Developing country marketaccess concerns with environmental measures

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Developing country market-access concerns with
environmental measures

• Ronald Steenblik
• OECD Trade Directorate

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Importing country, MEA or private
standard-setting body
Exporting country and affected product(s)

• Australia
• European Union
• Germany
• Japan
• Netherlands
• USA
• Montreal Protocol
• Flower Campaign
• Green Globe
• Int Fruit Container Org.
• Mangrove Action Project / Responsible Aquaculture
• Marine Stewardship Council

• Brazil (gasoline lobster)
• Colombia (cut flowers)
• Chile (organic products)
• Guatemala (snow peas)
• Honduras (farmed shrimp)
• Hong Kong, China (plastics)
• India (tea, textiles, leather)
• Pakistan (textiles, leather)
• Philippines (textiles)
• Tanzania (farmed shrimp)
• Venezuela (gasoline)
• Zimbabwe (leather)

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Questions addressed in case studies

• PROCESS How was the measure developed?
• IMPACT How did developing-country exporters
  react?
• RESPONSE How did the importing country (or other
  standard-setting body) respond?

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Questions addressed in case studies (1)

• PROCESS How was the measure developed?
• What was the environmental issue that the measure
  sought to address?
• What type of approach did the government or
  standard-setting body take?
• Were there international standards at the time?
  If so, was the new measure based on that
  standard? If not, why not?
• How open and transparent was the
  policy-development process?
• To what extent were effects on exporters
  considered, and did those effects shape the final
  measure? Was, there, for example a phase-in
  period for developing countries?

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Questions addressed in case studies (2)

• IMPACT How did developing-country exporters
  react?
• What was the short-term effect on trade? Who was
  most affected?
• Were there unexpected consequences?
• Did the exporter have any difficulty
  understanding the measure?
• Did they have the capacity to respond quickly and
  efficiently?
• If there were problems, what did the exporter do?
• Did it change its own environmental standards or
  regulations?
• Did it ask the importer to modify its measure?
• Did it seek redress -- e.g., through WTO dispute
  settlement?

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Questions addressed in case studies (3)

• How did the importing country (or other
  standard-setting body) respond?
• Did it modify the measure or implementation
  schedule?
• Did it (or another body) offer technical
  assistance?
• In what form was that technical assistance
  provided?

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Types of lessons we hope to learn

• Identify relative importance, during policy
  design, of
• international norms
• transparency
• prior consultation
• flexibility
• Anticipate potential problems,
• avoid some unintended consequences
• Identify good practices, and understand role of
  technical assistance

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Developing an International Standard for Green
Tourism

• Development of the measure
• Private measure, led by tourism industry itself
• Concern to encourage more-sustainable tourism
• Consultative process for basis document
• Issues raised by developing countries
• Difficult to find direct reactions (plenty of
  indirect)
• Main issues cost fear eco-labelling will favour
  North and international corporations
• Responses
• Made itself independent lowered fees, especially
  for destinations in developing countries

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Phytosanitary Measures Affecting the Import of
Fresh Durian Fruit

• Development of the measure
• Concern to protect plant life from specific pests
• Transparent, scientific procedure used by
  Australia
• Problems in obtaining adequate information caused
  delays
• Issues raised by developing countries
• Thailand felt measures were too stringent and
  costly, especially requirement to cut open almost
  half of fruits
• Responses
• Australia tried to explain risk assessment,
  continued bilateral contacts looking for
  technical alternatives

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Adapting TEDs to Local Conditions

• Development of the measure
• Concern to protect endangered sea turtles
• Policy evlolved through court interpretations
• Compliance through U.S. Govt certification most
  likely to be granted if exporting government
  required TEDs
• Issues raised by developing countries
• A number of countries challenged the measure at
  WTO
• Costa Ricas main problem was the technical
  specifications of TEDs not suitable for their
  local conditions
• Responses
• USA worked with Costa Rica to approve a modified
  TED, and offered technical assistance

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Regulating the Labelling of Organic Plant Products

• Development of the measure
• Concern to protect consumers, prevent fraudulent
  labelling
• Rules developed relatively quickly, based on
  Codex guidelines
• Conformity assessment procedures relatively
  flexible
• Issues raised by developing countries
• Few complaints raised so far
• Main issues seem to have been confusion over some
  of the terms
• Responses
• Japan has allowed foreign certifiers to certify
  products has recognised IFOAMs accreditation
  body provided some assistance to Thailand

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Private Certification of a Fishery as Sustainable

• Development of the measure
• Concern to reduce over-fishing by rewarding
  sustainable fishing
• MSC Standards (Principles and Criteria) for
  label based on international guidelines (FAO Code
  of Conduct), developed following consultations
• Issues raised by developing countries
• Could not apply uniform (Northern) standards to
  southern fisheries
• Certification costly (benefits uncertain),
  requiring difficult-to-obtain data
• Responses
• MSC and WWF have put considerable efforts into
  funding assessments and adapting rules to
  tropical conditions

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Findings policy development

• International norms
• measures adopted in 1970s and 1980s years were
  often imposed unilaterally some of those evolved
  into international norms (e.g., chemical residues
  in textiles)
• measures in early 1990s increasingly were
  informed by international norms and practices,
  but many deviations from those norms
• since Uruguay Round, importers more careful to
  justify any deviations

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Findings policy development

• Transparency and consultation
• Pre Uruguay Round, very difficult for exporters
  to learn about new measures under consideration
  in importing countries
• Since UR, notifications of draft measures are
  required (are they sufficient?)

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Findings impacts and reactions of developing
countries

• Impacts
• difficult to assess impacts during pre-1990
  period
• impacts have varied widely, often depending on
  nature of the production process affected
  (contrast pesticide residues with cadmium in
  plastics)
• impacts have by no means been homogenous --
  neither among developing countries nor even
  within countries (agriculture, aquaculture,
  textiles, fisheries)
• Reactions of developing countries not always
  clear
• many have adopted the importers regulation or
  standard, while at the same time complaining
  about it
• also common is that some segments of the industry
  quietly comply (cut flowers, containers)

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Findings responses of regulators or
standard-setting bodies

• Governments
• Generally -- but by no means always -- have shown
  a reluctance to modify measures until (threatened
  with) dispute (e.g., US gasoline rules)
• In some cases have looked for temporary fixes
  (e.g., EU organic import procedures)
• In a few cases, governments have provided
  specific programmes to improve technical capacity
• Private entities
• Industries are motivated by commercial interests
  are willing to modify standards or provide
  technical assistance if it helps sales
• NGOs have been more transparent, generally keen
  to be seen as responsive to developing-country
  interests -- i.e., those interests with which
  they can identify.

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Other findings

• SPS and TBT agreements refer favourably to
  international standard-making bodies (e.g.,
  Codex), but their standards are by no means
  complete.
• Importers are supposed to be able to defend their
  regulations, but there are many that remain in
  place that nobody has questioned.
• More and more, NGOs are getting involved in the
  development of standards for sustainable
  processed or production methods. This raises
  several issues
• Harmonisation favours centralisation however,
  centralisation can mean monopolisation.
• NGO initiatives are often mimicked by
  governments is that necessarily better for
  developing countries?

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Phase 2 workshop in November 2002

• Four groups of stakeholders
• Developing country exporters to obtain improved
  information
• environmental regulators to hear DC concerns
• donor agencies to share experience from the field
• trade environment policy makers input in WTO

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Follow-up?

• Identify best practices?
• Focus on particular policy issues, such as
  conformity assessment procedures, technical
  assistance and capacity building?
• other issues arising from workshop?