How to Counter-balance the Global Trade Agenda with "Green Protectionism"
Green Institute Publications
by Steve Emmott
November, 2004

Since the
inception of the General Agreement on Trade and Tariffs (GATT) in 1948
as part of the post-war settlement - the so-called "Washington
Consensus" promoting the neo-liberal doctrine of free-trade, alongside
the International Monetary Fund and the World Bank - tariff and quota
barriers have been progressively reduced or dismantled, but they have
been replaced by other, more subtle protective mechanisms. These are
the non-tariff barriers to trade - technical regulations, health and
safety standards, customs red-tape and so on - which are much more
difficult to evaluate. These are indeed obstructions to trade in the
literal sense. Some have a legitimate regulatory role to play; others
are subtle or sometimes not-so-subtle means of protectionism.

I
recall an instructive story about a very French response to the problem
of opening their markets. I believe it to be true, but it bears
re-telling even if it is not! Faced with the need to permit a flood of
cheap Japanese electronic goods into the country as a result of the
removal of tariff barriers, the French set up an office to check that
the equipment complied with safety and other technical norms, insisting
that all importation paperwork had to be routed through there. The
catch was that the office was in the middle of nowhere and had just one
desk, one chair and one telephone line. Business was slow!

These
agreements included plans to open up trade in agriculture, trade in
services and trade in intellectual property such as patents. Sensitive
and far-reaching policy issues suddenly became subject to global trade
rules. Under these new accords, support for rural development was open
to challenge under the Agreement on Agriculture because it could
include farm subsidies. Private management of water and other public
services by multinational companies was on the agenda as a result of
the General Agreement on Trade in Services (GATS): access to and
control over genetic and biological resources became a high-profile
issue as a result of the patentability provisions in the Agreement on
Trade-Related Aspects of Intellectual Property (TRIPs).

"Technical
barriers to trade" which presented "unnecessary obstacles" were
attacked, with the decree that they should not be "more
trade-restrictive than necessary." Health and safety standards were to
be applied only when "necessary for the protection of human, animal or
plant life or health" and should not "constitute a disguised
restriction on international trade." So the test of "necessity" becomes
a key instrument in determining which restrictions are justified and
which are not. However, deciding which things are necessary is
notoriously difficult. My kids "need" to go to the disco whereas I
think it is "necessary" that they stay home and finish their homework.
Necessity is often in the eye of the beholder, and my views often
prevail because I control the purse strings!

Add to this
explosive mix the creation for the first time of an effective disputes
settlement mechanism with real powers of enforcement. Taken together,
all of these measures put the WTO and the global trade regime way ahead
of any other system of international governance in terms of scope and
power. How should civil society and the green movement react to this?
For a long time the response was summed up by the name of the "Shrink
it or Sink it" NGO coalition, with its strong call for the regime to be
renegotiated to create "a new socially just and sustainable framework
for the 21st Century." This has more recently transmuted into the more
defensive-sounding but equally vociferous "Our World is Not for Sale"
movement, carrying the message to each WTO Ministerial meeting from
Seattle to Doha to Cancun and in 2005 to Hong Kong.

I should note here that the
international trade organisation was originally intended also to be an
agency of the United Nations. However, the WTO as finally created was a
stand-alone body, answerable to its member governments, but with no
lines of outside accountability or legal scrutiny.

In the short
term, at least, we are not going to abolish the WTO, nor even reform it
simply by external demands that it become more democratic or
transparent or sustainable - although we should not stop demanding
these reforms loudly and often. Even successful damage limitation
campaigns such as blocking for the time being the opening of
negotiations on new treaties (for example on investment and competition
rules) does not change the nature of the beast.

Counter-Balance?

We
need to find a counter-balancing mechanism. That should have been the
task of the global community at the United Nations World Summit on
Sustainable Development (WSSD) in Johannesburg in 2002, but they blew
it (or rather the trade advocates got their retaliation in first and
blocked any real progress) so we continue with a one-sided governance
structure as far as global trade is concerned. By the end of the WSSD
it was clear that any prospect of re-writing the rules of global
governance was gone for at least another decade.

The UN
environment, development and labour agencies (UNEP, UNCTAD, UNDP, ILO)
lack the ability to empower themselves and will not be given this power
voluntarily because the big economic players - including now the
newly-emerging powerhouses such as Brazil, India, China who have learnt
how to play the WTO game - have a vested interest in maintaining the
structural status quo. For example, Brazil this year hosted the XI
UNCTAD Ministerial, but noticeably failed to put any constructive
proposals on the table for strengthening UNCTAD's mandate. The outcome
was a predictable WTO-compliant Ministerial declaration.

Logically
therefore if the WTO's powers are to be restrained, it will have to be
an inside job. The protection of social and environmental standards get
an honourable mention in the WTO accords, but in practice they have a
secondary importance and at present count for little in global trade
negotiations. In other forums such as NAFTA or the embryonic Free Trade
Area of the Americas (FTAA), they count for even less.

"Green Protectionism"

It
becomes necessary therefore to subvert the process by reintroducing
protective barriers into the international trade regime, not to save
uncompetitive industries, but to protect social and environmental
standards. This is what I would call "green protectionism."

I am
deliberately borrowing the word "protectionism", which in its normal
usage is provocative and always gets a bad press, to shape it into
something else. Thus "green protectionism" should be a series of policy
spaces where authorities can legitimately develop and defend their
social, environmental and other values, whether in the field of public
procurement, food standards, animal welfare, rural development or
elsewhere. This inevitably will produce conflict because one person's
freedom to choose a subjective, value-laden, option will be a barrier
to another's 'right' to trade; however, the risk of controversy should
not stop us inserting the monkey wrench in the system.

These
values should not be judged on the basis of "necessity", or
"least-trade-restrictive" as the WTO rules would have it, but on the
basis of societal choices that reflect what people collectively prefer.

Does
this sound like Green dreaming? Well, the idea of "collective
preferences" is one that has recently been taken up by Pascal Lamy, the
outgoing EU Trade Commissioner (our equivalent of the U.S. Trade
Representative).

Although his views are still very much
trade-oriented, this is what he had to say recently at a Brussels
conference on the subject:

"The key question is how the social
choices of trading partners interact and define their relations when
they open up their markets to each other. It has become especially
clear, for example, that the European approaches to rural development
or sanitary risk play an important role in its relations with third
countries.

In the same time and in the current context of
declining traditional trade barriers, trade disputes tend to be more
related to the specificities of the norms and rules societies decide on
according to social choices.
Interactions between collective
preferences are however clearly not limited to trade issues they are
relevant to every dimension of international relations. There is a need
not only to re-think the commercial system giving due consideration to
this issue, but also to re-examine the whole system of global
governance, including the emergence of global collective preferences."

When
an internal EU discussion paper on this idea was leaked in November
2003, there was a predictable outcry from industry lobbyists that this
concept was highly dangerous and unworkable, and it is still not very
clear how far the EU Commission will take it. Lamy could of course
simply be throwing this into the ring as some sort of farewell gesture.
His successor, Peter Mandelson, may not be equipped with the same
degree of global vision but has said that he will support and encourage
further debate of these issues.

Real Life Issues

In
Europe right now we have at least two potential front-runners for
"green protectionism" which reflect very strongly these collective
preferences. The first is the question of the commercialisation of
genetically modified (GM) or genetically engineered (GE) food and
agricultural crops.

Public opinion runs so strongly against
commercialisation that the EU approvals regime is still semi-paralysed
and supermarkets by and large do not stock GM products. Ultimately the
European Commission (which has the default power to licence) will have
to decide whether or not to back public opinion and to restrict or ban
GM crops and/or to permit GM-free zones where local communities and
regions declare themselves no-grow areas, a movement which is gathering
pace all over Europe.

In the meantime the US administration,
backed by Canada and Argentina, has filed a complaint that the EU
blockage in the approvals pipeline is damaging their exports and is in
conflict with their right to market GE products in Europe. The case
will of course be debated and decided within the WTO Dispute system
from a narrow trade-related perspective, and there is no appeal from
there to any outside court. The complainants want the case to be
settled on the question of the failure of the European Union to apply
its own regulatory framework in a timely and proper manner. However the
tribunal has now decided to look at the wider question of the safety
risks of GM food and crops. This will inevitably bring into play the
environmental impact of the growing of GM crops and the use of the
precautionary principle in refusing or restricting commercial licences.

US
agri-business lobbyists are pressing for their government to open up a
second front in this transatlantic battle of wills by challenging the
very basis of the EU regulatory legislation. New rules concerning the
labelling and traceability of GM seeds, crops and products are now in
force which imposes a high burden on suppliers and growers. These rules
reflect the EU's recent experiences with mad cow disease, foot and
mouth in cattle, dioxin contamination in chickens and many other food
safety and public health threats. Much of this new legislation was
conceived and implemented as a result of Green Party campaigning and
parliamentary activity, a literal example of "green protectionism" at
its best.

If the US decided to challenge the right of the EU to
legislate in such a way, requiring it to justify itself before a WTO
tribunal on the basis of the WTO's restrictive trade rules, it would be
risking a major escalation of already fractious transatlantic tensions.
Such a challenge to these well-expressed "collective preferences" would
raise the stakes very high indeed and put into question the whole basis
of the sovereignty of nation states to decide their own norms and
standards of behaviour.

The second example is the question of
defending regional agricultural products under a Geographical
Indications system (GIs), where the quality of traditional and
culturally important local products and production methods (for example
Parma ham or Roquefort cheese) is an essential part of their economic
value and should be protected from foreign imitators. The EU has such a
system in place aimed at promoting the quality, reputation or other
characteristics that are essentially attributable to their geographical
origin and traditional know how. This legislation has been challenged
by Australia as unfairly discriminating against other products.

There
are many other countries with local appellations of indigenous quality
products: think of Basmati rice or Darjeeling tea from India, Idaho
potatoes, Kenyan Kirimarar or Jamaican Blue Mountain coffee. People are
increasingly recognising that geographical indications, like
trademarks, are valuable as marketing tools in the global economy. GIs
also highlight specific national, regional or local qualities, such as
renowned manufacturing skills and traditions for non-foodstuffs. Think
this time of "Swiss" watches.

Negotiations on recognising such
GI protection inside the WTO (under the TRIPs Agreement) are stopped
because of obstruction from some members who suspect that this is just
a disguised form of protectionism! They are right, of course. In fact
it is not even disguised: GI protection is an example of a deliberate
attempt to protect specialised products against unfair competition from
anonymous, undifferentiated, bottom-priced, quality-indifferent,
globally traded commodities. It seeks to ring-fence certain intangible
values and is another case for "green protectionism".

Conclusion

This
is clearly a very nuanced subject, open to attack from many quarters,
but it provides the beginnings of a way out of the trade-dominated
mindset which the creation of the WTO has imposed. It is not, I hope,
an apology for a watered-down, softer-edged, globalisation. As a
minimum, it provides the tools for a counter-attack in defence of
non-trade values. Taken to the ultimate, it could provide for a radical
re-shaping of the global agenda. If you still doubt the need for it,
consider finally the planetary problems we face from climate change and
the apparent inability of the global community to take fast and
meaningful action to reverse the emission of greenhouse gases or to
tackle our addiction to damaging production and consumption patterns.
At some point in the future, nearer than we may care to imagine,
climatic catastrophes will force those of us in the rich North to reach
an urgent consensus about our collective need - no longer just a
'preference' - to drastically scale back the way we live our lives and
consume the earth's resources. Green protectionism may not be popular
or comfortable to the global traders of the world, but if we are to
reverse our present and unsustainable collision course, what is the
alternative?

This Article is based on the concept for a book he is currently writing on "Green Protectionism".