Supachai Panitchpakdi
describes the challenges and opportunities in reconciling environmental protection and trade liberalization

Poor or rich, we are all concerned about our environment. Protecting it, whether locally or globally, is an essential component of sustainable development. There is also an undeniable relationship between alleviating poverty and improving the environment. If the immediate problem is hunger or disease it will be more difficult to be concerned with the larger picture – including some of today’s global environmental problems, such as climate change.

Last year, in Doha, ministers reaffirmed their commitment to the objective of sustainable development, as stated in the Preamble of the World Trade Organization (WTO) Agreement itself. They even instructed both the WTO Committee on Trade and Environment and its Committee on Trade and Development to act as fora to identify and debate developmental and environmental aspects of the negotiations, so as to ensure that sustainable development concerns are reflected in the outcome of the Doha Development Agenda. This message was yet again reinforced in the outcome of last year’s World Summit on Sustainable Development in Johannesburg.

Channelling resources
Trade facilitates economic growth. And while economic growth per se is not necessarily sustainable, higher incomes are a precondition for being able to act. If poverty is part of the problem, economic growth will be part of the solution. But, again, greater income is not in itself a remedy for environmental problems: it needs to be accompanied by policies which channel resources accordingly, in a way that leads to responsiveness and accountability.

National governments play a key role. Environmental problems are complex and varied. Academics and politicians battle – and understandably so – over the choice of concrete economic measures to translate policy goals into specific incentives or disincentives in each environmental field. Appropriate regulatory policy is neither self-evident nor cost-free.

Trade liberalization – paradoxical as this may seem to some – is not about deregulation. On the contrary, it spotlights the need for appropriate regulation, or good governance, and increases the burden of responsibility on governments. All this must be considered in the light of the fact that many governments may have serious resource constraints to begin with, or have priorities which lie elsewhere.

Reducing discrimination
The WTO is a rule-making institution. It is concerned with removing unnecessary barriers and distortions to trade and with reducing unjustifiable discrimination between its Members. Trade liberalization may be intrinsically positive to the environment in that it entails a more efficient allocation of global resources. Many governments argue, for example, that subsidies which directly stimulate intensive agricultural production have negative environmental effects and put producers in other parts of the world at a disadvantage. Another example cited by the Worldwide Fund for Nature (WWF) are the subsidies which may directly stimulate over-capacity in fishing fleets. Liberalization here has been termed ‘win-win-win’, for development, the environment and trade.

There is no one WTO set of rules specific to the environment. Environmental issues and concerns are horizontal in nature. Hence, much of the discussion in the WTO is about whether its current rules adequately meet environmental concerns.

It is important to reiterate that the WTO itself does not create environmental standards. The expertise and technical knowledge for this lie in the domain of multilateral environmental agreements (MEAs), each of them being specific to various global or regional environmental concerns (such as biodiversity, chemicals, etc.). The ongoing negotiations in the WTO are now looking at, among other things, the relationship between existing WTO rules and ‘specific trade obligations’ contained in MEAs. One of the key issues, which Members have long debated, is how best to ensure that international trade and environmental regimes are mutually supportive.

What does this mean? It should not be possible for a government to negotiate one set of rules in the context of an MEA and another, conflicting, one in a trade forum such as the WTO. If this happens, and assuming – as I must – that governments act in good faith, failure of communication must lie at the root of the problem. Perhaps it is not so strange that there is a growing need for cooperation and coordination in a world that is increasingly interconnected.

Positive synergies
This calls, first and foremost, for domestic coherence in trade and environmental policy within national governments. It is all very well for us, in the WTO Secretariat, to organize technical assistance and capacity-building activities with our colleagues in other Secretariats such as the United Nations Convention on Trade and Development (UNCTAD), UNEP and the MEAs – but at the end of the day it is national governments which will negotiate the mutually supportive rules on which both MEAs and the WTO stand. In fact, better interaction between environment and trade officials is likely to be part of the solution to the ongoing trade and environment negotiations themselves.

The commitment from Doha to negotiate on trade and environment should be welcomed as a significant development. It is important for the trading system to continue to advance understanding of the complex linkages between policies in the two areas. Through the negotiations, environmental and trade agencies are increasingly recognizing that there are positive synergies between trade disciplines and environmental objectives.

The WTO/MEA relationship is an important part of the trade and environment debate in the WTO, but it is not at its heart. Many member countries share a fundamental concern that protecting the environment could all too easily be used for trade protectionist purposes – that it might result in arbitrary or unjustifiable discrimination, or a disguised restriction on international trade. Of course, nobody questions the importance of environmental protection. No member of the WTO is prevented from taking measures to protect human, animal or plant life or health, or the environment.

Understanding and cooperation
The crux of the matter lies in translating a policy objective into a measure which affects trade. This can be a source of friction, but it need not be if there is better understanding and cooperation on all sides.

Complying with environmental regulations and requirements can be costly for developing countries. Matters are often made worse by the fact that such requirements vary considerably between export markets. If this leads to reduced market access it may not be in the interest of sustainable development. Many developing countries feel that there is a lack of recognition for their own traditional ways of production, which may reflect their own priorities and level of development.
There is an undeniable relationship between alleviating poverty and improving the environment
Herein lies a major challenge: while recognizing the legitimacy of environmental measures and regulations, how should these be crafted so as to take into account the concerns of developing countries whose exports and trade are vital for their development? There has been a call in the WTO for more ‘positive’ measures, such as capacity-building and technology transfer. We are doing our best through our technical cooperation activities to help developing countries develop the institutional capacity to implement trade rules. Environmental agencies, with other relevant partners, can do the same in their areas of expertise to help developing countries to move on to environmentally cleaner and more sustainable forms of production.

Trade opportunities
Tackling environmental problems is an essential component of sustainable development. But poverty alleviation is also a prerequisite for it. I cannot emphasize enough the importance of market access, in particular for products of export interest to developing countries. Trade opportunities will be key if sustainable development is to be achieved

Dr. Supachai Panitchpakdi is Director-General of the World Trade Organization.

PHOTOGRAPH: Chris Cypert/

This issue:
Contents | Editorial K. Toepfer | Looking through new lenses | Development with a human face | Trade can transform | Achieving win–win–win | People | Promises to keep | As precious as gold | Expanding the circle | At a glance: Globalization, poverty, trade and the environment | Acting local | Cooperation is catching | Books & products | Getting through the bottleneck | Investing in the environment | Bishkek Mountain Platform | You can’t breathe money | We will succeed | Fair trade? Fair question


Complementary articles in other issues:
Issue on Production and Consumption, 1996
Issue on World Summit on Sustainable Development, 2002
José María Figueres Olsen: A climate of change (Beyond 2000) 2000
Ricardo A. Navarro: Unfair trade (Beyond 2000) 2000

AAAS Atlas of Population and Environment:
About the AAAS Atlas of Population and Environment
Population and natural resources
Population and Land Use