Environment Shortchanged in Trade Accord

Article excerpt

If the final agreement of the GATT Uruguay Round, which was signed Friday in Marrakesh, Morocco, did not promise such large economic gains and represent such an immense expenditure of global diplomatic effort, it would deserve to be rejected on environmental grounds.

As it happens, the agreement's economic benefits and the political costs of its rejection far outweigh its environmental shortcomings. But these shortcomings are still substantial enough to erase much of the enthusiasm for the round's achievements.

During the seven years it took to negotiate this round of the General Agreement on Trade and Tariffs, seven global environmental agreements were reached. This burst of activity sprang from the spreading realization that economic growth and human welfare ultimately depend on a healthy environment.

That understanding has penetrated nearly all international institutions to varying degrees, but not the GATT. There, free trade is not a means to the end of greater economic growth but the end itself, and environmental concerns are nothing more than impediments.

In fact, the costs of remaining trade restrictions and those of environmental degradation are each about 1 to 2 percent of gross domestic product (except where economic policies are highly distorted or environmental abuse is extreme, as in Russia or China, where estimates run to 15 percent and more of GDP). Rules of free trade and environmental measures are therefore equally necessary to achieve sustainable economic growth.

GATT does not agree. Mostly, it ignores the environment. When it has addressed environmental issues, it has generally shown itself unwilling or unable to take them seriously. The terms of the Uruguay agreement and the arrangements for the new World Trade Organization suggest that unless the institution can be brought to drastically change its thinking and its institutional culture, the future isn't going to be much better.

The need to mesh trade and environmental policies was recognized too late to be dealt with in the Uruguay Round. It was sparked by the infamous tuna-dolphin decision, in which a GATT panel ruled that it was an illegal restriction of trade to impose sanctions on countries whose tuna-fishing practices killed large numbers of dolphins. The decision cast doubt on the legitimacy of national environmental laws and even of multilateral agreements that use trade measures. The decision also reached the nonsensical view that countries can use trade measures to protect resources, but only when those resources are within their own borders, as though air, water and species stay neatly within the lines on a map.

Because the ruling was so extreme, Mexico, the complainant in the case, chose not to bring it up for formal adoption. …