Trade Briefing

Birds, Biodiversity and the World Trade Organisation (WTO)

The Lodge, SandyBedfordshire SG19 2DLTel: 01767 680551Fax: 01767 691178-

Why is the RSPB interested in trade and the WTO? The RSPB is working to ensure that international trade and international trade rules do not adversely affect the environment. The RSPB believes that there is a need for internationally agreed rules for trade. However, rather than pursuing trade liberalisation as an end in itself, these rules should be aimed at managing trade to benefit people and the environment. The greatest threat to birds - and biodiversity more widely - is habitat loss. The loss of habitats all over the world is being driven by a wide range of factors, many of which are linked with national and international economic policies. Trade policy therefore has an important bearing on both the RSPB’s habitat conservation work in the UK and its international work as part of the BirdLife International partnership - an international network of conservation groups to which the RSPB belongs. International trade has two main impacts on birds and biodiversity. First, the impacts of international trade itself and second, the impacts of international trade rules on environmental policy. What follows is an explanation of some of these impacts.

Impacts of trade on birds and biodiversity Introduction Ever more international trade – characterised by increasing transport of goods, more mobile capital and companies, ‘export-led growth’ policies and specialised resource use – can have a range of environmental impacts. For example, intensive shrimp farming for export in some parts of the world is leading directly to the destruction of mangrove swamps 1, an extremely valuable habitat for many migratory birds. Conversely, fair trade and organic labels on food products mean that we pay a little more for products so that producers can gain a fair price for their goods and produce them in ways that do not damage the environment. More specific areas where trade affects birds and biodiversity include the following. Climate change Increasing international trade is facilitated by ever cheaper international transport. However, the environmental and social costs of oil extraction, transport, processing and use are not included in the price of oil. This means that the price of international transport is artificially low, making long distance freight movement more economically viable than it should be. In fact international aviation and shipping fuels (and hence emissions) remain untaxed and, due to strong opposition from major energy using countries, such emissions are not even required to be counted in greenhouse gas inventories submitted by Governments to the climate change convention (agreed in Rio in 1992). Greenhouse gas emissions from international trade are among the fastest growing in the world, exacerbating climate change and threatening wildlife globally. Trade in wild birds

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People have caught and kept birds for many centuries but it is only in the last 150 years that the international trade in wild birds has become significant. The number of birds removed from the wild for the international bird trade is not precisely known, largely because of the extensive trade between South East Asian nations. It certainly however runs into several millions a year. Most of the birds in trade are songbirds. BirdLife has estimated that around 150 of the world’s threatened bird species are being detrimentally affected by trade (including domestic trade) or collecting. For some families, particularly the parrots, international trade is a very significant threat and for species, such as the Spix’s Macaw, the trade may well lead to its extinction in the wild. Although the trade in some bird species is restricted by the Convention on the International Trade in Endangered Species (CITES), this treaty only covers a small proportion of those species traded. For species of high value, CITES controls, whilst definitely important, have had only limited effectiveness due to the high incentive to get around regulations and the relatively low priority given by most countries to effective enforcement. Also, the trade restrictions sanctioned by CITES could potentially be challenged through, and undermined by, the World Trade Organisation (WTO) though this has not happened to date (see below). The ‘race to the bottom’ International competition and the global mobility of corporations can discourage governments from increasing environmental standards that are perceived to have a significant impact on business costs. Companies can threaten to relocate their businesses if they feel a government is ‘over-regulating’ and this can dissuade governments from implementing higher environmental standards. For example, in 1999 the UK steel and chemical industries threatened to relocate to other countries if the UK Government implemented a full climate change levy on their greenhouse gas emissions 2. The Government subsequently modified its proposal. This ‘chilling’ of environmental standards is sometimes referred to as the ‘race to the bottom’. Growth and limits Trade can help increase wealth and improve quality of life but this can itself bring environmental costs as well as benefits. Increased wealth can bring, for example, better sanitation, housing and education and it has been shown that rich countries have lower emissions of some industrial pollutants – such as sulphur dioxide – than middle income countries3. However rich countries generally do emit more ‘greenhouse gases’, consume more natural resources and produce more waste per person than poorer countries. Constantly increasing trade and economic growth can conflict with the physical limits of the Earth’s environment and the need to sustainably manage natural resources. Part of the problem lies in the fact that governments generally equate ‘quality of life’ with economic growth measured through ‘Gross Domestic Product’ (GDP) - and increasing GDP is a key aim of the WTO. However, GDP is not an adequate measure of our quality of life because it does not take into account the costs of environmental destruction. For example, over-fishing, unsustainable logging, intensive farming, industrial pollution and oil spills1 – which can all threaten bird and other species - are perversely counted as being beneficial because they can all increase GDP in the short term. Specialised resource use Production for export is based on the specialisation of resource use (e.g. monoculture forestry and oil palm plantations) which can impoverish natural habitats and reduce species diversity. Economists argue that with increased international competition and trade, countries will specialise in producing what they are best at and exchange these goods with others. This, it is said, is more economically ‘efficient’. However, the downside of increased specialisation is that it can impoverish our natural environment. 1

Note: Industrial pollution and oil spills indirectly contribute to GDP through operations to clean them up.

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For example, in forestry, Sweden has become one of the most ‘efficient’ producers and exporters in the world. The result of this specialisation is that Sweden has replaced much of its broad-leaved and ancient forests with managed pine and spruce plantations in order to be more competitive. This has had severe impacts on wildlife. The Middle Spotted Woodpecker for instance, has disappeared from Sweden due to the cutting of the large oak trees on which it was dependent4.

Impacts of trade rules on bird and biodiversity conservation policy Introduction International trade is governed by a set of rules agreed through the World Trade Organisation (WTO). WTO rules effectively outweigh other international laws because WTO rules can be ultimately enforced through the use of trade sanctions. The WTO comprises 135 member countries whose representatives negotiate international trade agreements. WTO rules govern how countries can trade with each other and are intended to promote a more ‘efficient’ trade system. However, the RSPB argues that the rules need to balance a range of social, environmental and economic concerns and that the current emphasis is on trade liberalisation and economic concerns rather than on managing trade to improve our quality of life. Particular issues where current or proposed rules do or could conflict with biodiversity conservation include the following. Multilateral Environment Agreements (MEAs) Effective international environmental policy – through existing agreements like the Convention on the International Trade in Endangered Species (CITES) and the Biosafety Protocol - is crucial for wildlife conservation. However it is currently uncertain whether trade-restricting measures that are allowed by Multilateral Environment Agreements (MEAs) like CITES are compatible with WTO rules which generally try to encourage freer trade. This means that MEAs are potentially open to challenge in, and could be undermined by, the WTO. Trade rules and trade concerns are also having a ‘chilling effect’ on the development of new MEAs. For example, an international agreement, negotiated in January 2000, to regulate the trade and use of Genetically Modified Organisms (the ‘Biosafety Protocol’) was weakened because of the trade concerns of a small group of GM crop exporting countries (including Canada and the USA). These GM crop exporters also managed to ensure that the relationship between the Protocol and WTO rules remains unclear. This means that future implementation of the Protocol could be undermined by a WTO challenge, or even by just the threat of a WTO challenge. More sustainable production processes Although being able to favour more environmentally benign production methods is potentially a very important tool in reducing our adverse impact on biodiversity, the current interpretation of WTO rules prohibits discrimination on the basis of the way products are produced (what are known as ‘non product-related Process and Production Methods’ – PPMs). For example, under WTO rules, a country cannot give tax concessions to timber that is certified as being sustainably produced (in order to encourage more sustainable forestry). This is because, according to WTO rules, timber is timber no matter how it has been harvested so all timber should be treated the same. Any discrimination on the basis of the way it has been produced is deemed ‘unfair’. Safety first policies (i.e. the ‘precautionary principle’) It is very important that governments can act to protect the natural environment even when there is scientific uncertainty or lack of scientific consensus on the nature or extent of the environmental impacts of an activity. The ability to take such a ‘safety first’ approach has been enshrined in national laws and international treaties through what is known as the precautionary principle. However,

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despite its recognition in other laws, the status of the precautionary principle in WTO rules is uncertain. For example, the UK Government claims that it cannot, under WTO rules, implement a precautionary general moratorium on commercial Genetically Modified (GM) crop planting. Agriculture Intensive agriculture has been one of the major causes of bird declines in the UK and it is crucial that agricultural policies address these impacts. This is why the RSPB, with BirdLife International partners, has been heavily involved for many years in working for more sustainable agricultural policies in the UK, Europe and world-wide. Particular attention has been focused on reform of the environmentally damaging Common Agricultural Policy (CAP) in Europe. However the CAP has to comply with the WTO Agreement on Agriculture (AoA), the re-negotiation of which over the coming years will have a major bearing on how agriculture develops in the future, in Europe and elsewhere. If these negotiations are to result in policies that encourage more sustainable agriculture, they must take into account the ‘multiple functions’ (environmental, social and economic) of agriculture so that environmentally and socially damaging subsidies are reduced while incentives for environmentally friendly farming and rural development are retained. Forests In the WTO, products from forests are treated like any other industrial good (e.g. cars, toys, televisions etc.). Yet, like agriculture, forests also serve multiple functions and provide multiple benefits to society including stabilising soils, playing an important role in determining microclimatic and global climatic conditions, providing food and shelter for forest-dwelling peoples as well as being important reservoirs of wildlife. It is crucial therefore that forests are not treated just like any other industrial product at the WTO and that trade policy is based on ensuring that these multiple benefits can be realised. Ownership and control of plants and animals The WTO rules on life-form patenting enshrined in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) could have significant impacts on the control and use of biological resources. For example, a US company has filed patents on various properties of the Neem Tree in India and could theoretically claim royalties from Indian people using the Neem Tree despite the fact that they have been doing so for centuries. The private rights over life-forms conferred to companies by the TRIPs Agreement seem also to conflict with the Convention on Biological Diversity (CBD) requirements that benefits from biological resources should be shared with indigenous/ local peoples and that indigenous/traditional knowledge over biological resources should be recognised. Government purchasing policy Under proposed WTO rules, government procurement policies that discriminate in favour of more environmentally sound products could be outlawed, thus further limiting the range of policies available to encourage biodiversity conservation.

Broader sustainable development concerns As well as impacts on birds and biodiversity, the trade system also creates a number of broader sustainable development concerns that need addressing such as: • • •

the technical and financial capacity of developing country WTO members to effectively participate in negotiations; the technical and financial capacity of developing country WTO members to implement a range of complex trade rules; the impacts of international commodity market price fluctuations on developing country producers;

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the extent to which trade liberalisation helps or hinders poverty elimination, food security and other national development goals.

Biodiversity conservation cannot be seen in isolation from these wider concerns. Trade policy must therefore pursue the conservation and sustainable use of our natural heritage through a sustainable development agenda that aims to benefit people and the environment.

An agenda for reform The RSPB believes that there is a need for internationally agreed rules for trade. However, the WTO’s current rules and operation are skewed towards pursuing trade liberalisation as an end in itself rather than as a means to an end - which should be to benefit people and the environment. International trade policy-making therefore needs to concentrate on how to manage trade to achieve human and environmental benefits. We are therefore advocating ‘managed trade’, not ‘free trade’ which will involve a range of policies (including both liberalisation and regulation) to achieve sustainable development. In particular it is vital that: • impact assessments are conducted in order to better understand how trade affects people and the environment, and that such assessments inform the trade negotiating agenda; • the deficiencies of the current agreements are rectified (e.g. regarding: the status of MEAs and the precautionary principle, and the need to permit countries to exempt life-forms from patenting rules); • the multiple functions - environmental, social and economic - of agriculture and forests are recognised and form a key part of trade negotiations on these issues; • governments implement measures - both unilaterally and multilaterally - aimed at ‘internalising’ the social and environmental costs of economic activities so that they are reflected in prices; • WTO rules are amended to allow environmental policies that discriminate between products on the basis of the way that they are produced. This, where possible, should be linked to international agreements/standards and should also be linked to the principle of common but differentiated responsibility (agreed at the Rio Earth Summit in 1992) which, put simply, states that industrialised countries have a greater responsibility to pay for environmental protection/ improvement than developing countries; • industrialised countries address the capacity constraints faced by developing countries in negotiating and implementing trade agreements; • industrialised countries build trust with developing countries on trade and environment issues by addressing them as part of a broader sustainable development agenda including reduction of environmentally damaging subsidies (e.g. in agriculture and fisheries), reforming rules on intellectual property rights and improving market access; • alternative measures for quality of life are developed and used to inform the direction of trade negotiations and trade policy decisions; • the objectives of trade agreements and negotiations reflect the need to manage trade for sustainable development.

RSPB, April 2000

Notes:

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1

Maybin, E & Bundell, K. (1996). After the Prawn Rush: The Human and Environmental costs of Commercial Prawn Farming. London, Christian Aid. 2 ENDS Report. (1999). Energy Tax, Emissions Trade Debate Hots Up. ENDS Report No.292, May 1999. pp21-23 3 Grossman, G.M & Kreuger, A.B. (1993). Environmental Impacts of a North American Free Trade Agreement. In: Garber, P.M. (Ed). (1993). The Mexico-US Free Trade Agreement. Cambridge, Massachusetts, The MIT Press. 4 Hansson, L. (Ed). (1992). Ecological Principles of Nature Conservation; Applications in Temperate and Boreal Environments. London, Elsevier Applied Science.

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