Environmental requirements of Cancún

Trade and environmental policy need to support each other

To my mind, the most important objective of the talks from an environmental viewpoint is to ensure that Multilateral Environmental Agreements (MEAs) and WTO rules are recognised as having equal status, as was confirmed by the outcome of talks at the World Summit on Sustainable Development in Johannesburg. That equality should be assured by a general acknowledgement – as expressed in an interpretative decision by the WTO member states – of specific trade measures in MEAs. In this way we will prevent environmental measures, such as bans on trade in certain animal and plant species, being undermined by trade rules. I do not see this as an end in itself; nor do I see it as a protectionist instrument. On the contrary, I see considerable uncertainties and risks for trade and environmental policy if we do not manage to clarify such matters between the WTO member states. That would leave us dependent on decisions within the jurisdiction of the WTO, which could challenge the democratically legitimised policy measures we take. No one could want that.

It needs to be made clear that multilateral environmental rules form as much an independent international policy regime as the rules governing trade. There must be no superordination and no subordination. Unlike the WTO, however, the environmental regime has so far been a very heterogeneous construct. A tight concentration of MEA secretariats under the umbrella of the UNEP could heighten the environmental side's assertive capacity. Such recognition would also be a positive signal for multilateral political solutions. Because of the difficulty of negotiating multilateral agreements there have recently been more attempts – in both trade and environmental policy – to reach bilateral and regional solutions. For global environmental problems, however, we need global solutions. So upgrading multilateral agreements in the world trade round would be a highly desirable move.

Giving equal status to environmental and trade regimes also means, I believe, extensively involving UNEP and the MEA secretariats in the world trade round. They need to be granted observer status and participatory rights. The first steps here have already been made. And I welcome that very much. In Cancún, however, the ad hoc participation that has been agreed should be turned into permanent participation. This could ensure that the expertise of these organisations is properly harnessed.

Environmental goods and services, environmental labelling

The talks on environmental goods and services are also very important. Here, our sights are set on a major reduction in customs tariffs and other trade restrictions. To this end, as many environmental goods as possible need to be brought into the negotiations to facilitate their worldwide distribution and provide incentives for the manufacture of such goods. This applies both to environmental technologies (e.g. exhaust gas treatment facilities) and resource-saving products (e.g. solar energy facilities, energy-saving appliances) and to products made by eco-friendly manufacturing methods (e.g. recycled products, products of organic farming). Dismantling trade barriers for these goods is very important, especially for Germany. Germany is the world's no. 2 exporter of environmental technology. So liberalisation in this sector could create jobs for the country. At the same time, it would make for the global distribution of modern environmental technology and eco-friendly products. But it will also open up new market opportunities for developing and threshold countries, e.g. through Fair Trade products.

Closely connected with environmental goods, of course, are environmental labels used to identify eco-friendly products. Environmental labels which meet certain criteria, such as those for compliance with ISO standard 14024, should be acknowledged in the world trade round as not constituting an impediment to trade. Consumer information is an important instrument of environmental policy with a comparatively minor impact on market activity. Acknowledgement of this instrument would give a boost to environmentally aware consumer behaviour worldwide. This applies particularly to internationally recognised labels like that of the Forest Stewardship Council (FSC) for wood from sustainable forestry. Such international labels – created in dialogue with all interest groups – are important for the achievement of global environmental objectives.

Dismantling environmentally harmful subsidies

Both from an environmental and economic policy viewpoint, extensive dismantling of environmentally harmful subsidies is important– especially in agriculture and fisheries. Only by substantially rolling back these subsidies can we make a credible case for our environmental demands in the WTO. Where wrong incentives due to subsidisation cease to be provided, environmental damage such as the extermination of plant species, over-fertilisation of land and excessive exploitation of fish stocks is prevented. Worsening over-fishing of the world's oceans is a global environmental problem which has become an existential economic problem for many less developed coastal regions. In fisheries – as in tourism – the close connection between an intact environment and economic interests is particularly apparent. To that extent, the talks on reducing fisheries subsidies – paying special attention to environmental aspects – are a valuable step in the direction of sustainable development.


The developing and threshold countries' interests

The Doha ministerial declaration places the needs and interests of the developing countries at the centre of the new world trade round. In my view, this was the most important outcome of the conference. As was acknowledged at Doha, there is a commitment to sustainable development, especially with regard to the interests of the less developed countries. These need to be involved in international trade on a fair and equal basis.

From the viewpoint of both environmental and development policy, it is very important to preserve national freedoms for the protection of rights to the use of living organisms and for the protection of biodiversity. What needs to be achieved is to ensure that a wide variety of plant species can continue to be grown and that this is not prevented by patent law restrictions. Traditional knowledge should continue to be available to those whose forefathers used it before them. So the negotiations pertaining to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) need to take account of small farmers' and indigenous peoples' interests in using traditional seed and protecting traditional knowledge.


Liberalisation in environmentally sensitive areas

Liberalisation of trade must not create a situation where supplies of vital goods are jeopardised or the promotion of environmental protection in Germany or other countries is undermined. This particularly needs to be borne in mind in the talks on services (GATS). Liberalisation agreements must not jeopardise the supply of vital, environmentally sensitive goods in developing countries. Unfortunately, there have been a number of negative examples of this in the past, e.g. with regard to drinking water supply. I am thinking here not only of high water prices – for example, in Cochabamba in Bolivia – but also of the relocation of water-intensive agricultural activities to areas where water is inexpensive. Flower growers must be prevented from taking so much out of a local hydrological cycle that a lake gets progressively smaller and freshwater for the community becomes scarce – as is the case, for example, at Lake Naivasha in Kenya. Another example, from a totally different area, is the clearance of mangroves which are put to diverse uses to make way for commercial shrimp farms on coasts. Ecuador is a case in point. For liberalisation here, crash barriers should be erected – controls to ensure sustainable development and supplies of vital commodities for all. At the same time, it must be guaranteed that the promotion of renewable energies can be continued.

Transparency is imperative

Transparency and participation need to be fundamental principles of the globalisation process. Civil society has to be involved in this process, so do the developing countries, especially the least developed ones. Only when the implications of trade liberalisation are revealed can preconceived ideas – especially in civil society – be corrected and chances of substantial co-determination for all negotiating parties be made possible.

For this reason, assessments of the impact of trade liberalisation measures on sustainable development still need to be made. They can show what positive and what negative effects liberalisation measures have on the environment.

The potential for such corrections can be very great. One case study conducted for UNEP, for example, showed astonishing expansion of fishing in Argentina: as a result of liberalisation; fishing off the Argentinian coast increased so sharply a few years ago that fish stocks in many coastal waters were wholly depleted – mainly by foreign fishing boats – within a short space of time. This is not just a problem from an ecological point of view. The economic damage done to coastal fisheries and the Argentinian economy as a whole was many times greater than the "economic benefit" reaped during the years of over-fishing. An assessment of future impact might have prevented what ensued.

Improved transparency also entails providing information for civil society and involving it more fully in WTO processes. This means furnishing up-to-the-minute information and granting opportunities for commenting on liberalisation negotiations and arbitration proceedings. Examples of this are already found at international level. Participatory procedures like the ones that have stood the test of time at the United Nations and the Commission on Sustainable Development (CSD), could serve as models for the WTO.


Goals for Cancún

The WTO ministerial conference in Cancún should show that both the industrialised world and the developing and threshold countries are serious about taking environmental, social and developmental aspects into account in the process of shaping globalisation. In the world trade round, a reasonable balance needs to be achieved between liberalisation measures and consideration for the goals of sustainable development.

On the environmental front, Cancún needs to give clear signals that trade and environmental negotiations are moving forward. The WTO talks need to advance beyond the phase of mandate interpretation – and progress needs to be visible.