Global Policy Forum

By Robert Evans

Geneva - An accord on ending government subsidies to farming, fishing and energy industries could make a major contribution to environmental protection, a World Trade Organisation (WTO) report said yesterday. In a set of recommendations for the WTO's 134 member states, the report also suggested they could help fight global pollution by dropping all barriers to trade in modern technologies and environmental services.

"Every WTO member government supports open trade because it leads to higher living standards for working families which in turn leads to a cleaner environment," the WTO's new Director-General Mike Moore said in a comment on the report. He said the detailed document, issued as environmentalists and other anti-free trade groups are preparing major protests against the body at a ministerial meeting in Seattle late next month, "underscores that trade and environment need not be contradictory, but can indeed be complementary."

A New Trade Round Could Tackle the Environment

The report, which some trade diplomats said could upset big industrial firms and both developed and developing countries, suggested a new trade round could tackle these issues. A summary issued on the WTO's website said trade - blamed by radical groups for most of the world's ills - "could play a positive role....by facilitating the diffusion of environment-friendly technologies around the world." This, it said, would require countries "to scrap trade barriers on modern technologies and (against) suppliers of environmental services to reduce the cost of investing in clean technologies and environmental management systems." The report, written by an analyst in the WTO secretariat and another working for the North American Free Trade Association (NAFTA), said a new round of trade liberalisation talks could tackle this issue. The same round could "address subsidies that harm the environment, including energy, agricultural and fishing subsidies," it declared.

Big Powers Face Sensitive Political Decisions

Subsidies to farmers are a sensitive issue in the United States and the European Union, both of which are criticised by a range of advanced and emerging economies in the so-called Cairns Group for encouraging over-production and distorting markets. The EU, whose fishery industries are largely kept alive by subsidies, is under increasing pressure to reconsider its policies, which critics say lead to gross over-fishing and a worldwide depletion of stocks.

The report's authors, Hakan Nordstrom of the WTO and Scott Vaughan of NAFTA, did not call specifically for the new "Millennium Round," expected to be launched by trade ministers in Seattle in early December, to take on these issues. In discussions so far on the agenda for that meeting, both U.S. and EU officials have given little indication of willingness to move on what are politically sensitive problems. But developing countries are also largely opposed to allowing the WTO to take on any environmental role, which they see as part of moves by richer powers to set rules which would put their goods at a competitive disadvantage. However, the report suggested that rather than changing WTO rules, member countries and states outside the organisation could create "a new global architecture of environmental cooperation" based on the WTO model with both rights and obligations.

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