Revised February 2003

Since the last meeting of the second phase of the China Council for International Cooperation on Environment and Development (CCICED) there have been two major developments in the World Trade Organization (WTO): China has joined the WTO, and the 4th WTO Ministerial Meeting in Doha adopted a Declaration that provides the basis for new trade negotiations. Both events have significant implications for environment and sustainable development in China. They merit careful consideration by the CCICED in its third phase, drawing on the work done previously by the CCICED Working Group on Trade and Environment (WGTE) and through a new Task Force on WTO and Environment (TFWE).

In the past six years, since the WGTE was established, the trade agenda has widened, and the linkages between this agenda and sustainable development have become more visible. It is by now widely accepted that major changes in the trade regime entail potentially significant changes in the environment. It is also recognized that a range of environmental measures at both national and international levels can impact trade relations. It is consequently essential to monitor developments in both areas of policy to ensure complementarity where possible and to mitigate conflicts where they are unavoidable.

It is to be expected that China's accession to the WTO and the Doha Declaration will together have important consequences for the environment in China, many of which will only become apparent in the coming years. Looking forward, the Chinese government will also need to prepare to address the environmental agenda that is deeply embedded in the Doha Declaration.

Two priority areas of policy advice have now been identified by the new Task Force on WTO and Environment to be focused in order to provide reliable information to China's policy-makers so that they can stay up to date and to ensure that environmental issues attributable to changes in trade policy can be identified in a timely manner. The two priority areas are: 1) to assist the State Environmental Protection Administration (SEPA) in determining the environmental impacts of further trade liberalization with WTO membership and in adopting adequate policy measures to minimize the environmental impacts and to promote sustainable trade; and 2) to assist the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and SEPA to identify China's interests in sustainable development in the new WTO Round of negotiations, and to participate in, and make meaningful contributions to, the development of the WTO rules governing the relationship between trade and the environment.

The first priority area will involve an integrated assessment of the environmental consequences of China's WTO accession with a view to developing appropriate strategies and policy measures to support sustainable trade. To date, a number of developed countries have conducted national environmental assessments of trade policy and trade liberalization. For China, as the largest developing country and a new WTO member, undertaking such an environmental assessment of trade policy and further trade liberalization will be useful to the development of its own trade and environmental policy and set an example for other developing countries.

The second priority will help China's negotiators to address the environmental issues in the new Round of WTO negotiations. Although the agenda set for the upcoming new Round of trade negotiations by the Doha Ministerial Declaration requires serious commitment to address issues at the trade and environment interface, it is widely recognized that the environmental agenda in the WTO engenders suspicion on the part of developing countries. As a new member and likely a significant player in the WTO, China will play an important role in the development of the environmental agenda in the upcoming WTO negotiations. The new Task Force on WTO and Environment will act as a resource group for the Chinese trade-related organizations to provide information on the negotiating stance of other countries, to provide access to the latest research in other countries on these issues, to enhance awareness and understanding of the trade and environment relationship, and to identify China's interests in sustainable development in the upcoming negotiations.

The Task Force will submit a full report on "China, the WTO and the Environment" to the Annual Meeting of the CCICED in 2004. This report will draw on the results of research undertaken for the Task Force to assess the environmental consequences of China's membership in the WTO, and the results of capacity building for WTO negotiations.

The Task Force will include Chinese and international experts in the areas of environment, development and trade.

The Task Force will meet regularly:

• to consider progress of the research that is being undertaken;
• to monitor the negotiations based on the Doha Declaration with a view to helping the Chinese government develop priorities for the negotiations and for the Fifth and Sixth Ministerial meetings of the WTO; and
• to consider work outside China in relation to the development and implementation of methodologies to assess the environmental effects of trade policy.

International experience and studies will be incorporated into the work of the Task Force, including the results of the following studies supported by the State Secretariat for Economic Affairs of Switzerland: Environmentally Sound Technologies/Cleaner Production Centre, Cleaner Solid Waste Management, NSS (National Strategy Study on Climate Change, World Bank), Sustainable Forest Management, and Quality Improvements in Agriculture. The constructive elements of these studies and others will be considered and integrated in the studies of the TFWE.

In this manner, the Task Force will be able to provide the CCICED, and through it the Chinese government, with practical proposals in an important area of policy based on high-quality research.