New Internationalist

Trade now, pay later

Issue 320

Honour the Earth Global environment standards must be set by a new world body under the mandate of the UN – a Global Environment Organization. These standards must be based on sustainability, equity and justice and should be imbedded in all international trade and investment agreements.

That’s the credo of the World Trade Organization. But take heart. Steven Shrybman argues that environmentalists have much to learn from such a powerful opponent.

Nick Cobbing / Still Pictures
Protesting genetically modified crops in Britain: a challenge to the genetic common. Nick Cobbing / Still Pictures

For activists who have been working to establish an international legal framework for the environment there is some good news and there is some bad news.

First the ‘good’ news. In 1995 more than 100 nations endorsed an agreement that will have profound impacts on biodiversity, climate change and virtually every other major environmental issue. The agreement is binding and is armed with powerful enforcement measures to ensure that every member lives up to its obligations under the treaty.

Unfortunately, the bad news is that this international treaty will be an environmental disaster.

Can’t guess which agreement this is? Here are more clues. The treaty wasn’t established under the UN Environment Programme; instead it was the product of highly secretive negotiations conducted by public officials working hand-in-glove with the worlds largest corporations. Nor is it explicitly about the environment. In fact the treaty rarely mentions the word and never even refers to biodiversity, climate change or desertification.

For those still wondering, this international ‘environmental’ treaty is – the General Agreement on Trade and Services supervised by the World Trade Organization (WTO). While its proponents deny that it is anything more than a commercial agreement, their protests betray the dangerously myopic perspective they bring to economic and trade policy. The WTO’s environmental relevance has also been obscured behind a smokescreen of jargon. In ‘trade-speak’ environmental standards become ‘technical barriers to trade’, food-safety regulations are ‘sanitary and phytosanitary measures’ while the genetic common becomes a system of ‘intellectual property rights’. This also explains why its backers have been successful in denying the link between trade agreements and environmental concerns.

In broad terms, the WTO is designed to entrench ‘grow-now, pay-later’ globalization by removing the power of governments to regulate corporate activity in the public interest. The result is that it will undermine our capacity to redirect current economic, development and trade policies towards a truly sustainable path.

Clear evidence of its impact can be seen in a number of successful trade challenges to environmental, conservation and food-safety regulations. Since the WTO was founded four years ago we have watched (its rules prohibit public participation) as the treaty’s enforcement machinery has been wheeled into action to punish governments that flout its rules.

The growing list of casualties now includes European and Japanese food-safety measures, US clean-air regulations and marine mammal conservation laws, aid and development treaties between Europe and a few impoverished former colonies, and Canadian cultural programmes. And the list is likely to grow.

These trade disputes represent only the most visible conflicts between free-trade rules and the environment. Indeed, the most damaging effects of this new global regime occur out of sight. Governments quietly abandon laws protecting the environment, consumers, worker rights and conservation rather than become embroiled in international trade disputes.

Lately, many environmentalists have come to realize that while they were plodding down the hallways of conference centres trying to negotiate international agreements to combat climate change, protect biodiversity or reduce hazardous-waste trade to poor nations, the ink was drying on an agreement that would only heap fuel on these ecological fires.

This is discouraging, but it is also instructive. The WTO’s authority depends on powerful enforcement machinery and in this regard it offers a model for environmental treaties. It proves that when governments are motivated they will sign up to truly binding international agreements.

Any government that violates WTO rules is vulnerable to sanctions – often too severe for even the wealthiest nation to ignore. In the organization’s first trade complaint (a challenge by foreign gasoline refiners to US Clean Air Act regulations) the Government’s Environmental Protection Agency was given two options. Either remove the offending statute or face trade sanctions in the order of $150 million a year.

A similar fate befell European food-safety regulations last year when the WTO ruled that a European Community (EC) ban on hormone-treated beef violated several rules. The organization ordered the EC to remove its import controls and, when it refused, authorized trade sanctions worth more than $125 million as the price of its defiance. Moreover, sanctions can be imposed against unrelated products – wherever they will be felt most. In addition, WTO cases are routinely heard, decided, appealed and resolved within a year. It would be impossible to find any other legal sanctions against government initiatives that are as quick and effective as these.

Reinhard Janke / Still Pictures
Toxic sludge in Germany: obvious conflicts between trade and nature. Reinhard Janke / Still Pictures

In contrast, international environmental agreements rarely use trade sanctions. Even in cases where they exist they represent only a pale imitation of the powerful enforcement regime built into the WTO. Agreements like the Framework Convention on Climate Change and the Biodiversity Convention don’t include any enforcement mechanism other than moral persuasion. This lack of teeth explains why governments have so resolutely ignored commitments they made when they signed these agreements at the Earth Summit in Rio nearly eight years ago. Ultimately, nation-states must face legally binding obligations if international environmental goals are to be met. This is where we need to tear several pages from the WTO text concerning enforcement.

Consider, for example, the enforcement provisions of the WTO Agreement on Intellectual Property Rights which were written to promote the interests of global pharmaceutical, biotechnology and media firms. Then imagine environmental goals being taken as seriously as patent rights. If the WTO were transformed into an organization that was as concerned about climate change as it is about the growth of transnational drug companies, we could have an Agreement on Trade-Related Measures To Combat Global Warming.

Such an Agreement could require all WTO members to:

• adopt domestic laws to stabilize greenhouse-gas emissions at 1990 levels. • provide for customs inspection, seizure and disposal of goods that were produced in ways that violate the Agreement. • establish criminal sanctions for any breach of the legislation or regulations mandated by the Agreement. • authorize the use of trade sanctions, including cross-retaliatory measures – such as prohibiting the export of energy or energy products – against any jurisdiction that was in breach of its obligations under the Agreement.

It is a measure of how much work lies ahead that a proposal to treat climate change as seriously as pharmaceutical patents would no doubt be greeted with complete incredulity by the WTO. That’s why it’s critical that governments be pressed to explain why they consider patent protection a higher priority than global warming or biodiversity loss.

But what then do we do with trade and investment deals that are currently exacerbating ecological crises? Does the WTO need to be fundamentally overhauled? Or do proposals to delegate environmental issues to a new UN organization, such as a Global Environmental Organization, make sense?

The answer depends on whether you believe that the environment can be isolated and protected from the main thrust of free trade policies. In fact, they are cut from the same cloth.

As conflicts between environmental and trade policy became too obvious to deny, free traders have pushed the environment debate to the margins within the WTO or isolated it entirely.

Current WTO head Michael Moore suggests that environmental issues don’t belong in his agency and should be left to ‘specialized institutions’ with the expertise to address them. He is hoping that most people won’t appreciate how intimately interrelated trade and environmental issues really are. Of course we do need to strengthen the mandates of the international environmental institutions. But it is naive to imagine that this can happen outside the framework of international economic relations. Indeed, the isolation of these organizations from UN agencies like the World Bank and the WTO explains the marginal influence they have had.

The WTO is as much an environmental agreement as the Basel Convention on Transboundary Waste Shipments is a trade agreement. The distinction is artificial and serves only to defeat efforts to build a sustainable and integrated model for human development.

Trade agreements must serve the goals of combating climate change, preserving biodiversity, assuring food security and protecting diversity. By the same token, international environmental agreements must integrate economic and environmental strategies if they are to be effective and durable.

The need for fundamental reform of the WTO is undeniable. But a supranational Global Environment Organization (GEO) could also play a supportive role by legitimizing the use of trade and economic sanctions. A GEO will have to be equipped with enforcement mechanisms very much like those of the WTO. Noncompliance would be greeted with sanctions every bit as certain, swift and substantial as those meted out by the WTO. Economic and trade sanctions might not always be necessary, but they’d have to be available just in case.

It is unlikely that Michael Moore can imagine a GEO to rival the power and influence of the WTO he now heads. Indeed, the challenge of establishing an effective international environmental regime will be no less daunting than transforming the WTO. Ultimately, this is because both agendas have precisely the same end point – a treaty to promote ecological and economic security for all peoples, rather than some grotesque notion of international trade built on perpetual growth.

Steven Shrybman is Executive Director of the West Coast Environmental Law Association and author of the Citizen’s Guide to the World Trade Organization. For further information see www.wcel.org

This first appeared in our award-winning magazine - to read more, subscribe from just £7

Comments on Trade now, pay later

Leave your comment