Environmental Goods and Services Negotiations at the WTO: Lessons from multilateral environmental agreements and ecolabels for breaking the impasse

This analysis looks for paths to progress in the WTO's stalled negotiations on environmental goods and services—a set of talks that is frequently cited as trade policy's natural contribution to climate change objectives.

It surveys the experience of a number of multilateral environmental agreements—The Rotterdam Convention (Prior Informed Consent or PIC), the Stockholm Convention (Persistent Organic Pollutants or POPs) and Convention on International Trade in Endangered Species of Wild Fauna and Flora—and ecolabels (looking at coffee, fisheries and the Energy Star label) for helpful lessons.

Focusing on environmental goods, the analysis begins by creating a taxonomy that allows different treatments for fundamentally different sorts of goods. Type I goods are those, like efficient washers, that are relatively green in their end use or disposal. Type III goods are those that are relatively environmentally friendly in their manner of production, like organic agricultural products. And Type II goods are those that are designed for environmental improvement or natural resource management, such as equipment to contain oil spills.

On the basis of the analysis, the paper makes six recommendations:

• Start from first principles (enunciate an environmental objective);

• Refer to standards created outside the WTO, where they exist (most relevant for Types I and II);

• Where standards do not exist, go slowly (elaborate criteria for "acceptable" standards that may be created in the future and look to non-standards-based lists for Type II goods);

• Build in flexibility (for example, so that countries can lodge limited reservations for specific goods);

• Base it on science (establish and use technical bodies); and

• Build in special and differential treatment.