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The Doha Mandates on Trade and Environment
At the Doha Ministerial Meeting organized in November 2001, it was agreed between the meeting members to launch negotiations on some issues related to trade and environment.
During the meeting, WTO Members reaffirmed their commitment to health and environmental protection and agreed to embark on a new round of trade negotiations, including negotiations on certain aspects of the linkage between trade and environment (WTO, 2004). The Committee on Trade and Environment Special Sessions (CTESS) was established to conduct the issue. In addition, the CTE and the Committee on Trade and Development were asked to act as a forum in which the environmental and developmental aspects of the negotiations launched at Doha could be debated (WTO, 2004). According to the WTO (2004), the Doha mandate has placed trade and environment work at the WTO on two tracks:
i. The CTE Special Session (CTESS) has been established to deal with the negotiations (mandate contained in paragraph 31 of the Doha Ministerial Declaration- refer to annex 2).
ii. The CTE Regular deals with the non-negotiating issues of the Doha Ministerial Declaration (paragraphs 32, 33 and 51- refer to annex) together with its original agenda contained in the 1994 Marrakesh Decision on Trade and Environment (mandate contained in paragraphs 32, 33 and 51- refer to annex 2).
Other issues that will be discussed in this section and related to trade and environments are market access and environmental requirements and the effects of trade liberalization on the environment.
Effects of Trade Liberalization on the Environment
For developing countries, international trade is considered as an important means to gain benefit in increasing the exports and improving the income of a country. To some extent, trade liberalization contributes to the economic development of a country with the incoming foreign investment in certain sectors. Therefore, it is assumed that trade liberalization in certain sectors has the potential to bring benefits for trading partners. The removal of the trade restrictions and distortions should be emphasized by the WTO members. According to the FAO (1995), some environmental interest groups argued that by contributing to economic growth and increasing the world’s demand for natural resources, trade liberalization is a cause of the problem and not the solution. Some groups proposed trade restrictions to protect the environment. They supported trade barriers and tighter restrictions in multilateral agreements to control excessive resource depletion and protecting consumers from hazardous imported products (FAO, 1995).
On that issue, in 1992, the United Nations Conference on Environment and Development (UNCED) outlined a work programme on trade and the environment and established a guideline for trade and the environment to encourage member governments to work towards national trade and environmental policies that are more compatible with each other (FAO, 1995). Following that in 1993, the United States, Canada and Mexico signed an agreement on an environmental adjunct to NAFTA that subjects trade agreements to environmental review. In 1994, a committee on trade and the environment within the WTO was set up to ensure that trade rules were responsive to environmental objectives. This is where Committee on Trade and Environment of the WTO came into the picture. The WTO Secretariat prepared a background note to address the fact that trade liberalization is not the primary cause of environmental degradation, nor are trade instruments the first-best policy for addressing environmental problems (WTO, 2004). Also the CTE has the responsibility of promoting sustainable development and making appropriate recommendations on any modifications of the provisions of the multilateral trading system (WTO, 2004).
For developing countries, the issues of sustainable development, trade and environment pose real policy dilemma as they need to increase incomes and at the same time reduce environmental damage in their countries. To some extent, the dependency of the developing countries on their natural resources cannot be denied. The developmental and food security needs, together with the macroeconomic imbalances of these countries impose pressure on their natural resources in order to reduce food import dependence and generate foreign exchange from exports (FAO, 1995). Among others, the forest sector is considered as one of the main contributors to income generation from the export of products and attracting foreign direct investment to the country.
Therefore, the pressing needs to increase income and develop the economy as well as reduce the environmental damage raise important questions about how to balance between all the effects associated with environmental protection, economic development and trade.
Recent Trends in International Trading System
Several important trends have developed within the GATT liberal trading system over the past decades. The number of GATT contracting parties has increased markedly and includes many developing countries too. Also, contracting parties have expanded GATT beyond trade in “goods” to some other areas. For instance, the negotiations were extended by including services, trade related investment measures (TRIMs) and intellectual property rights in the Uruguay Round (Lallas et al. 1992). Furthermore, the Uruguay Round negotiators created a separate negotiating group to address trade in natural resource products and sanitary and phytosanitary measures. Indeed, negotiations in these areas are relevant to the environmental concerns. In addition, countries continue to form regional trading blocks and most of them aim to establish more open or preferential trading rules among the participants. The underlying reason of setting up the regional trading block is to make the parties more competitive through economies of scale, diversification of labour markets, broader resource bases and trading preferences (Lallas et al., 1992). Many countries have also actively enforced the provisions of their GATT-based domestic trade instruments including those relating to anti-dumping, subsidies and unfair trade practices (Lallas et al., 1992). These regional and bilateral arrangements along with domestic trade rules, add another layer of rules governing international trade that increasingly affects international trade patterns (Lallas et al., 1992). To date, there has been some attention given to the potential impacts of trade on environmental protection. This trend in international trade is changing the conditions and priorities among developing countries to increase their market access. Several “economically advanced” developing countries have rapidly increased their trading activities, and many other developing countries seek to expand exports to foster internal development (Lallas et al., 1992). Many countries face pressure to increase natural resource product exports to earn income to repay international debts, or in response to fluctuating commodity prices or market access barriers in other products. Hence, the increasing trend has resulted in rising stress on the environment in those countries (Lallas et al., 1992).
Environmentally Related Standards as Non-tariff Barriers
Recently societies have increasingly become aware of the problems of environmental degradation, pollution and disruption of ecosystem at local, national and global level. Scientific and technological advances have increased greatly the understanding of the causes and consequences of environmental degradation and the global nature of the environmental problems. Liberalized trade and investment also may improve the exchange of environmental engineering and treatment technologies and services among countries, helping them to better address environmental problems. However, developing countries remain concerned that developed countries have used and will use environmental standards and related trade measures to protect their domestic markets. In tandem with that issue, it is widely recognized that nontariff barriers (NTBs) to trade have been increasingly widespread since the 1980s. These include quantitative restrictions or subsidies in agriculture, textiles and other sectors, voluntary restraint agreements, such as those in the steel sector and tariffs that increase according to the trade item’s level of processing (Lallas et al., 1992). It is assumed that some of these measures may have significant implications for environmental protection and economic development. Furthermore, strong pressure on developing countries to export natural resources and other products to service international debts or for some other reasons places additional stress on the environments of developing countries.
According to Ruddell et al. (1998), several developments in market access and trade in forest products have the potential to become new non-tariff barriers. To some extent, environmental regulations and standards may act as trade barriers especially for developing countries in adapting to these standards. The following issues might create unnecessary non-tariff barriers in forest products (Ruddell et al., 1998):
i. Environmental and trade restrictions on production and export in developed countries that might affect international trade patterns.
ii. Quantitative restrictions on imports of “unsustainably produced” timber products.
iii. The use of ecolabelling and “green” certification as import barriers.
The WTO has sent a strong message that countries having high domestic environmental standards cannot use trade policy to force their standards on the rest of the world even if the countries imposing the trade policy apply the same requirement on their domestic products. Furthermore, the agreement on TBT (GATT Standards Code) adopted in the Tokyo Round of GATT Negotiations is designed to prevent countries from using product-related standards and technical regulations to create unnecessary obstacles to trade and to encourage countries to harmonize standards at the international level. The GATT Standards Code was negotiated in order to further develop rules and disciplines to prevent “implicit discrimination” against imports through the use of “product standards”.
Table of contents :
Acknowledgements
Abstract in English
Abstract in French
List of Tables
List of Figures
List of Abbreviations
Introduction
Chapter One: Trade and environment
1.1 Background
1.2 The emergence of trade and environmental debate
1.2.1 Environment and international trade
1.3 The Doha Mandates on Trade and Environment
1.4 The Relationship between MEAs and the WTO
1.5 Market Access and environmental requirements
1.5.1 Labelling requirements and taxes for environmental purposes
1.6 Effects of Trade Liberalization on the Environmen
1.7 Recent Trends in the International Trading System
1.8 Environmentally Related Standards as Non-tariff Barriers
1.9 Conclusion
Chapter Two: Malaysian Timber Export: An Overview of the European Market
2.1 Background
2.2 Malaysia as a Key Player in the International Tropical Timber Trade
2.3 Asia: Major Destination for Malaysian Tropical Timber Products
2.4 Europe: Traditional Market for Malaysian Timber Products
2.5 Issues and Challenges Influencing Malaysian Timber Trade in Europe
2.6 Conclusion
Chapter Three: Comparative Advantage of Malaysian Wood Products in the European Market
3.1 Introduction
3.2 Comparative Advantage
3.3 Malaysian Wood Products in the European Market
3.4 Balassa Approach
3.5 Results and Discussion
3.6 Conclusion
Chapter Four: Willingness to Pay for Wood Flooring: Case Study of French Consumers
4. 1 Introduction
4.2 Valuation of Non-market Goods
4.3 Stated Preferences Approach
4.4 Sustainable Management and Willingness to Pay
4.5 Materials and Methods
4.6 Econometric Model of Choice Experiment
4.7 Data and Results
4.7.1 Simple conditional logit model
4.7.2 Conditional logit interaction model
4.8 Conclusion
Chapter Five: Discussion and conclusion of thesis
Primary Bibliography
