International Trade and Environment - Environmental and Trade Conflicts - Stakeholders and Interests - Diplomacy - Existing Solutions - Proposed Solution

1. EU TRADE perspectives UNEP negotiation Developping
stakeholdersBUSINESS REALISM WTO governments countres
Developed multilateral
China Countries
VALUESGLOBAL COMPACT
MNEs
education NAFTA SME
DIPLOMACYawareness ECONOMY NGOs GATT
AGREEMENT
CIVIL SOCIETY KYOTO SUSTAINABILTY ineffectiveness
Environment Doha PROFITS WEO COOPERATION
green WETO
USA
ENVIRONMENT
AND
INTERNATIONAL TRADE
Diplomacy – IMA 2
12.12.2013

2. Environment and International Trade
Case Overview
Problems related to Environment and International Trade
- What impact do trade have on the environment?
- Responsible?
- Should trade rules be changed to meet the Environmental standards?
3 perspectives
 Environmentalist
 Economist
 Business Community
12.12.2013
Trade and Environmental Conflicts
 NAFTA
 EC
 GATT
Multilateral Environmental
Agreements
 The Basel convention
 CITES
 Tropical timber
(ITTA/ITTO)
 The Montreal Protocol
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
2

3. Environment and International Trade
Evironmental and Trade Conflicts
Organisation
Date of Establishment
Who was involved
Conflict/discussion
Did it work out? (problems)
NAFTA
Official negotiation 1990,
Approved agreement in 1993
Governments
& Environmentalists from all
three countries
(U.S, Canada & Mexico)
Free trade agreement among US,
Canada & Mexico
• Objections about maquiladora
factories
• Increased trade & economic growth=
more pollution
• lower environmental and health
standards in U.S & Canada
• Jobs lost in US
•
Several nations in EC
•
EC as the authority to set the same
directives to every nation
Economic reason which led to a
Harmonization of member-country
standards (recycle law Germany)
• Solutions of standardization disrupted
trade, made it ineffective or raised the
trade barriers (German recycling law =no
effect)
• Over 200 directives and regulations (2000)
• Act as a single neglecting unit of its
members
US MMPA Regulations to ban import of
tuna caught with fishing methods fatal
to dolphins.
MMPA was incompatible with GATT precepts
and the “global common of the world” was
beyond control of one single nation
Mexico as the exporter to US, opposed
the agreement and said they was
discriminated by the rules
• US could not prohibit imports of tuna
products from Mexico because it did not
match the US regulations .
• GATT  U.S. could not use domestic
legislation to protect dolphins outside its
own territorial limits.
• Eco-colonialism
EC Directorates
for Environment
and
Trade
From mid 1980s
GATT
Circulated from 1988, never adopted
12.12.2013
•
GATT, MMPA, Mexico and US
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
•
The right of every country to establish its
own standard as long as it sought
legitimate environmental objectives
First agreement with connection of trade
and development. NAAEC (North
American Agreement on Environmental
Cooperation)
3

4. Environment and International Trade
Problem(s) at Stake
 Ineffectiveness and non
acceptance of the governmental
approach to cohere environment
and trade.
 Environmental Standards as
Discrimination against Developing
Countries
DILEMMA OF VALUES IN TERMS
OF ENVIRONMENT AND
INTERNATIONAL TRADE
 Environmental Goals as
Legitimation for Suspending the
Usual Trade Rules
12.12.2013
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
4

5. Environment and International Trade
Stakeholders & Interests
States & Government
• Ruling their country & focusing on their country’s
interests
• Enacting laws which could either support the
environment, international trade or combine both
Environmentalists
• Protecting the natural environment
• Economic development leads to more intensive use of
global resources and greater volume of pollutants
• Wish a international cooperation
Economists
• Support free trade
• Some reject the bad influence of international trade on
the environment (i.e. indirect effect of trade could be
environmental beneficial)
Business Community
• Conflicting interests
•
•
12.12.2013
free trade enables growth & increases the # of
competitors
implementing environmental rules cause costs, but
prevention costs are often lower than remedial
measures
NGOs
• Perspective of NGOs differ. But mainly NGOs are
representing the interests of a certain group of people
(i.e. environmentalists)
• International Chamber of Commerce: open cross-border
trade and investment and global economic integration
for sustainable growth; job creation
• WWF: anti-growth policies; CITES; Creating awareness,
finding members to sign & support
Institutions as WTO
• Established at the closure of the Uruguay Round (GATT
negotiation 1994) to consider whether environmental
provisions (i.e. green taxes) undermined free trade
principles. It deals with the global rules of trade between
nations.
• Main function is to ensure that trade flows as smoothly,
predictably and freely as possible.
• Fundamental goals : sustainable development and
protection and preservation of the environment
Civil society
• Consumer is driven to fulfil their needs and wants
• Growing awareness on environment issues
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
5

6. Environment and International Trade
Diplomatic Processes
 How did the diplomatic processes look like?
 Hard power failed, soft power?
 Hard power: i.e. US banned imports of tuna 1988
 Soft power:
 i.e. GATT installed WTO (diplomatic approach)
 Inefficient i.e. DOHA round
 Negotiations
 WTO
 Treaties
12.12.2013
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
6

7. Environment and International Trade
Existing Solutions
UNEP
UN Global
Compact
Business and
Environment
Initiatives
Voice of
the Environment
•
Non-profit organization (Established
2006)
•
UNEP, established in 1972 within the
United Nations system
•
Voluntary corporate responsibility
initiative in the world
•
global environmental authority
•
UNEP acts as a catalyst, advocate,
educator and facilitator to promote the
wise use and sustainable development
of the global environment.
Purpose:
•
Public-private collaboration to find
long-term solutions concerning areas
of human rights, labour standards, the
environment and anti-corruption
Environmental principles:
•
Business should support a
precautionary approach to
environmental challenges;
•
Undertake initiatives to promote
greater environmental responsibility,
and;
•
•
Assessing global, regional and national
environmental conditions and trends
12.12.2013
ESG stands for Environmental, Social
and Governance. There is growing
evidence that suggests that ESG
factors, when integrated into
investment analysis and decision
making, may offer investors potential
long-term performance advantages.
ESG has become shorthand for
investment methodologies that
embrace ESG or sustainability factors
as a means of helping to identify
companies with superior business
models.
Round of Trade Negotiations 2001-2013
Purpose:
•
A more open market for environmental
goods and services
•
More coherence between trade and
environment rules
•
Better cooperation between the WTO and
MEAs
Committee on Trade and Environment (CTE)
•
Developing international and national
environmental instruments
EITI:
•
1995
•
Strengthening institutions for the wise
management of the environment
•
•
identifying the relationship between trade
measures and environmental measures in
order to promote sustainable development,
and making appropriate recommendations
on whether any modifications of the
provisions of the multilateral trading
system
•
 objective: sustainable development
Encourage the development and
diffusion of environmentally friendly
technologies
Not compulsory, not much
influence on international
level
•
UNEP work encompasses:
•
ESG:
Doha Round
Tool to negotiate, not useful
for business issues, on
national level
The Extractive Industries Transparency
Initiative (EITI) is a global coalition of
governments, companies and civil
society working together to improve
openness and accountable
management of revenues from natural
resources
Good starting point, need to
go deeper (expand)
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
Non-discrimination dilemma,
only framework setting
7

8. Environment and International Trade
Various Problem Sets
• Developed countries have
pressure from environmental
interest groups to reconcile
what they perceived as
"incompatibilities" between
trade and environmental
policies
 Consequence: no more
market access opportunities for
developing countries
12.12.2013
• Proposals for the creation of a
United Nations Environmental
Organization (UNEO) have come
as some question the efficacy of
the current United Nations
Environmental Program (UNEP)
at dealing with the scope of
global environmental issues.
• Created to act as an anchor
institution in the system of Global
Environmental Governance
(GEG)
 failed to meet those demands
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
8

9. Environment and International Trade
Our Proposed Solution(s)
WTO
WTO
Civil
Society
Sustainable development and
protection and preservation of the
environment are fundamental goals
of the WTO  implemented
Marrakesh Agreement (1995)
Increase awareness among civil
societies
Civil
Society
Business
 Strengthen NGOs‘ position in the
society and media
 Implement “environment“ along
the course of people’s education
No single solution possible
BUT starting point for further improvement
Business
Increase commitment towards
sustainability among the MNE and
SME because companies are
important actors
 Offer benefits
12.12.2013
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine
JUNGBAUER, Kerstin KNOBLOCH
9

10. Environment and International Trade
Virtuous Circle
WTO 2.0 / WETO
GET ALL STAKEHOLDERS TO
A ROUNDTABLE
REPRESENTATIVES
OF CIVIL SOCIETY
Business
Civil Society
WTO
WTO 2.0
/ WETO
NGO
12.12.2013
Government
WTO 2.0 /
WETO
LESS POSSIBILITY
MULTILATERAL
DRAFTS FOR AGREEMENTS TO REJECT AGREEMENTS
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
10

11. Environment and International Trade
Our Proposed Solution(s)
• Creation of an International evironmental agency who is taking the lead to set an
international framework for the environmental issues concerning international trade
agreements
• (international level)
•  Try to reduce the overlapping of the agreements, values
•  increasing awareness of environmental issues among
the MNE and SME, civil societies
• Most important actors will be the companies
• But also on national level
A World Environmental Trade Organization could serve as an umbrella for the implementation of
existing multinational environmental agreements, as well as promoting further agreements consistent
with global sustainable development strategies.
12.12.2013
Julie ANTOINE, Karin GRÖNVALL, Margareta HEIDT, Sabine JUNGBAUER, Kerstin KNOBLOCH
11

12. EU TRADE perspectives UNEP negotiation Developping
stakeholdersBUSINESS REALISM WTO governments countres
Developed multilateral
GLOBAL COMPACT
China Countries
MNEs VALUES education NAFTA SME
DIPLOMACYawareness ECONOMY NGOs GATT
AGREEMENT
CIVIL SOCIETY KYOTO SUSTAINABILTY ineffectiveness
Environment Doha PROFITS WEO COOPERATION
green WETO
USA
THANK YOU
FOR
YOUR ATTENTION
Diplomacy – IMA 2
12.12.2013