RESTRICTED
WORLD TRADE WT/CTE/M/3
18July1995
ORGANIZATION(95-2058)
Committee onTrade andEnvironment
REPORT OFTHE MEETING HELD ON21-22 JUNE 1995
Note bytheSecretariat
1. TheCommittee onTrade andEnvironment helditsthirdmeeting on21-22 June1995
under thechairmanship ofAmbassador JuanCarlos Sánchez Arnau ofArgentina. Theagenda for
themeeting wasadopted ascontained inWT/AIR/96.
2. TheChairman recalled thatthefocus ofthemeeting would beonitemeight:
"Trade-Related Aspects ofIntellectual Property Rights (TRIPS)"; itemnine: "Services"; and
itemtwo: "therelationship between environmental policies relevant totrade andenvironmental
measures withsignificant trade effects andtheprovisions ofthemultilateral trading system."
After these items hadbeentaken up,delegations could return totheitems discussed atthelast
meeting iftheywished, namely items four, fiveandten.Henoted thetwobackground documents
prepared bytheSecretariat forthismeeting: WT/CTE/W/8 on"Environment andTRIPS" and
WT/CTE/W/9 on"Environment andServices." TheSecretariat alsohadprepared aNote onthe
results ofthethirdsession oftheCommission onSustainable Development inApril 1995,
contained inWT/CTE/W/7.
3. With respect toitemeight, namely "TRIPS", theChairman recalled thattheMinisterial
Decision onTrade andEnvironment stated thattheCommittee onTrade andEnvironment should
consider therelevant provisions oftheTRIPS Agreement asanintegral partofitswork, within
theCommittee 'sterms ofreference.
4. Concerning itemnine, namely "Services", theMinisterial Decision onTrade and
Environment stated thattheCommittee should consider thework programme intheDecision on
Trade inServices andtheEnvironment asanintegral partofitswork, within theCommittee 's
terms ofreference. TheMinisterial Decision onTrade inServices andtheEnvironment stated
that"inorder todetermine whether anymodification ofArticle XIVoftheAgreement isrequired
totakeaccount ofsuchmeasures [i.e.measures necessary toprotect theenvironment], torequest
theCommittee onTrade andEnvironment toexamine andreport, withrecommendations ifany,
ontherelationship between services trade andtheenvironment including theissue ofsustainable
development. TheCommittee shallalsoexamine therelevance ofintergovernmental agreements
ontheenvironment andtheirrelationship totheAgreement."
5. TheChairman informed theCommittee thathehadheldaninformal meeting onthe
meeting 'sagenda from which hademerged thatanareaoffocus under itemeight wasthe
importance oftherelationship between theTRIPS Agreement andtheConvention onBiological
Diversity (Biodiversity Convention) andunder itemninethatthescope ofArticle XIVofthe
General Agreement onTrade inServices (GATS) would needtobeexplored.WT/CTE/M/3
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Itemeight ofthework programme:
Trade-Related Aspects ofIntellectual Property Rights (TRIPS)
6. Therepresentative ofNigeria saidthattheCommittee needed toestablish theparameters
fordiscussion ofthisnewitemwithin theWTOs competence. Given thatthelinkages between the
TRIPS Agreement andtheenvironment were complex andevolving, hisdelegation preliminary
viewwasthatwork inthisareashould address: (i)whether there wasalinkbetween intellectual
property rights (IPRs) andtheenvironment; discussions elsewhere hadshown thatthislinkage,
which wasself-evident tosome, wasquestioned byothers; (ii)whether theTRIPS Agreement
facilitated access toandtransfer oftechnology, thedevelopment ofenvironmentally-sound
technologies, and,initsoperation, ensured compatibility withprovisions ofrelevant multilateral
environmental agreements (MEAs) andthegoalofsustainable development; (iii)whether the
TRIPS Agreement prevented thepossibility tocontrol technology thatmight haveadverse
environmental effects; and(iv)whatthemain concerns intherelationship between the
TRIPS Agreement andtheenvironment were andhowtoaddress them.
7. Although hisdelegation didnothaveresponses tothese questions atthisstage, hereferred
totheTRIPS Agreement 'srelevant provisions todetermine whether ithadtheflexibility tomake
itsoperations compatible withsustainable development. Herecalled thattheMinisterial Decision
onTrade andEnvironment established clear goals fortheCommittee 'swork programme,
including thepursuit ofsustainable development. Given thatIPRs hadeffects ontheenvironment
andhence development, thelinks between IPRs andtheenvironment should beexamined by
assessing theeffects thatmight result from theintervening variable oftrade; these links were
established byArticles 8and27oftheTRIPS Agreement. Hisdelegation considered thatthe
current levelofunderstanding oftherelationship between theTRIPS Agreement andthe
environment needed toberaised ashadbeenpreviously noted bythedelegation ofthe
United States. TheCommittee should move beyond questioning whether ornotlinks existed and
focus onraising thelevelofunderstanding ofthese links. Hesaidthattrade-related IPRs had
profound sectoral impacts onliving resources, agriculture andpharmaceutical products, and
therapeutic medicine.
8. Thetransfer oftechnology, including biotechnology, wasanimportant aspect ofthe
TRIPS Agreement. Theobjective ofArticle 7wastopromote technological innovation, to
transfer technology tothemutual advantage ofproducers andusers oftechnological knowledge in
amanner conducive tosocial andeconomic welfare, andtobalance rights andobligations. Inthe
event oftension between theobjectives ofpromoting technological innovation andthetransfer of
technology, theTRIPS Agreement contained provisions thataddressed thisdifficulty. For
instance, disclosure requirements under Article 29obliged Members torequire patent applicants to
disclose theinvention. Article 30permitted Members tomake limited exceptions torights
conferred onpatentees, forexample foractsundertaken forexperimental purposes. Article 31on
compulsory licensing provided foralicence granted without theagreement ofthepatentee, under
certain conditions, toanapplicant touseapatented invention where therightholder hadnotbeen
willing togrant avoluntary licence onreasonable commercial terms within areasonable period of
time. Article 66.2required developed country Members toprovide incentives toenterprises and
institutions intheirterritories forthepurpose ofpromoting andencouraging technological transfer
toleast-developed countries toenable them tocreate aviable technological base. These provisions
ledhisdelegation toconclude thattheTRIPS Agreement provided aflexible scope foraccess to
andtransfer oftechnology, including biotechnology. These issues raised inthecontext ofthe
TRIPS Agreement were linked tocorresponding provisions intheBiodiversity Convention.WT/CTE/M/3
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Article 16oftheBiodiversity Convention emphasized thefacilitation ofaccess toandtransfer of
technology, fortheconservation andsustainable useofbiodiversity, aswellasadequate and
effective IPRprotection. Recognizing thatIPRs mayhaveaninfluence ontheBiodiversity
Convention, Article 16.5stated thatParties should cooperate toensure thatIPRs were supportive
oftheConvention 'sobjectives.
9. Thus, provisions intheTRIPS Agreement andtheBiodiversity Convention provided facets
forensuring harmony andcompatibility intheoperation ofthese Agreements forthegoalof
sustainable development. TheCommittee should pursue, therefore, concrete forms ofcooperation
between these Agreements based ontheessential provisions oftheArticles towhich hehad
referred. Hisdelegation considered thattheTRIPS Agreement provided reasonable flexibility for
facilitating access toandtransfer oftechnology asenvisaged intheBiodiversity Convention. If
theTRIPS Agreement functioned asitshould, itcould playacrucial roleindeveloping
technologies thatwould respond, amongst other things, toenvironmental problems. However,
there wasaneedtomonitor themeasurable effects oftheTRIPS Agreement onthetransfer of
technology, withregard tobiodiversity conservation andthepursuit ofsustainable development.
Thelikelihood oftheTRIPS Agreement promoting environmentally-sound technology would
depend ontheTRIPS Agreement 'simplementation andtheextent ofcooperation sought between
theTRIPS Agreement andrelevant MEAs, including theBiodiversity Convention.
10. Article 8.1oftheTRIPS Agreement provided thatMembers informulating oramending
theirlawsmayadopt measures necessary toprotect public health andnutrition, andtopromote the
public interest insectors ofvitalimportance totheirsocio-economic andtechnological
development. Article 27.2provided thatMembers mayexclude from patentability inventions, the
prevention within theirterritory ofthecommercial exploitation ofwhich wasnecessary toprotect
public order ormorality, including theprotection ofhuman, animal orplant lifeorhealth orto
avoid serious prejudice totheenvironment. Article 30provided thatMembers maymake limited
exceptions totheexclusive rights conferred onpatentees. Although, these provisions were not
obligatory, itwould beunreasonable forMembers toactinamanner thatdidnotprotect human,
animal orplant lifeorhealth oravoid environmentally-prejudicial effects oftechnology. Ifa
consensus were toemerge tomodify theTRIPS Agreement forenvironmental reasons, thenone
possibility would betomake obligatory theprovisions ofArticles 8.1,27.2and30.
11. Hisdelegation 'sviewwasthatIPRs should begiven strong andadequate protection and
thatMembers should havetheauthority, within theTRIPS Agreement 'sprovisions, tocheck and
control technology, based onscientific evidence thatmight haveadverse environmental effects.
These twogoals were notincompatible andwere achievable within theTRIPS Agreement. His
delegation shared theconcerns ofsome delegations concerning theneedtocurbtechnology. In
thisregard, hereferred totherelease ofnewbiotechnological products intotheenvironment that
would haveuncertain environmental consequences, suchastheundesirable effects ofany
uniformization ofgenetic diversity forcommercial purposes oragricultural chemicals which were
routinely tested andapproved before authorization wasgranted formarketing. Although the
TRIPS Agreement wasreasonably flexible todealwiththese concerns under Articles 8.1and
27.2, much waslefttoMembers 'discretion since these provisions were notobligatory.
Furthermore, theTRIPS Agreement didnotprohibit orlimitaction foraddressing adverse
environmental effects thatcould betaken under, forexample, Article XXofGATT 1994 andthe
TBTAgreement.
12. Hehighlighted some general concerns ontherelationship between theTRIPS Agreement
andtheenvironment which carried potentially highriskswhose severity should notbe
underestimated. Many developing countries were concerned about theriskthatindustrial rights,WT/CTE/M/3
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which hereiterated should beadequately protected, would prevail overtraditional interests and
rightholders mentioned inArticles 8(j)and10(c) oftheBiodiversity Convention. The
TRIPS Agreement 'soperation should exclude thispossibility andaccord recognition totraditional
interest andrightholders. Heidentified thelatter tobeanareaofpotential tension andconflict
thatcould beresolved bymultilateral cooperation.
13. Hisdelegation considered thattheTRIPS Agreement wasextending intoareas thatwere
notconsidered appropriate forpatentability. Forinstance, hisdelegation wasopposed tothe
patenting oflifeforms. Recently, there hadbeenanapplication from atechnology group fora
patent ontheMedium Earth Orbit inspace. Theissue ofpatentable subject matter was
exceptionally problematic andtheriskwasthatpatents might beaccorded without serious
consideration oftheirwider consequences. Therefore, thereview process ofpatentable subject
matter under Article 27.3should bemade precise withclear language ontheneedforbiodiversity
conservation andthesustainable useofitscomponents inwater, landandspace. Heemphasized
thatthesubstantive details ofpatentable subject matter might beasubject forthecombined efforts
oftheTRIPS Council andtheCommittee. TheCommittee should ensure thatitdidnothing that
limited theconsideration ofappropriate action inrelevant MEAs, suchastheBiodiversity
Convention, andshould ensure thatcooperation wasengendered. Henoted thatthediscussion
wasataninitial stage andthelinkages between theTRIPS Agreement andtheenvironment should
bedeveloped freeoftension andcontroversy.
14. Therepresentative ofIndia saidthatsince thiswasthefirstmeeting atwhich thisitemwas
being discussed, hisremarks were ofapreliminary nature andraised issues fortheCommittee 's
consideration. Henoted thathisdelegation 'sviews were stillevolving andithadanopenmind
concerning thevarious issues which might beinvolved under thisitem. Herecalled thatthe
Committee wasmandated tomake appropriate recommendations onwhether anymodifications of
theprovisions ofthemultilateral trading system were required, while ensuring thatthese were
compatible withanopen, equitable andnon-discriminatory trading system. Themandate also
made clear thattherules governing themultilateral trading system should promote sustainable
development, withspecial consideration totheneeds ofdeveloping countries. Itwasagainst this
background thathisdelegation approached therelationship between theTRIPS Agreement andthe
issue ofenvironment andsustainable development.
15. TheTRIPS Agreement 'scentral objective, recognizing thatIPRs were private rights, was
thereduction ofdistortions andimpediments tointernational trade andforthisreason itaddressed
theneedtopromote effective andadequate IPRprotection. Even so,itwasimportant tobearin
mind thattheTRIPS Agreement aimed atacertain minimum standard ofIPRprotection andnot
theharmonization ofstandards world-wide.
16. Each MEA hadclearly defined objectives; theBiodiversity Convention 'sobjectives dealt
withtheconservation ofbiodiversity, thesustainable useofitscomponents andthefairand
equitable sharing ofthebenefits arising outoftheuseofgenetic resources, including access to
genetic resources andtransfer ofrelevant technologies. TheMontreal Protocol 'sobjective wasto
phase outozone-depleting substances. Atfirstglance, theTRIPS Agreement andthese twoMEAs
were different inscope, subject matter andintent. WT/CTE/W/8 proceeded onthebasis that
there wasnodisharmony between theTRIPS Agreement andrelevant MEAs. Forexample,
paragraph 56noted thatnothing intheTRIPS Agreement prevented agovernment orinternational
financial mechanism from providing financial assistance toenable privately heldproprietary
technology onconcessional terms. However, itmight beargued withequal conviction thatthere
wasnothing intheTRIPS Agreement which provided forspecific mechanisms forachieving
sustainable development andenvironmental protection. Thisillustrated thatthere wasacomplexWT/CTE/M/3
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interface between theTRIPS Agreement andvarious MEAs, which hisdelegation hesitated to
characterize asacontradiction oraconflict. Heraised anumber ofissues which theCommittee
could examine withanopenmind, keeping inviewitsmandate andterms ofreference.
17. Therelationship between IPRs, access toandtransfer oftechnology andenvironment and
sustainable development wascaptured inArticle 16oftheBiodiversity Convention, which
provided thattechnology transfer must beaccomplished onterms which recognized andwere
consistent withadequate andeffective IPRprotection. Italsoprovided thatParties, recognizing
thatpatents andother IPRs might haveaninfluence ontheConvention 'simplementation, should
cooperate inthisregard subject tonational legislation andinternational lawtoensure thatsuch
rights were supportive ofanddidnotcounter itsobjectives. Theissue waswhether the
Biodiversity Convention authorized Parties tousemeasures which limited orrestricted IPR
protection ongrounds thatthiswasconsistent withtheBiodiversity Convention 'sobjectives,
especially asitrelated totechnology transfer. Partoftheproblem wasthatIPRs didnotalways
impact ontechnology transfer. WT/CTE/W/8 observed thatmost technology wasinthepublic
domain andthatgovernments were freetotransfer technology onconcessional terms, when such
technology, patented orotherwise, wasintheircontrol. WT/CTE/W/8 added thatthere was
nothing intheTRIPS Agreement thatprevented agovernment oraninternational financial
mechanism from providing financial assistance toenable thevoluntary transfer ofprivately-held
proprietary technology onconcessional terms. Thismight becorrect, butitraised thequestion as
towhether IPRs, atleastinsome cases, impeded theachievement oftheBiodiversity Convention 's
objectives. Theresponse should delineate whattherelevant IPRs were vis-à-vis theBiodiversity
Convention; thethree IPRs relevant totheBiodiversity Convention, specifically totechnology
transfer, were patents, plant breeders 'rights (PBRs) andtrade secrets.
18. Article 27.2oftheTRIPS Agreement made itclear thatMembers could exclude from
patentability inventions, theprevention within theirterritory ofthecommercial exploitation of
which wasnecessary toavoid serious prejudice totheenvironment. Thisacknowledged that
exclusion from patents wassometimes necessary toavoid serious prejudice totheenvironment.
Since language inArticle 27.2tracked Article XXofGATT 1994, theuseoftheword
"necessary" could beinterpreted tomean the"necessity test"thathadbeenacknowledged in
adopted panel reports. Some would argue forabroader interpretation ofArticle 27.2inlightof
MEAs thancorresponding GATT panel decisions interpreting Article XX(b). Thislinkshould be
recalled during discussions ofArticle XXunder other items ofthework programme.
19. Concerning patents andtheBiodiversity Convention, heinquired astowhether acountry
could implement theConvention byresorting tocompulsory licensing of,orexcluding entirely
from IPRs, acropvariety thatusedgenetic resources from itsterritory. Thisexclusion could be
justified asameans ofencouraging technology transfer tothecountry thatwasthesource ofthe
genetic resources. Heposed thisasaquestion atthisstage andwould beinterested inother
delegations 'reactions asthiswasnotmerely ahypothetical question. Toemphasize the
complexities oftheissues, hereferred tothecontroversial areaofpatenting oflifeforms.
Although Article 27.3(b) oftheTRIPS Agreement excluded from patentability plants andanimals,
itdidnotexclude micro-organisms. Since micro-organisms were living organisms, theirpatenting
hadbeencalled theslippery slope thatcould leadtopatenting ofalllifeforms. Thishad
controversial dimensions ofethics, value judgements andmorality which hadimplications for
plant andanimal life.
20. Article 27.3(b) stated that"Members shallprovide fortheprotection ofplant varieties
either bypatents orbyaneffective suigeneris system orbyanycombination thereof." In
contrast, Article 8oftheBiodiversity Convention setouttheobligations toconserve biodiversity,WT/CTE/M/3
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including insituconversation ofplant andanimal crops which might depend heavily ontheir
natural habitat forprotection. Hesaidthatitcould beargued thatIPRs forplant varieties
militated against insituconservation andpromoted monocultures withnegative implications for
biodiversity. Theworst casualty, inanIPRregime forplant varieties, wastheknowledge,
innovations andpractices ofindigenous andlocalcommunities embodying traditional lifestyles
relevant fortheconservation andsustainable useofbiodiversity, highlighted inArticle 8(j)ofthe
Biodiversity Convention. Itwaspossible tocontemplate asuigeneris regime inaccordance with
Article 8(j)inwhich newforms ofIPRs were created fortraditional knowledge andinnovations of
localandindigenous communities. Byitself, thismight notconflict withtheTRIPS Agreement,
which concerned minimum standards ofprotection andnotmaximum orharmonized standards.
However, heinquired astowhether acountry could challenge another country 'sIPRregime for
failing togiveadequate protection toinformal innovations thatoriginated inindigenous orlocal
communities andwas,thus, inviolation ofArticle 8(j). Theanswer layinevolving asuigeneris
system thatencompassed "Common IPRs" which respected Article 8(j).
21. Trade secrets were usedtoprotect subject matter which wasunpatentable asitdidnot
meetthecriteria forapatent orastheholder didnotwanttopublish thesubject matter fora
competitor tousetheinformation totheowner 'sdisadvantage. Trade secrets could beapplied to
awiderange ofinformation; forexample, scientific information oratraditional healer 's
knowledge could beprotected. Ithadbeenagreed, asinArticle 8(j)oftheBiodiversity
Convention, thattraditional knowledge must bepromoted andmade more widely available. In
thisregard, henoted thattheknowledge must beusedwiththeoriginal holder 'sapproval and
involvement andthecommunities concerned must receive afairshare ofthebenefits from itsuse.
Thiswascritical astraditional communities 'knowledge provided scientists withashort-cut to
developing newproducts, particularly inagriculture andmedicine. Forexample, virtually allthe
drugs derived from plants thatwere usedinmodern Western medicine were discovered from use
intraditional societies. Newlegislation andcodes ofconduct, including changes inthenotion of
trade secrets, might beneeded toensure thatthecommunities thatwere thesource ofthis
knowledge received benefits from itsexploitation. Thiswasadifficult tasksince traditional
communities didnotusually havealegalidentity andtheknowledge concerned might notbe
confined toasingle village orgroup, posing problems ofdeciding whoshould derive thebenefit
andhow.
22. Herecalled thattheBiodiversity Convention reaffirmed thatstates hadsovereign rights
overbiological resources intheirterritories andtheprincipal responsibility forbiodiversity
conservation anditssustainable use. Hisdelegation reiterated itsfundamental conviction that
MEAs, suchastheBiodiversity Convention, were thebestmeans totackle environmental and
sustainable development issues onthebasis ofconsensus andinternational cooperation.
23. Hesaidthatgenetically modified organisms (GMOs), produced byevolving
biotechnologies, were genetic combinations from widely different types oforganisms thatdidnot
occur innature andwere, thus, alientotheecosystems inwhich theywere released, posing risks
tobiodiversity andtotheenvironment. There wasmuch debate toensure thatGMOs didnot
injure health ortheenvironment anddeveloping countries hadsupported aninternational
agreement onbio-safety standards inthisregard. International cooperation wasnecessary inthis
areasince GMOs, unique because theycould reproduce andmigrate sometimes without human
intervention, didnotrespect international frontiers oncetheywere released intotheenvironment.
Also, there might beconcern thatsome industrialized countries exported products inthiscontext
which posed arisktohealth ortheenvironment. Assuch, these issues were relevant forthe
Committee 'sdiscussions under item7,namely "theissue oftheexport ofdomestically prohibited
goods."WT/CTE/M/3
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24. There were other provisions intheBiodiversity Convention whose relationship with
GATT/WTO Articles could beexamined. Heinquired astowhether under Article 15(2) ofthe
Biodiversity Convention, aParty could discriminate between Parties seeking access tothegenetic
materials found initsterritory according towhether theusetowhich theaccess seeker would put
thegenetic resources would beenvironmentally-sound. Thiswould involve Articles IandXIof
GATT 1994. Similarly, acountry challenging bio-safety access conditions, imposed pursuant to
theBiodiversity Convention, needed tothink ofobligations/rights under theSPSand
TBTAgreements. These issues were similar tothose thatwere being examined under itemone
concerning MEAs, towhich thescope ofArticle XX(b) or(g)wascritical.
25. Therelationship between anMEA, suchastheBiodiversity Convention, andother
international agreements raised ahostofquestions. Therelationship withother agreements was
addressed byArticle 22oftheBiodiversity Convention, which stated thattheBiodiversity
Convention 'spresent provisions should notaffect therights andobligations ofanyParty deriving
from anyexisting international agreement, except where theexercise ofthose rights and
obligations would cause serious damage orathreat tobiodiversity. Heinquired astowhether this
could beinterpreted tomean thatwhere theBiodiversity Convention andanother agreement
conflicted, theConvention would trump theother agreement ifexercising theother'sprovisions
would seriously damage orthreaten biodiversity. Thisissue should beconsidered under other
items, especially onMEAs.
26. Under theMontreal Protocol, projects pertaining toCFC phase-out were presented tothe
Multilateral Fund forfinancing; these projects usually involved technology transfer. Inthis
regard, IPRs were central todetermining thedirection andcontent oftechnology transfer. Unless
multilateral rules onthetransfer ofIPRprotected technology were framed, countries inpossession
ofsuchtechnology would havethediscretionary power torestrict access totechnology andto
impose trade restrictions onproducts from allegedly environmentally-unsound technologies. He
considered thatthiswasanissue which theCommittee might examine.
27. Considering therelationship between WTO andMEA dispute settlement mechanisms,
which wasaseparate itemunder discussion intheCommittee, henoted thatthisissue would be
equally relevant forgoods andservices asitwasforIPRs. Acountry which considered thatits
rights hadbeenviolated under anMEA might notalways haveachoice regarding thedispute
settlement forum. Also, thequestion ofMEA non-parties andtheirattitude towards therights and
obligations ofMEA Parties would beadetermining factor inhowthesituation evolved. The
Biodiversity Convention andtheTRIPS Agreement were newagreements andParties 'interpretive
guidance would bedecisive indetermining theultimate relationship between them. Hisdelegation
recognized thatthere could bevarying perceptions astotheforum inwhich these issues should be
dealtandconsidered thattheCommittee should consider them inviewofother fora'sdiscussions.
28. Therepresentative ofKorea gavehisdelegation 'spreliminary observations onthisitem
since thiswasthefirstdiscussion ofitintheGATT/WTO framework, itwasinterlinked with
other items which were under consideration, andithadfar-reaching socio-economic andlegal
implications. Given thatthenegotiations ofMEAs containing IPR-related provisions hadbeen
entangled withconfrontation anddiscrepancies ofviews, theWTO should giveMEAs some
guidelines orprinciples dealing withIPR-related issues toavoid ambiguity andpossible conflicts.
TheTRIPS Agreement 'sprovisions relevant tomatters raised indiscussions inenvironmental
fora, outlined inSection VofWT/CTE/W/8, were agood basis upon which toensure thatthe
multilateral trading system andMEAs were mutually supportive. Articles 7and8ofthe
TRIPS Agreement contained provisions forstriking abalance between therights andobligations of
IPRholders andusers, andbetween theneedtopromote inventions andtheneedtoprevent abusesWT/CTE/M/3
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ofIPRs. Article 27.2provided explicitly forpatenting requirements necessary toprotect human,
animal andplant lifeorhealth, ortoavoid serious prejudice totheenvironment. Considering that
itwasnecessary tomake thedifferent objectives ofMEAs andtheWTO mutually supportive with
regard toIPRs, hisdelegation considered thatArticle 27.2should beinterpreted inamanner
conducive toMEAs objectives, while notderogating from theTRIPS Agreement. Acautious
approach should betaken since MEAs withIPR-related provisions andtheTRIPS Agreement had
equally littleexperience intheirimplementation. TheBiodiversity Convention hadbeen
negotiated tostrike abalance between technology transfer andaccess tobiodiversity; Article 16
oftheConvention wasintheearly stages ofimplementation.
29. Considering theTRIPS Agreement 'sroleintransferring environmentally-sound
technology, hisdelegation considered thatthere wasaneedforstronger IPRprotection tofoster
innovation forenvironmental protection andMEAs should strengthen theprotection ofsubject
technology fortheirrespective objectives. Ifapatent holder ofenvironmentally-sound technology
wasallowed tounreasonably refuse tolicense thetechnology, itstransfer would beimpossible
evenonacommercial basis andthepatent holder could secure monopolistic profits. Inthe
Montreal Protocol, afterCFC'swere regulated orprohibited, HCFC production technology would
become crucial asanalternative technology andifaccess toitwasdenied, evenoncommercial
terms, thismight giveanunfair disadvantage tothetechnology users.
30. Inhisdelegation 'sview, itwasnotclear thattheTRIPS Agreement provided a
satisfactory solution forenvironmental protection. Article 27should bereviewed, aswellasthe
Articles relating tocompulsory license andanti-competitiveness practices, toconfirm whether they
were sufficient tostrike abalance between theprotection ofpatent holders andusers which would
ensure awider diffusion ofenvironmentally-sound technology. Inthemeantime, efforts should be
made topromote technology transfer thatwasconsistent withMEAs andtheTRIPS Agreement.
Herecalled Chapter 34ofAgenda 21which stated thattechnologies inthepublic domain should
befreely transferred tofurther MEAs objectives andthemeans explored toencourage thetransfer
ofprivately-owned technologies protected byIPRs. There wasalsoaneedtofollow developments
inrelevant MEAs, particularly theBiodiversity Convention andtheInternational Convention for
theProtection ofNewVarieties ofPlants (UPOV Convention), andthedevelopment ofemerging
IPR-related concepts, suchasfarmers 'rights andplant breeders 'rights.
31. Therepresentative ofEgypt identified some issues fordiscussion concerning thelinkages
between theTRIPS Agreement andenvironment-related issues. Although environmental concerns
hadnotoccupied apriority during theTRIPS Agreement 'snegotiation, itwasflexible asfarasthe
environment wasconcerned asitdidnothinder anyaction toaddress adverse environmental
effects, nordiditstand inthewayofrewarding innovation intheinformal sector. Shesaidthat
Articles 8.1and27.2were relevant totheCommittee 'swork. IftheTRIPS Agreement put
environmental-sound technology beyond theeconomic reach ofdeveloping countries, thiswould
haveanegative impact ontheenvironment andondeveloping countries 'efforts tocopewith
environmental requirements. Herdelegation considered that,asstipulated inArticle 7ofthe
TRIPS Agreement, patenting encouraged thedevelopment anddissemination ofnewtechnology.
Sheinquired astothebestwaytofacilitate access toandtransfer oftechnology topromote
sustainable development indeveloping countries andtowhatextent could developing countries
afford this. Section VofWT/CTE/W8 should beexamined withregard tohowthe
TRIPS Agreement waslinked tothegeneration of,access toandtransfer ofenvironmentally-
sound technology.
32. When addressing these issues, theBiodiversity Convention wasrelevant asitdealtwith
IPRs andtheenvironment. Based onWT/CTE/W/8, aswellasrelevant non-governmentalWT/CTE/M/3
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organizations '(NGOs) papers, sheposed aseries ofquestions which theCommittee could
address. Sheinquired astotherelationship between Article 16.1oftheBiodiversity Convention,
which provided fortransfer oftechnology relevant toconservation andsustainable useof
biodiversity ortechnology which usedgenetic resources inanenvironmentally-sound manner, and
Article 33oftheTRIPS Agreement, which provided fora20yeartermofprotection. Sheasked
howthese twoobjectives interacted without adversely affecting oneanother, whether theycould
co-exist andwhether theTRIPS Agreement allowed discretion atthenational levelintheuseof
patenting forplant resources. Concerning theusage ofArticle 31(k) oftheTRIPS Agreement on
compulsory licensing, sheinquired astowhether itserved tofacilitate access toandtransfer of
technology, including biotechnology, onfairandmost favourable terms, asstipulated by
Article 16.2oftheBiodiversity Convention.
33. Sheasked which agreement would prevail ifaconflict arose between the
TRIPS Agreement andtheBiodiversity Convention, specifically between Parties andnon-Parties
ofeither. Also, sheinquired astotherelevance totheCommittee 'swork ofArticle 16.5ofthe
Biodiversity Convention, which stipulated thatIPRs should besupportive oftheConventions '
objectives. Inthiscontext, there should beanexamination ofparagraph 12ofWT/CTE/W/8,
which referred toArticle 22oftheBiodiversity Convention thatemphasized theConvention 's
supremacy ifthere wasserious damage orathreat tobiodiversity.
34. Shesaidthatthere existed awiderange ofopposing views andpositions, from which the
Committee could benefit. Development andenvironment NGOs hadfocused longbefore the
Committee onthese issues andtheirviews should notbeneglected inorder nottobeconfronted
withthesame kindofsituation which hadconfronted theTRIPS Agreement, namely thecriticism
thatithadbeennegotiated outofthepublic 'sview. Sheinquired astowhether adialogue with
NGOs should bethrough aformal orinformal round tablediscussion orseminar. Herdelegation
considered thatthiswasanimportant issue which necessitated theChairman 'sfurther
consideration, especially withregard totherelationship between theTRIPS Agreement,
sustainable development andaccess toandtransfer ofenvironmentally-sound technology, including
biotechnology.
35. TheChairman saidthathewould consult withtheCommittee inthisrespect andrecalled
thatrelations withNGOs wasincluded under itemtenofthework programme.
36. Therepresentative ofMalaysia, speaking onbehalf oftheASEAN countries, saidthatthe
TRIPS Agreement represented asignificant accomplishment withimproved coverage and
enforcement ofIPRs which allowed Members todenythegranting ofpatents inorder toprotect
public order ormorality, toprotect human, animal orplant lifeorhealth ortoavoid serious
prejudice totheenvironment. Hisdelegation 'sviewwasthatthefocus should beon
implementation astheTRIPS Agreement contained thenecessary prerequisites forthedevelopment
oftechnology anditstransfer, andaddressed theenvironment. WT/CTE/W/8 noted that
IPR-related issues hadbeenthesubject ofdebate invarious environmental fora, specifically
concerning patenting ofspecific technology. Hisdelegation considered thatthere wassufficient
coverage ofthisissue intheTRIPS Agreement.
37. Provided thatitwaseffectively implemented, theTRIPS Agreement contained provisions
which were conducive tothedevelopment oftechnology, aswellastheprotection ofthe
environment. TheTRIPS Agreement granted incentive forthegeneration ofnewtechnology, by
giving theinventor anexclusive rightovertheinvention 'suseforaperiod oftime, which should
provide forthedevelopment ofenvironmentally-sound technology. TheTRIPS Agreement 's
objective wastopromote notonlytechnological innovation, but"thetransfer anddissemination ofWT/CTE/M/3
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technology, tothemutual advantage ofproducers andusers oftechnological knowledge andina
manner conducive tosocial andeconomic welfare, andtoabalance ofrights andobligations."
TheTRIPS Agreement provided thebasis forthedevelopment ofenvironmentally-sound
technology andtherequirement thatthistechnology bemade available forthebenefit ofmankind.
Such acooperative approach would promote growth andsustainable development, inparticular in
developing countries. Hisdelegation considered thattechnology transfer would befacilitated
without recourse toother provisions.
38. Assignatories totheBiodiversity Convention, theASEAN countries were committed to
ensuring thatitsobjectives were achieved. Asnoted inWT/CTE/W/8, during theBiodiversity
Convention 'snegotiation, IPR-related issues were animportant component oftheprovisions
dealing withaccess toandtransfer oftechnology, andprovisions hadbeenincluded which were
significant totechnology transfer, including research andtraining, exchange ofinformation and
technical cooperation. Also, ithadbeenrecognized thatinorder fortheeffective technology
transfer tooccur there hadtobeasynergy between thehardcomponent (machinery and
equipment) andthesoftcomponent oftechnology (skills know-how anddesign). Itwasenvisaged
thattheConvention 'sproper implementation would pavethewayforconserving biodiversity and
using itscomponents sustainably.
39. Herecalled thepreamble totheMinisterial Decision onTrade andEnvironment, which
mentioned theobjective of"protection oftheenvironment andthepromotion ofsustainable
development." While theWTO would create greater disciplines andamore conducive
environment intheconduct anddevelopment ofinternational trade ingoods andservices, italso
hadtheresponsibility tocontribute towards thepromotion ofsustainable development. This
would notentail thattheCommittee should deliberate upon scientific, philosophical, religious and
ethical issued, butitwasrelevant thatMembers takedueaccount ofdiscussions elsewhere. The
Committee would needtoexamine theimplications fortheTRIPS Agreement, bearing inmind the
review ofitsrelevant provisions referred toinArticle 27.3(b); there were implications of
financial andsocial costs withrespect totechnology transfer andsubsequent implications ontrade,
market access andconsumer prices. TheTRIPS Agreement 'sreview should address howtomore
precisely interpret thescientific andpractical definitions ofterms, suchas"plants", "animals",
"micro-organisms", "biological processes", "plant varieties", and"effective suigeneris system".
Heconsidered thatitwastimetostartaprocess toclarify theprecise definition andinterpretation
ofkeyterms andtheirmeanings.
40. Environmental concerns were thatthepatenting ofgenes, genetic materials and
genetically-engineered crops andplants promoted oraccelerated theprocess bywhich plant and
agricultural biodiversity waseroded; biodiversity erosion wasrecognized asamajor
environmental problem, which could haveserious developmental consequences. Also, scientists
andecologists were concerned thattheintroduction ofpatent regimes forplant andcropvarieties
would contribute tothespread ofgenetically-engineered crops, which could leadtoecological
problems, suchastheproliferation ofsuper weeds, theerosion oftraditional plant varieties, and
thespread ofherbicide-resistant characteristics. TheCommittee should beaware ofsuchconcerns
andmechanisms should besetupsothatdiscussions inother fora, suchastheBiodiversity
Convention, could befedintoitswork.
41. Social justice andequity concerns were thattheIPRsystem thatwould apply tobiological
materials would tendtorecognize andreward corporations thatundertook genetic engineering of
plants, crops, animals, andmanufactured biotechnology products inagriculture andmedicine.
TheIPRsystem wasnotsuited torecognizing orrewarding knowledge andinnovation ofthe
non-formal sector, suchasfarmers andindigenous peoples whose knowledge ofcrops andWT/CTE/M/3
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medicinal plants hadbeenthebasis formuch ofthedevelopment inagriculture andmedicine.
There wasalegitimate fearthattherealinnovators andowners ofbiodiversity knowledge would
beunrecognized andmarginalized, andthattheymight havetopayforthepatented products. For
example, there wasconcern thatdeveloping country farmers would havetopayforpatented and
genetically-engineered seeds. Ethical andmoral concerns were related totheappropriateness of
patenting lifeforms. According toreligious belief, lifewascreated byGod; although genetic
engineering might shuffle genes oraltertheform ofliving things, itdidnotinitself create life.
Therefore, heinquired astowhether theproducts ofsuchgenetic engineering could bepatentable.
Discussions inscientific, philosophical, religious andethical forashould beconsidered inthe
Committee 'sdeliberations ontheTRIPS Agreement inthecontext oftrade andenvironment.
42. Therepresentative ofArgentina saidthatanumber ofconcerns hadbeenraised astothe
apparent conflicts between IPRprotection andenvironmental conservation. Asother delegations
hadmentioned, environmental riskscould ariseasaconsequence oftechnological advances, such
asthedevelopment ofgenetically-engineered animal andplant species. Incertain circumstances,
theirrelease intotheenvironment could haveunforseen consequences andcould affect biodiversity
andalterinahazardous manner theevolution ofother species. Hisdelegation recognized the
legitimacy ofthese concerns although theydidnotariseexclusively from environmental issues but
from moral concerns, suchasthepatenting oflifeforms. However, theCommittee didnothave
therequired scientific ortechnical knowledge required toanalyse them.
43. Hesuggested thatdiscussion should focus onpossible areas ofcooperation between the
TRIPS Agreement andMEAs which contained IPR-related obligations. Itwould beuseful to
identify theIPR-related obligations contained inMEAs inorder thattheCommittee would beina
position toreceive information ontheirimplementation andtodecide whether itwould be
appropriate fortherelevant information tobechannelled through theTRIPS Agreement 's
notification mechanisms. Forexample, Article 16.3oftheBiodiversity Convention provided that
eachParty should takelegislative, administrative orpolicy measures, asappropriate, withtheaim
thatParties, especially developing country Parties, which provided genetic resources, hadaccess
totechnology anditstransfer onmutually agreed conditions. Asother delegations hadmentioned,
thisobligation wascompatible withtheobligation tonotify laws, regulations andfinaljudicial
decisions ofgeneral application made effective byMembers pertaining tothesubject matter ofthe
TRIPS Agreement, pursuant toArticles 63.1and63.2. Thus, hisdelegation considered thatit
would beuseful toconcentrate onthepossible synergies between theTRIPS Agreement and
relevant MEAs.
44. Therepresentative ofBrazil saidthatthisissue wascomplex asitdealtwithnew
multilateral trading rules, mostly untested intheirapplication, which needed tobeexamined from
anewperspective. Twopotential areas fortheCommittee 'sexamination were theconsequences
oftheTRIPS Agreement fortechnology transfer, particularly environmentally-sound technology to
developing countries, andtherelationship between theTRIPS Agreement andtheBiodiversity
Convention. Given thattheCommittee wasbeginning itsexamination ofthese issues, his
delegation didnotwanttohasten toanyconclusions, butwished toconfirm whether other
delegations hadidentified these issues fordiscussion.
45. Concerning theTRIPS Agreement 'simpact ontechnology transfer, hisdelegation noted
thetheoretical arguments putforth inWT/CTE/W/8 andconsidered thatitwould besome time
before more empirical andconclusive evidence wasavailable. Hisdelegation wascommitment to
theimplementation oftheTRIPS Agreement andtheBiodiversity Convention; asParties toboth,
itwasinitsinterest toensure theirharmonious evolution. TheBiodiversity Convention wasoneWT/CTE/M/3
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oftheUNCED 'skeyresults andhisdelegation reiterated itscalltogovernments, whohadnot
doneso,tosignorratify it.Future developments intheBiodiversity Convention would be
relevant totheTRIPS Agreement, inparticular tothereview foreseen inArticle 27;thisreview
would touch onthepatenting oflifeforms, anareawhich wasreceiving increased public
attention. TheCommittee 'sdiscussions should notprejudge theresults ofthisdebate orofthe
Biodiversity Convention 'sdiscussions inthisrespect, anditshould bekeptinformed of
developments, ashadbeensuggested bythedelegation ofArgentina. Results ofthese discussions
would indicate whether anadditional perspective should beadded todiscussions under itemone.
46. Therepresentative ofChile recalled thatIPRs were afundamental issue during the
Biodiversity Convention 'snegotiation. Thedifferent perspectives ofindustrialized anddeveloping
countries hadbeenreflected intheambiguities andcompromises oftheConvention 'slanguage,
particularly Article 16.Theprovisions ofthisArticle hadbeencriticized. Hesaidthatthese
provisions, which addressed access torelevant technologies being facilitated fortheconservation
andsustainable useofbiodiversity, were vitaltodeveloping countries. Oneoftheimportant
issues relating totheharmonization ofIPRs withenvironmental protection waswhether
Article 16.5, which saidthatIPRs should support rather thanstand inthewayoftheConvention 's
objectives, authorized Members tolimitIPRs inorder topromote technology transfer. Inthis
area, there wasacontroversy regarding whether patents should begiven togenetically-modified
organisms. Itwasnotclear thatthiswastheconcept ofminimum standards forIPRprotection
thatwascontained intheTRIPS Agreement, although theAgreement provided fordifferent types
ofstandards, suchaspatents, copyright, industrial design andindustrial secrets, andprovided for
deadlines andlegalmechanisms forIPRprotection.
47. Concerning theprotection ofplant varieties, there wasaconsiderable degree ofdiscretion
inthewayinwhich Members could apply theTRIPS Agreement. Hisdelegation hadacceded to
theUPOV Convention, which demonstrated theconsistency ofitslegislation withaneffective
suigeneris system, asoutlined intheTRIPS Agreement. Inthisregard, hereferred tothe
relevant provisions onpatents compiled bytheChairman oftheNegotiating Group, contained in
Annex 4ofWT/CTE/W/8. Herecalled thatsince Article 27.3oftheTRIPS Agreement excluded
from patentability plants andanimals other thanmicro-organisms, andessentially biological
processes, anyrestrictions under theBiodiversity Convention should becompatible withthis,
although itwasnotpossible toanticipate whatapanel finding might beinaspecific case. He
noted thattheBiodiversity Convention wasbeing analysed byitsConference oftheParties andthe
provisions ofArticle 27.3(b) oftheTRIPS Agreement would bereviewed fouryears afterthe
entry intoforce oftheFinal Act. From abroader perspective thanpotential conflict between the
TRIPS Agreement andtheBiodiversity Convention, itwasinteresting toobserve thatinthe
context ofbiotechnology, genetically-modified organisms might haveanadverse impact on
eco-systems andaffect biodiversity. Inorder toprevent this,bio-safety hadbeendeveloped. This
wasanareainwhich itwasnecessary toestablish agreed minimum standards tomaintain
competitiveness andtoprevent thederegulation processes from giving undue advantage tocertain
countries 'bio-safety industries.
48. Therepresentative ofAustralia saidthatWT/CTE/W/8 identified keyenvironmental
concerns regarding IPRs andtheBiodiversity Convention 'sobjectives ofconservation, sustainable
useandequity; public concern hadbeenexpressed thattheTRIPS Agreement could hinder the
pursuit ofthese objectives. However, ithadbeensuggested alsothatIPRs could contribute
positively totheBiodiversity Convention 'sobjectives; further work wasneeded toidentify this
contribution. Individual countries andintergovernmental forawere examining IPR-related issues
withrespect toenvironmental considerations. TheCommittee should address public uncertainties
astotheTRIPS Agreement 'senvironmental implications. Theanalysis inWT/CTE/W/8WT/CTE/M/3
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suggested thatthree issues, inparticular, deserved consideration. First, there wastheissue ofthe
promotion ofappropriate environmentally-sound technologies through technological innovation and
access toandwidespread useofsuchtechnologies. WT/CTE/W/8 outlined howthe
TRIPS Agreement sought tobalance theobjectives ofpromoting technological innovation and
facilitating access toandtransfer oftechnology andhowawelldeveloped IPRsystem could
provide arolefortheprivate sector inthisregard. Atthesame time, nothing inthe
TRIPS Agreement prevented governments orinternational financial mechanisms from providing
financial assistance topromote technology transfer.
49. Second, there wastheissue ofthetreatment oftechnology thatmight haveadverse
environmental affects. WT/CTE/W/8 noted thattheTRIPS Agreement didnotaffect
governments 'righttorestrict research, development oruseoftechnology necessary toprotect the
environment. Article 27.2enabled aMember toexclude from patentability inventions whose use
seriously prejudiced theenvironment. Third, there wastheissue oftherelationship between the
TRIPS Agreement andincentives fortheconservation, development anduseofbiological
resources inasustainable andequitable manner. Thisincluded arecognition ofindigenous
peoples andlocalcommunities 'contribution totheBiodiversity Convention 'sobjectives onequity
grounds andinviewoftheirroleinconserving andmaking available genetic plant resources.
50. Recognition ofthecontribution oflocalandindigenous communities fortheconservation
anduseofbiological resources wasbeing considered atthenational levelandinother
international fora, including theBiodiversity Convention; thepossible roleofIPRs wasoneofthe
mechanisms being studied. Insome cases, theminimum IPRstandards required bythe
TRIPS Agreement might assist inprotecting theknowledge andpractices oflocalandindigenous
communities andtheTRIPS Agreement didnotpreclude thedevelopment ofnewforms of
protection adapted totheirparticular circumstances. Heinquired astowhether IPRregimes
adequately catered totheknowledge andpractices oflocalandindigenous communities,
particularly given thatmuch ofitwasnotnew, wascollectively owned andwould notmeet
protection conditions setoutinexisting IPRregimes.
51. Fundamentally, there wasthequestion ofwhatcontribution IPRs, incomparison toother
mechanisms, could make toaddressing localandindigenous communities 'concerns relating to
theirknowledge andpractices. Even ifIPRregimes were strengthened, most localandindigenous
communities might nothavethehuman andfinancial resources togothrough theoften slowand
lengthy process ofapplying forIPRprotection and,assuch, commercial enterprises could be
better placed totakeadvantage ofanypotential gains. Theinterests ofindigenous andlocal
communities intheirtraditional knowledge andpractices covered awiderange ofissues andwas
notrestricted tothose raised intheBiodiversity Convention. Inthisrespect, Article 27.3(b) of
theTRIPS Agreement hadparticular environmental relevance, including biodiversity conservation,
andlocalandindigenous communities 'issues; theCommittee 'sdiscussion ofitsimplications
would encourage informed debate ontherelationship between theTRIPS Agreement andthe
environment andsustainable development.
52. Therepresentative ofSwitzerland recalled theCommittee 'smandate, bearing inmind that
theWTO didnothavearoleinenvironmental standard-setting andthatanyinterpretation ofthe
Biodiversity Convention would bedetermined byitsConference oftheParties. Moreover, any
amendment orinterpretation oftheTRIPS Agreement wastheMinisterial Conference andthe
General Council 'sexclusive competence. Oneconclusion which could bedrawn from theanalysis
inWT/CTE/W/8 wasthattheTRIPS Agreement didnotcreate anobstacle toenvironmental
protection; itcontributed toenvironmental protection byproviding incentives forthegeneration
ofnewtechnologies. Adequate andeffective IPRprotection would create aclimate ofconfidenceWT/CTE/M/3
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andfacilitate effective technology transfer. TheTRIPS Agreement contained provisions which
allowed countries toestablish abalance between theinterests ofproducers andusers of
technological knowledge intheirnational laws. Although Article 27oftheTRIPS Agreement was
theonlyprovision which referred explicitly totheenvironment, others could berelevant, suchas
those concerning patents, protection ofundisclosed information andcontrol ofanti-competitive
practices incontractual licences. Also, Articles 7and8related tothepromotion of
environmentally-sound technology.
53. Concerning therelationship between theTRIPS Agreement andtheBiodiversity
Convention, herdelegation considered thatthere wasapriori noconflict between theirprovisions
astheTRIPS Agreement permitted Members tocarry outnational policies infavour ofsustainable
development andtotakeadequate measures inconformity withbothAgreements. Concerning
further work onthisitem, herdelegations would reflect onthesuggestions which hadbeenmade
byother delegations.
54. Therepresentative ofNorway saidthattheCommittee 'swork should address thepossible
links between theTRIPS Agreement andtheBiodiversity Convention withregard toprotection
andtransfer oftechnology, access togenetic resources andrelated inventions subject toIPRs.
TheTRIPS Agreement covered allmain IPRs, suchascopyright, trademarks, industrial designs,
andpatents. Although environmental concerns were hardly mentioned intheTRIPS Agreement
andwere addressed inrelation totechnology, access topatenting might influence conservation
strategies andtheBiodiversity Convention 'simplementation. TheBiodiversity Convention
stressed theimportance ofconservation andsustainable useofgenetic resources andthefairand
equitable benefit sharing oftheirusebetween developing anddeveloped countries oftheiruse.
TheTRIPS Agreement emphasized theneedtopromote technological innovation, transfer and
dissemination; itspreamble committed Members "toreduce distortions andimpediments to
international trade, taking intoaccount theneedtopromote effective andadequate IPRprotection
andtoensure thatmeasures andprocedures toenforce IPRs donotthemselves become barriers to
legitimate trade."
55. TheBiodiversity Convention affirmed thatbiodiversity conservation wasa"common
concern ofmankind", butstressed thatstates hadsovereign rights overtheirbiological resources
andwere responsible forbiodiversity conservation andsustainable use. According toArticle 15.4
and15.5oftheBiodiversity Convention, access toaParty'sgenetic resources wasonmutually
agreed terms andonthebasis oftheprior informed consent oftheParty providing theresources.
Thedifference between thetwolegalinstruments wasthatwhile theBiodiversity Convention
stressed thatsharing anduseofgenetic resources should takeplace onmutually-agreed terms, the
TRIPS Agreement wasbuiltonGATT/WTO principles ofMFN andnational treatment.
56. Hisdelegation considered thattheCommittee should analyse thelinkages between the
Biodiversity Convention andtheTRIPS Agreement, concentrating onanevaluation ofwhether the
TRIPS Agreement 'sexemption clause provided states withalegalbasis forincluding
environmental concerns. Thisrelated totheBiodiversity Convention 'simplementation andits
interpretation oftheTRIPS Agreement asprovided inArticle 16.5oftheBiodiversity Convention,
which required thatinternational IPRsystems, suchastheTRIPS Agreement, support its
objectives. Another element foradiscussion ofthelegalaspects ofimplementation ofthe
TRIPS Agreement andtheBiodiversity Convention layintherelationship between MFN and
national treatment toterms ofaccess togenetic resources andIPRs. When relevant, thescientific
community 'scontribution should besought tofacilitate theCommittee 'swork.WT/CTE/M/3
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57. Therepresentative ofMexico saidthatWT/CTE/W/8 wasauseful reference forthe
Committee 'sdiscussion onthisitem. Herdelegation recognized andshared theenvironmental
concerns expressed byseveral delegations concerning biodiversity conservation, particularly
concerning genetic resources, aswellastherights oflocalcommunities. Such concerns should be
given serious consideration intheappropriate fora. Sheconsidered thatthisitemshould bedealt
withcautiously inorder nottoexceed theWTO 'scompetence ortheCommittee 'sterms of
reference. TheCommittee should avoid anyinterpretation ofrelevant MEAs, suchasthe
Biodiversity Convention, andshould examine whether theTRIPS Agreement 'sprovisions were in
conflict withthose ofother agreements andifthere were possible areas ofcooperation between the
WTO andother relevant fora. Herdelegation 'spreliminary analysis wasthatthere wasnoclear
conflict asyet.Shesupported thesuggestions ofthedelegations ofArgentina andBrazil
concerning potential areas ofcooperation between theWTO andrelevant intergovernmental
organizations.
58. Therepresentative oftheEuropean Communities saidthatasthisitemwasbeing
examined forthefirsttime, hisdelegation hadnotyetdeveloped aclear position. Heconsidered
thattheCommittee 'sdiscussion ontheTRIPS Agreement andtheenvironment risked being
theoretical astheTRIPS Agreement hadcome intoforce on1January 1995 and,according to
Article 65,"noMember should beobliged toapply theprovisions oftheAgreement before the
expiry ofageneral period ofoneyearfollowing thedateofentry intoforce oftheWTO
Agreement." Lengthier transitional periods were foreseen fordeveloping countries andfor
economies intransition. Therefore, theTRIPS Agreement hadnotyetbeentested noritslinkages
withenvironmental protection explored.
59. TheBiodiversity Convention, which wastheMEA which hadthemost linkages tothe
TRIPS Agreement, hadcome intoforce attheendof1993 andhadnotbeenfullyimplemented.
Atthisstage, onemight havetheimpression thattheCommittee would besecond-guessing
potential environmental problems originating form theTRIPS Agreement 'soperation, including its
relationship withMEAs. Asageneral principle, hisdelegation considered thatwhen
environmental protection andsustainable development necessitated access toandtransfer of
technology, thiswould becompatible witheffective IPRprotection, which wasaprerequisite for
thedevelopment ofenvironmentally-sound technologies. Regarding theTRIPS Agreement, inhis
delegation 'sviewsome ofitsprovisions tookintoaccount environmental concerns, which
provided itwithflexibility. Article 27allowed Members toexclude, incertain cases, technologies
from patentability andmentioned explicitly theenvironment. Other provisions could be
interpreted toaccommodate environmental concerns toacertain extent.
60. Therelationship between theTRIPS Agreement andcertain MEAs deserved attention to
ensure thattheywere mutually supportive andeffectively implemented. Inthiscontext, the
Biodiversity Convention called forIPRs tosupport itsobjectives andestablished general
obligations forcooperation inthisregard. Hisdelegation suggested thateffective cooperation be
established between theWTO Secretariat andother international bodies, suchastheBiodiversity
Convention 'sSecretariat, asanalysis andcasestudies would benefit from theirrespective
expertise. Thiscould bedoneinapreliminary manner before theBiodiversity Convention 's
second meeting oftheConference oftheParties inNovember 1995. Hisdelegation considered
thatthere wasnoinherent contradiction between effective IPRprotection andthepursuit of
appropriate environmental policies andtheCommittee could examine thisissue inanon-divisive
andnon-confrontational manner.
61. Therepresentative oftheUnited States saidthattheBiodiversity Convention andthe
TRIPS Agreement were complementary multilateral agreements withnodirect overlap insubjectWT/CTE/M/3
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matter andwithnoinconsistencies orconflicts between theirobligations orobjectives. The
TRIPS Agreement addressed minimum IPRstandards, focusing onspecific rights associated with
different IPRregimes. TheBiodiversity Convention addressed theconservation andsustainable
useofgenetic resources andsetasanobjective theequitable sharing ofbenefits of
commercialization orother usesofgenetic resources. TheBiodiversity Convention addressed
IPRs indirectly andidentified technology transfer asoneform ofbenefit sharing Parties should
promote. Itdidnotaddress specific aspects ofIPRsystems ortheparticular characteristics of
IPRs, butprovided thatmechanisms usedtopromote technology transfer should recognize andbe
consistent withadequate andeffective IPRprotection, which wasthestandard demanded bythe
TRIPS Agreement.
62. AstheTRIPS Agreement recognized, effectively functioning IPRsystems promoted
innovation andtechnology transfer. Effective IPRsystems would dosobyproviding anincentive
forMembers tocreate thetechnology thatwould serve asthevehicle forsubsequent efforts to
share theirassociated benefits. Thisassertion wasbased ontherecognition thattechnology hadto
existbefore itstransfer could bepromoted orthebenefits associated withitscommercialization
shared. AstheTRIPS Agreement 'sprincipal objective wastoencourage innovation byensuring
adequate protection fortheinnovator, domestic systems based atleastontheTRIPS Agreement 's
standards would promote theBiodiversity Convention 'sobjective topromote technology transfer
related tocommercialization anduseofgenetic resources.
63. Herdelegation referred tofeatures ofeffectively functioning IPRsystems thatpromoted
innovation andtechnology transfer. Effective IPRsystems promoted openresearch andearly
disclosure ofresearch results; forexample, effective patent protection allowed acompany or
research group topublish freely oncepatent protection hadbeensought. Patents themselves
served asasource ofpublicly accessible information oninventions andadvances intechnology.
Effective IPRsystems promoted jointventures andopendealings between entities seeking touse
orcommercialize genetic resources andentities, organizations orgovernments seeking tobenefit
from theiruseorcommercialization. Effective IPRsystems promoted domestic innovation and
localization oftechnology toaddress domestic needs. IPRprotection acted toencourage
innovation andtheavailability ofprotection would stimulate investment inresearch directed at
solving problems ofthedomestic market. Effective IPRsystems promoted parity intreatment of
domestic andforeign innovators, regardless oftheirstatus ororigin. Itwascrucial torecognize
thatIPRs were available without regard totheidentity oftheParty seeking protection andmeant
thattheParty didnothavetobeacorporate researcher toobtain IPRprotection. Effective
IPRsystems helped ensure thatdomestic market conditions were receptive toforeign investment,
research anddevelopment. TheCommittee should takeintoaccount thatextensive work hadtaken
place invarious foraonthese topics andthisshould notbeduplicated. Herdelegation suggested
thatways beconsidered tobenefit from private sector andother NGO input. The
TRIPS Agreement andtheBiodiversity Convention were newinstruments andthere wasno
experience withtheireffects, given thattheywere intheprocess ofbeing implemented andthe
Committee should notprematurely determine theeffects ofthese twotreaties without thebenefit
oftheiroperation.
64. Therepresentative ofCanada saidthatitwasnothisdelegation 'sintention toenter intoa
substantive discussion ofthisitematthistime. Hehoped thatthere would beafuture such
opportunity given thatanumber oftheissues raised byother delegations merited further
consideration.
65. Therepresentative ofColombia referred totheCommittee 'smandate contained inthe
Ministerial Decision andsaidthattheCommittee 'swork should centre ontheharmonization oftheWT/CTE/M/3
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TRIPS Agreement andIPR-related MEAs, inparticular theBiodiversity Agreement, aswellasthe
various guidelines setoutinAgenda 21ofUNCED. Hisdelegation considered thatthe
TRIPS Agreement wasnotincompatible withthese agreements, however astudy should be
conducted toidentify thepossible areas where theTRIPS Agreements didnotreflect exactly the
specific provisions included inrelevant MEAs, forexample, patentability andtechnology transfer.
66. Regarding patentability, theTRIPS Agreements didnotreferspecifically totraditional
technologies andtheirresulting IPRs, nortotheequitable distribution ofrights. Hisdelegation
shared theconcerns expressed bythedelegation ofIndia which hadillustrated theimpact ofthe
TRIPS Agreement onbiodiversity. There were notonlyeconomic butpolitical implications in
thisregard. Regarding technology transfer, Article 7oftheTRIPS Agreement offered IPR
protection topromote technological innovation, transfer anddissemination. Itcould beconsidered
thattheaccess ofdeveloping countries totechnology transfer wasfacilitated byrespecting their
IPRs, under themost favourable terms, including preferential andconcessional terms, inkeeping
withAgenda 21andtheBiodiversity Convention.
67. Therepresentative ofJapan saidthathisdelegation considered thattheTRIPS Agreement
didnotposeanycontradictions between effective IPRprotection andthedevelopment of
environmentally-sound technologies. Attheimplementation level, cooperation between developed
anddeveloping countries wasthekeyfortheexpansion ofenvironmentally-sound technology and
furthering IPR-related trade. From thisperspective, hisdelegation hadanopenmind concerning
theappeal ofdeveloping countries toparticipate inacooperative spirit. Heexpressed concern
withregard tosome delegation 'sprevious comments onfurther work. Atthisstage, acautious
approach wasrequired concerning anyinterpretation ofMEAs; theCommittee wasnotthe
appropriate forum tomake judgements onthetechnical provisions ofMEAs.
68. Therepresentative ofVenezuela saidthatsince thiswastheCommittee 'sfirstdiscussion
oftheTRIPS Agreement andtheenvironment, thescope oftheanalysis should bedefined. The
main focus ofthediscussion should betherelationship between theTRIPS Agreement andthe
Biodiversity Convention, which waslinked todiscussions under itemone,concerning MEAs. As
theglobal implications ofitemonewere anobstacle toadetailed analysis, hisdelegation
considered thatitemeight wastheappropriate setting foranexamination ofthese issues, while
recognizing thatanyanalysis could notinterpret theBiodiversity Convention.
69. Herecalled theprinciple, which hadbeenaccepted atUNCED, thatenvironmental and
trade policies should bemutually supportive; therelationship between theTRIPS Agreement and
theBiodiversity Convention should confirm thisprinciple. There wasconcern thatthe
development ofIPRs under theTRIPS Agreement, specifically withregard tothe
commercializations ofbiodiversity andgenetic resources might bepursued tothedetriment ofthe
Biodiversity Convention 'sobjectives. TheBiodiversity Convention contained provisions which
gaveitaspecial status withregard todeveloping countries 'positions inthedebate onthe
environment, especially since itrecognized therightofindigenous andlocalcommunities to
maintain practices andknowledge relevant totheaimofpreserving biodiversity, aswellasneed
fortheequitable sharing ofthebenefits arising from theutilization oftheirknowledge, practices
andinnovations. Italsocontained provisions which recognized theimportance oftransferring and
facilitating access totechnologies, which would serve tofoster conservation andthesustainable
useofbiodiversity, including through financial mechanisms.
70. Without interpreting theBiodiversity Convention andrecognizing itsscope, consideration
should begiven towhether preserving biodiversity wascompatible withtheTRIPS Agreement. In
thisrespect, Article 22oftheBiodiversity Convention provided thattheConvention would takeWT/CTE/M/3
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precedence overother international instruments when thelatter were incompatible withpreserving
biodiversity. Thiscould beconsidered under itemone,butamore in-depth examination would be
possible under itemeight. Ashadbeennoted byprevious delegations, another problem concerned
patenting oflifeforms, which appeared tobeenvisaged intheTRIPS Agreement. The
TRIPS Agreement andtheBiodiversity Convention were toorecent tojudge whether IPR
protection hadadverse environmental effects ongenetic diversity andonthedevelopment of
competitive genetic resources indeveloping countries. Afurther issue could bethepatentability
ofgenetic sequences contained inDNA fibres. Thiswasafieldinwhich rapid strides were being
made, forexample intheUnited States, where laboratories andfirms specializing ingenetics were
accelerating theirefforts toidentify genes contained inDNA fibres. Heasked whether different
WTO rules would apply todiscoveries patented without having made anadditional contribution
concerning theapplicability ofthegenes identified andthepatent wasnotrecognized orgranted in
other countries. Intheabsence ofagreement bythepatent owner ortheapplicant forapatent, he
inquired astowhether Article 31oftheTRIPS Agreement oncompulsory licensing orArticle 27
onrestricting patentability granted entitlement torefuse suchalicence based ontheBiodiversity
Convention. Hisdelegation considered thatanswers tothese questions were partially outside the
Committee 'scompetence, since theywere matters fortheBiodiversity Convention 'sParties to
consider.
71. Article 27oftheTRIPs Agreement stipulated thatwhatconstituted patentable subject
matter should bereviewed within fouryears. Taking thisintoaccount, theCommittee could
consider thecompatibility oftheTRIPS Agreement withtheBiodiversity Convention 'sobjectives
andstrengthen cooperation between thetwobypromoting thecomplementarity oftheirobjectives.
Thereview could takeintoaccount theTRIPS Agreement 'saccommodation oftheBiodiversity
Convention 'sprovisions; thelatter aimed atsecuring fordeveloping countries amore equitable
sharing ofthebenefits from thecommercial exploitation ofgenetic resources originating intheir
territories andfrom traditional technologies. Anevaluation oftheTRIPS Agreement 's
implementation oftechnology transfer would beuseful inorder toconsider theirpossible recasting
inlightoftheabove-mentioned factors.
72. Therepresentative ofHong Kong saidthathisdelegation would reflect onthe
interventions which hadbeenmade. Atsome stage, itwould beuseful tohaveanindication of
thetrade impact oftheissues discussed withrespect totheaccess toanddistribution ofbenefits of
biotechnology, covered inArticle 16and19oftheBiodiversity Convention; paragraphs 77and
78ofWT/CTE/W/8 saidthatthese issues hadnotbeenfullyaddressed intheTRIPS Agreement.
Hesaidthatitwould beuseful toknow howthese aspects related tothemagnitude ofthetrade
involved. Such ananalysis could shedlightonthedirection oftheCommittee 'sfurther work.
73. Therepresentative ofMorocco considered thattheTRIPS Agreement wascompatible with
theBiodiversity Convention yetcooperation between these twoagreements wasvitalinorder to
ascertain this. Article 27oftheTRIPS Agreement allowed Members toexclude certain inventions
from patentability inorder toavoid serious prejudice totheenvironment. Hecommented thatthe
Biodiversity Convention 'sprovisions would beinterpreted byitsConference oftheParties inthe
same manner astheTRIPS Agreement would beinterpreted byWTO Members.
74. TheChairman saidthatthishadbeenaninitial overview oftherelevant issues which were
relevant totheCommittee 'swork under thisitemofitswork programme. Anumber ofissues
hadbeenhighlighted bydelegations, which could beusedtofurther discussions under thisitem,
most ofthem related tothelinkages between theTRIPS Agreement andtheBiodiversity
Convention. Toagreat extent, discussions hadfocused onthecompatibility andcomplementarity
ofthese twoAgreements, specifically withregard toissues relating totechnology transfer;WT/CTE/M/3
Page19
patentability; facilitation ofaccess toenvironmentally-sound technology; andtheknowledge of
traditional andlocalcommunities. Mention hadbeenmade ofthepossible contribution ofother
intergovernmental organizations where anon-going debate onthisissue wasbeing conducted,
including theBiodiversity Convention 'sConference oftheParties, aswellascontributions from
thescientific community andnon-governmental organizations. Reference hadbeenmade tothe
needfortheCommittee toremain within itsterms ofreference andwithin WTO competence,
particularly inviewoftherecent approval ofboththeTRIPS Agreement andtheBiodiversity
Convention.
Itemnineofthework programme: Services
75. Therepresentative ofBrazil commented thatthediscussion ofservices inthecontext of
theCommittee 'smandate required anewperspective onnewrules. Asnoted inWT/CTE/W/9,
theenvironmental issues intheservices areawere linked tothenegotiation ofthe
General Agreement onTrade inServices (GATS) withrespect totheexceptions provided forin
Article XIV. Inorder toaddress whether Article XIVwassufficient, there would havetobean
initial analysis ofwhether there were anyproblems withwhich thepresent disciplines could not
cope, suchashadbeencarried outforArticle XXofGATT 1994 inthegoods area.
76. Herecalled thattheCommittee should notdiscuss environmental policy, although itwasa
necessary point ofreference. Also, itshould notdiscuss theenvironmental effects ofservice
industries ortheenvironmental measures needed toaddress anyproblems which might be
identified. Rather, itshould identify, withthehelpoftheSecretariat, theenvironmental measures
which were applied bygovernments intheservices areaduetointernal decisions orinternational
agreements; whether these measures hadanimpact onservices trade; andwhether they
conflicted withanyWTO disciplines. With respect tomeasures taken pursuant toMEAs,
WT/CTE/W/9 wasapoint ofdeparture foranexamination oftheissues. Thebasic questions
were similar tothose which hadbeenraised inthegoods area, although themanner inwhich they
would beapproached might bedifferent astheGATS hadfewer disciplines thantheGATT which
were generally applicable, many ofwhich hadbeenestablished onasectoral basis orinthe
schedules ofconcessions andthere might bevariations inthemode ofservice supply. Also, some
oftheGATS disciplines, suchassubsidies andgovernment procurement, hadyettobedecided.
Thus, itwould benecessary toexamine whether anyparticular GATS perspective would haveto
beinjected inthegeneral discussion onMEAs under itemone.
77. Therepresentative ofKorea gavehisdelegation 'spreliminary observations onthisitem,
since itwasbeing discussed forthefirsttimeanditwasclosely interlinked withother items. He
agreed thattheapproach described inparagraphs 20and31ofWT/CTE/W/9 wasthemanner in
which toexamine theadequacy ofArticle XIV(b) toaddress environmental concerns. First, to
identify trade restrictive measures forenvironmental purposes intheareaofservices; second, to
consider whether suchmeasures could bejustified byGATS provisions other thanArticle XIV;
andthird, toexamine whether Article XIV(b) wasanadequate basis upon which toaddress
environmental concerns. Following thisapproach, thestarting point wasanexamination of
measures which restricted services trade andhadonlytobejustified bytheexception clause.
Given thatitwasdifficult tofindexamples ofmeasures forthefirstandsecond stages ofthe
approach, theCommittee 'sdiscussions might notprogress significantly iftheproblems were only
ofminor ortheoretical importance. Therefore, heinquired astowhattheappropriate measures,
ifany,could beforpossible work.WT/CTE/M/3
Page20
78. Thecomplementarity ofservices withother products anddifferent modes ofservice supply
needed tobetaken intoaccount when considering theadequacy ofGATS Article XIV(b) for
environmental concerns. Since Article XIV(b) hadgeneral textual similarities withArticle XX(b)
ofGATT 1994, discussion onthesufficiency ofArticle XX(b) would benefit those under this
item. Hesuggested thatdiscussions onitemoneshould bemonitored, while attempts were made
toidentify examples ofrelevant measures. Bearing inmind thatnoconflicts hadbeenposed
between MEAs andGATS andtheGATS wasstillanevolving framework, theCommittee could
focus onidentifying trade restrictive measures inservices trade.
79. Therepresentative ofAustralia saidthattheCommittee 'sexamination oftherelevance of
intergovernmental agreements ontheenvironment toservices trade andtheirrelationship tothe
GATS should consider discussions under itemone,related toMEAs. Also, itemsixprovided an
opportunity toexplore thecontribution which theliberalization oftrade inservices might make to
amore efficient useofresources topromote sustainable development. Paragraph 20of
WT/CTE/W/9 outlined three questions thatshould guide theCommittee 'sdeliberations in
examining therelationship between GATS provisions andtheenvironment: determining which
measures were needed forenvironmental purposes intheservices area; whether suchmeasures
were inconsistent withanyGATS provision; andwhether Article XIVwasanadequate basis for
taking suchmeasures. TheCommittee should consider allGATS Articles relevant tomaking
trade andenvironment policies mutually supportive andidentify thatthescope ofArticles VIand
VIIprovided forenvironmental protection related toservices trade, soasnottohavetoresort to
theexceptions provisions ofArticle XIV. Article VIrecognized thatcountries regulated services
trade through domestic regulatory measures, including qualification requirements andprocedures,
technical standards andlicensing requirements. Insectors where specific commitments were
undertaken, Members were required toensure thatallmeasures ofgeneral application affecting
services trade were administered inareasonable, objective andimpartial manner. Thus,
Article VIwould allow Members toinstitute andenforce measures regarding theenvironmental
impact ofservices production andimports, regardless ofwhether theyhadmade specific
commitments inrelevant services.
80. Article VI:4provided fortheCouncil forTrade inServices toestablish awork
programme toexamine whatdisciplines might benecessary toensure thatqualification
requirements, technical standards andlicensing didnotbecome unnecessary barriers toservices
trade. These results might haveimplications forthetreatment ofservices trade andthe
environment, although thebasic rightofgovernments toregulate would remain. Article VIalso
raised issues thatmight berelevant totherelationship between theGATS andrelevant MEAs.
Forexample, VI:5(b) provided thataccount should betaken ofinternational standards applied by
Members inrelation toGATS obligations inservices sectors where commitments hadbeen
undertaken. MEAs might berelevant toArticle VII,which provided that,where appropriate,
recognition oftheeducation orexperience obtained, requirements met,orlicenses orcertification
granted inother countries should bebased onmultilaterally agreed criteria. Members were
encouraged towork towards theadoption ofcommon international standards forrecognition, and
standards forthepractice ofrelevant services trades. Article VIIcould beusedtorecognize, in
addition tobilateral arrangements, thelicensing andcertification requirements established by
international agreements. Themajor requirement thatArticle VIIwould impose wasthatall
WTO Members should beafforded adequate opportunity todemonstrate thattheymetthe
recognition criteria.
81. Therepresentative ofChile referred totheeffort which wasbeing made tocompare
GATS Article XIVandArticle XXofGATT 1994 inorder tohighlight environmental protection.
Hereferred toparagraphs 58to60ofWT/CTE/W/9, concerning MEAs, which outlined theworkWT/CTE/M/3
Page21
ofrelevant MEAs withrespect toservices andtheenvironment. TheAnnex toWT/CTE/W/9, on
tourism andsustainable development, illustrated thecomplexity oftheissue inaspecific sector.
Hisdelegation 'sviewwasthattheCommittee 'sanalysis should focus ontwoaspects. First, there
wastheissue ofwhether theGATS wascompatible withrelevant MEAs which contained
restrictions onservices trade, suchastheBasel Convention, theLondon Convention onDumping
and,toacertain extent, theMontreal Protocol. Heinquired astohowoperational GATS rules
were. Second, forenvironmental services, itwould beinteresting toanalyse theeffects of
measures mentioned inArticle XXVIII (c)(ii), particularly regarding theapplication ofnational
treatment when theservice sector hadbeenliberalized, i.e.service providers were given access to
therelevant services essential fortheirtrade operations asprovided forintheschedules. The
Council onTrade inServices hadanimportant roletoplayinsupervising thatmeasures
concerning qualifications, procedures, technical standards andlicences didnotbecome barriers to
services trade. Thegeneral issue which wasbeing discussed concerning MEAs waswhether
restrictions onservice providers derived from MEAs were more acceptable thanrestrictions
established unilaterally innational regulations. Hisdelegation considered thatastudy should be
made ofthelinks between services trade andtheenvironment tofurther work onthisitem.
82. Therepresentative ofMexico saidthatparagraphs 20and31ofWT/CTE/W/9 identified
thekeyissues tobediscussed under thisitem, ashadbeennoted bythedelegation ofKorea.
Discussions should revolve around determining which measures were necessary forenvironmental
purposes intheservices area; whether suchmeasures were inconsistent withanyprovision other
thanGATS Article XIV; andwhether Article XIV(b) wasanadequate basis fortaking such
measures. Based ontheGATS negotiating history, which wassummarized inSection IIof
WT/CTE/W/9, there wasabroad agreement between thenegotiators concerning thefactthatthe
protection ofhuman, animal orplant lifeorhealth alsocovered theenvironment, butthere were
alsoconcerns regarding theuseandraison d'êtreofthegeneral exceptions inArticle XIV.
83. Herdelegation agreed withothers thatitwasnotwithin theCommittee 'smandate nor
capability toanalyse theenvironmental impact ofservices trade oritsliberalization. Furthermore,
thiswould bedifficult given thattheGATS wasstillintheprocess ofbeing negotiated. The
liberalization ofcertain services trade might haveapositive environmental effect, suchasinthe
caseofcertain environmental services, described inparagraph 12ofWT/CTE/W/9. For
example, theliberalization oftransborder railtransport might encourage amaximum capacity of
cargo, since vehicles would nothavetoreturn empty totheirpoint oforigin. Asnoted in
WT/CTE/W/9, nothing intheGATS restricted thecapacity ofanyMember toprovide market
access conditions which were more liberal thanthose contained intheirschedules, inorder to
benefit from possible positive effects. Consequently, itmight beconcluded thatmodification to
theGATS provisions wasnotnecessary inorder tomaximize suchpositive potential aspects. The
implications ofthepossible useofsubsidies would needtobeexamined. However, itwasnot
evident thattheCommittee should become involved inthisdiscussion, asnegotiations hadnotyet
beenconcluded.
84. Concerning potential negative environmental effects ofservices trade, herdelegation
considered thatsince services were intangible theycould notbepolluting. Paragraph 21of
WT/CTE/W/9 noted thatthere might becases where sucheffects might exist, suchaswhen the
service wascomplemented bytheuseofgoods. These cases could beincluded under
paragraph 12(c) ofWT/CTE/W/9, which presented alistofservices inrelation totheirdegree of
complementarity withagood. However, hereagain itwasnottheservice orthetrade inthe
service which wasresponsible fortheimpact, butthegoods themselves. TheWTO already hada
number ofprovisions which ensured thatMembers could takemeasures necessary for
environmental protection intheirterritory asitconcerned trade ingoods. Inparticular,WT/CTE/M/3
Page22
Articles IIIandXX,andcertain oftheTBTAgreement 'sprovisions. Anyclarification which
might beconsidered necessary withrespect tothelatter might bemade intheCommittee 's
discussions onitems one,three andseven. Shecitedthecaseofrailtransport toillustrate the
measures needed forenvironmental proposes intheareaofservices. Since thepolluter wasthe
vehicle andnottheservice, measures should affect emissions andthevehicle 'scharacteristics.
Thiswaspossible inthecontext oftheTBTAgreement 'stechnical rules. Nothing intheGATS
prevented Members from applying theirnational legislation withregard tothistypeofprovision,
totheextent thattheyabided bynational treatment andMFN provisions. Iftheobjective was
environmental protection, measures tocontrol emissions should beapplied equally tonational and
foreign vehicles, onanon-discriminatory basis. Thus, there would benoneedtoresort to
Article XIV. Herdelegation wasunable tofindexamples ofmeasures necessary for
environmental proposes intheareaofservices which were inconsistent withtheGATS provisions,
inparticular, theprinciples ofnational treatment andMFN. WT/CTE/W/9 suggested thatthere
might becases inwhich aMember could consider ameasure necessary iftheenvironmental
impact oftheservice wastransborder. Herdelegation wasnotconvinced thatthegoods usedand
nottheservice were responsible forthepollution. Inanyevent, thequestions which resulted
from suchanassumption were being discussed under itemoneandherdelegation considered that
thisdiscussion should becontinued inthatcontext.
85. Therepresentative ofArgentina recalled theCommittee 'stwotasks which hadbeen
mandated bytheMinisterial Decision. Hisdelegation agreed withthedelegations ofKorea and
Mexico thatitwould beappropriate todealwithanymodifications toArticle XIVafterprogress
hadbeenmade withrespect toArticle XXofGATT 1994, which hadbeenthemodel usedfor
drafting GATS Article XIV. Given therelationship between these twoArticles, itwould be
logical todraw some conclusions from theresults ofdiscussions under itemone,which would
facilitate thetaskofdetermining whether anymodifications were required forGATS Article XIV.
Assuch, hisdelegation considered thatitwould benecessary toavoid parallel discussions onthe
same issues when analysing Article XIVofGATS.
86. With respect totherelevance ofMEAs andtheirrelationship totheGATS, itmight be
possible alsotomake progress independently ofitemone. Heconsidered thatthefirststage
would betorequest theSecretariat tofurther identify possible interlinkages between relevant
MEAs andtheGATS.
87. Therepresentative ofMalaysia, onbehalf oftheASEAN countries, considered that
environmental policies andthedevelopment process could co-exist andenvironment protection and
services trade could bemutually reinforcing. Inhisdelegation 'sview, these objectives could be
achieved without modifying theGATS. Theproblem wasthatconflicts could arisebetween
liberalizing trade andenvironmental policies. Onecountry 'senvironmental policy orstandard
could beconsidered asatrade restriction toanexporting country. Theresolution ofthese
concerns didnotinvolve anewGATS provision, assufficient provision wasalready available in
thecurrent GATS, aswellinother WTO Agreements.
88. TheGATS negotiating history confirmed thatmeasures necessary toprotect human,
animal andplant lifeorhealth were understood toinclude measures necessary toprotect the
environment, provided suchmeasures were applied inanondiscriminatory manner. His
delegation considered that,forthepresent, there wasnoneedtoprovide foranything more than
thatcontained inArticle XIV(b). Herecalled thatthescope ofArticle XIV(b), which allowed a
suspension ofcommitments, meant thatMembers would needtopassthe"necessity test"anddid
notgivecarte blanche tosuspend commitments. Members would needtoexamine themeasures
before permitting theirjustification toprotect plant, human andanimal lifeandhealth.WT/CTE/M/3
Page23
89. Governments hadtherightandresponsibility todevise measures tointernalize
environmental costs intheproduction ofagood orservice, including imposing production taxes
onenvironmentally-harmful products, suchasremoving orreducing subsidies onpesticides or
fertilizers thathadharmful effects; giving financial incentives toenvironmentally-friendly
activities; or,where there were spillover effects, imposing quantitative limits on
environmentally-harmful activities. Governments hadarighttousethese under WTO Agreements
andunder theGATS Articles VIandXVI. Thus, without invoking Article XIV(b), which could
beinvoked onlyafteraMember hadjustified thatdomestic market access commitments hadhada
negative environmental impact which necessitated asuspension ofcommitments, agovernment
could impose conditions onthecross-border consumption andproduction ofservices intheir
territory. Placing reservations andlimitations onmarket access ex-ante andapriori would
forewarn theservice supplier ofimporting market conditions. Itwould notdoanygood tothe
service supplier if,onceinthemarket, Article XIV(b) wasinvoked, thereby nullifying and
impairing itsexpected benefits, evenifithadbeenjustified under Article XIV(b).
90. Therepresentative oftheEuropean Communities saidthattheabsence ofcommon rules
anddisciplines forservices trade, similar totheGATT forgoods, hadmade itdifficult to
acknowledge oraddress therelationship between services trade andtheenvironment. This
situation hadchanged withtheentry intoforce oftheGATS. Hisdelegation considered thatthe
positive relationship between theliberalization ofservices trade, ensured bytheGATS, andthe
environment should notbeneglected. Environmental services, suchaspollution clean-up and
landscape protection, were ofincreasing economic importance; recent OECD figures valued
global environmental services at$200 billion. Assuch, liberalization ofservices trade resulting
from theGATS would permit amore efficient provision ofenvironmental services withpotential
environmental benefit.
91. Hereferred totheCommittee 'smandate andsaidthat,inexamining therelationship of
services trade andtheenvironment, twoalternative approaches could befollowed, depending on
whether ornotthisissue wasconsidered tobeapriority. Ifitwasanitemworth exploring asa
result ofthestocktaking exercise andgiven theissue'snovelty, theCommittee 'smandate could be
considered asanarrow one. TheGATS contained several provisions other thanArticle XIV
which might haveinterlinkages withtheenvironment; allofthem contained, toanextent,
references thatcould besupplementary orcomplementary tothework foreseen bytheMinisterial
Decision. IftheCommittee followed abroader perspective, acommon approach should be
developed toexamine howservices could beprovided, i.e.different modes ofsupply, andtheir
respective, andsectoral relationship withtheenvironment. Thebasic parameters forsuchan
analysis were outlined inWT/CTE/W/9. Theintrinsic nature ofthefourdifferent supply modes
ofservices indicated thatthedirect orindirect influence ofservices trade ontheenvironment
differed between modes andsectors. Even iftheservice hadnothing todowiththeenvironment,
theform ofsupply could beofrelevance toit.TheCommittee 'sfirsttaskcould betoconduct an
indepth analysis ofhowdifferent services sectors covered bytheGATS were supplied andthe
relationship between thesupply andtheenvironment, focusing onpositive andnegative influences.
Onedetermining factor would betheinvolvement orusage ofgoods. Forexample, most business
services involving theprovision ofadvice, i.e.lawyers, architects, orconsultants, didnotuseany
good, ifsupplied across theborder, anditwasdifficult toargue thatarelationship existed with
theenvironment. However, ifthesupply ofaservice involved orfacilitated theuseofagood or
theestablishment ofaphysical presence, i.e.anoffice orafactory, therelationship withthe
environment wasmore apparent; theorigin ofthisrelationship would havetobedetermined. He
asked whether itwould bethegood ortheservice, oracombination ofboth, which determined
thecriteria which established theenvironmental link. TheCommittee could giveparticularWT/CTE/M/3
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attention totheinvolvement ofgoods asthiswould determine, toanextent, which multilateral
trade provisions were relevant, i.e.theGATS and/or GATT 1994.
92. IftheCommittee considered thatthisissue wasnotapriority, duetoitsmandate 'slimited
scope, analysis could focus ontheopportunity tomodify Article XIV(b). Assuch, the
Committee 'smandate might beinterpreted assetting different categories ofinterpretation for
GATS Article XIVandArticle XXofGATT 1994. TheMinisterial Decision onTrade and
Environment didnotmention specifically thepossible modification ofArticle XX. However,
discussions ontheinterlinkages between trade ingoods andtheenvironment hadledtodiscussing
itsmodification. Theroute thusfarintrade ingoods wasthatthrough acollective interpretation
ofArticle XX,environmental concerns could beaccommodated, toagreat extent, intheWTO.
Thefocus ontheGATS Article XIVcould setthetoneonadifferent levelandraised theissue as
towhether itshould beincluded inArticle XIV. Thiscould indicate thatthere wasscope for
discussion oftheGATS Article XIVindependent from thatonArticle XXofGATT 1994. His
delegation didnothavepreconceived ideas astotheCommittee 'sfinalresults. Assuch, there
might beageneral consensus tomodify Article XX,therefore considering theideaofacollective
interpretation asinsufficient toensure thepositive interaction oftrade andenvironment.
However, hisdelegation considered thatitwasnotadvisable todevelop thediscussion onservices
trade andtheenvironment onaseparate track from thatontrade ingoods. When examining the
caseforamodification ofArticle XIV, consideration should begiven totheexperience acquired
inthefieldofgoods, since much ofitwasapplicable toservices, while atthesame timetaking
intoaccount eachfield'sspecificities.
93. Therepresentative ofNorway saidthattherelationship between theenvironment and
services wasmultifaceted andcomplicated andthemanner inwhich theCommittee started work
onthisissue wasimportant. Asastarting point, theCommittee should consider whether the
GATS Article XIVprovided anadequate basis formeasures necessary toprotect theenvironment.
Itshould beclarified whether Article XIVwassufficient orwhether there wasaneedtoinclude
environmental concerns inother GATS Articles. Onepossibility would betocombine the
twoalternatives, whereby environmental concerns could beintegrated inArticle XIVandother
relevant parts oftheGATS. Thiswaswhathadbeendoneconcerning goods andwashis
delegation 'spreferred approach todealwithservices inaccordance withtheCommittee 's
horizontal mandate.
94. Inorder todetermine whether environmental concerns were sufficiently covered bythe
GATS, more background information wasneeded, including ananalysis ofsectors covered bythe
GATS. Then, itwould benecessary toevaluate which areas required newprovisions todealwith
environmental concerns. Inorder fortheCommittee 'smandate tobefulfilled, complementary
studies should beconsidered, forexample ontheapplication oftrade measures todealwith
problems arising from trade intransport services andtheirrelation totheGATS. Information was
needed where environmental effects were directly linked toservices trade, particularly inthe
transport sector, which UNEP wasintheprocess ofanalysing. Negative environmental effects of
trade liberalization could emerge from transportation when themovement ofgoods andservices
expanded without environmental safeguards. Itwasimportant toidentify andimplement
environmental measures todealwiththisnationally andinternationally.
95. Astudy ofenvironmental problems resulting from tourism could bewarranted toconsider
theneedtointegrate further provisions intheGATS. Another areawhich could beexamined was
subsidies, given that,asstated inCTE/WT/W/9, theGATS didnothaveanydisciplines on
subsidies intheareaofservices. Thisimplied thattheGATS didnotinclude provisions forusing
subsidies, i.e.asapositive means topromote environmentally-sound policies. ApertinentWT/CTE/M/3
Page25
question waswhether provisions parallel toArticle 8(c)intheSubsidies Agreement, concerning
non-actionable subsidies, should beincluded intheGATS. According totheCouncil forTrade in
Services 'decision of30March 1995, aWorking Group onSubsidies andGovernment
Procurement hadbeenestablished todevelop multilateral rules withrespect tothese services. The
Committee would havetoconsider whatroleitcould playinthisprocess; Members, onan
individual basis, could ensure thatenvironmental concerns were taken intoaccount inthis
Working Group. Hisdelegation 'spreference would befortheCommittee togivetheWorking
Group itsrecommendations indicating where newenvironmental provisions were necessary.
96. Services trade often implied theuseofcomplementary products andtheenvironmental
problems which arose from theiruseshould becovered bytheWTO. Itshould beclarified
whether suchconcerns were tobecovered bytheGATS orbyAgreements inthegoods area, as
wellashowtoestablish theenvironmental linkinthisrespect. Heraised thequestion ofwhether
thegeneral environmental consequences oftheliberalization offinancial services should be
examined, ifincreased capital mobility would leadtochanges inproduction andconsumption
patterns, which inturnmight haveenvironmental effects. Concerning MEAs which were relevant
totheGATS, hisdelegation considered thatresults intheservices areashould correspond tothe
solutions identified intheareaofgoods. Ashadbeensuggested byseveral delegations, the
Committee should arrive atsubstantial conclusions under itemoneatanearly stage inorder to
facilitate work under other items.
97. Therepresentative ofSwitzerland saidthatservices trade could haveanadverse
environmental impact, forexample from transport pollution. Assuch, thepossibility tosuspend
theGATS obligations necessary toprotect human, animal orplant lifeorhealth wasrequired. In
thisrespect, GATS Article XIV(b) hadbeennegotiated asananalogue toArticle XX(b) of
GATT 1994. Concerning thepotential environmental impact ofservices trade andtheappropriate
measures needed forenvironmental protection, sheasked whether Article XIV(b) wassufficient.
Oneofthecharacteristics ofservices which needed tobeanalysed wasthefactthatsome services,
suchastourism, required production intheterritory where theywere soldandconsumed. Thus,
aspecific regulation ofthetrade-environment problem might bejustified andevenrequired for
services. Herdelegation wasnotcertain thataword forword comparative analysis between
GATS Article XIV(b) andGATT Article XX(b) wasnecessary tofulfil theCommittee 'smandate,
eventhough theanalytical work onArticle XX(b) under itemoneshould beconsidered inthe
analysis oftheenvironmental aspects ofservices trade.
98. Sheproposed athree stepapproach fortheCommittee 'swork. Thefirststepcould bean
analysis ofthedifferent services sectors inorder toknow atwhatstage ofthelife-cycle ofa
service asignificant environmental impact occurred. However, itwasnecessary todetermine if
themodel oflife-cycles wasapplicable toservices. Second, afterhaving setupsuchatypology of
service categories andtheirrelated impact ontrade, different types oftrade-related measures
needed orapplied forenvironmental protection could beidentified. Third, according tothe
classification ofdifferent trade-related measures tobetaken inorder tomitigate negative
environmental impacts ofservices, theCommittee could analyse whether amodification of
GATS Article XIV(b) would berequired, taking intoaccount thesituations which would needto
relyontheexception under Article XIV(b); thiswould benecessary onlytojustify abreach ofa
GATS commitment. Also, theanalysis ofother GATS provisions related totrade and
environment wasimportant, suchasmarket access commitments forenvironmental services.
Also, account should betaken ofongoing work inrelated intergovernmental organizations.
99. Therepresentative ofCanada considered thattheGATS didnotposeachallenge to
environmental protection. Although hisdelegation considered thatfurther analytical work ontheWT/CTE/M/3
Page26
possible environmental impact ofservices trade would havetobecompleted before this
preliminary conclusion could befullyconfirmed. Inhisdelegation 'sviewtheCommittee 's
discussions ontrade ingoods were applicable, toagreat extent, toservices trade. Henoted that
there might beanexception forthetransport sector, where there might besome environmental
impacts. Heunderstood thatthere were discussions inother foraonthese impacts which should
betaken intoconsideration, suchastheWTO 'snegotiating group onmaritime services, aswellas
work within theInternational Civil Aviation Organization andtheInternational Maritime
Organization. Hereferred tothesuggestion ofthedelegation oftheEuropean Community that
work ontrade andenvironment intheareaofgoods might beleading toacollective interpretation
ofArticle XXofGATT 1994. Hisdelegation didnotshare thisview.
100. Heagreed thattheissues were defined bythequestions posed inWT/CTE/W/9,
concerning which measures were necessary forenvironmental purposes intheservices area;
whether suchmeasures were inconsistent withanyprovision other thanGATS Article XIV, and
whether GATS Article XIV(b) wasanadequate basis fortaking suchmeasures. However, given
thatcertain subject matters, particularly domestic regulation, government procurement and
subsidies were thesubject ofongoing consideration, these questions might notbeaddressed fully
bythetimeoftheMinisterial Conference in1996. Thus, hisdelegation suggested thatthe
Committee 'sinitial work focus ondetermining which environmental measures were necessary in
theservices areaandtherelationship between relevant MEAs andtheGATS. Inmany instances,
WT/CTE/W/9 implied thatfortheprovision ofaservice which involved acomplementary good,
WTO Agreements other thantheGATS applied. Heproposed thattheSecretariat analyse this
aspect further. Ifthiswere thecase, thenthisitem'sscope could benarrowed toaconsideration
ofservices trade which didnotinvolve thecomplementary useofagood.
101. Thedelegation oftheUnited States considered thatthisitemoverlapped withothers inthe
Committee 'swork programme, suchasitems oneandsix.Itwould beuseful toexamine the
contribution thatmarket access, especially intheareaofenvironmental services, could provide to
making trade andenvironment mutually supportive, increasing theavailability ofenvironmental
services andtechnologies andpromoting more opentrade. Members could gobeyond their
obligations but,aswasthecaseforgoods, thesecure climate created bybound obligations
encouraged investment andinnovation.
102. Shesaidthatanimportant question washowtoassociate environmental safeguards which
might bedeveloped fortrade ingoods totrade inservices, forexample byreexamining the
adequacy ofGATS Article XIVtodetermine ifanadditional exception should beincluded
modelled onArticle XX(g) ofGATT 1994; andbyexamining themeasures related togoods
which should alsobeapplied toservices. Inthisrespect, theCommittee wasatapreliminary
stage inassessing thepossible linkages between Article XXofGATT 1994 exceptions andthose
inother WTO Agreements. While thework inthegoods areamight provide useful insight inthe
services area, herdelegation considered thatapriori assumptions should beavoided which applied
results inoneareaautomatically totheother; eachshould beexamined withregard toits
specificities. Acautious approach would betopresume thatGATS Article XIVincluded an
exception similar toGATT Article XX(g), untilexperience demonstrated thatsuchanexception
wasnotrelevant forservices. Herdelegation sawmerit inaconsideration ofwhether MEAs
indicated thatparticular service sectors needed special environmental measures. Relevant MEAs
andtheirrelationship toGATS should bereviewed, keeping inmind WTO expertise. Any
consideration ofwhatenvironmental measures were needed intheservices areashould bebased
oninformation from environmental experts andintergovernmental organizations, forexample in
thetransport sector.WT/CTE/M/3
Page27
103. Shereferred toparagraph 33ofWT/CTE/W/9, which addressed production andprocess
methods (PPMs) inservices, which could takeonadifferent nature inservices thanforgoods,
especially when theservices were produced intheimporting country byforeign suppliers. Inthis
respect, itmight beuseful toexamine GATS Article VI.There were differing views onthe
territorial scope ofGATT Article XX(b) and(g)and,therefore, alsoofGATS Article XIV(b) and
herdelegation didnotconsider thatthese provisions were necessarily limited inscope toa
Member 'sjurisdiction, assuggested byparagraphs 27and35ofWT/CTE/W/9; herdelegation
would continue tostudy theissues identified inWT/CTE/W/9 andcomment further later.
104. Therepresentative ofJapan recalled theCommittee 'smandate andsaidthatthisitem,
should behandled withcaution assome ofthemajor disciplines oftheGATS which would affect
theoutcome oftheCommittee 'sdiscussions hadnotbeenestablished; subsidies andgovernment
procurement would benegotiated bytheServices Committee thisAutumn. Also, disciplines in
theareaofqualification requirements, technical standards andlicensing inaccordance with
Article VI:4were expected inthecoming months. Asnoted inWT/CTE/W9, the
complementarity ofservices withother products existed. Services bynature were notsmoke-stack
industries andtheirnegative environmental effect would berelated mainly tocomplementary
goods. Thus, itwould beappropriate todealwiththeissues astheyconcerned goods before
examining services trade, which wasusually ofsecondary importance. Considering the
similarities inthetextsofGATT Article XXandGATS Article XIV, itwould beproductive to
further discussions intheformer. GATS Article XIVmight betaken upatalaterstage when a
degree ofprecedence hadbeenestablished forGATT Article XX. Healsosaidthatitwas
premature toundertake theproposed sector-based casestudies.
105. Heresponded tothedelegation oftheEuropean Communities 'statement concerning a
collective interpretation ofGATT Article XX. Hisdelegation supported thedelegation ofCanada
instating thatitcould notshare thedelegation oftheEuropean Communities 'viewinthisrespect.
There wasalongwaytogoforthere tobeconsensus onthisissue anditwasnotareasonable
basis upon which todiscuss GATS Article XIV(b). Hisdelegation 'ssuggestion wasthatthe
Committee 'swork should further discussions inthegoods areaunder itemoneandthendecide the
scope oftheissues inthecontext ofservices taking intoconsideration paragraph 20of
WT/CTE/W/9, which identified ananalysis ofmeasures necessary forenvironmental purposes in
theservices area, whether suchmeasures were inconsistent withanyprovision other than
GATS Article XIV, andwhether GATS Article XIV(b) wasanadequate basis fortaking such
measures. However, hesaidthattheGATS wasinitsnascent phase anditwould bedifficult to
modify oneofitsmost sensitive Articles.
106. TheChairman saidthatthediscussions hadrevealed thatthere were differing anddiverse
perspectives ontheissues andtheverynature ofwhatwasbeing discussed. Oneapproach
indicated thatservices trade would notbedisruptive totheenvironment. Theother wasthat
consumption models whose evolution could haveenvironmental effects should beanalysed inthe
general context ofservices trade. There were differing views astowhether complementary goods
involved intheprovision ofservices should beincluded intheCommittee 'sdiscussions ofthis
item. Also, there were diverging views regarding GATS Article XIVandwhether itsufficiently
provided forenvironmental considerations. Inaddition, there were differences astowhether to
examine Article XIVindependently from GATT Article XX,which wasbeing discussed under
itemoneofthework programme andwhether theCommittee should include initsdiscussion the
relationship between theGATS andrelevant MEAs. Members should beaware ofthese
divergences which hademerged intheCommittee 'sinitial discussion ofthisitem. Asanumber
ofdelegations mentioned, itwasimportant tokeepinmind thattheGATS wasstillintheprocess
ofbeing negotiated.WT/CTE/M/3
Page28
Itemtwo:
Therelationship between environmental policies relevant totrade and
environmental measures withsignificant trade effects andtheprovisions
ofthemultilateral trading system
107. Therepresentative oftheUnited States saidthatexamples ofenvironmental policies that
could beconsidered under thisitemincluded theuseofprecautionary approaches and
environmental subsidies. Thisitemalsopresented theopportunity toconsider howenvironmental
policies, notdiscussed under other items, could beusedtoaddress theenvironmental effects of
trade. Herdelegation shared theviewofmany other delegations thataction byWTO Members in
theirowncountries wasoften thefirstandprincipal opportunity tomake trade andenvironment
mutually supportive, forexample through theappropriate useofenvironmental reviews and
assessments which were awell-established element ofenvironmental policy. Theimportance of
assessing theenvironmental effects oftrade hadbeenrecognized atthisyear'smeeting ofthe
U.N. Commission onSustainable Development, where many Members hadjoined inencouraging
governments todevelop orstrengthen theassessment oftheenvironmental effects oftrade policies
andhadnoted theimportance ofopenness andtransparency inthese processes. Useful work had
beendoneintheOECD onthisissue, particularly onpossible methodologies.
108. Several countries hadgained experience inundertaking reviews fortrade agreements,
including herdelegation andother WTO Members. Herdelegation 'sexperience suggested that
these provided information topolicymakers bypromoting anunderstanding ofpositive and
negative environmental implications andidentifying alternatives andpolicy interventions. Issues
suchastherelationship between trade andenvironmental costinternalization could beanalysed in
thiscontext. Also, involving thepublic inanassessment process supported democratic approaches
togovernance generated newinformation andideas andpromoted broader support forpolicy
decisions. Sheinvited Members toexamine herdelegation 'sreviews which hadbeenmade
available totheSecretariat andencouraged other Members tosupply theirs totheSecretariat to
make them more easily available andtopromote information sharing. TheCommittee 's
consideration ofthese issues wasasteptoward bringing environmental policy perspectives into
trade policy.
109. Shereferred toecolabelling, which fellunder itemthree butalsocould bediscussed under
itemtwo. Shesuggested thatsince some aspects fellwithin thecontext oftheTBTCommittee,
which would bediscussing thisitematitsJulymeeting, theCommittee could revert tothisissue
atitsSeptember meeting afterthatdiscussion hadtaken place.
110. Therepresentative ofSwitzerland saidthattheCommittee should focus onanalysing the
relationship between environmental measures andWTO provisions, distinguishing between
twoaspects. First, there were environmental policies andmeasures toachieve aspecific
environmental policy goaldirectly, ofwhich shedistinguished three different categories:
economic instruments (such asprice-instruments andquantitative instruments); regulatory
instruments (command andcontrol instruments); andvoluntary approaches (such asmoral
suasion). Economic instruments, likeregulatory instruments, could havetrade impacts through
price andnon-price effects andthese effects would depend ontheinstrument anditsdesign.
111. Second, ascountries pursued different environmental policies, theymight apply additional
specific measures toaddress international competitiveness problems ortominimize theriskof
having theachievement ofanenvironmental policy goalaffected byother countries 'environmentalWT/CTE/M/3
Page29
policies. These measures were accompanying offset policies orresponses toother countries '
environmental policies anddidnotbelong tothefirstcategory ofenvironmental policies and
instruments. From theWTO perspective, notonlythetrade effect ofthese measures butalsothe
relationship between GATT/WTO provisions andthese additional policies andmeasures was
important, astheymight beapplied todomestic andimported "like products". Such
accompanying offset policies included countervailing duties, border taxadjustment, environmental
subsidies, harmonization ofenvironmental policies andbilateral trade/environment agreements.
Thedistinction between environmental policy instruments perseandtheaccompanying offset
policies might beimportant totheCommittee 'sanalysis. Bothcategories ofmeasures might be
relevant totrade andhavesignificant trade effects andtherelationship toWTO rules wasof
interest. However, herdelegation questioned whether measures under thesecond category
mentioned above, which were notrealenvironmental measures, should betreated under itemtwo.
112. According totheCommittee 'smandate, specific environmental instruments were the
subject ofother items, suchasitemthree. Thus, theCommittee should limitdiscussions under
itemtwotosome specific environmental policies andinstruments andtheiraccompanying offset
policies which were notyettreated under other items. Herdelegation suggested thatthe
Committee establish alistofallenvironmental policies andinstruments andtheiraccompanying
offset policies; identify thepolicies andinstruments which were notyettreated under other items;
analyse thetrade relevance/potential trade impacts ofthese policies andinstruments; andclarify
therelationship between these policies andinstruments andGATT/WTO provisions.
113. Theuseofeconomic instruments, ascomplements toregulatory approaches, might be
useful astheycontributed toenvironmental goals andpromoted innovation inamore efficient way
thanregulations. Economic instruments haddifferent trade impacts; many categories of
economic instruments existed, suchasproperty rightmeasures; market creation measures
(tradeable emission permits); fiscal instruments (emission taxes); financial instruments (financial
subsidies, softloans); liability systems; andbond anddeposit refund systems. Economic
instruments suchastaxes andcharges, hadaprice effect ontherelated product andmight havean
impact onthecompetitiveness ofthese products, depending ontheamount ofthetaxes andhow
theywere designed. Theapplication ofother economic instruments suchastradeable emission
permit systems anddeposit refund systems impacted onmarket access rather thanprice andmight
beanobstacle forforeign suppliers. Thewaythatgovernments applied economic instruments to
domestic aswellasimported products would define theircompatibility withGATT/WTO rules.
Assuchtheyshould bedesigned andimplemented inaccordance withtheprinciples andrules of
themultilateral trading system suchasnational treatment andnon-discrimination toavoid
unnecessary trade barriers. Sheconsidered thatastructured analysis would benecessary inorder
todefine thetrade significance ofthese instruments andtheirrelationship toGATT/WTO
provisions andproposed starting withananalysis oftradeable emission permits.
114. Therepresentative ofNorway saidthatitemtwoshould cover issues thatwere not
adequately covered under other items. Inorder tomake trade andenvironment policies mutually
supportive, themultilateral trading system should bedesigned toaccommodate environmental
concerns while ensuring thatprotectionism disguised astrade measures forenvironmental purposes
wasavoided. Relevant GATT/WTO provisions should bereviewed inthelightofrecognized
environmental principles andobjectives toseewhether anymodifications would berequired. This
review should include, interalia,considerations ofwhether theexisting rules permitted awide
range ofenvironmental policy instruments andwhether theyprevented theinternalization of
environmental costs, aswellascontributed totheemergence ofnon-sustainable production and
consumption patterns.WT/CTE/M/3
Page30
115. Although hisdelegation haddoubts astowhether some ofthesubjects should beaddressed
under itemtwoorwhether theywere adequately covered under other items, itsuggested focusing
onsubsidies, border taxadjustment, andtariff escalation. Concerning theAgreement onSubsidies
andCountervailing Measures, areview could becarried outinlightoftheFramework Convention
onClimate Change 'sobjectives. Oneimportant question waswhether thecurrent trade rules
encouraged subsidization ofenvironmentally-harmful products withrespect toenergy use,and,
consequently, should thesubsidies Agreement bemodified. TheCommittee would havetoclarify
whether allquestions relevant tosubsidies should bedealtwithunder item3(a). Border tax
adjustment provisions were relevant totheCommittee 'swork, including footnote 61tothe
Subsidies Agreement. Inaddition, theeffects oftariff escalation onnatural resource use,
transport, etc.would needfurther analysis andmight beanelement under itemsix,concerning
market access. TheCommittee could examine whether adiscussion of"like products" would be
required under itemtwo,which would depend onthesolutions arrived atunder itemone,suchas
howtodealwiththePPM issue. Much work hadbeendoneonitemoneanditwould facilitate
work under itemtwo,ifconclusions could bereached atanearly stage.
116. Therepresentative ofAustralia saidthatthisitemraised issues which were being
considered under other items, including items three, fourandsix.Itemtwooffered an
opportunity toconsider additional issues toreflect keyprinciples intherelationship between the
WTO andenvironmental policies. Herecalled Agenda 21principles which stated that
environmental policies should dealwiththerootcauses ofenvironmental degradation andnot
create unnecessary trade restrictions. There wasaneedtodetermine where theuseoftrade
measures forenvironmental objectives might beappropriate toachieve thebestenvironmental
outcome. Appropriate environmental policymaking could contribute topromoting astrong
multilateral trading system andavoiding protectionist trade measures orunjustifiable trade
discrimination. Under itemsix,thecontribution which trade liberalization could make tothe
implementation ofsound environmental policies would beexamined, aswellastheroleof
complementary environmental policies inensuring thattrade reform contributed tosustainable
development. WT/CTE/W/1 highlighted thecontribution which trade reform might make to
ensure fairandecologically-sustainable returns forcommodity producers, toencourage
diversification andlessen dependence onnatural-resource intensive industries, andtopromote
internalization ofenvironmental costs. Trade reform should beaccompanied bycomplementary
domestic environmental policies
117. Many environmental measures were notdirectly relevant toWTO provisions. For
example, GATT/WTO provisions didnotlimitacountry 'srighttousenon-product related
regulations ortaxes toaddress environmentally-damaging behaviour initsownjurisdiction, such
aspolluting activity bydomestic producers. These provisions covered onlyregulations andtaxes
which applied toproducts. Thedisciplines imposed ontheuseofproduct-related regulations and
taxes were limited inintent andwere designed toensure, through applying theprinciple of
non-discrimination, thattheydidnotadversely affect thecompetitive position ofimported
products. Anissue forfurther exploration wasthecontribution which non-discrimination could
make topromoting mutually supportive trade andenvironment policies, including measures to
address domestic environmental objectives, i.e.howtoapply non-discrimination while ensuring
thatcountries could implement domestic environmental policies appropriate fortheirsocial,
political, economic andenvironmental preferences. Inthisrespect, anexamination ofthe
TBTAgreement 'srelevance toenvironmental policymaking could beaddressed under itemthree.
While theTBTAgreement encouraged theuseofinternational standards, itrecognized thatthere
were environmental reasons whynational standards could differ. TheTBTAgreement 's
transparency provisions andtheCode ofGood Practice onthePreparation, Adoption and
Application ofStandards could contribute tosound environmental policymaking andminimizeWT/CTE/M/3
Page31
adverse trade effects. Another areawhere WTO provisions andenvironmental policy objectives
could intersect wasinrelation tothereform ofpolicies responsible forenvironmental degradation.
Inmany cases, suchastrade distorting assistance toagriculture inmajor industrialized countries,
trade andenvironmental concerns were similar andstrengthening WTO rules supported sustainable
development andcomplemented environmental policies.
118. Therepresentative ofVenezuela saidthatitemtwocovered abroad spectrum ofissues
which were thesubject ofexamination under other items oftheagenda, particularly itemthree.
Assuggested bythedelegations oftheUnited States, Australia andSwitzerland, thisitemcould
examine topics which were notthesubject ofdiscussion under other items. Hisdelegation agreed
withthedelegation ofAustralia thatsome broad subjects could beconsidered, suchasthe
implementation oftrade measures based onenvironmental considerations andtheirrelationship
withtheprinciple ofnon-discrimination; orthequestion oftheextrajurisdictional implementation
ofenvironmental measures, rules andstandards; ortheimplementation ofPPM based measures
andhowtheyrelated toWTO standards. Assuggested bythedelegations ofSwitzerland andthe
United States, consideration could begiven tocertain economic policy instruments. Inthis
context, hementioned thatsuchmeasures which were being analysed inUNCTAD through
national studies onthelinkages between environmental andtrade policies indeveloping countries,
todetermine theapplicability ofeconomic instruments fordeveloping countries. Hesaidthatthe
Secretariat could relyonUNCTAD 'sexperience inthisfield. Heresponded tothedelegation of
Switzerland 'sstatement concerning thepossibility ofanalysing countervailing duties by
emphasizing thatanyreference tocountervailing duties inconnection withtheenvironment wasa
reference to"ecological dumping." Hesaidthatreopening questions ofthisnature would
complicate theCommittee 'sdiscussions. Thishadbeendiscussed atUNCTAD inconnection with
thequestion ofcompetitiveness andithadbeenacknowledged thatthere wasevidence tosupport
thecontention thatdifferences inthelevelofenvironmental requirements andstandards between
countries were notarelevant factor inindustrial relocation.
119. Therepresentative ofArgentina considered that,since thisitemwasbroad, itencompassed
areas which were covered under other items, suchasitems three andsix.Forthisreason, itwas
appropriate tofocus onthose issues which hadnotbeendealtwithandhesupported thedelegation
ofSwitzerland 'sproposal onhowtoidentify them. Anexamination oftheenvironmental
measures withtrade effects which could notbedealtwithunder itemsixcould analyse those
subsidies which encouraged producers toadopt environmentally-sustainable practices; these
subsidies were notdirectly related toproduction, buthadanimpact onthecoststructure and
producers 'income. Without claiming toprejudge theanalysis under thisitem, hesuggested
focusing initially onananalysis oftheSubsidies Agreement. Aswasgenerally acknowledged,
these subsidies were tobeofgeneral application andwere without timelimits, unlike other
standards which hadresulted from theUruguay Round andwere oflimited application suchasin
theAgriculture Agreement. TheCommittee might wishtoconsider amore specific analysis of
thelatter atasubsequent stage.
120. IntheSubsidies Agreement, thepossibility togrant subsidies fornewenvironmental
requirements waslimited tocases described under Article 8.2(c). Article 8.2(c) provided for
one-time, non-recurring measures which metspecified conditions withthesolepurpose of
promoting theadaptation ofexisting facilities tonewenvironmental requirements imposed bylaw
and/or regulations. However, asprovided inArticle 8.3,theirexantenotification wasrequired
withsufficient precision inorder tohavetherighttoclaim them asasubsidy under Article 8.2(c).
Hestressed thattheSubsidies Agreement limited thenature ofthistypeofsubsidy, andfinancial
contribution which didnotfulfil theconditions listed therein could notbeconsidered
non-actionable. Such subsidies were toserve exclusively topromote theadaptation ofexistingWT/CTE/M/3
Page32
facilities tonewenvironmental requirements imposed through lawand/or regulations; theycould
notbeusedtopromote adaptations toenvironmental standards which were voluntary, forexample
inorder togainaccess tovoluntary ecolabels. Inhisdelegation 'sviewthisquestion fellunder
item3(b), which dealtwithvoluntary ecolabelling schemes andwhich wasadelicate matter, as
voluntary ecolabels might entail newtrade barriers. Article 8.2oftheSubsidies Agreement was
precise concerning thenecessary terms ofcompliance and,thus, ecolabelling schemes hadnoright
tobesubsidized inthisregard.
121. Therepresentative ofNewZealand saidthat,while thisitemwaspotentially broad, his
delegation considered thatthetrade effects ofenvironmental subsidies should beconsidered ashad
beensuggested bythedelegation ofArgentina. Henoted thatArticle 8.2(c) oftheSubsidies
Agreement andAnnex 2.12oftheAgriculture Agreement exempted certain environmental subsidy
programmes from themore general disciplines onsubsides.
122. Therepresentative oftheEuropean Communities saidthatitemtwodidnotreferto
specific environmental measures, buttotheirrelationship toWTO provisions. Thetask,
therefore, wastoidentify issues which deserved attention, while avoiding replicating discussions
under other items. Inorder toperform thistask,twoapproaches could befollowed. Afirst
approach could betoexamine whether there were specific environmental measures other than
those covered under itemthree which were relevant totrade, including environmental taxes,
product requirements, labelling, packaging andrecycling requirements. Another approach would
betodetermine whether there were general categories ofenvironmental measures, suchas
PPM-related measures, which deserved attention. Hisdelegation 'spreliminary conclusion was
thatenvironmental measures ofinterest were being addressed already under other items, in
particular under items oneandthree.
123. PPM-related measures raised concerns vis-à-vis themultilateral trading system, especially
when theyaddressed environmental problems. Asagreed inPrinciple 12ofAgenda 21,
environmental measures toaddress transboundary andglobal challenges should notbedetermined
unilaterally, asfaraspossible, butshould bebased oninternational consensus. Therelationship
between themultilateral trading system andtrade measures, including PPM-based trade measures,
taken inthecontext ofMEAs wasbeing discussed under itemone. Also, PPMs were relevant for
life-cycle analysis incertain ecolabelling programmes, which wasbeing addressed under
itemthree. Another more general issue which might beraised inconnection withPPM-related
requirements wastheirimpact oninternational competitiveness. However, itdidnotseem thatthe
Committee should giveitfurther consideration. Hisdelegation shared thegeneral consensus
which hademerged that"green" countervailing duties onimported products tooffset additional
costs incurred bydomestic companies because ofmore stringent PPM-related environmental
requirements wasnotanappropriate response tothese concerns andshould berejected. Thishad
beenaconclusion reached byUNCTAD 'sAdHocWorking Group ontrade, environment and
development atitssecond session. Hisdelegation didnotconsider thatthere wasaneedto
examine PPM-related measures under itemtwo. Nevertheless, hisdelegation wasaware thatother
delegations might notshare thisviewanditwasopentosuggestions astohowtoproceed.
124. Heresponded tosuggestions made bysome delegations thatsubsidies should beexamined
under itemtwo. Given thatthewording ofitem2referred toenvironmental policies and
measures, there wasnoscope forexamining subsidies ingeneral andtheonlycategory of
subsidies which could beanalysed were subsidies forenvironmental purposes. Although
environmental subsidies andthedisciplines towhich theywere subject under theSubsidies
Agreement might deserve further attention, hisdelegation wasnotconvinced thattheissue of
environmental subsidies should bere-opened atthispoint.WT/CTE/M/3
Page33
125. TheChairman saidthatthere were differing perspectives astohowtoproceed onthis
item. Some delegations were oftheviewthatallaspects ofthisitemwere covered under other
items, while others hadsuggested adetailed programme ofanalysis inorder toencompass under
thisitemanumber ofissues which were considered nottohavebeenadequately considered. As
such, further discussion wasneeded tobring about aconvergence ofviews.
Other items
Itemfourofthework programme:
Theprovisions ofthemultilateral trading system withrespect tothetransparency
oftrade measures usedforenvironmental purposes andenvironmental measures
andrequirements which havesignificant trade effects
126. Therepresentative ofCanada reiterated hisdelegation 'sproposal which hadbeenmade at
theCommittee 'slastmeeting, whereby ithadproposed ajointsession oftheCommittee andthe
TBTAgreement topursue aconsensus thatecolabelling programmes were covered bythe
TBTAgreement 'sCode ofGood Practise. While itrecognized thatsome delegations might notbe
ready topursue suchdiscussions, hisdelegation wanted tosecure agreement thattheissue would
beaddressed inthenearfuture. Hisdelegation wasflexible ontiming, butconsidered thatthis
wasanissue thatneeded tobepursued. Inthemeantime, herequested theSecretariat toprepare
abackground document ontheTBTAgreement, which would address thenegotiating history of
theTokyo Round andUruguay Round, particularly theparts relevant toecolabelling programmes
andthescope fornon-product related PPMs.
127. Therepresentative oftheUnited States saidthattheproposal bythedelegation ofCanada
wasthatthere beajointbody created tofocus ontheTBTAgreement 'sinterpretation andthe
manner inwhich itapplied toecolabelling. Hisdelegation didnotconsider thattheCommittee 's
rolewastointerpret WTO rules, butrather toexplore theiradequacy. While itrecognized thatit
wasessential toknow thebaselinefrom which itwasworking inorder tohaveaneffective
discussion, hisdelegation 'sviewwastheappropriate place tohavediscussions onthe
TBTAgreement 'sinterpretation would beintheTBTCommittee. Perhaps, theTBTCommittee
could takeupthisissue inorder toassist theCommittee 'sdiscussions. Ifthere were broader
ambitions fortheproposed jointinformal meeting, hisdelegation would beinterested inlearning
precisely whatwasbeing proposed. Hisdelegation hadnodifficulty withtheSecretariat
preparing abackground document ontheTBTAgreement 'snegotiating history, including
background onthegeneral issue ofthecoverage oflabelling.
128. Therepresentatives ofNigeria, Venezuela, andJapan supported thedelegation ofCanada 's
proposal. Therepresentative ofNigeria considered thatajointmeeting between theCommittee
andtheTBTCommittee would beimportant tohighlight andclarify ecolabelling programmes and
thequestion ofnon-product related PPMs. ASecretariat background document would provide an
institutional memory forMembers which hadnotbeenpresent when theTBTAgreement hadbeen
negotiated. Therepresentative ofVenezuela saidthathehadnotunderstood thattheCanadian
proposal atthelastmeeting wasthatajointmeeting between theCommittee andthe
TBTCommittee would discuss non-product related PPMs; thiswasadelicate issue anditwould
havetobedecided whether theCommittee should cover it.
129. TheChairman noted thathehadraised thepossibility ofhaving ajointmeeting between
theCommittee andtheTBTCommittee withtheTBTCommittee 'sChairperson andhewould
consult further inthisregard.WT/CTE/M/3
Page34
130. TheCommittee agreed thattheSecretariat should prepare abackground document onthe
history andscope oftheTBTAgreement 'snegotiation, including theTokyo Round andthe
Uruguay Round negotiations, which would cover ecolabelling andnon-product related PPMs.
Itemten:
Arrangements forrelations withintergovernmental andnon-governmental
organizations referred toinArticle VoftheWTO
131. TheCommittee agreed tocontinue toextend observer status tothose intergovernmental
organizations (IGOs) which hadhadobserver status attheCommittee 'sprevious meetings,
pending theapproval ofcriteria andconditions forobserver status forIGOs intheWTO.
132. Itwasagreed thattheChairman would consult informally inorder totakeadecision atthe
nextCommittee meeting ontherequest bytheInternational Organization forStandardization (ISO)
tobeinvited toattend theCommittee meetings asanobserver. Itwasnoted thatISOwas
involved intheestablishment ofenvironmental management standards which might berelevant to
theCommittee 'swork programme andthatISOhadbeeninvited tomake apresentation onthe
development ofISO14000 atthenextTBTCommittee meeting on14July.
133. TheChairman recalled thattheWTO General Council hadbeenmeeting atthelevelof
heads ofdelegations, andconsultations were ongoing toexamine which provisions toadopt
concerning relations withnon-governmental organizations. Itwasagreed topostpone discussions
onthisitemuntilthese consultations hadbeenconcluded.
Schedule ofmeetings
134. Itwasagreed thattheCommittee 'smeetings inAutumn would beheldon
12-13 September and26-27 October. AttheSeptember meeting items sixandseven ofthework
programme would betaken up.Fordiscussion under itemsix,theSecretariat hadprepared a
paper onthe"Environmental benefits ofremoving trade restrictions anddistortion" which had
beencirculated asWT/CTE/W/1, February 1995. Fordiscussion ofitemseven, theSecretariat
hadprepared abackground paper onthehistory oftheissue ofexports ofdomestically prohibited
goods (DPGs) inGATT andonrecent developments within andoutside ofGATT/WTO,
contained inPC/SCTE/W7, December 1994. Inaddition, theSecretariat hadprepared apaper
which provided up-to-date information onthemembership, product coverage andoperational
procedures ofthe12international andplurilateral agreements andinstruments which dealtwith
trade inDPGs andother hazardous substances, contained inWT/CTE/W/6, March 1995. The
Chairman recalled thatdelegations could return toanyitems thathadbeendiscussed atthis
meeting attheendofdiscussions oftheitems offocus atthenextmeeting inSeptember.
135. Itwasagreed that,inorder toprepare forastocktaking oftheCommittee 'swork and
consider theagenda fortheremainder oftheperiod before theMinisterial meeting, theChairman
would holdinformal meetings between theSeptember andOctober meetings. TheChairman
recalled that,attheCommittee 'sFebruary meeting, ithadbeenagreed thatastocktaking exercise
would beheldattheOctober meeting aftertheCommittee hadcompleted itsfirstrunthrough of
itswork programme, inorder fortheCommittee tonoteareas ofconsensus andthose where
further work wasneeded.
136. TheChairman saidthathewould address theissue ofthetranslation ofdocumentation,
which hadbeenraised bythedelegations ofVenezuela andMorocco, withtheChairman ofthe
General Council andreport backtotheCommittee.