RESTRICTEDWORLD TRADE
ORGANIZATIONTN/TE/R/6
12 June 2003
(03-3073)
Committee on Trade and Environment
Special Session
SUMMARY REPORT ON THE SIXTH MEETING OF THE COMMITTEE
ON TRADE AND ENVIRONMENT SPECIAL SESSION
1-2 MAY 2003
Note by the Secretariat1
1. The Special Session of the Committee on Trade and Environment (CTESS) held its sixth
meeting on 1-2 May 2003 on the basis of the agenda set out in the convening airgram
(WTO/AIR/2071).  Ambassador Yolande Biké of the Republic of Gabon chaired the meeting.
The CTESS had extended an invitation on an ad hoc basis to six multilateral environmentalagreements (MEAs)
2 and the United Nations Environment Pr ogramme (UNEP), all of whom attended
Paragraph 31 (i) discussions.  Delegations welcomed the ad hoc invitees and thanked them for their
constructive engagement.
I. PARAGRAPH 31(I) – WTO RULES AND SPECIFIC TRADE OBLIGATIONS IN
MEAS
2. The Chairperson indicated that participants had submitted four new documents under this
agenda item, namely: documents TN/TE/W/26 from Japan, TN/TE/W/28 from Hong Kong, China,
TN/TE/W/29 from Malaysia, and TN/TE/W/31 from the European Communities (EC).  In addition,
two documents were circulated by the Secretariat:  document TN/TE/S/3/Rev.1 entitled "Compilation
of Submissions under Paragraph 31 (i)," and document TN/TE/S/5 entitled "Matrix of Trade
Measures Pursuant to Selected Multilateral Environmental Agreements."  Delegations introduced
their documents and the following discussion took place.
On The Way Forward
3. Brazil, Mexico , Thailand , Pakistan , Malaysia , Indonesia , Argentina , Korea , Peru  and the
Philippines supported Hong Kong, China's call for examining the trade obligations in different MEAs
in a systematic way.  Brazil and Peru  argued that identifying the MEAs that would be the subject of
analysis at the next meeting, would facilitate the determination of which MEAs to invite on an ad hoc
basis to that meeting.  Brazil, New Zealand , Peru , Thailand , and the Philippines  proposed that focus
initially be placed on the Montreal Protocol, the Basel Convention, and the Convention onInternational Trade in Endangered Species of Wild Fauna and Flora (CITES).  But Peru added that the
six MEAs proposed by the United States (US) should be kept in mind.  Mexico stated that it was
flexible on whether to start with the three MEAs th at had entered into force, or with the US' six.
Thailand asked that the three MEAs that had entered into force share their implementation and
                                                     
1 This document has been prepared under the Secr etariat's own responsibility  and without prejudice to
the positions of Members and to their rights and obligations under the WTO.
2 The Basel Convention on the Transboundary Movement of Hazardous Wastes and their Disposal
(Basel Convention), the Convention on Biological Diversity (CBD), the Convention on International Trade in
Endangered Species (CITES), the International Tropical Timber Organization (ITTO), the Montreal Protocol on
Substances that Deplete the Ozone Layer (Montreal Protocol), and the United Nations Framework Conventionon Climate Change (UNFCCC).TN/TE/R/6
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non-compliance experience with the CTESS.  Canada indicated that it had no objection to starting
work on the three MEAs that had entered into forc e.  While it was willing to examine the six MEAs
proposed by the US, it was in favour of keeping an even broader range of MEAs in mind.  China
indicated its preference for a practical, analytical, way forward, while paying due attention to thedevelopment dimension.  Saudi Arabia argued that the six MEAs suggested by the US would be the
minimum number of MEAs to consider, and that discussion ought to include their Conference of
Parties (COP) decisions, annexes and protocols.
4. The United States indicated that it was flexible on whether the CTESS started by focussing on
the six Agreements which it had previously identified, or by the three mentioned by Brazil. It noted
that there was a considerable degree of common ground among delegations in their analysis of
specific trade obligations (STOs), but underlined that it was not in fact necessary to reach a definitive
consensus on the full range of STOs.  The purpose of the collective assessment was simply to providea foundation for the sharing of views and experi ences on the relationship between STOs and WTO
rules.  Australia believed that the six MEAs id entified by the US were likely to be the only
agreements to contain STOs.  All other agreements were either (1) not multilateral, (2) did not have
environmental protection as their main objective, or (3) did not contain STOs.  It agreed with Brazil
on the need for a more structured approach for th e work of the CTESS, and with the US on the need
to share STO negotiation and implementation experiences as the way forward.  It called upon the
demandeurs to also engage in experience sharing.
5. Switzerland, Norway  and Poland  indicated that they did not favour a listing of STOs, and
called for a more conceptual approach to the identification of such measures.  The
European Communities argued that it was time to cease discussions on which approach to follow, an
MEA-by-MEA analytical approach, or the conceptual/definitional approach.  It argued that an
examination of individual MEAs did not have to preclude a parallel discussion on conceptual issues,
and contended that all submissions made to date were based on a mixture of approaches.  It added that
the development of a "list" of STOs would not provide an answer to conceptual questions, such as
what to do with future MEAs, whether or not to include regional accords, and how to deal with theissue of "discretion" in defining STOs.  However, it stated that delegations should start to consider the
stage at which they begin to pull together the different views expressed. In response to the EC,
Australia clarified that it was not seeking to put a new process in place as was being implied, but that
the kinds of conceptual issues that the EC and some others were continuing to advance fell outside themandate. It argued that a conceptual approach could not be designed in a vacuum and needed a
practical underpinning.  Japan agreed with the EC that it would be difficult to reach consensus on a
list of STOs.  That did not mean that it did not consider the experience sharing to be useful, it did, but
wanted that work combined with a conceptual debate.
6. New Zealand argued that there were no pressing procedural issues before the CTESS at
present.  At the outset of the negotiations there was concern about a possible imbalance between the
approach that Australia and New Zealand had propose d and that of the demandeurs, but that concern
was no longer there.  New Zealand believed that progress had been made on different elements of themandate.  On "MEAs," it felt that the weight of opinion favoured a restrictive reading, although it did
not believe that this matter required a definitive conclusion.  On "STOs," there seemed to be a
consensus on category (1) measures of the EC and Japan.  A useful expansion of the debate had been
suggested with the inclusion of measures such as notifications and technical regulations, but it argued
that no formal agreement needed to be reached on the term, since it was sufficient to simply develop asense of the universe of STOs.  On the term "set out in MEAs," and the debate on COP decisions,
once again it argued that the majority view tended to be restrictive.  The term "among parties," was
extremely important and would require much greater work in its view.  New Zealand was flexible on
whether the CTESS should address at its next meeting the six MEAs, or just the three, or even just
CITES. However, it indicated that these discussions would need to be held on a "without prejudice"basis. It cautioned that, beyond a certain point, work on STOs would deliver diminishing returns,
since the CTESS was not negotiating on the meaning of STOs.  It was the applicability of WTO rulesTN/TE/R/6
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amongst Parties to MEAs that was the concern.  It believed in pursuing a conceptual approach that
would be firmly grounded in particular agreements and provisions, and called for an eventual shift of
focus to the underlying questions of the mandate: (1) the issues that have arisen when taking trade
measures under STOs in relation to WTO rules, and (2) what those issues said about the direction that
the negotiations should take.  Egypt agreed with the EC that the way forward would need to be based
on a mixture of the two approaches.  India also sugge sted that the two approaches would be difficult
to separate, but called for a more structured approach based on experience sharing, like Hong Kong,
China had done.
On Substance
7. Brazil agreed with Hong Kong, China that Article II.4 of CITES, which prohibited trade in
species contained in Appendices I, II and III, constituted an STO.  However, it argued that it was
important not to lose sight of Articles III, IV, and V which established the exceptional circumstancesunder which that trade could in fact proceed.  It also mentioned Article 4(b).2 of the
Montreal Protocol, which allowed developing countri es to delay the implementation of a system for
the import and export licensing of controlled substances in Annexes C and E.  Brazil wished to return
to the issue of "flexibility provisions" at a later date since it believed it would form an integral part of
the negotiations under Paragraph 31 (i).
8. On the Japanese paper, Brazil believed that only  category (1) obligations in that paper could
be considered STOs.  Other categories involved too high a degree of discretion. It concurred with
Malaysia's definition of both MEAs and STOs, but disagreed that Article II.4 of CITES could not be
considered an STO.  On COP decisions, Brazil argued that only those mandatory decisions pertaining
to trade measures could be considered STOs. It disagreed with the EC that the term "set out in MEAs"automatically covered future COP decisions.  Futu re decisions would have to be looked at on a
case-by-case basis.
9. The United States shared Brazil's view that category (2) measures identified by Japan did not
constitute STOs.  On COP decisions, it believed that they needed to be treated on a case-by-case basis
to determine the extent to which the decisions were  linked to STOs set out in MEAs.  It questioned
the EC's suggestion that the legally binding character of a COP decision was the principal determinant
of whether it could be considered to be "set out" in an MEA.  On the question of the specificity of a
trade obligation, the US argued it should be enough that a provision required a trade-related result
(such as Article 3.2(b) of the Persistent Organic Pollutants (POPs) Convention).  However, it argued
that a required result that provided discretion as to whether it was achieved through restrictions on
trade or other measures, such as an internal tax, could not be considered an STO.  Contrary to the
Swiss analysis, therefore, the US did not consider Ar ticle 2.1 of the Kyoto Protocol to be an STO. It
added that when provisions required a result that directly involved trade, they would not be covered
by the mandate if not sufficiently specific.  Thus, Article 16.1 of the Biosafety Protocol could not be
considered an STO either.
10. Australia welcomed the US and Indian papers submitted at the last meeting, indicating that
they demonstrated the complexities involved in categorizing STOs.  The Indian paper had taken a
narrower approach to the definition of STOs than had the US.  The US had included MEA obligations
that had to be fulfilled for trade to take place, while India had only included those obligations directly
related to the actual trade taking place. For example, under the Basel Convention, the US had
suggested that there were 28 STOs, while India that there were only seven.  Australia's preliminary
analysis of the six MEAs in question suggested th at the STOs fell somewhere between the US and
Indian papers.  Under the Basel Convention, some of the STOs excluded by India were considered
STOs by Australia, such as:  Articles 4.2 (g), 4.7 (a), 4.7 (b), 6.2, 8 and 9.2.  On the other hand, some
of those included by the US, Australia excluded, such as:  Articles 3.1, 3.2, 4.2(f), 4.10, 5.1 and 13.2,
13.3 (a) and 13.4. Australia welcomed the fact that the Japanese contribution had also focussed on the
six MEAs identified by the US, but observed that Japan continued to prejudge the outcome of theTN/TE/R/6
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negotiations.  It agreed with the Malaysian contribution that the only STOs that should be considered
were those contained in the body of the agreements, and in their protocols or annexes.  However, it
questioned the EC's argument that all COP decisions  which were legally binding were covered by the
mandate.
11. Chile welcomed Hong, Kong China's contribution, and shared the view that the mandate was
limited to trade between parties, and that measures more stringent than those prescribed by MEAs
could not be considered STOs.  It understood Japan to be arguing that measures that left parties with a
degree of discretion fell outside the mandate, but wondered how that squared with the opinions
expressed by Japan on category (2) measures in its paper.
12. Canada thanked Malaysia for its contribution but indicated that it did not want to define
"MEAs."  It was STOs that had to be looked at in relation to WTO rules.  The Japanese contribution
indicated to Canada that different STOs would have a very different relationship with WTO rules.  Inparagraph 7 of its submission, Japan excluded provisions establishing certain rights, which were not
STOs by definition.  However, Canada believed such  an exclusion to be premature. It agreed with
Japan and India that MEA provisions must sometimes be read together with other provisions to fully
determine if they were STOs. Canada argued that COP decisions had to be binding on parties to be
considered STOs. It did not consider itself bound under international law by decisions whose bindingnature was not explicitly specified.  It enquired about paragraph 18 of the Indian paper which
interpreted the mandate to refer to only those measures that were mandatory and specific in their
entirety.  Canada wondered if India would be willing to expand this narrow definition to cases where
specificity and obligations depended on "other related factors."  It pointed out that, while common
ground was developing between Members that STOs had to be specific, mandatory and trade-related,divergences existed between Members when it came  to identifying the specific measures in MEAs
(this seemed to be particularly the case with the Basel Convention).  It therefore argued that it would
be best to refrain from listing STOs or even MEAs.  It called on the CTESS to focus instead on
working towards understanding the nature and variety of STOs.  It asked the MEA secretariats for
information on the precise nature of COP instruments.
13. Switzerland did not favour a listing of STOs, but preferred to develop criteria that would
allow for the identification of STOs in a more conceptual way.  It believed that an STO did not
necessarily have to be provided for in a single ar ticle of an agreement, but could result from a set of
provisions of an MEA.  Such cases could not be dealt with through a simple listing of provisions.  It
believed that STOs could also be contained in COP decisions, as mentioned by the EC.  Similarly, it
was clear, legally speaking, that all amendments to MEAs which entered into force could be
considered STOs.  Therefore, the mechanism the CTESS developed needed to take into considerationthe future development of MEAs.  If Members were to proceed on the basis of a list, each time a new
measure was negotiated or entered into force, the list would have to be adapted, which would be a
cumbersome and inefficient procedure.
14. Switzerland believed that STOs fell into two broad categories:  (1) trade measures that were
explicitly provided for and mandatory under MEAs, and (2) other measures that were appropriate andnecessary to achieve an MEA objective.  There seemed to be consensus amongst WTO Members that
category (1) constituted STOs.  With respect to category (2), it explained that some trade measures in
MEAs were elaborated in such a way as to prov ide parties with discretion on the measures to be
taken.  The discretion was often deliberately and explicitly provided for in MEAs.  It was important to
ensure that WTO rules did not interfere with the sovereign right of a party to use this discretion.However, a WTO Member should be able to intervene in the framework of WTO, if another
WTO Member misused this discretion for protectionism or unjustifiable discrimination.
15. Taking POPs as an example, Switzerland stated that many delegations considered Article 3.1
to be an STO.  The Article stated that Parties sh all prohibit and/or take the legal and administrative
measures necessary to eliminate the production and use of the chemicals listed in its Annex, andTN/TE/R/6
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would as necessary eliminate the import and export of the chemicals listed in Annex B.  Article 3.2 of
this same Convention did not refer in the same explicit and specific manner to STOs but gave Parties
latitude with regard to the trade-related measures to be adopted.  This Article fell into category (2) of
the Swiss typology and needed to be considered an STO.
16. Switzerland then turned to th e Basel Convention.  It argued that while Article 4.1, which
obliged Parties to prohibit the export of wastes to Parties that had banned their imports, was
considered by a majority of delegations to be an STO, Article 4.7 which called on Parties to ensure
the safe handling of the transboundary movement of hazardous wastes through packaging, labelling
and transport measures, did not pass the STO test of some Members.  Switzerland believed that it
ought to and that it fell under the Paragraph 31 (i) mandate.
17. Switzerland reiterated its belief that the "necessity" of trade measure called for by MEAs
should not be put into question by WTO.  There had to be a presumption that any measure whichqualified as an STO was necessary to achieve the objectives of an MEA.  This presumption would
not, of course, prevent Members from challenging the way in which a measure was applied, in
particular to see whether its implementation involved arbitrary or unjustifiable discrimination or a
disguised trade restriction.  However, if such charges could not be proven, the measure would have to
be deemed compatible with Article XX of GATT.  Switzerland believed that such an approach orclarification would not add to or diminish the rights and obligations of Members under existing
WTO agreements, as stated in Paragraph 32 of the Doha Declaration.  Norway concurred that a
definitive or exhaustive list of STOs would not be useful, and called for an identification of moregeneral criteria.
18. Argentina agreed with the Malaysian paper in its totality on both MEAs and STOs.  On the
EC paper, it stated that the issue of COP decisions would need to be looked at very carefully, and on a
case-by-case basis.  On the Japanese paper, it believed that Japan had included in the Annex to its
papers, under category (1), measures which did not fit its own characterization of that category.  It had
included measures which allowed for a certain degree of discretion, despite the fact that under its own
definition of categories (1) and (2) discretionary measures were excluded.  For instance, Japanconsidered Article II.4 of CITES to fall under category (1).  However, that Article simply stated that
Parties should not allow trade in species which fell under Appendices I, II or III, except under the
conditions provided for in the Convention.  As trade in these species could be prohibited through a
variety of measures, such as administrative or environmental measures, or criminal sanctions, none of
which were specified in the Article, this could not be considered an STO.  On the other hand, on
Article IV.2 of CITES, which stated that "export of any type of specimen of a species included in
Appendix II required an export permit which was granted once the requirements were met,"Argentina could agree with Japan that that constitute d an STO, as it identified the specific measure to
be taken.
19. Argentina could not agree that category (2) measures proposed by Japan constituted STOs.
Japan proposed a certain presumption of conformity for these measures.  Argentina believed that
Japan's call for such a presumption, as well as Switzerland's call for some sort of a "mechanism," felloutside the mandate.  It could not agree with Switzerland that its proposed mechanism would not alter
rights and obligations, since it would reverse the burden of proof under GATT Article XX.  Brazil and
Australia agreed that the Swiss proposal of reve rsing the burden of proof constituted a fundamental
change in the balance of rights and obligations, and was not a mere procedural change.
20. The United States, Brazil  and Australia  commented on the Swiss intervention.  They argued
that a conceptual approach of defining criteria would have made sense if the CTESS had been
engaged in a process of developing a mechanism for a solution.  However, they indicated that a large
majority of delegations had already rejected this approach in previous discussions.  Most had
expressed scepticism that there was an inherent conflict between STOs in MEAs and WTO rules that
required legal clarification of the sort that Switzerland proposed.  These delegations had insisted on aTN/TE/R/6
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phased and analytical approach that increased understanding of what was covered by the mandate, and
which provided an opportunity for the demandeurs to make the case that there were real concerns and
not just hypothetical ones.  The United States clarified that it was not trying to elaborate a definitive
list of STOs, nor was it looking for consensus on any particular list.  Instead, it was interested inlearning from the experiences of others with respect to the negotiation and implementation of STOs inMEAs.  The US experience had been positive, pa rticularly with respect to coordination between
national trade and environment officials.
21. The Philippines called on the CTESS to pursue a pragmatic approach, instead of developing
criteria or a mechanism for accommodating STOs.  The Philippines welcomed the Malaysian and
Japanese papers, but had concerns about Japan's classification of STOs.  It wondered where the two
conditions that Japan imposed on category (2) measures came from, since it found them arbitrary, and
believed that it would be premature to work on the basis of this categorization.
22. Mexico welcomed the Hong Kong, China and Malaysian papers.  It felt that only category (1)
measures in the Japanese paper were STOs, and believed that the paper prejudged the outcome of
negotiations.  It called for the focus of the CTESS to be placed on measures in the text of the MEAs
themselves, and not in COP decisions as suggested by  the EC.  It disagreed with Switzerland that its
proposal would not change the balance of rights and obligations.  Mexico indicated that a "list ofSTOs" could be a useful tool for progress in the discussions, but did not need to be either closed or
comprehensive.
23. Switzerland clarified its intervention saying that it distinguished between the Chapeau of
Article XX and its indents.  The presumption of  conformity that Switzerland was proposing only had
to do with the indents.  If MEAs negotiated trade measures, then they clearly saw those measures asbeing either "necessary" or "related to" the fulfilment of their objectives.  Therefore, Switzerland
called for a presumption of conformity with the i ndents of Article XX.  Switzerland was not, however,
proposing changes to the Chapeau.  Measures that were arbitrarily or unjustifiably discriminatory
could still be taken to dispute settlement.  It clar ified that while the CTESS did not have to develop a
mechanism, it certainly needed to develop some so rt of response to the mandate on the relationship
between WTO and MEAs.  The CTESS was not negotiating simply to share implementation
experiences.  It argued that while many delegations had stated that they did not see a problem,
problems could arise in the negotiation of new MEAs.  On the comment made by India about
continental versus common law, Switzerland argued that it preferred that Members be the ones to
decide on the WTO-MEA relationship, rather than leav ing the matter to dispute settlement.  This was
the continental law approach, and in any case negotiations had already been agreed to in Doha.  It
welcomed the US clarification about not seeking an exhaustive list of STOs, and believed thatdiscretionary measures required further discussion.  Argentina responded that the distinction that
Switzerland drew did not change its opinion that a reversal of the burden proof altered rights andobligations.  It referred Members to document WT/CTE/W/203 on the jurisprudence under
Article XX which demonstrated how the burden of proof  had applied.  It reiterated that it did not see
where in the mandate there was a call for a "mechanism" to be devised, and called for a clarificationof the scope of paragraph 8 of the Swiss paper.
24. Chile explained that it understood the Swiss position to distinguish between a rebuttable
presumption for STOs, and a rebuttable presumption for other trade measures.  With respect to the
former, Switzerland proposed a reversal of the burden  of proof.  With respec t to the latter, however,
they clearly fell outside the mandate.  On the rebuttable presumption for STOs, Switzerland wasjustified, since there would be no logic in a country putting into a question the need for a measure
which it agreed to in another forum.  Nevertheless, the discussion prejudged the outcome of
negotiations.  The United States indicated that it did not believe that a clarification by Switzerland of
its proposal would be a top priority at this time, since the proposal was premature and the CTESSshould not get side-tracked.TN/TE/R/6
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25. New Zealand welcomed the updated Secretariat Matrix, but indicated that it found the total
number of agreements listed in its Annex (28) to be alarming.  It did not believe that all of these
Agreements needed to be considered, such as the Agreement on Polar Bears for instance.  On the EC
paper, it believed that COP decisions needed to be looked at on a case-by-case basis.  While it could
accept that legally-binding COP decisions could be presumed to be "set out in MEAs," it believed thatthese decisions would still need to fulfill the criteria that Members had identified for an STO.  In other
words, they needed to be (1) specific, (2) trade-related, and (3) mandatory.  On the Japanese paper,
New Zealand argued that it made a leap of logic from using "discretion" to define an STO, to using it
as a factor in assessing the compatibility of MEA obligations with WTO rules.  Discretion was not a
test that was used in WTO dispute settlement.  New Zealand was struck by the fact that some trade
provisions that it considered STOs did not appear in the category (1) table of Japan's paper.  It
welcomed the Malaysian paper's definition of MEAs and STOs, which were strict and narrow, andtheir application to three specific Agreements in the annex to their paper.  It also welcomed the
pragmatic approach of Hong Kong, China's paper.
26. Indonesia believed that MEAs were agreements which were negotiated under the auspices of
the United Nations, had a large membership, and were open to all countries which shared their
environmental objectives.  It argued that the negotiations should only cover MEAs which had alreadyentered into force. It supported Malaysia's view of what constituted an MEA.  On the Japanese paper,
while Indonesia agreed that categories (3) and (4) fell outside the scope of the Doha mandate, it
disagreed that they be examined on a case-by-case basis.  It also disagreed that category (2) measures,
even when complying with the two requirements set out by Japan, could be considered STOs.  The
requirements were subjective.  Furthermore, Indonesia did not believe that automatic compatibilitywith WTO rules could be presumed for category (1) measures. Indonesia shared Malaysia and India's
assessments of what constituted an STO.  It believed that Articles II, III.2, III.3, III.4, IV.2, IV.3 to
IV.6, V.2 to V.4, VI, VIII, and XIV of CITES; Articles 4A and 4B of the Montreal Protocol;  and
Articles 4.1(a), 4.1(b), 4.1(c), 4.2(e), 4.2(g), 4.5, 4.8, 4.9 (a to c), 6.1 to 6.4, 8, 9.2, and 11 of the
Basel Convention, constituted STOs.  Indonesia was encouraged that there were similarities in thetrade provisions identified by Members as STOs under these three MEAs, which was due to the
precision and clarity of certain MEA provisions.  There also seemed to be wide acceptance amongst
WTO Members that the three agreements above were MEAs, and Indonesia called on the CTESS to
see what it was in those agreements that led them  to be considered MEAs for the purpose of the
negotiations, since that could help in the identification of other agreements to be looked at.  On the
EC paper, Indonesia questioned the need to look at COP decisions in the context of these negotiations.
COP decisions evolved over time, which would make  them difficult to consider.  Indonesia proposed
a step-by-step approach that would begin with the identification of STOs in the MEAs themselves.
27. Kuwait drew Members' attention to page 78 of document TN/TE/S/5 which indicated that "no
adverse impact on trade pursuant to policies and measures adopted by parties have been reported to
the United Nations Framework Convention on Climat e Change [UNFCCC]."  It indicated that that
sentence was misleading since adverse impacts on trade were in fact being felt, but that no reportingmechanism had been put in place for parties to communicate those impacts.  This, despite a UNFCCC
COP decision for parties to report on adverse imp acts. It referred to two studies, one from the
International Energy Agency (IEA) and another from the Massachusetts Institute of Technology
(MIT), that demonstrated adverse effects.
28. Kuwait explained that the UNFCCC did not address purely environmental issues;  it also
ventured into the socio-economic, technical, scientific and ethical domains.  Annex 1 Parties to the
Kyoto Protocol were given flexibility in fulfilling their commitments under the Protocol, since the
Protocol provided for the clean development mechanism, for joint implementation and other tools.
The Framework Convention was just a "framework," and did not go into setting the specific
obligations of the Parties.  It was through COP decisions that rights and obligations were to bedetermined.  Kuwait believed that the issue of specificity needed to be examined beyond the scope of
single measures.  While STOs needed to be clear and precise, when an agreement provided for severalTN/TE/R/6
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alternative ways of implementing its provisions, these alternatives could be considered specific.
Climate change levies, green taxes, and carbon taxes were all "specific" measures.  Organization for
Economic Cooperation and Development (OECD) countries imposed numerous such taxes on
consumers, which according to the CEO of British Petroleum, did not clean the environment, but
peoples' pockets instead.  Kuwait explained that a trade measure was "any measure that modified theconditions of trade flow or of competition between substitutable products."  It added that it saw all
mandatory COP decisions, resolutions or amendments to be STOs as well.  Saudi Arabia shared the
views expressed by Kuwait.  It asked the UNFCCC ad hoc invitee if trade-related issues, such asmarket access, were considered part of the UNFCCC mandate.  It wondered if the UNFCCC
considered such measures to be STOs.
29. Thailand believed that STOs had to be explicit trade measures that were mandatory in MEAs
(as stated by Japan, Hong Kong, China and Malaysia).  It agreed with Hong Kong, China that they had
to be measures which affected the free flow of goods, and with Malaysia that STOs contained in
annexes, protocols and amendments ratified by the Parties fell within the Paragraph 31 (i) mandate.
However, Thailand was not convinced of the inclusion of COP decisions in the discussion at this
point.  It called on the CTESS to focus on STOs in the MEAs themselves at this stage of the
discussion.  It agreed with the general thrust of the Malaysian paper on the concept of MEAs.Thailand did not agree that category (2) measures in the Japanese paper were STOs, but agreed with
Japan that categories (3) and (4) were excluded.
30. Pakistan welcomed the approach taken in the Hong Kong, China paper, but enquired about
the reference made to accommodating certain MEA provisions under WTO rules.  It wondered if this
would stretch the mandate of Paragraph 31 (i).  Pakistan believed that an STO was a measure that wasspecific and mandatory in its entirety, and which required a Party to take, or refrain from taking, an
action related to trade.  Pakistan fully subscribed to the examples given in the Indian paper, in
paragraphs 8(ii), 8(iii) and 8(iv), which alluded to measures that did not constitute STOs.  It agreed
with the Malaysian paper on what constituted an ME A.  On the Japanese paper, it associated itself
with the comments made by Brazil and the US.  It di d not agree that category (2) measures constituted
STOs.
31. Poland agreed with the EC that the CTESS' analysis should not be limited to the MEAs
themselves, but should extend to the entire operational framework of these agreements,
COP decisions included.
32. Korea was concerned about the Japanese paper's statement that category (1) STOs could be
compatible with WTO rules.  Such statements were  premature.  It also questioned the requirements
that Japan had set for category (2) compatibility.  With respect to COP decisions, Korea believed thatthese had to be reviewed on a case-by-case basis.  In paragraph 14 of the Japanese paper, Japan had
distinguished between two categories of COP decisi ons.  However, Korea did not understand the basis
for this distinction.
33. The European Communities requested clarification from the ad hoc invitees on MEA
terminology with respect to COP instruments.  While some agreements used the word
"recommendation" to mean "decision," others used the word "decision" to refer to
"recommendations," and sometimes to non-legally binding ones. It also asked the ad hoc invitees to
comment on the way in which COP decisions were addressed in the EC paper, and on the factual
accuracy of the CTESS' discussions under Paragraph 31 (i).
34. The EC welcomed the distinction drawn in the Japanese paper between explicit trade
measures and the " obligation de résultat ," a distinction which the EC had itself made.  However, it
stated that it needed to reflect further on the conditions which Japan had set for the latter category.
The EC also welcomed the degree of discretion concept introduced in the paper, as well as the
reference to the Biosafety Protocol, and to ha ndling and packaging requirements.  The paperTN/TE/R/6
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introduced a new element into the debate, that of the "reference made to other international
instruments" under MEAs (where Article 4.7(b) of the Basel Convention had been alluded to), which
would need to be considered.  Paragraph 11 had also expanded the scope of "STOs," by bringing in
notifications, technical regulations, and packaging and labelling measures.  The paper also initiated an
important discussion on COP decisions.  On the Hong Kong, China paper, the EC welcomed the
drawing of conceptual conclusions on the basis of its MEA implementation experience, and the call
made in the paper to avoiding a "one-size fits all solution."  The EC welcomed the Malaysian paper's
efforts to define "MEAs," as well as the opening which it provided for considering certain types of
COP decisions, such as protocols and amendments that had been ratified.  It asked that the Swiss
intervention be circulated in writing.
35. In response to comments made on the EC paper, the EC indicated that in suggesting that the
"legally-binding" nature of COP be considered, it was not suggesting that other factors be omitted.  Infact, the EC paper stated that legally-binding COP decisions would only be STOs "if and to the extent
they contain obligations within the definition of an STO."
36. Peru did not believe that conceptual issues needed to be addressed, since there was no conflict
between MEAs and WTO rules.  In fact, it argued that an interpretation or clarification could itself
lead to a conflict of competence between the WT O and MEAs.  On the Japanese paper, it could only
agree to having category (1) measures be considered STOs.  The other categories were too subjective.
It believed that STOs had to be specific, mandatory and trade-related. It agreed with Hong Kong,
China that Article II.4 of CITES constituted an STO, since it called for a prohibition on trade, and in
general welcomed the Hong Kong, China and Malaysian contributions.  It expressed its concern about
the EC suggestions that COP decisions automatically be considered STOs.
37. Egypt enquired if Hong Kong, China was arguing that certain provisions of CITES
(Articles II, III, IV, V, VI) were incompatible with GATT Article XX and the Import Licensing
Agreement.  It added that in its view, MEAs did not hinder, but rather regulated, the free flow of
goods.  While Egypt believed that it was premature to discuss COP decisions, it concurred with the
EC that amendments and annexes to treaties could be considered STOs.  It agreed with category (1)measures in the Japanese paper but not with the others.
38. India believed that a number of trade measures in MEAs needed to be read together and
approached the discussion on STOs from that perspect ive.  However, this did not imply that if one
measure was to be considered an STO, then all other measures would have to as well.  It believed in a
literal reading of the mandate, and supported the Malaysian submission, and interventions by
Indonesia and Pakistan. It agreed with Malaysia that MEAs negotiated under UN auspices and having
near universal participation, reflecting the di versity of UN and WTO membership in terms of
geographical spread and stages of economic and social development, should be considered under
Paragraph 31 (i).  It also agreed that trade measures which were obligatory and specific could be
considered STOs.  It welcomed the sharing of implementation experiences as done by Hong Kong,
China.  India agreed with Japan on category (1) measures, but could not agree with other categories,
since discretion ran counter to specificity.  It believed that the outcome of negotiations should bebased on the exchange of implementation experiences.
39. Hong Kong, China responded to Pakistan's claim that there was a stretching of the mandate in
the Hong Kong, China paper.  It explained that it was referring to those MEA provisions that were
related to trade, but that did not "hinder" or "regulate" trade.  These measures did not need to be
looked at further in view of Hong Kong, China since the question of their WTO compatibility (withwhich Pakistan was concerned) would not even arise.  On CITES, it clarified that Hong Kong, China
had merely stated that Articles II, III, IV, V and VI could contain STOs.  It did not try to prejudge the
outcome of the negotiations, nor did it call for the WTO consistency of these measures.  Responding
to the EC comment on Hong Kong, China's conclu sions, Hong Kong, China clarified that while
Article IV of CITES only required the prior presentation of either an export permit or a re-exportTN/TE/R/6
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certificate for endangered species listed under Appendix II, it had put in place import permits not
specifically required under CITES in order to strengthen import control.  While Hong Kong, China's
procedure was straightforward, it was possible that other Members would put in place more
burdensome or arbitrary measures under the cover of Article XIV.  As there was room for discretion
under this Article, it did not consider this to be an STO under the mandate.
40. Malaysia explained to Brazil that its analysis was based on whether a measure was obligatory,
and whether it contained a specific trade requirement (this was explained in the table to its
submission).  If both conditions were met, then a measure was considered an STO.  It was on this
basis that Malaysia had identified Article II.4 of CITES as an STO.  It added that while some
delegations did not think it was important to define MEAs, such a definition was necessary if
Members were to remain within the terms of the mandate.  Malaysia believed that Members' positions
diverged on STOs, with some aiming for a broad interpretation and others for a narrow.  Furtheranalytical work would be required.  While Malaysia did not exclude the development of an exhaustive
list, it asked that STO provisions be looked at more comprehensively.  In response to the EC, it
stressed that it only considered amendments, annexes and protocols, adopted and ratified by the
broader membership of an MEA, to fall within the mandate.  It was not clear to Malaysia why the EC
had included COP decisions of an interpretative nature.  While they could be needed to interpretSTOs, they were not themselves STOs.  On the Japanese paper, it only agreed with category (1)
measures.  It was not clear to Malaysia either why measures considered STOs would be automatically
compatible with WTO rules, nor did it see the logi c of the Swiss "mechanism."  It was opposed to any
prejudgement of the outcome of negotiations.  Malaysia welcomed Hong Kong, China's contribution
and shared its analysis of STOs, except for Article II.4 of CITES.  Hong Kong, China had howevermade an interesting observation that supplementary domestic measures could be taken pursuant to
certain provisions, and could be discretionary and not STOs.  Hence, it agreed that Article IV of
CITES was not an STO.
41. The European Communities clarified to Mala ysia why it had spoken of interpretative
COP decisions as opposed to amendments, which would have the same legal status.  It explained that
often interpretative decisions needed to be taken into account to understand the nature of the
relationship between an STO in an MEA and WTO rules.  Such decisions may not be STOs in
themselves but could need to be considered.  In response to Hong Kong, China's point on Article XIV
of CITES, the EC believed that Members needed to decide on the amount of discretion they were
willing to accept in measures that qualified as STOs, and argued that a conceptual debate,
underpinned by examples, was the way forward.  With  respect to the exchange between Switzerland
and Argentina, the EC pointed out that it had made a similar point to Switzerland's underparagraphs 28 and 29 of its first submission. It had argued that there was a case to be made for
considering certain MEA trade measures legitimate under WTO rules.  While this would raise the
burden of proof issue, it wished to point out that under WTO rules it was not always clear-cut that
those who invoked exceptions provisions had the burden of proof.  It referred Members to the
Agreement on Technical Barriers to Trade's (TBT) presumption of conformity for the use ofinternational standards. Those who benefitted fr om the presumption still had to prove that they
complied with all other elements of the Agreement.
42. Japan responded to the apparent contradiction between the concepts of specificity and level of
discretion.  It believed that some MEA provisions which gave Parties a degree of discretion in
fulfilling their obligations needed to be read in combination with other measures in order to bring
specificity.  For instance, the Basel Convention's Article 4.2(e), which called on Parties to take
appropriate measures, could give the impression that it was discretionary.  However, the subsequent
part of the Article was clear about the result to be achieved through the measure, and so together they
could be considered an STO.  The US and India had also considered this Article an STO.  It then
turned to the leap of logic from discretion to WTO compatibility hinted at by New Zealand, andargued that what it wished to do was to first discuss discretion in relation to specificity; and then turn
to the question of WTO compatibility.  On the "subjectivity" argument made by some delegationsTN/TE/R/6
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regarding the conditions set for category (2) measures, Japan explained that it had tried to be as
objective as possible. The conditions had been based on Japan's analysis of WTO jurisprudence, such
as the Shrimp/Turtle case.
43. Turning to Argentina's comments on how Articles II.4  and IV of CITES did not constitute
STOs, it argued that any measure that affected the free flow of goods had to be considered an STO.The Argentinian approach was too narrow, since even the US and India had considered these Articles
to be STOs.  On Korea's question of why Japan gave examples under paragraph 14.1 of its paper, but
not 14.2, it explained that that was due to the fact that it believed that 14.2 was not an STO.  Japan
welcomed the EC contribution and believed that further discussion was needed on the second
category of COP decisions.  It also welcomed the Hong Kong, China contribution but believed that
Members should not be too hasty in looking at national measures.  The sharing of national
experiences was useful, but the mandate had to do with WTO rules and STOs.  Japan added that itsaw paragraph 17 of the Malaysian paper as too narrow.
44. CITES thanked the CTESS for its invitation and hoped that this would be the start of fruitful
cooperation between CITES and the Committee.  It explained that it had worked closely with the
WTO Secretariat on the Matrix and stood ready for further cooperation with the WTO, UNEP and
other MEAs.  CITES hoped to now be able to be part of this process on an equal footing.  Whether ameasure was an STO or not was for the Committee to define, and CITES indicated that it would not
interfere in that discussion.  However, it explained that for the past three decades, CITES had proven
to be a very necessary and effective international wildlife trade regulation tool, and was of major
importance for species conservation world-wide.  It prohibited trade in 800 animal species and some
250 plant species, and it regulated trade in 4,000 non-endangered animal species and 25,000 non-endangered plant species. CITES was a convention with teeth because of the instruments it had at its
disposal.  Some of these instruments the CTESS may decide were STOs, but without such obligations,
the Convention would have been useless.  In the case of CITES, it was important to note that many
provisions and measures could not be found in the text of the Convention as such, but had been
created by the COP (referred to on page 49 of the Matrix).  It had trade measures that were decided bythe COP;  trade measures decided by its standing Committee, on behalf of the COP; trade measures
that were recommended by the animals and plants committees, which were the scientific committees,
and which were adopted by the standing committee;  and trade measures recommended by the
Secretariat to the COP and the standing committee.  There was therefore a whole series of possible
trade measures to be found, based on the text of the Convention, but not necessarily immediately
visible.
45. Some examples of these measures were reflected in the CITES legislation project.  CITES
had analysed the legislation of all parties, and given them a time-frame in which to improve their
legislation.  If that was not done, then the Secretariat would recommend to the standing committee to
ban trade, or to suspend trade, with the party concerned, in CITES species.  That was based on
Article VIII of the Convention.  In Article IV.3 of the Convention, countries were supposed to make
sure that their exports of wildlife were sustainably carried out, but where the animals or plantcommittees found that a country was not implementing that Article, it could propose to the country to
adopt a limitation of exports, a quota system or a full prohibition of such trade, and the secretariat
then had to carry out that decision or that recommendation together with the country.  If the country
did not follow up properly, then the standing committee could again decide on a suspension of trade.
When there were enforcement problems, and the secretariat or a party found that a country wasactively involved in serious cases of illegal trade, it tried to solve that with the party, and if it was not
possible, the standing committee or the COP could again decide to suspend trade with the country
concerned.
46. In the EC paper, reference to those COP measures was made, but mostly to non-binding
recommendations.  However, there were other CO P decisions on export quota levels and other
conditions under which parties could trade, and they included measures to register traders with theTN/TE/R/6
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CITES secretariat or through the COP,  and measures that only allowed trade if the commodities in
trade were marked or labelled.  CITES added that decisions of the CITES COP were not taken by
consensus, and in many cases were taken by a two-thirds majority vote.  Under such a democratic
system, it was impossible for Parties to agree on the measures taken, but the representative had no
doubt that measures were multilaterally decided, based on generally accepted scientific criteriaadopted by the COP, and were adapted to changing scientific findings on a regular basis.  As a result,
there had been no real disputes between individual Parties, nor between one Party and the rest of
the 161 Parties to CITES in the 30 years of CITES' existence.
47. CITES also commented on the level of discretion i ssue.  Article II.4 clearly stated that parties
should not allow trade except in accordance with the Convention, and there was a non-exhaustive list
of legal tools to achieve that in the Convention's Article VIII.  Because there were many ways of
achieving the same aims, there was a level of discretion.  However, the legislation project showed thatthe checklist for measures to be taken and on which parties were held accountable by the COP, was
rather strict and the level of discretion narrow.
48. The Convention on Biological Diversity (CBD ) also expressed its appreciation for this
invitation.  This was consistent with decisions of the COP to the CBD on the need for cooperation
with the WTO.  It was with a view to cont ributing to the overarching objective of mutual
supportiveness of trade and environment agreements, which had been emphasized both by the COP of
the CBD and the Doha Ministerial Declaration, that th e CBD participated in this meeting.  Given that
the Biosafety Protocol was widely regarded by  CTE Members as containing STOs, it provided
updated information on it.  It informed Members that the Protocol had been ratified by 47 countries
and one regional integration organization.  Thus, only three more ratifications were needed to reachthe fiftieth ratification, which would trigger the 90-day period for entry into force of the Protocol.
Given the current pace of ratifications, it was expected that the fiftieth ratification would be deposited
in the next few weeks and that, as a result, the Protocol would enter into force around August or
September of this year.  Thus, the Cartagena Protocol was most likely to be in force at the time of the
Cancún Ministerial Conference and, at that time, the procedure applicable to the transfer of livingmodified organisms embodied in the Protocol would be legally binding on those countries that ratified
it.  The expected date of entry into force meant th at the first meeting of the Parties to the Protocol
would be held back-to-back with the seventh meetin g of the COP to the CBD, which was to be held in
Malaysia in April or May of next year. On that occasion, Parties to the Biosafety Protocol would
examine various issues concerning its implementation, notably identification requirements for living
modified organisms intended for direct use as food or feed or for processing;  issues relating to
monitoring and reporting of the Protocol; and issues relating to compliance, liability and redress.
49. Turning to COP decisions, the CBD made a num ber of remarks without prejudice to the
outcome of discussions in the CTESS.  COP decisions varied greatly in content and purpose.  For this
reason, it was probably not possible to draw a general conclusion on their legal status.  They had to be
looked at on a case-by-case basis.  As indicated by the EC in their paper, some COP decisions were
political in nature and, as such, were not legally binding.  Other decisions related to the functioning ofthe institutions of the Convention and budget.  However, many COP decisions, in fact, the majority of
them, in the experience of the CBD related to the implementation of the substantive provisions of the
agreement, and as such, were complementary to these provisions.  They could determine how Parties
were expected to discharge their obligations a nd how institutional mechanisms under the Convention
were to operate.  In the case of the Cartagena Prot ocol on Biosafety, when the Protocol entered into
force in the next few months, the meeting of the Parties would need to adopt important decisions
regarding its operation, which were called for in the provisions of the Protocol.  These included the
adoption of institutional mechanisms to promote compliance and address cases of non-compliance,
the format and timing of reporting by Parties, as well as the identification requirements for living
modified organisms intended for direct use as food or feed, or for processing.  These were, of course,key issues concerning the operation of the Cartagena Protocol and regarding the way in which PartiesTN/TE/R/6
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would meet their obligations under it.  As such, these decisions were intimately related to the
operation of key provisions of the Protocol.
50. The International Tropical Timber Organization (ITTO) also expressed its gratitude for the
invitation.  It noted that MEA observership at this meeting was focussed on paragraph 31 (i) of the
Doha Ministerial Declaration, as paragraph 31 (ii) observership was still under consideration.  Itrealized that the process of negotiating paragraph 31 (i) had commenced, and that it was important
that it be placed on the right track from the beginning.  In view of this, it was only appropriate for the
ITTO to refrain from commenting on matters under negotiation.  The ITTO had provided the CTE and
its Secretariat with information about the ITTO, particularly on its ongoing effort to integrate trade
and environment through its promotion of international trade in tropical timber from sustainably
managed sources (the ITTO's Objective 2000).  It stood ready to respond to any further requests for
information and clarification on ITTO from the Committee and its Secretariat.
51. The UNFCCC also thanked the CTESS for the invitation.  It reiterated that mutual
supportiveness was an agreed objective of both the Doha Declaration and of the World Summit on
Sustainable Development (WSSD), which were two regi mes that were on an equal footing.  It wished
to obtain any questions that CTESS Members had in writing, if they were of an interpretative nature
concerning the relationship between the legal regimes, so that it could transmit them to its Parties, andbring back their response.  It indicated that as a Secretariat it was in a delicate position, and saw itself
as a messenger that had to assure a two-way flow of information.
52. In response to Saudi Arabia's question, the UNFCCC drew the delegate's attention to
Article 3.5 of the Convention, which stated that "parties should cooperate to promote a supportive and
open international economic system, that woul d lead to sustainable economic growth and
development in all parties, particularly developing country parties, thus enabling them to better
address the problems of climate change.  Measures taken to combat climate change, including
unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or disguised
restriction on international trade."  As the Member from Kuwait had also pointed out to the
Secretariat, in the reporting to the UNFCCC,  no adverse impact on trade pursuant to policies andmeasures adopted by parties had been reported.  The UNFCCC added that the Kyoto Protocol had not
yet to come into force, nor had the provision which refered to the matter raised by Saudi Arabia.
Article 2.3 stated that Parties, including those in Annex 1, "should strive to implement policies and
measures under this Article, in such a way as to minimize adverse effects, including the adverse
effects of climate change, effects on international trade, and social, environmental and economic
impacts on other parties, especially developing country parties."  Article 2.3 of the Kyoto Protocol
went on to say that "the COP, serving as the meeting of the parties to this Protocol, could take furtheraction, as appropriate, to promote the implementati on of the provisions of this paragraph." He hoped
that this responded to Saudi Arabia's question.
53. The Montreal Protocol also thanked the CTESS for its invitation. It indicated that Parties to
the Protocol had adopted a decision late last year which requested the Secretariat to monitor
negotiations under the Doha mandate and keep them informed of progress on a regular basis. TheParties to the Montreal Protocol were conscious that the STOs contained in the Montreal Protocol had
been adopted by international consensus through negotiations.  Some of these trade obligations had
not been applied when they were deemed to have no real value in promoting the objectives of the
Protocol.  In such situations, Parties to the Montreal Protocol have adopted the necessary decisions
acknowledging these practical difficulties. Trade measures in the Montreal Protocol had also beencomplemented by other favourable provisions which assisted developing countries, and countries with
economies in transition, in implementing the measures contained in the Montreal Protocol.  They
related to technical and financial assistance, technology transfer and capacity building.  Trade
measures were also negotiated by taking into account WTO concerns, and as far as possible, were
harmonized with GATT Article XX.  The 184 parties to the Montreal Protocol, which were workinghard to phase out all ozone-depleting substances, would have had difficulties if their task had not beenTN/TE/R/6
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complemented by trade measures and by Article 4 of the Protocol.  These measures promoted
ozone-protection efforts, and encouraged Parties and non-Parties to ratify the Montreal Protocol.
54. The Ozone Secretariat believed that the interaction which the MEAs and the WTO had had
was helpful for mutual supportiveness and had to be continued.  It believed that the kind of dialogue
which preceded the conclusion of the Montreal Protocol in 1987 with GATT, particularly concerningArticle 4 on trade measures was of serious concern, had been helpful.  The international community
appreciated the fact that the trade measures within the Montreal Protocol had not disrupted global
trade, but, rather, had complemented the efforts being made to promote free trade and protect the
environment.
55. The Basel Convention also thanked the CTESS for the invitation.  It indicated that the
Convention had placed great importance on this discussion and had actively participated in activities
and meetings organized by the CTE.  This year, it had participated in the WTO Regional Seminar onTrade and Environment in La Paz, Bolivia.  The workshop provided a productive forum to exchange
concrete information on MEA obligations and trade concerns.  It indicated that the secretariat would
also participate in the upcoming WTO Regional Seminar for Africa, to be held in South Africa,
through a representative of the Basel Convention Regional Centre for English-speaking African
countries in Pretoria.  The regional seminars represented an important tool to increase the capacity ofgovernments to establish informed policies and make sound decisions.  The Secretariat considered
that MEA participation in the CTESS was another tool to reach this objective.
56. Recognizing the importance of the negotiations taking place under the Doha Declaration and
the usefulness of the exchange of information between the CTESS and the secretariat of the
Basel Convention, the COP to the Basel Convention adopted Decision VI/30 at its last meeting,mandating the secretariat to request WTO observer status in the CTESS.  In accordance with this
decision, a letter was sent to the Director-General of the WTO on 28 January of this year.  The said
decision also mandated the secretariat to provide general information to the WTO upon request and to
submit to the COP questions related to the interpre tation of the provisions under the Basel Convention
at its next meeting.  This decision was a step towards promoting sustainable dialogue between the tworegimes in order to enhance their mutual supportiven ess.  During this meeting, several interventions
made reference to the Basel Convention which would be reflected on further. It emphasized that the
Basel Convention was a dynamic, living international instrument that aimed at protecting human
health and the environment.  Annexes to the Basel Convention were reviewed on a regular basis to, as
necessary, adapt to scientific or technological changes or for harmonization purposes with other
international systems whose work related to the transboundary movements of hazardous wastes.
57. The implementation of the Convention was supported by the decisions adopted by the COPs,
the legislative body of the Convention.  These decisions contained amendments, technical guidelines
or additional rules of procedures, amongst others .  The COP Decisions in the Basel Convention had
always been adopted by consensus.  Indeed, COP decisions adopted under the Basel Convention were
respected "golden rules". In relation to the co mment made by the Basel Convention about COP
decisions being applied by all Parties, Egypt enquired about the ban amendment.  It believed that
several Parties did not see the amendment as mandatory because the text of the Basel Convention
itself did not categorically ban exports.  This showed the difficulties that would be involved in looking
at COP decisions, as called for by the EC.  The Basel Convention confirmed that Decision II/12,
adopted during the second meeting of the COP, established a prohibition of exports from OECD
countries to non-OECD countries.  As far as the secretariat was concerned, there was no case ofnon-compliance with this Decision.  However, there was a concern among certain parties that the
legal status of the Decision was not binding enough for the ban to be implemented.  Therefore, at the
following meeting of the COP, Decision III/1 was adopted, and contained the so-called ban
amendment, which had not yet entered into force.  At present, the amendment had been ratified
by 36 Parties.TN/TE/R/6
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58. UNEP thanked the CTESS for the invitation. UNEP considered it vital to foster a broad and
substantive interaction on the relationship between MEAs and the WTO, in the context of these
ongoing negotiations, which directly involved officials with responsibilities and expertise in the
functioning of both regimes. Governments recognized at the WSSD that trade was a crucial means of
implementation for sustainable development.  UNEP stood ready to offer its expertise to maximize theeffectiveness of trade in securing this goal, in th e context of the CTESS, and in relation to any other
elements of the Doha Work Programme deemed appropriate by WTO Members.  Its attendance of this
meeting underlined to UNEP and the MEAs the importance of these negotiations, and provided a
clearer appreciation of the priorities and concerns of WTO Members.  However, it had also underlined
the importance of efficient and timely provision of information by MEA Secretariats and UNEP.  It
hoped that WTO Members would enable the ad hoc invitees do this on a secure and predictable basis.
59. Turkey expressed its gratitude for the participation of the ad hoc invitees.  It believed that
Members had to continue to seek a consensus on the principles that would govern the WTO-MEA
relationship.  Numerous MEAs had been negotiated following the Rio Earth Summit through
international consensus.  Trade measures in MEAs, therefore, had to be maintained, but it was
important to ensure that their implementation did not create an obstacle to developing country trade.
Developing countries had to receive financial and technical assistance, technology transfer, andcapacity building.
60. Brazil thanked the MEA Secretariats and UNEP for their participation and for the views
contributed on Paragraph 31 (i).  It believed that their participation was a major step forward in the
negotiations under Paragraph 31 (ii), as well as for the more horizontal issue of observership in WTO.
Nevertheless, it enquired about the precise terms of reference for the participation of ad hoc invitees atCTESS meetings.  Venezuela supported Brazil and together with Ecuador
 and Barbados  asked that
overlapping MEA and CTE meetings be avoided in future, since the Basel Convention had held ameeting at this same time. They asked for greater coordination in future between the WTO, UNEP
and MEAs.  The United States indicated that long discussions had been held at the last CTESS
meeting on the scheduling of meetings, and that sensitivity had been shown to avoiding conflicting
meetings as much as possible.
61. The Chairperson stated that while she had not been able to hold informal consultations on the
form that the participation of the ad hoc invitees would take, informal consultations would be
organized prior to the next meeting of 8 July 2003 to address this and other matters. She thanked the
ad hoc invitees for their constructive participation.  She had found the debate to be very rich, and to
have been based on a mixture of the pragmatic and conceptual approaches.
II. PARAGRAPH 31(II) – INFORMATION EXCHANGE & CRITERIA FOR
OBSERVER STATUS
62. The European Communities asked delegations to contemplate progress on Paragraph 31 (ii) at
the Cancun Ministerial Conference.  It felt that there was scope for consolidating the ad hoc
invitations to UNEP and MEAs at the Conference, on the basis of the criteria suggested in the
February meeting of the CTESS, and for having Ministers endorse the MEA information sessions inthe CTE.  Consolidating the information exchange would not change the institutional balance of
WTO.
63. Switzerland welcomed the EC suggestion and looked forward to a more concrete proposal.
Argentina distinguished between the negotiating mandate on criteria for the granting of observer
status, and the consolidation of the ad hoc invitation to MEAs and UNEP at Cancun.  It believed that
the latter should take place on the basis of criteria, such as relevance of the invitee's work to that of
the CTESS, and the invitee's universal representation.  Brazil welcomed the EC's suggestion, but
wished to first define MEAs, and discuss the format of invitee participation.  Thailand sought
clarification from the EC on the MEAs covered by the proposal and the criteria that would be used.  ItTN/TE/R/6
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explained that its support for the ad hoc invitations had been based on their "ad hoc nature," and the
fact that their participation was linked to issues under discussion in the CTESS.  Egypt did not see the
need for consolidating the ad hoc invitations, and emphasized that the question of observer status wasa horizontal issue.  A number of other delegations expressed an interest in further discussing the EC
proposal.  The European Communities stated that it would reflect further on the issue of criteria, but
that it was important not to impose conditionalities through the development of criteria that would
empty the recommendation out.  It added that the d ecision by Ministers could be accompanied by a
statement that it was without prejudice to what would be considered an "MEA" under Paragraph 31(i)
negotiations.  It also clarified that its proposal was limited to the CTESS, and did not cover the regular
CTE, nor any other WTO bodies.  With respect to information exchange, it explained that Ministers
would simply be endorsing an existing practice, and they should not be asked to get into the details
(such as on the number of information sessions to be held per year).
A. INFORMATION EXCHANGE
64. The Chairperson summarized the main sugges tions made in the CTESS on information
exchange:  (1) formalizing information sessions wi th MEAs and organizing them on a regular basis;
(2) holding information sessions on specific th emes by grouping the MEAs that shared common
interests;  (3) having other WTO committees organi ze meetings with MEAs, either with the CTE or
separately; (4) creating avenues for information exchange between government representatives from
the trade and environment sides; (5) having the WTO Secretariat organize parallel activities at the
COP meetings of MEAs in a more systematic manner;  (6) organizing joint WTO, UNEP and MEA
technical assistance and capacity building proj ects; (7) promoting documents exchange, while
respecting confidential information; and (8) establishing an electronic database on trade andenvironment.  The Chairperson invited Members' comments on these points, and more broadly on the
way to move discussions forward. The Chairperson th en drew the attention of participants to a new
document by Switzerland (TN/TE/W/30), which Switzerland introduced.
65. A number of delegations, including the United States, Kenya , and Japan,  agreed with
Switzerland's view that one of the main objectives of information exchange was to promote mutual
supportiveness and coherence between environmental and trading systems.
66. While supporting the need for regular information exchange, a number of delegations
including Cuba, Malaysia , Egypt , Indonesia , Qatar , Canada , Thailand  and Kenya  expressed concern
with the Swiss and EC proposals of instit utionalizing the information exchange.
67. Cuba and Egypt  were of the view that the institutionalization of information exchange was
not in conformity with the parameters of the manda te.  Cuba stated that consolidation of existing
practices must not lead to a change in the existing status of MEAs participating within the WTO, or tothe creation of a new institutional structure.  It felt the Swiss and EC proposals went beyond existing
practice for the exchange of information between MEAs and the WTO.  The European Communities
noted that consolidation through an organized series  of meetings did not require any changes in WTO
rules and procedures as suggested by Cuba, and would not alter the institutional balance.  It was felt
that in terms of the frequency of the information sessions, the focus should be on demonstrating thatthe WTO was making an effort to improve governance.
68. Malaysia believed that regular information exchange was important.  The MEA secretariats to
be involved in the exchange could be decided on the basis of:  (1) those that were eligible to be WTO
observers under the criteria that the CTESS would negotiate, and (2) those on which WTO
Committees could agree by consensus.  On the WTO bodies that could be involved in the exchange,the CTE seemed the most obvious, although it should be up to each body to decide.  It welcomed the
numerous suggestions advanced on information exchange, and added that capacity building seminars
and workshops could also be considered.  Relevant WTO bodies could decide for themselves on
issues such as the topics of information sessions, the capacity building seminars, etc.  The SwissTN/TE/R/6
Page 17
proposal tried to micro-manage the process.  It expressed concern about the institutionalization of
information exchange, cautioning that the financial and human resources of the WTO and of small
delegations needed to be taken into account.
69. Qatar, Argentina , Kenya  and Indonesia  supported Malaysia's statement.  Kenya  also
advocated the use of the least costly system for information exchange, questioning the need for
additional information.
70. Egypt and Canada  felt that the frequency of meetings should not be predetermined but,
instead, driven by needs and requirements which were subject to change.  Venezuela expressed
support for this view.  Kenya agreed and stated that it was progress, not frequency, that was
important.  The United States noted that holding MEA information sessions twice a year may be too
ambitious. Canada considered that one formalized meeting with MEAs may be sufficient.  Thailand
noted that current practice was adequate.
71. The United States welcomed the Swiss submission as an important contribution.  It agreed
with paragraphs 3, 4, 5 of the submission, including the existence of significant potential benefits
through enhanced cooperation.  Details provided in paragraph 8 regarding the formalization of WTO-
MEA information sessions was thought to be useful.
72. Australia noted that better information exchange could play an important role, both at
domestic and international level, in building confidence and understanding between trade and
environment officials.  The Swiss paper was a useful contribution in this regard.  In addition to the
work conducted in the WTO, Australia stressed the need to take account of activities in other
domestic, regional or international fora, and in this context, mention was made of an upcoming Asia
Pacific Economic Cooperation forum (APEC) workshop on trade and environment.3
73. Canada stressed the importance of both domestic and international coordination processes in
order to develop mutually supportive trade and environment regimes.  There was a need to take more
active steps to facilitate the development of pr ocedures for information exchange between MEA
secretariats and WTO Committees and the development of criteria for granting observer status.
Canada recognized the positive contribution made by informal information exchange processes,which enabled useful information flow when these processes were carried out in a manner that
promoted open dialogue.  However, Canada believed that apart from MEA information sessions, there
was a variety of mechanisms for information exchange, including document exchange, jointly
sponsored events, secretariat meetings, symposia, regional seminars and workshops, technical
assistance projects, and web sites.  The value of focusing on specific issues and conducting focused
regional meetings was recognized.  The type of information to exchange was varied, and included:
basic information regarding a body's expertise, research or analysis in areas of common interest,information on databases, planned meetings, summaries of discussions and new developments and
issues, capacity building and technical activities.  The benefit of obtaining feedback from MEAs
regarding the potential value of different information exchange mechanisms and various types of
information was noted.  Due to the constraints experienced by MEA secretariats, it was thought that
the WTO Secretariat should seek MEA views in re gard to information exchange in a structured
manner, such as through a questionnaire.
74. New Zealand was not persuaded of the need to address the legal relationship between MEA
trade provisions and WTO rules;  it considered that efforts should be made to improve the mutual
supportiveness of the two regimes at the practical level.  In terms of reducing the risk of conflict, it
agreed with Canada that the main focus needed to re main at the national level, both with regard to the
negotiation and implementation of trade and environment agreements.  At the intergovernmental
level, importance was attached to confirming observer status of MEAs in the CTESS, as well as
                                                     
3  This workshop was held in Bangkok on 19-20 May 2003.TN/TE/R/6
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information exchange.  With regard to procedures for information exchange, the key question was
thought to be how to retain a degree of flexibility while still establishing some regularity and
consistency, so as to preserve the value of the exchange.
75. Chile recognized the benefits associated with improved cooperation between the WTO and
MEAs as proposed in the Swiss document.  However,  it considered the flexibility inherent in current
arrangements to be valuable.  It noted that the formalization of existing practices or the imposition of
strict criteria should be avoided.  Instead the focus should be to appeal to Members to intensify
cooperation for instance through the methods suggested by Canada and Switzerland.
76. Brazil noted that it attached great importance to this aspect of the negotiations, and expressed
support for more regular information exchange.  It agreed with the suggestions made at the MEA
Information Session in November, including to hold information sessions on specific themes, enhance
the exchange of documents and promote or update databases.  It also supported Malaysia's proposalon joint capacity building, and Canada's suggestion regarding technical assistance projects and
symposia.  While Brazil was not in a position to present definitive views on the institutionalization of
information sessions, it shared Switzerland's views on information exchange enhancement.  With
reference to paragraph 9 of the Swiss paper, the belief was expressed that the WTO should continue to
be responsible for the convening of joint meetin gs where specific elements of the Doha mandate
would be discussed.  The comments by Chile on pa ragraph 10 of the Swiss paper were supported.
77. Japan welcomed the Swiss paper as a valuable contribution.  Support was noted for the
suggestion that institutionalized or more focused information sessions would provide benefits, as
outlined in paragraph 5 of the Swiss paper.  With regard to ways to better organize the information
exchange between MEA secretariats and the WTO committees, Japan supported the points made bySwitzerland in paragraphs 8 and 11 of its paper.
78. Venezuela thanked Switzerland for its document which, together with the earlier EC and US
submissions, would help facilitate progress in the discussion.  Paragraph 3 of the Swiss submission
was felt to be useful with particular reference to the WSSD and the need for consistency.  It was
suggested that the issue of consistency between special and differential treatment under the WTO andcommon and differential responsibility under the Rio Declaration and MEAs, be raised with MEAs.
In this respect, reference was made to the specific mandate regarding special and differential
treatment under the Ministerial Declaration.  The importance attached to national and international
coordination, capacity building and technology transfer in paragraph 5 of the Swiss proposal was
found to be reassuring.  Support was expressed regarding the proposal to give structure to the
meetings, although the term "institutionalization" was not favoured.  Clarification was requested
regarding the question of reciprocal treatment in paragraph 17 of the Swiss paper.
79. Indonesia stated that procedures for information exchange should be aimed at providing the
Members with opportunities to gather and improv e their knowledge of the impact of trade and
development on the environment from the perspective of MEAs.  The opinion was expressed that the
mandate was limited to procedures for regular information exchange, and therefore the negotiations
should not prejudge the issues to be discussed in future information exchange.  Information exchangesessions should focus on specific issues and MEA attendance should be determined accordingly.
Indonesia was of the view that Internet use could enhance information exchange between WTO and
MEAs.  A preference was noted for an adaptation of the existing web site and the consideration of
links between WTO and MEA web sites.
80. Switzerland responded to the comments made.  On the issue of institutionalization of
MEA information sessions, the proposal was aimed at a more efficient organization of the sessions,
rather than a structural change in the organization of the work.  Emphasis was placed on more
regularity, as stipulated in the mandate.  Switzerland agreed with the comment by New Zealand on
balancing flexibility and regularity.  Although two meetings were proposed in the paper, it wasTN/TE/R/6
Page 19
thought the focus should not be on the number, but rather on the regularity of the meetings.
Coordination was also important due to the extra burden on some delegations.  It was noted that
Malaysia's proposals regarding different types of cooperation should be taken into account.
81. The Chairperson noted that valuable suggestions had been advanced and that the CTESS
would need to look at how to combine them.  She highlighted that feedback from MEAs on the
potential value of these information exchange mechanisms, as well as the different types of
information would be useful to the discussion.
B. OBSERVER STATUS
82. On observer status, the Chairperson requested delegations to focus specifically on the
identification of criteria, and of the WTO Committees concerned by this mandate.  The new Swiss
submission, document TN/TE/W/30, was also discussed in relation to observer status.
83. Egypt, Kenya , Indonesia  and Malaysia  noted that the issue of observer status was a horizontal
issue to be resolved and determined within the organization as a whole.  Several delegations stated
that the outcome of discussions in the General C ouncil and TNC had to be awaited.  Cuba added that
it had systemic concerns with regard to the Swiss proposal.  The United States welcomed the Swiss
submission on observer status and noted that the issue of criteria for observer status had been
addressed in a former US paper.4  Indonesia shared the Swiss view that observer status should be
based on reciprocity and relatedness of the MEAs in question to the work of the WTO.
84. Brazil stated that although it was possible to work on the basis of the guidelines for
observership contained in Annex 3 of the Rules of Procedure for Sessions of the Ministerial
Conference and Meetings of the General Council, refinement was required.  Argentina noted that as it
concerned regular meetings as opposed to meetings of negotiating bodies, Annex 3 could be
inadequate and other elements needed.
85. Malaysia, supported by Qatar ,  welcomed the presence of selected MEAs at meetings of the
CTESS.  Current rules of procedure dictated that such participation be decided on a case-by-case
basis, and that organizations accorded observer status in a particular body should not automatically be
granted observer status in other bodies.  Malaysia agreed with Brazil that some terms of reference
were necessary to govern the participation of MEAs at CTESS meetings.
86. Australia felt that the Swiss paper outlined a set of sensible, practical reasons why the
presence of MEAs on a more permanent basis in future discussions could be useful.  Although they
were sensitive to some of the broader issues raised by delegations, they expressed the hope that the
issue would move forward, particularly in the CTESS, in order to benefit from the synergies that they
believed would flow from a more considered engagement of MEAs in the discussions.
87. Canada suggested that the WTO Secretariat prepare a questionnaire to be sent to all
potentially relevant MEA secretariats to clarify the focus of their interests.  In order to facilitate
responses, the questionnaire should include a short summary of the mandate and key activities of each
WTO Committee.  A compilation of such responses would assist Members to gain a complete and
detailed understanding of the interests of MEAs.
88. Chile and Japan  considered that the horizontal discussion on observer status did not create an
obstacle to discussion of the issue in the CTESS pursuant to its specific mandate .  Chile felt that the
CTESS discussion could provide direction and an impetus to the horizontal discussion .  A closer
examination of the issue of MEA criteria as mentioned by Switzerland in paragraph 17 of its paper
should be pursued at the next meeting.  Japan stated that the question of observership should be
                                                     
4 TN/TE/W/5.TN/TE/R/6
Page 20
considered on the merits it would bring to the CTESS work.  Support was expressed for the Swiss
proposal on: paragraph 20 being the basis for observership and the development of more detailed
guidelines; the ad hoc approach in paragraph 23 being pragmatic and good;  and the contribution by
MEA secretariats being important and valuable for the progress of work in the CTESS.
89. New Zealand welcomed the Swiss submission. The approach taken to criteria for observer
status in Part 3 of the paper regarding the flexibility of criteria and the emphasis on interest and
involvement in trade policy, was thought to be sensible.  Support was noted for the formalization of
observer status, which was both central to the mandate and specific to the negotiations.
90. Switzerland thanked delegates for their responses and questions.  Regarding observership as a
horizontal issue, it reiterated its position that discussion of the issue in the General Council and TNC
was not an obstacle and that the CTESS had a specific mandate.  In response to Chile's comment in
relation to paragraph 17, it indicated that the criterion of "direct interest" was taken directly fromAnnex 3 of the Rules of Procedure for Sessions of the Ministerial Conference and Meetings of the
General Council.  Direct interest was understood to mean direct interest in the negotiations provided
for in the Doha Declaration regarding trade and environment, which would mean observership in the
CTE and CTESS.  In response to Venezuela's question on reciprocal treatment it was explained that
MEA observership in the WTO would give rise to an expectation of WTO observership at the relevantMEAs in question, although it was noted there had been no problems up to this point in this regard.
91. The Chairperson concluded that Members would have to further reflect on the criteria for the
granting of observer status in order to garner consensus.  Members were encouraged to focus on the
mandate given to the CTESS and to try to move forward on the basis of the discussions at the
February meeting.
III. PARAGRAPH 31(III) – ENVIRONMENTAL GOODS AND SERVICES
92. The Chairperson drew the attention of Members to the new document by Qatar, document
TN/TE/W/27.  She also informed Members of the recent circulation in the CTE Regular of an OECD
document which compared the lists of en vironmental goods of APEC and OECD.5
93. Qatar noted that its submission was a response to requests from delegations to provide the
Harmonized System Codes for products referred to in their earlier proposal6 regarding the inclusion of
natural gas-related products and technologies in the OECD list of environmental goods.  Five factors
were specified.  Firstly, classification of goods as environmental goods required examination of how
these goods added value to the environment, i. e. how they helped environmental objectives.
Secondly, environmental objectives could be classified as either global or local, the former being
achieved through MEAs.  The environmental goods covered in the proposal, relevant to the
UNFCCC, would help both types of objectives.  Thirdly, environmental benefits should bescientifically quantifiable for any environmental good in any WTO list.  Energy-related products such
as those proposed by Qatar had an extensive environmental added value and were easily quantifiable.
Fourthly, trade volume should also be quantifiable.  Fifthly, as the development dimension was a
critical factor for developing countries, proposals from developing countries should be considered in
WTO negotiations.
94. Canada, the United States
, and Australia  thanked Qatar for its contribution and noted that
submissions on environmental goods were useful when accompanied by HS Coding.  Canada also
considered the identification of selection criteria useful.  Malaysia welcomed Qatar's submission as an
impressive list.  Egypt noted its belief that the two categories, gas turbines and products, were
environmental goods.  Its support of this classification would continue unless challenged by
                                                     
5 This document was circulated as WT/CTE/W/228 and TN/TE/W/33.
6 TN/TE/W/19 and Corr.1.TN/TE/R/6
Page 21
definitional consensus or convincing argument.  New Zealand noted that the supplementary
submission would assist in the analysis  of the earlier submission by Qatar.
95. The United States stressed that a clear definition of environmental goods was required in
order to develop a modality for market access liberalization.  Key factors of the APEC list's history
were highlighted in order to help inform the curren t work of the WTO.  The focus of the APEC list on
practical implementation due to its purpose as a basis for tariff liberalization was stressed.  Pragmatic
approaches taken by APEC members were noted including: questions relating to customs
administration; the preclusion of the use of end-use certificates and PPM designation; the inclusive
approach taken to issues of dual-use; the use of HS tariff headings based on prevalence of the
environmental goods in a given tariff heading and their importance for the environmental industry.  It
was noted that the APEC list comprised of a combin ation of goods in two broad categories: the first
category involving environmental remediation or end of pipe activities and pollution prevention, andthe second category environmentally friendly goods or "clean technologies".  It was recognized that
the APEC list excluded products for practical reasons which might otherwise have been worth
including from a purely conceptual perspective.  The OECD list was distinguished on the basis of its
more academic purpose.
96. Canada, the United States
, Switzerland  and Australia  considered the APEC list a useful
starting-point for the classification of environmenta l goods.  Further suggestions for additions to this
list were open for consideration, and Members' submissions were welcomed.  Switzerland also
supported the use of the OECD list as a starting-point.  However, it was stressed that these lists would
not be enough and they were currently reviewing what other goods could be proposed for inclusion.
The United States and Canada  stressed the importance of flexibility to ensure the list of environmental
goods addressed the interests of a wide group of WTO Members.
97. Kenya and India  stated that the APEC list was not the appropriate starting-point for the
negotiations.  Kenya held the same view on the OECD list on the basis that these lists were not in the
interests of developing countries.  It felt there was a need to produce a list of environmental goods
containing products of export interest or potential export interest to developing countries, to enablethem to play a positive role.  It was felt that the CTESS should define environmental goods in order to
assist the progress of the Negotiating Group on Market Access for Non-Agricultural products
regarding negotiations on environmental goods.  Clarification was sought on the relevant fora for and
treatment of agricultural goods which may be considered as environmental goods.  Malaysia felt that
there were some items on the APEC list that could be classified as environmental, while others couldnot.  It was felt that multiple use also needed to be considered.  For these reasons, the APEC list
required refinement.  They expressed interest in contributing to the list regarding those goods ofexport interest to developing countries.  However, the difficulty for developing countries to contribute
substantively to the list and to obtain relevant data was highlighted.  While acknowledging the
difficulties experienced by developing countries, Switzerland felt it was important that they put
forward proposals regarding environmental goods based on their interests.  The United States
expressed interest in hearing about potential products that may be of interest to developing countries.India felt there was a need to deliberate on whether the CTESS would be working towards
clarification of the concept of an environmental good for the negotiations conducted in theNegotiating Group on Market Access.
98. The Chairperson noted that Kenya's points raised issues within the responsibility of the
CTESS.  There was a need to cooperate with the Negotiating Group on Market Access regarding
definitional issues and general coordination.  Examination of UNCTAD's approach to environmental
goods should be undertaken.
99. The European Communities commented that although the APEC list had an illustrative
purpose, it had no standing under the negotiations in the Negotiating Group on Market Access or in
the CTESS.  It noted that there had been a focus on problems rather than solutions in theTN/TE/R/6
Page 22
interventions.  Recognition was given to the problem of end-use and the possible problems associated
with PPMs.  The EC felt that the present environment could be distinguished from past contexts and
that the PPM issue should be approached with an open mind.  Additional market access could be
considered as opposed to trade restrictions for PPM reasons.  Consideration should be given to what
products could benefit from such an approach.  The re al problem with regard to the current lists was
that they leaned towards a certain group of Members and could have the result of making progress
difficult.  The United States disagreed that the APEC list had no status, since a number of delegations
considered it could be used as a starting-point in the discussions.
100. New Zealand stated that the reason why they had circulated the APEC list in June 20027 was
to give impetus to the negotiations, and not to impose an Asia-Pacific approach or invite its adoption.
The APEC list was considered a good reference point due to its WTO pedigree, its development by a
diverse group, the focus on sectoral liberalization, and the pragmatic approach taken.  The relevantquestion was what could be drawn from the APEC exercise which might be broadly acceptable and
applicable, including elements of definition and process, that could help form some guidelines.  The
APEC list was considered a useful reference point in terms of identification of reasons why products
were, or were not, included on the list. Relevant points made by the US were: the APEC list's tariff
liberalization basis as opposed to the more conceptually based OECD list; and the practicalimplementation focus regarding customs administration, dual use, nomenclature issues, and WTO
legal issues.  This part of the mandate was important and would have to deliver both environmental
and market access benefits, the latter which should lean towards developing countries.
101. Canada and Australia
 supported the use of end-use criteria as the basis for negotiations.
Australia stated that the issues raised by end-use criteria were easily resolved as compared to issues
that arose, for instance, from PPMs, life cycle anal ysis and relative environmental benefits.  Interest
was expressed in further elaboration of the proposal regarding the identification of products from the
HS Code considered more environmentally friendly.  With reference to the views expressed by
Switzerland at the CTESS meeting on 12-13 February 2003, Australia did not see how criteria based
on environmental efficiency or performance would be workable, or how such criteria were anydifferent from PPM-based criteria.
102. The United States, Australia
, Malaysia , and Egypt  opposed the inclusion of goods defined by
process and production methods (PPMs) for practical reasons.  Australia felt that the PPM approach
would not assist trade liberalization and would give few environmental benefits.  Malaysia expressed
agreement with paragraph 4 of Qatar's submission that it was essential for goods to be based on
end-use criteria. It was felt that the EC proposal seemed to still be process-based.  Egypt noted that
they were not convinced by the EC' comments on PPMs in relation to the possibility of positive
market access and the distinction from previous issues of market restrictions.
103. Qatar restated their proposal that the relative benefits of products should be the main criteria,
and noted that end-use and PPM criteria both entailed certain problems.  The problem end-use
products presented for developing countries in regard to the issue of disposal was highlighted.  It was
suggested that negotiations be based on a new list containing four categories: (1) proposedenvironmental good; (2) scientific and quantifiable environmental benefit of each good;
(3) trade volume, and; (4) identification of major producers.  The identification of major producers
was highlighted as the critical issue for developing countries.  The opinion was stated that where the
environmental benefit of a product had been identified in an MEA, for instance natural gas in the
context of the climate change negotiations, this should also be reflected in the CTESS.
104. The Chairperson requested delegations to propose definitions of environmental goods, and to
identify relevant exported and imported environmental goods.
                                                     
7 TN/TE/W/6, 6 June 2002.TN/TE/R/6
Page 23
IV. OTHER BUSINESS
105. Venezuela reiterated its question posed to the Chairperson at the CTESS meeting of
12-13 February 2003 regarding the orientation of the CTESS with regard to Paragraph 51 of the
Doha Declaration, and noted that the Chairperson had stated her intention to consult with other
Chairpersons, including the Committee on Trade and Development and also perhaps theGeneral Council.  The Chairperson indicated that the issue could be taken up under "Other Business"
at the next meeting of 8 July, 2003.
__________