COMMISSION ON SUSTAINABLE DEVELOPMENT CONCLUDES TWO-DAY HIGH-LEVEL SEGMENT WITH DISCUSSION ON TRADE

Press Release
ENV/DEV/546

COMMISSION ON SUSTAINABLE DEVELOPMENT CONCLUDES TWO-DAY HIGH-LEVEL SEGMENT WITH DISCUSSION ON TRADE

Director-General of World Trade Organization (WTO) Tells Commission WTO Objectives Fully Compatible With Agenda 21

The objectives of the World Trade Organization (WTO) were fully compatible with Agenda 21, Michael Moore, Director-General of the WTO, told the Commission on Sustainable Development this afternoon, as it concluded its two-day high- level segment with a discussion on trade.

The Commission monitors implementation of Agenda 21, the plan of action adopted at the 1992 United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro. Over the course of its high-level segment, delegations considered land and agriculture, preparations for the ten-year review of UNCED, forests, and finance and investment.

Addressing the meeting through a videotaped presentation, Mr. Moore said that while sustainable development was one of the objectives of the WTO, the organization was not an environmental protection agency. It had to remain sensitive to the needs of its members, the majority of which were developing countries. Further trade liberalization could put developing countries on a firmer footing in the global economy. Assuring that trade and environmental policies were put in place in a mutually supportive manner could not be done without the support of developing countries.

A one-size-fits-all approach clearly did not work in the area of trade liberalization, stated Martin Khor, Director of the Third World Network. Developing countries were in the unjust position of having to cancel their quantitative restrictions and reduce their agriculture tariffs and subsidies. It was necessary for the developed countries to rapidly reduce and eliminate their high export subsidies, eliminate unjustifiable domestic support and meaningfully reduce tariffs.

With regard to trade and environment, he said there were legitimate concerns that unbridled free markets and trade could and had contributed to unsustainable patterns of production and consumption. Trade had to change, but in a fair way, on the basis of common but differentiated responsibility. The Commission was the guardian of the interrelation of environment and development and could play a useful role in the trade policy process.

Sustainable Development Commission - 1a - Press Release ENV/DEV/546 11th Meeting (PM) 27 April 2000

Speaking on behalf of the “Group of 77” developing countries and China, Nigeria’s Minister of Environment, Hassan Adamu, said that trade was one of the best channels to achieve and promote sustainable development. However, that was only possible when the pursuit of trade and environmental policies complemented each other and environmental measures were not an unnecessary obstacle to trade, or protectionist in intent.

He was concerned that certain environmental requirements might adversely affect access to the markets of developed countries, since developing countries might lack the technical and financial ability to comply with the environmental regulations of the industrialized countries. Hence, there was an urgent need for the full participation of developing countries in the decision-making process on issues relating to trade and environment.

Trade liberalization encouraged a more efficient use of natural resources and a broader availability of environmental goods, services and technologies, stated James Currie, Director-General of Environment of the European Commission, on behalf of the European Union and associated States. To promote a mutually supportive relationship between trade and environment policies in favour of sustainable development, it was essential to avoid using environmental measures for protectionist purposes. It was also necessary to make the WTO more responsive to environmental concerns.

Siri Bjerke, Norway’s Minister of Environment, underlined the need for decoupling economic growth and environmental degradation. Sustainable development and environmental protection should be one of the overall principles in the upcoming WTO trade negotiations. The use of sustainability reviews, for which national authorities bore responsibility, could help achieve the objective of integrating environment and development concerns in trade policies.

Despite the clear understanding in 1992 that the implementation of Agenda 21 would require new and additional financial resources, stated the representative of Pakistan, there had been a continuing decline in the level of official development assistance to developing countries. Rising levels of poverty and an ever-increasing debt burden had further complicated the problems of developing countries. The fact that a large number of developing countries had virtually no access to financial resources spoke volumes for the lack of progress in Agenda 21’s implementation.

Also participating in this afternoon’s meeting were the government ministers and representatives of Ecuador, Cameroon, Chile, Philippines, Germany, Honduras, Sweden, Bolivia, Indonesia, Japan, Guyana, Finland, Brazil, Canada, United States, India, New Zealand and Egypt.

In addition, the Director-General of the United Nations Environment Programme (UNEP) also spoke, as well as the representatives of the United Nations Conference on Trade and Development (UNCTAD), the International Chamber of Commerce, the Women’s Caucus, the Indigenous People’s Caucus and the International Centre for Sustainable Trade and Development.

The Commission will meet again at 10 a.m. on Friday, 5 May, to conclude its eighth session.

Commission Work Programme

The eighth session of the Commission on Sustainable Development met this afternoon to conclude its high-level segment with a meeting on trade. The Commission monitors implementation of Agenda 21, the plan of action adopted at the 1992 United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro. (For further background on the session, see Press Release ENV/DEV/536 issued on 20 April.)

For its high-level meeting, before the Commission is the report of the Secretary-General on economic growth, trade and investment (document E/CN.17/2000/4), which focuses on how the integration of markets on a worldwide scale may influence economic growth, the international distribution of the gains from growth and the environmental implications of growth. It also describes ways in which the traditional objective of economic growth can be geared towards sustainable development through environment-related trade policies and environmental practices of transnational corporations.

Also, there is a need for building confidence and consensus on a trade, environment and development agenda that would balance the interests of both the developed and developing countries, the report states. Such an agenda should be based on the objectives set out in the Rio Declaration on Environment and Development, Agenda 21 and the Marrakesh Agreement Establishing the World Trade Organization (WTO). It should seek to enhance the contribution of the multilateral trading system to sustainable development and to find solutions outside the WTO framework.

On the foreign direct investment front, private and public interests in protecting the environment have yet to converge, the report adds. Governments seek to promote sustainable development within a national context; transnational corporations strive to enhance their competitiveness in an international context.

According to the report, UNCED, which linked environmental policy with development, emphasized that for effective environmental policies it is necessary first and foremost to address poverty and inequality issues. The proposed scenarios call for developed countries to take the lead in changing production and consumption patterns to provide environmental space for the developing countries, as well as promoting technology transfer and financial assistance. They also require that interactions between the developed and developing countries in trade, science, technology and finance take the form of partnerships, based on the principles of the right to development and the rights of future generations.

The development, diffusion and effective use of modern, eco-efficient technologies, states the report, will be the most important factor in developed countries for reducing the material and pollution intensity of production. Despite the huge potential of technological progress, it is unlikely that the resulting material and resource savings will lead to an absolute decline in resource use in developed countries. In developing countries as well, restructuring, eco-efficiency and changes in consumption patterns play a role in determining the environmental impact of economic growth.

However, the report continues, there are two other key factors that contribute to environmental stress -– poverty and high population growth. Most of these factors lead to increasing environmental impacts with economic growth in the South. The lack of modern, environmentally sound technology is preventing most developing countries from improving eco-efficiency of production and creating favourable conditions for technology “leapfrogging”. Significant changes in consumption patterns are unlikely to occur in the light of the catch- up demand for many consumer goods and the massive poverty in many developing countries.

Because major environmental challenges also emerge from lack of growth, it is important first and foremost to meet people's basic minimum consumption needs, adds the report. Also, the technology needed to leapfrog into environmentally sound production and consumption patterns is not easily accessible to developing countries.

Ushering in global environmental sustainability will demand a much higher degree of organization and effective decision-making than at present, according to the report. It will entail far higher levels of global cooperation in such areas as technology development, dissemination of technology and changes in consumption patterns. It will also entail a commitment of the international community to promote an increase of consumption levels of basic goods and services in developing countries.

There is a general consensus that trade and environmental policies can complement each other, states the report. However, it needs to be ensured that environmental measures do not act as unnecessary obstacles to trade or are protectionist in intent and that trade rules do not stand in the way of adequate environmental protection. In addition, although there is wide agreement that there should be a harmonious relationship between multilateral environmental agreements and the multilateral trading system, there is no agreement on whether any modification of WTO rules is needed.

According to the report, the level of environmental degradation resulting from industrial activity is closely linked to the production efficiency of firms and their capacity to innovate. Environmental damage tends to be greatest in low-productivity operations working with obsolete technology, outdated work methods, poor human resource development, inefficient energy use and limited capital. To a large extent, environmental performance is a function of the use of clean technology within an efficient environmental management framework.

The demands for change from transnational corporations regarding the environmental impact of their operations on the environment is reflected in the increased stringency of national environmental regulations in a growing number of countries. This concern has also found its way into international commitments, the most prominent of which is Agenda 21, which contains a number of provisions across five chapters that are directly addressed to transnational corporations.

For the developing countries, continues the report, the issue of environmental protection is also about time, or rather lack of it. The pressure of delivering high growth rates and attracting foreign direct investment means that policy decisions have to be taken in response to immediate output and employment objectives. The lack of resources and expertise in monitoring and enforcement, and sometimes the inability to work collaboratively with transnational corporations, add to the problem.

In addition, the Commission had before it the report of the Ad Hoc Inter- sessional Working Group on Financial Resources and Mechanisms and on Economic Growth, Trade and Investment (document E/CN.17/2000/10). The meeting, held from 22 to 25 February in New York, produced two types of documents on the two groups of issues -- possible elements for draft decisions/resolutions and the Co- Chairmen’s summaries of the discussions.

Regarding possible elements for a draft decision at the eighth session on financial resources and mechanisms, the report states that it is important that countries approach sustainable development through a holistic approach, in view of the interconnectedness of the trade, financial, environmental and social aspects of sustainable development. In general, the financing for the implementation of Agenda 21 will be met from domestic resources. Yet, for many developing countries, official development assistance is a main source of external funding, and substantial new and additional funding for sustainable development and the implementation of Agenda 21 will continue to be required.

The Commission will continue to address financial resources and mechanisms as an overarching issue. The next comprehensive discussion of the issue will take place at the 2002 review of UNCED, which will benefit from the outcome of the high-level event on financing for development, to be held in 2001. Priority areas for future work include: promotion of international finance for sustainable development; mobilization of domestic financial resources for sustainable development; exploration of innovative financial mechanisms; and improvement of institutional frameworks and promotion of public and private partnerships.

On possible elements for a draft decision on economic growth, trade and investment, the report states that there should be a balanced and integrated approach to trade and environment in pursuit of sustainable development, taking into account the economic, environmental and social aspects, as well as the different levels of development of countries without undermining the open, equitable and non-discriminatory character of the multilateral trading system or creating any disguised barriers to trade.

In particular, it continues, for developing countries and countries in transition it will be an important challenge to stimulate domestic investment and attract foreign direct investment to achieve sustainable development. At the same time, the international community should strive to avoid the risks that can be associated with the volatility of short-term private capital flows and to enhance the contribution that investments can make to sustainable development. Priorities for future work include promotion of sustainable development through trade and economic growth, making trade and environment mutually supportive, promotion of sustainable development through investment, and strengthening institutional cooperation and promotion of partnership.

The co-Chairmen's summary states that trade and investment are essential for sustained economic growth and sustainable development. Some delegations emphasized that trade and investment policies must, however, be complemented by policies that provide for high levels of environmental and social protection and enforcement of these laws at the national level. While some developing countries have benefited from globalization and trade liberalization, there is still a need to address the issue of marginalization, and to support the integration of developing countries into the world economy.

Some delegations stressed the need for effective environmental policies to maximize the contribution of trade liberalization to sustainable development, the report continues. There is also a need to consider links between trade liberalization and the social dimensions of sustainable development. Technical assistance and capacity-building initiatives in favour of developing countries must be identified. There is a need for improved coherence and coordination between donors and international organizations.

As agreed in Agenda 21, developed countries should take the lead in addressing unsustainable production and consumption patterns, taking into account the principle of common but differentiated responsibilities. Several delegations also recognized the importance of keeping the public informed and engaging in regular dialogue between governments and stakeholders.

Expert Presentations

Addressing the meeting through a videotaped presentation, MICHAEL MOORE, Director-General of the World Trade Organization (WTO), said that the objectives of the WTO were fully compatible with Agenda 21. Sustainable development was one of the objectives of the WTO Agreement, as enunciated in its preamble. At the same time, the WTO was not an environmental protection agency. It dealt with aspects of environment that might affect trade. “How could the WTO contribute to sustainable development”? he asked. There were three main ways. First, the WTO Agreement gave greater scope for the pursuit of national environmental protection policies, provided that those policies did not discriminate against WTO members.

The second way, he continued, was through the work of the WTO Committee on Trade and Environment, whose aim was to explore ways and means to make international trade and environmental policies mutually supportive. One area of intersection was the evolving relationship between multilateral environmental agreements and multilateral trade agreements. The Committee had also identified environmentally harmful trade measures, such as trade-distorting subsidies in agriculture and fisheries. The WTO must remain sensitive to the needs of its members, the majority of which were developing countries. Progress on assuring that trade and environmental policies were put in place in a mutually supportive manner could not be done without the support of developing countries.

The third way the WTO could make a contribution, he said, was by further strengthening the international trading system, which would contribute to sustainable development. WTO members were not prevented from implementing targeted environmental programmes. Further trade liberalization could be expected to put developing countries on a firmer footing. The agricultural negotiations could make a significant contribution to both economic and environmental sustainability. He was confident that the Commission would elaborate action plans in a way that was mutually supportive of the WTO.

MARTIN KHOR, Director of the Third World Network, said the failure of the WTO Seattle Ministerial Meeting presented the opportunity to re-think what might be wrong with the multilateral trading system. There were linkages between trade and development and trade and environment. The principle of common but differentiated responsibility was critical. That principle must be at the centre of the multilateral system. On trade and development, it became clearer that the Uruguay Round agreements, on the whole, were imbalanced. Given the problems of implementation, developing countries wanted implementation issues to be resolved and the imbalances in rules corrected. Developing countries faced two types of problems, he said. First, the North had not implemented some its major commitments to the South, resulting in the South not obtaining the promised benefits of the Uruguay Round. Second, the South itself faced major problems from having to fulfil its own obligations in the many WTO agreements. Developing countries were in the unjust position of having to cancel their quantitative restrictions and reduce their agriculture tariffs and subsidies. The solution was for the North to very rapidly reduce and eliminate its high export subsidies, eliminate unjustifiable domestic support and meaningfully reduce its tariffs.

Another implementation problem arose from the Trade Related Intellectual Property Rights (TRIPS) agreement, he continued. TRIPS was about protectionism for the strong and prevented technology transfer to the weak; it facilitated monopoly and prevented competition; and it hindered development, as well as the environment. TRIPS should not be in the WTO because it was not an agreement about trade. TRIPS was about protectionism for the strong and prevented technology transfer to the weak. The decision-making system needed an overhaul, as was made clear at Seattle. The principle that all Members had the right to be present and to participate equitably in all proceedings must be upheld in future WTO processes. The reform of the WTO must include the secretariat, which was biased in terms of staffing, leadership and content in favour of major trading countries. A one size fits all approach clearly did not work in the area of trade liberalization, he continued. The trade deficits of developing countries had increased considerably in the past two decades, to which rapid import liberalization had contributed. Many countries were unable to increase their exports. Both the trade system and rules had to be revised. On the issue of trade and environment, there were legitimate concerns that unbridled free markets and trade could and had contributed to unsustainable patterns of production and consumption. Trade had to change, but in a fair way, on the basis of common but differentiated responsibility. The Commission was the guardian of the interrelation of environment and development and could play a useful role in the trade policy process.

Statements

Speaking on behalf of the “Group of 77” developing countries and China, HASSAN ADAMU, Minister of the Environment of Nigeria, said that trade was one of the best channels to achieve and promote sustainable development. However, that was only possible when the pursuit of trade and environmental policies complemented each other and environmental measures were not an unnecessary obstacle to trade, or protectionist in intent. He was concerned that certain environmental requirements might adversely affect access to the markets of developed countries, since developing countries might lack the technical and financial ability to comply with the environmental regulations of the industrialized countries. Hence, there was an urgent need for the full participation of developing countries in the decision-making process on issues relating to trade and environment.

Of particular interest to the Group, he said, was the current stringent market access conditions for agricultural and industrial products of export interest to developing countries. There was a need to improve, on a broad and liberal basis, access of those products to the markets of developed countries. Also, the developed countries should eliminate the undue subsidies on some agricultural products, so as to allow for a fair playing field and healthy competition for similar products and services originating from the developing countries.

While the Group was not opposed to the development and promotion of biotechnology, it was concerned about the possible long-term impacts, he added. The effect that products of biotechnology might have on the environment and sustainable development must be fully established before they were introduced into the domestic market or be exported to developing countries, most of whom lacked the capacity to control the negative consequences of such products.

JAMES CURRIE, Director-General of Environment of the European Commission, spoke on behalf of the European Union, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Cyprus, Malta and Turkey. He said that trade patterns should be more equitable and help to narrow the gap between rich and poor countries. Developing countries must be able to reap the benefits of trade liberalization for development and poverty eradication and effectively integrate into the world’s economy. A comprehensive round of trade negotiations was the best way to achieve that objective.

Trade liberalization encouraged a more efficient use of natural resources and a broader availability of environmental goods, services and technologies, he said. In order to promote a mutually supportive relationship between trade and environment policies in favour of sustainable development, it was essential to avoid using environmental measures for protectionist purposes. It was also necessary to make the WTO more responsive to environmental concerns. Further, it was important to dispel uncertainties concerning the relationship between trade rules and the Rio principles, notably the precautionary principle. Similarly, the compatibility of labelling schemes with trade rules needed to be recognized.

He said that it was necessary to prevent and offset potential transitory, negative effects of trade liberalization and maximize its benefits for all members of society. Particular attention should be paid to those affected by social exclusion, living in poverty or facing unemployment or labour conditions that did not meet internationally recognized standards, as well as to vulnerable groups such as women and children.

SIRI BJERKE, Minister of the Environment of Norway, said that the Commission was in a unique position to offer overall policy views on the economic, social and environmental aspects of trade. Trade and investment must be strengthened as vehicles for poverty eradication. International rules and regulations and codes of conduct were important to that end. Governments must seek out new partnerships and alliances. Civil society and non-governmental organizations were important partners in the efforts for sustainable development. Environmental stewardship was lagging behind economic development.

Norway underlined the need for decoupling economic growth and environmental degradation, she said. Sustainable development and environmental protection should be one of the overall principles in the upcoming trade negotiations under WTO. Developing countries must be better integrated into the multilateral trading system. The use of sustainability reviews could help achieve the objective of integrating environment and development concerns in trade policies. National authorities were responsible for carrying out reviews and sustainability assessments.

The Commission should give a clear signal that relevant multilateral agreements in the areas of trade and environment must contribute to sustainable development, she added. Norway's concern was illustrated by the debate on the relationship between the Convention on Biological Diversity and the TRIPS Agreement on the issue of fair and equitable sharing of benefits arising from the use of genetic resources. The debate had been initiated by developing countries, many of which felt that the TRIPS agreement was an obstacle to effective Convention on Biological Diversity implementation. If environmental reviews had been undertaken in parallel with the TRIPS negotiations, the potential for conflicts between different types of agreements, including the Convention, would have been reduced.

RODOLFO RENDON, Minister of Environment of Ecuador, said that even though his was one of the smallest countries in the world in terms of area, it was also one of the world’s most biologically diverse. Ecuador had made important achievements in environmental management and the promotion of sustainable development. Among other things, it had strengthened its environmental authority and established a set of actions for sustainable development and conservation. Poverty had been identified as one of its main environmental problems. To resolve that, the Government had to strengthen its productive apparatus and create more jobs. The Government was firmly determined to do that within the limits of sustainable development.

From 6 to 8 March, an international meeting on liberalizing trade and promoting sustainability was held in Quito, he said. Among the conclusions of that meeting was that it was possible to maintain a multi-sectoral dialogue on issues pertaining to environment and trade. Another was that the evaluation of sustainability could be a tool in political decision-making. Also, the evaluation of sustainability was still in its initial stages and it must be explored as to how that tool would contribute to sustainable development. The diversity of possible methodological approaches must be recognized, as well as the need to respect each country’s specificities. The proper theme for the ten- year review should be sustainable development, since that was the goal.

SYLVESTRE NAAH ONDOA, Minister of Environment and Forests of Cameroon, said that Cameroon had decided to set aside 30 per cent of its territory and keep it as protected land. His country called on the international community to support the efforts of Central African countries to manage forest areas, with a view to establishing funds for forest protection. The international community must support countries that count on commodities and it must also ensure that forest products were developed through the establishment of fair and equitable pricing. Farmers lived on the products of the forests, and as long as those products had no value, it would difficult to ensure environmental protection in the countries of the Congo basin.

CRISTIAN MAQUIEIRA (Chile) said that moving towards sustainable agriculture and rural development was one of his country’s basic objectives. Among the other national challenges were ensuring food security and alleviating poverty. He supported the proposal to strengthen the institutional capacity of the United Nations as a tool for sustainable development. Addressing poverty in rural areas was an important element in the pursuit of rural development. Achieving that objective involved improving the competitiveness of agriculture. The level of subsidies to agriculture in developed countries exceeded the situation that preceded the Uruguay Rounds. That left the developing countries in a difficult situation, reflected in an increase in malnutrition.

Today, he continued, trade in agriculture was facing new challenges. Under the guise of the concept of multi-functionality, some countries were trying to exert protectionist measures. Progress in implementing the Rio commitments had proven limited and difficult. The application of the concept of multi-functionality would lead to a distortion in agricultural trade.

SHAMSHAD AHMAD (Pakistan) said that the realization of the objectives of Agenda 21 was likely to remain a mirage in developing countries until the goals of economic growth and social development were pursued in tandem with environmental protection. That environment-centred approach had led to selective implementation of Agenda 21. Somewhere in the process, the two most important pillars of sustainable development, namely economic growth and social development, had apparently been lost.

Despite the clear understanding in 1992 that the implementation of Agenda 21 would require new and additional financial resources, there had been a continuing decline in the level of official development assistance to developing countries. Rising levels of poverty and an ever-increasing debt burden had further complicated the problems of developing countries. Private capital flows had only reached a few destinations. A large number of developing countries had virtually no access to financial resources. That spoke volumes for the lack of progress in the implementation of Agenda 21.

One of the most expedient ways of providing additional financial resources was to ensure market access for the products of developing countries, he added. Neo-protectionist measures, disguised in the form of social and environmental standards, had worked counter to the goals of sustainable development. Globalization had further accentuated the problems of developing countries in the areas of trade and investment. Concerted measures were required to address those anomalies.

The representative of the Philippines said that poverty eradication was a precondition for sustainable development. Further, an equitable and fair trading system was essential for the attainment of sustainable development. Many basic actions had not yet been undertaken in the area of trade and sustainable development. In addition, many existing obstacles -- such as protectionist policies, non-tariff trade barriers, and foreign debt burdens -– had yet to be removed. That failure had shifted the burden of adjustment to the most vulnerable sectors of the developing countries. Those burdens must be shifted back to the countries most able to absorb them. The Philippines would not want to see environmental impact assessments used as conditionalities on developing countries.

Dialogue

The Chairman of the Commission, JUAN MAYR MALDONADO (Colombia) said that there was a problem of a lack of trust. The dialogue should focus on ways to restore that trust.

The representative of Germany said that globalization was one of the keys to reaching a higher development. At the same time, it was true that globalization had significant risks. There were losers and winners in globalization. One risk was that globalization could lead to a race to the bottom in environmental and social standards. Avoiding that risk did not mean opposing globalization. A coherent and ecologically sound strategy for globalization must be created.

Every market had its limitations, he said. International economic regimes had to be re-oriented to better reflect and integrate ecological and social concerns. That process must include government, civil society and the business sector. Industrialized countries must be more open to the concerns of developing countries. They must discuss the transfer of environmentally sound technology and the removal of trade-distorting subsidies.

The representative of Honduras said that trust must begin with the building of trust in each respective country. Then that trust must be brought to discussions in the international arena. Sustainable development was much more than environment. It involved economic and social aspects, as well. Poverty eradication must be addressed in the pursuit of sustainable development. Consistency and coordination were necessary between the sectors dealing with trade and sustainable development.

He said Honduras had established a dialogue between all sectors on sustainable development in a workshop involving various government ministers, which sought to establish trust in seeking answers to national challenges. Transparency was the new golden rule in sustainable development, he added. One of the main problems in both developed and developing countries was corruption.

A representative of Sweden said that international trade was an important factor for economic growth. Increased market access was vital. Attention must be paid to environmental, as well as the economic aspects of trade. The social dimension of trade liberalization was also relevant. Two other key factors were capacity-building and technology transfer. If developing countries were to participate in WTO negotiations, developed countries must be prepared to treat them as equals. “Were developed countries prepared to do that”? he asked. “We all know that we are not”. A new round of trade negotiations should be secured and should be held in a manner of solidarity.

A representative of Bolivia said that trust was a process that must be built step by step. One way to generate trust would be to work jointly on matters of concern to the WTO and the environmental treaties and bodies dealing with sustainable development. Protecting emerging markets should be a matter of concern to the WTO. Joint work on assessment must and would build trust.

A representative of Indonesia said that both domestic and external resources were of critical importance in stimulating economic growth and in tackling poverty and under-development. The international community must work towards overcoming the adverse impact of financial crises in international markets. Supportive measures, such as access to financial resources and transfer of technology, should be implemented. The international community should also double efforts to ensure market access to exports of developing countries, which would facilitate flows of both foreign direct investment and official development assistance. On trade and environment, the issue of greatest concern to developing countries should be adequately addressed. The principle of common but differentiated responsibility should also be fully respected. Unilateral action to restrict trade should be avoided and greater access should be promoted. On the role of foreign direct investment for sustainable development, the international community should ensure sustainable growth and promote capacity-building.

The representative of Japan said that the world was living in a state of muddled confusion and ambiguity, in which there was a delicate balance between multilateral environmental agreements and WTO agreements. Everyone knew that environmental agreements would impact trade and also knew that trade agreements would impact the environment. Trade liberalization might not always lead to an environmentally sound outcome. It was essential that each State aim to integrate environmental conservation into their national development plans. He agreed with the need to develop methodologies to assess the environmental impact of trade liberalization. He felt that Mr. Khor’s assessment of the Uruguay Rounds was too critical.

With regard to public financing, he said that all countries needed to establish environmental guidelines to determine which projects should be financed or invested in. Also, the work of the Organization for Economic Cooperation and Development (OECD) in establishing guidelines for environmental agreements deserved attention.

KLAUS TOPFER, Executive Director of the United Nations Environment Programme (UNEP), offered the following elements for making trade and environment policies mutually supportive: capacity-building on trade, environment and development; integrated assessment of trade-related policies; strengthening multilateral environmental agreements; and cooperation with both the United Nations Conference on Trade and Development (UNCTAD) and the WTO.

Guyana’s representative said that the issue of trade, and particularly, the impact of globalization on sustainable development, was one that had to be seen in the context of the focus of globalization. Globalization had to be seen either as a form of global cooperation, or as global competition. It was in that context that many developing countries were fearful. A key issue was the ability of countries to access needed technologies. Despite what was set out in Rio, many countries with the technology were treating that technology as commodities. As a result, they were inaccessible to developing countries, due to their high cost. By the time they could be accessed, those technologies had been replaced by newer ones.

Therefore, he continued, the direction of globalization needed to be redirected and put in the form of cooperation. When industrialized countries used protectionism, they were very often protecting the interests of large multinational corporations. When developing countries used protectionism, they were often protecting the interests of their people, particularly small farmers. The very opposite of sustainability might turn out to be globalization, unless the relevant issues were adequately addressed.

A representative of the Philippines said he looked at assessments in a positive way. Even at the national level in the Philippines, academia had been asked to conduct assessments because they were the most neutral organization. National assessments could be a way of building trust and it would be good to replicate them at the international level. The Philippines supported inclusion of economic growth in relation to poverty as part of the ten-year review of progress, and hoped that review at regional levels could also take place.

A representative of Finland said that trade and investments were essential engines of economic growth. Alone, they could not eradicate poverty or lead to a better environmental state. A framework of sustainable development was needed. A framework should be a starting point for decision-making. The building of trust began at home. Sustainability reviews could be a valuable tool by which one could identify “win-win” situations. Assessments would also identify cases in which a win-win situation was not possible. It was important for decision-makers to know where the trade-offs were. On international cooperation, the framework for sustainable development was also important.

The representative of Brazil said that it became difficult to discuss concepts at the level of the Commission. The Commission made binding decisions, and Brazil was worried about the consequences of those decisions. The meeting in Quito had been organized by a non-governmental organization, with the support of governments, and had provided a forum for dialogue. The Conference was a confidence-building initiative and civil society had an appropriate role to play. Non-governmental organizations could provide a forum for dialogue. The theory of multi-functionality was being used to justify subsidies. It was a question of concepts and the way concepts were used. It was difficult to have dialogue on such a concept. Initiatives, such as the Quito conference, would help to build trust by creating a neutral, non-binding atmosphere.

Canada’s representative said that while there had recently been efforts to reach out by institutions, the basic problem was the lack of coherence in national positions. What was being said here would not necessarily be heard in WTO meetings. “We have to get the coherence right at home.” He was encouraged by the work done by UNEP on trade and environment, particularly its work on analysing the precautionary principle. He wished that the WTO would undertake a more joint process with UNEP.

The representative of the United States said that it seemed that everyone agreed that trade, investment and environment policies should be mutually supportive. Economically successful trade and investment policies must be environmentally sound. To encourage that mutually supportive relationship, he had several suggestions. First, poverty must be the focus of deliberations. Also, the issues that most affected the poor, such as disease, labour exploitation and lack of security of tenure, deserved more focused attention.

Second, he endorsed the comments made about taking fully into account the environmental implications of decisions made. Third, practical, win-win practices must be used. It was necessary to eliminate tariffs on environmental goods and agricultural export subsidies. As for financial resources, he said that private capital and liberalized trade were no substitutes for official development assistance. At the same time, the absence of official development assistance was no excuse for the lack of implementation of clear national strategies.

India’s representative said that new and sophisticated barriers had been raised to prevent the access of goods from the developing countries to the markets of developed countries. In Seattle, the developing countries were pleading for free trade, while the developed countries held to their protectionist stance. Confidence could be built only if the developed world moved faster towards dismantling tariff and non-tariff barriers.

The representative of New Zealand said that trade and environmental policies must be mutually supportive. Trade and economic endeavours should protect and preserve their own environment. The removal of trade distorting subsidies provided an excellent example of how trade and environment policies could be mutually supportive.

The representative of Ecuador said that assessments were only a tool to build better decisions. Their good or bad use depended on who used that tool and how. On trust, the Seattle demonstrations were about poverty. "Who could have trust if they were confronting circumstances that were unfair?"

A representative of the United Nations Conference on Trade and Development (UNCTAD) said that development had been included in the UNCTAD X plan of action. Indonesia had raised the important issue of protecting traditional knowledge. UNCTAD had organized an expert meeting on that subject.

The representative of Egypt said that confidence-building was presently the major challenge and the Commission should put forward concrete recommendations on how that could be accomplished. Concerning the issue of environmental impact assessments, he said that Agenda 21 was an agreement reached by all countries related to sustainable development. The Kyoto meeting saw the presentation of a number of methodologies to assess various policies. While there were many options available, most of them were in their infancy stage. A good way to build trust was not to link environmental assessment to multilateral trade negotiations. Every country should choose the methodology that best suited them. The only thing left for the international community to do was to draw up a menu of the available methodologies.

A representative of the International Chamber of Commerce said that from both the institutional and policy standpoint, the current global trading regime needed to build greater trust. Governments must work to develop policies that were consistent with the WTO. Trade should be liberalized further and the process begun under the Uruguay Round to reduce and eliminate tariffs accelerated. Within the trade liberalization aspect of sustainable agriculture and rural development, he supported the work of the Agri-business Network as presented during the multi-stakeholder segment. Dialogue, by itself, was not enough and further action was necessary to achieve sustainable agriculture.

A representative of the Women’s Caucus said that trade liberalization was not gender-neutral. While some women gained from the opening of trade, the majority of them were adversely affected by unequal power relations created at national, regional and international levels. Trade policies should ensure gender equality, equity and people-centred sustainable development. She recommended a comprehensive gender, social and environmental assessment of the implementation of the Uruguay Round agreements at the local, national and regional levels before undertaking a new round.

Current financial flows, both private and public, were the engine of destructive globalization, she continued. However, the quality of financial flows must be examined in terms of the kind of development they were actually supporting. Investment liberalization should be scrutinized under the gender, social and environmental assessment proposed. To achieve sustainable outcomes, women needed to be fully and equally involved in all areas of development. That also applied to all preparations for the 2002 review.

A representative of the Indigenous People's Caucus said that the problems they faced because of trade liberalization were immense. Control over their territory had been undermined by liberalization of investments. The liberalization of trade had also destroyed traditional livelihoods. Privatization had led to the privatization of water and indigenous knowledge. Commercialization had also been a big problem. The indigenous peoples agreed with the proposals presented earlier to exempt small farmers and review or remove the TRIPS agreement. The Commission should integrate the results of the dialogue sector into the proposals presented on the issue of trade liberalization.

A representative of the International Centre for Sustainable Trade and Development said that the different modus operandi with which the meeting had been conducted led them to think that 2002 would be led in same way. The Centre was created for the formulation of trade policy that would keep sustainable development as the centre of its vision. Great efforts had been made to generate an understanding of opinions. Some of the points made were essential for the generation of trust, including the exchange of information and capacity generation.

Mr. KHOR said that the issues of confidence-building and trust was critical. Many delegations expressed fear that what had been discussed could be used in another forum that was legally binding. On the issue of assessments, some felt that assessments might facilitate unfavourable actions. Many were concerned about how assessments would be conducted. It was clear that they could not move forward unless what was unfair and unbalanced was corrected. It was also clear that the current agreements must be assessed and rectified after a review the existing rules. A United Nations agency had assessed the Uruguay Round and found that it had indeed increased poverty worldwide. Because of that assessment, the agency had been criticized by a developed country. Coherence began at home. Trust should start at the Commission.

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