MOREPRESS RELEASE
TRADE AND ENVIRONMENT BULLETIN
PRESS/TE/037
16 October 2001
(01-5053)
WTO COMMITTEE ON TRADE AND ENVI RONMENT DISCUSSES SERVICES,
TWO THEMATIC CLUSTERS  AND ADOPTS 2001 REPORT AND SCHEDULE OF
MEETINGS FOR 2002
At the WTO Committee on Trade and Environment (CTE) meeting on 4 October 2001,
Members adopted the CTE Annual Report for 2001 (see Annex).  The Chairman, Ambassador
Alejandro Jara (Chile), will present this Report to the General Council at its meeting of 23 October
2001.  Members also adopted the CTE's work programme and schedule of meetings for 2002.
At this meeting, Members addressed services and the environment, and the two thematic
clusters of market access and the linkages between the multilateral environmental and trade agendas.
The meeting was brief since Members were heavily engaged in preparing for the WTO's upcoming
Fourth Ministerial Conference in Doha, Qatar, which will be held from 9-13 November 2001.1 At the
meeting, the Secretariat was requested to conduct a literature survey on the environmental impact of
services liberalization in certain services sectors.  Statements by various Members were made on the
environmental benefits of removing trade restrictions and distortions in the agriculture, energy and
environmental services sectors.
A detailed report of the October meeting follows.  Papers referred to in this Bulletin can be
accessed through the WTO web site (http, or upon request from the Trade and Environment Division.
                                                     
1 Some of the issues on the agenda for this meeting were not discussed, such as the item 10 on WTO
relations with intergovernmental and non-governmental organizations.PRESS/TE/037
Page 2
MOREItem 9 The work programme envisaged in th e Decision on Trade in Services and the
Environment
The Decision on Trade in Services and the Environment requested the CTE to examine the
relationship between services trade and the environment, including sustainable development, to
determine whether any modifications of Article XIV of the General Agreement on Trade in Services
(GATS) are required.  Paragraph (b) of GATS Article XIV on General Exceptions  allows for the
exception of measures "necessary to protect human, animal or plant life or health."   In relation to the
Decision of Trade in Services, Switzerland reque sted the WTO Secretariat to conduct a literature
survey on the environmental impact of services liberalization, with a focus on the (1) tourism, (2)
transport, (3) energy, and (4) environmental services sectors.  It indicated that since negotiations on
the liberalization of trade in services were alre ady underway in the Council for Trade in Services, it
was important for the CTE to begin to consider their environmental implications.  It requested that the
Secretariat examine studies prepared at the national and international levels, as well as review relevantwork conducted by non-governmental organizations (NGOs) in preparing this survey.   Studies
conducted by the World Tourism Organization and the World Wide Fund for Nature were specifically
mentioned.
The European Communities (EC) supported the Swiss request and asked for an update of a
Secretariat Note entitled Environment and Services  from 1995 which examined the negotiating history
of GATS Article XIV and relevant ongoing work in other international organizations.
2   Japan, the
United States, the Czech Republic, Canada and Norway expressed their support for the Swiss request,
and the Chairman concluded that both the EC and Swiss requests would be met through a single
study.
MARKET ACCESS
Item 4 The provisions of the multilatera l trading system with respect to the
transparency of trade measures used  for environmental purposes relating to
products, including standards and technical regulations, packaging, labelling
and recycling
Under this item the Secretariat circulated the Environmental Database (EDB) for the year
2000 (WT/CTE/W/195), which compiled the environment-related notifications under WTO
Agreements.  The Secretariat will update the EDB for the year 2001. Canada updated Members on its
signature of the Biosafety Protocol on 19 April 2001.
• 
Item 6 The effect of environmental measures on market access, especially in relation to
developing countries, in particular to the least developed among them, and
environmental benefits of removing trade restrictions and distortions
Sectoral analysis
Agriculture
Costa Rica presented a paper on Organic Agriculture  and  explained the growing importance
of the organic agricultural sector for the Costa Rican economy.3  Small agricultural producers have
been shifting towards organic agriculture due to the high cost of agrochemicals and their loss of
effectiveness, the health and environmental problems associated with traditional agriculture and the
                                                     
2 WT/CTE/W/9.
3 WT/CTE/W/202 (8 October 2001).PRESS/TE/037
Page 3
MOREsearch for new niche markets. It said  there were now approximately 4000 organic agricultural
producers in Costa Rica, with a total of ov er 9400 hectares devoted to organic production.
Costa Rica hoped its organic agricultural produce would be recognized by the European
Union in the near future for increased trade.   Organic agriculture inspection and certification systems
have also been developed in Costa Rica.  However, despite growth of this sector,  problems in theform of high costs of certification, lack of information on market opportunities, insufficient research
and transfer of technology, were encountered.  It welcomed the support being given by developed
countries to this growing sector, as well as the project by the United Nations Conference on Trade and
Development (UNCTAD) on Strengthening Research and Policy-Making on Trade and Environment
in Developing Countries , which addressed, amongst other issues,  the promotion of organic
agriculture.
Paraguay said the Costa Rican experience was relevant to the agricultural sectors of many
developing countries.  It underlined the importance of designing governmental support programmes
for this sector, for developing certification systems for organic agriculture as well as marketing
strategies.  Chile said it also had a growing organic agriculture sector (producing organic tea, honey
and wine).  It highlighted the important role the private sector has played in the transition to organicagriculture, indicating that many consumers were willing to pay price premiums for organic products.
It emphasized the importance of greater international cooperation in this field, as well as cooperation
with NGOs and consumer groups.   The EC said it was pleased organic agriculture was an expanding
sector in developing countries and felt this was an example of the synergies which could exist
between trade, development and the environment.  It stressed the need for greater transparency incertification to allow for increased market access.
 India said when item 6 was put on the agenda of the CTE by developing countries, the
intention was to increase market access for the developing world in such sectors as agriculture and
textiles, where there had been a long history of protectionism.   This protectionism preventsdeveloping countries from obtaining, through trade, the financial resources required for environmental
protection. India felt that item 6 had been gradually narrowed to include only those market access
opportunities that could lead to "win-win" situatio ns (for trade and the environment).  While the
emphasis on win-win situations was not wrong and it was a welcome development that developing
countries could export environmentally-friendly goods  (such as organic agriculture), India said the
original focus of item 6 was on granting greater market access to developing countries in all areas of
comparative advantage, since any form of trade could generate the financial resources needed for
environmental protection.
Energy
 Discussions focussed on a study prepared by the WTO Secretariat on The Environmental
Benefits of Removing Trade Restrictions  and Distortions:  The Energy Sector .
4  The Czech Republic
updated the Committee on its energy policy.   The EC made preliminary comments on the Secretariat
study, indicating that the energy sector was particularly challenging from a trade and environment
point of view because of the issue of climate change.  It said the Committee had to work to distinguish
good from bad subsidies, that there was a need to carefully define subsidies  and that subsidy reformcould help by having energy prices reflecting envi ronmental cost.  Norway agreed with a number of
statements made in the study; namely that there were both good and bad subsidies, that subsidy
reform did not equal subsidy removal, that subsidies had to be carefully targeted to be effective, that
certain taxes and subsidies were important for social and developmental objectives and that carefully
formulated environmental policies would always be needed.
                                                     
4 WT/CTE/W/200 (18 September 2001).PRESS/TE/037
Page 4
MORECanada said that while the paper suggested carbon taxes were a useful remedy to the
environmental problems associated with energy consumption,  it was important to bear in mind that
they were not the only instrument.  Recent work by the Organization for Economic Cooperation and
Development (OECD) and the International Energy Agency (IEA) had highlighted this.   Egypt raised
the issue of the transfer of technology as being crucial for developing countries in the energy sector.
India supported that point, arguing that the whole issue of energy consumption, as opposed toproduction, needed to be given greater attent ion, since energy consumption could also be
environmentally-harmful.  Finally, the representative of the OECD presented a recent OECD study on
the Environmental Effects of Liberalizing Fossil Fuels Trade:  Results from the OECD Green Model ,
5
and cautioned against the simplistic classification of subsidies into the "good" and the "bad", since
subsidies that were good in some situations, could be bad in others.
Environmental Services
A representative of the WTO's Trade in Services Division gave a brief presentation on the
status of environmental and energy services und er GATS negotiations, explaining that various
proposals had been tabled on how trade liberalization in these two sectors could proceed.   She
indicated that the classification of environmental and energy services was one of the main issues
which Members were addressing.  India stated that it should come as no surprise that developingcountries had not made a single proposal on environmental services, since developed countries were
the main suppliers of these services and would be the main ones to benefit trade-wise.  He
acknowledged, however, that the environmental benefits could accrue to both developed and
developing countries.
LINKAGES BETWEEN THE MULTILATERAL ENVIRONMENT AND TRADE AGENDAS
Items 1&5 The relationship between the provisions of the multilateral trading system and
trade measures for environmental purposes, including those pursuant to MEAs;
and the relationship between the dispute settlement mechanisms in the
multilateral trading system and those found in MEAs
A representative from the United Nations Environment Programme (UNEP) updated the
CTE on its work on trade and environment.   He indicated that UNEP has developed three central
elements to its work programme  including:  enhancing mutual supportiveness between multilateral
environmental agreements (MEAs) and the WTO; assessing the environmental benefits of trade-
related policies and capacity-building on the trade a nd environment policy interface.  He said that at
the WTO's Fourth Ministerial Conference, UNEP would present the results of its work onenvironmental assessment at a side event which would take place on the morning of November 11
th.
Moreover, a second synthesis report on the outputs of five meetings on the MEA-WTO relationship,
which UNEP had organized since June 1999, would also be released in advance of the Ministerial
Conference.   The document will outline next steps in the enhancement of synergies between the
WTO and MEAs.  Prior to the first CTE meeting in 2002, UNEP announced that it would hold a
second workshop on Subsidies and Sustainable Fisheries Management.    It would continue to
complement the work of the CTE, and participate in the WTO's regional seminars on trade and theenvironment.
                                                     
5 COM/TD/ENV(2000)38/FINAL (September 2001).PRESS/TE/037
Page 5
MOREItem 8 The relevant provisions of the Agreement on Trade-Related Aspects of
Intellectual Property Rights
Brazil updated the CTE on two recent events of relevance to item 8:  (1) an event co-
sponsored by the Brazilian government and the EC on The Protection of Biodiversity, Traditional
Knowledge and Intellectual Property , which took place in Brazil from 9-11 September 2001; (2) a
seminar organized by UNCTAD and the Foundation for International Environmental Law andDevelopment (FIELD) on Strengthening Research and Policy-Making Capacity on Trade and
Environment in Developing Countries , which took place in Tanzania from 4-6 April 2001.   In Brazil,
fruitful discussions were held on how developing countries could grant access to their genetic
resources in a sustainable manner and in fulfilment of their development objectives.   It was noted that
patents could be an important tool in promoting sustainable access to genetic resources.   However,
the meeting highlighted the importance of ensuring that the TRIPS Agreement and the Convention on
Biological Diversity (CBD) were implemented in a mutually supportive fashion.   While the CBDrefered to the TRIPS Agreement, the TRIPS Agreement made no similar reference to the CBD.  The
meeting indicated that certain elemen ts of the CBD needed to be incorporated in Article 27.3(b) of the
TRIPS Agreement.
In Tanzania, a working group on biodiversity held discussions on issues relevant to item 8.
The working group emphasized the need to maintain the existing flexibility in Article 27.3(b), butindicated that the Article should to be adapted to developmental and environmental needs.   It noted
that there was ambiguity in some of the terms used in the Article (such as the term "micro-
organisms") which had to be addressed.   It drew at tention to the importance of protecting traditional
knowledge and preventing biopiracy, as well as cooperating at the international level on these issues.
India expressed its hope that Ministers at the WTO's Fourth Ministerial Conference would give somedirection to the CTE and the TRIPS Council in this area.
Report of the CTE for 2001
Members adopted the Report of the CTE's work in 2001 (WT/CTE/6), which the Chairman
forwarded to the General Council for its meeting on the 23
rd of October.  The CTE agreed to hold
three meetings next year on 21-22 March, 12-13 June, and 9-10 October.PRESS/TE/037
Page 6
MOREANNEX
REPORT (2001) OF THE COMMITTEE ON TRADE AND ENVIRONMENT
(WT/CTE/W/6)
1. The Committee on Trade and Environment (CTE) continued its analysis of the items of the work
programme in the Marrakesh Ministerial Decision on Trade and Environment, pursuing a clusterapproach for the themes of market access and the li nkages between the multilateral environmental and
trade agendas.  Discussions took place under th e Chairship of Ambassador Yolande Biké (Gabon),
followed by the Chairship of Ambassador Alejandro Jara (Chile).
2. The CTE held three meetings in 2001 (see attached Annex).  The 13-14 February meeting
examined those items of the work programme relevant to the theme of market access, including
items 2, 3, 4 and 6.  Under item 2, discussion took place on a paper submitted by the
European Communities on "The European Council Resolution on the Precautionary Principle",adopted in Nice in December 2000.  Under item 3, the Chairman of the Nordic Technical Working
Group on Fisheries Eco-Labelling Criteria presented the voluntary certification scheme the Working
Group has developed for products from sustainable fisheries, and a discussion on ecolabels took
place.  The Environmental Database (EDB) for the year 1999 was presented to Members under
item 4.
3. The Committee also broadened and deepened its sectoral analysis under item 6, with particular
focus on the agriculture, energy, fisheries, and non-ferrous metals sectors.  The Food and Agriculture
Organization (FAO), the Organization for Economic  Cooperation and Development (OECD) and the
United Nations Environment Programme (UNEP), informed the Committee of progress made in their
work on fisheries.   Under item 6, discussion was also held on the effects of environmental measureson the market access of developing countries in relation to a paper circulated by India.  The Members
also discussed the benefits of addressing initiatives that advance trade liberalization, environmental
protection and development.
4. The focus of the meeting held on 27-28 June  was on those items related to the multilateral
environmental and trade agendas, including items 1&5, 7 and 8.  On 27 June, the CTE held anInformation Session with the Secretariats of Multilateral Environmental Agreements (MEAs) to
enhance understanding of the compliance and dispute settlement provisions in MEAs and the WTO.
The WTO and UNEP Secretariats, in close cooperation with MEA Secretariats, prepared a
background paper for the meeting (WT/CTE/W/191).   Representatives of the following MEA
Secretariats were involved:
- United Nations Framework Convention on Climate Change;
- Montreal Protocol on Substances that Deplete the Ozone Layer;
- Basel Convention on the Control of Tran sboundary Movements of Hazardous Wastes
and their Disposal;
- Rotterdam Convention on Prior Informed Consent;
- Stockholm Convention on Persistent Organic Pollutants;
- Convention on Biological Diversity a nd the Cartagena Protocol on Biosafety;
- United Nations Fish Stocks Agreement;  and
- Convention on International Trade in Endangered Species of Wild Fauna and Flora.
5. While unable to attend the meeting, the International Commission for the Conservation of
Atlantic Tunas and the Commission for the Conservation of Antarctic Marine Living Resourcescontributed to the background paper, and cooperated closely with the WTO and UNEP Secretariats.
Members noted the important contribution of MEA Information Sessions to increasing mutual
understanding of the relationship between the WT O and MEAs, particularly through identifyingPRESS/TE/037
Page 7
MOREsynergies between the WTO, UNEP and MEAs.  These Sessions also provide an excellent opportunity
to forge practical institutional links between the WTO, UNEP and MEA Secretariats.
6. To enhance their understanding of item 7, Members invited the United Nations Secretariat to
present the UN Consolidated List of Products Whose Consumption and/or Sale Has Been Banned,
Withdrawn, Severely Restricted or Not Approved by Governments.  The presentation stimulateddiscussion on the issue of the export of domestically prohibited goods (DPGs), and demonstrated that
much information already exists on these goods.  The List needed to be more widely disseminated,
including through the Internet, and better used by countries in need of such information.  Developing
countries expressed a need for technical assistance and capacity building to enable them to effectively
control the import of DPGs.
7. Under item 8, discussion was held on a paper presented by Brazil on the review of Article 27.3(b)
of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  The
representative of the Convention on Biological Diversity (CBD) briefed the Committee on a decision
adopted by the CBD, which invites WTO Members to acknowledge the relevant provisions of the
CBD and to take into account the inter-relationshi p between the provisions of the TRIPS Agreement
and that Convention.  This was followed by a presentation by the representative of the World
Intellectual Property Organization (WIPO) on the work of the WIPO Intergovernmental Committeeon Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore.
8. The 4 October  meeting addressed items 9 and 10, as well as both thematic clusters previously
taken up during the year, and adopted this report of the CTE to the General Council.  In addition to
items 9 and 10, discussion of item 6 took place, with a focus on the agriculture and energy sectors.
9. The EDB was updated for the year 2000 by the Secretariat in document WT/CTE/W/195.  The
EDB was established in 1998 in fulfilment of the recommendation in the 1996 Report of the CTE to
the Singapore Ministerial Conference (WT/CTE/1) to compile and update annually all environment-
related notifications to the WTO.  The list of documents circulated in the CTE since 1995 is contained
in WT/CTE/INF/4.
10. As part of continued technical assistance in the trade and environment area, the Secretariat
organized a regional seminar on trade and environment for government officials from developing and
least-developed countries in Thailand in March 2001, and will be organizing another such seminar in
the Caribbean region in December this year.  The objective of these seminars is to raise awareness on
the linkages between trade, environment and sust ainable development and to enhance the dialogue
between policy-makers from Ministries of both trade and environment in developing andleast-developed WTO Member governments.
11. Pending the outcome of the Fourth WTO Ministerial Conference and the future work programme
of the WTO, the CTE agreed to hold three meetings in 2002 to continue to deepen its analysis of all
items on its work programme based on the thematic clusters.  It also agreed to work towards the
World Summit on Sustainable Development (also known as "Rio+10"), to be held in Johannesburg,
South Africa, from 2-11 September 2002.  Consideration will also be given to any other issues
Members wish the Committee to address in order to fulfill its mandate.PRESS/TE/037
Page 8
ANNEX TO ANNUAL REPORT
Work Programme and Schedule of Meetings for 2001
1. The 2000 Report of the Committee on Trade and Environment (WT/CTE/5) sets out that the
CTE will continue to analyse all the items on its work programme based on the "cluster approach"under the themes of market access and the linkages between the multilateral environment and trade
agendas.  Pending the future work programme of the WTO and building on the contribution of
Members, including where possible their national experience, on the items of the work programme,
the following tentative schedule of meetings is proposed.  At each meeting, time will be allotted for
Members, if they so wish, to return to items discussed at the previous meeting.
2. The CTE meeting of 13-14 February will address those items relevant to the theme of market
access, including:
Item 2: the relationship between environmental policies relevant to trade and environmental
measures with significant trade effects and the provisions of the multilateral trading
system;
Item 3: the relationship between the provisions of the multilateral trading system and:
(a) charges and taxes for environmental purposes;
(b) requirements for environmental purp oses relating to products, including
standards and technical regulations, packaging, labelling and recycling;
Item 4: the provisions of the multilateral trading system with respect to the transparency of
trade measures used for environmental purposes and environmental measures and
requirements which have significant trade effects;  and
Item 6: the effect of environmental measures on market access, especially in relation to
developing countries, in particular to the least developed among them, and
environmental benefits of removing trade restrictions and distortions.
3. At a meeting on 27-28 June the CTE will discuss the items related to the linkages between the
multilateral environmental and trade agendas, including:
MEA Information Session;
Item 1: the relationship between the provisions of the multilateral trading system and trade
measures for environmental purposes, including those pursuant to multilateral
environmental agreements;
Item 5: the relationship between the dispute settlement mechanisms in the multilateral trading
system and those found in multilateral environmental agreements;
Item 7: the issue of exports of domestically prohibited goods;  and
Item 8: the relevant provisions of the Agreement on Trade-Related Aspects of Intellectual
Property Rights.
4. On 4 October, the CTE's discussions will include:Item 9: the work programme envisaged in the Decision on Trade in Services and the
Environment;
Item 10: input to the relevant bodies in respect of appropriate arrangements for relations with
intergovernmental and non-governmental organizations referred to in Article V of the
WTO;
Review of the two thematic clusters of market access (items 2, 3, 4 and 6) and the linkages betweenthe multilateral environmental and trade agendas (items 1, 5, 7 and 8);  and adoption of the 2001
Report of the CTE.
END