The Global Environmental Operative

The Global Environmental Operative (GEO) is a hypothetical global environmental rights organization. The group was founded to promote awareness of global environmental, and ecological problems. Through its position at the table of the WTO, GEO hopes to introduce of a long-needed voice of environmental responsibility within the context of global trade. Fundamental to our position is non-adherence to the ‘classical’ doctrine of the GATT and the WTO that increases and liberalizations in trade will, alone, generate wealth in poorer nations that will enable them to pursue environmentally friendly production methods (Dillon, p352).

However, GEO is in favour of global trade. It is our belief that through proper administration of trade, global standards of prosperity can be increased, while at the same time ensuring protection of both local environments as well as the global commons (oceans, atmosphere, etc.). Without people to trade with on earth, organizations such as the WTO will have a tough time negotiating anything of purpose. GEO adopts a long-range vision for protection of the earth, and considers an environmentally minded approach to be beneficial to both the people of earth and the economy of the world, particularly when considered in the context of long-term benefits.

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GEO recognizes and embraces the language of the WTO preamble that directs the trading nations towards “raising standards of living” (Ward, p597), as well as the “allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development” listed as an objective in the WTO agreement (Ward p599). To these ends, we have outlined positions on three issues to be discussed at the upcoming Hamilton Round of the WTO.

Article I

Investment Liberalisation:

GEO views foreign investment in developing economies as a potential means of spreading global wealth from areas where it is concentrated to those areas that could benefit most from it. From an environmental perspective, trade agreements that seek to abolish or severely restrict the ability of host-nations to impose trade-related investment measures (TRIMs) are viewed as potentially damaging to environmental protection.

Current definitions of TRIMs are often nebulous; discussing them as state policy that “restricts the inflow of foreign investment [distorting] the pattern of both production and trade” (DeLuca p254). Such definitions can and have been used to challenge local environmental laws, successfully rescinding them by portraying them as barriers to foreign direct investment (FDI). GEO is committed to setting up strong regulations to prevent the ‘race to the bottom’ of local environmental standards. GEO recognizes the necessity of ensuring that environmental laws are not used as unilateral protectionist tools, however it is GEO’s goal to define the difference between protectionist trade measures and protective environmental measures. GEO also recognizes that opposition to TRIMs is often the domain of wealthy nations, with numerous MNC interests. In GATT discussions of TRIMs, the EU granted support for six of eight measures proposed by the United States, while Japan supported seven. Representatives from developing nations supported none (DeLuca, p256). GEO is committed to setting standards for developing nations to prevent manipulation of local environmental laws in the poorer nations of the world by dangling FDI capital in front of them.

Current wording in international trade documents such as the Free Trade Area of the Americas draft (FTAA) implore countries to “strive to ensure that environmental and labour laws are not relaxed to attract investment” (Elwell et.al. p25). GEO agrees with the sentiment of these statements, but a simple request to “strive” towards maintenance of strong environmental goals is not enough given pressure to lower them in the face of much needed development capital. GEO looks forward to strengthening the language regarding protection of environmental standards in light of TRIMs, making sure that a well reasoned and forward looking national policy is not repealed due to either pressure from corporate investors or by a WTO ruling. GEO’s solution to the problem of determination of protective versus protectionist laws is discussed later in Article II of this document.

NAFTA, the North American Free Trade Agreement, ratified January 1994 prior to the establishment of the WTO, has built into it provisions granting great power to the sources of FDI, the corporations themselves; it is the famous Chapter 11. Under Chapter 11 investors can seek damages from foreign governments by way of lawsuit when anything perceived as a TRIM, standing in the way to greater profits, raises their ire. This tool, granting power equivalent or greater to that held by states to corporate interests, has the potential to eradicate environmental and conservational measures enacted by governments. Challenges under Chapter 11 are “determined by a secretive international arbitral tribunals, which operate outside the framework of domestic law, courts or constitutional guarantees of fairness, due process, fundamental justice and equality” (Elwell et.al, p25)

GEO is opposed to such language being integrated into any future WTO document regarding trade liberalisation. Since the treaty of Westphalia, states have been regarded as the only legitimate actors in international affairs. Though GEO believes that due process is often questionable within states, the nature of a state is that it must answer to its citizenry and thus ideally each has a vested interest in the protection of their own resources. A corporate interest must not be given means to challenge the state, as there is little evidence pointing to any corporate responsibility beyond profit and the bottom line. For this reason GEO is opposed to allowing corporate challenges to government policy.

GEO is also opposed to closed-door tribunals in any dispute over TRIMs. WTO disputes and subsequent rulings tend to set precedents. GEO believes the limit placed upon WTO power in regards to arbitral rulings is “often the result of political discourse rather than explicit legal discourse” (Ward p599). GEO believes that such negotiations should remain transparent so as to facilitate informed political discourse of the electorate of involved states, GEO maintains that such public awareness will further prevent the degradation of environmental standards by reducing closed-door deals between national governments and corporate interests.

Article II

Environmental and Labour Concerns

GEO recognizes that both environmental and labour concerns relating to trade are unfairly underestimated in importance if divorced from their human rights and non-economic values (Ward p599). From a purely economic viewpoint, deregulated free trade has massive benefits, but has been shown to lead to “unemployment and environmental degradation … [due to pressures] of competition” (Dillon p358). Unfettered and unregulated trade is often presented as the solution to these problems, curiously leading to the conclusion drawn by Dillon that “if ‘ever freer trade’ harms the environment, then only more trade can heal it” (Dillon, p358). GEO maintains that environmental standards must be in place to limit trade where it would compromise environmental security and labour standards.

GEOs simplest trade-related position states that voluntary eco-labelling measures enacted by states should be recognized as non-state activities. It is GEO’s belief that the trade distortions as a result of customer preference to purchase goods labelled ‘environmentally friendlier’ are not state actions. GEO argues that because application for an eco-label is voluntary, such applications are the actions of private business and thus not subject to regulation under the guise of technical barriers to trade (TBT) or article XX of the GATT.

GEO believes that ruling a voluntary policy such as the European Union’s voluntary eco-labelling program as a state sponsored barrier to trade could set a precedent whereby “every governmental measure beyond the classic regulatory instruments would be subject to scrutiny under the WTO/GATT system.” (Tietje, p144) since it could be argued that many other activities pursued by governments within their own borders could indirectly affect demand for certain goods, in the same way that customer preference often leads to selective purchasing of eco-labelled goods. Therefore GEO believes that protection of voluntary eco-labels cements the “consumer’s right to know what is in their food”, and any trade distortions arising from that should not lead to their consideration as TBTs. (Elwell et.al, p15)

Likely more controversial than the stance on voluntary eco-labelling, is GEO’s assertion that any trade-barriers stipulated as methods of enforcement of multilateral environmental agreements (MEAs) ratified by WTO member states should be regarded as legitimate by WTO tribunals, and also not fall under the title of technical barriers to trade (TBT). MEAs such as the Montreal Protocol on Ozone depleting chemicals, often utilize trade sanctions as a means to enforcement of certain goals, such as limiting industrial use and trade in ozone depleting chlorofluorocarbons (Ward p609). In the interest of global trade, GEO does recognize that these legitimate trade sanctions should only be enacted as a last-ditch measure, only being ‘legal’ in the eyes of the WTO following documented offers of financial or technical assistance by other WTO-members/MEA-signatories towards the MEA violating nation.

The WTO possesses an ability to denature or severely water-down current and future MEAs, which often rely on sanctions against non-compliant nations to prevent ‘free rider’ nations from continuing down the environmentally destructive path to short-term profit, while other nations look towards long-term goals by strengthening environmental controls. Without permitting MEAs these crucial enforcement tools, the WTO threatens to accelerate the ‘race to the bottom’ of global standards, thus contravening its commitment to sustainable development in the eyes of GEO.

The most sweeping position that GEO will submit at the upcoming Hamilton round of the WTO is based upon current WTO precedent on Trade-related intellectual property rights (TRIPs). As alluded to in article I, GEO hopes to set out a policy to reduce the ambiguity between unlawful protectionist barriers to trade and sustainable environmentally protective statutes. Starting from observations of the WTO policy on intellectual property (IP), where there is strong pressure upon states to ‘harmonize’ laws regarding IP (Dillon, p363) GEO examines the argument in terms of environment and labour standards. Part of the pressure to forge common IP legislation worldwide comes from a realization that when IP laws are in harmony, they cannot be cited as trade barriers. GEO promotes global harmonization of environmental and social laws, to the end that a common set of environmental standards will prevent legitimate protective environmental and social regulations from being labelled as protectionist.

GEO believes that there will be an initial negative reaction within the WTO to this proposal. A cursory glance may prompt WTO members to state that this end is not within the WTO mandate. Those who view such proposed environmental and labour standards as an infringement on member nations sovereignty will be hard-pressed to explain how pressure can be placed on nations to harmonize in regards to IP but not in regards to global environmental concerns. Again, GEO asserts that global environmental and labour standards are crucial to preventing the ‘downward spiral’ of ever-declining standards in light of the competitive pressures of global trade and investment. Such pressures have already shown themselves, an example of which being the NAFTA-established export processing zones in Mexico, where industrial pollution was rampant as a means of keeping production costs low (Ward, p611). Instead of a threat to sovereignty, GEO invites WTO member states to see harmonized environmental and labour standards as an expression of solidarity between countries in their pursuit of the increased standard of living for the world’s citizens as discussed in the WTO charter. (Ward, p611)

Article III

Intellectual Property Rights

Though many areas of IP standards are not within the mandate of GEO to discuss, the area of IP as it relates to biotechnology is important to discuss. GEO is opposed to the actions of certain corporate ‘bioprospectors’, who seek to acquire patents on traditional medicines of the world’s indigenous peoples. GEO seeks to uphold the convention on biological diversity (CBD) that “gives national states sovereign rights over their biological resources and allows protection of indigenous knowledge and rights” (Elwell et.al, p14). To this end, GEO hopes the WTO recognizes the ‘prior use’ of indigenous medicines, not allowing them to be considered as developed intellectual property. This is GEO’s only specific stance on IP rights.

GEO is also opposed in spirit to many aspects of TRIPs policy in general, but realizes that in order to promote harmonization of environmental and social laws, certain costs must be accrued. Permitting the further harmonization of IP laws sets a standard to rise to in terms of harmonizing other laws towards global long-term environmental and social goals. In regards to the very ‘hot’ environmental topic in the realm of IP, genetically modified (GM) foods, GEO hopes that goals spelled out in Article II regarding voluntary labelling systems, will be respected by the WTO. This will prevent future legislation on voluntary labelling of GM foods enacted by governments from falling under the category of a TBT. GEO believes the functionality of this compromise rests on the power of the informed consumer, and market pressures that will arise from consumer knowledge of product contents. GEO also notes that should provisions spelled out in Article II of this document come to pass, future MEAs on GM foods that are ratified by WTO member states will not be challenged by the WTO as protectionist measures.

Conclusion

GEO believes that the positions spelled out here are well reasoned and serve the goal of environmental sustainability in light of the three issues to be discussed at the upcoming Hamilton round of the WTO. It is understood that reliance on a major tenant of WTO TRIPs policy ties the hands of GEO in terms of formulating positions on IP rights. This is not perceived as an ideal situation by GEO, but it is recognized as a compromise in the name of furthering environmental goals. Despite these compromises, GEO feels that in this document it has spelled out several goals that, if agreed upon, will maximize the WTO ability to promote sustainable development and environmental protection.