Trade, Globalization and Sustainable Development: Where are we Post-WSSD?

1. Trade, Globalization and Sustainable Development:Where are we Post-WSSD? H.E. Dr. John W. Ashe WTO Symposium on Trade and Sustainable Development Geneva, 10-11 October 2005

2. Outline • Leading Question • Overview of Major trends • Changing nature of trade barriers • NTBs • Domestic regulations • Trade and MEAs • Trade in Environmental Goods & Services • Concluding Remarks

3. What are the major multilateral processes shaping the interactions among trade, globalization and sustainabledevelopment? • WTO-Doha • Monterrey Consensus • 2005 World Summit • CSD • Multilateral environmental agreements

4. WSSD and Trade = JPOI • Call for timely conclusion of Doha Development Round, specifically: • Improved market access for developing countries; • Reduction with view to phasing out agriculture export subsidies, trade-distorting domestic support; • Support for trade-related technical assistance and capacity-building; • Duty-, quota-free access to exports of LDCs; • Building capacity to diversify exports;

5. Trade and Sustainable Development – the JPOI links • Incentives to adopt efficient, clean technology; • Increased availability, lower cost of clean technology; • Technology transfer through export-oriented FDI; • Information sharing with small- and medium enterprises;

6. Structure of world trade and the position of developing countries • Developing countries account for a growing share of world trade, including for manufactures and services;

8. Non-traditional export opportunities for developing countries • Moving up value-chain does not always mean moving from primary commodities to manufactures • natural-resource based industries • services

9. Low-income countries still face obstacles to world trade integration • Tariff escalation remains a problem • Other trading costs weigh heavily • Weak supply side response • Even as tariff rates fall, non-tariff barriers remain and even increase

10. Source: UN-ECLAC, Agricultural Development Unit, based on WITS/TRAINS data (World Integrated Solution, Trade Analysis Information System).

11. Non-tariff barriers (NTBs) • Non-tariff barriers (NTBs) are an increasing source of concern especially for the world’s poorer nations; • Currently affect up to 40% of the exports of the world's least developed countries; • Wide ranging (direct and indirect);

12. Evolution of NTB use by category Source: UNCTAD TRAINS database

13. The trend in the evolution of NTBs creates a challenge for JPOI • Thwarts the role of trade in achieving sustainable development, by, inter alia • Affecting higher value aquaculture exports, making moving up value chain more difficult; • Risk of market fragmentation; • Measures often exceed multilaterally accepted norms; • Challenge for small economies and community-based entrepreneurial capacity;

14. Domestic environmental legislation and barriers to trade • National legislation and regulatory regimes can act as barriers to trade-related sustainable growth. • Examples: • Biofuels are environmentally preferable products but effected by protective trade rules; • Approval of biotech products is long and complex in key markets; • Foreign organic production systems are not recognized key markets, requiring dual certification.

15. Trade and Multilateral Environmental Agreements • Proliferation of trade agreements and environmental agreements; • Agenda 21 of the Rio Conference states that measures should be taken to “avoid unilateral action to deal with environmental challenges outside the jurisdiction of the importing country”; • WTO Members have agreed to clarify the legal relationship between WTO rules and MEAs; • No disputes have thus far come to the WTO regarding the trade provisions contained in an MEA; • Of the approximately 200 MEAs currently in force, only about 20 contain trade provisions.

16. Trade in Environmental goods and services • Opportunity for fast tracking • Trade in environmental Goods and Services is sizable and growing fast; • Elimination of tariff and non-tariff barriers to environmental goods and services;

17. Growth of environmental goods trade, 1990-2002 Source: Bora and Teh (2004). Tariffs and Trade in Environmental Goods. WORKSHOP ON ENVIRONMENTAL GOODS, Geneva, 11 October 2004. WTO Secretariat.

18. Growth Factors for environmental goods and services • Domestic regulation and public pressure • Customer requirements: global supply chains • EU enlargement; regional trade agreements • Infrastructure development • MEAs and associated financing mechanisms

19. Measures to address market access concerns • Enable developing countries to be more involved in standard setting • Enhance the capacity of developing countries to deal with NTBs • Formulate a balanced approach towards disciplining arbitrary and abusive use of such barriers

20. Measures to foster int’l diffusion of environmental goods and services • Public financing, risk sharing for export of EGS – consistent with international trade disciplines, e.g., • waste-water treatment technology • flue gas capture • methane capture from landfills for power geneneration • waste incineration, including for power generation

21. Conclusion • Firm groundwork in major multilateral processes; • Progress on implementation is vital; • Successful completion of Doha would mean greater progress in sustainable development objectives: • Reversal of the trend in escalating NTBs • Addressing market-access concerns for developing countries • More can be achieved by focusing on areas of opportunity for fast-tracking: • Trade in Environmental Goods and Services • Cleaner production technology