Maka Gabelia
Monterey Institute of International Studies
Commercial Diplomacy
Class of 2001

  

Congressional Testimony on Continued U.S. 
Membership in the WTO

  
Contact Information
Maka Gabelia
244 Van Buren Street Apt.B
Monterey, CA 93940
(831)372-4895
mgabelia@cheerful .corn

Statement of Maka Gabelia
President and Chief Executive Officer
National Wildlife Federation
Testimony before the Senate Finance Committee
Hearing on the Continued United States Membership in the WTO

I am Maka Gabelia, President and CEO of the National Wildlife Federation. Our
members are conservation advocates who share a commitment to United States leadership in building a global economy that protects the environment while raising living standards for all people throughout the world.

Our mission is to influence, encourage and assist the society to conserve the integrity
and diversity of nature and to ensure that any use of natural resources is equitable and
ecologically sustainable.

We have been involved with international trade since the beginning of this decade,
starting with our support for the North American Free Trade Agreement and its environmental side agreements that were the recognition of an environmental agenda in an international trade agreement.

On behalf of the National Wildlife Federation I urge the U.S. to remain a member of the WTO to help promote sustainable development and increase sovereignty of national rules protecting the environment.

Economic liberalization has sparked economic growth in many countries around the
world, helped create job and investment opportunities, and increased the incomes of many
people. The WTO has been an integral player in this accomplishment. We want this
international trade organization to succeed in order to monitor and ensure the process of further liberalization of global trade. But we also take a deep interest in increasing the respect of the multilateral trading system for the environment.

The United States has been the main advocate for opening markets to freer trade and financial flows since WW II. We volunteered to play the lead role in helping Europe rebuild. After the war - while we did this in part to secure markets for our own goods, we also knew that free trade would greatly speed Europe's economic recovery.

The United States still supports trade liberalization, but the public has become very critical of the process. The public's definition of a good quality of life has changed. Today, people in the United States and other developed countries recognize the importance of maintaining a healthy environment. People demand conservation of natural resources and protection of good human health.

The United States believes in sustainable development, and it has an opportunity to steer the multilateral trade system in this direction through the WTO. Thus, the United States should maintain its leading role in this institution. If the United States withdraws from the WTO, it will undermine the liberalization of the multilateral trading system. Instead, we must secure our membership in this institution to influence the trade policies and environmental conservation practices of other members of the WTO. As the largest and most open economy in the world, the United States is in the best position to call for such a commitment. Indeed, the WTO Secretariat, in a recent report on U.S. trade policies, noted the critical role that the United States plays in serving as a positive modej for other WTO member countries by maintaining open markets.

The WTO provides the opportunity for substantial gains from trade to its members by
their adherence to fundamental principles, grounded in economic sense, of non-discrimination, stability, predictability, and transparency. However, the world is experiencing accelerating environmental degradation and there are substantial economic costs associated with this degradation. The problems range from an alarming loss of productive lands to the highest rates of species extinction in recorded history. Under the current WTO system, when conflictsbetween trade and environment arise, trade concerns are often given priority over environmental concerns.

In our view, the objective of international trade rules should be to promote a stable
environment for trade and investment, and greater consumer choice and value, while
maintaining the ability of national governments to regulate in the public interest.

There are already many WTO rules that could benefit the environment. For example, in the preamble of the 1994 agreement establishing the WTO, Member countries agreed to "protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development." Through the WTO membership, the U.S. could build balanced policies and guidelines for making sustainable development and fully complementary trade policies on a
global level because in theory there is room for this in the WTO.

The U.S. seeks international trade rules that allow countries to set high standards for protection of health, safety and the environment. To achieve this goal, the U.S. must continue its membership in the WTO. This institution recognizes the sovereign rights of members to determine the level of protection that their standards are designed to achieve. Agreement on Sanitary and Phytosanitary Measures (SPS) acknowledge the right of countries to maintain pre-approval requirements. For instance, as a matter of U.S. law and practice, pesticides must receive approval before they go on the market. For this purpose, the producers ought to provide sufficient data to enable regulators to determine that there are no unreasonable adverse effects on public health or the environment. The United States must take the initiative to make the WTO take the precautionary principle into consideration. However, we would like to confirm that the National Wildlife Federation does not support measures that hide protectionism behind environmental safeguards. Through membership in the WTO we can resist protectionism and protect our gains from trade liberalization.

Through the WTO, the U.S. can ensure that individuals and nations are able to consider the 
environmental effects of how products are produced. In this process, we can rely on the rules of the agreement on Technical Barriers to Trade (TBT), which covers ecolabels based on process and production methods (PPMs) rather than product characteristics. Nothing in the agreement says that PPMs are not allowed.

Government subsidization discourages producers from considering the long-term environmental implications of the use of natural resources. For example, some governments still subsidize the fishing industry. As a result, unsustainable fishing practices worldwide have led to the depletion of many fish stocks. According to the United Nations Food and Agriculture Organization, 69% of the world's fisheries are either fully exploited, overexploited, depleted or slowly recovering from the effects of over fishing.

The U.S. has the power to eliminate the use of subsidies through the WTO because this
institution discourages the use of subsidies in trade. We can use the agreement on Subsidies
and Countervailing Measures in order to dispute a Member's use of subsidies at the Dispute Settlement system, which is a part of the WTO. By reducing the environmentally damaging subsidies, producers will not harvest products at rates, which may not be sustainable.

The WTO can, within its mandate, be part of the solution to the world's pressing
environmental problems. It can help eliminate restrictions on trade in environmental goods and services. This "win-win" potential for free markets will also foster technology transfer, and thus provide developing countries with ready access to the latest approaches to pollution prevention.

MULTILATERAL ENVIRONMENTAL AGREEMENTS (MEAs)

WTO members are committed to multilateralism. MEAs are representative of efforts of
the international community to pursue shared goals. The relationship between the WTO and
MEAs is a partnership of equals. Through cooperation in the WTO, we can address challengesof common interest. The United States should use the WTO membership to protect enforcement of MEAs.

WTO rules are flexible. Rules which are embedded in Article XX of the GATT allow  exemptions from trade obligations for specified environmental and health purposes. One relevant provision is Article XX (b), which tolerates exceptions to WTO rules for measures "necessary to protect human, animal or plant life or health." The second relevant measure is article XX (g), which deals with the "conservation of exhaustible natural resources if such measures are made in conjunction with restrictions on domestic production or consumption."

The National Wildlife Federation strongly believes that MEAs encourage transparency
and nondiscrimination. They prevent unilateral measures that may bring tensions to trade.
MEAs provide certainty for businesses and discourage "free-riders" from attaining competitive advantages over law-abiding competitors.

ENVIRONMENTALLY RESPONSIBLE TRADE NEGOTIATING AUTHORITY

The National Wildlife Federation urges a continued WTO membership of the United
States, but demands a new approach in order to restore American leadership in trade. This new way would focus on the importance of environmental issues in international trade rules and regulations. The U.S. would also rebuild people's confidence in the WTO by adopting the new approach. For this purpose, we argue that trade negotiations must become more inclusive, democratic, and accountable. To face this task appropriately, our organization suggests some possible reforms for the future developments. 

Restoring the Constitutional Balance on Trade

Congress should increase its oversight and involvement in trade talks. The President will
preserve his leadership in negotiations and provide assurance that "special interests" will not
dissect finished trade agreements.

Authority for Trade Negotiations

The trade negotiating authority should set general trade negotiating objectives, including 
those for the environment, public health, labor, human rights, and other matters. Congress should mandate that trade and investment agreements, which promote sustainable development, uphold the precautionary principle in cases of scientific uncertainty,  level the playing field by eliminating subsidies, and encourage public participation.

New Congressional Trade Institutions

Congress should establish a new Special Standing Committee on International Trade
(SSC) and a Congressional Trade Office (CTO). The SSC would consist of the House and Senate majority and minority leaders plus the majority and ranking members of each committee whose jurisdiction is affected by the trade agreements. The CTO would provide assistance to the SSC in its deliberations on trade issues.


PLUMMETING PUBLIC SUPPORT FOR THE INTERNATIONAL TRADE SYSTEM AND THE WTO

Average citizens do not believe that the rules of international trade respect their values,
including their concern for the environment. If we want to boost the citizens' confidence in the present international trade system, we must reconcile it with core democratic values. It is in the interest of the United States to establish public confidence in the WTO if it wants trade to succeed. The members of Congress should provide leadership in this effort.

If the U.S. focuses on reforming the WTO the public will support international trade
policies. Specifically, the U.S. should make an effort to change the WTO so that the new tradeagreements include environmental assessments. The WTO must adopt more transparency of the organization as well.

I appreciate the opportunity to present the views of the National Wildlife Federation and would be happy to answer any questions committee members may have.

CONCLUSION

I would like to repeat that our organization supports continued U.S. membership in the WTO. In addition, on behalf of this organization I would like to take an advantage of the
opportunity to propose the following recommendations as potential objectives for future trade initiatives and on possible reforms of the WTO. The U.S. should: 

I.          Establish appropriate and reasonable limits to the WTO's influence on legitimate
            national and international environmental measures by improving WTO deference to
            national standards and MEAs.
II.        Harness competitive energy to work for the environment by addressing the PPMs
           dilemma, eliminating environmentally perverse subsidies, conducting environmental
           assessments, slowing down Forest Products Accelerated Tariff Liberalization
           (ATL) Initiative, and negotiating environmentally responsible investment agreements.
III.       Support cooperation on environmental matters among trading nations
IV.       Make trade negotiations and the WTO more open and transparent.