Trade, Globalization and Trade, Globalization and Sustainable Development:Sustainable Development:Where are we Post-WSSD?Where are we Post-WSSD?

H.E. Dr. John W. Ashe H.E. Dr. John W. Ashe WTO Symposium on Trade and WTO Symposium on Trade and

Sustainable DevelopmentSustainable DevelopmentGeneva, 10-11 October 2005Geneva, 10-11 October 2005

• Leading Question•Overview of Major trends •Changing nature of trade barriers

NTBsDomestic regulations

•Trade and MEAs•Trade in Environmental Goods & Services•Concluding Remarks

Outline

What are the major multilateral processes shaping the interactions among trade, globalization and sustainable development?

•WTO-Doha•Monterrey Consensus•2005 World Summit•CSD•Multilateral environmental

agreements

WSSD and Trade = JPOIWSSD and Trade = JPOI• Call for timely conclusion of Doha Call for timely conclusion of Doha

Development Round, specifically:Development Round, specifically:• Improved market access for developing countries;Improved market access for developing countries;• Reduction with view to phasing out agriculture export Reduction with view to phasing out agriculture export

subsidies, trade-distorting domestic support;subsidies, trade-distorting domestic support;

• Support for trade-related technical Support for trade-related technical assistance and capacity-building;assistance and capacity-building;

• Duty-, quota-free access to exports of Duty-, quota-free access to exports of LDCs;LDCs;

• Building capacity to diversify exports;Building capacity to diversify exports;

Trade and Sustainable Trade and Sustainable Development – the JPOI linksDevelopment – the JPOI links• Incentives to adopt efficient, clean Incentives to adopt efficient, clean

technology;technology;• Increased availability, lower cost of clean Increased availability, lower cost of clean

technology;technology;• Technology transfer through export-Technology transfer through export-

oriented FDI;oriented FDI;• Information sharing with small- and Information sharing with small- and

medium enterprises;medium enterprises;

Structure of world trade and the position of developing countries

•Developing countries account for a growing share of world trade, including for manufactures and services;

Non-traditional export opportunities for developing countries

•Moving up value-chain does not always mean moving from primary commodities to manufactures

natural-resource based industries

services

Low-income countries still Low-income countries still face obstacles to world face obstacles to world trade integrationtrade integration

•Tariff escalation remains a problem •Other trading costs weigh heavily •Weak supply side response•Even as tariff rates fall, non-tariff

barriers remain and even increase

Source: UN-ECLAC, Agricultural Development Unit, based on WITS/TRAINS data (World Integrated Solution, Trade Analysis Information System).

Latin American agricultural exports: proportion of peak tariffs in total tariff lines, by stage of commodity processing (%)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

China Japan Mexico EU15 CAN UnitedStates

Mercosur Canada CACM

Unprocessed Semi-finished Finished

Non-tariff barriers (NTBs)Non-tariff barriers (NTBs)• Non-tariff barriers (NTBs) are an Non-tariff barriers (NTBs) are an

increasing source of concern especially increasing source of concern especially for the world’s poorer nations;for the world’s poorer nations;

CCurrently affect up to 40% of the urrently affect up to 40% of the exports of the world's least exports of the world's least developed countries;developed countries;

Wide ranging (direct and indirect);Wide ranging (direct and indirect);

0

10

20

30

40

50

60

1994 2004

TechnicalQuantityTariffPrice Contr

Evolution of NTB use by Evolution of NTB use by categorycategory

Source: UNCTAD TRAINS database

The trend in the evolution of The trend in the evolution of NTBs creates a challenge for NTBs creates a challenge for JPOIJPOI• Thwarts the role of trade in achieving Thwarts the role of trade in achieving

sustainable development, by, sustainable development, by, inter aliainter alia•Affecting higher value aquaculture exports, Affecting higher value aquaculture exports,

making moving up value chain more difficult; making moving up value chain more difficult; •Risk of market fragmentation;Risk of market fragmentation;•Measures often exceed multilaterally Measures often exceed multilaterally

accepted norms;accepted norms;•Challenge for small economies and Challenge for small economies and

community-based entrepreneurial capacity;community-based entrepreneurial capacity;

Domestic environmental Domestic environmental legislation and barriers to tradelegislation and barriers to trade• National legislation and regulatory National legislation and regulatory

regimes can act as barriers to trade-regimes can act as barriers to trade-related sustainable growth.related sustainable growth.

•ExamplesExamples:: BiofuelsBiofuels are environmentally preferable products are environmentally preferable products

but effected by protective trade rules;but effected by protective trade rules; Approval of Approval of biotech productsbiotech products is long and is long and

complex in key markets;complex in key markets; Foreign Foreign organic production systemsorganic production systems are not are not

recognized key markets, requiring dual recognized key markets, requiring dual certification.certification.

Trade and Multilateral Trade and Multilateral Environmental AgreementsEnvironmental Agreements• Proliferation of trade agreements and Proliferation of trade agreements and

environmental agreements;environmental agreements;• Agenda 21 of the Rio Conference states that Agenda 21 of the Rio Conference states that

measures should be taken to “avoid unilateral measures should be taken to “avoid unilateral action to deal with environmental challenges action to deal with environmental challenges outside the jurisdiction of the importing country”;outside the jurisdiction of the importing country”;

• WTO Members have agreed to clarify the legal WTO Members have agreed to clarify the legal relationship between WTO rules and MEAs;relationship between WTO rules and MEAs;

• No disputes have thus far come to the WTO No disputes have thus far come to the WTO regarding the trade provisions contained in an regarding the trade provisions contained in an MEA;MEA;

• Of the approximately 200 MEAs currently in force, Of the approximately 200 MEAs currently in force, only about 20 contain trade provisions.only about 20 contain trade provisions.

Trade in Environmental goods Trade in Environmental goods and servicesand services•Opportunity for fast trackingOpportunity for fast tracking

Trade in environmental Goods Trade in environmental Goods and Services is sizable and and Services is sizable and growing fast;growing fast;

Elimination of tariff and non-Elimination of tariff and non-tariff barriers to environmental tariff barriers to environmental goods and services;goods and services;

0

100

200

300

400

500

600

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Year

Inde

x (1

990=

100)

OECD Env. Goods Exports

APEC Env. Goods Exports

Total Merchandize Exports

Growth of environmental goods Growth of environmental goods trade, 1990-2002trade, 1990-2002

Source: Bora and Teh (2004). Tariffs and Trade in Environmental Goods. WORKSHOP ON ENVIRONMENTAL GOODS, Geneva, 11 October 2004. WTO Secretariat.

Growth Factors for Growth Factors for environmental goods and environmental goods and servicesservices

• Domestic regulation and public pressureDomestic regulation and public pressure• Customer requirements: global supply Customer requirements: global supply

chainschains• EU enlargement; regional trade EU enlargement; regional trade

agreementsagreements• Infrastructure developmentInfrastructure development• MEAs and associated financing MEAs and associated financing

mechanismsmechanisms

Measures to address Measures to address market access concernsmarket access concerns• Enable developing countries to be Enable developing countries to be

more involved in standard settingmore involved in standard setting• Enhance the capacity of developing Enhance the capacity of developing

countries to deal with NTBscountries to deal with NTBs• Formulate a balanced approach Formulate a balanced approach

towards disciplining arbitrary and towards disciplining arbitrary and abusive use of such barriersabusive use of such barriers

Measures to foster int’l Measures to foster int’l diffusion of environmental diffusion of environmental goods and services goods and services • Public financing, risk sharing for Public financing, risk sharing for

export of EGS – consistent with export of EGS – consistent with international trade disciplines, e.g.,international trade disciplines, e.g.,

•waste-water treatment technologywaste-water treatment technology•flue gas captureflue gas capture•methane capture from landfills for power methane capture from landfills for power

genenerationgeneneration•waste incineration, including for power waste incineration, including for power

generationgeneration

ConclusionConclusion• Firm groundworkFirm groundwork in major multilateral in major multilateral

processes;processes;• Progress on Progress on implementationimplementation is vital; is vital;• Successful Successful completion of Dohacompletion of Doha would mean would mean

greater progress in sustainable development greater progress in sustainable development objectives:objectives:

• Reversal of the trend in escalating NTBsReversal of the trend in escalating NTBs• Addressing market-access concerns for developing countriesAddressing market-access concerns for developing countries

• More can be achieved by focusing on areas of More can be achieved by focusing on areas of opportunity for opportunity for fast-tracking:fast-tracking:

• Trade in Environmental Goods and ServicesTrade in Environmental Goods and Services• Cleaner production technologyCleaner production technology