GATT vs environment
p. 35 · Read in the full issue
NOW the mammoth Uruguay round of trade talks is complete people are beginning to comb through the thousands of clauses which make up this history making deal.
According to Greenpeace the GATT agreement is a potential environmental disaster for small' countries.
Clauses insisting that there be no impediments to free trade can be used to challenge national and state legislation to protect the environment and are likely to pull the teeth of future international environment treaties. It’s a case of clash of ideology. GATT (General Agreement on Tariffs and Trade) is all about breaking down thee regulations which hamper business and letting the market have a free rein.
Environmental protection has been about protecting our natural resources from just these forces. As Noni Keyes, Greenpeace’s Canberra-based Pacific
campaigner puts it “it is precisely because the market has failed to protect the environment that governments have been pressured to develop legislation and policies to protect our environment and natural resources.
“It (the GATT agreement) effectively says that trade is paramount over environment when in reality trade should be serving social objectives including environmental protection and sustainable development. “That’s where we think the whole Uruguay round went right off the rails” said Ms Keyes.
“There was a refusal by the negotiating countries to include sustainable development as a goal and an overriding objective of what trade is all about.”
“The new rules diminish a government’s sovereignty over its natural resources” Ms Keyes said. As yet there have been few formal challenges to national regulations under GATT but if the indications from smaller free trade agreements such as the US. Canada Free Trade Agreement or the European Union are anything to go by then challenge will be many and varied.
Under the European agreement Danish bottle recycling laws and Belgian limits on hazardous waste imports are under challenge in the European Court as disguised barriers to trade. In Canada, the government of the state of British Columbia decided to not to go ahead with a reforestation program to avoid a battle over whether the program constituted a subsidy to Canadian timber exporters.
One of the few environment related decisions by the GATT dispute resolution panel disallowed regulations designed to protect herring and salmon in Canada. Under GATT rules the penalties for offending the principles of free trade are high; the ultimate weapon being full trade sanctions. Although most Pacific Island nations are not members of GATT they could still be eligible for these sorts of penalties if they violate GATT guidelines.
As Noni Keyes puts it “this is not a very fair or level playing field when you look at some of the differences in economic might and power between a small country and a large country”. GATT has a myriad of rules which could conflict with the policies of the elected governments of Pacific Island nations.
In the area of forest protection both Papua New Guinea and Solomon Islands have been vigorously pursuing policies which limit the export of raw logs and favour local control of the industry and value adding at home. Under new trade rules which prohibit export restrictions rules banning the
export of raw logs instituted by countries such as Indonesia and the
Philippines have been challenged by
Japan and the European Union.
GATT also contains rules forbidding measures which favour local industry over foreign investment. Many de veloping countries are very concerned that these rules will keep the third world in the role of exporting resources.
Says Noni Keyes “it will be very difficult to get out of that in the long run because when you can’t discrimi nate in favour of your own domestic industries then it gives favour to transnational corporations that are in the best position to take advantage of access to resources all over the world.
Essentially that is who the new GATT arrangements really benefit in the long run”.
Moves to harmonise standards and
safeguards (ie. make them the same)
threaten to reduce environmental con
trols to the lowest common denominator. Still more rules which ignore how a product is produced have started to undermine products produced with minimal environmental impact. A recent GATT dispute resolution panel decision on Tuna imports declared tuna caught using methods which kill thousands of dolphins as the same as tuna caught using less destructive fishing methods.
As Greenpeace points out “without differentiation of products by production methods as well as by end use it is impossible to provide incentives to promote clean, environmentally sensitive extraction or production
processes”. Similarly, electronic microchips produced using
solvents based on the potent CFCs (which destroy the earth’s protective ozone layer) are considered “like products” compared with chips using water as a solvent even though the environmental implications of the production processes are very different.
The Pacific islands have played a leading role in negotiating international environment treaties. Here too the new GATT rules are likely to have a big impact particularly in treaties dear to the heart of many Island nations. The global Climate Change Convention is a good example.
The low-lying Pacific nations, who will bear the most severe repercussions of global warming and sea level rise, have long been pushing for mandatory targets for the reduction of Greenhouse gas emissions by the industrialised countries which are causeing the problem. If one looks at the fate of the Montreal Protocol on Protection of the Ozone Layer one can see the problem.
It encourages widespread participation by restricting trade in ozone destroying CFCs and uses the threat of trade sanctions against backsliding signatories as an enforcement mechanism.
Under the new GATT rules a nation which has signed the Montreal Protocol could be challenged for doing its bit to restrict trade in CFCs by a non-signatory to Montreal. Under these conditions the likelihood that trade sanctions will be included in new international environment treaties as an enforcement method is remote. So what teeth are left to enforce these agreements? For the island nations the direct effect of some of the GATT provisions may not be felt for a long-time.
GATT challenges will not happen overnight and some protection is also given by existing preferential trade agreements such as SPARTECA with Australia and New Zealand and Lome with the European Union. By the turn of the century both these agreements will have expired and competition with other developing nations is likely to be intense. □