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During this period, important developments were also taking place in environmental forums. In 1987, the World Commission on Environment and Development produced a report entitled Our Common Future, in which the term “sustainable development” was coined. The 1992 UN Conference on Environment and Development (UNCED), also known as the Rio “Earth Summit”, drew attention to the role of international trade in poverty alleviation and in combating environmental degradation.
Towards the end of the 1986–94 Uruguay Round, attention was once again drawn to trade-related environmental issues, as a result, the preamble to the Marrakesh Agreement Establishing the World Trade Organization, referred to the importance of working towards sustainable development. The first paragraph of the preamble recognizes sustainable development as an integral part of the multilateral trading system illustrates the importance placed by WTO members on environmental protection. To begin a comprehensive work programme on the trade and environment in the WTO, the WTO Committee on Trade and Environment was also created in 1994 (and two decades after the EMIT group was set up in GATT) by trade ministers from participating countries, which brought environmental and sustainable development issues into the mainstream of WTO work. The committee’s duties are “To identify the relationship between trade measures and environmental measures, in order to promote sustainable development; To make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system are required, compatible with the open, equitable and non-discriminatory nature of the system…” . It has a broad-based responsibility covering all areas of the multilateral trading system- goods, services and intellectual property. This broad mandate was narrowed down to a 10-item agenda for work and has been used as its framework for discussions by the committee.
(I) WTO and MEAs
The conflict between trade and environment is perhaps best demonstrated by the GATT/WTO on the one hand, regulations and agreements at national and multilateral levels on the other. To identify the relationship between trade measures and environmental measures and reconcile the potential conflict between them is one of main tasks of CTE.
There are about 200 international agreements dealing with various environmental issues currently in force. They are called multilateral environmental agreements (MEAs). Only about 20 of these include provisions that can affect trade: for example they ban trade in certain products, or allowing countries to restrict trade in certain circumstances. Among them are the Motreal Protocol for the protection of the ozone layer, the Basel Convention on the trade or transportation of hazardous waste across international borders, and the Convention on International Trade in Endangered Species (CITES). The WTO’s committee discusses the basic WTO principles of non-discrimination and sustainable development do not conflict with trade measures needed to protect the environment, including actions taken under the environmental agreement. So far, there have been no disputes in the WTO on the trade provisions contained in an MEA. However, the actions taken to protect the environment and having an impact on trade can play an important role in some environmental agreement, particularly when trade is a direct cause of the environmental problems. The potential of conflict will arise where an environmental trade measure imposed as part of an MEA is inconsistent with trade measures. Should such disputes be addressed in the WTO or to the dispute settlement procedures that exist in the MEAs themselves? There is general agreement that in the event a dispute arises between WTO Members who are also signatories to an MEA, they should try first to resolve it through the dispute settlement mechanisms available under that MEA. Were a dispute to arise with a non-party to an MEA, but with another WTO Member, the WTO would provide the only possible forum for resolving the dispute.
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