Trade, Environment and Development

1. UNCTAD Trade, Environment and Development Multilateral Environmental Agreements Module 5

2. Transboundary and global environmental problems (e.g. climate change, ozone depletion, loss of biodiversity) are of international concern Developing countries are vulnerable to the effects of such problems, even though they have not contributed significantly to them Addressing transboundary and global environmental problems requires international cooperation Background [1] TrainforTrade: Trade, Environment and Development

3. Adjustment costs have to be allocated between Parties on the basis of the principle of common but differentiated responsibilities (Principle 7 of the Rio Declaration). Multilateral environmental agreements (MEAs) are the preferred instrument Viet Nam can derive important benefits from participation in MEAs Viet Nam participates in all major MEAs Background [2] TrainforTrade: Trade, Environment and Development

4. There has been considerable debate on the policy instruments used to achieve the objectives of MEAs: The relationship between trade measures pursuant to MEAs and the provisions of the multilateral trading system The trade and economic effects of policy instruments used in MEAs Background [3] TrainforTrade: Trade, Environment and Development

5. To raise awareness of global environmental issues and multilateral approaches to address these problems To raise awareness of supportive instruments available under MEAs, such as finance, technology and capacity-building To promote domestic policy co-ordination To promote the effective participation in the further development of MEAs and the work of the Conferences of Parties (CoPs) Objectives of this module TrainforTrade: Trade, Environment and Development

6. Key MEAs: objectives and policy instuments used The role of trade measures and supportive measures The relationship between trade measures pursuant to MEAs and the provisions of the WTO UNCTAD/CBTF contribution and possible follow up Issues for discussion Structure of this presentation TrainforTrade: Trade, Environment and Development

7. Key MEAs: objectives and policy instruments TrainforTrade 2000: Trade, Environment and Development

8. The Convention on International Trade in Endangered Species of Wildlife and Flora (CITES) The Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and their Disposal The Montreal Protocol on Substances that Deplete the Ozone Layer (MP) The Convention on Biological Diversity (CBD) and the Cartagena Biosafety Protocol (CP) The UN Framework Convention on Climate Change (UNFCC) and its Kyoto Protocol Selected MEAs TrainforTrade: Trade, Environment and Development

9. Objectives: Protect wildlife against over-exploitation Prevent international trade from threatening species with extinction http://www.cites.org/index.html CITES (1973) TrainforTrade: Trade, Environment and Development

10. Appendix I includes all species threatened with extinction which are or may be affected by trade Trade is subject to particularly strict regulation Appendix II includes species that may become threatened with extinction unless trade is subject to strict regulation Trade is regulated by export permits CITES trade measures TrainforTrade: Trade, Environment and Development

11. Appendix III covers species identified by an individual Party as being subject to regulation within its jurisdiction and for which it requests the cooperation of other Parties in the control of trade CITES trade measures TrainforTrade: Trade, Environment and Development

12. “Administrative” projects Funding for participation in COPs or other meetings; Technical assistance (e.g., support in the development of CITES-related legislation) Training “Species” projects Funding for scientific research related to a particular animal or plant species CITES supportive measures TrainforTrade: Trade, Environment and Development

13. Strictly regulates the transboundary movements of hazardous wastes Parties are obliged to ensure that such wastes are managed and disposed of in an environmentally sound manner http://www.basel.int Basel Convention TrainforTrade: Trade, Environment and Development

14. Article 4.1(a) - Allows Parties to ban imports of hazardous waste Article 4.1(b) - Prohibits exports to Parties that have banned import of wastes Article 4.1(c) - prohibits export of wastes without written consent of importing country Article 4.2(e) - prohibits export of waste believed not to be managed in anenvironmentally sound manner in the importing country Basel Convention: trade measures TrainforTrade: Trade, Environment and Development

15. Article 4.5 - prohibits trade with non parties Exception Article 11 – non-parties can trade in hazardous waste if transboundary movements are subject to appropriate bilateral/multilateral or regional agreement Provisions in these agreements should not be less environmentally sound than those in the Convention Basel Convention: trade measures TrainforTrade: Trade, Environment and Development

16. COP 2: Amendment to the Basel Convention (1995) bans movement of hazardous waste for final disposal and for recovery from “Annex VII countries” (Parties and other States which are members of the OECD, EC, Liechtenstein) Amendment has to be ratified by 62 (¾) Parties; 26 have already done so COP4: Annexes VIII and IX clarify definition of hazardous waste The Basel ban TrainforTrade: Trade, Environment and Development

17. Basel Declaration on Environmentally Sound Management Move from regulatory system to capacity building Protocol on Liability and Compensation for Damage resulting from Transboundary Movements of Hazardous Wastes and their Disposal See next slide Recent developments TrainforTrade: Trade, Environment and Development

18. Regime for liability and compensation for damage resulting from transboundary movement of wastes, including incidents occurring because of illegal traffic At COP 6, Parties agreed to re-evaluate the financial limits to strict liability in this Protocol: this may reduce incentives for waste reduction Liability Protocol TrainforTrade: Trade, Environment and Development

19. No specific financial mechanism to facilitate technology transfer Regional and sub-regional centres for training and technology transfer Focal points for capacity building Funding not gauranteed Limited funds for capacity building Parties agreed to provide US$300,000 per year over a three-year period (2000-2002) to initiate activities for the implementation of the Basel Declaration of 1999 Basel Convention: supportive measures TrainforTrade: Trade, Environment and Development

20. The Montreal Protocolon Substances that Deplete the Ozone Layer as adjusted and/or amended in London 1990Copenhagen 1992Vienna 1995Montreal 1997Beijing 1999 Montreal Protocol (MP) TrainforTrade: Trade, Environment and Development

21. Control of trade in ODS with non parties Control of trade in ODS products with non-parties Trade among Parties is “indirectly” constraint by ODS production and consumption limits It was decided at MOP V that it was not feasible to ban or restrict trade in products made with, but not containing controlled substances. Montreal Protocol (MP) TrainforTrade: Trade, Environment and Development

22. Created by London Amendment, Article 10 Has disbursed nearly US$1 billion to 120 developing countries for institutional strengthening, training, project preparation and implementation of investment projects The Fund has the obligation to meet all the agreed incremental costs of developing countries for implementing the control measures Indicative list of agreed incremental costs Funding support has focused more on phasing out ODS than on supporting production of substitutes MP: Multilateral Fund TrainforTrade: Trade, Environment and Development

23. Objectives The conservation of biological diversity The sustainable use of its components The fair and equitable sharing of the benefits arising out of the utilization of genetic resources http://www.biodiv.org/ Convention on Biological Diversity CBD TrainforTrade: Trade, Environment and Development

24. No explicit reference to trade measures Article 8(j): Protection of knowledge, innovations and practices of indigenous and local communities (“traditional knowledge”, TK) Article 15: Access and benefit sharing (ABS) subject to prior informed consent (PIC) CBD: some key provisions TrainforTrade: Trade, Environment and Development

25. Financial support (Articles 20 and 21) Transfer of technology (Articles 16 and 19) Capacity building (Articles 12 and 18) Market incentives (Articles 10 and 11) CBD: supportive measures TrainforTrade: Trade, Environment and Development

26. Objectives To ensure an adequate level of protection in the field of safe transfer, handling and use of Living Modified Organisms (LMOs) that may have adverse effects on the conservation and sustainable use of biological diversity, taking into account risks to human health http://www.biodiv.org/biosafety/ Cartagena Protocol on Biosafety (2000) TrainforTrade: Trade, Environment and Development

27. Trade and environment agreements should be mutually supportive The Protocol does not imply a change in the rights and obligations of a Party under existing international agreements (including the WTO); and The intent is not to subordinate the Protocol to other international agreements Biosafety protocol: Preamble TrainforTrade: Trade, Environment and Development

28. LMOs intended for introduction into the environment, such as seeds and microorganisms These can mutate, migrate and multiply, and may therefore pose unexpected threats to native species Subject to AIA (see next slide) LMO-FFPs: LMOs that are intended for direct use as food or feed, or for processing These include commodities such as genetically modified corn, soy, wheat, canola and tomatoes Subject to less restrictive procedures Biosafety protocol: Coverage TrainforTrade: Trade, Environment and Development

29. Artcicle 7 lays down AIA procedures that must be followed, prior to the first intentional transboundary movement of LMOs for intentional introduction into the environment of the Party of import The purpose is to ensure that recipient countries have the opportunity to assess the risks that may be associated with the LMO before agreeing to its import LMO-FFPs and 4 other categories of LMOs are not subject to AIA Advanced Informed Agreement (AIA) TrainforTrade: Trade, Environment and Development

30. Article 8: Exporting party (or exporter) shall notify the competent national authority of the importing prior to the first intentional transboundary movement of an LMO Article 10: Decisions taken by the Party of import shall be in accordance with the risk assessment under Article 15 Article 26: Parties may take into account socio-economic considerations such as the value of biological diversity to its indigenous and local communities in reaching a decision on import of LMOs Practical application of AIA TrainforTrade: Trade, Environment and Development

31. Article 1 (Objective): the objective of the Protocol is to be pursued “in accordance with the precautionary approach contained in Principle 15 of the Rio Declaration..” Precautionary approach [1] TrainforTrade: Trade, Environment and Development

32. Article 10, paragraph 6: “lack of scientific certainty due to insufficient relevant scientific information and knowledge regarding the extent of the potential adverse effects of a LMO on the conservation and sustainable use of biological diversity in the Party of import, taking also into account risks to human health, shall not prevent that Party from taking a decision, as appropriate, with regard to the import of the LMO in question, in order to avoid or minimize such potential adverse effects” Precautionary approach [2] TrainforTrade: Trade, Environment and Development

33. Can a WTO Member refuse import of LMOs? The precautionary principle Relationship to WTO Issues to be dealt with in the future Documentation of LMO-FFP Issue of liability Key issues TrainforTrade: Trade, Environment and Development

34. LMOs intended for introduction into the environment Subject to AIA Procedure (facilitated through a central clearing house mechanism) Responsibilities rest on exporting party: notification and possible burden of proof to show harmless nature of the LMO and to conduct and finance risk assessment Can imports of LMOs be refused? [1] TrainforTrade: Trade, Environment and Development

35. LMO-FFPs Shipments of commodities that contain, or may contain LMO-EPPs must be identified as such in accompanying documentation Such information may be useful to countries enacting domestic labelling schemes Details still have to be worked out Exporters of LMOs fear they have to segregate LMO and non-LMO commodities or to label all commodities as “may contain LMO-FFPs” Miami Group: segregation is not currently feasible Can imports of LMOs be refused? [2] TrainforTrade: Trade, Environment and Development

36. Miami-Group (Argentina, Australia, Canada, the United States and Uruguay) Exporters of LMOs Had opposed inclusion of LMO-FFPs arguing that these do not pose a threat to biodiversity Canada and United States contested EU plans to impose mandatory labelling Positions TrainforTrade: Trade, Environment and Development

37. Like-Minded Group (most developing countries) Need for a strong protocol It is impossible to ensure that LMO-FFPs would not be introduced into the environment Protocol should take account of human health risks Need to protect countries without adequate regulatory or institutional capacity to effectively handle LMO imports Positions TrainforTrade: Trade, Environment and Development

38. The Protocol promotes international co-operation to help developing countries build the human resources and institutional capacity to use biotechnology safely and to regulate it efficiently Supportive measures TrainforTrade: Trade, Environment and Development

39. ”Framework" for future action, intended to stabilize and reduce the emissions of greenhouse gases, the primary cause of climate change The UNFCCC does not directly rwgulate or restrict trade However, actions of countries implementing the UNFCCC could have significant trade implications http://www.unfccc.de/ UNFCCC TrainforTrade: Trade, Environment and Development

40. Article 11: Establishes a financial mechanism (which is the GEF) to provide financial resources, including for the transfer of technology UNFCCC-supportive measures TrainforTrade: Trade, Environment and Development

41. Sets quantified emission limitation and reduction commitments for industrialized or "Annex I" countries (developed countries and Central and Eastern European countries with economies in transition) Developing countries are not required to limit their emissions http://www.unfccc.de/resource/convkp.html Kyoto Protocol TrainforTrade: Trade, Environment and Development

42. Represent the widest use of market-based instruments of all MEAs Article 6 Joint Implementation (projects between Annex I countries to help meet a Party’s commitments) Article 12 Clean Development Mechanism (CDM) Article 17 Emissions Trading http://www.unfccc.de/issues/mechanisms.html Three flexibility mechanisms TrainforTrade: Trade, Environment and Development

43. Role of trade measures and supportive measures TrainforTrade 2000: Trade, Environment and Development

44. To control trade in, and restrict markets for, products that may constitute a health and/or environmental risk or that are unsustainably produced To prevent free-riding (whereby non-participants enjoy the advantages of the MEA without incurring its costs) and promote wide participation by encouraging governments to join and/or comply with the MEA Objectives of trade measures TrainforTrade: Trade, Environment and Development

45. To ensure the effectiveness of an MEA by preventing leakage –the situation where non participants increase their emissions or otherwise unsustainable practices, as a result of the control measures taken by signatories Objectives of trade measures TrainforTrade: Trade, Environment and Development

46. Taking into account the common but differentiated responsibilities of States and difficulties that developing countries may encounter in implementing an MEA, several measures have been included in the agreements or developed over the years to assist developing countries Such measures include transfer of finance and technology, technical assistance and capacity building Positive or enabling measures TrainforTrade: Trade, Environment and Development

47. Trade measures and the WTO provisions TrainforTrade 2000: Trade, Environment and Development

48. There is broad support for MEAs Trade measures play a significant role in some MEAs There has been no challenge under the WTO against trade measures taken pursuant to MEAs Many WTO Members believe that Article XX of GATT (see Module 2) is sufficient to resolve any problems Background of the debate[1] TrainforTrade: Trade, Environment and Development

49. Many believe national coordination and consultations between the secretariats of WTO and MEAs will be sufficient to avoid conflicts Some believe that conflicts are nevertheless not excluded. They point out that the Chile/EU dispute on swordfish almost resulted in a conflict Background of the debate[2] TrainforTrade: Trade, Environment and Development

50. EU complaint in WTO Chile presented the case to the special chamber of IFTLOS (International Tribunal of the Law of the Seas in Hamburg, Germany) In the light of an amicable arrangement, ITLOS has suspended proceedings (until 1 January 2004) Gehring, M., Sustainable development angles to the swordfish dispute, Bridges, No. 7, Vol. 5 (September 2001), pp. 13-14) Swordfish Chilean measure prohibiting EU vessels to enter Chilean ports TrainforTrade: Trade, Environment and Development