Global Policy Forum

New Approach Could Turn Barriers Into Opportunities

Download Full Report: Trade and Environment Review 2006

The review, known as the TER, recommends that developing countries adopt a strategic, anticipatory approach to new requirements in place of their current reactive, "fire-fighting" approach. Such a strategy has two key elements: (i) developing country producers and exporters should actively participate in the development and review of new environmental, health and safety requirements created by Western governments or companies; and (ii) developing country governments should look beyond the costs of such adjustments to the domestic opportunities and benefits that may be gained. For example, establishing expertise in products such as organic agriculture could boost exports, and the removal of heavy metals from electronics manufacturing could reduce national levels of toxic waste and the health and environmental dangers associated with it.

The Costs of Compliance
Environmental and related health requirements are becoming increasingly numerous, complex and wide-ranging. They include energy efficiency standards and restrictions on the use of hazardous substances in electrical products, low residue levels for pesticides and other chemicals in food imports, animal welfare concerns and occupational safety issues. Some standards are so stringent or technically advanced that developing countries may not have access to the equipment and expertise needed to implement them and demonstrate compliance. For example, some maximum levels of pesticide residues are measured in parts per billion, which are only detectable with the latest equipment. And the removal of heavy metals such as lead from electronic equipment requires costly research and development work to create substitute materials and new product designs. Meeting such standards is often made more difficult by the lack of internationally recognised testing procedures.

The costs and technical challenges of meeting such standards are of increasing concern to developing country exporters - particularly small- and medium-sized enterprises, which often lack the financial, institutional or technical capacities to adapt to increasing numbers of complex requirements.

A Strategic Approach
The Report recommends that developing-country governments gather and quickly analyse information on new requirements, forge effective partnerships with domestic businesses to devise adjustment strategies and identify market opportunities, and work with other governments and organisations to share experiences on best adjustment practice. These strategies can save time and resources, improve environmental and occupational health conditions, and reduce adjustment costs.

Developing countries also can defend their interests by influencing environmental requirements at the design stage: the TER recommends that governments and exporters increase their participation in the consultations that precede the adoption of new regulations in importing nations. Such consultation processes should be transparent and inclusive, and those creating new requirements should facilitate the participation of developing country producers in the consultations. The Review calls for developed and developing countries to acknowledge that they have a "shared responsibility" to ensure that environmental, and not trade, protection is promoted by new requirements.

Examples
The Thai government initiated a series of consultations, research projects and working groups to analyse the impacts of new requirements in the electrical and electronic equipment (EEE) sector and to identify measures needed to help Thai industry successfully adjust. Actions taken as a result include legislation on used EEE imports, a national plan for waste management, active participation in EU standard-setting consultations, seeking technical assistance from the EU and the launching of an alliance between manufacturers, government departments, testing laboratories and research organisations on new EU hazardous substance directives in the EEE sector.

In the organic agriculture sector, developing country governments could improve prospects by helping farmers with transition costs as they convert to organic methods, and governments and firms in developed countries could contribute by pursuing harmonization of organic-agriculture standards, establishing mutual recognition and equivalence in regard to such standards, and ensuring that rules and procedures governing organic imports are transparent and easily understood.