WORLD TRADE
ORGANIZATIONWT/CTE/8
11 July 2003
(03-3739)
Committee on Trade and Environment
REPORT TO THE 5TH SESSION OF THE
WTO MINISTERIAL CONFERENCE IN CANCÚN
Paragraphs 32 and 33 of the Doha Ministerial Declaration
I. INTRODUCTION................................................................................................................. ............... 1
II. PARAGRAPH 32 ................................................................................................................ ................. 2
A. P ARAGRAPH 32(i)  (M ARKET ACCESS ).................................................................................... 2
1. The Market Access Aspect.......................................................................................... 2
2. Sector Analysis ............................................................................................................. 4
B. P ARAGRAPH 32(ii) (TRIPS) ..................................................................................................... 7
C. P ARAGRAPH 32(iii)  (L ABELLING ) ........................................................................................... 8
D. O THER PARAGRAPH 32 ITEMS ............................................................................................... 11
III. PARAGRA PH 33 ............................................................................................................... ................ 12
A. T ECHNICAL ASSISTANCE AND CAPACITY BUILDING ............................................................. 12
B. E NVIRONMENTAL REVIEWS AT THE NATIONAL LEVEL ......................................................... 14
ANNEXES ........................................................................................................................ ................................. 16
ANNEX 1:  D OHA MINISTERIAL DECLARATION , PARAGRAPHS 32 AND 33 ................................... 16
ANNEX 2:  I TEMS OF THE CTE W ORK PROGRAMME ..................................................................... 17
ANNEX 3:  WTO S ECRETARIAT TECHNICAL ASSISTANCE AND CAPACITY BUILDING
ACTIVITIES ................................................................................................................... 18
I. INTRODUCTION
1. The following report covers the work undertaken by the regular session of the Committee on
Trade and Environment ("the CTE ") between the Fourth (Doha) and the Fifth (Cancún) Ministerial
Conferences of the WTO.1   Each issue is sub-divided into "(a) Papers" and "(b) Discussion".  The
first lists the papers submitted under each item.  The second, "Discussion", is a factual summary of
those issues that have been discussed and that are covered by the reporting requirement in
paragraphs 32 and 33 of the Doha Ministerial Declaration ("DMD").2
                                                     
1 The full detail of the discussions is reflected in the reports of the five meetings held during this period
(WT/CTE/M/29-34).
2 The relevant provisions of the DMD are reproduced in Annex 1, on page 16.  Unless otherwise stated,
paragraph numbers refer to those of the DMD.WT/CTE/8
Page 2
II. PARAGRAPH 32
2. As a recommendation for the Cancún Ministerial Conference , one Member proposed that
Members review the CTE's Work Programme (Annex 2) with a view to determine whether it
continued to meet the requirements of Members.  The CTE could then report to the next Session of
the Ministerial Conference with a proposal for amended Terms of Reference.3
A. PARAGRAPH 32(i)  (M ARKET ACCESS )
The effect of environmental measures on market access, especially in relation to
developing countries, in particular the least developed among them, and those
situations in which the elimination or redu ction of trade restrictions and distortions
would benefit trade, the environment and development.
3. The CTE discussed the two aspects of paragraph 32(i) separately:
(a) The effect of environmental measures on market access, especially in relation to
developing countries, in particular the least developed among them (referred to as the
"market access aspect"); and,
(b) those situations in which the elimination or reduction of trade restrictions and
distortions would benefit trade, the environment and development (referred to as the
"sector analysis").
1. The Market Access Aspect
(a) Papers
Members Title Date and Symbol
India The Effects of Environmental Measures on Market Access,
Especially in Relation to Developing Countries, in particular the
Least-Developed among them, Submission from India onparagraph 32(i) of the Doha Ministerial Declaration.WT/CTE/W/207,
21 May 2002
Observers
UNCTAD Expert Meeting on Environmental Requirements
and International Trade (Geneva, 2-4 October 2002)WT/CTE/GEN/2,
20 November 2002
OECD Global Forum on Trade: The Development Dimensions of Trade
and Environment (New Delhi, India, 27-28 November 2002)WT/CTE/GEN/3,
20 November 2002
(b) Discussion
4. It was generally recognized that improved market access  for developing countries' products
was key to the goal of achieving sustainable development.  It was recalled that, in line with
Rio Principle 11,4 environmental standards, objectives and priorities needed to reflect the particular
environmental and developmental context to which they applied and that standards applied by some
countries could be inappropriate and of unwarranted economic and social cost to others, particularlydeveloping countries.  Small and medium sized enterprises (SMEs) were especially vulnerable in this
regard.
                                                     
3 Canada in Job(03)/105.
4 Rio Principle 11 reads as follows: "States shall enact effective environmental legislation.
Environmental standards, management objectives an d priorities should reflect the environmental and
developmental context to which they apply. Standards applied by some countries may be inappropriate and ofunwarranted economic and social cost to other co untries, in particular developing countries."WT/CTE/8
Page 3
5. Several Members stressed that the protection of the environment and health were legitimate
policy objectives  and that Members had the right to set their own appropriate level of environmental
protection so as to address such objectives.  Howe ver, it was also acknowledged that environmental
requirements could affect exports adversely.  The answer to concerns about reduced market access
was not to weaken such standards, but rather to enable exporters to meet them.  Several Members
stressed that there was sufficient scope in exis ting WTO Agreements to ensure that environmental
measures did not unduly restrict exports;  the rules of the Agreement on the Application of Sanitary
and Phytosanitary Measures ("SPS Agreement") and the Agreement on Technical Barriers to Trade
("TBT Agreement") were referred to in particular.
6. In striking the appropriate balance between safeguarding market access and protecting the
environment, it was felt that there was a need to examine how environmental measures could be
designed by importing countries in a manner that (i) was consistent with WTO rules;  (ii) wasinclusive;  (iii) took into account capabilities of developing countries;  and, (iv) met the legitimate
objectives of the importing country.
7. Several Members stressed the importance of involving developing countries in the design and
development of environmental measures as a way of mitigating negative trade effects.  Similarly, the
facilitation of effective participation of developing countries in the early stages of the internationalstandard-setting process was important.  Once developed, flexibility in the application  of
environmental measures was seen as key and several Members mentioned longer time-frames as an
example of this;  the inclusion of exceptions was also raised.  Several Members emphasized the
principles of equivalence and mutual recognition in this regard and one Member proposed that the
CTE could look at guidelines for the application of environmental requirements as a means ofefficient and operational provision of special and differential treatment.  Most Members considered
that technical assistance and capacity building were key to help developing countries' exporters to
meet environmental requirements.  Technology transfer was also mentioned.
5
8. Information  dissemination on new environmental requirements was essential.  One Member
pointed out that, in the context of the World Summit on Sustainable Development (WSSD), thecreation of "Sustainable Trade and Innovation Centers" to address this very need had been proposed.
Others stressed that enforcing current disciplines on notification requirements more rigorously could
give concerned Members an early opportunity to review upcoming environmental requirements and to
adjust production methods, as appropriate.
9. In discussing ways forward, several Members felt that more weight had to be given to the
identification of trade opportunities  for sustainable growth.  The CTE could look at incentives and
means to assist developing countries to identify products, and develop export markets forenvironmentally friendly products in areas where these countries enjoyed a comparative advantage.
This would reinforce the message contained in the CTE's 1996 Report (Singapore)
6 that trade
liberalization had the potential to generate resources that could be applied to implement sound
environmental policies.  Moreover, one of the outcomes of the WSSD had reiterated the need to
support voluntary, WTO compatible market-based initiatives for the creation and expansion ofdomestic and international markets for environmentally friendly goods.
7
10. Several Members agreed on the need for more analysis , and the identification of concrete
cases regarding the effects of environmental measures on market access, particularly on exports of
products of importance to developing countries.  Such analysis, particularly if sector-specific and
based on real situations, could further the understanding of the issues and could serve to target
                                                     
5 For more detail on technical assistance, see Section III and paragraph 51 in particular.
6 WT/CTE/1, 12 November 1996, paragraph 197, in particular.
7 WSSD Plan of Implementation, paragraph 99(b).WT/CTE/8
Page 4
positive measures.  In this regard, several Members referred to relevant work undertaken by the
OECD8 and UNCTAD.9
2. Sector Analysis
(a) Papers
Members Title Date and Symbol
Japan Analysis on the Relationship between Fisheries Subsidies and
Over-exploitation of Fisheries ResourcesWT/CTE/W/226,
24 April 2003
Japan Sustainable Development and the Trade of Forest and Fishery
ProductsWT/CTE/W/222,
6 February 200310
Japan Issues on Forestry Products Trade and Environment WT/CTE/W/211,
11 June 2002
New Zealand Fisheries Subsidies WT/CTE/W/204,
 19 March 2002
Observers
Saudi Arabia Energy Taxation, Subsidies and Incentives in OECD Countries
and their Economic and Trade Implications on Developing
Countries, in Particular Developing Oil Producing and ExportingCountriesWT/CTE/W/215 and
TN/TE/W/9,
23 September 2002
UNEP UNEP Workshop on the Impacts of Trade-Related Policies on
Fisheries and Measures Required for their Sustainable
Management,  15 March 2002, Geneva, Chairman's SummaryWT/CTE/W/205,
8 May 2002
(b) Discussion
(i) Agriculture
11. One group of Members argued that agricultural trade reform offered "win-win-win"
opportunities for the environment, trade and development.  Trade- and production-distorting
agricultural subsidies had a negative effect not only in the countries that applied such policies
(incentive for intensive farming practices), but also on the environment of other countries, particularly
developing countries.  Such subsidies increased the instability of the international price of agriculturalcommodities.  This led to reduced returns from agriculture in developing countries, which
discouraged production and investment.  Lower agriculture returns were linked to poverty - a major
cause of environmental degradation.  Conversely, increased returns would lead to higher incomes for
developing country producers, thereby improving their financial capacity to maintain and pursue
sustainable farming practices.
12. Another group of Members was of the view that a certain level of domestic support was
necessary to maintain various environmental bene fits arising from agricultural production.  Such
environmental benefits included the maintenance of cultural landscapes, land conservation,
management of water resources and the preservation of biodiversity.
(ii) Energy
13. Some Members and one Observer were of the view that the energy sector also presented a
potential "win-win-win" situation for environment, tr ade and development.  They argued that existing
                                                     
8 In particular:  the OECD "case studies" contained in the publication "The Development Dimension of
Trade and Environment:  Case Studies on Environmental Requirements and Market Access",
19 November 2002, COM/ENV/TD(2002)86/FINAL (available on the OECD website).
9 With regard to relevant work by UNCTAD, there is more detail under paragraph 33.
10 This document was previously submitted by Japan as a proposal in the Negotiating Group on Market
Access (TN/MA/W/15/Add.1, 6 January 2003).WT/CTE/8
Page 5
taxation and subsidy schemes in OECD countries were generally biased and discriminatory vis-à-vis
petroleum products.  There were negligible taxes on coal and gas, and, in addition, coal products in
many OECD countries, were subsidized.  Such policies needed to be corrected.  It was suggested that
subsidies be removed and that fuel taxation be restructured to reflect carbon content – this would
ensure that polluting sources (with higher carbon content) be penalized, not favoured.  It was stressedthat the issue was not climate change mitigation per se , but the impact of environmental policies on
market access on the one hand, and their consistency with WTO rules on the other.  Herein lay the
relevance to the CTE mandate in paragraph 32(i).  Nevertheless, some other Members considered that
the CTE was not the appropriate forum to discuss th e impact of measures taken to mitigate climate
change as this was being dealt with adequately in the UNFCCC
11 and the Kyoto Protocol.
(iii) Fisheries
14. There was a general recognition of the importance of achieving the objective of sustainable
development in the fisheries sector.  It was recalled by a number of Members that the very fact that
negotiations on the subject of fish had been launched at the Doha Ministerial Conference was largely
based on the preceding CTE analysis.  Subsequently, the WSSD Plan of Implementation had
reaffirmed the call to clarify and improve WTO disciplines on fisheries subsidies, taking into account
the importance of this sector to developing countries.12
15. A few Members maintained that poor fisheries management  – taking place under open-access
fisheries – coupled with increasing world demand for fishery products was at the root of declining
world fisheries resources resulting from over-exploitation and illegal, unreported and unregulated
fishing.  In this regard, subsidies could be an effective instrument to reduce capacity, for example
through vessel buy-back programmes.  One Member stressed that the possible effects of subsidies onresources changed depending on resource status and fishery management regimes.  The cases of
skipjack tuna, and purse seine fishery in the Eastern Pacific Ocean were referred to in this regard.
13 It
was argued that there was a need for flexibility among products when determining tariff levels, taking
into account the level of fishery resources and the status of fishery management.
16. Other Members argued that over-capacity, and, consequently, a significant part of over-
exploitation of fisheries, was caused by subsidies . Even when apparently sound management regimes
were in place, subsidies could destabilize fisheries management and impede the objective of reducing
over-capacity.  A high value tuna species was given as an example of a particular fishery which was
under a multinational management regime and where stocks had collapsed.  It was emphasized that it
was the trade measure (the subsidy) that generated over-capacity and needed to be disciplined.  Trade
liberalization, in concert with sustainable res ource management, could stimulate more efficient
production with more long-term environmental benefits.  Trade barriers in the form of tariffs, or othernon-tariff measures, were no substitute for effective resource management.
17. Most Members stressed that since relevant negotiations were taking place in the Negotiating
Group on Rules and the Negotiating Group on Market Access the issue of fish was best left to these
bodies.  While agreeing that duplication of work needed to be avoided, one Member argued that the
CTE needed to monitor the issue of subsidies fr om an over-exploitation point of view, i.e. an
environmental point of view;  this had always been the role of the CTE .  Another Member pointed out
that the CTE could contribute to the ongoing negotiations, while avoiding an isolated CTE discussion,
through paragraph 51 of the DMD.
18. All agreed that more could be done to provide technical assistance  in natural resource
conservation and management through the various international environmental organizations in the
                                                     
11 United Nations Framework Convention on Climate Change (UNFCCC).
12 WSSD Plan of Implementation, paragraph 31(f).
13 For more detail, see WT/CTE/W/226.WT/CTE/8
Page 6
fisheries sector.  Some Members reiterated the importance of further studies on the effects of fisheries
subsidies and referred, in particular, to the work of the Food and Agriculture Organization of the
United Nations (FAO), UNEP and the OECD in this regard.  One delegation in particular called for
case studies with respect to the impact of subsidies on fishery resources.
(iv) Forests
19. Several Members recalled that the WSSD Plan of Implementation attributed considerable
importance to the concept of sustainable forest management.14  It was pointed out that as forests
provided multiple benefits, such as the mitigation of global warming and the conservation of
biological diversity, the issue needed to be dealt with in a cross-sectoral manner which included a
discussion of trade-relevant elements.  While Members agreed on the importance of achieving the
objective of sustainable development, some stressed that there were different ways of achieving
sustainable forest management.  There was, therefore, a need to look at measures which ensuredconservation without reducing countries' ability to benefit economically from their forestry resources.
20. Several Members shared the concern that international trade of illegally harvested forest
products could undermine conservation efforts in source countries, as well as other environmental,
economic, and social goals.  The importance of appropriate domestic regulation , and the capacity to
implement and monitor such regulation, was emphasized.  In addition, it was pointed out that moreattention needed to be given to the fact that poverty and high indebtedness fuelled the illegal
exploitation of forestry resources and were at the root of the problem.
21. One Member considered that while domestic measures taken to combat illegal logging were
needed, it was also important to examine possible international approaches  from a trade perspective,
taking into account discussions in other international fora.  In this regard, a positive contribution tothe forestry issue presented a key challenge for the WTO.  A number of other Members, however,
were of the view that the issue was being appropriately dealt with in other fora and questioned the
usefulness of debating it in the WTO.  One Member emphasized the importance of regional initiatives
and private-public partnerships in the forestry sector.
22. The same Member argued that there was a relationship between tariff levels  and over-
exploitation and stressed that each Member needed to retain flexibility among products when
determining the appropriate level of tariffs.  A number of other Members, however, argued that tariffs
and non-tariff measures were no substitute for efficient resource management and that tariff
elimination would not inevitably lead to an exhaustion of natural resources.  On the contrary, it was
argued that tariff escalation on processed products greatly hampered developing countries' efforts to
achieve sustainable forest management.  Moreover, the focus on tariff levels would open up the
possibility of discrimination on the basis of non-product related process and production methods(PPMs), which remained unacceptable to several delegations.  It was stressed that the modalities of
the tariff reductions on forestry products was best left to the Negotiating Group on Market Access.
23. One Member questioned the rationale and WTO-compatibility behind the use of  export
restrictions  for the preservation of forest resources when such restrictions were imposed on the raw
material but not on processed products thereof.  Some other Members maintained that such measuresconstituted part of the country's sovereign right to protect its forest resources and were consistent with
Article XX(g) of the GATT.
24. Several Members pointed out the importance of positive measures  in the forestry sector.  In
this regard, national  solutions would always be the most effective ones as they involved countries
themselves in the conservation effort. Several Members noted that they were providing technicalassistance and expertise through organizations with specific expertise in the area, such as the FAO,
                                                     
14 WSSD Plan of Implementation, paragraph 45.WT/CTE/8
Page 7
the United Nations Forum on Forests (UNFF), the International Tropical Timber Organization
(ITTO), as well as the Convention on International Trade in Endangered Species of Wild Fauna and
Flora (CITES).
B. PARAGRAPH 32(ii) (TRIPS)
The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS).
(a) Papers
Members Title Date and Symbol
European
CommunitiesReview of Article 27.3(B) of the TRIPS Agreement, and the
Relationship between the TRIPS Agreement and the Conventionon Biological Diversity (CBD) and the Protectionof Traditional Knowledge and Folklore, "A Concept Paper"WT/CTE/W/223
15,
14 February 2003
Observers
UNCTAD Seminar on Systems for the Protection and Commercialization
of  Traditional Knowledge, Communiqué - New Delhi,
3 – 5 April 2002WT/CTE/W/214,
IP/C/W/350,
26 June 2002
Convention on
BiologicalDiversity (CBD)Review of the Provisions of Article 27.3(b), relationship between
the TRIPS Agreement and the Convention on Biological Diversityand Protection of Traditional Knowledge and FolkloreIP/C/W/347/Add.1
and WT/CTE/W/210,10 June 2002
(b) Discussion
25. Some Members were of the view that an amendment  of the TRIPS Agreement to
accommodate some essential elements of the Convention on Biological Diversity (CBD) was
necessary.  Such an amendment could require that an applicant for a patent relating to biological
materials or to traditional knowledge (i) disclose the source and country of origin of the biological
resource and/or of the traditional knowledge used in the invention;  (ii) give evidence of priorinformed consent through approval of authorities;  and, (iii) give evidence of fair and equitable benefit
sharing.  It was felt that a failure to provide a solution to this relationship could be detrimental to the
objectives of the agreements themselves, and to sustainable development in general.
26. Some Members wished to further consider proposals such as the creation of an international
instrument which would provide for a positive protection  of traditional knowledge at the national and
regional levels.  This would not only prevent misappropriation but would also guarantee that national
benefit sharing mechanisms and laws were respected world-wide.  The creation of a database on
traditional knowledge was also mentioned.  Such a database could be useful for authorities when
granting patents to determine the novelty of an invention associated with traditional knowledge.
Regarding the disclosure of origin, one Member proposed the possible introduction of a system such
as a "self-standing disclosure requirement" on biological resources and traditional knowledge.  It was
argued that this would allow WTO Members to keep tr ack, at a global level, of all patent applications
for which they themselves had granted access.
27. Another group of Members argued that, from a legal perspective, the CBD and the
TRIPS Agreement were mutually supportive.  Nevertheless, their implementation  could create
conflicts.  Hence, both bodies of law needed to be implemented in a mutually supportive way in order
not to undermine their respective objectives;  sound national legislation and regulation was key to
this.  One Member argued that contractual systems, developed to protect sovereign rights over access
to genetic resources or traditional knowledge, could be a means of effectively implementing
                                                     
15 This paper was previously circulated as a communication from the European Communities in the
TRIPS Council (IP/C/W/383,  17 October 2002).WT/CTE/8
Page 8
CBD provisions in a manner that rendered changes to the TRIPS Agreement unnecessary.  Another
Member suggested that a compilation of national experiences on CBD implementation could be useful
for the work of both the CTE and the TRIPS Council.
28. Most Members were of the view that key asp ects of the debate on the relationship between
the TRIPS Agreement and the CBD were being dealt with appropriately by the TRIPS Council  and
that the CTE needed to avoid duplicating such work.  In the same vein, it was felt by some that the
fundamental intellectual property rights issues should be left to the World Intellectual Property
Organization (WIPO), an organization that had considerable expertise in this area.
29. The CTE also took note of the work undertaken in other fora, in particular with respect to the
adoption, by the CBD, of the Bonn Guidelines on Access to Genetic Resources and Fair and
Equitable Sharing of the Benefits Arising out of their Utilization  and the finalization, by the FAO, of
the  International Treaty on Plant Genetic Resources for Food and Agriculture .
C. PARAGRAPH 32(iii)  (L ABELLING )
Labelling requirements for environmental purposes.
(a) Papers
Members Title Date and Symbol
Canada Labelling and Requirements of the Agreement on Technical
Barriers to Trade (TBT):  Framework for Informal,  Structured,Discussions.WT/CTE/W/229
16,
23 June 2003
EuropeanCommunitiesLabelling for Environmental Purposes WT/CTE/W/225
6 March 2003
Switzerland Labelling for Environment Purposes WT/CTE/W/219,
14 October 2002
European
CommunitiesLabelling G/TBT/W/175,
WT/CTE/W/212,12 June 2002
Observers
ISO Progress in Environmental Management Systems (EMS)
StandardizationWT/CTE/GEN/1,
19 November 2002
(b) Discussion
30. Most Members agreed that voluntary, participatory, market-based and transparent
environmental labelling schemes were potentially efficient economic instruments  in order to inform
consumers about environmentally friendly products.  As such they could help move consumption on
to a more sustainable footing.  Moreover, they tended, generally, to be less trade restrictive than other
instruments.  It was also noted, however, that environmental labelling schemes could be misused for
the protection of domestic markets.  Hence, these schemes needed to be non-discriminatory and not
result in unnecessary barriers or disguised restrictions on international trade.  One Member questioned
the assumption that comprehensive labelling schemes had a positive effect on achieving goodenvironmental outcomes.
31. Some Members noted that for developing countries, and their SMEs in particular, difficulties
arose along with the growing complexity and diversity of environmental labelling schemes in export
markets.  While international standards for labelling had a significant potential to facilitate trade by
promoting the convergence of labelling requirements, as was previously pointed out with respect toenvironmental requirements in general (paragraph 6 above), there was a need to better involve
                                                     
16 This paper was previously circulated by Canada in the TBT Committee as G/TBT/W/174/Rev.1,
31 May 2002.WT/CTE/8
Page 9
developing countries in the setting of environmental standards and regulations, whether at the national
or international level.  It was reiterated that developing countries were at a disadvantage due to limited
or ineffective participation in these processes.
32. For developing countries, the recognition of the equivalency  of their own certification systems
was an area of particular concern; it was important to concentrate on assisting developing countries todesign schemes that supported environmental ob jectives within thei r own domestic context.
33. All agreed that  transparency  was of utmost importance with respect to environmental
labelling schemes.  Information on regulations had to be properly disseminated in order for foreign
producers not to be at a disadvantage and not to suffer unnecessary losses.
34. Regarding the basis  for environmental labelling schemes, some Members stressed that such
schemes needed to be based on measurable scientific considerations.  One Member was of the view
that "consumer information" per se  was a legitimate objective.  Others questioned what additional
information needed to be provided in response to market and consumer demands beyond health,
safety and direct environmental consequences of products (such as toxicity).  Familiar differences of
views remain on what was characterized by one Member as the root cause of controversy surrounding
the labelling debate:  the WTO compatibility of measures based on non product-related processes and
production methods (npr PPMs).
35. Some Members considered that there was a need to reach some form of common
understanding, interpretation or guidance  with respect to labelling requirements for environmental
purposes;  it was desirable to clarify through agreement rather than through dispute settlement –
without undermining existing WTO provisions.  One Member proposed that the CTE could (i) come
to a common understanding on the types of labelling schemes discussed and the meaning of thevarious terms used (environmental labelling, eco-l abelling, labelling for environmental purposes);
(ii) identify specific trade concerns relevant to environmental labelling; and (iii) make
recommendations for necessary action.
36. Another Member proposed that the CTE focus its discussions in a pragmatic way on one
particular type of eco-label where common views might be easier to achieve:  voluntary labels based
on the life-cycle approach .  It was pointed out that such labels were increasingly based on
international standards and the standards of the International Organization for Standardization (ISO)
were referred to in this regard.  It was emphasized that such a discussion would take place within
existing rules and would not extend to non-product related PPMs, nor would it prejudge discussions
on other types of eco-labelling schemes.  It was pointed out that the life-cycle approach was
inherently an environmental concept and therefore appropriately dealt with in the CTE.  It was
suggested that the CTE could agree on the principle that the use of voluntary eco-labelling schemesbased on a life-cycle approach was legitimate within the rights and obligations of the
WTO Agreements.  The idea of a notification procedure – or other appropriate means of consultation
– for existing and new such schemes was flagged, as well as the need to assist developing countries in
entering niche markets.  Several other Members welcomed the focus on voluntary  schemes and agreed
that the issue was, at its root, a market access one.  Some welcomed further discussions on this point.However, concern was expressed with regard to the concept of life-cycle approach and the notion of
agreeing on the "principle" of the legitimacy of such schemes under WTO rules;  it was pointed out
that any interpretation of voluntary eco-lab elling programmes needed to come from the
TBT Committee.  Moreover, given the non-governmental nature of many of the schemes at issue,
some questioned (i) how the WTO could facilitate the use of such eco-labels, (ii) the feasibility of thesuggested notification procedures and, (iii) what contribution, or added value, the WTO could provide
considering work done in other fora, such as the ISO.
37. Most Members were of the view that existing WTO disciplines were adequate to deal with the
issue of environmental labelling, including specific trade concerns that could arise.  The issue was oneWT/CTE/8
Page 10
of satisfactory implementation  of the SPS and TBT Agreements.  In their view, no compelling
argument had been made for the need for a common understanding or guidance to be negotiated.  Nor
was it clear that further work on this issue needed to include the clarification of existing rules.  The
TBT and SPS Agreements had created the appropriate balance of rights and obligations for both
mandatory and voluntary labelling programmes.
38. With respect to voluntary environmental labelling schemes, the importance of the
TBT Agreement's Code of Good Practice for the Preparation, Adoption and Application of
Standards17 was stressed, and acceptance of this Code by the bodies developing labelling requirements
was encouraged.  Moreover, it was recalled that the TBT Committee's Decision on the "Principles for
the Development of International Standards" provided useful guidance.18  This decision contained the
principles for the development of standards, including environmental labelling standards.  These
were:  transparency, inclusiveness or openness (that all stakeholders be involved in the developmentof the standard), impartiality and consensus,  effectiveness and relevance,  coherence,  and, wherever
possible, responsiveness to the needs and interests of developing countries.
39. While all agreed on the necessity of having a structured approach to the discussions, and the
need to avoid duplication, views diverged on the appropriate forum  to discuss the issue of
environmental labelling.  Some Members were of the view that, considering the mandate contained inparagraph 32(iii) which instructed the CTE to give particular  attention to labelling requirements for
environmental purposes, the CTE needed to intensify its work on environmental labelling.  The
discussion in the CTE could then be used as an input to the debate in the TBT Committee.  They felt
that it would not be appropriate to make wo rk in the CTE conditional on progress in the
TBT Committee which did not have a mandate specific to labelling for environmental  purposes.
40. Many other Members, however, held a different view.  They argued that the TBT Committee
was better suited for the task of deliberating WTO rules vis-à-vis labelling since it was already
discussing labelling in general, including  environmental labelling.  It would be unwise for the CTE
either to preempt or to duplicate such work and more preferable to consider the results of the work
carried out in the TBT Committee before taking a decision on the course of action for the CTE.
41. It was pointed out that work could be pursued on both tracks in parallel, as had been done
before, and that one way of doing this would be to maintain frequent communication between the
Chairpersons of the two bodies.  Looking ahea d, one Member suggested that the CTE could give
priority to certain issues, such as the trade impact s on developing countries of environmental labelling
schemes and, for example, the extent to which such schemes could help achieve the goal of
sustainable development.
42. As a recommendation for the Cancún Ministerial Conference , one Member proposed that the
CTE hold, before the end of 2004 and in addition to its usual schedule of meetings to be agreed, three
"dedicated sessions" to engage in a positive dialogue on governmental and non-governmental
voluntary eco-labelling schemes, notably those based on life-cycle analysis (LCA).
19
                                                     
17 Annex 3 of the TBT Agreement.
18 G/TBT/9, 13 November 2000, "Second Triennial Review of the Operation and Implementation of the
Agreement on Technical Barriers to Trade", Annex 4.
19 European Communities in Job(03)/130.WT/CTE/8
Page 11
D. OTHER PARAGRAPH 32 ITEMS
43. It is recalled that CTE Members were instructed, under paragraph 32, to pursue work on all
items20 on the CTE work programme within its current terms of reference.  The issues below reflect
substantive discussions under paragraph 32 that have not been covered above.
(b) Papers
Observers Title Date and Symbol
CITES
Items 1 and 5Economic Incentives and Trade Policy WT/CTE/GEN/7,
11 February 2003;WT/CTE/GEN/6,20 November 2002;
WT/CTE/GEN/5,
20 November 2002
UNEP
Items 1 and 5Enhancing Synergies and Mutual Supportiveness
of MEAs and the WTO,  A Synthesis ReportWT/CTE/W/213,
12 June 2002
and WT/CTE/GEN/4,20 November 2002
WTO Secretariat
Items 1 and 5 GATT Article XX paragraphs (b), (d) and (g) WT/CTE/W/203,
8 March 2002
(General) Selective Bibliography on Trade and Environment
1995-2002WT/CTE/W/49/Add.1,
7 October 2002
Item 9 Discussion Paper on the Environmental Effects of
Services Trade LiberalizationWT/CTE/W/218,
3 October 2002
Item  4 Environmental Database For 2001 WT/CTE/EDB/1 (and Corr.1),
31 May 2002
(c) Discussion
44. Under Items 1 and 5 , the CTE took note of the document prepared by the Secretariat on
GATT Article XX paragraphs (b), (d) and (g).  Some Members were of the view that the evolution of
WTO jurisprudence (in respect of Article XX) favour ed the protection of the environment, and was an
additional reason for environmentalists to be more at ease with the ability of the WTO to address
environmental concerns.
45. Under Item 2 , the CTE took note of a report entitled “Uncertainty and Precaution:
Implications for Trade and Environment”, develope d by the OECD Joint Working Party on Trade and
Environment.  The paper examined, inter alia ,  how the concept of precaution fitted into the
framework of environmental protection and provided  a brief overview of how it was reflected in
national laws and international environmental instruments.
46. The CTE took note of the Environmental Database for 2001, submitted under Item 4 .  All
notifications that were environment-related or included environmental references were listed in this
document, as well as the trade policy reviews in which reference was made to environment-related
measures or provisions.
47. Under Item 9  the CTE took note of a Secretariat document, prepared at the request of
Members, on the environmental effects of services trade liberalization.  The paper was also relevant,at least in part, to Item 6  as it considered the environmental benefits of removing trade restrictions.
The paper focused on three sectors (tourism, transport and environmental services) as a way of
illustrating some of the links between liberalization of trade in services and the environment.
                                                     
20 The items of the CTE work programme, derived from the 1994 Decision on Trade and Environment,
are contained in Annex 2.WT/CTE/8
Page 12
48. Under Item 10 , the WTO held, on 29 April – 1 May 2002, a two and a half day public
symposium entitled "The Doha Development Agenda and Beyond".  One session was devoted to trade
and environment.  On 16-18 June 2003, the WTO held another public symposium entitled
"Challenges Ahead on the Road to Cancún".  A number of sessions were relevant to trade and
environment.  Also, under this agenda item, UNEP underlined the importance of observer status forintergovernmental environmental organizations, including the Secretariats of Multilateral
Environmental Agreements (MEAs), in WTO negotiations on trade and environment.
III. PARAGRAPH 33
We recognize the importance of technical assistance and capacity building in the
field of trade and environment to developing countries, in particular the
least-developed among them.  We also encourage that expertise and experience be
shared with Members wishing to perform en vironmental reviews at the national level.
A report shall be prepared on these activities for the Fifth Session.
49. The CTE considered the two aspects of paragraph 33 separately:
(a) Technical assistance and capacity building; and
(b) national environmental reviews.
A. T
ECHNICAL ASSISTANCE AND CAPACITY BUILDING
(a) Papers
Members Title Date and Symbol
United States Paragraph 33 of the Doha Declaration WT/CTE/W/227
29 April 2003
Observers
UNEP UNEP Workshop on Capacity Building on
Environment, Trade and Development, 19-20 March 2002,
Geneva, Chairman’s SummaryWT/CTE/W/206,
8 May 2002
WTO Secretariat
Technical Assistance and Capacity Building activities in 2002 WT/CTE/W/216,
30 September 2002
WTO, UNEP and
MEA SecretariatsMEA Information Session on Technical Assistance,
Capacity Building and Enhancing Information ExchangeWT/CTE/W/209,
5 June 2002
(b) Discussion
50. Members took note of the WTO Secretariat's  technical assistance activities (Annex 3).  The
main focus of these activities was on regional seminars directed at government representatives from
trade and environment ministries, organized in cooperation with – as well with the participation of –
the secretariats of UNEP, UNCTAD and MEAs. "Side events" at certain MEA meetings, such as the
meetings of the Conference of the Parties, had also been organized.  These events targeted developing
country participants in environmental fora with th e objective of increasing their level of awareness
vis-à-vis specific trade-related issues.
51. In the context of environment-related technical assistance and capacity building, the
importance of market access  was reiterated:  aid did not replace trade.  In this vein, several Members
were of the view that capacity building efforts should focus on the needs identified in the discussion
under paragraph 32(i) (see above).WT/CTE/8
Page 13
52. Moreover, Members encouraged activities that brought together trade and environment
officials in a manner that enhanced coordination and policy coherence  at the national level.  Emphasis
was placed on the need to ensure that developing countries had the resources and the capacity to
engage fully in, and make contributions to, the Doha mandate.  Involving trade and environment
officials from non-resident Members in WTO seminars and meetings could contribute to this goal.The need to target negotiators was also underscored.  Members encouraged further cooperation and
coordination between the WTO, UNEP, UNCTAD and MEAs in the delivery of technical assistance.
Several stressed the need for follow-up thereto.
53. Some Members reported on their own technical assistance activities.  In addition, one
Member presented a paper on technical assistance and environmental reviews that emphasized, inter
alia, the importance of establishing lines of communications between trade and environment officials
at national levels.
54. UNCTAD's technical assistance and capacity-building activities in the area of trade,
environment and development fall into three segments : (i) activities that are part of the environmental
component of UNCTAD's  programme on technical assistance and capacity building for developing
countries, especially LDCs, and economies in tran sition in support of their participation in the
WTO post-Doha work programme; (ii) activities in the context of the joint UNEP-UNCTADCapacity-building Task Force (CBTF) on Trade, Environment and Development;  and (iii) a UK
DFID-funded project on building capacity for improved policy-making and negotiation on key trade
and environment issues.
  Moreover, UNCTAD's intergovernmental work also focused on specific
issues of the DMD. The Commission on Trade in Goods and Services, and Commodities convened an
Expert Meeting on Environmental Requirements and International Trade (2-4 October 2002). Themeeting highlighted that environmental and health requirements had become more frequent, stringent
and complex. Experts discussed various approaches to assist developing countries in strengthening
capacities to respond to and anticipate environmental/health requirements, in particular as regards
information gathering and dissemination, standard setting and supportive policies.
55. The main objectives of UNEP's technical assistance is to raise awareness and understanding
of the linkages between trade, environment and development, and enable countries to:  (i) assess the
environment and development impacts of trade and tr ade liberalization;  (ii) engage effectively in
trade and environment negotiations;  (iii) formulate and implement mutually supportive policies to
meet national obligations under multilateral trade and environment agreements, while also
maximizing the net development gains of trade liberalization;  and (iv) capture environment-related
development opportunities offered by trade and globalization.  To this end, UNEP undertook
capacity-building workshops, training, policy dialogues, and country projects.  Of particular relevanceto the CTE, UNEP organized a series of back-to-back meetings with the CTE Regular Session and, a
Workshop on Capacity Building on Environment, Trade and Development, which took place in
Geneva, on 19-20 March 2002.  The meeting provided an open forum for governments,
intergovernmental organizations, regional and sub-regional organizations, policy research institutes
and NGOs to assess emerging needs and current approaches to capacity building.  This meeting hasbeen followed up by activities at the regional level, including UNEP-UNCTAD CBTF workshops
held back-to-back with WTO regional seminars, and a UNEP regional meeting in Mexico City on
27-28 March 2003.WT/CTE/8
Page 14
B. ENVIRONMENTAL REVIEWS AT THE NATIONAL LEVEL
(a) Papers
Members Title Date and Symbol
European
CommunitiesDocumentation pertaining to an EC Seminar on Sustainability
Impact Assessment of Trade Agreements.WT/CTE/W/224,
21 February 2003
Canada Initial Environmental Assessment: Trade Negotiations in the
World Trade Organization, Submission by Canada.WT/CTE/W/221,
24 January 2003
EuropeanCommunitiesSustainability Impact Assessment WT/CTE/W/208, also
WT/COMTD/W/99 andTN/TE/W/3),
3 June 2002
(b) Discussion
56. It was recalled that the importance of environmental reviews in WTO trade negotiations had
been confirmed in the DMD and, subsequently, in the WSSD Plan of Implementation.21  Moreover,
the value of environmental impact assessment (E IAs) was recognized by Principle 17 of the
Rio Declaration.22  While some Members emphasized the usefulness of an exchange of information
on methods of environmental reviews and on implementation thereof, others noted the constraints
facing developing countries in this regard.  Some Members stressed the fact that environmental
reviews at the national level, besides being voluntary, needed to be consistent with a country's
priorities and that the task of developing countries should not be made more onerous by harmonizingreview procedures.  Such reviews had to be ca rried out in the light of national requirements,
capacities, level of development, expertise, and the local situation.
57. One Member presented a paper on its initial environmental assessment of the WTO Trade
Negotiations.  This assessment suggested that, in the aggregate, any effect the new WTO negotiations
might have on the national environment was likely to be minimal, on account of one or a combinationof three reasons:  (i) further trade liberalization was likely to affect only a small proportion of the
country's trade as the bulk of it was already subject to a regional trade agreement and other free trade
agreements; (ii) federal and provincial environmental legislation, policies and measures that could
mitigate negative effects were already, or would soon be in place; and (iii) certain negotiations would
not directly translate into increased production or trade, and therefore, were unlikely to lead to anyenvironmental negative effects.
58. One Member informed the CTE of its activities regarding procedures and methodologies used
for sustainability impact assessments  (SIAs).  It was noted that the underlying objective of SIAs was
to improve quality, coherence and synergies of trade policies with other objectives by informing
negotiators about the impact of negotiations on the environment, social development and theeconomy.  A better identification of linkages between these different aspects could facilitate the
development of the appropriate policy mix to mitigate negative effects and maximise positive ones for
sustainable development.  It was stressed that no Member had the perfect tool for this exercise and
that such a tool needed to be adapted to each partic ular situation.  It was suggested that the CTE could
discuss concrete cases.
59. Another Member was of the view that SIAs posed particular difficulties for developing
countries in that they added intangible elements to the concept of an EIA.  In their view, SIAs did not
take into account the diversity of countries and had the potential effect of constituting an additional
means to prevent access of developing countries’ goods and services into developed countries’
                                                     
21 WSSD Plan of Implementation, paragraph 97(d).
22 Rio Principle 17 reads as follows: "Environmental impact assessment, as a national instrument, shall
be undertaken for proposed activities that are likely to have  a significant adverse impact on the environment and
are subject to a decision of a competent national authority."WT/CTE/8
Page 15
markets.  SIAs needed to be used as an instrument to identify the difficulties faced by developing
countries so as to promote sustainable development and overcome these difficulties;  they needed to
aim at bringing environmental, economical and social benefits to all countries.
60. Other Members informed the CTE of the status quo  of environmental reviews of the
WTO negotiations and other major trade agreements in their own countries.
61. The CTE took note of UNEP's work on environmental reviews at the national level.  This
included the completion of reports on six countries (Argentina, China, Ecuador, Nigeria, Senegal, and
Tanzania) as well as a synthesis report and a Reference Manual for the Integrated Assessment of
Trade-Related Policies.  A further round of seven country projects focusing on integrated assessment
of the effects of trade-related policies on the rice sector was currently underway.WT/CTE/8
Page 16
ANNEXES
ANNEX 1:  D OHA MINISTERIAL DECLARATION , PARAGRAPHS 32 AND 33
"32. We instruct the Committee on Trade and Environment, in pursuing work on
all items on its agenda within its current terms of reference, to give particular
attention to:
(i) the effect of environmental measures on market access,
especially in relation to developing countries, in particular the least-
developed among them, and those situations in which the eliminationor reduction of trade restrictions and distortions would benefit trade,
the environment and development;
(ii) the relevant provisions of the Agreement on Trade-Related
Aspects of Intellectual Property Rights;  and
(iii) labelling requirements for environmental purposes.
Work on these issues should include the identification of any need to clarify relevant
WTO rules.  The Committee shall report to the Fifth Session of the Ministerial
Conference, and make recommendations, where appropriate, with respect to future
action, including the desirability of negotiations.  The outcome of this work as well as
the negotiations carried out under paragraph 31(i) and (ii) shall be compatible with
the open and non-discriminatory nature of the multilateral trading system, shall not
add to or diminish the rights and obligations of Members under existing
WTO agreements, in particular the Agreement on the Application of Sanitary and
Phytosanitary Measures, nor alter the balance of these rights and obligations, and will
take into account the needs of developing and least-developed countries.
33. We recognize the importance of technical assistance and capacity building in
the field of trade and environment to developing countries, in particular the least-developed among them.  We also encourage that expertise and experience be shared
with Members wishing to perform environmental reviews at the national level.  A
report shall be prepared on these activities for the Fifth Session."  [emphasis added]WT/CTE/8
Page 17
ANNEX 2:  I TEMS OF THE CTE W ORK PROGRAMME
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 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(A): The relationship between the provisions of the multilateral trading system and
charges and taxes for environmental purposes.
ITEM 3(B): The relationship between the provisions of the multilateral trading system and
requirements for environmental purposes relating to products, including standards
and technical regulations, packaging, labelling and recycling.
ITEM 4: The provisions of the multilateral tradin g system with respect to the transparency of
trade measures used for environmental purposes and environmental measures and
requirements which have significant trade effects.
ITEM 5: The relationship between the dispute settlement mechanisms in the multilateral
trading system and those found in multilateral environmental agreements.
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.
ITEM 7: The issue of exports of domestically prohibited goods.ITEM 8: The relevant provisions of the Agreement on Trade-Related Aspects of Intellectual
Property Rights.
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.WT/CTE/8
Page 18
ANNEX 3:  WTO S ECRETARIAT TECHNICAL ASSISTANCE AND CAPACITY BUILDING ACTIVITIES23
Date Type Place Coverage With the participation of
28-30 Jan
2002Regional Seminar Saint Lucia Caribbean countries CITES, Basel Convention,
Montreal Protocol, UNEP,
UNCTAD
5-7 Mar 2002 Regional  Seminar Bogota Latin American countries UNCTAD
8 Mar 2002 Side Event New York Developing country participants
at UNFF2-
9 Apr 2002 Side Event The Hague Developing country participants
to the CBD COP6-
13-15 May
2002Regional Seminar Singapore Asian countries UNEP Regional Office,
UNCTAD
30 May 2002 Trade Policy Istanbul Members of the Organization of
the Islamic Conference (OIC)In cooperation with the Islamic
Development Bank (IDB) and
the Organization of the Islamic
Conference (OIC).
9-11 Jun 2002 Regional Seminar Windhoek English-speaking African
CountriesUNEP Regional Office,
UNCTAD
21 Jun 2002 Trade Policy Course
(TCD)Addis Ababa African countries In cooperation with the African
Development Bank (ADB) and
the United Nations Economic
Commission for Africa (ECA).
1 Aug 2002 Trade Policy Course
(Training Institute)Casablanca French-speaking African
CountriesPartnership with Institut de
Commerce et d'Administration
des Entreprises (ISCAE)
20-23 Aug
2002Trade Policy Course
(Training Institute)Nairobi English-speaking African
CountriesPartnership with the University
of Nairobi.  Including one-day
visit to UNEP
10-12 Sep
2002Regional Seminar Riga Central and Eastern European
countriesUNEP, UNCTAD, UNFCCC
15-17 Oct
2002Regional Seminar Tunis French-speaking African
CountriesUNCTAD, Basel Convention,
CITES
24 Oct 2002 Trade Policy Course
(TCD)Vienna Developing countries Organized in cooperation with
the Joint Vienna Institute
6 Nov 2002 Side Event Santiago Developing country participants
to COP12 of the CITES-
20-21 Nov
2002National Beijing China -
26-28 Nov
2002Regional Seminar Suva Pacific island economies UNEP, UNCTAD
27 Nov 2002 Side Event Rome Sixth Meeting of the Conference
of the Parties (COP-6) to the
Vienna Convention for the
Protection of the Ozone Layer
and the Fourteenth Meeting of the
Parties (MOP-14) to the Protocol
of Montreal-
13 Dec 2002 Side Event Geneva Sixth Meeting of the Conference
of the Parties to the Basel
Convention (COP 6)
25-27 Feb
2003Regional Seminar Santa Cruz de
BoliviaRegional Seminar on Trade and
Environment for Latin American
CountriesUNCTAD, CITES and Basel
Convention
12-17 May
2003Side Event Panama City 34th Session of the International
Tropical Timber Council-
19-21 May
2003Regional Seminar South Africa English-speaking African
CountriesUNEP, UNCTAD
                                                     
23 The table includes those activities organized by the WTO and which took place outside of Geneva
(except for Side Events). It does not include activities in which the WTO was simply represented, nor does itcover Geneva-based technical assistance such as trade po licy courses or introductory courses for LDCs.  The "*"
indicates a planned event.WT/CTE/8
Page 19
Date Type Place Coverage With the participation of
6 Jun 2003 Side Event Geneva United Nations Forum on Forests,
3rd Session (UNFF3)
*Aug 2003 Regional Seminar Jordan Arab and Middle East UNEP
*Oct 2003 Regional Seminar Djibouti French-speaking African
Countries
*Nov 2003 Regional Seminar Jamaica Latin America and the Caribbean UNEP / UNCTAD CTBF
*Dec 2003 National Seminar Korea, Republic
ofRepublic of Korea
*Dec 2003 National Seminar Tanzania Tanzania
*Dec 2003 National Seminar Uruguay Uruguay
*Dec 2003 Regional Seminar Hungary Eastern European Countries UNEP / UNCTAD CTBF
__________