Statement of Nina Barmeier,
Director General of WWF-International

Testimony Before the Committee on Finance 
of the House Committee on Ways and Means

Hearing on the Importance of continued US
Membership in the World Trade Organization and
the Protection of the Environment

February 23, 2000


Nina Barmeier
Master Candidate in Commercial Diplomacy
Monterey Institute of International Studies
Monterey, California
nina. barmeier@miis. edu
  

Statement of Nina Barmeier,
Director General ofWWF-International
Testimony Before the Committee on Finance
of the House Committee on Ways and Means
  
  
Hearing on the Importance of continued US
Membership in the World Trade Organization and
the Protection of the Environment

February 23, 2000

Mr. Chairmen and distinguished members of the Finance Committee, 

My name is Nina Barmeier, I am the Director General of the World Wide Fund for Nature, formerly known as the World Wildlife Fund International. WWF is the world's largest independent conservation organization with 4.7 million supporters and National Organizations on five continents. WWF's goal is to stop, and eventually reverse, the accelerating degradation of our planet's natural environment, and to help build an ecologically and economically sustainable future.

I appreciate the opportunity to testify today on the importance of continued US membership in the WTO and the protection of the environment. Trade and the degradation of the environment seem to operate hand in hand. Over the past quarter of a century, our planet has lost some 30 per cent of its natural wealth. During the same period, world trade has grown exponentially. But without the natural wealthy growth in trade and economical well being would not be possible. If we are to protect nature and ensure the living standards of future generations, it is vital we ensure that environmental protection and sustainable development feature at the center of trade agreements.

I would like to focus my remarks on three issues: 

1. the Importance of the WTO for a sustainable future; 

2. future tasks for the WTO; and 

3. the importance of the US in promoting sustainable development in theWTO.

The Importance of the WTO for a Sustainable Future
  
Trade policy and environmental policy are both needed to assure long term economic growth. The WWF's objective in the context of the WTO is to make trade ecologically sustainable. We are convinced that multilateral trade rules, standards and regulations can be an effective tool for sustainable development.

The WTO, especially after the Seattle ministerial, has the potential to become a forum in which the discussion concerning the environment is vital and dynamic, involving environmentalists, economists, and countries from all stages of economic development. The WWF wants to embrace this opportunity to market the ideal of sustainable development.

The WTO has the potential to become the missing link between the idealistic environmental community represented by citizens and NGOs, IGOs and Multilateral Environmental Agreements on the one hand and the market driven business community on the other hand. Multilateral Environmental Agreements have never enjoyed the large and diverse audience of the WTO rules and regulations. They also lack the enforcement mechanism and international recognition.

Trade liberalization, in general, allows for more efficient use of world resources, thus reducing the exploitation of resources. To ensure the sustainable use of natural resources, especially in the fisheries and agricultural sector, further trade liberalization is vital. Let me address the impact of governmental subsidies in these two sectors.

A recent WWF report found that global fishing capacity might be as much as two and half times what is needed to bring in sustainable catches. Government subsidies are estimated by the World Bank to account for 29% of the revenues of the commercial fishing industry worldwide. The subsidies that contribute to overfishing do enormous damage to the health of our international economy and to the local economies of coastal communities on every continent. The reduction and reform of fishing subsidies make such obvious good sense that they should enjoy support from all but the most entrenched special interests. The explicit objective must be the agreement of new and binding rules, which further sustainable management of fisheries worldwide. Equally important is that negotiations on fishing subsidies take full account of the needs of developing countries, of small scale fishing communities, and of the need for a proper transition to sustainable fishing practices. However, the WWF does not oppose government support per se. Government involvement can be necessary to help achieve fisheries and fishing industries that are healthy
and sustainably managed. 

The same applies to agriculture. Subsidies given by wealthy governments drive global prices for agricultural goods down and increase pressure on farmers without access to governmental aid. The result is increased use of fertilizer, pesticides and other unsustainable agricultural practices with tremendous cost to the environment. And not only to the environment of specific countries. Soil erosion and salinisation, deforestation and desertification are effecting the globe as a whole changing climate patterns and depleting important carbon s.inks. The costs of unsustainable agriculture and forestry will have to be
carried by all of us. However, even if the agricultural sector would not be subsidized anymore, it wouldn't, by itself, assure the environmentally sound use of fertilizers, pesticides, and land subject to erosion and desertification. As long as environmental policies of governments or binding international agreements are not in place the degradation of the environment will continue.

Future Tasks of the WTO

There is a new appreciation that trade should not just be regarded as something that boosts short-term cash flows, but that it should de directed to serve long-term human needs. The WTO has to take concrete steps to initiate environmental reform to address the concerns of the community. 

An accurate value should be placed on the resource used and the environmental degradation associated with its exploitation or production. To advance trade in tandem with environmental growth, the prices at which goods are exported and imported should incorporate any social and environmental costs. This could be achieved by taxation or tradable pollution permits. The recent cyanide spill in the Tisza River showed again how important it is to embrace costs to the environment in the balance of payments. All gold mined at Baia Mare would not be enough to pay for the cleanup, compensations for fisheries and ecological damage.

Core environmental standards have to be introduced in conjunction with internationally recognized voluntary standards and regulation subject to labeling. If core environmental standards would be carefully introduced, taking into account the special position of the developing countries, we believe there would be no opposition from WTO members. A global network of voluntary standards distinguished by internationally and reliable labels could not be perceived as green protectionism by the developing countries either. Environmental and social production costs of a good would then be subject to consumer
choice and provide incentives for importers of goods to meet higher standards than those required by the core environmental standards. 

Let me now address the WTO dispute settlement mechanism. Sea turtles, dolphins, and GMOs have become a focal point in the environmental dispute and major players in the public arena. To receivepublic support, the dispute settlement mechanism should not overturn consumer choice and concern nor should it rule against environmental practices. The trade-environment imbalance needs to be corrected by the inclusion of environmental considerations. Experts on trade and the environment should be present in the panel hearings and the secretariats of Multilateral Environmental Agreements should be consulted to ensure that the panel does not overrule these agreements.

The WWF also sees the adoption of the precautionary principle as crucial. Whatever technology humans have invented be it DDT as an efficient way to fight pests, nuclear energy to have a clean source of energy, CFCs as a non-reactive safe cooling device, and many others, we have greatly underestimated the costs. GMOs have recently been added to the list and will, according to this not-so-golden rule, most likely have a serious and unexpected downside. Not even the most thorough scientific testing will give us the guarantee of safety. Please remember the lengthy testing of CFCs. They where so safe and stable they only broke down under conditions so extreme we did not consider. The WWF is not an advocate of banning GMOs in general. GMOs have a great potential for the protection of the environment and human health. But proof of danger of certain products or processes is often hard to establish because the tools available to scientists to assess possible dangers are insufficient. The principle of precaution should fill in the uncertainty with new technologies and products. 

Humans, within certain limits, are able to choose the direction of their future development and with it the development of the ecosystem dependant on us. We should take advantage of that and step out of the vicious cycle. The WTO could be the vehicle to do that. And the US should be the driving force. 

The Importance of the US Membership in the WTO

Finally, I would like to turn to the importance of the US support and leadership in achieving the goal of sustainable development in the WTO. In the US a higher level of political priority has been given to trade and environment than we have seen before and subsequently there is a large potential for positive publicity, especially after Seattle.

We appreciate the Administration's call to improve public distribution of WTO documents, enhance public participation in WTO dispute settlement proceedings, and encourage reduction of subsidies that distort trade and encourage overexploitation. Sound environmental policy is the basis for long-term growth. Without the natural wealth confined in resources such as clean groundwater, divers ecosystems and clean air, it will not be possible to sustain our standard of life.

The economic value of our natural wealth is only lately being fully understood. Recent developments in the exploitation of biological resources to create new pharmaceutical products and agricultural crops express the value of the genetical diversity. Forest, once appreciated in terms of wood supply, has not only been discovered for the biotechnology, pharmaceutical and agricultural industries but also as valuable carbon sinks in times of climate change and envisaging possible tradable pollution permits. 

The flourishing green market of organic products and ecologically friendly production processes will most likely continue its growth worldwide. Internationally recognized labeling standards would open new export markets to the US.

I was thinking about asking you the "what if the US would withdraw" question in this hearing and I could have drawn a scenario of a bunch of bilateral trade agreements, deviating product standards worldwide, high economic costs and large scale degradation of the environment in certain countries with global consequences. However, I am not going to ask you that question because I came to realize that the key questions is how we are going to address the concerns of different interest groups and continue to reap the benefits of free trade. 

Speaking on behalf of the environmental community, although not the most radical one, the WWF envisages the great opportunities of the WTO and endorses US membership. A healthy environment is a prerequisite for well being and environmental factors will sooner or later be included into the multilateral trade system. The US, usually at the forefront of new markets and developments, should not hesitate to be the leading nation this time. We need the US to support the idea of sustainable development and to introduce it as soon as possible into the WTO framework.

Mr. Chairman, ladies and gentlemen, thank you for the opportunity to share the WWF's views on the importance of the US membership in the World Trade Organization and the protection of the environment