Unfair Trade

Unfair Trade developed countries are increasingly using trade restrictions as means to enforce their concept of sustainable development. There are different international forums like the World Trade Organisation ( wto ) where trade is the primary agenda, and the United Nation conventions where the focus is on environment and sustainable development. Over recent years, these forums have become places where the developed countries try to further their own cause. This attitude came out in the open during the wto conference on trade and environment held in Geneva on March 15-16 1999. Once again, developed countries tried to impose their environmental standards on products they import from developing countries. But, at the end of the meet, Renato Ruggiero, director general of the wto admitted that no progress had been made at the conference.

Over the last 50 years, the wto and its predecessor, the General Agreement on Tariff and Trade ( gatt ), have been successful in reducing international trade barriers. This has produced a remarkable increase in international commerce, close to three trillion us dollars per year. Though protecting the environment is not the primary objective of the wto, rules permit governments to implement within their borders any legitimate policies with respect to environment. In 1994, wto member countries agreed "to protect and preserve the environment and to enhance the means for doing so'. Multilaterally agreed, legally binding principles and rules on trade now apply to trade among 133 countries.

Unfortunately, trade and environment issues are increasingly clashing with each other and development suffers. As Klaus Topfer, executive director of the United Nations Environment Programme ( unep ), aptly summed up, "Trade and environment must be linked to development and not in a way that hurts the poor. We will never get our trade or environment policies right until the policies adequately address the economic constraints facing the developing countries. We cannot isolate trade and environment policy from the need to alleviate poverty."
Environment stick Developed countries use environment as a means to protect their own economic interest and do not allow even what may be environmentally friendly industries to grow in the poor countries. Take the case of jute bags from India. Jute industry can provide employment to thousands of people if India could export goods in jute packaging. But according to the standards set by the developed countries, jute bags are not classified as biodegradable products and, therefore, environmentally-unfriendly. Unfortunately, the government and the non-governmental organisations ( ngo s) from the North, who are usually sympathetic to the poor nations, are also falling into the trap of what some call "green fascism'. Developed nations are not above adopting double standards. "The use of trade sanctions for environmental purposes can easily be manipulated for protectionist reasons,' says Luis de la Calle, vice-president for the international trade negotiations for Mexico. "We are told to improve our production methods; to harmonise them with the environment,' says Stefan Bogdan Salej, president, Federation of Industries in the state of Minas Gerals, Brazil. "In Germany, companies conform to environmental standards. Why is it then that out of the 3,000 industrial German units in Brazil, only one meets the International Standard Organisation ( iso) 14000 standard,' asks Salej. iso 14000 spells out management standards for participating countries like environmental auditing.

There are various policies like the product method standards ( ppm s), ecolabelling and precautionary principle that are used by developed countries to disguise restrictions when it comes to trade.

PPMs: The Agreement on Technical Barriers to Trade and other related provisions in the wto allow nations to formulate national product, process and production methods standards ( ppm s) that might have international trade implications. ppm s specify characteristics of a product such as quality, performance, safety or dimensions and also include criteria such as energy efficiency, emission of pollutants and recyclability. Agricultural products must conform to phytosanitary measures to protect animals, plants and humans. However, scientific evidence need not be conclusive before restrictive policies are imposed on health grounds. ppm s regulate how goods must be produced and each nation can set its own standards. As of now, non-product process standards, such as technologies for harvesting are not part of wto laws.

Ecolabelling is a popular tool to promote environmentally preferable consumption and production patterns. Labels are given to products that have been produced by environment-friendly processes that give the consumers the right to choose.

Proponents insist that this is essentially not a barrier to trade. However, according to N D Kitikiti of Economica International Consultants, Harare, Zimbabwe, "It is naive to believe that voluntary ecolabelling has minimal impact on trade. Standards can be set artificially high in order to benefit certain products, and depending on the importance of continuing export, developing countries will be forced to reorient their domestic environment policies to conform to the requirements of major importers.' The irony is that environment goals are not even met and the burden passes on to the poor. While the products are often from developing countries, this labelling acts as a barrier to free trade and a declining export market threatens the livelihood of small producers in those countries. Often the standards can only be achieved by the developed countries themselves. For example, a large part of the demand for textiles in the European Union ( eu ) is met through imports: as much as 80 per cent of the value of eu imports of t -shirts and bed linen originates from developing countries. As most of the harmful environment effects meant to be addressed by the ppm -related criteria are present in developing countries, they are hardpressed to meet the strict standards set by the eu regarding product processes. These countries are unable to meet the strict eu standards regarding production processes.

THE PRECAUTIONARY PRINCIPLE: It allows importing countries to legally halt trade in case of doubt. Often used in environmental policy, it allows preventive measures when scientific evidence is lacking, within a protocol. This principle legitimises barriers to free trade.

It is, therefore, possible for a country to insist that shrimps farmed in the developing countries should meet not only a particular standard but also be farmed in a particular way. However, if a developing country were to say that genetically-modified food should be banned, it would be asked to produce scientific evidence to back up this claim but may not have the resources to do so.

The faith that the us industry has on un environment negotiations and, indeed, on the environment is obvious from the nature of their lobbying. They have been seeking a shift in the forum of the biosafety protocol which will deal with international biotechnology trade, currently under the aegis of the Convention on Biological Diversity to the wto arena. It seems the us is going to push for a dilution of the precautionary principle and insist that it be based on sound science, knowing fully well the importing countries are hardly in a position to do so. The us also insists that a country has the right to achieve those levels of health, safety and environmental protection that they deem appropriate, even when such levels of protection are higher than those provided by international standards.
Missing link Debates currently rage on what exactly the relation between trade and environment should be. The focus is usually on the concerns raised by the environment community and proposed changes in the wto modus operandi . There are gaps in the picture that is presented. The concerns of the developing countries operating within the wto are not considered. "The relation between trade and environment is one about conciliation and compromise,' feels Taimoon Stewart of the University of West Indies. "Any such process requires understanding the other party's fears and concerns and respecting their views,' he said.

Unfortunately, member countries, India being one of them, have no special expertise on environmental problems. Active campaigning by ngo s like the Switzerland-based World Wide Fund for Nature and the London-based Foundation for International Environ mental Law and Development succeeded in getting the us to unilaterally ban shrimp import from India, Pakistan and Malaysia. The technique employed by these countries to catch shrimps was proving a threat to turtles. The us government took action under its own national Endangered Species Act. It demanded that shrimp trawlers use turtle excluder devices ( ted s) in their nets in areas where turtles were likely to be present. "Shrimp farming causes the death of less than half a per cent of turtles,' discloses Carlos Mazal, executive director of the Peru-based intergo vernmental organisation, Oldepesca. "Should not the other reasons be tackled first?' he asks. Some like Trinidad and Tobago did not even dare protest (see box: Counter-productive ). Joint action and representation by the affected countries have resulted in the ban being lifted, but at what cost? Fifty of the 200-odd Indian shrimp exporters have already fixed ted s after spending considerable amounts of money.

Written by Indira Khurana from Geneva

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