Multilateral Environmental Agreements (MEAs) and Trade

 
The Issues
At the outset, it is important to distinguish between the use of trade measures to help strengthen implementation, and the trade effects of MEA implementation. Given the increasingly close links between environmental policies and economic policies, almost all MEAs will have some trade effect. Indeed, it is widely expected that some of the post-UNCED agreements, notably the Climate Change Convention, will have important trade effects, even though they do not contain what is traditionally referred to as trade measures.

In some cases, developing countries have been the principal supporters of trade measures in MEAs. This has primarily been the case where exports from (mainly) developed to developing countries may pose health and environmental risks to developing countries, which may not have sufficient information as well as technological capacities to cope with potential risks. Examples can be found in the areas of hazardous waste and products, obsolete technologies and genetically modified organisms.

The use of trade measures in MEAs goes beyond the legal debate concerning their compatibility with the rules of the multilateral trading system. This debate has been an important focus of the WTO's Committee on Trade and Environment. Instead, of interest is the extent to which these trade measures contribute to and strengthen environmental policy, while at the same time cause little economic distortion in their implementation. That is, while uniform trade measures are applied in these MEAs, thereby affecting all parties to the MEA, in practice they tend to have non-uniform effects, given differences between countries in the stage of development, technological profiles, market composition and trade intensities.

In looking at the costs and benefits of MEA implementation at the national level, it is crucial that analysis of trade measures is viewed within the wider picture of the effects of all measures in MEAs. Although there has been a tendency in the trade and environment debate to divide MEAs into two distinct categories -- "trade measures" on the one hand and "positive/supportive/enabling measures" on the other -- in reality this terminology is an imprecise abbreviation for a very complex and sophisticated interplay between different types of measures. For the sake of simplicity, non-trade measures are referred to here as positive, supportive or enabling measures. These include a wide range of measures, including technical training and capacity building, the provision of financial assistance to help meet incremental costs in achieving international standards contained in MEAs, the use of other types of information exchange and environmental management assistance -- often embodied in differences in the burden of environmental management responsibilities between exporting and importing countries -- and many other measures. There has been a consistent and strong commitment among MEAs for the past twenty-five years to make explicit allowances for the special needs and circumstances of developing countries in addressing common problems. These provisions have been in place well before the 1992 UNCED Conference, in which principles such as common but differentiated responsibility were endorsed formally by the world community.

Trade and positive/supportive/enabling measures are generally part of a package which is MEA -, and sometimes even country group-specific. It is therefore important to view MEAs as a package of different types of measures which work together. The term "positive, supportive or enabling" measures is the result of a historical process of discussions on the role of and interrelationship between trade and non-trade measures in MEAs.

The main focus of UNCTAD's activities is the analysis, design and assistance in implementing positive/supportive/enabling measures with a view to meeting the objectives of MEAs, which include trade measures/restrictions, without compromising developmental and social priorities in developing countries. Such measures are particularly useful in reducing adjustment costs of the uniform trade measures under

  • divergent levels of development, technological profiles, market composition and trade intensities;
  • lack of information on the underlying economics behind the use of trade measures, in particular in encouraging access to and use of environmentally sound technologies;
  • overwhelming presence of the informal sector (i.e. production or servicing units with no operating permit) with little technological and financial capacity;
  • situations in which trade measures might not necessarily address the root cause of the environmental problem.

 
Our Work

UNCTAD's role is basically three-fold:

1. UNCTAD will contribute to building capacity for informed participation in trade and environment deliberations. This includes the empirical analysis of the implications of trade measures in MEAs and their developmental and social effects.

2. UNCTAD is building capacity in developing multi-stakeholder environmental deliberations at the national level aimed at

  • taking pro-active policy measures for reducing domestic adjustment costs of the trade measures of MEAs;
  • identifying suitable packages of positive/supportive/enabling measures in this regard;
  • facilitating the creation of conducive conditions for access to and effective use of environmentally sound technologies.

3. UNTAD facilitates co-operation among developing countries, particularly at regional level, with a view to exchanging experience on the use of suitable domestic policy packages to supplement the trade measures in MEAs or finding regional solutions to similar technical or economic problems.

Publications :

  • Proceedings of the Scheveningen meeting on implementation of MEAs - ways and means
  • The use of trade measures and positive measures to achieve the objectives of Multilateral Environmental Agreements, results of case studies on developing countries in Asia (forthcoming)