Briefing Note by the Secretariat

Cooperation between the Basel Convention and the World Trade Organization Briefing Note by the Secretariat

Introduction

Cooperation plays an essential role in the successful implementation of the Basel Convention1. The Basel Declaration on Environmentally Sound Management, for example, emphasizes the value of cooperation and partnership at all levels among countries, public authorities, international organizations, the industry sector, non-governmental organizations and academic institutions. In decision VI/29, the Conference of Parties stresses the need for cooperation with international organizations, including the World Trade Organization. It requests the secretariat:

…to continue and further strengthen its cooperation in critical areas for the effective and concrete implementation of the Basel Convention, the Basel Protocol and Amendments with relevant organizations, including the … World Trade Organization.

This general statement is supplemented by a more detailed decision (decision VI/30) that welcomes enhanced cooperation between the secretariats of the Basel Convention and the World Trade Organization, and requests the Basel Convention secretariat to undertake a range of actions (See Box 1).

The value of strengthening cooperation and information exchange between the WTO and MEAs has also been underscored by trade ministers at the WTO’s Doha Ministerial Conference, reflecting the need for concrete efforts to realize the promise of mutual supportiveness between trade and environment regimes. In support of that goal, this note is designed to provide a

Box 1 -- In Decision VI/30, the Conference of the Parties:

Requests the secretariat of the Basel Convention to:

(a) Seek observer status in the Committee on Trade and Environment meeting in special session, and to advise the Parties to the Basel Convention when the request has been submitted to and granted by the World Trade Organization;

(b) Report to the Parties to the Basel Convention on any meetings it attends at the World Trade Organization and any substantive contacts with the World Trade Organization secretariat and its committee secretariats;

(c) Monitor developments in the World Trade Organization Committee on Trade and Environment meeting in special session and report to the Parties thereon;

Also requests the secretariat of the Basel Convention, when called upon to provide general information to the World Trade Organization on trade provisions of the Basel Convention, to consult with the Parties to the Basel Convention before providing that information. If the Secretariat of the Basel Convention is requested to provide interpretation on the trade provisions of the Convention, it will refer such requests to the Conference of the Parties.

1 summary of relevant WTO negotiations and other ongoing work in the field of trade and environment, and their potential relevance to the work of the Basel Convention.

WTO Trade and Environment Negotiations

In November 2001, Ministers at the WTO’s Fourth Ministerial Conference in Doha, Qatar, agreed to commence negotiations on a number of environment and trade issues. These negotiations are to be conducted with a view to enhancing the mutual supportiveness of trade and environment, and focus on the following three areas: clarifying the relationship between WTO rules and trade measures in MEAs; developing procedures for information exchange between MEA Secretariats and relevant WTO Committees and criteria for granting observer status; and liberalization of trade in environmental goods and services2.

WTO rules and trade measures in MEAs

The relationship between trade-related measures in MEAs and GATT-WTO rules has been the subject of much debate. One view is that no conflict arises between the two regimes, and that the status quo affords sufficient protection to MEA measures. Others argue that uncertainty affects MEA negotiations and implementation and a clarification of the relationship would help increase predictability.

At the WTO’s Doha Ministerial, Ministers agreed to launch negotiations on the relationship between certain MEA trade measures and WTO rules. The objective of these negotiations is to clarify how WTO rules apply to WTO members that are also parties to MEAs. Specifically, the Doha Declaration calls for negotiations on:

…the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs). The negotiations shall be limited in scope to the applicability of such existing WTO rules as among parties to the MEA in question. The negotiations shall not prejudice the WTO rights of any Member that is not a party to the MEA in question3;

The implication of these negotiations for the Basel Convention remains unclear. In Decision VI/30, the Conference of the Parties notes that implementing the Convention “requires consideration of all trade related aspects of the transboundary movement of hazardous wastes, including the monitoring of international trade and prevention of illegal trade of hazardous wastes, as well as the export and import licensing systems for hazardous wastes.” “These trade measures”, according to the decision, “are designed to protect, by strict control, human health and the environment against the adverse effects that may result from the generation and management of hazardous wastes and other wastes”.

At the WTO, negotiations so far have focused mainly on definitional issues, including the meanings of the terms “multilateral environmental agreements”, “specific trade obligations” and “set out in”. Two complementary approaches have been advanced in the negotiation: the identification of specific MEA measures for examination; and a more conceptual discussion of the WTO-MEA relationship. A number of delegations have submitted proposals suggesting that the Basel Convention’s measures – including Articles 4 and 6 – fall within the scope of the negotiations. The outcome of the negotiations may therefore have implications for the balance

2 between WTO rules and those set out in the Basel Convention, and on the application of WTO obligations to Basel Convention Parties seeking to implement the convention.

Information and observer status

The Basel Convention’s Conference of Parties has noted that it is “mindful of the need to strengthen cooperation between the Basel Convention and the World Trade Organization within their respective mandates” and has requested the secretariat to “seek observer status in the Committee on Trade and Environment meeting in special session” (Decision VI/30). The importance of cooperation has also been noted by trade ministers at the Doha Ministerial, when they established negotiations on two related issues: procedures for regular information exchange between MEA and WTO secretariats; and criteria for granting observer status 4.

WTO negotiations on procedures for regular information exchange have yielded a range of useful suggestions for increasing information exchange, including strengthening cooperation between officials at the national level and among secretariats, and regularizing MEA-WTO information sessions. WTO members, however, have also emphasized limited time and capacity and encouraged a flexible approach.

Despite an explicit mandate to negotiate criteria, WTO negotiations on observer status remain blocked for political reasons. UNEP and MEA secretariats have been permitted to attend some parts of CTE Special Session meetings on an ad hoc basis, pending agreement among WTO members. Restrictions on access by environmental institutions have arguably limited the potential for dialogue. An agreement on criteria would pave the way for an exploration on other ways to increase information exchange and for progress on the WTO’s other trade and environment agenda.

Environmental goods and services

In Doha, trade Ministers agreed to negotiations on the reduction or elimination of tariff and non- tariff barriers to environmental goods and services5. Negotiations have occurred in the Negotiating Group on Market Access for Non-Agricultural Goods, the Services Council in special session and the CTE.

Discussions about environmental goods have focused, among other things, on the suitability of OECD and APEC classifications as the basis of negotiations, on the need to balance liberalization of goods of export interest to developed and developing countries (e.g. high-tech versus agricultural products), and on whether and how products made using environmentally-sound production and process methods (or PPMs) should be covered.

Environmental services have been subsumed into the broader process of submitting requests and offers as part of the services negotiations. Environmental services are being classified in light of a 1991 Services Sectoral Classification List (MTN/GNS/W/120) that includes four categories: sewage, refuse disposal, sanitation and “other”6. Some WTO members argue that this classification should be updated. Others have noted that environmental goods and services are often used together, requiring progress on both fronts to yield positive outcomes. Negotiations on these items have been identified by the CTE Chair, in her report in preparation

3 for the Cancun Ministerial, as requiring further efforts. In particular, she accentuated the need for efforts to identify “environmental goods for import or export with a view to negotiating the reduction or elimination of tariff and non-tariff barriers7.

Ongoing work in the WTO Committee on Trade and Environment

In addition to new negotiations, the Doha Declaration called on the CTE to continue its work on a range of trade and environment issues. Ministers, in paragraph 32 of the Doha Declaration, called on the CTE in pursuing work on all items on its agenda to give particular attention to the following three issues.

Market access

Improving access to markets can strengthen economic growth and liberate resources for environmental protection, capacity building and implementation of cleaner technologies. The CTE has thus been exploring the “effect of environmental measures on market access, especially in relation to developing countries” (Doha Declaration, paragraph 32(i)). Discussion has focused, among other things, on the need to balance safeguarding market access and protecting the environment, on avoiding protectionist use of environmental measures, and on assisting exporters to meet legitimate environmental standards. Market access discussions have also focused on “situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, the environment and development” (Doha Declaration, paragraph 32(i)). The CTE’s discussion on this item has focused principally on potential for win-win-win outcomes in the agriculture, energy, fisheries, and forest sectors.

Intellectual property

The Doha Declaration calls for particular attention in the CTE to “the relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights” (Doha Declaration, paragraph 32(ii)). Discussions about the TRIPS Agreement have explored a range of issues, including the relationship between it and the Convention on Biological Diversity, the protection of traditional knowledge and folklore, and the agreement’s implications for the transfer of technology. This latter relationship has also been discussed in the Working Group on Trade and Transfer of Technology, discussed below.

Environmental labeling requirements

The Doha Declaration also calls for particular attention to “labelling requirements for environmental purposes” (Doha Declaration, paragraph 32(iii)). This issue is being discussed in both the CTE and the Committee on Technical Barriers to Trade. Discussions have ranged across a broad set of issues, including the value of recognizing the equivalency of certification systems, as well as efforts to increase transparency and to strengthen developing country participation in standards setting. One question that continues to be considered by WTO members is whether new negotiations are desirable to clarify the application of WTO rules to labelling requirements for environmental purposes. The outcome of this discussion, as well as WTO labelling discussions more generally, may have implications for Parties to the Basel Convention, which itself addresses labelling issues and provides parties shall “require that hazardous wastes and

4 other wastes … be packaged, labelled, and transported in conformity with generally accepted and recognized international rules and standards” (Article 7(b)).

Other environment and trade issues

As well as these issues, a number of other issues may be considered related to implementation of the Basel Convention. In particular, the secretariat’s Note on Environment and Trade Issues (UNEP/CHW. 6/31/Add1) identifies the following issues as relevant.

Technical assistance and capacity building

“ The importance of technical assistance and capacity building in the field of trade and environment to developing countries, in particular the least-developed among them”, was recognized by Ministers at Doha (Doha Declaration, paragraph 33). They also confirmed that “technical cooperation and capacity building are core elements of the development dimension of the multilateral trading system” (Doha Declaration, paragraph 38). The Basel Convention, similarly, has emphasized the need to “collaborate with existing institutions … to facilitate or support capacity-building for the environmentally sound management of hazardous and other wastes” (Strategic Plan paragraph 5(f)). More specifically, field (e) of the Basel Declaration emphasizes the “improvement and promotion of institutional and technical capacity-building, as well as the development and transfer of environmentally sound technologies, especially for developing countries and countries with economies in transition.”

Environmental reviews at the national level

Trade Ministers also took note of efforts by members to “conduct national environmental assessments of trade policies on a voluntary basis”, and encouraged “expertise and experience be shared with members wishing to perform environmental reviews at the national level.” The Basel Convention also emphasizes the role of assessments in the context of the implementation of national legislation and policies, use of technical guidelines, and enhancing waste prevention and minimization in all regions (Strategic Plan). Basel Convention Regional Centers, for example, have undertaken regional assessments of transboundary movements and of regional waste management capacity.

The relationship between trade and technology transfer

At the Doha Ministerial, Ministers also established a working group to examine the relationship between trade and the transfer of technology, and possible recommen-dations on steps within the WTO to increase flows to developing countries (paragraph 37)8. Similarly, one of the Basel Convention’s aims includes “active promotion of the transfer and use of cleaner technologies” (Strategic Plan, paragraph 4). Further exploration of technology transfer issues could help enhance the supportive implementation of both sets of agreements.

Outcome of the WTO’s Cancún Ministerial

The early conclusion of the WTO’s Fifth Ministerial Conference in Cancún, Mexico, meant that no significant environment-related outcomes arose from that meeting. Rather, progress on trade and

5 environment negotiations and discussions, along with many other topics, has moved relatively slowly since Cancun. The appointment of Chairs on 11 February 2004 to various WTO bodies (including Ambassador Gabr of Egypt as the CTE Chair) suggest that the pace of discussions during the coming weeks and months will increase in the run-up to the 1 January 2005 date for conclusion of negotiations. Active participation by trade and environmental officials – including those involved in the work of the Basel Convention – will help to ensure favorable and mutually supportive outcomes from the negotiations.

6 1 See, for example decisions V/12, VI/29 and VI/30. 2 Additionally, paragraph 31 of the Declaration notes that fisheries subsidies form part of the negotiations provided for in paragraph 28 3 See paragraph 31(i) of the Doha Declaration. 4 See paragraph 31(ii) of the Doha Ministerial Declaration. 5 See paragraph 31(iii) of the Doha Declaration. 6 For further information on the environmental effects of the liberalization of trade in services see the WTO Secretariat’s notes WT/CTE/W/218 and WT/CTE/GEN11. 7 See WTO document TN/TE/7/Suppl.1 at paragraph 21. 8 For the 2003 Report of the Working Group on Trade and Transfer of Technology to the General Council see WT/WGTTT/5. * This note was drafted by Matthew Stilwell, Senior Legal Advisor to the Basel Convention Secretariat. The note is current as at February 2004.