Triangulating Sustainable Development: International Trade, Environmental Protection, and Development

Sanford E. Gaines

[Editors' Note: In June 1992, at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, the nations of the world formally endorsed the concept of sustainable development and agreed to a plan of action for achieving it. One of those nations was the United States. In September 2002, at the World Summit on Sustainable Development, these nations will gather in Johannesburg to review progress in the 10-year period since UNCED and to identify steps that need to be taken next. In anticipation of the Rio + 10 summit conference, Prof. John C. Dernbach is editing a book that assesses progress that the United States has made on sustainable development in the past 10 years and recommends next steps. The book, which is scheduled to be published by the Environmental Law Institute in June 2002, is comprised of chapters on various subjects by experts from around the country. This Article will appear as a chapter in that book. Further information on the book will be available at www.eli.org or by calling 1-800-433-5120 or 202-939-3844.]

The author is a Professor, University of Houston Law Center. Professor Gaines was Deputy Assistant U.S. Trade Representative for Environment and Natural Resources from 1992-1994.

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The Agenda: "To Make International Trade and Environment Policies Mutually Supportive in Favour of Sustainable Development."¹

Introduction

At the time of the United Nations (U.N.) Conference on Environment and Development (UNCED) in Rio de Janeiro, the persistent effort by governments during the previous half century to remove barriers to the free movement of goods among nations had contributed to a rise in living standards unparalleled in world history.² Liberalized trade had also wrought an ever richer network of economic and social interactions among nations that helped reduce political tension and international armed conflict.³ With this affirmative history in mind, the Rio Declaration ordains: "States should cooperate to promote a supportive and open international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation."⁴

The second half of the 20th century also saw deepening economic disparities between the wealthiest and least wealthy individuals and nations, intensification and proliferation of violent civil strife and regional conflict, and perceptible deterioration of the environment locally and globally in most parts of the world brought about in considerable measure by the prodigious activities of people and businesses engaged in the production and consumption of the ever-increasing quantity of goods flowing in international trade.⁵ Cognizant of this darker side of the late 20th century, the world's leaders at Rio also undertook to "cooperate in the essential task of eradicating poverty as an indispensable requirement for sustainable development, in order to decrease the disparities in standards of living and better meet the needs of the majority of the people of the world."⁶ They further committed themselves to "reduce and eliminate unsustainable patterns of production and consumption" in order to "achieve sustainable development and a higher quality of life for all people."⁷

These three statements from the Rio Declaration reflect the still unresolved core contradictions⁸ in sustainable development and international trade policies: the promise that the wealth-generating benefits of market-driven international economic systems can help alleviate grinding poverty comes with the danger that those same unconstrained market forces will perpetuate and even exacerbate economic inequalities and environmental harms that are socially unacceptable and environmentally unsustainable. Ten years after Rio, the discrepancy between the vision—there "should not be, nor need be any policy contradiction between . . . an open . . . trading system on the one hand, and acting for the protection of the environment and the promotion of sustainable development [32 ELR 10319] on the other"⁹ —and the reality—current patterns of international trade cause environmental harm and impair sustainable development—is too obvious to deny. No wonder, then, that the relationship between liberalized patterns of international trade and sustainable development has emerged as a matter of fierce controversy in civil societies and intergovernmental diplomacy. At the end of 2001, the president and the U.S. Congress have yet to resolve definitively (after seven years of debate) whether or how to include environmental and social issues in U.S. trade policy¹⁰; the World Trade Organization (WTO) has adopted a very modest agenda of environmental questions to address in current and proposed trade negotiations¹¹; and protests by anti-trade environmental partisans have become a regular accompaniment to international meetings of political and economic leaders.¹²

This Article must take account of the heated debate about the fundamental compatibility or incompatibility of the liberal international trade regime with the sustainable development objective, but it does not intend to develop a definitive argument on that point.¹³ The Article's main purpose is less normative and more descriptive: to examine the last 10 years of U.S. trade policy rhetoric and practice to ascertain the degree to which that policy has been shaped by, or given expression to, widely agreed core principles embedded in "sustainable development." Nevertheless, the descriptive history invites an assessment about whether the resulting policies of the United States and its influence on the world trade community are moving in the right direction in making trade and environmental policies support sustainable development. The answer this Article offers is complex, hence ambiguous.

The U.S. policy builds from a premise that this Article accepts as valid: that there is no fundamental inconsistency between reducing barriers to international trade on the one hand and taking efforts at home and abroad to protect the environment and promote sound economic development.¹⁴ In general, the economic benefits of liberalized trade coincide with the environmental and economic goals of reducing waste (pollution) and inefficiency (excessive consumption of resources) and help generate income gains to finance environmental protection efforts. Nevertheless, domestic and international market failures need to be corrected through environmental and developmental policy interventions to achieve sustainable development goals,¹⁵ so trade policy must allow, and should do nothing to discourage, appropriate deviations from core principles of "free" trade and non-discrimination.¹⁶ Below, I identify the interconnectedness of trade, environment, and development goals. Thereafter, I offer a primer on the trade-environment issues that have dominated the policy debate since Rio. The Article then provides a history of U.S. trade-environment policy since 1990.

The devil is in the details of defining and agreeing on just which deviations from trade norms are appropriate to promote sustainable development. The evaluation of particular environmental and developmental adjustments to trade policy depends importantly on one's conception of sustainable development. Rather than attempt one more definition of sustainable development, this Article identifies selected principles inherent in the concept that relate closely to international trade policy. Some of the principles, such as intragenerational equity, set broad objectives. Others, like the precautionary principle, establish decisionmaking criteria bearing on discrete points in the working out of the trade-environment-development relationship. A third cluster of principles, such as policy integration, have an essentially procedural character. Because substantive trade policy [32 ELR 10320] reform has remained elusive in the decade since Rio, the Article, by default, focuses on these procedural principles.

The portion of the Article that describes and assesses U.S. trade policy of the last 10 years will show that the United States has taken significant positive steps to enhance the consideration of the environmental and developmental consequences of its trade policy, and has actively promoted institutions and policies that would promote such procedural integration of policy in other governments and international organizations. The United States has also acted or negotiated in favor of certain substantive policies that fit with the norm of a "mutual supportive" relationship between trade and sustainable development. On the other hand, America's substantive trade policies are very uneven in fostering sustainable development. Driven as they are by politically and economically framed conceptions of national self-interest, U.S. trade policies often put short-term and purely domestic goals ahead of the broader sustainable development strategy. U.S. trade actions in 2001 illustrate the internal contradictions, which to some other countries smack of the casual hypocrisy of the hegemon.

The conclusion of this Article looks at the policy situation after the November 2001, WTO trade ministerial in Doha, Qatar, and proposes measures to move U.S. trade policy forward on sustainable development while taking note of the current impediments to such progress. The analysis brings the focus back to development, the element often missing in U.S. trade and foreign policy debates since UNCED. By decreasing rather than increasing its attention to the profound problems of global underdevelopment and poverty, U.S. policy has not only failed to serve well the substantive policy goal of sustainable development but has also contributed to the polarization of rich-poor international diplomatic conflict. The stridency of the diplomatic confrontation, in turn, has grave implications for the capacity of international institutions such as the United Nations and the WTO to give organizational coherence and support to the hoped-for patterns of mutual support between trade and sustainable development.

The Policy Triangle

This section takes a preliminary look at the trade-environment-development policy triangle alluded to in this Article's title. Much of the past decade's policy debate within the United States has been conducted in a bipolar "trade-environment" terminology. Consequently, this Article will tend to emphasize the environmental conservation dimension of another bipolar concept, sustainable development. But one gets a distorted policy view by looking at either trade-environment or environment-development through such bifocal lenses. Although it gets little attention in the United States and therefore will not show up much in this Article, there is a third active policy arena, that of trade and development.¹⁷ Linking these three policy lines together forms a trade-environment, environment-development, development-trade triangle. From this more robust and stable policy construct it may be possible to identify and support and promote the mutual benefits of open trade, environmental protection, and economic development. It seems premature to suggest, as one national delegate did in a recent debate in the U.N. Commission on Sustainable Development, that the trade-environment focus is sufficient because the broader concept of sustainable development has "'failed miserably as an action principle.'"¹⁸

One corner of the policy triangle is the panoply of international trade agreements that establish enforceable disciplines on government regulation of trade with other countries. The agreement establishing the WTO, which now has more than 140 Members, comprises the General Agreement on Tariffs and Trade (GATT) and many other multilateral agreements on subjects ranging from the traditional, like customs valuation and subsidies, to the post-modern, like protection of intellectual property rights, trade in services, and rules on investments.¹⁹ Some regional trade agreements, including the North American Free Trade Agreement (NAFTA) and the several treaties at the core of the European Union (EU), have even more comprehensive policy scope than the multilateral trade agreements.

The second point of the triangle is development. In the context of sustainable development writ large, there are multiple factors of social, cultural, political, and economic development that help to create sustainability. In the trade-environment-development policy debates that are the subject of this Article, economic development of the "developing" countries is the main issue. For the "least developed" countries, economic development is seen as an essential requirement to reach tolerable and sustainable environmental conditions. Trade and investment policies that will help alleviate poverty thus contribute to sustainable development.²⁰ For the more developed of the developing countries, economic development, if linked to sound environmental policies, can promote sustainable development by leading to improvements in pollution control and efficiency of resource use and by helping to generate wealth and raise standards of living, both of which contribute to sustainable development.²¹

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Trade ties to development because the international trade regime covers a greater and greater proportion of economic activity as world interdependence deepens²² and governments look to exports and foreign investment as engines for national economic development. Yet international trade is just one aspect of national economic activity; domestic markets still predominate in most countries. Thus the WTO agreements and the international trade they facilitate remain "embedded"²³ in a much denser and more potent framework of separate national economic policies and regulations. Most important economic and development decisions are still national decisions, including taxation, social security, labor policy, physical infrastructure investment, education, health care, competition policy, and banking, among many others.²⁴ Patterns of development, then, depend very much on national context even in an interdependent world.²⁵ Official development assistance (ODA) is one means of channeling developed country resources toward particular development objectives in recipient countries. In spite of promises at Rio, however, ODA has declined in the last 10 years, so market-driven patterns of private foreign direct investment and contractual relationships have become the key sources of outside funds for development in many developing countries.²⁶ As economic development has become more deeply entwined with international trade and investment, it has become a vital concern of developing countries to maintain and strengthen a liberal trade regime that facilitates this trade and investment.

Whether the linked national patterns of economic development are sustainable or not is in large measure a question of their effect on natural resources, on environmental conditions, and on human health. The environment is the third corner of the sustainable development policy triangle. The world's corpus of environmental law is at once more vast and more inchoate than the trade law regime. Most environmental law is national or even subnational, so environmental policy, even more than trade policy, is deeply "embedded" in national decisionmaking.²⁷ Although there is a substantial and growing superstructure of international agreements and customary law obligations, these international agreements rely on national implementation for their effectiveness.²⁸

The points of tension in this policy menage a trois are readily apparent. Most governments and business leaders (and many independent policy analysts) embrace UNCED's normative assertion that trade and sustainable development "should be" mutually supportive and aspire sincerely (though often weakly) to implement the stated goal of world trade policy

to expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.²⁹

Environmentalists and many others in civil society, observing that world environmental conditions are worsening as trade has become more open, strenuously object to the traditional insistence by capitalist enterprises and trade officials for autonomy from any international economic control of environmental behavior through trade restrictions based on environmental performance. Many in this camp do not necessarily take exception to sustainable development as a goal, but doubt the sincerity of the governments and businesses pursuing it and their capacity to make the necessary policy reconciliations to achieve it. Others, however, think that the intertwining of liberal trade policy and sustainable development in the Rio documents shows that "sustainable development" itself has irredeemable flaws as a world policy objective or, worse yet, is just a cynical concept designed to perpetuate patterns of wealth and power that are at the root of the world's environmental problems.³⁰ Ironically, some developing countries also are skeptical of "sustainable [32 ELR 10322] development" as a mantra, but for the opposite reason—because they think it ignores developmental needs.³¹

To complicate the picture further, governments and nongovernmental organizations (NGOs) from developed countries have been the main proponents of reforms in world trade rules to make explicit accommodation to the ecological dimensions ofsustainable development, while developing countries have insisted on strict adherence to the core established principles of liberal trade, have pointed out the failures of the developed world to implement their side of the "Rio bargain" in terms of development assistance, and have vigorously resisted proposals from the North to modify the international trade legal regime on environmental grounds.³² In both academic analysis and official discussion, the North has indeed tended to frame the issue not as "trade and sustainable development" but as "trade and environment," because the lack of explicit consideration of environmental values in trade policy is seen to be the main deviation from sustainable development. The sharpest grievance of the developing South, in contrast, has been that the world trade system is not yet liberal enough, denying them the poverty-reducing and developmental benefits of free access to the markets of the North. These divergent views have prevented consensus on any post-Rio express incorporation of environmental considerations into world trade rules.³³ At the same time, the developmental potential of liberalized trade has not been realized because of deep problems of lack of capacity, lack of technology, and low levels of foreign investment in and assistance to the least developed of the developing countries.³⁴

A Primer on Trade and Environment

The major objective of this chapter is to evaluate the performance of U.S. trade policy in the last 10 years in terms of its conformity with and promotion of sustainable development principles. That task requires an appreciation of the main points of tension between trade and environmental policies and a basic understanding of recent U.S. trade policy. For those who have not followed trade issues in the last decade, the next two parts of the Article provide the necessary background. Trade-knowledgeable readers may want to skip ahead to the section entitled "Sustainable Development Principles for International Trade."

On January 1, 1994, NAFTA³⁵ entered into force, a distinctly new and comprehensive regime with the two largest trading partners of the United States. On January 1, 1995, the WTO came into being, replacing as an international organization the imperfectly formed and awkwardly named GATT. Along with the establishment of the WTO there entered into force a constellation of multilateral trade agreements, similar in scope and intent to NAFTA, that represented the culmination of the so-called Uruguay Round of trade negotiations. The WTO oversees all these multilateral agreements, which are designed to assure all 143 Member nations³⁶ the benefits of an open, market-oriented, and rules-based world economic system. The NAFTA and the WTO agreements together define the trade policy environment for the United States.

The GATT

The core tenets of NAFTA and the WTO systems have been in effect for more than 50 years, enunciated in the key "constitutional" trade agreement dating from 1947, the GATT.³⁷ Summarized very succinctly, the GATT allows a government to use tariffs, but only tariffs, to restrict the amount of foreign goods coming into its country and thereby "protect" domestic producers from competing imports. GATT Article II requires governments to negotiate and "bind" themselves to a schedule of maximum tariff rates on particular goods that they cannot thereafter raise, and the most-favored-nation (MFN) rule of GATT Article I requires that the tariffs and other rules applying to imports will apply equally to all trading partners. (A free trade area like NAFTA or a customs union like the EU removes nearly all tariffs on trade among the participating countries, and is an authorized exception to MFN.) The further objective of liberalized trade, achieved in stages during the last half of the 20th century, was to reduce the prevailing level of tariffs on most goods, so that tariffs on manufactured products are now just a few percent on average, and often zero.³⁸

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Three other core GATT provisions protect this tariff system from poaching by non-tariff restrictions on trade. The prohibition on quantitative restrictions (GATT Article XI) prevents governments from restricting imports through quotas or similar limits. The nondiscrimination principles—MFN and national treatment (GATT Article III)—shield trade against restriction through the disparate application of other non-tariff laws and regulations. In particular, governments have many often complex domestic regulations about products, such as safety standards or environmental standards, and many excise taxes on products. Under MFN and national treatment, such regulations and taxes, whether national, state, or local, must be applied evenhandedly to domestic products and similar (like) foreign products from any country.

The GATT contains a "general" exceptions provision, Article XX, that authorizes deviation from any of the GATT doctrines for measures "necessary to protect human, animal or plant life or health" (XX(b)) or "relating to the conservation of exhaustible natural resources" (XX(g)). The Article XX exception is qualified, however, by the condition that the measures not constitute "arbitrary or unjustifiable discrimination" or a "disguised restriction on trade." For various reasons beyond the scope of this Article, Article XX has been construed very narrowly, making it difficult for any environmental measure not otherwise in accordance with GATT rules to qualify for the exception.³⁹

Brief mention should also be made of the system of trade dispute settlement. The WTO agreements include the Uruguay Round Understanding on Rules and Procedures Governing the Settlement of Disputes, better known as the Dispute Settlement Understanding (DSU), which codifies and strengthens procedures that developed under the old GATT system. Essentially, the DSU allows any WTO Member that believes another Member is violating the GATT or any other WTO agreement to initiate dispute settlement in the WTO. After a short opportunity for consultation and possible settlement, the dispute is referred to an ad hoc panel of three trade experts who receive briefs from the parties and conduct an oral hearing. The report of the dispute settlement panel will become binding unless it is rejected by the WTO membership. The DSU also established a process for appeals from panel reports on issues of law. The Appellate Body, a permanent group that functions much like a federal court of appeals, receives briefs and hears arguments on the disputed legal issues, and issues its own report. This report, too, is final unless rejected by the WTO membership. The Appellate Body has, in the six years of its existence, begun to develop a coherent body of jurisprudence on trade-environment issues. Its reports will be referred to at appropriate points in this Article.⁴⁰

Trade Rules on Product Standards

The WTO agreements and NAFTA have elaborated the trade rules on product regulation under the rubric technical barriers to trade (TBT).⁴¹ The TBT provisions explicitly affirm the right of governments to regulate products for just about any purpose, including environmental protection, and to determine the degree of protection of consumers or the environment that they want to achieve through their regulation. At the same time, the rules of nondiscrimination are reasserted, and a further customary trade policy is stated explicitly—that the governments should achieve their regulatory goals through measures that are the least restrictive of trade.⁴² "Least trade restrictive" is closely akin to accepted constitutional law concepts in the United States (the dormant U.S. Commerce Clause rule against "undue burdens" on interstate commerce) and in the EU (the "proportionality principle" that environmental measures may affect the free movement of goods only as necessary and in proportion to the environmental objective).⁴³

Agricultural and food safety standards designed to protect against the introduction of agricultural pests or diseases or the import of unsafe or contaminated foods and feeds, known in the trade world as sanitary and phytosanitary (SPS) measures, are a special realm of product regulation with a separate set of trade rules now codified.⁴⁴ The tricky part to SPS measures is that the normal anti-discrimination rules don't work; SPS restrictions often apply to the products [32 ELR 10324] of a single country because the source of the risk is confined to the targeted country, as exemplified by the recent trade bans on British beef. The WTO and NAFTA SPS provisions clearly state the right of any country to establish the levels of health or argicultural protection that it wants to achieve in terms of food additives and contaminants or pests and diseases. The question is: which SPS measures are legitimate to achieve the chosen level of protection? Trade rules give presumptive validity to internationally established food safety standards on the theory that internationally agreed standards are presumably nondiscriminatory among different nations. If a country wants to impose standards that are different from or more stringent than the international norms, it must have a "scientific justification"⁴⁵ and make an assessment of the risk to show that the more stringent standard is necessary to achieve its chosen level of health protection.⁴⁶

The acute anxiety among environmental interests about the intrusion of the TBT and SPS disciplines into domestic standard-setting became one of the key points in the trade-environment controversies of the early 1990s. Environmentalists were concerned that these trade rules about product regulation would allow (and encourage) other countries to question our national environmental standards in the name of free trade. For example, the Delaney Clause to U.S. food and drug laws⁴⁷ prohibits the marketing (and hence the import) of any food product containing any additive that has been shown to cause cancer in laboratory tests on animals. Despite the Delaney Clause's scientific linkage between animal carcinogenesis and suspicion of human carcinogenesis, some consumer and environmental advocates feared that its blanket prohibition could be attacked as scientifically unjustified, so they sounded an alarm that the SPS trade rules threaten U.S. food safety.⁴⁸ In fact, after seven or eight years, the SPS provisions have not given rise to attacks by foreign governments on any U.S. pesticide and food safety standards, including the Delaney Clause.⁴⁹ The SPS rules do have an important bearing, however, where the scientific basis for the projection of risk is deeply flawed, as happened in the case of European ban on beef from cattle fed with growth hormones when the data showed that the use of the hormones in cattle did not lead to human exposure to those hormones in meat. That case is discussed below in the context of the precautionary principle.

General Concerns About the Environmental Effects of Trade

Apart from the product standards issues, the environmental community has three general concerns with international trade rules that implicate the regime as a whole rather than its detailed legal provisions: interference with regulation, competition effects, and scale effects.

First, environmentalists instinctively object to the conventional rule in international trade law that governments may not restrict imports from other countries based solely on how the products were made or obtained (the celebrated cases involve U.S. tuna and shrimp import restrictions based on how the tuna or shrimp were harvested in order to protect dolphins from tuna fishing practices and protect sea turtles from shrimp trawling practices). After all, most environmental regulation to control pollution or manage resources operates in just this way—by setting specific operational or performance requirements for manufacturing or harvesting processes or production methods (known as PPMs in trade argot).⁵⁰ It should be noted that most developing countries voice the opposite concern—that PPM-based restrictions are already being insinuated into international trade through such systems as eco-labeling and requirements on packaging, to the detriment of their opportunity to develop economically by export of goods to developed-country markets.⁵¹

A second environmental concern about trade has to do with the supposed dynamic of competition among producers and among governments competing with each other in a global marketplace where differences in environmental standards might be a point of competitive advantage or disadvantage. This concern is stated variously as a concern that other countries will deliberately lure firms to relocate with lower environmental standards (the "pollution haven" concept), that U.S. producers saddled with high environmental [32 ELR 10325] compliance costs will be unable to compete with lower cost foreign competitors (H. Ross Perot's "giant sucking sound" of jobs going south to Mexico under NAFTA), that international competitiveness concerns will exert a "political drag" or "regulatory chill" on efforts to strengthen environmental legislation and regulation,⁵² or that competing jurisdictions will engage in a "race to the bottom" of lower environmental standards.⁵³ The developing countries (and many economists and other analysts) have a countervailing theoretical posture on this point, too. They argue that different natural resource endowments (like greater assimilative capacity) and diversity in national preferences about environmental protection are the very stuff of comparative advantage that drives international exchange, and that nations should be permitted freely as sovereigns to make national environmental policy choices, at least where there are no transboundary spillover or global effects.⁵⁴ The Rio Declaration, and the Stockholm Declaration before it, strongly affirm this view.⁵⁵

Given the baptist-bootlegger alliance between organized labor, radical anti-capitalists, and many environmentalists in opposition to further liberalization of trade, some observations on the socioeconomic effects of trade may be pertinent. It is a commonplace observation about international trade that, while it almost certainly generates macroeconomic benefits, some firms and some business sectors in a given country may lose in the more competitive environment. Anecdotal accounts of job losses or social impacts from trade are to be expected, then, but most likely do not provide a fair picture of broader effects. But broader effects are usually measured by national data, such as gross domestic product (GDP), which may obscure significant employment or social disruptions. The gaps in the data leave a broad field for controversy fueled by selective reference to available information and different perspectives on the proper measures for "national welfare," "quality of life," or fairness in the distribution of economic gains and losses. National data almost uniformly show macroeconomic gains from trade in terms of both job growth and higher wages associated with export-based jobs. Specific studies of job gains and losses attributable to the effects of NAFTA on U.S. employment, show that the numbers of jobs gained and lost is essentially the same.⁵⁶ Employment gains in Mexico have been substantial, but there has also been dislocation in traditional sectors such as small-scale manufacturing and subsistence-style agriculture. At the world level, only the poorest of the developing countries, victimized by falling international prices for commodities, have suffered economically in the more open trading regime of the last six years.

A related issue is the migration of industry. Again, the world trade effects are difficult to measure, but tend to show that the more polluting manufacturing industries (chemicals, refining, metals) migrate more frequently from one developed country to another than they do from developed to developing countries.⁵⁷ Nevertheless, certain more rapidly developing countries, such as Brazil, India, Korea, Malaysia, and Mexico, are gaining increasing shares of manufacturing exports, though many of these exports are in relatively lower polluting industries like electronics manufacturing, textiles, and assembly. Some of these countries are also gaining significantly in low-margin services trade, such as data processing. More polluting industries like steel and chemicals manufacturing are relatively immobile due to high-capital investment, and tend to locate and compete based on standard business factors such as access to resources, access to markets, and efficiency of production. The losers in an open trading environment in those industries tend to be the least efficient, most highly polluting producers, such as the steel mills of eastern Europe and Russia after they were exposed to international competition. By the same token, anti-trade measures such as subsidies or protectionist tariffs usually serve to perpetuate environmentally unsound operations such as those same older steel mills in eastern Europe and Russia, and indeed the old integrated steel mills in the United States.

Unsustainable patterns of development can arise with economic and social change, including new business opportunities from falling trade barriers. Nations need to have effective national and local policies in place to prevent environmental and social disruptions from uncontrolled development. For example, there has been an unanticipated sharp increase in manufacturing on the Mexican side of the United States-Mexico border area since NAFTA came into force. That increase appears to be driven mostly by the abrupt change in terms of trade from the 1995 devaluation of the peso and has little to do with reduced tariffs or other trade rule changes in NAFTA itself. Moreover, the industrial concentration in the border area is unsustainable primarily in the sense that infrastructure development on both sides of the border—housing, roads, transportation services, water and sewer services, waste disposal capacity, and social services delivery—has not kept pace with the explosive growth in traffic, population, and industry. NAFTA-related institutions, the Border Environment Cooperation [32 ELR 10326] Commission (BECC) and the North American Development Bank,⁵⁸ were established to build up the environmental infrastructure, but have been less effective than hoped. On the positive side, many environmental conditions and practices are improving in Mexico, particularly with respect to manufacturing.⁵⁹ The story is less encouraging in terms of agriculture and resource extraction, e.g., the displacement of agricultural communities unable to compete with corn and fructose imports from the more efficient U.S. producers,⁶⁰ but many of those problems relate to distortions in agricultural and resource-based production through subsidies, price controls, and ineffective provision of education, health care, and other services to rural communities, problems that persist in the United States and Europe as well as in developing countries.

The third broad environmental concern with burgeoning international trade is the "scale effect." Quite simply, an open international economic system is intended to⁶¹ and does promote economic growth and thus exacerbates all problems where the "scale" of human activity is the driving force behind environmental degradation. As many ecologically aware economists have pointed out, the world cannot go on indefinitely increasing the quantity of material goods that it produces and consumes.⁶² To the extent that the rapidly escalating monetary values of the goods transferred in international trade reflect increases in materials (rather than increases in intangible "value"), the very economic wealth embodied in liberal international trade, so proudly pro-claimed by the WTO as a contribution to world welfare, may represent instead the downward spiral of the unsustainable expenditure of the world's natural environmental capital. Developing countries do not directly dispute this concern, but point the finger of blame back at the huge scale of economic activity in the developed world as the main problem to be corrected. They argue for explicit application of the principle of "common but differentiated responsibility" to trade policy as well as environmental policy, and object to any policy that would burden the world's poor countries' development prospects by seeking to moderate the scale effect of trade.⁶³

In the end, the response of trade advocates and most developing countries to all three of these concerns comes down to a single argument: trade is not the source of the observed environmental problems. Environmental protection, they assert, should be and can be pursued on its own terms through the application of environmental regulation and other environmental policy tools to solve these problems directly at their source. It is ineffective, they argue, to use trade restrictions or conditions as an indirect, if politically expedient, means to achieve environmental objectives. Trade officials fear, more ominously, serious damage to the entire trade system if national legislatures and regulators were allowed to engage in "green protectionism"—protection of their own producers from foreign competition under the pretext that the trade restrictions serve environmental ends. Having carefully erected the liberal trade regime over the last 50 years and laboriously closed off many avenues of economic protectionism, they are not about to open a new one.

It is appropriate to mention another environmental concern about trade agreements that has emerged in just the last year or two—the allegation that local or national governments could be compelled by investor-state arbitral tribunals to pay compensation to foreign investors for economic damages merely from the proper exercise of their environmental regulation responsibilities. The posterchild for this concern is the decision by the Canadian government to settle a claim brought against it by Ethyl Corporation under Chapter 11 of NAFTA for investment losses from a two-year Canadian ban on import or interprovincial shipment of the manganese-based gasoline additive methylcyclopentadienyl manganese tricarbonyl (MMT). Careful analysis of the facts behind this case and several others under Chapter 11 strongly indicates that investor-state arbitration does not threaten environmental regulation after all. Rather, it has served its intended purpose to assure fair treatment for foreign investors, helping investors gain compensation for government actions that, while purporting to be environmental measures, were really designed to protect or advance certain domestic economic or political interests.⁶⁴

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A Short History of Trade and Environment Issues, 1990-2001

Pre-UNCED Developments

The relationship between international trade and environmental protection was a topic of study well before Rio, indeed as early as the Stockholm Conference on the Human Environment in 1972. For example, the Organization for Economic Cooperation and Development (OECD) in 1972 adopted a Recommendation on Guiding Principles Concerning the International Economic Aspects of Environmental Policies.⁶⁵ The polluter-pays principle is the best known of these, but other principles put the OECD on record in support of general GATT rules and against export rebates or import duties for environmental purposes.⁶⁶ The OECD action and the occasional academic study,⁶⁷ though, did not gain much political visibility. Although the GATT trade body authorized the creation of a trade-environment working group in 1971, it was not constituted for another 20 years. As Thomas Schoenbaum has observed, "before 1991, the relationship between the protection of the environment and international trade was an arcane specialty that attracted little attention."⁶⁸

The political neglect of the trade-environment relationship ended abruptly during the run-up to UNCED in response to four impulses. First, the preparatory work for UNCED inspired various organizations and interests—not only the GATT itself, but the OECD, the U.N. Conference on Trade and Development (UNCTAD) and the World Bank, among others—to study the issues and formulate policies. Second, GATT Director-General Arthur Dunkel released a draft text of the ambitious Uruguay Round agreements late in 1991, and a number of its provisions drew environmental criticisms from U.S. and European NGOs. Third, the United States was embarking on NAFTA negotiations. Interests in the United States who had previously paid scant attention to trade policy, including national environmental organizations and their foundation donors, focused on this new high-profile trade initiative. Fourth, a September 1991, opinion of a GATT dispute settlement panel, the Tuna-Dolphin 1⁶⁹ case, found that the U.S. embargo of tuna from Mexico because of Mexico's inadequate efforts to protect dolphins violated Mexico's rights under the GATT. This ruling galvanized ordinary citizens to take an interest in trade policy. It also galvanized developing countries in support of Mexico's position, beginning the North-South rift on trade-environment issues that persists today. A general meeting of UNCTAD in Cartagena, Colombia, in 1992, took a clear position against the U.S. tuna embargo by adopting the following language as a principle: "Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus."⁷⁰ With unanimous developing country support, the identical language appears in Principle 12 of the Rio Declaration and in Chapters 2 and 39 of Agenda 21.

The U.S. policy apparatus on the trade-environment relationship evolved quickly during the early 1990s in response to these four impulses. The U.S. Environmental Protection Agency (EPA) and the Office of the U.S. Trade Representative (USTR) responded most rapidly and have continued since then to be the major policy players in the executive branch. In 1991, EPA Administrator William Reilly requested the EPA National Advisory Council for Environmental Policy and Technology to establish a new trade and environment advisory committee, the first forum in the government for open, transparent trade-environment dialogue.⁷¹ By 2000, EPA's office of international activities had a full-time trade-environment policy coordinator, and several lawyers in its office of general counsel have become trade experts. In 1991, U.S. Trade Representative Carla Hills gained a new senior position for her agency—deputy assistant U.S. trade representative for environment and natural resources—to be filled by an environmental expert from outside the USTR.⁷² Ambassador Hills also secured appointment of senior representatives of environmental interests—including prominent NGO leaders—to each of the USTR's statutorily prescribed policy advisory committees and to the president's advisory committee on trade policy and negotiations.⁷³ The "environmental advisors" became an important sounding-board for the USTR and exerted substantial influence in NAFTA negotiations in particular. Both the internal staffing and the advisory structure at the USTR have since been strengthened: internal staffing was expanded to a full office headed by an assistant U.S. trade representative in 1994; the environmental advisors were regrouped and augmented in a separate new policy advisory [32 ELR 10328] committee—the Trade and Environment Policy Advisory Committee, jointly administered with EPA.⁷⁴

On a more substantive note, the USTR and EPA pioneered trade and environment policy coordination in 1991 and 1992, most visibly in the NAFTA context. The two agencies collaborated on a detailed report identifying and evaluating environmental issues relevant to the negotiation of NAFTA, released in February 1992.⁷⁵ The USTR also included EPA in NAFTA policy formulation and negotiation, with EPA officials chairing a couple of the negotiating teams on issues where environmental regulation was centrally involved. Officials of the Food and Drug Administration, the U.S. Department of Labor, and the wildlife agencies in the U.S. Departments of the Interior and Commerce were also involved where appropriate on issues such as food safety, worker health issues, or trade in endangered species. This spirit of cooperation spilled over into the continuing negotiation of new multilateral agreements on the same issues in the Uruguay Round of GATT negotiations, which continued through most of 1993.

The four exogenous impulses of the early 1990s also prompted many other interested parties and organizations to try to influence this new area of policy debate. Articles, books, or policy studies poured forth from leading institutions, including the World Bank,⁷⁶ the Environmental Law Institute,⁷⁷ the Center for International Environmental Law,⁷⁸ the Council on Foreign Relations,⁷⁹ the Worldwatch Institute,⁸⁰ the World Resources Institute,⁸¹ and the Institute for International Economics (Washington's most highly regarded think-tank on trade policy),⁸² among others. Environmental advocacy groups such as the Sierra Club, the National Wildlife Federation (NWF), and the Natural Resources Defense Council, among others (including Europe-based groups such as Greenpeace International and Friends of the Earth International), assigned staff to the trade-environment issue and began generating position papers and taking an active role in the broader public process of making and influencing policy. Congress commissioned major studies of trade and environment issues by the Congressional Research Service and the Office of Technology Assessment,⁸³ and tasked the U.S. General Accounting Office to examine selected salient issues. The Energy and Environment Study Conference also conducted seminars and sought to find common ground among interested parties on possible long-term solutions to the tuna-dolphin controversy. Since the early 1990s, some of this activity has subsided, but several national environmental organizations, including the Sierra Club, the NWF, the World Wildlife Fund, and Public Citizen continue to have fulltime advocacy staff on trade issues.

All told, by the time of UNCED the public debate in the United States on trade and sustainable development issues had progressed to the point where a significant constellation of government officials, politicians, NGO leaders, and independent researchers and analysts could discuss the issues intelligently. A number of trade experts and policymakers had become familiar with environmental values, concepts, and systems, and they could interact with a corresponding group of environmental experts and officials now equipped with an understanding of the essential elements of international trade theory, law, and practice. The U.S. government was beginning to construct the early outlines of a national policy on how trade and environment policies should interact in order to promote sustainable development.

For the United States, then, UNCED itself was not a significant step in drawing concepts of trade, environment, and development together. The major trade policy issue during the Rio conference was the wording of Principle 12, which was prompted by the high-profile tuna-dolphin dispute in the GATT. The United States, lacking support from any other government for the legitimacy of its tuna import measure, was unable to defeat or deflect the strong language in Principle 12 calling on nations to "avoid" unilateral trade measures for protection of the environment beyond national jurisdiction.

Intense Activity, 1992-1994

The period from UNCED to the end of 1994 saw intense trade policy activity coupled with a heightened U.S. responsiveness to trade-environment considerations in all dimensions of trade negotiations, environmental negotiations, trade policy formulation, and trade dispute settlement. Five actions in these years stand out in terms of trade and sustainable development: (1) the final negotiations of environmental provisions in NAFTA text itself in the summer of 1992; (2) the commitment to environmental side agreements to NAFTA, first made by President George H.W. Bush and his Administration, carried to completion under President William J. Clinton in 1993, and quickly implemented in 1994; (3) negotiating for environmental provisions in the closing stages of the Uruguay Round of GATT talks and in the final documents establishing the WTO signed in Marrakesh in April 1994; (4) U.S. advocacy in disputes in the GATT/WTO in Geneva, where U.S. environmental measures were in question; and (5) the push by the Clinton Administration for further trade liberalization agreements exemplified by the Summit of the Americas in Miami in December 1994. A number of other policy initiatives during these years confirmed the sharper focus on environmental issues in trade policy.

[32 ELR 10329]

NAFTA and the Side Agreements

The political traction of environmentalists concerned about the effects of NAFTA prompted the trade negotiators to modify their initial "parallel track" approach to environmental issues and introduce some environmental considerations directly into the trade agreement in the final stages of the negotiations in 1992. The preamble was modified to include improved environmental protection and environmental enforcement in the three countries as objectives of NAFTA. A provision was added to assure that NAFTA would not interfere with efforts to carry out the terms of several important international environmental agreements.⁸⁴ A paragraph was added to the investment chapter that not only confirmed the right of countries to impose nondiscriminatory environmental requirements on new investments, but expressed the governments' joint disavowal of the "pollution haven" strategy of enticing investment by lowering environmental requirements.⁸⁵ Calling NAFTA with these provisions "the greenest trade agreement ever" may have been election-year hyperbole, but NAFTA marked the first time a trade agreement had dealt self-consciously with environmental concerns.

In September 1992, just weeks after the NAFTA trade deal was struck, the United States hosted a historic first meeting of the three North American environmental ministers, who publicly launched negotiations toward the creation of a trinational environmental commission.⁸⁶ The Clinton team took over the negotiations in the winter of 1993, and concluded the North American Agreement on Environmental Cooperation (NAAEC) that August.⁸⁷ They followed this with a bilateral "side" agreement with Mexico in October 1993, to establish a BECC and a North American Development Bank to promote and finance environmental infrastructure construction in the United States-Mexico border area.⁸⁸ After intense lobbying and the shaping of the side agreements, five environmental organizations announced their support for NAFTA. A final obstacle was a lawsuit insisting that the USTR was obligated to prepare an environmental impact statement (EIS) on NAFTA. The government prevailed on that issue in the D.C. Circuit Court of Appeals,⁸⁹ but at the same time prepared an "environmental report" covering the salient environmental issues for the information of the public and Congress.

Closure on the Uruguay Round

With the president's trade negotiating authority due to expire in April 1994, the new Clinton Administration was also under pressure to complete the long-running Uruguay Round of trade negotiations. Environmental concerns again loomed as a significant late political factor. The draft texts on TBT and SPS in particular suffered by comparison with NAFTA, which the United States was now touting as the new standard for responding to environmental concerns in a trade agreement. U.S. negotiators pressed for changes in relevant sections of the agreements, but on the larger world stage the reception to these intiatives was cool. In the end, the United States secured a few footnotes to the SPS agreement and a clarification of interpretations of some terms in the TBT agreement, but otherwise was unable to persuade other governments to take a NAFTA-like approach.

The United States had better luck gaining agreement on certain symbolic but ultimately important gestures as part of the final package of documents concluding the Uruguay Round signed at the trade ministerial meeting in Marrakesh, Morocco, in April 1994. The preamble to the agreement establishing the WTO was redrafted to go beyond the ritual affirmation of sustainable development as a goal to include more specific reference to environmental protection and the "optimum" use of resources.⁹⁰ With support from other quarters, the United States also urged the establishment of a standing committee of the new WTO to address the full range of trade and environment issues. In the end, the Ministerial Declaration on Trade and Environment established the WTO Committee on Trade and Environment (CTE) as a provisional committee, though it has met regularly since then and carried on a very active agenda of research, discussion, engagement with international environmental bodies such as the U.N. Environment Program (UNEP), and periodic consultation with the broader community of environmental NGOs.⁹¹

Key Trade-Environment Disputes

After the infamous tuna-dolphin opinion of the GATT dispute settlement panel in 1991, the United States pressed for adjustments in GATT interpretation during the general trade-environment discussions of the GATT working group on environmental measures and international trade. The U.S. arguments had little effect in the face of nearly unanimous endorsement of the panel report by other countries. More constructively, the United States used the occasion of further trade disputes in the GATT and then the WTO to argue for, and in part secure, new readings of GATT Article XX. The first occasion was the Tuna-Dolphin II⁹² case, brought by the EU, in which the United States persuaded the dispute panel that there was no legal basis in the GATT text [32 ELR 10330] to rule out the use of trade measures to protect a resource outside national jurisdiction. The panel nevertheless ruled against the U.S. measure on the somewhat new (and questionable) ground that the U.S. law did not protect dolphins directly but was instead designed to coerce other governments to change their policies.⁹³

The very first dispute to be resolved under the new WTO DSU was another challenge to a U.S. environmental measure brought by Venezuela and Brazil over certain aspects of EPA regulations under the Clean Air Act provisions on reformulated gasoline. Although the United States again lost (in this case deservedly so since certain details of the regulations clearly discriminated by providing one set of rules for U.S. refiners and a different set of rules for foreign refiners), the United States achieved a major step forward by getting the new WTO Appellate Body to agree that clean air is an "exhaustible natural resource" and that the statutory provisions on reformulated gasoline were "related to the conservation" of that resource.⁹⁴ A few years later, in the much-analyzed Shrimp-Turtle⁹⁵ case, the Appellate Body made further strides toward a fuller acceptance of the legitimacy of national trade measures to protect natural resources. The Appellate Body embraced the idea that the protection of sea turtles anywhere in the world was a substantial environmental issue and referred extensively to international environmental law as support for national efforts to protect these endangered species. The panel in that case also made extensive use of a group of scientific experts on sea turtles, a useful procedural innovation. Even so, the case ended with a disappointing and troubling conclusion that the U.S. regulations had been applied with "arbitrary and unjustifiable discrimination," and so did not qualify for GATT Article XX exception. On the other hand, the United States successfully defended its response to this decision, which was to make only modest adjustments to its program while maintaining the basic structure of the embargo.⁹⁶

The Summit of the Americas and the Asia-Pacific

Economic Cooperation (APEC)

The summer and fall of 1994 saw the culmination of this intense period of action on trade issues and active discussion of the environmental consequences of trade. The United States worked vigorously with Canada and Mexico to implement the two environmental side agreements to NAFTA and to get the respective commissions budgeted, directors named, and advisory committees appointed. The Clinton Administration also waged a campaign to secure congressional approval of the Uruguay Round results. In contrast to the NAFTA vote, environmental NGOs were united in their opposition to the WTO agreements, but their arguments lacked the bite of earlier concerns about NAFTA and their advocacy lacked energy. The Administration again prepared an environmental evaluation of the WTO agreements, addressing the salient concerns. The commitment to create a CTE in the new WTO assuaged some of the environmental concerns.

In these months, the Clinton Administration also aggresively pursued two regional schemes for trade liberalization, one in the APEC forum and the other in the Summit of the Americas. The APEC intiative included specific U.S. attention to the promotion of environmental technology transfer through U.S. advice and the export of U.S. environmental control technology. In a high profile action, the U.S. hosted a Summit of the Americas in Miami in December 1994, where the enterprise to negotiate the Free Trade Area of the Americas (FTAA) was launched. The "plan of action" adopted there paid rhetorical homage to sustainable development (free trade and increased economic integration are key factors for sustainable development) and recalled the Rio language (sustainable development "will be furthered as we strive to make our trade liberalization and environmental policies mutually supportive"), but democracy and increased investments were given the most attention there and at subsequent hemipsheric summits (the latest in April 2001 in Quebec). Environmental issues in the FTAA negotiations have been relegated to a nonsubstantive committee on civil society that will offer nonbinding "recommendations" on trade and environment to the trade ministers.⁹⁷

Implementation and Incremental Change, 1995-2001

By the time of the official inauguration of the WTO on January 1, 1995, U.S. trade-environment policy had assumed the basic shape that it retains today. The past seven years have been active in the implementation or re-articulation and refinement of the policy, but have brought forth only a couple of new initiatives. In the United States-Jordan Free Trade Agreement,⁹⁸ negotiated in 2000 and approved by Congress in 2001, the United States negotiated for a provision in the trade agreement itself that mimics the enforcement provision of the environmental side agreement to NAFTA, making failure to enforce national environmental laws a basis for trade sanctions. In 1999, President Clinton issued an Executive Order establishing a formal requirement for the environmental assessment of new broad-scale trade agreements, followed by guidelines for the content and preparation of such assessments in 2000.⁹⁹ Otherwise, trade policy activities since 1995 have generally continued established policy. For example, the United States has been an active player in and a strong defender of the North American Commission for Environmental Cooperation (NACEC), seeking to implement the earlier policy promises for better environmental protection efforts and better integration of trade and [32 ELR 10331] environment policy that helped secure congressional approval of NAFTA. The United States has made some effort to insert NAFTA-style environmental provisions in the text of the FTAA, but has run into substantial resistance from other countries, including NAFTA-partner Mexico. Similarly, active U.S. advocacy in the WTO CTE has largely recycled, with only modest refinements, established U.S. positions on the perennial points of discussion. The issues the United States has pushed most strongly in the WTO are transparency and citizen access to WTO forums, including the right to submit amicus briefs to WTO dispute settlement panels.

A significant restraint on policy reforms has been the weakness of political support for bringing environmental issues into the trade arena. President Clinton failed in several attempts to get Congress to agree that environmental issues should be part of the U.S. trade negotiating agenda. As a result, Congress declined to renew its delegation of authority for foreign commerce negotiations under the so-called fast track legislation by which Congress sets broad trade negotiation goals but limits its own prerogative to micromanage trade policy and agrees to approve or disapprove major negotiated trade agreements without amendment. Newly re-named the "trade promotion authority" legislation by President George W. Bush and his Administration, the delegation legislation is being criticized for the time being from the opposite side, that the U.S. agenda should more specifically embrace environmental issues as part of trade policy.¹⁰⁰ This political deadlock, dramatized by the knife-edge 215-214 vote in the House on December 6, 2001, to approve a fast track bill with a narrow environmental mandate, has inhibited U.S. trade negotiators from advancing new environment-related initiatives. The absence of clear congressional support has weakened U.S. credibility with foreign governments as a good-faith promoter of sustainable development in its trade policy.¹⁰¹

Sustainable Development Principles for International Trade

The "key principles" articulated by John Dernbach¹⁰² provide an excellent point of departure for capturing the essence of sustainable development in the international trade context. They apply to trade policy, however, in different and sometimes peculiar ways. Some principles, especially intergenerational equity and its complement, intragenerational equity, set a normative framework within which the details of trade policy are now discussed but have only oblique application to specific rules or policy reforms and will not be applied in detail to the analysis that follows. Other principles, such as the polluter-pays principle and the precautionary principle, not only declare broad policies but explicitly or implicitly guide specific substantive policy choices and merit consideration when those specific policies are at issue. Even so, they do not help greatly in the overall evaluation of trade policy reform. Finally, some principles relate to procedure and institutional behavior—integration of economic and environmental policymaking, public participation, and developed country leadership. Though these "procedural" principles do not, by themselves, determine policy outcomes, they have been near the center of the national and international discussion in the trade-environment context, and so will form the analytical heart of this Article. With respect to trade and sustainable development at least, one has to agree with Howard Mann that "sustainable development is a permanent process, and therefore requires an emphasis on process issues for it to be achieved and maintained."¹⁰³ An emphasis on process also rescues sustainable development from premature burial as a "failure," a "buzzword largely devoid of content."¹⁰⁴

Broad Normative Principles Situate Trade Policy in Sustainable Development

If there is one principle that defines most clearly the difference between earlier discussion of environment and development policies and the post-Rio international dialogue, it is surely intergenerational equity, which reminds policymakers that in their actions they must consider the sustainability over long periods of time of the development they seek to advance. For trade as a particular policy sphere bearing on development, intergenerational equity does not indicate a clear direction or a particular agenda of policy reform. Rather, it situates trade in a fresh context, adding a temporal component to the evaluation of whether a particular trade policy assists in the development process. The Appellate Body of the WTO took note of this fresh context in its decision in the Shrimp-Turtle case, supporting in principle the right of the United States to invoke trade measures to help assure the continued survival of endangered sea turtles on the basis that such a policy is consistent with world efforts to protect endangered species and promote the conservation of biodiversity.¹⁰⁵ To that extent, one can say that the international trade regime has begun to orient itself, intellectually at least, toward sustainable development.

The principle of intragenerational equity, often overlooked, complements intergenerational equity as a basic pillar of sustainable development thinking. In articulating its famous definition of sustainable development, the World Commission on Environment and Development (WCED) emphasized "the concept of 'needs,' in particular the essential needs of the world's poor, to which overriding priority should be given."¹⁰⁶ Poverty alleviation within the context of ecologically sustainable development necessarily connotes [32 ELR 10332] a channeling of economic resources away from unsustainable levels of consumption in the wealthiest countries and toward the great masses of the world's poorest people now, in the present generation.¹⁰⁷ The WCED also observed that intergenerational equity, linked as it is to physical sustainability, is "a concern that must logically be extended to equity within each generation."¹⁰⁸ The key consideration here is equity in the opportunity to satisfy aspirations for a better quality of life.

Intragenerational equity has a particular connection to trade policy because international trade should contribute to sustainable development by helping meet the basic needs of all the world's people and by offering an equitable opportunity for a quality of life beyond those basic needs. With ever-greater commonality of purpose and political determination, the developing countries insist that the world trade regime needs to be restructured so as to give new emphasis to the developmental needs of the poorest countries.¹⁰⁹

Intergenerational equity and intragenerational equity considerations will inform some of the analysis in the section below entitled "Assessing U.S. Trade Policy in Light of Sustainable Development Principles" and many of this Article's conclusions. I will not use them, though, as specific policy assessment criteria because of their generality.

Polluter-Pays, Precaution, and Other Principles Intended to Steer Specific Decisions

Under the influence of international law and the civil law tradition, key concepts in international environmental law are defined in considerable part by a set of principles that has accumulated through declarations such as Stockholm and Rio, texts of certain treaties, and the practice of states. Philippe Sands sets forth seven such principles that he believes support and give content to the concept of sustainable development. Two of those seven are principles of substantive environmental law, at the national and international levels: the polluter-pays principle and the precautionary principle.¹¹⁰ Although U.S. environmental laws and lawyers do not typically refer to these principles, they have been at the core of U.S. environmental policy since the early 1970s.

The polluter-pays principle was originally enunciated by the OECD to restrain public subsidization of the pollution control costs of private firms in line with traditional liberal economics calling for the internalization of environmental externalities. In its original strict sense, the polluter-pays principle holds that polluting enterprises should bear the costs of controlling their pollution to the degree required by national environmental regulation. It sought to avoid disruptions in trade flows that might arise if there were different degrees of subsidization of environmental controls from one country to another, but it specifically avoided the issue of competitive effects from differences in the underlying environmental standards. As it evolved, polluter-pays was broadened to encompass a corollary "user-pays" principle—the notion that users of environmental resources should pay to prevent or correct the environmental consequences of their use. Thus, the polluter-pays principle has become more or less coincident with the general theoretical proposition that private entities should be required to internalize in their cost of doing business all the environmental externalities associated with their activities. The principle thus has special pertinence to the trade policy issue of restricting or allowing subsidies for activities that may cause environmental harms.

The precautionary principle (or precautionary approach, as it is called in the Rio Declaration) is more subtle and less clearly defined than polluter-pays.¹¹¹ At its broadest extent, it operates similarly to the principle of intergenerational equity as a concept that reshapes the context for policy deliberation. It establishes a presumption that actions posing potentially significant, if poorly understood, risks of environmental harm should be avoided, thus putting the onus on those engaged in such practices to justify the risks they are creating to overcome the presumption. At this level, the precautionary principle is, for example, an argument in favor of immediate reductions in carbon emissions even while we continue to debate the extent or effect of a warmer climate. As a broad principle, it has little guidance to offer general trade policy, because the environmental effects of trade depend on what is being traded.¹¹² With the exception of energy consumption in shipping and perhaps the problem of ballast water pollution and inadvertent introduction of invasive species, international commerce in and of itself does not present environmental risks of the type to be controlled under a precautionary approach.

The precautionary principle does have a more immediate bearing on trade policy, though, when applied in its narrower form as a rule of decision about the environmental and health risks associated with certain activities or certain products, especially chemicals and genetically modified organisms. It has a place in international environmental agreements dealing with trade in products or wastes, as well as in the WTO and NAFTA agreements' sections on national product standards, especially SPS measures. This Article will take up that aspect of the precautionary principle in the [32 ELR 10333] section below entitled "Assessing U.S. Trade Policy in Light of Sustainable Development Principles."

Procedural and Institutional Principles That Are Reforming Trade Policymaking

Trade policy reform toward sustainable development has been seen most generally and emphatically as matter of adjusting the mind-set of the trade policy community. Unsustainable patterns of production and consumption are encouraged in closed systems of decisionmaking and alliances between business and government that promote short-term economic advantage over long-term sustainability of development. Trade policy has been a notoriously closed policy system, accessible only to government officials, who in turn were accessible nationally only to business interests. Even some advocates of liberal trade agree that opening domestic and international trade policy forums to input from environmental officials and experts and to the participation of environmental NGOs is an important means to the end of gaining consideration of the environmental effects of trade policy.¹¹³

Three separate and somewhat interrelated principles set new sustainable development norms for trade policy institutions and procedures. The first is integrated policymaking, which Mann calls "the most essential principle."¹¹⁴ In its simplest form, this principle calls on economic policymakers like trade officials to take environmental considerations into account in their work, and vice versa. As we will see, such procedural integration is easy to prescribe, but more difficult to achieve. At this still early 10-year mark in the evolution toward sustainable development, a good deal of the observable progress to be evaluated in the assessment discussion of this Article has to do with better communication and interaction among environmental, trade, and social interests, both governmental and nongovernmental.

More robustly, integrated policymaking implies substantive results—that trade policymakers and other economic decisionmakers will not simply introduce environment and resource conservation into their policy analysis, but that they will give environmental factors equal stature beside economic factors in their decisionmaking criteria. Ideally, then, policy integration means that trade policies will substantively seek to promote only environmentally sustainable economic development and they will actively combat tendencies toward unsustainable policies. Once again, environmental policymakers would also themselves need to incorporate developmental aspects into their policy decisions. In its most comprehensive form, integrated policymaking for sustainable development would also pay explicit attention to social and cultural circumstances and human development so as to enhance the opportunity for all in a sustainable world economic system.¹¹⁵ The assessment and conclusion which follow will offer judgments of the substantive results of U.S. policy, recognizing that full substantive policy integration represents an ideal standard that may not be attained for a long time, if ever.

The second principle, which connects with the social and cultural as well as the economic and environmental aspects of sustainable development, goes by various terms, the narrowest of which is public participation and the broadest of which is good governance. Integration of policy cannot occur in closed councils of officials and experts, even if those councils are multidisciplinary. In the final analysis, economic development and environmental protection touch on important parts of each of our lives, and thus the people at large should have an avenue for introducing their knowledge and their values into policy deliberations. At a more abstract level, sustainable development theory also embraces the general conviction that societies and institutions that do not create meaningful opportunities for direct public input into public policy are themselves inherently unsustainable. The vigor of anti-globalization protests gives credence to academic speculation about legitimization of policymaking; the WTO's perceived lack of legitimacy may be its most profound current weakness.¹¹⁶ Prying open the doors of trade negotiations and trade dispute settlement becomes a key part of the campaign to make trade policy more compatible with sustainable development.

The third institutional principle relevant to the world trade system is the call for developed country leadership, itself a corollary of the broader principle that all nations in the world have "common but differentiated responsibilities" for putting the world on the path to sustainable development. This principle fits well in the trade context because the developed countries in general, and the United States in particular, exercise a degree of influence over the WTO that corresponds to their economic muscle in world markets. They also have large staffs in their capitals and in Geneva attending to these policy issues, whereas many developing countries can support only a single trade representative, or perhaps only one representative for all the Geneva-based international organizations. If there is to be a movement of trade policy in the direction of sustainable development, the developed countries will have to lead it.

Assessing U.S. Trade Policy in Light of Sustainable Development Principles

The Polluter-Pays Principle

U.S. environmental policy and trade policy both follow the polluter-pays principle as a guiding philosophy even though U.S. law and policy statements rarely mention the principle [32 ELR 10334] as such. Indeed, because U.S. environmental policy conforms closely to the principle, seldom offering government financial support for environmental protection steps by private parties, it comes naturally for the United States to pursue efforts to have other governments adopt similar environmental policies. Such initiatives are often advocated by U.S. firms that pay their own pollution control or resource conservation costs and then face competition from imported products that arguably are not paying their own way.

In its conventional form, the polluter-pays principle requires only that regulated entities pay the costs of meeting national environmental standards, accepting that there may be differences in the stringency of those standards from one country to another. The U.S. trade policy initiative since Rio that adheres most closely to that model is the NAFTA side agreement provision that allows trading partners to be held accountable through trade measures for failures to enforce their own environmental requirements.¹¹⁷ The same idea is replicated in a more straightforward fashion as an operative provision of the recent United States-Jordan Free Trade Agreement.¹¹⁸ The United States also supported the tight conditions on the WTO's "green light" environmental subsidies, which limit such subsidies to 20% of the costs for existing facilities to meet new, more stringent environmental requirements.¹¹⁹

Apart from the restraints on subsidies, however, international trade rules do little to encourage countries to strengthen their national policies on cost internalization. The traditional pattern has been to rely on the individual nations to adopt appropriate environmental policies for the regulation of pollution and the conservation of resources. Yet the WTO has done little actively to encourage such policies. For example, it has not revised its policy that disapproves tax adjustments on exports or imports of goods for taxes on unincorporated inputs to the goods, such as energy. Without the opportunity to make such adjustments for international trade, competitiveness concerns about carbon taxes or other "green" taxes have discouraged governments from implementing them.¹²⁰ Thus, contrary to much popular rhetoric, the feebleness of the WTO system, not its alleged too-great strength, makes it more difficult to implement the polluter-pays principle, the very principle where the mutual support between trade and environment policies is most obvious and obtainable.¹²¹ A stronger WTO system could rein in environmentally harmful subsidies and other widespread distortions in national policies.

To its credit in terms of sustainable development principles, the United States has made subsidy controls a leading element of its objectives for future WTO trade negotiations.¹²² The United States and other agricultural exporters have been very wary of European and Japanese initiatives designed to excuse some agricultural subsidies on environmental policy grounds, and the United States has also been a leading supporter of the effort to get the issue of subsidies to deep-sea fisheries addressed by the WTO, with a goal of reducing or eliminating those subsidies because they encourage the overfishing that has devastated most fish stocks in recent decades.¹²³ The repeated efforts of the United States to impose extra duties on Canadian softwood lumber to offset the trade effects of alleged below-cost timber sales by British Columbia may also be consistent with a user-pays principle, though the massive effort that three successive administrations have put into this campaign clearly have more to do with assistance to U.S. timber producers than with any noble aspiration for sustainable development of forest resources in Canada.¹²⁴

A strong version of the polluter-pays principle and its user-pays cousin holds that polluters or resource users should pay to eliminate or compensate for all of the environmental externalities of their activities. The strong version of the principle lends support to the often-stated arguments of environmentalists that trade policies should allow for measures to offset the competitive advantage of lower environmental standards in foreign countries. A favorite policy prescription is the "green countervailing duty" on imports to counteract "eco-dumping." The theoretical and empirical bases for green countervailing duties are weak, however, and the United States and other governments in the OECD [32 ELR 10335] have gone on record in opposition to them.¹²⁵ On the other hand, the United States has argued strongly, but virtually without support from other governments, for the right to use trade measures in certain circumstances to put economic pressure on other countries to take steps to protect shared or global commons resources, notably with the tuna and shrimp embargoes at issue in the infamous Tuna-Dolphin and Shrimp-Turtle cases in the GATT and the WTO. The U.S. laws barred imports of tuna or shrimp from countries not making efforts equivalent to U.S. efforts to protect dolphins or sea turtles, respectively. In each case, the environmental motivation for the U.S. policy was reinforced by a congressional interest in protecting U.S. fishermen (who were paying for dolphin and turtle protection gear and practices) from lower cost imports from countries not taking similar measures.

Recommendations on Trade and the Polluter-Pays Principle

The United States should continue those elements of its trade policy that seek removal of environmentally deleterious subsidies, e.g., fisheries subsidies. It should change those elements of both domestic policy and its international negotiating position that seek to defend or perpetuate subsidies and quotas. The list of such distortions to trade that should be eliminated is long, including most prominently subsidies or other protections to agriculture, timber, mining (below-cost or no-cost access to mineral resources on federal land), and textiles.¹²⁶

The United States should continue to press for provisions in trade agreements or in parallel environmental accords that allow investigation of and appropriate trade sanctions against failures of trading partners to enforce national and local environmental requirements.

The United States, both domestically and internationally, should press for more active use of environmental taxes as a cost-internalization tool. Internationally, the United States should urge the WTO to take up formal reconsideration of the policy on border tax adjustments, with a view to allowing border tax adjustments for domestic environmental taxes, especially those that seek to reduce the consumption of polluting energy resources.

The Precautionary Principle

The precautionary principle (or precautionary approach) is fundamentally a principle of environmental management. As such it has no general bearing on international trade policy, which self-consciously seeks to avoid establishing environmental policy.¹²⁷ But of course trade policy sometimes interacts with environmental policy, where both have something to say about the goods, services, or investments in question, or the protection of intellectual property associated with goods or services, and in these situations the precautionary principle may be relevant. To take a simple example, the United States was one of the strongest proponents of the newly signed Stockholm Convention on Persistent Organic Pollutants,¹²⁸ which sets up a system of controls on international trade in such chemical substances, including prohibitions or restrictions on the export and import of certain listed chemicals. The Stockholm Convention squares well with international trade law because it is a multilateral agreement, it applies trade measures only as appropriate to meet the environmental objective of reducing, controlling, or eliminating the production and use of persistent organic pollutants (POPs), and it allows trading of these substances with nonparty States who comply with the basic convention framework, thus avoiding any trade discrimination based on the formality of party or nonparty status. The convention preamble says that "precaution . . . is embedded within the [Stockholm] Convention," and the Parties agree to make future decisions about POPs to be added to the convention annex lists "in a precautionary manner." This application of the precautionary approach in no way alters the convention's relationship to international trade rules. The USTR was supportive of the POPs convention throughout its development.

But not all trade-environment connections involving precautionary policies are so easily reconciled. As mentioned in the primer on trade and environment above, a key area of specific trade-oriented concern about environmental and health policy has to do with national measures to guard against food contamination under SPS regulations. From a trade perspective, trade in foods and feeds has substantial economic importance and is, at the same time, subject to substantial national political pressure to protect domestic farmers from international competition. Most large economies are both major exporters and major importers of food. In the WTO negotiations, then, the United States and many other governments tried to walk a fine line between getting assurance that their export opportunities would not be thwarted by other governments' manipulations of food safety regulations and securing their own interest, as importers, in freedom to take measures to protect their consumers against unsafe products and their producers against dangerous agricultural pests and diseases. The WTO and NAFTA SPS provisions strike the balance by allowing governments freely to determine the level of protection they want to achieve, but requiring that the resulting SPS measures be "based on scientific principles," including "an assessment, as appropriate to the circumstances, of the risks to human . . . life or health," and that they not be "maintained without sufficient evidence."¹²⁹ Both the WTO SPS agreement (Article 5.7) and NAFTA (Article 715.4) expressly accommodate the precautionary approach. They allow governments [32 ELR 10336] to adopt SPS measures "provisionally" based on available relevant evidence where the scientific evidence is insufficient to meet the standard requirements. At the same time, the agreements impose an obligation to seek further information and to review the provisional measure "within a reasonable period of time." Though this language does not differ greatly from much national legislation on risks, many environmentalists and health advocates would like to see more room for health and environmental protection in the trade rules and are critical of the interpretation of the SPS provisions by the WTO Appellate Body in the Beef Hormones¹³⁰ case.

In Beef Hormones, the Appellate Body upheld panel judgments in cases brought by the United States and Canada that concluded that the EU ban on beef from cattle treated with growth hormones was inconsistent with the SPS agreement because it lacked a scientific justification. It is well beyond the scope of this Article to tell the full saga of the beef hormones controversy. In abbreviated form, the United States and Canada allow the use of growth hormones in the raising of beef cattle. The hormone treatment ends some time before the cattle are slaughtered, and there are no detectable residues of hormones in the meat. In 1987, the European Commission, in response to public alarm about the serious health effects of hormones (some are human carcinogens), adopted a directive that no beef from cattle treated with growth hormones could enter the European market. This had the effect of stopping almost all exports of U.S. and Canadian beef and beef products to Europe. When pressed for the scientific basis for the import restriction, the EU asked for time to do further health studies. Those further studies concluded that hormone-treated beef was safe for human consumption, but the EU maintained its import restriction anyway. The United States and Canada, believing that the EU action was contrary to the WTO SPS provisions, initiated a dispute in the WTO.

Interestingly in terms of the precautionary principle, the EU did not argue that the opportunity to adopt provisional measures in Article 5.7 of the SPS agreement justified its measure. The EU presumably recognized that it faced a legal dilemma—if it invoked its right to a "provisional" measure under Article 5.7, then it would be challenged on the ground that the "reasonable time" for confirming scientific studies had long since run out. To avoid that dilemma, the EU made a broader argument: that the precautionary principle justified its measure under the basic rules that a measure be based on science and an assessment of the risk. The Appellate Body agreed with the EU that it would be improper to suggest that Article 5.7 is the full expression of the precautionary principle in the WTO SPS context. The Appellate Body has been consistent in asserting that the WTO agreements are to be interpreted in the light of general international law. Thus, while it observed the precautionary principle "finds reflection in Article 5.7,"¹³¹ it concluded that it is part of the international law context for the interpretation of the other articles of the SPS agreement as well. In that regard, the Appellate Body took note of the debate among international law scholars about whether the precautionary principle is an accepted principle, an approach, or an emerging norm, but carefully avoided expressing a view on this "important but abstract question."¹³² In the final analysis, though, the Appellate Body held that, absent textual instructions to the contrary, the precautionary principle does not justify "measures that are otherwise inconsistent with the obligations of Members set out in particular provisions" of the agreement.¹³³

With that preliminary discussion of the precautionary principle, the Appellate Body went into extensive analysis of the language about measures being "based on" scientific evidence and the nature of the required "risk assessment." Its interpretations of these provisions leave governments broad leeway in their approach to and interpretation of the scientific evidence, but in the end a measure must have some scientific support. In the case of the EU measure, the Appellate Body found that all the scientific evidence, save the views of a single scientist, gave no support to the ban on hormone-treated beef, and that the single scientist's views, not being based on direct consideration of the human effects of ingestion of beef treated with growth hormones, was insufficient in itself to support the EU measure.¹³⁴ General scientific conclusions that exposure to hormones can have serious human health effects do not, in the Appellate Body's view, contradict the uniform conclusions of studies directly assessing the risk from ingestion of hormone-treated beef that such beef consumption does not create health risks.¹³⁵

There is room for debate about whether the SPS provisions themselves and the Appellate Body's agnostic position on the general precautionary principle leave trade policy short of the sustainable development mark. In light of the Beef Hormones decision, though, it is not fair to say that the WTO takes no cognizance of the precautionary principle. The EU itself accepts that the precautionary principle still has vitality in the WTO context, suggesting only that in non-SPS matters, "because of the specific nature of other areas, such as the environment, it may be that somewhat different principles will have to be applied."¹³⁶ In any case, it should be noted that even though there are many variants of the precautionary principle or the precautionary approach in international instruments, governments remain reluctant to embrace it as an agreed-upon principle in international law,¹³⁷ and the articulation in Article 5.7 of the SPS agreement is not outside the mainstream in insisting that precautionary measures should be temporary and that there is a concomitant duty to try to fill the gaps in the scientific information.¹³⁸

[32 ELR 10337]

Many of the issues that the Appellate Body wrestled with in Beef Hormones may require interpretation again in the application of the Cartagena Protocol on Biosafety.¹³⁹ There was tremendous controversy during the negotiation of the Biosafety Protocol about the extent to which and the conditions under which states should be allowed to invoke the precautionary principle to restrict trade in genetically modified organisms, and equally strong controversy about the relationship of the Biosafety Protocol's trade provisions to the WTO agreements. The nuanced wording of the Biosafety Protocol leaves ample room for those arguments to continue.¹⁴⁰

The Biosafety Protocol's references to the precautionary principle are far from clear. The relevance of the precautionary approach, specifically the version of it in Principle 15 of the Rio Declaration, is acknowledged in the protocol's preamble. The protocol also contains detailed provisions on the type of risk assessment to be performed when a government decides whether or not to permit import of living modified organisms ((LMOs), basically seeds and whole food products) in terms of their possible effects on the conservation of biological diversity (which is the only permissible ground for restriction of imports of LMOs).¹⁴¹ Those provisions, however, refer only obliquely to the precautionary principle, stating that "the lack of scientific knowledge or scientific consensus should not necessarily be interpreted as indicating a particular level of risk, an absence of risk, or an acceptable risk."¹⁴² Atits clearest on the issue of precaution, the Biosafety Protocol states that decisions shall not be prevented by a "lack of scientific certainty due to insufficient relevant scientific information and knowledge regarding the extent of the potential adverse effects of a [LMO] on the conservation and sustainable use of biological diversity in the Party of import."¹⁴³

The relationship of the Biosafety Protocol's provisions on precaution and risk assessment to those of the WTO SPS agreement is also obscure, according to Sean Murphy.

In fiercely negotiated language, the protocol's preamble provides that the provisions of the protocol and of WTO agreements are to be "mutually supportive" and that the "Protocol shall not be interpreted as implying a change in the rights and obligations of a Party under any existing agreements," while at the same time such statements are "not intended to subordinate this Protocol to other international agreements."¹⁴⁴

As Professor Murphy insightfully remarks, regardless of the applicability or nonapplicability of WTO dispute settlement and WTO agreements to the interpretation of the Biosafety Protocol, and regardless of the breadth of discretion allowed to states to restrict trade in transgenic organisms on a precautionary basis, the Biosafety Protocol and its uncertain position in the context of the WTO agreements raises important and complex sustainable development considerations in terms of North-South relations. Some developing states might wish for relatively free access to biotechnology and free opportunity to export bioengineered products for reasons of economic development and environmental protection, and will resent and resist precautionary controls by developed countries. Other developing countries, recalling the social and economic upheavals to their agricultural sectors caused by the last generation's "green revolution," may wish themselves to restrain trade in and the proliferation of biotechnology that is largely the product of large corporations in developed countries. The WTO is poorly equipped to navigate these scientific, economic, and political cross-currents. Professor Murphy aptly concludes: "This calls for fresh thinking about transnational structures for incorporating new values into the global trade regime."¹⁴⁵ In what might or might not be considered an opening toward such fresh thinking, during the recent Qatar trade ministerial, the United States insisted on, and the EU provided, assurance that the EU will not use the newly agreed trade-environment negotiations in the WTO to promote the use of the precautionary principle to justify "illegitimate" restrictions on trade, in particular in the context of biotechnology trade.¹⁴⁶

Recommendations on Trade and the Precautionary Principle

The United States should advocate that the WTO and other trade or investment dispute settlement systems devise a process for delegating the scientific judgment about assessment of risk and appropriateness of precautionary measures affecting trade or investment to an independent body. Preferably this independent body would be a permanent entity structured to have legitimacy and build credibility in the eyes of the diverse interested communities—environmental and health advocates, scientists, producers, and users, from developed and developing countries alike.

Policy Integration

Principle 4 is one of the shortest and most forcefully stated in the Rio Declaration: "In order to achieve sustainable development, [32 ELR 10338] environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it." Since international trade and foreign investment are major components of the development process for most countries, the injunction to consider environmental issues as an integral part of development necessarily implies the integration of environmental issues in trade policy. Such integration can and should take place on three levels. First, decisionmaking procedures should be put in place to assure that the government officials and others with responsibility for and expertise in environmental matters can engage in a timely and influential way in the determination of trade policy. As a corollary to such integrative procedures, institutional structures should be established to make integration of trade, environment, and development a routine aspect of policymaking at national and international levels. Finally, such procedures and institutions should lead to meaningful substantive integration of economic and environmental considerations in policy decisions.

The United States was the first government to work seriously to integrate its approach to trade, environment, and sustainable development, and remains one of the few where integration has been maintained and even deepened over the last decade. Policy integration within the executive branch has gone well beyond procedural formalities to include regular interactions among environmental, development, and trade agencies and joint development of U.S. government positions at the WTO, the OECD, and other international fora where trade and environment issues are under discussion. Even so, policy tensions persist and trade policymakers remain reluctant to press environmental concerns where that would interfere with political or diplomatic efforts toward more traditional trade policy objectives. Despite occasional promises, for example, the North American trade ministers have yet to hold a joint meeting with their environmental counterparts after seven years of NAFTA. More importantly, the policy integration that has become commonplace within the executive branch is not yet reflected in the political process where the most important decisions are made. The key trade policy committees in Congress continue to be the House Ways and Means Committee and the Senate Finance Committee, the committees with tax and tariff jurisdiction. At the cabinet level and in the executive office of the president, economic-oriented agencies and interests continue to have predominant influence. Even President Clinton, who rhetorically promoted labor and environment considerations in trade, expended little political capital to press those issues domestically or internationally. President Bush, a staunch "free trader," has declined so far to endorse policy integration although his Administration shows signs of accepting some integration in order to gather sufficient political support for its more traditional trade agenda. U.S. Trade Representative Robert Zoellick and his team of negotiators have received some modest plaudits for the compromises they made on traditional trade issues like antidumping duties so as to cooperate successfully with the EU to include substantial reference to environmental issues in the Doha Ministerial Declaration of November 14, 2001, the first such explicit reference to environmental issues in a WTO negotiating agenda.¹⁴⁷

Procedural and Institutional Integration in General

Policy integration for the United States began in the early 1990s, even before Rio. In 1991, for example, when the OECD established the Joint Sessions of Trade and Environment Experts to work on the trade-environment relationship, the U.S. government quickly integrated its own policy in representing the U.S. interests in this joint experts group. The USTR and the International Trade Administration in the U.S. Department of Commerce (DOC), along with the economic bureau of the U.S. Department of State (State Department), were the main agencies on the trade side. EPA, the National Marine Fisheries Service (NMFS) in the DOC, and the U.S. Fish and Wildlife Service (FWS) in the U.S. Department of the Interior (DOI), along with the oceans and environment bureau in the State Department, were the main agencies on environmental issues. The U.S. delegations to the meetings of the joint experts included representation of both the environmental and the trade agencies, with chairmanship of the delegation dependent in part on the agenda for the particular meeting and the individuals involved. The OECD work thus immediately facilitated the policy integration that sustainable development calls for.

Beginning with the preparation for the meetings at the OECD and the parallel sessions of the GATT Working Group on Environmental Measures and International Trade (EMIT), the executive branch developed a routine system of interagency consultations for the formulation of U.S. policy. USTR, as the lead agency for trade issues in the government, convenes the policymaking meetings, but they included representatives from a dozen agencies or more. The regular interaction of staff experts from the various agencies has evolved into an informal network where policy integration is pursued not only in preparation for international meetings, but also for domestic purposes and for more open-ended drafting and discussion of broad policy concepts and strategies. For example, in early 1994 the Clinton Administration articulated an approach to the issueof the use of trade measures to protect the environment outside exclusive U.S. jurisdiction which was developed through the joint efforts of many agencies under a Presidential Review Directive coordinated by the National Security Council (NSC).¹⁴⁸

The history recounted earlier in this Article mentions the key institutional reforms within the U.S. government to facilitate policy integration. The presence of a full staff office for environment and natural resource issues in USTR, headed by an assistant U.S. trade representative, assures the necessary day-to-day interaction and access to senior policymakers that is essential for effective integration. EPA, for its part, instituted regular meetings of a trade policy committee drawn from its various programmatic offices, managed by a full-time trade policy coordinator for the assistant administrator for international activities.

Elementary as these procedural and institutional steps may seem, few governments in the world have done even [32 ELR 10339] that much. Most governments still rely exclusively on their trade officials to state policy in the WTO even while their environmental officials may be taking somewhat different positions in international environmental negotiations. The WTO secretariat, to its credit, has taken modest steps to increase its in-house environmental capability, and the CTE has invited the regular participation of UNEP and other international environmental bodies in its trade-environment deliberations.¹⁴⁹

Another arena important in trade policy—the mechanisms for the settlement of trade disputes—has also benefitted from procedural integration to ensure that environmental issues in such disputes would receive informed consideration. In the Shrimp-Turtle case, for example, the WTO panel exercised its authority under the DSU to appoint a panel of scientific experts on sea turtles, and the views of the experts informed the panel's and the Appellate Body's reports.¹⁵⁰

Procedural and Institutional Integration—Environmental Assessments of Trade

In 1992, despite the early steps mentioned in the previous section, the worlds of trade policy and environmental policy still knew very little about each other and seldom interacted. Whether one believed that trade and environmental policies were in conflict or were congruent,¹⁵¹ the truth was that trade policy had evolved and was being formulated with little specific regard for the environmental effects of trade or the changes in those effects that might come about from a change in the rules for trading, while environmental policy had rarely considered how environmental regulations or conservation measures might affect the movement of goods from one country to another. Changes in staffing and interagency cooperation in a national government are only a first step toward more meaningful integration. More formal procedures, nationally and internationally, are needed to build the policy space and create the opportunity for substantive integration.

One procedural device the U.S. government quickly applied toward that end, familiar to the environmental community, was the environmental assessment (EA). (The trade policy community proposed a reciprocal "trade impact assessment" of environmental policies, but that idea never crystallized into a formal procedure.) The idea that the government should prepare an EA of new trade policy initiatives was proposed by members of Congress and accepted by the president in the specific case of the incipient negotiations toward NAFTA. On May 1, 1991, President Bush (the elder) made a series of written "commitments" to the Congress in return for the renewal of his authority to negotiate NAFTA. One of his general commitments was to give focused attention to environmental issues. To do that effectively, the president agreed that his Administration would prepare a "review" of United States-Mexico environmental issues that would be affected by NAFTA so as to inform the NAFTA negotiators.¹⁵² With EPA and environmental experts from other federal agencies doing most of the work, USTR coordinated preparation of a draft review, circulation for public comment, and a final review in nine months.¹⁵³ Over a year later, after NAFTA was complete and the three governments had also concluded two environmental side agreements, the Clinton Administration prepared an additional environmental "report" of NAFTA and the related agreements for the benefit of the public and members of Congress.¹⁵⁴

Three things are noteworthy about this first ever exercise in assessing the environmental effects of a proposed trade agreement. First, the reports USTR prepared were substantial documents covering many different environmental conditions that sharpened awareness of the issues at stake in the public as well as among government officials. Second, the two reports, taken together, finessed a difficult methodological issue about whether to assess the environmental impacts of a new trade regime before negotiations when the final contours of the agreement are not known (in the hopes of making the agreement better from an environmental perspective) or only after the agreement is concluded (when the nature of the "proposed" action is clear and more specific assessment of its effects is possible). Third, these documents were not, and never pretended to be, an EIS of the type prescribed for major federal agency actions significantly affecting the quality of the human environment under the National Environmental Policy Act (NEPA). Indeed, both Administrations successfully defended against citizen lawsuits insisting that a full EIS was required.¹⁵⁵

From this initial effort the idea of EAs of trade agreements took root. USTR prepared an environmental report on the Uruguay Round agreements in advance of the vote by Congress to approve those agreements. Later, an environmental study of accelerated tariff liberalization of forest products was prepared. These experiences directly informed the decision of President Clinton to issue Executive Order No. 13141, ordering the preparation of an environmental review for most major trade agreements.¹⁵⁶ The Executive Order states a policy of "careful assessment and consideration of the environmental impacts of trade agreements" in support of the goal that: "Trade agreements should contribute to the broader goal of sustainable development."¹⁵⁷ After public comments and hearings, USTR and the Council on Environmental Quality (CEQ) jointly promulgated Guidelines for Implementation of Executive Order No. 13141 in late 2000.¹⁵⁸ USTR has published notices that it was initiating environmental reviews of the [32 ELR 10340] FTAA and the WTO-sponsored negotiations on liberalization of trade in agriculture and in services, and in late 2001 released a draft environmental review of the United States-Chile Free Trade Agreement that it is in the midst of negotiating.¹⁵⁹

The strengths and weaknesses of Executive Order No. 13141 and the implementing guidelines are much the same as with the earlier environmental reviews. On the positive side, the reviews will look at both direct environmental effects and environmental consequences of predicted economic changes. They will make comparisons between the expected agreement and the conditions in the absence of the proposed agreement. Drafts will be prepared and public comment invited. The reviews will be done at an early stage in the negotiations, allowing the review process to inform U.S. positions during the negotiation of the agreement. Certain limitations are nevertheless obvious. The economic modeling tends to be restricted to changes in trade flows, even though changes in investment patterns may have a more significant environmental effect.¹⁶⁰ Most importantly, the Executive Order itself focuses the review just on environmental impacts in the United States. Global and transboundary impacts can be omitted, though they may be included "as appropriate and prudent."¹⁶¹

At the international level, the OECD has resolved that its Member governments should prepare environmental reviews of trade agreements,¹⁶² but the implementation of that policy is highly variable. Among the three NAFTA Parties, the United States has done more to formalize its process and is committed to more ambitious reviews than its partners. Canada has done some ex post assessments of trade agreements (including NAFTA) and published in February 2001, a Framework for Conducting Environmental Assessments of Trade Negotiations to fulfill the mandate of a 1999 Cabinet Directive on the Environmental Assessment of Policy, Plan, and Program Proposals. The Canadian approach envisions a four-step "strategic EA": notice of intent; initial assessment; draft assessment; and final assessment. The first three are to be completed before trade negotiations begin; the last will be prepared as an evaluation of the final agreement.¹⁶³ EAs have been discussed in the WTO CTE, but the Member governments have made no commitments for regular EAs of trade agreements.

The Challenge of Moving From Procedural to Substantive Integration

Interaction between environmental and trade policymakers is a precondition to the integration of environmental considerations into trade and development policy, but it lacks inherent value. What matters for sustainable development is real policies and actions that are based on integrated thinking and analysis. Have the procedures and institutions described above led to new policies? In a sense this question is almost impossible to answer; as with efforts to determine if NEPA EIS have changed government behavior, we have no way of knowing whether and how the post-NEPA outcomes would have been different without NEPA. Nevertheless, it seems appropriate to offer some comment on the substantive content of U.S. trade policy in terms of its observable incorporation of sustainable development considerations.

In my estimation, the record of the United States is decidedly mixed. Take agricultural subsidies and quotas as an example. From a trade point of view, subsidies and quotas distort markets and lead to a misallocation of resources. Quotas result in artificially high prices in the domestic market. Subsidies in the United States tend to discourage imports and promote exports, while comparable subsidies in other countries have the opposite effect, restricting export opportunities for American farmers and perhaps facilitating imports that would otherwise not be competitive. From the environmental perspective, domestic subsidies and import quotas for agriculture promote inappropriate intensity and scale in use of land, water, and other resources. Quotas on sugar imports, for example, help perpetuate environmentally harmful sugar production in South Florida, cost American consumers money in higher sugar prices, and impair economic development in the Caribbean and Central America, which could otherwise profitably produce sugar for the U.S. market. Agricultural subsidies in Europe perpetuate intense patterns of land use that are leading to widespread nitrate pollution of water supplies. Similar lose-lose scenarios obtain for some other crops. From a sustainable development perspective, then, removal of most subsidies or quota protections for agriculture makes eminent sense, and it fits with traditional liberal trade policy as well. Yet the United States, having helped achieve multilateral agreements to cut back on agricultural subsidies in the WTO agreement on agriculture, has followed a pattern in recent years of yearly "emergency" subsidies for American farmers that take the place of the dismantled subsidy programs. The debate on agricultural subsidies and trade policy in Congress in autumn 2001 dramatizes with special vividness the wide gap between the trade and environment ideal of a competitive agricultural structure with modest government intervention and the hard political reality favoring huge subsidies and special protections for citrus growers and many other sectors.¹⁶⁴ Moreover, we maintain an elaborate system of quotas and [32 ELR 10341] other trade restrictions on various agricultural products. Despite NAFTA and the SPS agreements, for example, Mexican avocados, once completely banned from the United States for many years, can still only be sold in certain states and at certain times of the year.

On a more positive note, the United States has pioneered and championed various trade-oriented initiatives to improve environmental performance of businesses and environmental enforcement and other actions by governments. For example, the United States was the main promoter of the procedure in the NAAEC that allows citizens to complain to the NACEC about failure to enforce environmental laws,¹⁶⁵ and it has been the stoutest defender of that process against criticism from its NAFTA partners. It has also insisted, against nearly universal disapproval in the WTO, that governments should have reasonable scope to apply trade measures to help assure the protection of resources like sea turtles from market-driven threats to their survival. Moreover, it negotiated for provisions in the free trade agreement reached with Jordan in 2000 that make failure to implement national environmental policies grounds for withdrawal of trade benefits.¹⁶⁶ Nevertheless, its willingness or capability to sustain such policy commitments over time is very much in doubt. The partisanship in the 2001 congressional debate over trade negotiating authority shows that the United States has not yet reached a sufficient level of political comfort with such assertive trade-environment policies.

At the world level, one has to be disappointed that the WTO's CTE has become a multi-year seminar for refined analysis and abstract discussion rather than a working forum for meaningful debate on real policy proposals or textual reforms. Papers are presented, information is shared, and the discussion can be "lively," but at the end of the day few governments are prepared to press for real action. The secretariat summary of the June 2001 meeting of the CTE includes this description of some of the discussion on the important issue of the relationship between WTO agreements and trade measures in multilateral environmental agreements:

Members reiterated their positions and proposals concerning the WTO-MEA relationship. While many noted that existing WTO rules were sufficient to accommodate [multilateral environmental agreements (MEAs)], particularly given recent developments in WTO jurisprudence, others saw a need to clarify the legal status of the WTO-MEA relationship so as not to perpetuate uncertainty or undermine environmental negotiations.¹⁶⁷

Perhaps it should be counted as progress, though, that the WTO Members are now frequently talking about the three-way relationship between trade, environment, and development, even if many developing countries continue to insist that the poor state of their development is the root cause of their poor environmental performance.¹⁶⁸ At the Doha ministerial in November 2001, the EU pushed to have environmental issues specifically addressed on a specific timetable in a new round of trade negotiations, but the diplomatic rhetoric of Paragraph 31 of the Ministerial Declaration only manages to keep the key environmental issues on the agenda without any mention of specific objectives or time frames for results, and "without prejudging the outcome." For example, on the perennial issue of the WTO-MEA relationship, the declaration defines the negotiating agenda to be "the relationship between existing WTO rules and specific trade obligations set out in [MEAs]," limited further to the application of the WTO rules to parties to the MEAs.¹⁶⁹ Thus, the more difficult issue of WTO rules and non-parties to the MEAs is avoided, and the restriction to "existing WTO rules" seems to put out of bounds any debate on how changes to those rules could resolve the tension.

Recommendations on Policy Integration of Trade, Environment, and Development

Domestically, the United States needs to deepen and institutionalize its policy integration, especially to introduce development more fully into sustainable development. The following are some options for securing more systematic policy integration. Naturally, the recommendations all presuppose the political will, still lacking, to address sustainable development more effectively in U.S. policy.

Establish a sustainable development coordinating entity within the executive office of the president. This need not be a new office, but could combine elements of the existing Council of Economic Advisors, the NSC, the CEQ, and the USTR.

Reconstitute and rename the Trade and Environment Policy Advisory Committee into a Trade and Sustainable Development Advisory Committee, incorporating development interests and advocates and adding the department of state, along with EPA and USTR, as an administering agency for this committee.

Reallocate congressional responsibility for trade policy consultation and oversight (now the domain of the economically oriented Senate Finance Committee and House Ways and Means Committee) to better incorporate environmental and developmental considerations.

Expand the use of environmental attaches in U.S. embassies to major developing countries and regions to improve U.S. understanding of environmental issues in other countries and to include environment, along with commercial and political issues, more actively in U.S. foreign policy. (Currently, the only environmental attache posted is to Mexico.)

Internationally, the United States should continue and intensify its advocacy of policy integration mechanisms in international institutions.

The United States should try to move the discussions in the WTO CTE to matters of substantive trade policy reform.

The United States should play a more active role in UNCTAD, and encourage such collaborative initiatives as [32 ELR 10342] the UNEP-UNCTAD partnership called the Capacity Building Task Force on Trade, Environment, and Development.¹⁷⁰

Substantively, the United States should support more active support within the WTO for developing countries on all issues, from customs procedures and enforcement to expanded trade preferences in market areas of key interest to those countries.

The recommendations under the polluter-pays principle, above, also relate to substantive policy integration.

Public Participation

As noted above, the principle of public participation has three aspects, each one of which is expressed in Principle 10 of the Rio Declaration—access to information, the opportunity to participate in the decisionmaking process, and access to administrative and judicial proceedings to prevent or remediate injurious or improper acts. In the Principle 10 formulation, these desiderata of public participation are to be provided at the "relevant level," but the specific mandates are addressed to the national level. Similarly, the Aarhus Convention establishes obligations only for "Parties," that is, national governments and their subsidiary units.¹⁷¹ International trade policymaking and dispute settlement, though, are primarily matters of intergovernmental relations under the auspices of international organs established by the participating governments, most prominently the WTO.

The gap between national mechanisms of public participation and the international mechanisms of authoritative decisionmaking raises fundamental questions about the right of, or indeed the ability of, the public to participate effectively in the making of international trade policy. While those who make demagogic claims that U.S. environmental laws are at the mercy of nameless, faceless international bureaucrats exaggerate the problem and understate their own ability to exert influence on the process through their national representatives, there are structural limits on the degree to which international trade fora can be opened to the participation of "all concerned citizens." Despite these limits, important procedural reforms to increase public access to the process have been made at the international as well as the national level, and further reforms are possible.

The United States has been a pioneer in opening up its national trade processes to public participation and has been the leading proponent of participatory reforms in international institutions. These reforms differentially affect three stages of trade policy formation: general policy debate; negotiation of binding agreements; and resolution of disputes.

General Policy Debate

At the national level in the United States, there was always substantial access to information on the general contours of U.S. trade policy, but the access of environmental interests to trade policy in particular was enhanced and structured through several changes during the 1990s. As noted earlier, EPA and USTR established advisory committees on trade and environment policy. The EPA committee was a public advisory committee and operated for just a couple of years. The USTR environmental advisors became part of USTR's statutory structure of advisory committees, first through appointment to existing committees and later through the chartering of a separate committee on trade and environment policy which is now jointly operated with EPA. The advisory committee members have special access to confidential information, such as draft negotiating texts, and thus a special opportunity to influence policy. The drawback is that the committee members are not allowed to share confidential information with others (except their own personal "seconds"), so they can only imperfectly communicate with the broader communities of which they are a part.

Less formally, both USTR and EPA have developed the practice of conducting regular briefings for environmental NGOs on the course of international trade policy discussions and negotiations. Although there are no prescribed rules about how much information the government must share with the public, the practice throughout the 1990s was for the government to provide substantial and timely information, often including details of both the U.S. position in international negotiations and the responses of other governments to those positions. As an indication that the Bush Administration is not retrenching on access to information, the United States persuaded the governments of the Americas to make public the current drafts of the texts of the FTAA agreements, and these drafts were released and posted on the Internet in early July 2001.¹⁷² Informal briefings and access to documents have thus been not merely devices for the government to transfer information to the NGOs, but also create the occasion for the NGOs to develop contacts with key government officials and to engage those officials in a dialogue on the issues. The NGOs are thus enabled to be more effective participants in decisionmaking.

The WTO has also substantially improved the public accessibility of its information and the mechanisms for dialogue with the environmental community. For example, the WTO staff produces and posts on the WTO website detailed public reports on the meetings of the CTE, and many of the statements or position papers that governments submit during those meetings are also made available through the WTO website.¹⁷³ The WTO has also organized a few larger symposia on trade and environment issues for NGOs, where the NGOs can hear from WTO staff and Member government representatives and those officials can hear in turn from the NGO community. On a more formal basis, the WTO CTE has also agreed to official observer status at CTE meetings for a number of international organizations, such as UNEP and the secretariats of several multilateral environmental agreements. But U.S. advocacy of further moves to enhance transparency, such as opening committee and council meetings to public observation, have gained no support from other Members.¹⁷⁴

[32 ELR 10343]

Special note should be taken of two NAFTA-related entities designed specifically to enhance public participation in the trade-environment context: the BECC and the NACEC. These two entities assure that private citizens have institutional status to influence policymaking under these two agreements and the opportunity to check any tendency of the governments to make decisions that do not account for the views of affected and interested citizens. The BECC board, specifically, has a majority of members who are not officials of the federal governments, but rather state and local officials or private citizens. Citizen influence is further enhanced with an advisory council.¹⁷⁵ In the case of the NACEC, the Joint Public Advisory Committee, which comprises five private citizens from each of the three countries, has responsibilities and authorities specified in the agreement,¹⁷⁶ and has actively exercised its authority from the outset.

Negotiation of Binding Agreements

Formal intergovernmental trade negotiations remain closed to all public participation, including business interests as well as environmentalists. There is no reason to suppose that this situation will change in the near future. Indeed, many observers and analysts hold the view that negotiation would become impossible, or would be substantially impaired, if interested private parties were in the room during the negotiations. Governments are not even prepared yet to countenance the presence of nongovernmental persons on a nation's official delegation to trade talks, though the same governments accept such practices for negotiations on environmental agreements. Rather curiously, this attitude even applies in the OECD. There, business and labor interests have defined advisory input into OECD deliberations, but governments have been reluctant to create comparable channels of formal access for environmental NGOs.¹⁷⁷ As noted above, though, many interests have considerable access to information about the negotiations through their national governments, and this information gives them significant opportunity to lobby their government representatives on detailed points in the negotiations.

It should also be recalled that the results of trade negotiations among government negotiators must be approved and implemented at the national level in each country before they take effect. This gives the public an additional and important avenue to exercise influence over the course of the negotiations themselves. There are two separate channels to exercise that influence in the U.S. trade policy system. First, the USTR advisory committees have regular access to negotiation drafts, so they can convey views on specific details as well as general policies to the government negotiators. The advisory committees also have the statutory obligation to prepare their own evaluations of the final negotiated text for the benefit of Congress and the public. The second channel of influence is the Congress itself. Because the Congress must approve broad trade agreements like the NAFTA or the FTAA, the executive branch keeps members of Congress, especially the relevant committees, well informed about the course of the negotiations, and salient concerns from Congress are then factored into the U.S. negotiating position. The standard approval procedure has been that once a text has been agreed, it must be published at least 90 days before the United States can sign the agreement, during which time it is reviewed by Congress and hearings are held. Finally, even after signature the agreement is subject to a vote in Congress, with further opportunity for lobbying and public relations efforts to influence the outcome. The mere anticipation of this visible political process gave environmental interests a significant voice in the NAFTA negotiations and led to the supplemental negotiation of two separate environmental agreements. The legislative process just described expired in 1994; new legislation delegating trade negotiation authority to the executive branch might establish a different approval process.

Dispute Settlement

International trade is one of the few areas of international law in which the decisions of international dispute resolution bodies play a major role in interpreting agreements and in defining the legal obligations of governments. Because of the legal and policy importance of dispute settlement, the question of public participation in it takes on special significance.

Governments have been reluctant to create opportunities for public participation in the settlement of intergovernmental disputes over the application and interpretation of trade rules. Their reluctance stems in part from the well-understood political economy of liberal trade: the benefits it secures are collective, macro-economic increases in welfare, which national governments will promote, but to gain those collective benefits a country must accept economic vulnerability for certain businesses or business sectors. If the injured private interests are allowed to initiate trade disputes or participate in their settlement, narrow economic interests could distort the government's representation of the broader national interest and thus and defeat or impair the collective welfare gains. Another reason some have for opposing public access to dispute settlement proceedings is to preserve what is left of the traditional diplomatic and pragmatic problem-solving character of dispute settlement between governments and to resist its increasing judicialization. On the other hand, trade dispute settlement runs the danger of losing its public legitimacy if it is perceived as a closed, undemocratic system that protects certain economic interests at the expense of other aspects of society or human welfare.

The United States has been the most active and persistent proponent of increased public participation in WTO- and NAFTA-related dispute settlement, but even the U.S. position stops well short of full private access to dispute resolution processes. The first change that the United States accomplished, by its own actions and then in the WTO DSU, was to offer the public access to its own legal briefing for [32 ELR 10344] WTO cases. USTR created opportunities for NGOs to offer advice or draft briefs in advance of the final drafting and submission of the U.S. briefs. It also began a practice of making the U.S. brief publicly available, redacting only those portions that made direct reference to (confidential) positions taken by other government parties to the dispute. The right of a government to publish its own briefs was then made explicit in Article 18.2 of the DSU, which also requires any Member, on request, to prepare a summary of its briefs in a case for release to the public.¹⁷⁸ The United States has also pressed for the right of nongovernmental entities to submit amicus briefs to dispute settlement panels or to the Appellate Body. While the WTO Members have refused to make this change to the procedures, the United States submitted some briefs by environmental NGOs as annexes to its own brief in Shrimp-Turtle and the Appellate Body ruled that panels should accept those briefs. More ambitious proposals by theUnited States, such as making all submission in dispute settlement proceedings public, have fallen on deaf ears.¹⁷⁹

Similar issues of public participation and transparency arise in the investor-State arbitration process set up under Chapter 11 of NAFTA and in bilateral U.S. investment treaties. Because foreign investors may not get a fair process or a fair decision in national courts when making a claim against the host government, the right of the investor to initiate a commercial-style arbitration proceeding with the government has been developed and widely applied. The problem is that commercial arbitration procedures are highly secretive; this secrecy may promote effective settlement of purely private claims, but is not really appropriate where matters of public policy or government action are involved. There are no reforms in sight for these procedures, but the three NAFTA trade ministers issued a "clarification" statement on July 31, 2001, in which they committed to make all Chapter 11 tribunal documents available to the public.¹⁸⁰

In a somewhat more environmental but still trade-related context, the three countries of North America agreed to an unusual and innovative "supranational"¹⁸¹ dispute initiation and resolution procedure. Under Article 14 of the NAAEC, often known as the NAFTA side agreement, citizens of North America may submit to the NACEC a claim that any of the three governments is failing to enforce its environmental law. If the secretariat of the commission, after certain preliminary steps under Article 14, determines that the issues raised in the citizen submission merit further investigation, Article 15 authorizes the secretariat to recommend to the council of the three environment ministers that it prepare a "factual record" of the matter, which may be made public. To date, the commission has received more than 28 submissions, two factual records have been completed and published, a third is in preparation, and the NACEC has approved the preparation of five more.¹⁸²

Recommendations on Trade and Public Participation

The United States has been strongest on this element of sustainable development policy. It should continue to advocate in all forums for enhanced transparency, e.g., public availability of documents and summaries of confidential deliberations, enhanced access for the public to key processes, especially dispute settlement and investment arbitration proceedings, and NGO representation on national delegations at every appropriate international negotiation on trade issues, including the OECD and WTO meetings other than direct trade negotiations.

The United States should argue strongly for the establishment of environment and development institutions parallel to major trade agreement systems on the model of the NACEC and the BECC in the NAFTA context. In particular, the United States should vigorously seek the establishment of a hemispheric counterpart to the NACEC during the negotiations toward the FTAA.

Developed Country Leadership

From the earlier sections of this Article, it should be apparent that the United States has played a leading and generally positive role in steering trade rules in the direction of sustainable development, with modest success. The signal achievements of American trade policy in promoting sustainable development have come in advocating and implementing policy integration of trade and environment and greater participation of environmentally informed interests in trade policymaking. The NACEC, created at the initiative of NGOs and two U.S. Administrations, is the most important institutional embodiment of a new perspective on the trade-environment relationship and a new capacity for assessing and responding to the environmental consequences of the intense trading relationships that bind the three countries. The United States also championed the creation of the WTO CTE and has worked assiduously to open the doors of the WTO to the public. If those examples have not been actively followed in more recent trade initiatives like the FTAA negotiations,¹⁸³ that is a reflection of two factors—the divisive political climate in the United States as [32 ELR 10345] both the business and the environmental communities pull back from an activist, integrated trade-environment policy; and the antipathy (or at best the lack of enthusiasm) of developing country partners for the trade and environment policy connection.¹⁸⁴

Without meaning to suggest that the United States should be even more insistently unilateral in its leadership than it has been (for example, the United States is virtually alone in stoutly asserting a right to use trade measures to help protect vulnerable resources like sea turtles from environmental harms in other countries), it appears that the U.S. leadership often seems to have stressed words over deeds. Promoting the economic interests of the United States remains the central consideration in trade policy. If environmental protection initiatives dovetail with the economic objective, then they may be promoted, and USTR is equipped with staff and advisors to make environmentally sound decisions when the occasion arises. But where there may be implicit contradictions, environmental considerations are ignored or pushed into the background. For example, trade policy decisions in recent years to protect the old, inefficient, and polluting integrated U.S. steel producers from foreign competition through antidumping duties have been taken without any apparent thought to either national or international environmental effects. In the same way, the United States quickly back-tracked from its environmentally sound commitment through the WTO to curtail subsidies to agriculture, albeit with the convenient fiction that the substitute payments to farmers were "emergency" assistance rather than subsidies. Another policy shortcoming: having boldly asked for and negotiated for the NACEC and the BECC, both Congress and the Administration (and the other governments involved) have failed to give these new organizations the visibility, high-level political support, or levels of funding that they need to be really successful.¹⁸⁵

Even with these shortcomings in view, the trade policy initiatives of the United States in the 1990s stand out as leadership examples, not only for developing countries but for G-8 countries as well. No country has embraced integration of environmental considerations into trade policy with the same vigor. The policy shift in the United States has had a perceptible impact on Canada and Mexico as well through the intense interactions of the NAFTA relationship. When, or whether, other countries will see the value of this integration remains to be seen. At least through such forums as the WTO CTE governments the world over have been forced to think through the policy connections between trade and environment more systematically and at a higher level of analysis than any were capable of just a decade ago.¹⁸⁶

The key missing element in U.S. policy has been any serious attention to matters of intragenerational equity. Ten years ago, developing countries yielded in the Uruguay Round of trade negotiations to the political and economic power of the North, which pursued an agenda of tariff reductions on industrial goods and greater access to foreign markets for providers of everything from rice to financial services while leaving in place many of their own protective devices limiting access to developed-country markets for many commodities and low-cost products coming from the developing world, such as textiles, steel, sugar, and many agricultural goods. When the North proposed a continuation of such policies in 1999 at the Seattle, Washington, meeting of the world trade ministers—removal of subsidies for fishing fleets, removal of national restrictions on natural resource ownership and development, more rapid implementation of commitments to reduce tariffs and non-tariff barriers—and President Clinton used the occasion to speak out in favor of potential new trade restrictions to enhance protection of the environment and improve working conditions for labor, the developing countries banded firmly together to reject that agenda. In their view, the U.S. position continued to give short shrift to their needs for greater direct assistance in administering trade, greater protection from developed country exports of dangerous goods, and steps toward the removal of agricultural quotas and other barriers to agricultural and commodity trade still maintained by developed countries. As a result of the new vigor and determination of the developing countries, the Seattle meeting ended with no clear forward direction or momentum for trade policy reform.

Unfortunately, the United States receded from even its modest and ineffective Seattle efforts in the run-up to the trade ministerial in Doha in November 2001. By all accounts, the EU has became the main demandeur for WTO negotiations on environmental issues at Doha, and the developed countries still gave rather short shrift to the agenda of issues being advanced by the developing countries. Only the agreement to loosen the trade disciplines on intellectual property protection to allow developing countries greater scope for compulsory licensing or generic production of pharmaceuticals to protect the public health kept the developing countries engaged in Doha, and many feel that they gained nothing else of immediate benefit from the ministerial meeting.¹⁸⁷

Recommendations on Developed Country Leadership

In line with the preceding recommendations, the United States needs to make policy changes in two major respects in support of sustainable development. First, the United States needs to observe more faithfully in its domestic policies the policy prescriptions it advances for international trade and economic development in other countries, especially by removing barriers to access to the U.S. market and by eliminating substantial subsidies to keytrade-relevant [32 ELR 10346] sectors of the American economy. Such an exercise of leadership-by-example could be enormously helpful in international negotiations, as well as being sound domestic economic policy.

Second, the United States needs a more active policy of engagement with developing countries to work with them cooperatively to resolve the key impediments relevant to international trade that are restricting economic development and leading to continued environmental degradation. For example, U.S. policies of aid and export promotion should be retargeted toward sustainable development, such as environmental technology transfer and environmental assistance projects.

Third, even though the "trade, not aid" mantra has substantial validity as a guiding principle for development, aid continues to be a vital policy element, substantively and symbolically. The United States needs to pull itself up from its last-place position as a foreign aid donor on a per capita basis.¹⁸⁸

Conclusion

International trade policy has come an enormous distance since Rio in its consideration of the effects of trade and investment flows on the environment and on the sustainability of patterns of development. Environmental policy has come an equal distance in thinking about how international trade and the rules governing it play into the implementation of the full range of environmental objectives, be it protection of human health from products and pollutants or conservation of biodiversity and natural resources of all kinds. This still-evolving pattern of integration between trade and environment policy, reflected by the recent shift in international discourse to trade, environment, and development policy as an integral triad has been accompanied by, and in large measure accomplished through, newly transparent and participatory policymaking processes, particularly in the previously secretive realm of trade negotiation.

Applying certain Rio principles, then, trade policy has begun to account for its contribution to sustainable development through a more sophisticated and self-observant integration of policy going well beyond the pre-Rio mantra that international trade and environmental protection are mutually supportive. In the process, trade policy has also become more receptive to and more observant of the principle of public participation. This pattern of more comprehensive policy integration and public participation is especially evident in American trade and environment policies. The United States pioneered the inclusion of environmental clauses directly into trade agreements, was the main instigator of parallel institutions and forums for managing the trade-environment interface such as the NACEC and the WTO CTE, and has done more than any other country to develop and apply methodologies for the assessment of the environmental consequences of changes in trade rules.

Considerable as these achievements are, they ultimately disappoint. A candid assessment of the last 10 years of trade, environment, and development policy must conclude that for all the advances in analysis and understanding across disciplinary boundaries, the decade-old observation ofa Nobel laureate economist still applies: "While many nice things can be said about liberalizing and thus increasing trade, the structure of trade, as we know it at present, is a curse from the perspective of sustainable development."¹⁸⁹ The fault, though, does not lie exclusively, or even primarily, with trade officials and trade policy. Liberal trade rules create the space and the opportunity for businesses around the world to engage in the exchange of goods and in the selection of efficient locations for production and services. In some few but important cases, trade policy reform could make a contribution to reform of trade structure—removing agricultural and resource extraction and fisheries subsidies are the most prominent examples. More generally, though, trade policy reform by itself cannot move economic systems and patterns of trade onto the sustainable development path. What goods are produced where and what services are provided where are influenced not by trade policy but by the economic, social, and geographical conditions of each country and the economic and social policies of national governments.

This brings us back, at the end, to the third side of the policy triangle. As one observer puts it, "the efforts to bridge the gaps through the so called 'Rio bargain' have been a failure."¹⁹⁰ A major factor in that failure has been the insistence by the North that trade should replace aid as the main vehicle for transferring economic resources to the South, without attending in a timely or adequate manner to the other conditions, such as debt repayments deteriorating environmental conditions in the developing countries, that must also be adjusted if the resource flows of trade are to promote development on a sustainable basis.¹⁹¹ As a result, in the 10 years since Rio, the more that northern reformers insist on the right to apply trade-based or trade-affecting environmental measures like eco-labels oriented to developed country concerns, packaging requirements that discourage low-cost materials like jute, and at the extreme the right to ban products from the richest markets if they are made in an allegedly environment-harming manner, the deeper the suspicion among governments and peoples of the South that their developmental aspirations, which cannot be realized without the effective opportunity to trade with the North, will be frustrated in the name of environmental protection.¹⁹² Policies [32 ELR 10347] and means must be found to bridge the gap with a new North-South bargain that builds the still-missing foundations for sustainable development in the South and radically redesigns the economic superstructures in the North to make them sustainable as well.

Such an ambitious agenda has political and social as well as economic dimensions. The economist Amartya Sen, noting that the Bretton Woods institutions, including the GATT, have helped with trade and development but not with distributional equity, draws the conclusion: "The debate, rather, is about the inequality of power, for which there is much less tolerance now than in the world that emerged at the end of the Second World War."¹⁹³ The U.N. Development Program (UNDP) defines the challenge in similar terms:

The challenge of globalization in the new century is not to stop the expansion of global markets. The challenge is to find the rules and institutions for stronger governance—local, national, regional and global—to preserve the advantages of global markets and competition, but to provide enough space for human, community and environmental resources to ensure that globalization works for people—not just for profits.¹⁹⁴

Such a challenge is staggering in its complexity, and for the WTO to play a constructive role in working toward it will require new institutional systems to enhance the strength and legitimacy of the organization. But political analysts, observing that "the lack of intermediating politicians is the most serious 'democratic deficit' of . . . the WTO in particular," have only admittedly "utopian" solutions to offer.¹⁹⁵

One commentator with a political background has suggested a "new deal" based on a new North-South bargain: developing countries fully implement trade liberalization and agree to deal with environment and labor in new trade round; developed countries agree to increase financialand technological transfers and support capacity building and open their markets to the South.¹⁹⁶ As another commentator put it in a post-Doha analysis on the way agricultural subsidies, high tariffs on textiles and footwear, antidumping duties on steel, and other European and North American practices tilt the trade game against the developing countries: "If the West really wants to tackle global poverty and hunger, it should start by practising what it preaches on trade."¹⁹⁷ A North-South bargain may or may not be a sound or politically achievable¹⁹⁸ bargain, but it builds from an inescapable truth: only sincere, sustained, and effective attention to development will win acceptance of environmental considerations as integral elements of development and trade, and only in that way can international trade be restructured to be a blessing rather than a curse for sustainable development.

1. U.N. Conference on Environment and Development (UNCED), Agenda 21, U.N. Doc. A/CONF.151.26 (1992), P2.21(a).

2. The world economy grew more than sixfold from 1950-1998, and exports of goods grew seventeenfold to $ 5.5 trillion per year, and services trade has also multiplied, reaching $ 1.35 trillion in 1999. See Data from the World Trade Organization (WTO) website, http://www.wto.org (last visited Jan. 20, 2002), and from HILARY FRENCH, VANISHING BORDERS 5 (2000). See also Amartya Sen, "Global Doubts," 2000 Harvard Commencement address, reprinted in BRIDGES BETWEEN TRADE & SUSTAINABLE DEV., July/Aug. 2000, at 3, 4 (Int'l Ctr. for Trade and Sustainable Dev.), stating that there is "extensive evidence that the global economy has actually brought prosperity to many different areas of the globe."

3. This was a conscious objective of the architects of the post-World War II liberal trade system. See 1946 proposals from the U.S. State Department (State Department) quoted in, JOHN H. JACKSON ET AL., LEGAL PROBLEMS OF INTERNATIONAL RELATIONS 38-39 (3d ed. 1995). See also preamble to the unadopted International Trade Organization (Havana) Charter of 1948, reproduced in RAJ BHALA, INTERNATIONAL TRADE LAW HANDBOOK 83 (2d ed. 2001) (citing "the determination of the United Nations to create conditions of stability and well-being which are necessary for peaceful and friendly relations among nations.").

4. Rio Declaration on Environment and Development, U.N. Doc. A/CONF.151/5/Rev. 1, 31 I.L.M. 874 (1992), princ. 12 [hereinafter Rio Declaration].

5. See Sen, supra note 2 (observing that "we also have to recognize the enormous inequalities that exist across the globe and often within each country").

6. Rio Declaration, supra note 4, princ. 5.

7. Id. princ. 8.

8. John Dernbach has suggested that the word "contradictions" implies an irresolvable conflict between liberalized trade and sustainable development. Within the parameters of prevailing, official policy approaches, that is my position, so I have opted to keep the strong language. But that does not mean I see no possible resolution in favor of a "mutually supportive" relationship between sustainable development and open international trade. As this Article will show, reaching such resolution will require fundamental redefinition of the policy objectives for which the terms "sustainable development" and "liberalized trade" are just a convenient shorthand.

9. Preamble of the Decision of [Trade] Ministers on Trade and Environment, Agreement Establishing the World Trade Organization, reprinted in General Agreement on Tariffs and Trade: Multinational Trade Negotiations Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, done at Marrakesh, Apr. 15, 1994, 33 I.L.M. 1125 (1994) [hereinafter WTO Agreement]; see also GATT SECRETARIAT, THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS (1994).

10. Alison Mitchell, G.O.P. Delays Effort to Give Bush Latitude on Free Trade, N.Y. TIMES, Aug. 1, 2001, at A7 (reporting on the "cross-currents" of the trade policy debate). The policy impasse continues, and has in some respects been heightened, since September 11, 2001. See, e.g., Steven Greenhouse, Labor Leaders Say Trade Bill Threatens Bipartisanship, N.Y. TIMES, Oct. 17, 2001, at A16, reporting that organized labor strongly opposes the Bush Administration "trade promotion authority" legislation then being advanced by U.S. Trade Representative Robert Zoellick as a vital step in the worldwide anti-terrorist campaign. (The bill barely passed in the House of Representatives in December 2001.)

11. Joseph Kahn, The Rich-Poor Division Is in Stark Relief in Talks for Trade Agenda, N.Y. TIMES, Nov. 1, 2001, at C1. This division has been deepening in the 10 years since the Rio Summit. See Southern Leaders Call for Trade Negotiations Focused on the Development Dimension, BRIDGES BETWEEN TRADE & SUSTAINABLE DEV., Apr. 2000, at 7 (reporting on the April 12-14, 2000, G-77 South Summit in Havana) [hereinafter Southern Leaders]. The Declaration of the South Summit and Havana Program of Action commit the G-77 to oppose "'application of all disguised protectionist measures, such as labour standards and the attempt to widen the environmental windows currently existing under the rules.'" Id. Another story, African Trade Officials Set Post-Seattle Priorities, id. at 15, notes, "like every other Southern trade-related forum, the workshop urged developing countries to continue to resist attempts to introduce either labour or the environment in the mandate of the WTO."

12. For a post-September 11, 2001, account of the anti-trade protesters, see Leslie Wayne, For Trade Protestors, "Slower, Sadder Songs," N.Y. TIMES, Oct. 28, 2001, at C1.

13. For what it's worth, I have argued that open, competitive economic systems are more conducive to environmentally sound production practices than most environmental advocates care to admit, but by the same token strong national environmental policies are more conducive to business competitiveness than most business leaders appreciate. Sanford E. Gaines, Rethinking Environmental Protection, Competitiveness, and International Trade, 1997 U. CHI. LEGAL F. 231. On the broader pro-trade/anti-trade debate, there has been a profusion of books. On the pro-trade side, see, e.g., THOMAS L. FRIEDMAN, THE LEXUS AND THE OLIVE TREE (1999); JOHN MICKELTHWAIT & ADRIAN WOOLRIDGE, A FUTURE PERFECT: THE ESSENTIALS OF GLOBALIZATION (2000). For the anti-trade view, see, e.g., JOHN GRAY, FALSE DAWN: THE DELUSIONS OF GLOBAL CAPITALISM (1999); WILLIAM GREIDER, ONE WORLD, READY OR NOT: THE MANIC LOGIC OF GLOBAL CAPITALISM (1997).

14. "By combining trade and environmental reforms one should be able to find ways to raise incomes without compromising the natural environment. In this sense, at least, there is no inherent conflict between trade and the environment." HAKAN NORDSTROM & SCOTT VAUGHAN, TRADE AND ENVIRONMENT 34 (WTO Special Studies Paper No. 4, 1999). Nordstrom and Vaughan were with the WTO and the U.N. Environment Program (UNEP), respectively. Their study is in the nature of an independent review of the economics literature to address the key questions in the trade-environment policy debate.

15. "Rather, the [trade-environment] conflict arises as a result of the failure of political institutions to address environmental problems, especially those of a global nature which require a concerted effort to solve." Id.

16. There are elements of both "free" trade and nondiscrimination embedded in international trade policy. For an interesting effort to separate these strands and evaluate their merits independently, see David M. Driesen, WhatIs Free Trade?: The Real Issue Lurking Behind the Trade and Environment Debate, 41 VA. J. INT'L L. 279 (2001).

17. The major forum addressing these issues is the U.N. Conference on Trade and Development (UNCTAD).

18. CSD Reveals Unchanged Positions on Agriculture, Trade, and Sustainable Development, BRIDGES BETWEEN TRADE & SUSTAINABLE DEV., May 2000, at 7.

19. WTO Agreement, supra note 9. Annexed to the WTO Agreement are 16 multilateral agreements and numerous "understandings" and ministerial decisions.

20. The Brundtland Commission clearly made the link between poverty reduction and sustainable development: "Development that issustainable has to address the problem of the large number of people who live in absolute poverty . . . . Poverty reduces people's capacity to use resources in a sustainable manner; it intensifies pressure on the environment." WORLD COMMISSION ON ENVIRONMENT AND DEVELOPMENT, OUR COMMON FUTURE 49 (1987) [hereinafter OUR COMMON FUTURE]. For a bold effort by one country to operationalize poverty reduction, including through trade policy, see [U.K.] SECRETARY OF STATE FOR INTERNATIONAL DEVELOPMENT, WHITE PAPER ON INTERNATIONAL DEVELOPMENT—ELIMINATING WORLD POVERTY: MAKING GLOBALISATION WORK FOR THE POOR (2000), available at http://www.globalization.gov.uk (last visited Jan. 20, 2002) [hereinafter ELIMINATING WORLD POVERTY], announcing an agenda for managing globalization that includes such policies as "work in the WTO and other international bodies to identify and remove subsidies which harm poor producers and provide perverse economic incentives resulting in unsustainable use of natural resources" (id. at 76) so as to "brings sustainable benefits to the one in five of humanity who lives in extreme poverty," without which "we could see growing poverty, marginalisaton, conflict and environmental degradation." Id. at 7.

21. Nordstrom & Vaughan, supra note 14, at 57, summarize some of the findings of the economics literature on this issue as follows: "In other words, income growth, while perhaps a necessary condition for changing the focus from more immediate economic and social concerns to longer-term sustainability issues, is not sufficient to reverse environmental degradation. Environmental policies must follow suit. The importance of democratic institutions cannot be underestimated in this regard."

22. In 2000, exports of goods and services amounted to just over $ 7.6 trillion, which means that traded goods and services accounted for about 29% of world gross domestic product (GDP). The proportion of GDP involved with trade continues to rise, as it has consistently since World War II, having jumped by 50% during the 1990s. WTO, INTERNATIONAL TRADE STATISTICS 2001 (2001).

23. The term "embedded liberalism" was first used by John Gerard Ruggie, International Regimes, Transactions, and Changes: Embedded Liberalism in the Postwar Economic Order, 36 INT'L ORG. 379, 392-96 (1982).

24. See, e.g., Edward Luce, Cutting Red Tape Alone Could Significantly Boost Indian Growth, FIN. TIMES (U.S. ed.), Sept. 7, 2001, at 4 (reporting on a study by the McKinsey Global Institute delivered to the prime minister of India which concludes that removing domestic rules of various kinds could nearly double India's rate of economic growth). One example: India has by far the highest property prices relative to income because of byzantine rules and procedures that leave about 90% of land titles in dispute.

25. A telling commentary on foreign aid seems equally applicable to international trade and investment: "'We have learned that foreign aid is only as good as the recipient government. Foreign aid only reinforces the status quo. It cannot transform an antidemocratic process working against the majority into a participatory government shaped in its interests.'" DAVID MALIN ROODMAN, STILL WAITING FOR THE JUBILEE: PRAGMATIC SOLUTIONS FOR THE THIRD WORLD DEBT CRISIS 25 (Worldwatch Paper No. 155, 2001) (quoting Francis Moore Lappe et al.).

26. ODA declined from 0.33% of developed country GDP in 1990 to 0.24% in 1999. REPORT OF THE U.N. SECRETARY-GENERAL TO THE COMMISSION ON SUSTAINABLE DEVELOPMENT ON FINANCE AND TRADE P2, U.N. Doc. E/CN.17/2001/PC/10 (2001) [hereinafter U.N. SECRETARY-GENERAL'S REPORT]. At the same time, investment flows quadrupled to $ 800 billion per year, and the share going to developing countries rose from $ 20 billion to $ 126 billion. Foreign direct investment is now "the largest source of external finance for sustainable development" for middle-income developing countries. Id. PP5, 7.

27. This explains in part the preoccupation of much of international environmental law making with the definition of and possible expansion of notions of "State responsibility" vis-a-vis activities occurring within their jurisdiction. See generally EXPERTS GROUP ON ENVIRONMENTAL LAW OF THE WORLD COMMISSION ON ENVIRONMENT AND DEVELOPMENT, FINAL REPORT OF THE EXPERTS GROUP ON ENVIRONMENTAL LAW ON LEGAL PRINCIPLES FOR ENVIRONMENTAL PROTECTION AND SUSTAINABLE DEVELOPMENT (1987).

28. There is a substantial literature on issues of monitoring and compliance with international environmental treaty obligations. One interesting series of papers by Scandinavian scholars examining some of these issues is ENVIRONMENTAL LAW: FROM INTERNATIONAL TO NATIONAL LAW (Ellen Margrethe Basse ed., 1997).

29. WTO Agreement, supra note 9, pmbl.

30. Thomas L. Friedman, Evolutionaries, N.Y. TIMES, July 20, 2001, at A21 (discussing the divisions within the camp of globalization protestors).

31. "Pakistan pointed out that many developing countries mistrusted the entire concept of sustainable development, which they felt was consistently 'viewed through the prism of the environment,' with its social and economic aspects and equity concerns largely forgotten . . . ." "Trade, finance and investment were 'at the heart of sustainable development,' the Pakistani representative said, adding that environmental and social standards that restrain market access worked counter to sustainable development." The Philippine delegate agreed. CSD Reveals Unchanged Positions on Agriculture, supra note 18.

32. "Developing countries have expressed fears that environmental issues might be used to create new barriers to trade and thwart hard-won gains in market access, effectively turning environmental protection into trade protectionism." U.N. SECRETARY-GENERAL'S REPORT, supra note 26, P27. The Havana Declaration from the 2000 summit of the G-77 mentions the need to redress imbalances in the WTO, including abuse of protectionist measures such as anti-dumping and countervailing duties and tariff escalation, and meaningful liberalization of textiles. "While recognising the value of environmental protection [and other sociocultural issues] we reject all attempts to use these issues for resisting market access or aid and technology flows to developing countries." Southern Leaders, supra note 11, at 7.

33. "Clearly the issues of fair market access and environmental protection cannot be separated because developing countries fear the latter is a threat to the former." Pierre Marc Johnson, Creating Sustainable Global Governance, in GUIDING GLOBAL ORDER: G8 GOVERNANCE IN THE TWENTY-FIRST CENTURY 245, 255 (John J. Kirton et al. eds., 2000).

34. "Despite multiple efforts at reform, many of the poorest developing countries have not been able to share in the benefits of the liberalization process. The majority of least developed countries have failed to achieve economic growth and to integrate into global markets." U.N. SECRETARY-GENERAL'S REPORT, supra note 26, P22.

35. North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States, and the Government of the United States, Dec. 8-17, 1992, 32 I.L.M. 289 (entered into force Jan. 1, 1994) [hereinafter NAFTA].

36. This is the size of the WTO membership as of the formal entry of the People's Republic of China on December 11, 2001. Further expansion of the membership is expected; for example, the Russian Federation has begun negotiations over the terms of its membership.

37. General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, T.I.A.S. 1700, 55 U.N.T.S. 194 [hereinafter GATT]. Though originally negotiated in 1947, the GATT is now known officially as the "GATT 1994" as incorporated into the 1994 Agreement Establishing the World Trade Organization. The GATT is still the key trade agreement in force even though the "GATT" as an organizational entity no longer exists.

38. It should be noted, however, that tariffs on agricultural goods and other commodities remain at relatively high levels, creating differential effects between relatively free trade in manufactured goods traded among developed countries and the more advanced developing countries, e.g., Malaysia and Mexico, and substantial protectionist barriers to trade facing the poorer of the developing countries, e.g., most of sub-Saharan Africa, who have only commodities to offer.

39. The Appellate Body of the WTO found in a recent case that a French measure banning certain asbestos materials did qualify under Article 20 as being necessary to protect human health, but that conclusion was not determinative of the outcome because the Appellate Body also found that the French measure was consistent with the national treatment conditions of Article 3. European Communities—Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R (Mar. 12, 2001). More encouraging is the Appellate Body's decision confirming that the revised U.S. policy for implementing its shrimp embargo to protect sea turtles conforms to the requirements laid down in the Appellate Body's earlier decision in the same case. United States-Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW (Oct. 22, 2001).

40. The reports of all dispute settlement panels and the Appellate Body are available on and can be downloaded from the WTO's website, http://www.wto.org (last visited Jan. 20, 2002).

41. WTO Agreement, supra note 9, art. 2.2; NAFTA, supra note 35, ch. 9.

42. "Technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective." WTO Agreement, supra note 9, art. 2.2. (The NAFTA omits this phrasing, guarding only against "unnecessary obstacles to trade.") An example from a trade case illustrates this "least trade restrictive" principle. (Though not a TBT case itself, the principle is the same.) The government of Thailand wanted to reduce smoking for public health reasons. Toward that end, it decided to reduce the supply of cigarettes by banning or restricting imported cigarettes and subjecting them to higher taxes, while not imposing these requirements on the domestic state cigarette monopoly. Even accepting the putative health basis for the trade restrictions, the GATT disallowed the import ban on the grounds that it was not the least trade restrictive approach to reducing smoking, when compared with labeling, advertising restrictions, or other measures to reduce smoking not directly targeting trade. Panel Report, Thailand—Restrictions on Importation of and Internal Taxes on Cigarettes, GATT Doc. DS 10/R (1990).

43. For a discussion of the delicate balance between the twin goals of shielding open commerce and vindicating regulatory authority as expressed in both the GATT and the domestic contexts, see Daniel A. Farber & Robert E. Hudec, GATT Legal Restraints on Domestic Environmental Regulations, in 2 FAIR TRADE AND HARMONIZATION: PREREQUISITES FOR FREE TRADE? 59 (Jagdish N. Bhagwati & Robert E. Hudec eds., 1996) (concluding that "the general problem [of locating the balance point] . . . has resisted the best efforts of the Supreme Court . . . GATT tribunals, international negotiators, and a host of talented legal scholars. The reason, we believe, is that in some ultimate sense the problem is unsolvable."). Id. at 84.

44. Agreement on the Application of Sanitary and Phytosanitary Measures, Final Act Embodying the Result of the Uruguay Round of Multilateral Trade Negotiations, MTN/FA II-A1A-4, Apr. 15, 1994 [hereinafter SPS Agreement]; NAFTA, supra note 35, ch. 7B.

45. SPS Agreement, supra note 44, art. 3.3. The comparable NAFTA provision, Article 714.2(b), uses the term "scientific basis." The distinction between the two is subtle and not important for present purposes.

46. SPS Agreement, supra note 44, art. 3.3; NAFTA, supra note 35, art. 712.3(c). The agreements set forth the requirements for such risk assessments. SPS Agreement, supra note 44, art. 5; NAFTA, supra note 35, art. 715.

47. 21 U.S.C. § 348(c)(3)(A).

48. PUBLIC CITIZEN (GLOBAL TRADE WATCH), TRADING AWAY U.S. FOOD SAFETY (1994). In response, see OFFICE OF THE U.S. TRADE REPRESENTATIVE (USTR), REPORT ON U.S. FOOD SAFETY AND THE URUGUAY ROUND: PROTECTING CONSUMERS AND PROMOTING U.S. EXPORTS (1994) [hereinafter USTR REPORT].

49. The USTR REPORT, id. at 4, seems so far correct in its assertion that: "In fact, the Delaney Clause is completely consistent with the SPS Agreement. Congress' decision that U.S. consumers should not be subjected to any risk from cancer-causing chemicals in processed food is a value judgment that is fully protected under the Uruguay Round Agreement."

50. For a good overview by a staff expert from the OECD, see Candice Stevens, Trade and the Environment: The PPMs Debate, in SUSTAINABLE DEVELOPMENT AND INTERNATIONAL LAW 239 (Winfried Lang ed., 1995). For a challenge to the conventional position against PPM-based trade measures, see Robert Howse & Donald Regan, The Product/Process Distinction—An Illusory Basis for Disciplining "Unilateralism" in Trade Policy, 11 EUR. J. INT'L L. 249 (2000). But see the response by John H. Jackson, Comments on Shrimp/Turtle and the Product/Process Distinction, id. at 303.

51. For a recent expression of this concern, see Report of the Meeting Held on 13-14 Feb. 2001, WT/CTE/M/26, at PP98-105 (minutes of the discussion of a Nordic paper on voluntary eco-labeling of fish, in which Indonesia, Mexico, and Venezuela, among others, raise concerns about trade distortions and limitations on access to markets for their fish products). The developing countries take this skeptical/critical posture even though Rio Principle 8 calls for governments to tackle "unsustainable patterns of production and consumption," and Agenda 21, in P4.21, explicitly encourages environmental labeling as a consumer-information technique. The skepticism of the developing countries stems from the many implementation difficulties and potentially disparate impacts of packaging and labeling systems. Some of these are examined in Simonetta Zarrilli, Eco-Packaging Initiatives: Impact on International Trade and the Special Conditions of Developing Countries, in UNCTAD/SELA, TRADE AND ENVIRONMENT: THE INTERNATIONAL DEBATE 297 (n.d., approx. 1994), and Veena Jha & Simonetta Zarrilli, Eco-Labelling Initiatives as Potential Barriers to Trade: A Viewpoint From Developing Countries, id. at 311. For a consideration of the trade legal issues involved, see Ellen Margrethe Basse & Sanford E. Gaines, How Thinking About Trade Can Improve Environmental Performance: Trade Issues in Environmental Labelling Systems, 8 ENVTL. LIABILITY 71 (2000).

52. Daniel C. Esty & Damien Geradin, Market Access, Competitiveness, and Harmonization: Environmental Protection in Regional Trade Agreements, 21 HARV. ENVTL. L. REV. 265, 273 (1997).

53. For two views of the race-to-the-bottom argument in the federal-state context, see Richard Revesz, Rehabilitating Interstate Competition: Rethinking the "Race-to-the-Bottom" Rationale for Federal Environmental Regulation, 67 N.Y.U.L. REV. 1210 (1997) (positing the economic rationality of state decisions and seeing no evidence of effect of state standards decisions on industry location), and Kirsten H. Engel, State Environmental Standard-Setting: Is There a "Race" and Is It "to the Bottom"?, 48 HASTINGS L.J. 271 (1997) (explaining that state regulators believe that standards do affect industry location [,even if they really do not,] and therefore have incentives to lower standards).

54. Jagdish N. Bhagwati, The Demands to Reduce Domestic Diversity Among Trading Nations, in 1 FAIR TRADE AND HARMONIZATION: PREREQUISITES FOR FREE TRADE? 9 (Jagdish N. Bhagwati & Robert E. Hudec eds., 1996); Richard B. Stewart, Environmental Regulation and International Competitiveness, 102 YALE L.J. 2039 (1993).

55. Rio Declaration, supra note 4, princ. 2 ("States have . . . the sovereign right to exploit their own resources pursuant to their own environmental and developmental policies . . . ."); Declaration of the United Nations Conference on the Human Environment, June 16, 1972, 11 I.L.M. 1416, princ. 21 (identical to Rio except for the reference in Rio to developmental policies).

56. RAUL HINOJOSA-OJEDA ET AL., THE U.S. EMPLOYMENT IMPACTS OF NORTH AMERICAN INTEGRATION AFTER NAFTA: A PARTIAL EQUILIBRIUM APPROACH (2000), available at http://naid.sppsr.ucla.edu/pubs&news/nafta2000.html (last visited Jan. 15, 2002).

57. ROBERT REPETTO, JOBS, COMPETITIVENESS, AND ENVIRONMENTAL REGULATION: WHAT ARE THE REAL ISSUES? 8 (1995). I discuss this and related confirming data in Gaines, supra note 13, at 255-59.

58. Agreement Between the Government of the United States of America and the Government of the United Mexican States Concerning the Establishment of a Border Environment Cooperation Commission and a North American Development Bank, done at Washington, D.C., Nov. 16, 1993; Mexico, D.F., Nov. 18, 1993, 32 I.L.M. 1545 (1993).

59. Fernando Gutierrez Moreno, The Impact of the Free Trade Agreement on the Mexican Economy and Environment, and Claudia Schatan, Mexico's Manufacturing Exports and the Environment Under NAFTA, research papers presented at the NACEC-sponsored Symposium on Understanding the Linkages Between Trade and Environment, Oct. 11-12, 2000, available through http://www.iisd.ca/sd/cec/ (last visited Jan. 15, 2002).

60. Frank Ackerman et al., Environmental Effects of the Changes in United States-Mexico Corn Trade Under NAFTA 2000 (unpublished draft; abstract posted at http://www.cec.org/files/PDF/ECONOMY/Tusts-corn-e_EN.PDF).

61. The preamble to the Agreement Establishing the WTO, like the 1947 preamble to the GATT, aspires to a "steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services."

62. See, e.g., Robert Goodland, The Case That the World Has Reached Limits, in WORLD BANK, ENVIRONMENTALLY SUSTAINABLE ECONOMIC DEVELOPMENT: BUILDING ON BRUNDTLAND 5 (Robert Goodland et al. eds., 1991); Trygve Haavelmo & Stein Hansen, On the Strategy of Trying to Reduce Economic Inequality by Expanding the Scale of Human Activity, id. at 27.

63. See Southern Leaders, supra note 11, at 7, reporting that the G-77 summit in Havana in 2000 took the view that

solutions to global environmental problems should be based on the recognition of the North's "ecological debt" and the principle of common but differentiated responsibilities, "highlighting the need to gain access under preferential terms to the appropriate financial resources and technologies in order to ensure sustainable development as provided in Agenda 21.").

64. Several new or forthcoming studies agree on this analysis. David A. Gantz, Reconciling Environmental Protection and Investor Rights Under Chapter 11 of NAFTA, 31 ELR 10646 (June 2001); Sanford E. Gaines, The Masked Ball of NAFTA Chapter 11: Foreign Investors, Local Environmentalists, Government Officials, and Disguised Motives, in LINKING TRADE, ENVIRONMENT, AND SOCIAL COHESION: NAFTA EXPERIENCES, GLOBAL CHALLENGES (John J. Kirton & Virginia Maclaren eds., forthcoming 2002); Julie Soloway, Expropriation Under NAFTA Chapter 11: The Phantom Menace, in id.

65. Candice Stevens, The OECD Guiding Principles Revisited, 23 ENVTL L. 607 (1993).

66. These included the Harmonization Principle (harmonize where no valid reasons exist for differences); the National Treatment and Non-Discrimination Principle (a la GATT); and the Compensating Import Levies and Export Rebates Principle (the OECD is against both). Id. In its original incarnation, the OECD 1972 polluter-pays principle was meant to forestall the trade distortions that might arise if governments subsidized industrial pollution control. Sanford E. Gaines, The Polluter-Pays Principle: From Economic Equity to Environmental Ethos, 26 TEX. INT'L L.J. 463, 467-71 (1991).

67. See, e.g., ENVIRONMENT AND TRADE: THE RELATION OF INTERNATIONAL TRADE AND ENVIRONMENTAL POLICY (Seymour J. Rubin & Thomas R. Graham eds., 1982).

68. Thomas J. Schoenbaum, International Trade and Protection of the Environment: The Continuing Search for Reconciliation, 91 AM. J. INT'L L. 268 (1997).

69. Report of the GATT Panel, United States—Restrictions on Imports of Tuna (not adopted), GATT B.I.S.D. (39th Supp.) at 155 (1992).

70. United Nations Conference on Trade and Development, 8th Session, A New Partnership for Development: The Cartagena Commitment, Feb. 27, 1992. See Peter H. Sand, International Environmental Law After Rio, 4 EUR J. INT'L L. 377 (1993):

As regards the issue of potential conflicts between environment and trade law, the Rio Conference was unable to move beyond the status quo reflected in identical terms in both chapter 2 [P2.21(i)] and chapter 39 [P39.3(d)] of Agenda 21, which were taken verbatim from the earlier Cartagena Commitment of the UN Conference on Trade and Development (UNCTAD).

71. Jan C. McAlpine & Pat LeDonne, The United States Government, Public Participation, and Trade and Environment, in TRADE AND THE ENVIRONMENT: LAW, ECONOMICS, AND POLICY 203 (Durwood Zaelke et al. eds., 1993).

72. The author of this Article was privileged to be the first person to occupy this position, from 1992-1994.

73. The original appointees (and their affiliations at the time) were John Adams, Natural Resources Defense Council; Peter Berle, National Audubon Society; Kathryn Fuller, World Wildlife Fund; Jay Hair, National Wildlife Federation; John Sawhill, Nature Conservancy; and James Strock, California EPA.

74. The membership of the committee as of December 2000, is available on the Internet at http://www.ustr.gov/outreach/tepacroster.htm (last visited Jan. 20, 2002).

75. USTR & U.S. EPA, REVIEW OF U.S.-MEXICO ENVIRONMENTAL ISSUES (1992).

76. WORLD BANK, INTERNATIONAL TRADE AND ENVIRONMENT (Patrick Low ed., Discussion Paper No. 159, 1992).

77. Making the GATT Environmentally Correct, ENVTL. F., July/Aug. 1992, at 22; Will NAFTA Protect the Environment?, ENVTL. F., Mar./Apr. 1993, at 28.

78. ENVIRONMENT AND TRADE, supra note 67.

79. C. FORD RUNGE, FREER TRADE, PROTECTED ENVIRONMENT: BALANCING TRADE LIBERALIZATION AND ENVIRONMENTAL INTERESTS (1994).

80. HILARY F. FRENCH, COSTLY TRADEOFFS: RECONCILING TRADE AND THE ENVIRONMENT (Worldwatch Paper No. 113, 1993).

81. Robert Repetto, Trade and Environment Policies: Achieving Complementarities and Avoiding Conflicts, WRI ISSUES & IDEAS, July 1993.

82. GARY C. HUFBAUER & JEFFREY J. SCHOTT, NORTH AMERICAN FREE TRADE: ISSUES AND RECOMMENDATIONS (1992); DANIEL C. ESTY, GREENING THE GATT: TRADE, ENVIRONMENT, AND THE FUTURE (1994).

83. U.S. CONGRESS, OFFICE OF TECHNOLOGY ASSESSMENT, INDUSTRY, TECHNOLOGY, AND THE ENVIRONMENT: COMPETITIVE CHALLENGES AND BUSINESS OPPORTUNITIES (1994).

84. NAFTA, supra note 35, art. 104.

85. Id. art. 114.

86. NAFTA: United States, Canada, Mexico Forming Environment Commission to Oversee Pact, 15 Int'l Env't Rep. (BNA) 611 (Sept. 23, 1992).

87. North American Agreement on Environmental Cooperation (NAAEC) Between the Government of the United States, the Government of Canada, and the Government of the United Mexican States, done at Washington, D.C., Sept. 9 & 14; Ottawa, Sept. 12 & 14; Mexico, D.F., Sept. 8 & 14, 1993, 32 I.L.M. 1480 (1993) [hereinafter NAAEC].

88. See supra note 58.

89. Public Citizen v. U.S. Trade Representative, 5 F.3d 549, 23 ELR 21471 (D.C. Cir. 1993).

$=S

90. Expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.

WTO Agreement, supra note 9, pmbl.

91. The CTE was given new mandates at the 2001 trade ministerial in Doha, Qatar, assuring its continued existence indefinitely. Reports of the discussions of the CTE are available at the website of the WTO, at http://www.wto.org/english/tratop_e/envir_e/envir_e.htm#cte (last visited Jan. 20, 2002).

92. Report of the GATT Panel, United States—Restrictions on Imports of Tuna (U.S.-EU Case), P5.20, 33 I.L.M. 839, 887 (1994).

93. Id. at 888, PP5.25- .27.

94. Report of the Appellate Body, United States—Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (1996).

95. Report of the Appellate Body, United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (1998).

96. Report of the Panel, United States—Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 by Malaysia, P6.1(b), WT/DS58/RW (2001); United States-Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW (Oct. 22, 2001).

97. Carlos Murillo Rodriguez, Environmental Opportunities in the FTAA Negotiating Groups, in ENVIRONMENTALLY SOUND TRADE EXPANSION IN THE AMERICAS: A HEMISPHERIC DIALOGUE 93 (Robin L. Rosenberg ed., 2000) (observing that "the trade and environment issue has been practically excluded from the FTAA framework"). Id.

98. Agreement Between the United States of America and the Hashemite Kingdom of Jordan on the Establishment of a Free Trade Area, done at Washington, D.C., Oct. 24, 2000, available at http://www.ustr.gov/regions/eu-med/middleeast/textagr.pdf (last visited Jan. 20, 2002) [hereinafter United States-Jordan Agreement].

99. Exec. Order No. 13141, 64 Fed. Reg. 63169 (Nov. 16, 1999), ADMIN. MAT. 45116. The implementing regulations are at 65 Fed. Reg. 79442 (Dec. 19, 2000). See discussion infra at notes 156-61 and accompanying text.

100. See, e.g., Charles Rangel, The Wrong Approach to Trade, FIN. TIMES (U.S. ed.), Nov. 15, 2001, at 17 (saying Democrats would support fast track legislation "provided it addressed effectively the key issues of labor, the environment, and the role of the U.S. Congress").

101. Edward Alden, Trade Zone for Americas "Threatened," FIN. TIMES (U.S. ed.), Dec. 13, 2001, at 3 (reporting on comments from foreign officials saying that the provisions inserted into the fast track legislation to gain support from Florida lawmakers jeopardize the FTAA (Brazil) and "'seriously compromise the ability of the administration to actually negotiate freer and fairer trade arrangements'" (Australia)).

102. John C. Dernbach, Sustainable Development: Now More Than Ever, 32 ELR 10003 (Jan. 2002).

103. Howard Mann, Comment on the Paper by Philippe Sands, in SUSTAINABLE DEVELOPMENT AND INTERNATIONAL LAW 67, 71 (Winfried Lang ed., 1995).

104. Daniel C. Esty, A Term's Limits, FOREIGN POL'Y, Sept./Oct. 2001, at 74.

105. Report of the Appellate Body, United States—Import Prohibitions of Certain Shrimp and Shrimp Products, PP130-31, WT/DS58/AB/R (Oct. 12, 1998).

106. OUR COMMON FUTURE, supra note 20, at 43.

107. The government of the United Kingdom has embraced poverty reduction as a central element of its sustainable development policy. In its second White Paper on International Development, it explains the rationale:

Stronger international insitutions and a much stronger commitment to sustainable development at the national and international levels are needed to help the world shift to more sustainable patterns of production and consumption. But if the world remains deeply divided and the poorest countries believe that improved environmental standards will prevent or hinder their development, international agreement to protect global environmental resources will become impossible. A world commitment to sustainable development is dependent on the guarantee of development for the poor.

ELIMINATING WORLD POVERTY, supra note 20, P26.

108. OUR COMMON FUTURE, supra note 20, at 44. See also Dernbach, supra note 102.

109. See supra notes 32-34 and accompanying text.

110. Philippe Sands, International Law in the Field of Sustainable Development: Emerging Legal Principles, in SUSTAINABLE DEVELOPMENT AND INTERNATIONAL LAW, supra note 103, at 53.

111. Christopher Stone, indeed, argues that "there is no 'the' precautionary principle there. There are droves of differing versions, none of which is particularly helpful. Some sound downright wrong." Christopher D. Stone, Is There A Precautionary Principle?, 31 ELR 10790, 10799 (July 2001). For a reply to Stone, see Mark Geistfeld, Implementing the Precautionary Principle, 31 ELR 11326 (Nov. 2001).

112. Konrad von Moltke, The Dilemma of the Precautionary Principle in International Trade, BRIDGES BETWEEN TRADE & SUSTAINABLE DEV., July/Aug. 1999, at 3 (commenting that "the precautionary principle, with its potential for misuse without appropriate balances, will prove particularly difficult to operationalise at the international level").

113. See, e.g., Martin Wolf, Responding to the Anti-Globalisation Protesters, FIN. TIMES (U.S. ed.), Sept. 5, 2001, at 15 (saying that "NGOs are right to complain about the excessive intrusion of narrow corporate interests into policymaking"). He calls the U.S.-sponsored inclusion of intellectual property issues into the world trade system a "political blunder." Id.

114. Mann, supra note 103, at 71.

115. Mann remarks on the complexity of integration:

The applicable notion of integration is both multilayered and multidirectional. Multilayered in that it must encompass international, regional, national and local levels of input, as well as both governmental and nongovernmental inputs. Multidirectional in that the process of integration must include the ecological, economic, social and cultural development aspects associated with economic and development initiatives.

Id.

116. Professors Keohane and Nye write about the WTO as an example of a "club" that is now under pressure to legitimize itself democractically. They discuss transparency (both internal and external) but focus on external transparency as one corrective. Robert O. Keohane & Joseph S. Nye Jr., Between Centralization and Fragmentation: The Club Model of Multilateral Cooperation and Problems of Democratic Legitimacy (Social Sciences Research Network discussion draft, Feb. 2001), at http://papers.ssrn.com/paper.taf?abstract_id=262175 (last visited Jan. 20, 2002).

117. See Part V of the NAAEC, supra note 87, allowing trade sanctions to be imposed against a NAFTA partner found, after some elaborate procedures, to have a pattern of "persistent failure" to enforce its own environmental laws. No country has invoked this procedure, or is likely too. Indeed, the NAFTA parties have yet to develop procedures for the handling of Part V disputes.

118. See United States-Jordan Agreement, supra note 98, art. 5 (providing that trade benefits under the agreement may be withdrawn if a party fails "to effectively enforce its environmental laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the Parties . . .").

119. Article 8.2(c) of the Agreement on Subsidies and Countervailing Measures.

120. ALEXEY VIKHLYAEV, THE USE OF TRADE MEASURES FOR ENVIRONMENTAL PURPOSES—GLOBALLY AND IN THE EU CONTEXT 5 (Fondazione Eni Enrico Mattei, Working Paper No. 68, 2001).

121. See Martina Schuster, Comment on the Paper by Joachim Scherer, in SUSTAINABLE DEVELOPMENT AND INTERNATIONAL LAW, supra note 103, at 267 (comparing the "dynamic" strength of a system like the EU in which environmental policy conflicts are increasingly worked out "within" the system by EU environmental directives, with the "static" legal structures of the WTO, which encourage self-help unilateral measures to resolve trade-environment tensions).

However, as the main international actor in defending the absolute liberalization of trade, the GATT/WTO could play a unique role in creating the prerequisites . . . to correct the functioning of the free market, i.e., to establish the conditions in which the right price signals can be given to encourage the efficient allocation of (natural) resources. The GATT/WTO could therefore help to resolve the tension between trade and environment by contributing to the international decisionmaking on how to promote the internalization of external costs.

Id.

122. See, e.g., Statement of the United States at a WTO-sponsored High-Level Symposium on Trade and Environment, March 15-16, 1999, "Synergies Between Trade Liberalization and Sustainable Development" (focusing on three opportunities to promote trade liberalization and environmental protection simultaneously—trade in environmental goods and services, agricultural trade liberalization, and fisheries subsidies). The symposium was attended by high-level representatives from WTO Member governments and some 130 NGOs.

123. The Doha Ministerial Declaration puts subsidies generally and fisheries subsidies specifically on the negotiating agenda for the next four-year period. WTO, Ministerial Declaration, Nov. 14, 2001, WT/MIN(01)/DEC/W/1, PP13, 28, 31 [hereinafter Doha Ministerial Declaration].

124. The latest round in the saga came with the finding by the U.S. Department of Commerce at the end of October 2001, that the Canadians were engaged in dumping (below-cost sales) as well as benefitting from subsidies. Bernard Simon, U.S. Imposes a Second Duty on Canadian Lumber Imports, N.Y. TIMES, Nov. 1, 2001, at W1.

125. OECD, Report on Trade and Environment to the OECD Council at Ministerial Level (OECD/GD(95)63) (1995).

126. See Lael Brainard, Textiles and Terrorism, N.Y. TIMES, Dec. 27, 2001, at A19 (observing that "developed countries have their highest trade barriers in precisely those industries, like agriculture and apparel, where poor countries would have the best chance to work their way out of poverty").

127. The ministerial Decision on Trade and Environment contains the following preamble statement: "Desiring to coordinate the policies in the field of trade and environment, and this without exceeding the competence of the multilateral trading system, which is limited to trade policies and those trade-related aspects of environmental policies which may result in significant trade effects for its members, . . . .". Uruguay Round Trade Negotiations Committee, Decision on Trade and Environment, Apr. 14, 1994, available at http://www.wto.org/english/tratop_e/envir_e/issu5_e.htm (last visited Jan. 20, 2002).

128. Opened for signature at Stockholm, May 23, 2001, UNEP/POPS/CONF/4, App. II [hereinafter Stockholm Convention on POPs].

129. The quoted language is from the SPS Agreement, supra note 44, arts. 2.2 and 5.1. The corresponding NAFTA SPS language, NAFTA Article 712.3, differs only slightly ("based on scientific principles"; "not maintained where there is no longer a scientific basis for it").

130. Report of the Appellate Body, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS48/AB/R (Jan. 16, 1998). For a discussion of the Appellate Body case law in the context of interpreting "risk," see Vern R. Walker, Consistent Levels of Protection in International Trade Disputes: Using Risk Perception Research to Justify Different Levels of Acceptable Risk, 31 ELR 11317 (Nov. 2001).

131. Id. P124.

132. Id. P123.

133. Id. P124.

134. Id. P198.

135. Id. PP199-200.

136. Commission of the European Communities, Communication from the Commission on the Precautionary Principle, COM (2000) 1 final at 10-12.

137. For example, the Stockholm Convention on POPs, supra note 128, avoids any use of the words "principle" or "approach" in making reference to a policy of precaution.

138. James E. Hickey & Vern R. Walker, Refining the Precautionary Principle in International Environmental Law, 14 VA. ENVTL. L.J. 423, 432-36 (1995) (listing the many different expressions of the principle in international instruments up to that time). See also David P. Fidler, Challenges to Humanity's Health: The Contributions of International Environmental Law to National and Global Public Health, 31 ELR 10048 (Jan. 2001).

139. Cartagena Protocol on Biosafety to the Convention on Biological Diversity, adopted Jan. 29, 2000, 39 I.L.M. 1257 (2000) [hereinafter Biosafety Protocol].

140. Compare, for example, Alberto Szekely, Modified Organisms and International Law: An Ethical Perspective, 14 TRANSNAT'L LAW. 129 (2001): ("For me, the topic of biosafety in international law remains a case of deception and deceit, where the powerful interests of a few have prevailed over the interests of humankind at large, and, what is worse, with the connivance and complicity of the world's governments."), with Deborah Katz, The Mismatch Between the Biosafety Protocol and the Precautionary Principle, 13 GEO. INT'L ENVTL. L. REV. 949 (2001):

The Biosafety Protocol . . . has resorted too readily to an overly stringent version of the precautionary principle. The result may be unnecessary restraints on trade, either because of unfounded fears of biotechnology or veiled attempts at protectionism. Unwarranted restraints of the further development of safer versions and uses of transgenic plants may deprive the environment of the beneficial effects of genetic engineering.

Id. at 981. (The author is a molecular biologist.) For a dispassionate and thorough legal analysis of some of these issues, see Sean Murphy, Biotechnology and International Law, 42 HARV. INT'L L.J. 47 (2001).

141. Biosafety Protocol, supra note 139, art. 3 (defining LMOs); art. 7 (requiring "advanced informed agreement" to import of LMOs and indicating the basic parameters of such agreement); art. 15 (calling for and describing risk assessment); Annex III (giving details on risk assessment methodology).

142. Id. Annex III, P4.

143. Id. art. 10(6).

144. Murphy, supra note 140, at 78.

145. Id. at 90.

146. Gary G. Yerkey, EU Assures United States It Will Not Pursue "Precautionary Principle" in New Negotiations, 24 Int'l Env't Rep. (BNA) Nov. 21, 2001.

147. The results and some of the underlying negotiations are described in Daniel Pruzin & Gary G. Yerkey, World Trade Organization Agrees in Qatar to Negotiate New Rules Governing Trade, 24 Int'l Env't Rep. (BNA) Nov. 16, 2001, and Rafael D. Frankel, WTO to Take Up Environmental Issues in Next Round of Multilateral Trade Talks, Int'l Env't Rep. (BNA) Nov. 20, 2001. For one favorable assessment, see Michael M. Weinstein, A Better Chance for Free Trade, N.Y. TIMES, NOV. 20, 2001, at A19.

148. Sanctions: Administration Unveils New Policy on Sanctions for Environmental Harm, 11 Int'l Trade Rep.(BNA) 221 (Feb. 9, 1994).

149. See, e.g., WTO, Report (2001) of the Committee on Trade and Environment, WT/CTE/W/6, P4 (describing a June 2001, meeting of the committee involving representatives of eight multilateral environmental agreement secretariats).

150. The authority appears in Article 13.2 of the DSU, which provides that, with respect to scientific or technical issues, dispute settlement panels "may request an advisory report in writing from an expert review group."

151. John Jackson, World Trade Rules and Environmental Policies: Congruence or Conflict?, 49 WASH. & LEE L. REV. 1227 (1992).

152. President of the United States, Response of the Administration to Issues Raised in Connection With the Negotiation of a North American Free Trade Agreement, tab 4, at 8 (transmitted to the Congress May 1, 1991).

153. Review of U.S.-Mexico Environmental Issues, Feb. 25, 1992.

154. PRESIDENT OF THE UNITED STATES, THE NAFTA: REPORT ON ENVIRONMENTAL ISSUES (1993).

155. Public Citizen v. U.S. Trade Representative, 970 F.2d 916 (D.C. Cir. 1992); Public Citizen v. U.S. Trade Representative, 5 F.3d 549, 23 ELR 21471 (D.C. Cir. 1993).

156. Exec. Order No. 13141, supra note 99.

157. Id. §§ 1, 2.

158. 65 Fed. Reg. at 79442.

159. 65 Fed. Reg. 75763 (Dec. 4, 2000) (FTAA); 66 Fed. Reg. 20846 (Apr. 25, 2001) (WTO); 66 Fed. Reg. 56366 (Nov. 7, 2001) (Chile FTA).

160. FRANK ACKERMAN ET AL., THE LIMITS OF ECONOMIC MODELLING IN THE FTAA ENVIRONMENTAL REVIEW (Tufts Univ. Global Development and Environment Inst. 2001) (Comments of the authors on USTR's October 2000, "Report of the Quantitative Analysis Working Group to the FTAA Interagency Environment Group."). Among their criticisms: "The analysis should include the environmental impacts of other aspects of the FTAA beyond changes in tariffs and trade, such as expected changes in investment patterns. . . . The analysis should include the environmental impacts of the FTAA in the region as a whole, not just the [United States].") Id. at 2.

161. Exec. Order No. 13141, supra note 99, § 5(b).

162. Procedural Guidelines on Integrating Trade and Environmental Policies, in OECD, THE ENVIRONMENTAL EFFECTS OF TRADE 175 (1994).

163. Details are available at the website of the Department of Foreign Affairs and International Trade, available on the Internet at http://www.dfait-maeci.gc.ca/tna-nac/Environment-e.asp (last visited Jan. 20, 2002).

164. Elizabeth Becker, As House Prepares Farm Bill, Questions of Who Needs Help, and How Much, N.Y. TIMES, Sept. 9, 2001, at A22 (such payments were $ 7.3 billion in 1995, the year after the WTO agreement, and $ 32.2 billion in fiscal year 2001); Elizabeth Becker, Agriculture Secretary Versus Sacred Cow, N.Y. TIMES, Dec. 11, 2001, at A20 (describing the political uproar following Secretary Ann Veneman's proposals to reduce and redistribute subsidies); Alden, supra note 101 (describing Latin American reaction to special provisions in House "fast track" trade negotiating authority legislation requiring special consultations with Congress before negotiating any agreement liberalizing agricultural trade).

165. NAAEC, supra note 87, arts. 14, 15.

166. United States-Jordan Agreement, supra note 98. The key distinction between the United States-Jordan FTA and NAFTA is Article 5.3(a), which provides a mandatory obligation: "A Party shall not fail to effectively enforce its environmental laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the Parties, after the date of entry into force of this Agreement.".

167. WTO, PRESS/TE/036, July 6, 2001, at 4.

168. Id. An example of the level of discourse in the CTE on the opportunity to promote environment, development, and trade relates to fisheries subsidies and subsidy reform: "If there were to be a balance, Australia stressed, subsidy reform should be placed in the context of the WTO contribution to sustainable development. In this respect, several developing country Members noted that poverty is the main enemy of the environment.". Id. at 7.

169. Doha Ministerial Declaration, supra note 123, P31(i).

170. See the website for this collaboration at http://www.unep-unctad.org/cbtf/ (last visited Jan. 20, 2002). The task force will provide assistance and guidance to governments in such areas as EAs of trade, policy analysis, and representation in trade-environment forums.

171. Convention on Access to Information, Public Participation in Decisionmaking and Access to Justice in Environmental Matters, done at Aarhus, June 25, 1998, 38 I.L.M. 517 (1999). The Aarhus Convention entered into force in 2001; ironically, the United States has yet to ratify.

172. FTAA.TNC/w/133/Rev. 1, July 3, 2001, available by link from http://www.ustr.gov at http://www.ftaa-alca.org/ftaadraft//eng/draft_e.doc (last visited Jan. 20, 2002).

173. See the general trade and environment page at http://www.wto.org/english/tratop_e/envir_e/envir_e.htm (last visited Jan. 20, 2002).

174. The U.S. proposals were set forth in a document circulated before a meeting of the WTO general council. WTO General Council, WT/GC/W/413 (Oct. 10, 2000).

175. Sanford E. Gaines, Bridges to a Better Environment: Building Cross-Border Institutions for Environmental Improvement in the U.S.-Mexico Border Area, 12 ARIZ. J. INT'L & COMP. L. 429, 452-54 (1995).

176. NAAEC, supra note 87, art. 16.

177. For a good general description of the OECD, see James Salzman, Labor Rights, Globalization and Institutions: The Role and Influence of the Organization for Economic Cooperation and Development, 21 MICH. J. INT'L L. 769 (2000). The OECD system includes the Business and Industry Advisory Council and the Trade Unions Advisory Council, but Member governments have rejected ideas to create a formal environmental advisory council of similar stature. They have also insisted that NGO members of national delegations execute confidentiality agreements to protect the confidentiality of the intergovernmental discussions.

178. 19 U.S.C. § 3537 (access to the WTO dispute settlement process); WTO Dispute Settlement Understanding, art. 18.2, which provides that Party submissions (briefs) shall be treated as confidential, but noting that the DSU does not "preclude a Party to a dispute from disclosing statements of its own positions to the public," and requiring any other to prepare, on request, a "non-confidential summary" of its submission for publication.

179. See the U.S. position paper, WTO General Council, supra note 174.

180. Free Trade Commission Clarifications Related to NAFTA Chapter 11, July 31, 2001, PA.2.b., available at http://www.ustr.gov (last visited Jan. 20, 2002). Paragraph A.2.b. goes on to provide that business and government confidential information should be protected, as well as any information that must be kept confidential by arbitral tribunal rules. It remains to be seen if that last qualification swallows up the commitment to public information.

181. John H. Knox, A New Approach to Compliance With International Environmental Law: The Submissions Procedure of the NAFTA Environmental Commission, 28 ECOLOGY L.Q. 1, 12-44 (2001).

182. David L. Markell, The Commission for Environmental Cooperation's Citizen Submission Process, 12 GEO. INT'L ENVTL. L. REV. 545 (2000). On the five new factual records, see council resolutions 01-08 through 01-12, adopted on Nov. 16, 2001, available on the Internet at http://www.cec.org/who_we_are/council/resolutions/index.cfm?varlan=english. These latest resolutions are controversial because the council in several instances substantially curtailed the scope of the factual inquiry that the secretariat staff had recommended, in a way that will limit their ability to inform the governments and the public on broad issues relevant to sustainable development.

183. The FTAA negotiating structure does not include specific consideration of the trade-environment relationship. That and other social issues have been relegated to a relatively powerless committee on civil society. See supra note 101 and accompanying text. There is also no official discussion of a structure comparable to the CEC.

184. I discuss these factors in Sanford E. Gaines, Environmental Protection in the Free Trade Area of the Americas: Lessons From the North American Experience, in THE GREENING OF TRADE LAW: INTERNATIONAL TRADE ORGANIZATIONS AND ENVIRONMENTAL ISSUES (Richard H. Steinberg ed., 2002).

185. Indeed, there are plans afoot to restructure, perhaps to merge, the BECC and the North American Development Bank. Local groups and state governors are concerned that this would undermine the public participation structures of the BECC. Daivd Hendricks, Merger Proposal for San Antonio-Based Bank Faces Opposition, SAN ANTONIO EXPRESS NEWS, Dec. 14, 2001, at 1B.

186. See, e.g., WTO, PRESS/TE/034 and Report (2000) of the Committee on Trade and Environment, WT/CTE/5, P5 (Oct. 30, 2000):

Members noted the important contribution of the MEA Information Sessions to increasing a mutual understanding of the relationship between the WTO and MEAs, particularlythrough identifying synergies between the WTO, UNEP and MEAs. These sessions also provide an excellent opportunity to forge practical links between the WTO, UNEP and MEA Secretariats.

187. Pruzin & Yerkey, supra note 147 (quoting one developing country representative as saying about the United States and the EU: "'They can go home and celebrate,' he said. 'They got everything.'").

188. See, e.g., WORLD HEALTH ORGANIZATION, REPORT OF THE COMMISSION ON MACROECONOMICS AND HEALTH: INVESTING IN HEALTH FOR ECONOMIC DEVELOPMENT (2000) (calling for increases in high-income country direct assistance to health programs in the developing world).

189. Haavelmo & Hansen, supra note 62, at 27, 31.

$=S

190. The "northern agenda" of climate change, biodiversity and deforestation and the "southern" agenda of market access, debt relief, technology transfer and increased official development assistance existed side by side as long ago as the Earth Summit in 1992 and efforts to bridge the gaps through the so called "Rio bargain" have been a failure.

David Runnalls, International Institute for Sustainable Development, Remarks as Moderator of a Panel at the WTO Symposium on Issues Confronting the World Trade System (July 6-7, 2001), available at http://www.wto.org/english/forums_e/ngo_e/ngo_symp 2001_repenvir_e.htm (last visited Jan. 20, 2002).

191. Klaus Toepfer, director of UNEP, stated at the 1999 WTO High-Level Symposium that "'trade and environment policy cannot be isolated from the impact of international debt, the need to alleviate poverty, the equitable imperative to transfer technology, or the need to enhance capacity of developing countries to face the challenges of sustainable development.'" Quoted in Johnson, supra note 33, at 268.

192. On eco-labeling, for example, see Jha & Zarrilli, supra note 51.

193. Amartya Sen, "Global Doubts," Address at the Harvard University Commencement (June 2000), reprinted in BRIDGES BETWEEN TRADE & SUSTAINABLE DEV., July/Aug. 2000, at 4.

194. UNDP, Human Development Report 1999, at 2, as quoted in Johnson, supra note 33, at 274. The U.N. General Assembly recently sounded a similar theme: "'Democracy, respect for all human rights and fundamental freedoms, including the right to development, transparent and accountable governance in all sectors of society, as well as effective participation by civil society, are . . . an essential part of the necessary foundations for the realization of social and people-centred sustainable development.'" Programme for the Further Implementation of Agenda 21, U.N. GAOR, 19th Special Sess., Annex, U.N. Doc. A/S-19-29 (June 28, 1997), reprinted in 36 I.L.M. 1639 (1997), as quoted in Gunther Handl, The Legal Mandate of Multilateral Development Banks as Agents for Change Toward Sustainable Development, 92 AM. J. INT'L L. 642, 645 (1998).

195. Keohane & Nye, supra note 116, at 23, 24.

196. Johnson, supra note 33, at 269.

197. Martin Wolf, Broken Promises to the Poor, FIN. TIMES (U.S. ed.), Nov. 21, 2001, at 13.

198. The December 2001, trade policy moves by the Bush Administration, including possible removal of textile preferences for the Caribbean countries, promises to protect Florida citrus growers from Brazilian competition, and threats to impose hefty new duties on steel, all show that the tremendous political pressure for protectionism can skew the policies even of a president who is an avowed "free trader."