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World Trade Meets Ecological Decline

By Hilary French
Worldwatch Institute

shipping1.jpg - 10.76 K The recent burgeoning of environmental trade wars highlights the need for reforming the rules of the World Trade Organization (WTO). Thousands of demonstrators expected to gather later this month in Seattle at a key WTO meeting will challenge trade ministers to reconcile the rules of world trade with the imperative of reversing global ecological decline.

One priority is to incorporate into WTO rules a greater respect for the precautionary principle, which holds that where there are threats of serious or irreversible damage, lack of scientific certainty should not be used as a reason for postponing action. The WTO's provisions shift the burden of proof, in effect requiring that chemicals and food additives be proven harmful before their use can be restricted. If the economy's environmental support systems are to be protected, several other steps are also required.

Among these are protecting consumers' right to know about the health and environmental impact of products they purchase by safeguarding eco-labeling programs from trade challenges; deferring to international environmental treaties in cases where they conflict with WTO rules; insuring the right of countries to use trade measures to protect the global environmental commons; and opening the WTO to meaningful public participation. These changes are essential if the WTO is to garner the public support it needs to stay in business.

Ongoing transatlantic food fights are emblematic of a new kind of global trade conflict, in which the stakes are the survival of national health and environmental laws, rather than such traditional trade-war issues as tariffs, quotas, and the dumping of commodities like steel or wheat.

In a dispute between the United States and the European Union over the EU's ban on hormone-raised livestock, the WTO recently rejected the EU's defense that the measure was justified by the precautionary principle.

The U.S. and the European Union have long locked horns over the EU law, which keeps hundreds of millions of dollars worth of U.S. hormone-raised beef off of European supermarket shelves. The U.S. government took up the cause of its cattle industry, arguing that the hormone ban was an unfair trade barrier that violated WTO rules.

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The EU insists the hormone ban is not an intentional trade barrier at all, but only a prudent response to public concern that eating hormone-raised beef might cause cancer and reproductive health problems. The EU has so far refused to implement the WTO ruling against the hormone ban. Last July the U.S. government retaliated by imposing WTO-approved sanctions, slapping 100 percent tariffs on $116.8 million worth of European imports, including fruit juices, mustard, pork, truffles, and Roquefort cheese.

The beef hormone controversy is widely viewed as just a warm-up for a more serious trade controversy over genetically modified organisms (GMOs). Prompted by public concern over the uncertain health and ecological effects of GMOs, the EU passed legislation in 1998 requiring all food products that contain genetically modified soybeans or corn to be labeled, in order to give consumers the ability to choose for themselves whether or not to purchase these products.

Several other countries, including Australia, Brazil, Japan, and South Korea, are now following suit. U.S. companies allege that the labeling requirements amount to trade barriers, and both the U.S. and Canadian governments are now voicing this concern at the WTO and in other international forums.

Last February, a proposed biosafety protocol to the UN Convention on Biological Diversity became the first major victim of the growing international trade war over GMOs. Negotiations had been underway for several years, aimed at putting in place a system of prior consent for the transport of genetically engineered seeds and products.

The talks were scheduled to wrap up in Cartagena, Colombia in February, but six major agricultural exporting countries-Argentina, Australia, Canada, Chile, the United States, and Uruguay-put a monkey wrench into these plans by blocking adoption of the accord. One of the main U.S. arguments against the protocol was a claim that its provisions ran counter to the rules of the WTO.

shipping2.jpg - 3.45 K Although the U.S. government has few qualms about relying on WTO rules to challenge other countries' laws when it suits U.S. trade interests, this approach can backfire when U.S. environmental laws themselves come under attack at the WTO. Several U.S. environmental laws have in fact been found to be "WTO-illegal" over the last few years. In the most recent case, a WTO dispute resolution panel ruled last year against provisions of a U.S. law aimed at protecting endangered sea turtles.

Sea turtles are both endangered and highly mobile, making international action essential if they are to be protected. The provisions of the U.S. law in question were designed to reduce the accidental death of sea turtles caused by shrimp trawling. The law closed off access to the lucrative U.S. shrimp market to countries that do not require their shrimpers to use the turtle excluder devices (TEDs) that have been mandatory for U.S. fishers since 1988 or have comparable policies.

Many nations, including 13 Latin American countries and Indonesia, Nigeria, and Thailand, responded to the U.S. law by requiring the use of TEDs. But India, Malaysia, and Pakistan chose a different tack, launching a WTO challenge rather than meet the U.S. requirement. Although the environmental effectiveness of the U.S. law was clear, a WTO dispute resolution panel concluded in 1998 that the measure violated WTO rules, a decision that calls into question the ability of countries to take effective action to protect threatened global resources.

The accord that created the WTO in 1994 strengthened the terms of dispute resolution proceedings to make rulings binding, and to provide for tougher trade retaliation in cases where countries are unwilling to adhere to panel findings by changing offending laws. But dispute resolution panels are typically composed of trade rather than environmental experts, and are conducted in closed sessions. Making WTO proceedings more transparent is essential for an organization that stands in judgement on environmental laws that were passed by democratically elected bodies.
HILARY FRENCH is Vice President for Research at the Worldwatch Institute. She is the author of "Challenging the WTO," in the November/December 1999 issue of World Watch magazine, and author of a forthcoming book, the Vanishing Borders: Protecting Planet in the Age of Globalization, to be published by W.W. Norton & Co. in March 2000.

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