basis of the agenda set out in the convening airgram
(WTO/AIR/1806).  Ambassador Yolande Biké of the Republic of Gabon chaired the meeting.
I. ORGANIZATION OF WORK
A. ADOPTION OF THE RESULTS OF INFORMAL CONSULTATIONS (3 MAY 2002)
2. The CTE Special Session adopted the results of the informal consultations on Organization of
Work held on 3 May 2002.  On the phases of work , it was agreed that the work of the Special Session
would start with a preparatory period in which participants would examine the concepts contained in
paragraph 31 of the Doha Ministerial Declaration, and study the background documents prepared bythe Secretariat and submitted by participants.  It was decided that the Special Session would not
divide its work into rigid phases or set deadlines for them.  On the number  of meetings  to be held in
2002, it was agreed that Special Session would hold a total of four meetings, and that it would devote
its fourth to an Information Session with multilateral environmental agreements (MEAs).
3. On the phases of work, while the representative of the Philippines agreed with the decision
taken, he insisted that it would be important to develop guidelines for negotiations at the appropriate
time.  Such guidelines would ensure the appropriate pacing and sequencing of work in theSpecial Session, and would prevent unexpected issues from creeping into the negotiations.  It would
be important in those guidelines to establish cert ain principles for the negotiating process, such as
those of transparency, non-discrimination, special and differential treatment, and the effective
participation of developing countries (which would require technical assistance and capacity
building).  The limitations placed on the negotiations by paragraph 32 would also need to be takeninto account.  Such a model was used in the agricultural negotiations, and represented a useful
approach for the CTE Special Session to consider.
 B. PLANNING OF THE MEA INFORMATION SESSION
4. The CTE Special Session agreed that the MEA In formation Session to be held at its fourth
meeting be of a one-day duration, and be conducted in informal mode.  It was decided that the Session
would address paragraph 31(ii) of the Doha Ministerial Declaration, on "procedures for regular
information exchange between MEA secretariats and the relevant WTO Committees, and the criteria
                                                     
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/2
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for the granting of observer status," and that the possibility of holding another such Session in 2003
would be kept in mind.
5. It was decided that all 13 organizations which had previously participated in MEA
Information Sessions in the regular CTE would be invited, together with the United Nations
Environment Programme (UNEP).  This would be without prejudice to what participants consideredto be an "MEA".  The 13 organizations would include:
1. The Basel Convention on the Transboundary Movements of Hazardous Wastes
(Basel Convention);
2. the Convention on Biological Diversit y (CBD) and its Biosafety Protocol;
3. the Commission for the Conservation of Antarctic Marine Living Resources
(CCAMLR);
4. the Convention on International Trade in Endangered Species (CITES);
5. the International Commission for the Conservation of Atlantic Tunas (ICCAT);
6. the Intergovernmental Forum on Forests (IFF);
7. the International Tropical Timber Organization (ITTO);
8. the Montreal Protocol on Substances that Deplete the Ozone Layer
(Montreal Protocol);
9. the Rotterdam Convention on the Prior Informed Consent (PIC) Procedure for Certain
Hazardous Chemicals and Pesticides in International Trade;
10. the Stockholm Convention on Persistent Organic Pollutants (POPs);
11. the United Nations Convention on the Law of the Sea (UNCLOS);
12. the United Nations Framework Conventi on on Climate Change (UNFCCC); and
13. the United Nations Fish Stocks  Agreement (UN Fish Stocks).
6. The Information Session would revolve around presentations by these organizations, and
questions that participants would pose to them in the meeting.  It was suggested that not all
organizations needed to make individual presentati ons, but that other formats could be explored to
allow for an interactive meeting.  For instance, one delegation proposed that organizations which
addressed similar issues be asked to combine their presentations.
7. The Chairperson indicated that as soon as the Secretariat was able to find a suitable date for
this meeting, invitations to all 13 organizations and UNEP would be issued.
II. PARAGRAPH 31(I) – WTO RULES AND SPECIFIC TRADE OBLIGATIONS IN
MEAS
8. The Chairperson drew the attention of participants to the new documents circulated under this
item:  (1) document TN/TE/S/1 by the Secretariat, entitled  MEAs and WTO Rules; Proposals Made
in the CTE from 1995-2002 ; (2) document TN/TE/W/2 by Argentina; (3) document TN/TE/W/4 by
Switzerland; and (4) document TN/TE/W/7 by Australia.  She reminded participants that the
European Communities (EC) had also circulated a document under this item at the March meeting,
document TN/TE/W/1.  Argentina, Switzerland, and Australia presented their papers, and thefollowing discussion took place.
A. THE MANDATE
9. The representative of the United States (US) indicated that his delegation approached the
mandate from the premise that the WTO-MEA relationship was working well.  WTO rules did not
interfere with trade obligations among MEA Parties, and have not had a stifling effect on MEAnegotiators' willingness to include trade obligations in MEAs where deemed important for
environmental purposes.  For their part, MEA negotiators have generally sought to tailor their trade
provisions to meet particular environmental objectives, particularly among Parties, in a way that tookTN/TE/R/2
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account of WTO implications.  However, he acknowledged that, from a legal point of view, the
"MEA" aspect of a trade measure applied for environmental purposes was not necessarily a defining
one when it came to consistency with the WTO.  A party's national implementation of its international
obligations, including those in MEAs, could raise WTO issues when implementation was done in an
arbitrary or unjustifiably discriminatory way.  He asked participants to be mindful of what was not inthe scope of the mandate, and called for maintaining the integrity of both sets of legal instruments.
Specifically, participants had to be careful not to cr eate any reluctance on the part of countries to join
MEAs for fear that they would be simultaneously agreeing to forego their WTO rights.  He insisted
that, fundamentally there was no substitute for enhanced domestic coordination between MEA and
WTO policymakers and negotiators.
10. He argued that the mandate focused on a narrow, clear subset of the overall relationship
between MEA-related trade measures and WTO rules.  First, it refered to trade obligations, i.e. legallybinding commitments to take a particular trade action.  The mandate did not address trade measures
that were taken by a Party to an MEA where the MEA did not actually require such measures.
Second, it covered such obligations when they were se t forth in the MEA.  Thus, if Parties to an MEA
were to decide to take trade measures against a Party, but such decision was not actually in the MEA
in question (for example, it was in a decision of the Conference of the Parties), it would not becovered by the mandate.  Such a measure might also not be covered if, by virtue of its decision form,
it were not an "obligation." Third, the mandate covered trade obligations among Parties.  Thus, it
would include only those situations where Parties to an MEA agreed to bind themselves to take trade
measures vis-à-vis each other, not in relation to non-Parties. Fourth, the negotiating mandate
recognized that it was not the relationship between WTO rules and an "MEA" per se that was at issue,but rather the relationship between these rules and the STOs within such an MEA.  Fifth, the mandate
refered to "existing" WTO rules, rather than calling for  the elaboration of any new rules.  Finally, he
reminded delegations of the qualifications contained in paragraph 32 of the Declaration.
11. He believed the entire EC paper to be at odds with the Doha mandate.  The paper repeated
well-known EC views on the rela tionship between MEA-related trade measures and the WTO,
notwithstanding the decision by Ministers in Doha to only address a small subset of that relationship.
In fact, the Secretariat Note, TN/TE/S/1, demonstrated how the discussion had moved on in many
respects, and that many of the ideas discussed several years ago did not have the same relevance
today.  However, he acknowledged that a few important points had been made by the EC on the
important role that the WTO should play in achieving sustainable development, that governments
world-wide should be developing MEA positions with due consideration to WTO rules, and that there
were important alternatives to trade measures under MEAs (such as technical assistance and otherforms of cooperation).
12. The representative of India commented on the party/non-party issue, recalling that the
mandate was limited to the applicability of WTO rules among parties to an MEA.  Given that
amendments to MEAs were not always ratified by the original parties to the MEA, he believed that a
country which had not ratified an amendment had to be considered a non-party to thatamendment.   
13. The representative of Mexico underlined that it was important for international environmental
regimes to be based on consent rather than coercion.  Cooperation, transparency, and participation
were the most important tools required to achieve an environmental objective.  For Mexico, the
negotiating mandate was clear and precise.  It was logical, from a procedural point of view, to start byidentifying MEAs and the STOs they contained, and only then to proceed to a discussion of the results
of such an identification as suggested by Australia.  The mandate did not state that the WTO should
become an international legislative body defining what was or was not an MEA.  This went beyond
the competence of the WTO.  If, after the first two phases suggested by the Australian paper, the
Special Session found that it was necessary to de velop definitions, than that could be taken up.TN/TE/R/2
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However, the Special Session did not need to define MEAs to know that regional agreements would
not be covered.
14. The representative of Malaysia shared the Argentinian paper's understanding that
paragraph 31(i) addressed the relationship between WTO rules and STOs set out in MEAs.  It did not
address the relationship between WTO rules and MEAs in a general sense, nor did it address trademeasures taken pursuant to MEAs, or measures which could result from the implementation of such
agreements.  The mandate was limited to STOs set out in MEAs, and to the applicability of existing
WTO rules amongst parties to an MEA.  She argued that there was a need to examine STOs, MEAs,
and WTO rules.
15. The representative of New Zealand emphasized that the Special Session had a much narrower
mandate than the regular CTE on this issue.  He recalled that his delegation had accepted to have
broader discussion of the relationship between MEAs and WTO rules, but that the appropriate forumfor such discussion was the regular CTE.  He felt that the work of the Special Session would be
productive if the mandate were to be taken at its face value, accepting that it represented only part of
the potentially wider issue of MEAs and WTO rules.  Negotiations had to be conducted within the
confines of the mandate.
16. For the representative of Pakistan the Argentinian paper not only addressed the mandate
under paragraph 31(i), but went beyond it in addressing the implications for Members of attempts to
accommodate STOs in MEAs.  This aspect of the paper was clearly beyond the scope of the
negotiations.
17. The representative of Brazil shed light on the broader context within which his delegation
viewed the mandate.  He explained that since the Rio Earth Summit, Brazil had contributed to
enhancing awareness on environmental issues and the principle of common but differentiated
responsibility.  Brazil believed in the need to reconcile MEAs and WTO rules, and it was in this spirit
that it wished to promote greater compatability between the Convention on Biological Diversity
(CBD) and the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS).
However the mutual supportiveness between trade and the environment was not self-evident.  Forinstance, attempts to render MEA obligations automatically WTO-compatible could be
counterproductive by acting as a deterrent to the signing of an MEA.  Brazil recalled the Singapore
consensus position that "the WTO provided broad and valuable scope for trade measures to be applied
pursuant to MEAs in a WTO-consistent manner."  For Brazil, poverty alleviation was key, since
poverty was harmful for the environment.  Countries  needed more, rather than less, trade therefore.
The need to clarify the WTO-MEA relationship had to be confirmed.  To do so, there would be a need
to shed light on certain concepts contained in the mandate.  This could be done in a gradual manner,through a preparatory phase.  Problems would need to be identified, prior to solutions being devised.
18. The representative of Hong Kong, China be lieved the negotiating mandate before the
Special Session to be precise and clear, and subject to the numerous qualifications contained in both
paragraphs 31(i) and 32. The representative of Bolivia shared New Zealand and Argentina's views that
the mandate of the Special Session was different from that of the regular CTE, and together with the
representative of the Philippines expressed the concern that some participants were trying to stretch its
scope.
19. The representative of Canada noted that in addressing the WTO-MEA relationship, the WTO
could only address the trade side of the equation.  He argued that it would be inappropriate to put all
the burden of promoting a mutually supportive WTO-MEA relationship on international trade.Similar responsibilities belonged to the environm ental community, domestically and internationally.
The Doha Declaration provided a very specific negotiating mandate.  Some of the issues related to the
MEA-WTO relationship that had been discussed in r ecent years were outside the scope of what had
been agreed in Doha.  These could and should be addressed in the regular CTE.TN/TE/R/2
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20. The representative of Japan welcomed the EC paper, and enquired if the term "existing WTO
rules" used in the paragraph 31(i) mandate was understood by the EC to be limited to
GATT Article XX.
21. Responding to the concern of some delegations that the negotiating mandate was being
stretched, the representative of the EC explaine d that all WTO Members worked under the authority
of successive ministerial meetings, and that it was clear that results had to be produced which
respected the mandate.  However, he felt that there was a variety of different interpretations of that
mandate, as discussions in the Special Session had demonstrated.  He was confident, however, that
progress could be made, even if against different understandings of that mandate.
B. MULTILATERAL ENVIRONMENTAL AGREEMENTS
22. The representative of the US argued that that there was no need to define the term MEA,
since this would only be necessary if a generic solution was being contemplated to the
paragraph 31 (i) mandate.   His delegation was not convinced that there had been conflicts between
MEAs and WTO rules to require such an approach. The representative of Brazil stated that it was not
yet clear to his delegation if a definition of an MEA was required.
23. The representative of India agreed with the US, expressing his doubts about the utility of a
generic approach in defining an MEA.  He felt th at the criteria put forward in paragraph 13 of the
Argentinian paper could be problematic if a very specific definition of an MEA was attempted.  For
instance, he wondered how Argentina could argue that MEAs which had been "negotiated by more
than two parties" could at the same time be said to have "attained a certain degree of universality."
Furthermore, India disagreed with EC's argument that an MEA could be an agreement between at
least three parties.  He explained that the purpose of the negotiations was to promote a multilateraleffort to address transboundary or global environmental problems through international consensus.  It
was in this spirit that Members had launched these negotiations.  If MEAs were to be defined the way
the EC proposed, that would go against the objective of the negotiations.
24. The representative of Chile argued that experience showed that negotiations under the aegis
of the United Nations did not guarantee universality.  Furthermore, numerous regional environmental
problems existed that also required a solution.  Thus, Chile was of the view that there could be a
certain logic to the inclusion of regional agreements, for example, on fisheries under the term MEA.
An MEA should simply be considered "multilateral" if, amongst other elements, it was open to all
interested parties.
25. The representative of Indonesia commented on the EC's definition of an MEA, arguing that
given that the purpose of regional agreements was to address concerns specific to a particular region,
and not necessarily a global concern;  he needed clarification as to why the EC included them in itsdefinition.
26. The representative of Malaysia argued that the MEAs that the Special Session would examine
needed to be specified, since the Session was not looking at absolutely all environmental agreements.
The Session could then identify the STOs in the MEAs in question.  Moreover, Malaysia was of the
view that environmental agreements specific to a region or agreements that covered a particularspecies or product, which were not open to all, did not constitute an MEA.
27. The representative of Hong Kong, China shared the general thrust of the Argentinian paper's
interpretation of the term MEAs, subject to the qualification that Argentina would clarify what it
meant by MEAs attaining a "certain degree of universality."  While the Argentinian paper would be
an important reference document, he felt it unnecessary to enter into a protracted discussion to defineMEAs.TN/TE/R/2
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28. The representative of Korea believed that a common understanding of the mandate was a
critical starting point for discussions, particularly of the terms MEAs and STOs.  In Korea's view,
MEAs covered by paragraph 31(i) needed to have global status comparable to that of the WTO.  It
would be easier for participants to agree on MEAs with a global objective, than on ones which were
only relevant in a regional context.
29. The representative of Cuba stated that what was required to start work on paragraph 31(i) was
not so much a definition of the term MEA, but rather a list of the environmental agreements to be
taken into account in the negotiations.  By way of  preliminary comments, he suggested the following
criteria for the inclusion of MEAs on the list:  that they be agreements whose fundamental objective
was the protection of the environment pursuant to the chapeau and subparagraphs (b) and (g) of
GATT Article XX; and that they be open to any interested country.  He also found the elements
contained in paragraph 13 of the Argentinian paper useful, and agreed with some of them.
30. The representative of Japan first commented on the EC paper's definition of an MEA.  Japan
felt that the term "environment" used in paragraph 6 of the EC paper would need to be clarified by
referring to either GATT Article XX (b) or (g), Ar ticle 2.2 of the Agreement on Technical Barriers to
Trade (TBT), or panel reports.  With respect to the criterion of openness for non-parties, set out in
paragraph 7(c), Japan felt that that criterion had to be applied in a flexible manner to regional fisheriesagreements, taking into account the fact that Agenda 21 and the UN Convention on the Law of the
Sea recognized the importance of these agreements for the conservation and utilization of marine
living resources.
31. On the Argentinian paper, Japan argued that too strict an interpretation of certain terms in the
mandate could reduce the significance of the negotiations.  Since providing legal stability andpredictability was an important objective, he wonde red what the implications would be of limiting the
mandate to only those MEAs already "in force," as suggested by Argentina.  He inquired what the
Special Session would then do with those MEAs that had not entered into force, especially when their
texts already existed and were already signed by some countries.  The representative of Kenya asked
the same question, citing the examples of the Bi osafety Protocol and the Stockholm Convention on
Persistent Organic Pollutants.  Would the results of  the negotiations then apply to them, he wondered?
He felt it would be more reasonable to include in the negotiations all agreements that prescribed trade
measures, or which had trade goals.  The representative of the EC added that without prejudging what
the outcome of the negotiations would be on those MEAs that had not yet entered into force, it wasincumbent on the Special Session to provide an outcome that looked as far into the future as possible.
It therefore requested that MEAs which had not entered into force be at least kept as subject matter for
the Session's study and analysis.
32. The representative of Argentina explained that it was impossible to accommodate obligations
which did not yet exist or which had not entered into force.  Therefore, it could not agree with
Kenya's reading that paragraph 31(i) could incorporat e all MEAs.  In response to the comments about
the Argentinian paper's use of two seemingly contradictory terms, namely those of "multilateral" and
"universal", he clarified that multilateralism was a step towards universality.  An agreementnegotiated between more than two parties (and which was therefore multilateral) could attain
universality when its membership increased.  The agreements covered under 31(i) should be
multilateral and at least as universal as the WTO Ag reement itself.  With respect to Japan's comment
on Argentina's restrictive reading of the mandate, he argued that the mandate was the mandate and
could simply not be changed.
33. The representative of the EC explained that while a core list of universally acknowledged
MEAs existed, the EC could not risk closing off th at list.  He did not agree that MEAs had to be
agreements that had entered into force or which were universal; however, he shared the view that
MEAs had to be open during the negotiating process and after entry into force.  While negotiation
under UN auspices constituted a clear guarantee of MEA status, other open procedures sufficed.  HeTN/TE/R/2
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explained that it would be important to consider the extent to which environmental issues had to be a
predominant purpose for an MEA to qualify.  On the inclusion of regional agreements in what
constituted an MEA, he argued that while region, product, or species-specific agreements could exist,
they could still be of interest to all humanity.  He gave the example of the agreement to protect
Antarctica, which was a regional agreement that had been joined by some countries without flags inAntarctica.  Similarly, many countries that di d not produce tropical timber were members of the
International Tropical Timber Organization (ITTO).  Whereas it could be argued that the preservation
of the Antarctic and of tropical timber were not global concerns, his delegation's view was that their
preservation was of concern to the entire community of nations.  Thus, they should be kept within the
scope of the Special Session's work.
C. T
RADE MEASURES /SPECIFIC TRADE OBLIGATIONS
34. Commenting on the EC paper's definition of an STO, the representative of the US reiterated
the US position on what was not a STO:  a measure not explicitly provided for or mandatory under an
MEA, a measure not identified in the MEA but that parties could decide to implement, or a measure
not required in the MEA but which parties could decide to implement.  While these three categories,
which were identified in the EC paper, could and did arise, they were clearly not part of the Doha
mandate.
35. The representative of Chile contended that trade measures should be measures of last resort
for MEAs and that cooperation and technical assistance, as well as measures with no impact on trade,
should be the first options to be explored.  Chile felt that the term STOs played an important role in
the mandate, and it stressed the "enforceability" aspect of the term.  It believed that when
governments felt that trade measures were the best available tool to implement the environmentalobjectives of MEAs, they tended to give those measures greater legitimacy under the MEAs than
actions referred to by the EC as " obligations de  résultat ."  In other words, they tended to make them
mandatory.  It was known that countries exercised greater care in the negotiation of trade measures
when they knew that they would be under oblig ation to implement them.  This gave mandatory
measures special legitimacy which needed to be taken into account in these negotiations.  As a firststep towards defining STOs more accurately, the Secretariat Note WT/CTE/W/160/Rev.1, entitled
Matrix on Trade Measures Pursuant to Selected MEAs,  could be studied as suggested in the
Australian paper.
36. On STOs, the representative of EC stated that it was important to avoid a definition of trade
narrower than those issues which the WTO covered.  He indicated that specificity was going to be a
central linguistic and negotiating issue, which was important not to prejudge.  He recalled the
previous EC position which stated that the breadth of the result under this part of the DohaDevelopment Agenda (DDA) would bring benefits proportional to its coverage.  To assume a very
narrow result, or no result at all, would be damagi ng to the efforts needed across the board to achieve
DDA objectives.  Furthermore, he felt that negotiations on obligations in the abstract could lead to a
theoretical debate of the sort that all countries wished to avoid.  He believed that the mandate did not
limit the work of the Special Session to obligations contained in the text of MEAs, and did notpreclude obligations decided by Conferences of Par ties or contained in annexes or protocols to MEAs.
37. The representative of Malaysia argued that the Special Session needed to distinguish between
non-mandatory trade measures, and mandatory STOs.  STOs in MEAs identified as relevant in the
Special Session could then examined.  Relevant WTO rules would also need to be identified for STOs
to be studied against them.  Malaysia argued that an a priori assumption on the compatability betweenSTOs and WTO rules could not be made.
38. The representative of Pakistan reminded participants that the mandate from Doha called for
the identification of STOs, and an identification of MEAs only pursuant to such STOs.  He believed
that the word "specific" in the mandate was of considerable importance since the trade measuresTN/TE/R/2
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needed to be explicitly provided for in an MEA.  The mandate did not cover all MEAs which
contained any reference whatsoever to a trade measure.  Pakistan continued to believe that WTO
rules, especially GATT Article XX, were sufficient to cover trade measures under MEAs, provided
that they complied with the main principles of le ast-trade restrictiveness, and of not constituting a
means of arbitrary or unjustifiable discrimination between countries where the same conditionsprevailed, or were not applied in a manner that constituted a disguised restriction on international
trade.  Environmental discussions in WTO could be useful, provided that the sustainable development
context in those discussions was kept in mind.  De velopment was a critical component of sustainable
development, and the principles of common but differentiated responsibility and of special and
differential treatment had to be kept in mind.
39. The representatives of Singapore and Brazil
 agreed with the way in which STOs had been
defined in the Argentinian paper, sharing the view that they had to be mandatory.  Brazil added that
this corresponded to the first category of measures identified in the EC paper.  Brazil also shared
Argentina's concerns with respect to the creation of different categories of WTO Members if MEA
trade measures were to be accommodated in the WTO, which could create a disincentive to the
signing of MEAs.
40. The representatives of Hong Kong, China and India  agreed with the Argentinian paper that
the term STOs only covered "precisely identified obligations and legal duties related to export or
import measures." Measures not explicitly provided for, or which were not mandatory, were not
covered by it.
41. The representative of Canada called for a ll forms of WTO/UNEP/MEA cooperation to be
continued (described in WT/CTE/W/209).  He argued that a coherent relationship between the WTO
and current and future MEAs, would, in the long run, avoid undue recourse to trade measures to
address environmental issues, avoid constraints on the development of MEAs, and encourage
adherence to, and compliance with, MEAs.  This was an important objective since multilateral
solutions to environmental problems were the prefer red approach of WTO Members, as stated in the
CTE's Report to the Singapore Ministerial.
42. Canada believed that to take the negotiating mandate forward, there was a need to develop a
common understanding of the relationship between existing WTO rules and STOs set out in MEAs
among parties to the MEAs in question.  Canada was still at an early stage of its analysis of the scope
of paragraph 31(i), but its preliminary view was that "specificity" was key to the discussion.  It
viewed STOs as encompassing trade measures which MEAs explicitly stated had to be put into effect
by parties.  Conversely, it did not believe that trade measures designed by a party in pursuance of the
MEAs objectives fell within the scope of paragraph 31(i).  However, the precise line between thesetwo types of measures would need to be examined fu rther.  A preliminary review of the provisions in
existing MEAs, as described in the WTO document WT/CTE/W/160/Rev.1, suggested that different
MEAs had taken different approaches to operationalizing the concept of STOs.  Canada was of the
view that the general principles of international treaty interpretation would have a role to play in
improving understanding of the broader MEA-WTO relationship.
43. The representative of Korea argued that the cut-off point between specific and non-specific
STOs had to be established in a way that would enhance the predictability and stability of the
WTO-MEA relationship.
44. The representative of Japan commented on the term STOs as defined in the EC paper.
Referring to paragraph 25 of the paper, Japan argued that there was a need to recognize the difference
in legal implications between obligatory trade m easures and measures authorized by MEAs (i.e.
discretionary measures).  STOs had to fulfill the basic principles of the WTO, such as that of non-
discrimination, as well as the transparency requirements derived from the interpretation of the
Chapeau of GATT Article XX.  Referring to previous discussions on MEAs held in the regular CTE,TN/TE/R/2
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Japan felt that there would be no problem in considering MEA trade measures as WTO consistent, if
those measures were clearly specified and met certain procedural requirements in their
implementation so as to prevent their arbitrary use.  It would be difficult for trade measures which
were not explicitly provided for, nor mandatory under an MEA, to be automatically considered WTO-
consistent, since there were few safeguards to minimise the possibility of their arbitrary use.
45. In view of the importance of strengthening legal stability and predictability of the relationship
between specific trade measures in MEAs and WT O rules, Japan saw value in examining the WTO
consistency of trade measures set out in MEAs with a certain degree of specificity.  Such specific
trade measures could, for instance, coincide with those described in the second bullet of paragraph 25
of the EC paper.  Such STOs could be rebuttably presumed to be WTO consistent if they fulfilled
additional conditions, such as those necessity, proportionality and sufficient scientific evidence.
Regarding paragraph 29 of the EC paper, Japan was of the view that it would be more realistic toadopt an understanding or interpretative guideline on WTO rules in relation to STOs MEAs, than to
apply the principles of public international law, such as that of  lex specialis , since it could be difficult
to distinguish between general and specific bodies of law.
D. 
POTENTIAL OUTCOME
Argentinian Paper
46. The representative of the US believed that it was too soon to argue that a "normative solution"
was needed in the negotiations, as was suggested in the Argentinian paper.  With respect to the criteria
set out in Section IV of the paper, the representative of Singapore felt that it was important not to
prejudge the outcome of the negotiations.  He also felt it was too early to discuss Section VI.  Therepresentative of Malaysia felt that the three criteria of complementarity, derogation and conflict laid
out in the Argentinian paper could benefit from further discussion in the preparatory phase.  The
representative of Peru agreed with Argentina's assessment of the dangers associated with establishing
different categories of WTO Members, and argued that it was important not to prejudge the outcomeof negotiations.
Swiss Paper47. The representative of the Czech Republic indicated that, in being a party to the most
significant MEAs, his delegation supported the Swiss proposal.  However, a number of other
delegations were of the view that the proposal contained in the Swiss paper was premature, and that it
was important not to prejudge the outcome of the negotiations under 31(i).  They included the US,
Chile, New Zealand , Pakistan , Brazil , Singapore , Cuba , Canada  and Uruguay .  In particular, the US
argued that it would not be logical to rush towards negotiating a solution when a specific problem had
not yet been identified, Pakistan that an interpretative decision could also have the effect of stretching
the negotiating mandate, and New Zealand that it was too soon to conclude that dispute settlement
could not form part of a solution to the issues under negotiation.
48. While the representative of Chile argued that the solution proposed by Switzerland was
premature, he added that it was consistent with the Doha mandate in that it did not add to or diminish
the rights and obligations of Members.  He agreed with Switzerland that if a solution was trulynecessary, it should not be left up to Panels or the Appellate Body, and that it should not involve an
amendment to GATT Article XX for the reasons cite d by Switzerland.  Following Switzerland's logic,
he found it difficult to accept that a measure adopted in one forum be challenged in another, if care
had been taken in the negotiating the measure to ensure that it was truly necessary.  However, before
accepting the presumption of WTO conformity of trade measures taken under MEAs, as proposed bySwitzerland, Chile felt that the STOs to be covered by the presumption needed to be made absolutely
clear.  Chile felt that instead of the term "presu mption of conformity", Article XX language that said
that "nothing in this Agreement shall be construed to prevent the adoption or enforcement by anyTN/TE/R/2
Page 10
contracting party of measures … " should suffice.  However, Chile was of the view that irrespective
of the legitimacy or need for a trade measure in an MEA, its application should always be open to
challenge under the chapeau of Article XX in the WTO.  It enquired if Switzerland shared that view
since, while at some point the Swiss paper seemed to suggest that this view was indeed shared, it also
stated that Members would no longer have to demonstrate that their measures were covered by theexceptions of Article XX (b) and (g) (i.e. they would no longer have to show that the measures were
either necessary or arbitrarily discriminatory or protectionist).  The representative of Cuba shared the
view that the relationship between WTO rules and ME As should not be left to dispute settlement.
49. In response to the comments made, the representative of Switzerland explained that while a
number of delegations argued that the Swiss proposal was premature, it was important to discuss
concrete issues to arrive at concrete results.  Switzerland felt that there was no contradiction between
the presumption of conformity called for in paragraph 8 of its paper, and the principles it set out inparagraph 7.  Each legal system was competent on those activities falling within its mandate.  If an
MEA believed trade measures to be necessary to accomplish an environmental objective, then those
measures had to be benefit from a presumption of WTO conformity.
Other
50. The representative of Norway emphasized the need for greater national coordination between
trade and environmental policy makers.  He argued that it was not only desirable that governments
consider their WTO obligations when negotiating MEAs, but that WTO negotiators also had to take
MEAs into account when negotiating WTO rules.  While cooperation between WTO and MEA
Secretariats was helpful, national coordination was a must.
51. With respect to the cut-off point to be esta blished between specific and non-specific STOs,
Norway cautioned the Special Session against drawing such a line.  First, such an exercise fell within
the competence of MEAs and not of the WTO.  Norway questioned the value of a unilateral WTO
approach to issues outside its competence.   Attempting to define such obligations unilaterally would
complicate the negotiations.  Second, Norway asked participants to ask themselves what the
consequences of such a cut-off would be.  If a few measures were considered "specific" anddetermined to fall under the negotiating mandate, would the WTO begin to discriminate between
MEAs, he wondered?  Defining STOs could contribute to establishing a hierarchy between MEAs and
WTO rules.  This would create uncertainty that could undermine international environmental law,
leading to further unilateralism instead of multilateralism.
52. The EC paper argued that challenges between parties over STOs were highly unlikely from
both a political and legal point of view.  Norway supported this conclusion.  It had already been
agreed upon in Singapore.  It added that no conflicts between WTO rules and MEAs had arisen todate, even with respect to non-mandatory measures in MEAs.  Discussion of this issue, therefore, was
highly theoretical.  This did not mean that clarification was not needed to avoid potential conflicts,
especially with respect to the non-party issue.
53. The mandate, as it was formulated, focussed on WTO Members parties to an MEA.
However, if the negotiations were truly limited to parties, Norway wondered if the CTE was the
appropriate forum for this debate.  However, th e representative explained that Norway would be
reluctant to negotiate the relationship between WTO rules and MEAs which it was not a party to.
This could lead non-parties to MEAs to have undue influence over how measures in MEAs were
interpreted.  It could also prejudice the WTO rights of Members that were non-parties to the MEAs
being discussed.  In view of these considerations, Norway believed that the Singapore consensus was
all the more valid.  It provided useful principles for WTO Members on the WTO/MEA relationship.
54. The representative of Indonesia indicated that Members viewed MEAs and WTO rules as
being mutually supportive.  At Doha, Ministers reco gnized that safeguarding the multilateral tradingTN/TE/R/2
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system, protecting the environment, and promoting sustainable development were mutually
supportive objectives.  It was against this background that the paragraph 31 mandate was agreed, but
had to be conducted "without prejudging the outcome."  The negotiations before the Special Session
were difficult since Indonesia was of the view th at MEAs should not hamper the WTO's objective of
liberalizing trade.
55. For Indonesia, there was a need to first develop a common understanding of the mandate.
Careful consideration had to be given to the words "applicability of such existing WTO rules as
among parties to the MEAs" and to the term "STO."  As pointed out by Argentina, these words gave
the negotiating mandate greater precision.  It would be important for whatever solution that was to be
found under this item, not to open up the floodgate of trade obligations used among parties to an
MEA, or to enable Members to take environmental measures as disguised restrictions on trade.  While
trade measures could have a role to play in MEAs, for developing countries, capacity building,financial assistance, as well as technology transfer, were far more important in terms of facilitating the
implementation of an MEA.  It was also important to bear in mind that current WTO rules under the
General Exceptions have provided Members with the flexibility to pursue environmental objectives.
Whilst the outcome of negotiations could not reduce the flexibility available to WTO Members, it
could also not allow Members to take discriminatory trade measures.
56. The representative of Cuba indicated that he supported the main thrust of the EC paper, which
was to avoid the use of unilateral trade measures, and the use of environmental measures as disguised
restrictions on trade, but could not support the conclusion in the paper that STOs automatically be
considered to be WTO-consistent.
57. The representative of New Zealand indicated th at he preferred not to make an assumption at
this point that a monolithic solution would be required.  In previous discussions, New Zealand had
pointed to earlier proposals that could form part of  a multi-strand outcome, and the material contained in
document TN/TE/S/1 only reinforced the sense that such a possibility needed to be kept alive.
58. The representative of EC noted the agreement that the outcome of the negotiations should be
open, non-discriminatory, and should not add to or  diminish the rights of obligations of WTO
Members, but argued that different Members could have a different understanding of what the current
rights and obligations were.  He added that it would not be safe to assume that a "generic result" from
this mandate was ruled out, and it would be dangerous to voice the view that the absence of a
negotiated outcome would be what Ministers intended.  For this reason, the "status quo" approach in
Secretariat document TN/TE/S/1 was excluded.  All other approaches were theoretically possible,
although the EC would be averse to a complicated waiver approach, and would share the doubts of
others on the usefulness of changing GATT Article XX.  He drew attention to the proposal that hadbeen made by New Zealand (described in TN/TE/ S/1) on the creation of a voluntary consultative
mechanism, and indicated that in the lead up to the World Summit on Sustainable Development
(WSSD) many have been talking about the need fo r MEAs to build better consultation and dispute
settlement mechanisms within their own systems.  The Session's work, therefore, was not abstract but
related to concerns that went beyond the WTO system.
E. 
PROCEDURAL ISSUES
59. A number of participants expressed their support for the three-phased approach proposed by
Australia. In the first phase, the Special Session would identify the STOs in MEAs that needed to be
discussed, with Secretariat document WT/CTE/W/160/Rev.1 serving as a basis, as well as relevant
WTO rules.  In the second phase, an interactive process among participants would be conducted todetermine if implementation issues had arisen with respect to these STOs.  In the third phase, matters
arising from the first two phases would be addressed.  Participants which extended their support for
this approach included: the Philippines, Singapore
, Brazil , Thailand , Indonesia , Malaysia , Mexico ,
Chile, New Zealand , Canada , India , Hong Kong, China , Peru , Cuba , Egypt , Kenya , Uruguay , Bolivia ,TN/TE/R/2
Page 12
Korea, Pakistan , and Colombia .  The representative of the Philippines  indicated that while he
supported this approach, the reservations which he had earlier expressed on the phases of work would
need to be taken into account.
60. Moreover, while the representatives of Singapore, Brazil , Thailand , Indonesia , and Malaysia
supported the Australian approach, they argued that there was a need to examine certain concepts
contained in the mandate.  Singapore and Thailand suggested that the clarification of concepts could
proceed in tandem with the Australian approach, and saw the Argentinian paper as complementary.Mexico felt if a need arose during the course of work for the definition of certain concepts, the
Argentinian paper could be used as a basis.  Brazil stated that the MEA Information Session to be held
at the last meeting this year could be considered part of second phase suggested in the Australian
paper.
61. The representative of Chile proposed that the phases set out in the Australian paper be
accompanied by a flexible timetable to facilitate the work of the Special Session.
62. The representative of New Zealand felt that since the demandeurs for these negotiations saw
the issues, not as theoretical, but as real and substantive, the Special Session owed it to them to
provide an opportunity to establish more definitively the nature of the problem.  Only then could a
solution be negotiated.  The Australian proposal, and document WT/CTE/W/160/Rev.1, wouldprovide proponents with a framework to use in identifying those areas where the issues were most
real.
63. While the representative of Canada agreed with the Australian approach, on the issue of
information exchange, he was of the view that it would be preferable for MEA Secretariats to become
accredited observers in the CTE Special Session so that regular dialogue with them could take place.
64. The representative of the US welcomed the Australian paper's focus on discussing genuine,
rather than hypothetical, problems.  The representative of Japan indicated that the paper would need to
be examined in greater detail.
65. On Australia's suggestion of looking at whet her there had been problems between WTO rules
and MEAs, the representative of the EC stated that while the EC was prepared to do that, that was not
a limitation that the mandate imposed on the Special Session's work.  In other words, the Special
Session did not necessarily have to identify problems for negotiations under 31(i) to proceed.
However, the EC was not opposed to injecting into the debate the information that was available on
MEAs or on trade measures.  This was clearly part of the Special Session's work, but did not have to
cut off the submission of further papers on definitional issues or on the debate on principles and
parameters.  The work of the Special Session could proceed along several parallel tracks, and he
looked forward to doing so in successive meetings.  He concluded by congratulating the Chairpersonon the procedural achievement made on phases of work earlier in the meeting.
F. 
TECHNICAL ASSISTANCE AND CAPACITY BUILDING
66. A number of participants spoke about the need for technical assistance and capacity building
in the negotiations.  They included China, Kenya , Saudi Arabia , Argentina , India , the Philippines , and
Cuba.  More specifically, China  argued that as a new Member of WTO it was in need of assistance in
coming to grips with the complexities involved in the trade and environment negotiations.  Such
assistance would enable it to become a full participant in these negotiations.  Kenya explained that its
support for the phased approach suggested by Australia would require technical assistance at everystage.  It also argued that paragraph 33 of the Doha Ministerial Declaration could not be divorced
from paragraph 31.  Saudi Arabia explained that in the complex work that lay ahead before the
Special Session in identifying MEAs, and examining the implications of the negotiating mandate,
technical assistance would be required.  Argentina asked for technical assistance to identify the MEAsTN/TE/R/2
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that had entered into force, and those that were still under negotiation.  The representative
of Switzerland took note of the requests for technical assistance that were made, and believed that
paragraph 33 would provide an opportunity for this matter to be taken up, and that it should helpdelegations conduct paragraph 31 negotiations.
G. C
HAIRPERSON 'S CONCLUSION
67. The Chairperson thanked all participants for their contributions and a lively debate, and noted
that the Australian paper had received support fr om several delegations.  She looked forward to a
continuation of these discussions at the next meeting, and indicated that the Secretariat would update
document TN/TE/S/1 on a regular basis in a separate Note devoted to proposals tabled in the Special
Session.
III. PARAGRAPH 31(II) – INFORMATION EXCHANGE & CRITERIA FOR
OBSERVER STATUS
68. The Chairperson drew the attention of participants to the new documents circulated under this
item:  (1) document TN/TE/S/2 by the Secretariat, entitled  Existing Mechanisms for Cooperation and
Information Exchange Between UNEP/MEAs and the WTO ; and (2) document TN/TE/W/5 by the US.
The US presented its paper, and the following discussion took place.
A. C OOPERATION AND INFORMATION EXCHANGE
69. The representative of the EC agreed with the US on the usefulness of MEA Information
Sessions organized in the CTE.  It called on forthcoming Information Sessions stemming from the
negotiating mandate to be formalized and institutiona lized.  However, it was of the view that a yearly
meeting would not suffice.  These sessions had to be organized on the basis of well-determined terms
of reference, for example on the transfer of technology or technical assistance and capacity building.It also argued that it was important to initiate and strengthen the process of national coordination in
countries which did not have the technical capacity to ensure consistency and coherence.
Furthermore, it believed that the creation of a database and the organization of document production
could be useful.
70. The representatives of Indonesia, Thailand
 and Pakistan  also believed MEA Information
Sessions to have been very useful in the past.  Indonesia asked that they be regularized, and indicated
that much greater national coordination was taking place in Indonesia today.  Thailand also welcomed
all other proposals made in the US paper.
71. The representative of New Zealand welcomed the US paper, and in particular its reference to
the responsibility of national officials in ensuring compatibility between  WTO rules and rules
negotiated in other fora, and on the responsibility of national officials for implementing obligations in
a way that was consistent with other international obligations.  Discussions under 31(ii) were highly
relevant to the work of the Special Session in looking for practical responses  to 31(i).  New Zealand
appreciated that the proponents of negotiations on MEAs could be looking for something more
ambitious, but it was its strong hope that that would not stand in the way of accepting progress on
31(ii) as part of a solution to 31(i).  The representative of Japan supported US proposals made in parts
I and II of the paper, and shared the view that 31(ii) could indeed have a positive spillover on 31(i).
72. The representatives of Switzerland and Canada  agreed with the US on the importance of
national coordination.  Switzerland also shared the US views on the need for technical assistance for
developing countries to foster such coordination and regretted that UNEP had been unable to organize
a meeting back-to-back with the CTE this sessi on, since such meetings contributed to increased
coordination.  It believed Information Sessions and the promotion of documents exchange to beimportant instruments of cooperation, and could be organized on specific subjects.  Canada believedTN/TE/R/2
Page 14
that consideration should be given to institutio nalizing the information exchanges, and wished to
explore how to do this while maintaining a flexible structure that could be adapted to evolving needs.
It urged trade officials to increase their involvement in the World Summit on Sustainable
Development (WSSD) preparatory process where trade issues had arisen.  In the preparatory meetings
for the WSSD, few trade officials had participated.  The representative of China shared Canada's view
on the importance of national coordination, in particular in preparing for WSSD.
73. The representative of Mexico welcomed the US idea of institutionalizing MEA Information
Sessions.  With respect to the exchange of document s, it pointed to the rules recently approved by the
General Council on document derestriction, and argued that it was important to see this as a horizontal
matter.  It welcomed the US suggestion of addressing the capacity shortages in developing countries
on this front, but on a strictly voluntary basis.  Greater coordination was essential for coherent trade
and environmental policies to be devised.
74. The representative of Malaysia requested that the Special Session identify the WTO
Committees and MEAs that would be covered by th e mandate, the form of information exchange that
would be considered, and the way in which this exch ange could be regularized.  The Session needed to
start by examining existing practice and judging its e ffectiveness, prior to in stitutionalizing it.  While
CTE work required regular information exchange  with MEAs, other WTO bodies may not have to
pursue such exchange unless the need for it arose.   She wondered if other WTO Committees had in fact
had contact with MEA Secretariats.  On informati on exchange, many ideas had been suggested which
Malaysia needed to look at to see if a distinc tion could be drawn between information exchange and
cooperation more generally.  With respect to the US proposal on document derestriction, it pointed to
the same new General Council rules that Mexico me ntioned and wondered how the US proposal squared
with them.  Similarly, it wondere d how the derestriction proposed by  the US would protect document
confidentiality.  Malaysia explained that it was in  favour of MEA Informa tion Sessions but wished to
explore further the distinction between instituti onalizing and regularizing those sessions, and their
numbers.  The latter should depend on the specifics of  the situations at hand, and should not be
determined a priori.
75. The representative of Norway believed that existing cooperation between
UNEP/UNCTAD/MEAs/WTO was useful and should be enhanced.  Cooperation could take the form
of capacity building, expert workshops (such the UNEP seminar on fisheries), expert consultations on
issues relevant to the negotiations, increasing the environmental expertise of WTO and trade expertise
of MEAs, and cooperation between Secretariats and be tween elected officials.  It argued that MEA
Information Sessions in the WTO should also provide information on WTO policies in relevant areas.
Moreover, it called for cooperation at the national level to be enhanced.
76. The representative of Brazil emphasized that the mandate was limited to MEAs Secretariats
and appropriate  WTO Committees.  It made no refe rence to increased coordination between trade and
environment officials at the national level.  Even t hough this could be a desirable objective, it was the
primary responsibility of national governments to prom ote internal dialogue.  He viewed some of the
proposals in the US paper as extremely positive.  The regional seminars pointed out in the Secretariatdocument TN/TE/S/2, for instance, could indeed be regularized.  The representative of Chile also
argued that internal policy coherence was not for the WTO to decide, but had to be addressed bycountries themselves.  Moreover, the problem of lack of policy coherence was not only linked to
insufficient national coordination, but had to do with limited capacity.  On another note, while Chile
welcomed the MEA Information Sessions, it wondered if the US proposal on documents exchangecould reopen the rules recently agreed to in the WTO General Council, and establish different
categories of document users.  It called for the problem of document restriction to not be exaggerated
either, since few CTE Special Session documents were in fact restricted.TN/TE/R/2
Page 15
77. The representative of Kenya argued that MEA Information Sessions should address the issue
of capacity building which was critical for developing countries.  Information exchange should also
address the impact of MEAs and trade policy obligations at the national level.
78. The representative of Australia valued the cooperation processes developed to date and
documented by the Secretariat, and considered the US proposal to be a logical extension.  In
particular, he valued their suggestion for better two-way information flow between environment and
trade officials, not just Secretariat staff.  Joint technical activities that better informed environmental
activities would help to enhance domestic coherence.  On document exchange, he encouraged
Members to make their WTO documents available on an unrestricted basis, or to make them available
quickly if initially restricted.
79. The representative of Korea requested the US to clarify if it understood information exchange
between the WTO and UNEP and the WTO and MEAs to be the same, since various MEAs fell under
the auspices of UNEP.  The paragraph 31(ii) mandate, of course, only referred to MEAs.
80. The representative of the US responded to the comments made.  On national coordination, he
agreed with those delegations that stated that this was not part of the Doha mandate.  The US was not
making a proposal on national coordination, but on information exchange.  The US was simply trying
to provide a context for the negotiations.  In the past, cooperation and collaboration between MEA
Secretariats and WTO bodies helped provide an impetus for greater national coordination and the US
believed that more efforts in this regard could only increase coordination between national
environment and trade officials.  Second, several delegations had referred to examining the
effectiveness of existing mechanisms for inform ation exchange.  The US welcomed the suggestion
and asked if the WTO Secretariat could provide the Session with insight on how well the existingmechanisms were working.  The MEAs could also comment on this at the Information Session
planned for the end of the year.
81. The US indicated that it saw documents exchange as being part of the mandate.  The question
was raised as to how its proposal in this area would be consistent with the recent General Council
decision on the derestriction of documents.  The US saw the suggestions as being consistent since itwas not proposing the creation of a new category of  unrestricted documents, but of providing greater
access to existing restricted documents.  The US did not view the confidentiality of documents as
being a problem, since this was no different that the confidentiality of documents which Members and
existing observers already had to respect.
B. O
BSERVER STATUS
82. On observer status, a number of delegations explic itly stated that they saw the issue to be a
horizontal one, which had to be settled by either the General Council or the Trade NegotiationsCommittee (TNC).  They included:  the EC, Brazil
, Thailand , Mexico , Malaysia , Switzerland , Pakistan ,
and Cuba.  They added the following comments.
83. The representative of the EC stated that MEAs that had a direct interest in the work of certain
WTO bodies, such as the CTE, the TRIPS Council, the Committee on Trade and Development (CTD),
the Committee on Agriculture, the Services Council, the TBT Committee, and Committee on Sanitaryand Phytosanitary Measures (SPS), should be granted observer status.
84. The representatives of Brazil and Thailand 
argued that while it was important to involve MEAs
in the work of the CTE, a different standard coul d not be set for the CTE than for other WTO bodies.
85. The representative of Mexico commented on the US paper, saying that observers should obey
the basic criteria of being open to the entire WTO membership, and should have to demonstrate a
legitimate interest in the work of specific WTO Committees.  Thus, it enquired what the US meant byTN/TE/R/2
Page 16
stating that "other specific roles that relevant  MEAs could play in WTO proceedings" should be
considered, since precise criteria needed to be set.  The representative of Malaysia supported the
statements made by Brazil and Mexico.
86. The representative of Switzerland felt that the granting of observer status was a key
component of greater cooperation, and hoped that the question would be settled by the TNC as soon
as possible.  It recalled the views it had previously expressed on the need to identify the WTO bodies
which would benefit from such information exchange, which at least included:  the TBT, SPS and
Agriculture Committees, as well as the TRIPS and Services Councils.
87. The representative of Pakistan indicated th at progress on MEA observership in the CTE
Special Session would have to await progress made on 31(i).
88. The representative of Egypt supported paragraph 16 of the US paper's call for taking
"pertinent characteristic" into account in assessing requests for observer status.  Criteria for
observership should be objective, and should not al low for political considerations to enter into the
picture.  Such considerations were behind the impasse reached on the issue in the General Council.
Egypt believed the criteria should be flexible, and should allow for regional environmental
agreements.  This would ensure greater transparency.  The representative of Cuba supported Egypt's
comments, but added that a solution was needed at the TNC level.
89. The representative of Indonesia saw merit in having clear criteria for the granting of observer
status in the CTE.  The presence of interested MEA Secretariats in CTE meetings as observers could
facilitate the work of that body and enhance external transparency.  However, negotiations on this
issue had to be consistent with Annex 3 of document WT/L/161.  Furthermore, account had to be
taken of the work currently being conducted by the Chairman of the TNC on the matter.
90. The representative of Norway agreed that acc ount should be taken of ongoing discussions in
the TNC;  the Special Session had been specifical ly mandated to examine the issue.  He believed
simple criteria should be devised to govern the issue, such as: that the observer be an environmental
agreement or organization; that it be multilateral, although consideration should also be given to the
EC proposal of including regional product and species-specific agreements; and that it belong to theUNEP family, although others should also be considered.  MEAs with an interest in ongoing
negotiations also had to be included.  The representative of Kenya agreed with Norway.  The
representative of Chile supported Egypt's comments, and agreed with Norway that the CTE Special
Session had a very specific mandate in this regard.  It needed to establish criteria for observership not
only for the CTE but for all relevant WTO bodies.  The representative of Korea believed that the US
suggestion for the CTE Special Session to develop specific guidelines on observer status deservedconsideration.
91. The representative of Australia supported the US proposal for streamlining requests for MEA
observer status, and in giving consideration to th e role that MEAs could play in WTO proceedings.
The inclusion of MEAs as observers in the Special Session would significantly increase the
transparency and allay unnecessary concerns.  The representative of Japan supported all US proposals
in part III of the paper.
92. The representative of the US indicated that he was aware that this issue was being addressed
in two different fora, the TNC, with respect to WTO negotiating bodies, and the General Council,
with respect to WTO non-negotiating bodies.  The US proposal did not seek to prejudge the outcome
of their work.  The proposal specifically indicated that it was not a proposal on observership for
negotiating bodies, and that it was being made in the context of the existing framework ofGeneral Council procedures for observer status.  Instead, it sought to provide further guidance on this
existing framework.TN/TE/R/2
Page 17
C. CHAIRPERSON 'S CONCLUSION
93. The Chairperson welcomed the discussion which had taken place.  She hoped that it could be
taken further in future meetings, and that the MEA Information Session to be held at the end of the
year would contribute to it.
IV. PARAGRAPH 31(III) – ENVIRONMENTAL GOODS AND SERVICES
94. The Chairperson drew the attention of participants to the new document circulated under this
item: document TN/TE/W/6 by New Zealand on  Environmental Goods .  The representative of
New Zealand stated that while the paper, particularly its statistics, was more than three years old, it
continued to be valuable for the following reasons:  first, it contained a definition of environmentalgoods that a cross-section of WTO Members (those represented in the Asia Pacific Economic
Cooperation forum (APEC) at the time of its original drafting) had a reasonably high degree of
comfort with; and second, it contained detailed material on goods potentially covered by thesenegotiation.  New Zealand emphasized that its submission of this paper did not alter its earlier
position that the actual negotiations on environmental goods should place in the Market Access
Negotiating Group, and that the CTE Special Session should play a monitoring role.
95. The representative of Canada shared the understanding that the actual negotiations would be
conducted elsewhere, but that the CTE Special Session would monitor them.  He explained that it
was one of four economies (the others being Japan, Chinese Taipei and the US) that in 1997
nominated the environmental goods and services sector as a potential candidate for accelerated
trade liberalization (ATL) in response to a call from APEC trade Ministers.  Over the course of
1998 a series of technical expert meetings took place to elaborate the details of this trade
liberalization proposal.  The nominating APEC economies recognized the challenges in defining andclassifying these goods and services (including te chnologies) in a manner that would readily serve as
the basis for reaching agreement on trade liberalization.  For this exercise, APEC economies
utilized the Organization for Economic Cooperat ion and Development (OECD) definition of the
environment industry, which consisted of "activities which produced goods and services to
measure, prevent, limit or correct environmental damage to water, air, and soil, as well asproblems related to waste, noise and eco-systems.  Clean technologies, processes, products and
services which reduced environmental risk and minimized pollution and material use were also
considered part of the environment industry." Proceeding from this definition, APEC economies
identified, by their harmonized system (HS) codes, a list of goods to be covered under the agreement.
APEC developed a comprehensive listing of goods that had environmental application and in the
process considered and eliminated those that did not meet the criteria.  The resultant proposal was
presented and endorsed by APEC leaders at their annual meeting in Kuala Lumpur, inNovember 1998.  Canada believed that this work could provide a
 basis for the negotiations on
environmental goods that would be held in the Market Access Negotiating Group.
96. The representative of the EC indicated that while it did not rule out a definitional approach to
the environmental goods work, it did not think that it would be safe to rely exclusively on such an
approach.  Definitions did not have to be a precondition for work in this area.  Against thatbackground, it wondered if, as a starting-point for the negotiations,  participants could identify some
objective, or recognizable criteria, which would capture goods whose improved market access would
be positive not only for trade, but also for the environment.  However, the EC was open to other
suggestions on how attention could be paid to g oods whose increased trade could be environmentally
supportive (goods whose value chains and production characteristics were, for instance, sustainable).This approach would depend on countries that felt that they were producing in a particularly
sustainable way, saying, "let's look at sustainable teak garden benches", or "let's look at jute sacks" for
instance.  The EC also reminded delegations of the non-tariff aspect of the mandate, on which it was
eager for an ambitious approach.TN/TE/R/2
Page 18
97. The representative of Malaysia appreciated the work done by APEC, although in the wider
WTO forum it felt that its list of environmental goods could be interpreted differently.  It welcomed
the EC suggestion of the development of criteria, or even of definitional work.
98. The representative of India saw the New Zeala nd paper as a good starting-point for discussion
on this subject.  He indicated that the OECD had itself raised a number of issues that could be relevant
to a definition.  He recapitulated some of the concerns or difficulties which the OECD had itself
recognized.  First, the HS provided classification at only a six-digit level, while countries were
classification goods at eight, ten or more digits.  Identifying environmental goods on the basis of
six-digit HS product category codes, involved categorizing goods at higher levels of aggregation than
that which would have been required for those g oods to have their own distinct codes.  Second,
problems abounded in listing environmental goods.  The concern was the multiple use of products.
Many environmental products had multiple uses, several of which were not environmental.  Forinstance, the separation of harmful waste from an output stream required a centrifuge.  However, a
centrifuge could have a 10 per cent environmental use, but could be used 90 per cent of the time for
other purposes.  Third, the WTO had generally identified or classified goods according to their
physical characteristics.  In this discussion, products would have to be identified on the basis of end
use.  He was uncertain what the repercussions would be in the "like products" definition.  The issue ofprocess and production methods (PPMs) could also ar ise if products were to be classified based on
how they were produced.  Moreover some countries could use environmental goods simply because
they were cheaper, rather than more environmentally friendly, and he wondered how that would be
addressed.  Finally, he stated that clean technology could be relative, since clean technology in a less
technologically advanced country could become unclean technology in a more advanced economy.Therefore, technology considered environmentally friendly in one country could be considered
environmentally unfriendly in another.
99. The representative of Korea believed that the work of APEC was good starting-point for the
discussion.  The coverage of environmental goods had to be addressed, and had to be narrowed down
so that consensus by WTO Members could be reached.  Moreover, narrower product coverage couldfacilitate negotiations.
100. The representative of China agreed that the CTE Special Session would only play a
monitoring role on this issue, but called for an exchange of information between the
Negotiating Group on Market Access and the CTE Special Session.  China welcomed the
New Zealand paper, but indicated that it was still studying the concept of environmental goods.  It
asked for technical assistance in this field.
101. The representative of New Zealand stated that this preliminary discussion already highlighted
an area of potential concern; namely, that of how goods would be defined.  They could either be
defined based on product characteristics or on the basis of production criteria.  This ventured into the
realm of PPMs, a subject the CTE was all too familiar with.  He added that the issue of non-tariff
barriers would require further work.  With respect to environmental services, he indicated that the
paper flagged the material already circulated on the subject.
102. The Chairperson welcomed the debate and looked forward to its continuation at the next
meeting.
V. OTHER BUSINESS
103. The Chairperson drew the attention of participants to document TN/TE/W/3 by the EC on
Sustainability Impact Assessment (SIA) .  The representative of the EC explained that it did not wish to
present this paper, but simply wanted to draw the attention of participants to it.  While the paper was
partly circulated for information, it was also being circulated as an invitation for any experts,
governmental or academic, in WTO Member countries to contact those working on impact assessmentTN/TE/R/2
Page 19
issues in Europe.  The EC was conducting SIAs primarily because the WTO was in a negotiating
mode, although it was conscious that this was not a subject for negotiations.  A  number of
participants indicated that the CTE Special Session had not been the right forum in which to present
this paper.
104. The Chairperson requested delegations to reflect on their technical assistance needs in the
context of the negotiations, and concluded by thanking delegations for their participation.  She
indicated that the next meeting of the CTE Special Session would be held back-to-back with the
regular CTE, and would take place from 10-11 October 2002.
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