Adam Noel Darling Memorial Scholarship Fund Essay Contest
Spring 2000

  
Neal J. Wavra
Second Year MACD Candidate
neal.wavra@miis.edu
(831)649-6070

TESTIMONY
For
SENATE FINANCE COMMITTEE
On Bill
SXXXX
Presented By The
International Centre for Trade and Sustainable Development
Neal J. Wavra, President

Before I begin Mr. Chairman, I ask that the entirety of my written testimony for today's hearing be included in the official record. 

Chairman Roth, I wish to applaud your direction of this committee in holding a, hearing on Senate Bill XXXX, which calls for the withdrawal of the US' membership from the WTO. I also would like to commend Senator Moynihan on his attention to, matters related to trade as well as the environment. This committee will determine the WTO's role in a broader system of sustainability.

On behalf of the International Centre for Trade and Sustainable Development, I will present to this committee the importance of continued participation in the World Trade Organization not only for increasing economic growth, which I am certain this committee understands, but equally, and perhaps more pertinently, for addressing the needs of the environment through the promotion of sustainable development.

The International Centre for Trade and Sustainable Development, which from
now on I will refer to as the Centre, was established in Geneva in September 1996 to
contribute to a better understanding of development and environment concerns in the
context of international trade.

The Centre recognizes the undeniable intersection of the environment,
development and trade. That is why the Centre seeks to facilitate communication
between parties whose interests lie in those areas so as to harmonize policy making and its implementation related to trade and sustainable development. Many non-governmental organizations find it difficult to secure information on, and communicate their concerns to, key policy-making bodies that deal with trade and development. The WTO is one such body with which the Centre works closely to facilitate the open and transparent exchange of information. At the same time policy-makers and trade officials are often unaware of the NGO community's work on trade, development and environment and the Centre also serves to alert them to the works in progress within Civil Society.

So you see why it is most fitting that the Centre be called on to testify here today.
There is a need for increased information sharing between parties concerned with the
issue of trade and the environment, and in particular, what role the WTO has to play in
improving our environment while continuing to serve as a set of global rules that govern
the exchange of goods and services. The role the WTO must play is to continue to
liberalize trade and eliminate trade barriers, which have detrimental effects on the
environment. In coordination with other intergovernmental organizations, nations and
Civil Society, the WTO's role will contribute to a broader system ofsustainability.

Having hosted the Third Ministerial Conference of the WTO, the United States,
and indeed the world, are now aware of the spectrum of views related to trade. Thirty-
five thousand protesters in Seattle represented thousands more worldwide on issues of the
environment, labor and human rights. Many legitimate concerns were raised in Seattle on
the issue of trade and the environment and some of those concerns are no doubt the
impetus behind Senate Bill XXXX. The question at the crux of the issue is whether
economic growth, driven by trade, is part of the problem or part of the solution?

The answer is that it is Part of the Solution.

However at present, at a global policy level, trade and environmental rules are made with little coordination between the two. There is increasing likelihood of conflict between these two systems and in fact, conflict has already resulted. Cases such as the Dolphin case, the Shrimp Sea Turtle case, the Beef Hormone case and now GMOs have many up in arms against the WTO, claiming that it usurps a nation's rights to determine its own regulations. Others note that expanding trade increases the volume of goods transported and with it rises in pollution.

These issues are valid, but we must not forget that the role of the WTO is to continue to lower and eventually eliminate barriers to trade. These efforts should be viewed as steps in the right direction for the environment, but not the only ones. Increased coordination between intergovernmental organizations, nations and Civil 

Society is also necessary to obtain a broader system of sustainability. Trade barriers are
poor environmental policies held in place by individual nations, not the WTO. A
legitimate multilateral forum where members see it in their interest to comply with
consensus-based rules does not run contrary to the needs of the environment.
Governments have to be responsible for the policies made at the WTO and take an active
role in ensuring that all agreements take into account what is positive for the
environment.

At the same time, governments have found trade measures a useful mechanism for
encouraging participation in and enforcement of multilateral environmental agreements in
some instances, and for attempting to modify the behavior of foreign governments in
others. However, the use of trade measures in this way is fraught with risks for the
multilateral trading system, unless accompanied with rules agreed to by all parties.

Indeed new rules may need to be negotiated between nations and the WTO with 135
member nations is an ideal place to craft policy that promotes sustainable development and environmentally responsible trade.

The WTO has set up the Committee on Trade and Environment (CTE) to deal
with such issues. However, the CTE's track record shows that left to itself, solutions are
unlikely to be achieved in any acceptable amount of time. This is not the fault of the
WTO. A broader approach is needed, bringing together a package of trade, environment
and development measures that deliver positive benefits to all, especially for developing
countries. Key ingredients of such a package could include:

• Trade liberalization measures that benefit the environment, such as the reduction of production subsidies for agriculture, transport and energy.

• The reduction and removal of trade barriers against the poorest countries, particularly for textiles.

• Liberalization of trade in environmental technology and services.

• Exemption of multilateral environmental agreements from WTO rules.

The WTO is the correct forum where member nations can negotiate progressive trade
agreements that also address environmental problems.

Under a broad approach, no one party is responsible for resolving the problems
that exist between trade and the environment. We all live in the environment and have a
role to play in assuring that it is maintained by living in a sustainable manner. It is
therefore essential that governments actively encourage the shift towards sustainable
consumption through regulations and economic incentives that stimulate goods and
services that are energy and resource efficient, non-toxic and safe, which have a longer
life and can be repaired, reused and recycled. They should do this not only to represent
the interests of their public, but also because ensured economic prosperity depends
greatly on sustainable methods of production and consumption. By recognizing such
policies and supporting them, the WTO will live up to its own mandate, which is to
promote sustainable development. Goods and services will always be traded, but the
success of a broader system ofsustainability depends on the role the WTO has played and
will continue to play.

There is now a need for increased cooperation and coordination by all parties
concerned with trade, development and the environment. The WTO is necessary if a
broader system is to work. The WTO requires solid leadership that will continue to
champion trade liberalization while working to create policy, which provides incentives
for sustainable processing and production methods and discourages any unsustainable
practices related to trade.

Mr. Chairman, what seems to be clear from examining the intersection of trade,
environment and development is that trade and the WTO have a strong role to play in
addressing and eventually resolving the issues related to the environment. With the US
accounting for nearly twenty percent of global trade, any international system of trade
rules, without US membership, simply would lack legitimacy. Frankly speaking, US
participation is crucial if the WTO is to play its role in resolving the difficult issue of
trade and the environment.

So in closing Mr. Chairman, I ask this committee not to condemn the WTO for
the debate between trade and the environment, but instead to search for ways to improve
its role in the context of a broader system ofsustainability. Mr. Chairman, I and the Centre for Trade and Sustainable Development urge you and this committee to vote down
Senate Bill XXXX.

I yield my remaining time for questions from the committee. Thank you once
again for the opportunity to appear before you today. If I or the Centre can be of any help
in the future, please do not hesitate to call on us.