The Wto And The Environment

I. Introduction and Background

What is the World Trade Organization, and how can it be so controversial? The WTO itself has only been around for 11 years, since 1995, but its principles and operations date back to 1947. Following World War II, the United States along with other countries wanted to create an international trade body that would help promote trade and the global economy. The organization created became known as GATT, General Agreement on Tariffs and Trade. GATT's main functions were to lower tariffs and to be an international court-style system to settle trade disputes between nations. One of the principles that GATT was founded on was that of nondiscrimination, meaning one country could not favor trade with another country and not give other countries the same benefits. The GATT system had several "Rounds" of negotiations to lower tariffs and the first round in 1947 successfully lowered tariffs an average of twenty-one percent. At the conclusion of the Uruguay Round on January 1, 1995 GATT was transformed from a trade accord into an organization that required membership and was an international governing body that basically created codes of conduct for trade between its members. (Carbaugh, 181).

GATT and WTO are different in many ways. The main difference being that GATT was a set of rules agreed upon by nations, the WTO is a institutional body that covers a broader range of trade to include not only goods, but also goods in the service sector such as insurance, banking, and investments, and TRIPS which stands for Trade Related Intellectual Property rights, (GATT). The GATT dispute settlement process did not include the authority to enforce the panel's recommendations.

II. The Structure of WTO

WTO designed similar to many national governments. All members are allowed to participate in all councils and committees, but are not allowed to participate in the Appellate Body, Dispute Settlement panels, and plurilateral committees. WTO has 4 basic levels; in order from highest to lowest, they are the Ministerial Conference, General Council, Councils for Trade, and the Subsidiary Bodies. The Ministerial Conference meets every two years bringing all members together and has the ability to make decisions on anything regarding any multilateral trade agreement. The General Council conducts the day-to-day activities assigned by the Ministerial Conference. The General Council is located in Geneva, Switzerland the headquarters of WTO. It is represented by a member from each representative country's government and has the authority to act on behalf of the Ministerial Conference. The Councils for Trade cover different fields from goods, TRIPS, and services and report to the General Council on issues ranging from trade and development to environmental issues. The Subsidiary bodies fall under three groups - Goods, Services, and Disputes and Appellate. Under the Subsidiary Level is a general "all other committees" level, which include Trade and Environment, Trade and Development and Regional Trade Agreements (WTO, July 7)

The WTO has a set of agreements that all WTO members are supposed to follow, while under GATT many countries had side agreements (Carbaugh, 178-180). These side agreements are being enforced as a whole to the entire global community and are the source of many disputes occurring today. The WTO is not a government; this allows the member countries to set up their own levels of environment, health, labor, and safety protections. This standard has caused quite a stir amongst the environmentally friendly community and has spilled over into the laps of big business.

III. WTO Internal Issues

The WTO functions as an important mediator when it comes to aspects of international economics. As such, the WTO has many purposes and responsibilities. Among them are encouraging free trade, law enforcement, and monitoring. These responsibilities however, do not take into account outside factors such as the affect on developing countries and environmental issues.

The WTO serves as a world court regarding issues of free trade. However, this court is forced to follow the rules and regulations set by its member countries. This often limits the WTO from taking into account outside factors such as the environment. There are many causes for this behavior including WTO laws, regulations, and limited support. Laws and regulations limit the WTO's ability to act. One reason is that many laws are ambiguous and vague resulting in improper or limited to no enforcement at all. One instance of this is the irregular use of the precautionary principle. The precautionary principle is rarely used due to the way it is written and the ambiguity surrounding it. Compounding these problems, there are restrictions placed on the precautionary principle, such as the ongoing demand for proof and that it is only present in one of many agreements. (Neumayer, 2004) The second problem with WTO laws and regulations lies with the breadth of their enforcement. Imposed limitations on trade affect all aspects of a country's trade and may cause domino effects. If applied, this would include the items that the WTO finds objectionable as well as environmentally-sound products produced by the same country. WTO regulations focus more on the offending country than the individual products in question. Support is limited, which carries over into other roles of the WTO and the environment.

Environmental advancement within WTO is plagued by a lack of support. For example, the Committee on Trade and Environment has good intentions, but its suggestions are often ignored due to strife among dissenting countries. For instance, established countries tend to go against environmentally-sound regulations as they are the ones that will suffer most, whereas developing countries often vote for them. The WTO is also lacks the organizational means to handle environmental matters. Though there is a committee focused on trade and environment, there is little organization or infrastructure behind to make it effective. Furthermore, environmental issues are often placed behind "more important" issues. (Neumayer, 2004) As discussed the WTO has many internal problems which reduce its ability to advance an environmental agenda.

IV. WTO External Effects on the Environment

The internal problems regarding the WTO and the environment have profound impacts on the world's environment. For instance, the WTO's problems affect many aspects of our environment from fishing to our atmosphere. For example, in 1991 the US brought import embargoes against Mexico and four other member countries