Journal of World Trade 42(3): 407±432, 2008. # 2008 Kluwer Law International. Printed in The Netherlands.

Eco-labels and International Trade: Problems and Solutions Richard BONSI, A. L. HAMMETT and Bob SMITH1 Eco-labeling is one way to assure consumers of the environmental suitability of products they purchase. However, several arguments have evolved to show that the use of eco-labels poses barriers to international trade. This exploratory study seeks to determine whether or not the use of eco-labels is a barrier to international trade in reference to the World Trade Organization (WTO) and International Standards Organization (ISO) principles. Product related production processes and methods (PPMs) and non-product related production processes and methods (npr-PPMs) have been a major source of disagreement among researchers. Our study examined the ISO criteria for eco-labeling that demand that life-cycle assessment (LCA) including both PPMs and npr-PPMs be satisfied. One of the major problems uncovered is the difficulty in identifying corresponding environmental variables for LCA requirements since environmental conditions vary among countries. We provide some recommendations and conclude that eco-labeling is not intended to be a barrier to international trade provided that it is not advocated under the pretext of protectionism. I.

INTRODUCTION

Increasing problems of water, air and soil pollution have caused societies to demand environmentally benign and high quality products. Producers are also responding positively to consumer demands because such response presumably paves the way for them to penetrate the market. International trade makes it possible for countries with abundant resources (lower opportunity cost and higher comparative advantage) to extract, process, and export such goods while importing goods that are locally scarce. International trade also encourages economies of scale, where countries specialize in producing fewer goods on a larger scale, thereby reducing cost (Krugman and Obstfeld, 1997). 1 Richard Bonsi is a PhD student in the Department of Wood Science and Forest Products in the College of Natural Resources at Virginia Tech. He holds an MBA degree from the Freiberg University of Mining and Technology, Germany, in International Management of Resources and Environment. His research interests include marketing, eco-labeling, international trade and strategic management. Dr A. L. Hammett is Professor in the Department of Wood Science and Forest Products in the College of Natural Resources at Virginia Tech. His research focus includes international trade, certified forest products, marketing, forest-based economic development and forest products marketing. Dr Bob Smith is Professor in the Department of Wood Science and Forest Products in the College of Natural Resources at Virginia Tech. His research focus includes marketing, eco-labeling and certified forest products.

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According to the United Nations Conference on Trade and Development (UNCTAD) (2004), apart from 2001, the trends in exports and imports of developed, developing and transition economies, have been increasing since 1990 at an average rate of 6 percent (UNCTAD, 2004). Hanley et al. (2001) assert that if the average annual growth rate in trade stays at 6 percent, world trade would double in 11 years. This means that there will be more output of products as a result of the use of much more input materials, thereby increasing global pollution, as the law of thermodynamics states (Hanley et al., 2001). One example of such phenomenon is the pollution caused during transportation of goods from one location to another in international trade. Folmer and Gabel (2000) assert that, ``environmental problems are international because of transboundary pollution or global pollution such as acid rain or climate change'' (Folmer and Gabel, 2000). A concerted effort to enhance environmental protection has led to the formulation of various environmental laws and conventions, and setting of standards, for example the United Nations Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) (Hanley et al., 2001; CITES, 2007). Others are the Montreal Protocol for phasing out the use of Chlorofluorocarbons (CFCs) (Spencer, 2000), and ban imports of products containing CFCs by 1993 (Hanley et al., 2001), and the Basel Convention on the Control of Trans-boundary Movements of Hazardous Wastes and their Disposal, which restricts cross-border dumping of hazardous wastes (Hanley et al., 2001). Environmental degradation in the form of air and water pollution, overflowing landfills and energy waste, has compelled consumers to make purchase decisions to force companies to address impacts that their activities have on the environment (Bagozzi et al., 1998). Increasingly, more customers would rather buy products that have been produced in an environmentally benign atmosphere, whilst investors would prefer to invest in companies that demonstrate environmental responsibility (Folmer and Gabel, 2000). As the acceptance of a company by its workforce, local residents, politicians, environmentalists and the general public, depends not only on its economic achievements but also more and more on its ecological responsibility (Folmer and Gabel, 2000), adoption of environmental management systems by companies is inevitable. So, satisfying the needs of all stakeholders and, for that matter, the companies themselves would mean making headway towards sustainable business development and environmental management. One way to achieve these needs is the use of eco-labels. It is laudable that environmental consciousness is spreading fast. The enactment of laws, setting of standards (needing voluntary and compulsory compliance), and their implementation are equally praiseworthy. However, the enigma that may be difficult to decipher is whether the use of eco-labels, an environmental tool that informs consumers about the environmental suitability of products, does not affect international trade. There have been several arguments about whether the use of eco-labels affects international trade. The purpose of this study is to determine whether or not the use of eco-labels is a barrier to international trade in

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reference to the WTO and ISO principles. To begin this effort, we review relevant literature on eco-labeling and problems associated with eco-labels and international trade in the following sections. II.

ECO-LABELING

This section defines and describes eco-labels and environmental labeling in general. It also gives some examples of eco-labels and some notes about their significance. The ISO 14020 series and the importance of LCA in eco-labeling are also discussed. A.

DEFINITION AND DESCRIPTION OF ECO-LABELING

The efforts to inform consumers about the environmental friendliness of a product have led to the creation and use of eco-labels, which is a relatively new trend (Potts and Haward, 2007). The Global Eco-labeling Network (GEN), defines an eco-label as ``a label which identifies overall environmental preference of a product (i.e., good or service) within a product category based on life cycle considerations'' (GEN, 2004). In this regard, products with eco-labels are expected to pose no, or an acceptable level of, damage to the environment through their production, distribution, use or disposal whereas similar products without eco-labels may cause unacceptable damage to the environment (Anderson and Hansen, undated). There are numerous benefits that are enjoyed through eco-labeling. Some of these include easy identification of environmentally friendly products, protection and safety of people, environmental impacts control, avoidance of market failure through quality assurance, reduction in evaluation and comparison costs by consumers, and easiness of monitoring. Others include continuous improvement, sustainable production and consumption, a form of differentiation (Carter and Merry, 1998; Amacher et al., 2004), promotion of certification, alleviation from expensive regulation controls, achievement of higher economic incentives and attainment of competitive advantage (Teubner et al., 1994; Folmer and Gabel, 2000; Cumbo and Smith, 2001; Wessells et al., 2001; Case, 2004; Goss, 2004). According to the United Nations Environment Program (UNEP) eco-labels, unlike government laws, are voluntary tools that provide useful information to help consumers make useful decisions in buying specific products (UNEP/IISD, 2000). B.

THE ISO 14020 FAMILY

The ISO 14000 series addresses various environmental issues and specifies acceptable standards that help to abate environmental pollution. Most important to consider here is the ISO 14020 family, which comprises a group of standards, set by the International Standards Organization, to specifically govern environmental labeling

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(ISO 14020, 2000). The principles that the ISO 14020 operates on include, accuracy assurance, avoidance of unnecessary trade barriers, use of scientific methodology, accessibility of adopted methodology, open and participatory consultation with interested parties, life-cycle approach, allowance for innovation, posing of minimal administrative burden, and provision of information on products (ISO 14020, 2000; GEN, 2004). The ISO 14020 family includes three labeling schemes as explained below. 1.

Type I Environmental LabelingÐEco-labelling (ISO 14024)

ISO 14024 contains the guiding principles and procedures for Type I environmental labeling (ISO 14024, 1999; ISO 14020, 2000). It presents rules for a voluntary third-party certification system, where it fulfills certain set up criteria, such as scientific methods that cover the whole product life. This leads to the application of life cycle analyses to ascertain the environmental impacts of the product (ISO 14024, 1999; Folmer and Gabel, 2000). Applying life cycle assessment in this case means compiling and evaluating the inputs, outputs and the potential environmental impacts of the product system throughout its life cycle (ISO 14040, 1997; Taylor, 2002). It is worth noting that, as development and definition of product criteria are done through the third-party certification process, transparency and credibility are ensured. Because it upholds the use of multi-criteria third-party certification, the efforts that producers would have to put in to convince consumers about the environmental friendliness of their products are reduced (Jensen, 2000). Type I environmental labeling is the only labeling program that is compelled to employ the services of an eco-labeling body.2 Therefore it is only Type I labels that qualify to be called eco-labels (ISO 14024, 1999; GEN, 2004).

2.

Type II Environmental Labeling (ISO 14021)

The Type II environmental labeling scheme is supported by ISO 14021. It is a selfdeclaration labeling type and environmental claim system where manufacturers, importers, distributors, retailers or other stakeholders make direct claim about the environmental friendliness of their products without third-party certification (ISO 14021, 1999; Folmer and Gabel, 2000). ISO 14021 specifies the requirements for selfdeclared environmental claims, including symbols, regarding products. It also describes selected terms commonly used in environmental claims and gives qualifications for their use. In addition, the standard contains general evaluation and verification methodology for self-declared environmental claims and specific evaluation and verification methods (Jensen, 2000). Self-declared environmental claims may be in the 2

1999).

Third party body and its agents, which conducts Type I environmental labeling program (ISO 14024,

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form of statements, symbols or graphics on product package labels or in other forms, for example product literature, technical bulletins, advertising, telemarketing and the Internet. However, the system does not use predetermined and accepted criteria for reference (Goss, 2004), and normally covers only single attributes where it defines terms such as ``no use of ozone depletion substances'', ``recycled material'', ``energy efficient'', ``biodegradable'', ``designed for disassembly'' or ``reduced resource use'' (ISO 14021, 1999; Folmer and Gabel, 2000). 3.

Type III Environmental Declaration (ISO 14025)

According to the Business and Sustainable Development Global Guide (BSDGLOBAL) and ISO, the ISO 14025 provides guidance on technical, formatting and administrative issues for Type III environmental declaration (BSDGLOBAL, 2002; ISO 14025, 2006). Type III environmental declaration provides quantified environmental data based on independent verification using preset indices or predetermined parameters. In this sense, a third-party certification agency or an independent body uses a number of environmental performance indicators (EPI), including energy consumption, air emissions, water emissions, and others, to obtain an environmental score, which serves as the paradigm for each product group. It is assumed that such paradigms will help consumers to compare different goods and then purchase the one with the best score. There is, however, skepticism as to whether consumers have much time and discerning ability to undertake all these somewhat difficult tasks before purchasing an item (Goss, 2004; ISO 14025, 2006). In essence, Type III labels provide a list of impacts a product is likely to pose to the environment throughout its life cycle. They are similar to nutrition labels that give information about the fat, sugar and vitamin content of food. Essentially, Type III environmental declarations are most appropriate for use in business-to-business communication although they may be useful in business-toconsumer communication too (ISO 14025, 2006). C. SOME EXAMPLES OF ECO-LABELS Several eco-labels exist; some examples are the EU flower (Goss, 2004), the German Blue Angel (Cateora, 1996), the Nordic Swan, and the European eco-textile. An EU eco-label (see Figure 1) on a mattress is an indication that there is a reduced risk of allergic reactions to users, that water and air pollution during manufacturing is limited, there is a reduction in residues of dangerous substances that may affect health and the environment, ozone-depleting substances are absent and the product is guaranteed to last as long as conventional mattresses (EUROPA, 2004). A display of the German Blue Angel eco-label on products such as washing machines demonstrates their suitability in the consumption of energy, water and detergents. Products bearing the Blue Angel eco-label are therefore considered more

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FIGURE 1: THE EUROPEAN UNION ECO-LABEL (THE EU FLOWER) AND THE NORDIC SWAN Source: EUROPA, 2004, see .

environmentally friendly than products without such insignia (Markovich and Reinhardt, 1995; Brassington and Pettitt, 2000). The Nordic Swan, which covers about 60 product groups, is pictured in Figure 1. There are other national eco-labeling systems within the EU that cover various product groups. Examples of some of the recognized ones include Empfohlen vom IBR, Umweltbaum of Germany, Neckermann UmweltpraÈdikat (Eco Seal) of Germany, Bra Miljo È val (Good Environmental Choice) of Sweden, Stiftung Warentest, and the Milieukeur Label of the Netherlands (Goss, 2004). III. PROBLEMS WITH ECO-LABELING AND INTERNATIONAL TRADE The WTO permits national governments to formulate and apply environmental policy instruments that they deem necessary with the condition that these do not become encumbrances to trade. This means that environmental policy instruments should not discriminate between domestic and foreign goods of the same quality (Siebert, 1998). The preamble/chapeau of Article XX of the TBT Agreement of the WTO or the General Agreement on Tariffs and Trade (GATT) states that ``subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in the GATT/WTO TBT Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: (b) necessary to protect human, animal or plant life or health; (d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices.

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(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption'' (GATT, 1994). However, enforcing environmental policy in trade may be restricted. For example, the non-discriminatory principle means that goods that have been produced in an environmentally damaging way could also enter the market which does not give incentives to participants who have produced in an environmentally benign atmosphere, using more expensive production methods (Folmer and Gabel, 2000). Greaker (2006) contends that demands for eco-labeling are suspected to be protectionist actions by some groups while others think eco-labeling would increase costs of international trade (Melser and Robertson, 2005). Other problems we have identified that might pose barriers to international trade with the use of eco-labels include technical barriers, process and production methods, certification costs, low credibility, chain of custody requirements, and problems faced by developing countries. We expatiate on these in the next section. A.

TECHNICAL BARRIERS TO TRADE (TBT) OF THE GATT

Technical regulations and standards define the properties a product should possess, for example, its size, shape, design, functions and performance, or way of labeling or packaging before it is sold in the market (WTO, undated). Sometimes, these characteristics are affected by the processing methods of the products, for example making lumber from logs, so it is reasonable to develop technical regulations that must be satisfied by these processes and production methods. The difference between a standard and a technical regulation is that a technical regulation is mandatory and must be obeyed whilst compliance with a standard is voluntary. This means an imported good, which does not satisfy a domestic technical regulation, does not qualify for sale. An imported good that does not meet the requirements of a standard is, however, not prevented from entering the market, but domestic consumers who are standard conscious may not patronize such goods (WTO, undated). However, a law may set standards to achieve its purpose and once a standard is backed by a law or regulation compliance with the standard is compulsory (WTO, undated). The number of technical regulations and standards adopted by countries to ensure that their environmental and quality goals are met has increased dramatically in recent years (Ruddell and Stevens, 1998; WTO, undated). The adoption of technical regulations and standards by countries is seen as costly in various ways. Without international discipline, technical regulations and standards could likely be adopted and applied solely to protect domestic industries. To ensure proper formulation, interpretation and use of technical regulations and standards, and avoidance of protectionism, the TBT Agreement or the Standards Code, which laid down the rules for preparation, adoption and application of technical regulations, standards and

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conformity assessment3 procedures was signed at the Uruguay Round (WTO, undated). The objectives of the TBT Agreement are to protect human safety or health, protect animal and plant life or health, protect the environment, prevent deceptive practices, and ensure quality, technical harmonization and trade facilitation. The TBT Agreement respects standards and regulations of all countries provided they stand to protect human, animal or plant life or health and not as a pretext to promote protectionism. The number of technical regulations and standards has grown rapidly (GATT, 1994). Some problems have arisen between States regarding eco-labeling and international trade. For example, the United States placed a ban on shrimp and shrimp products from exporting nations not certified by US authorities. The United States wanted exporting countries to have their shrimp and shrimp products certified by the US authorities to prove that they used harvesting methods not leading to incidental killing of sea turtles above a certain level (GATT, 1994). In the forest products sector, Austria initiated a move in 1992 that was going to require labeling of all imported tropical timber and timber products but was criticized by some countries and later averted (Heissenbuttel et al., 1995; Markovich and Reinhardt, 1995). In a similar direction in 1994, Greenpeace campaigned against imports of British Columbia pulp into the UK with the claim that the pulp came from poorly managed forests (Markovich and Reinhardt, 1995). A related scenario is the case with Germany and the Netherlands in the early 1990s, which advocated against tropical timber as not coming from sustainably managed sources (Wille, 1991). These actions could be serious barriers to international trade. In addressing the case with shrimp imports to the United States, a Panel was set to settle the case and the Panel concluded that the case was not justifiable under GATT TBT Agreement Article XX, because the Article did not state ``measures conditioning access to its market for a given product upon the adoption by the exporting members of certain policies''. Without examining the import ban on the basis of Articles XX(b) and XX(g), the Panel concluded that the measure of the United States was not justified under the terms of the chapeau of the Article (GATT, 1994). The Appellate Body,4 however, after assessing the consistency of the demand of the United States with the GATT, saw the judgment of the Panel as a wrong interpretation of the scope of GATT Article XX. In contrast, the Appellate Body judged that exporters could have certification if they could prove that their shrimp or shrimp products were being caught using methods, which did not engender adventitious killing of turtles beyond a certain 3 Conformity assessment procedures are technical proceduresÐsuch as testing, verification, inspection and certification, which confirm that products fulfill the requirements laid down in regulations and standards. 4 A standing body of seven persons that hears appeals from reports issued by panels in disputes brought by WTO Members. The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate Body Reports, once adopted by the Dispute Settlement Body (DSB) must be accepted by the parties to the dispute.

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level. Also, the situation where importers may demand that exporters comply with, or adopt certain policies prevailing in domestic markets to ensure conditioning access to the domestic market may, to some extent, be necessary to meet the aims of the exceptions (a) to (j) of Article XX. The GATT recognizes domestic policies embodied in the measures necessary to enforce these goals as important and legitimate. The Appellate Body further said that if importing countries demand that exporters comply with, or adopt certain policies, which of course would promote goals such as health protection and resource conservation, such demands should not necessarily be assumed as out of the scope of Article XX; such an interpretation of the Article would render its purpose null and void (GATT, 1994). Besides, the Appellate Body described the chapeau of Article XX as one that demands balance of rights and duties among States. This means there should be a balance between the rights of a Member to adopt a measure in relation with Article XX. It is also the duty of that Member to respect the treaty rights of other Members to maintain equilibrium between rights of the Members involved and to avoid distortion of rights among the Members and their obligations. It is a difficult task interpreting the chapeau because of the broad nature of the standards inherent in it. However, a two-tier (the chapeau and the provision) consideration of the Article with the specific circumstances would yield fair judgments (GATT, 1994). According to the WTO, its Members have autonomy to form their own policies including those related to the environment and international trade. The WTO has nothing against the environmental objectives and legislation of its Members provided they respect the General Agreement and other Agreements (GATT, 1994). Despite the likelihood that some countries may capitalize on GATT TBT Agreement Article XX to indulge in protectionism, it is apparent from the judgments of the panels in the case above and similar cases not mentioned here that the provisions of the Article might, sometimes in contrast, be misinterpreted or evaded on the grounds that countries use them to protect themselves on the pretext of environmental protection. B.

PROBLEMS WITH PROCESS OR PRODUCTION METHODS (PPMS)

The Organization of Economic Co-operation and Development (OECD), defines process or production methods (PPMs) as the ways in which a product is manufactured (OECD, 1997). Two kinds of PPMs exist with regard to environmental impacts. ±

±

When process or production methods (PPMs) used to manufacture a product impart certain characteristics to the product, making it pollute the environment upon consumption or use, the process and production methods are called product-related PPMs or incorporated PPMs. Disposal of the product and recycling, for example, form part of incorporated PPMs, which affect both domestic and exporting countries. Non-product-related process and production methods (npr-PPMs) or

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unincorporated PPMs do not adulterate the final product but rather, they themselves inflict direct negative impact on the environment; for instance, natural resource harvest in the production phase. These pollutions are localized in the precincts of the manufacturer and do not pose a trans-boundary problem (OECD, 1997; Wessells et al., 2001; Manoj, 2004). According to Hanley et al. (2001), given that product-related environmental policies are non-discriminatory, that is, applying the principle of most-favoured-nation (MFN),5 they do not contravene GATT rules. So if Germany, for example, expects all cars to have catalytic converters and seatbelts, the same standards are imposable on imported cars, and not more (Hanley et al., 2001). The advocacy that cotton be pesticide free is an incorporated PPM requirement. An unincorporated PPM requirement may be that cotton be grown without pesticides, not minding whether traces of the pesticide are found in the final cotton or not. Other examples of npr-PPMs are organic products, in whose production the use of chemical fertilizers, pesticides and preservatives are prohibited even though these chemicals could be absent from the final product. Also npr-PPMs based, is the requirement that furniture be obtained from wood originating from sustainably managed forests. As the definition of technical regulations and standards depict, and thus supported by Manoj, npr-PPMs are not covered by the TBT Agreement and according to the history of the TBT Agreement, coverage of npr-PPMs was not planned to be included in the functions of the TBT Agreement (Manoj, 2004). However, the definition of eco-labeling, which includes LCA, demands that both PPMs and npr-PPMs be satisfied. Manoj contends that voluntary or mandatory requirements on the bases of npr-PPMs are outside the scope of the TBT Agreement. However, his reference to a submission by Switzerland to the WTO in 2001 shows that some people argue out that npr-PPMs are incorporated in the definition of technical regulation and standard in the TBT Agreement (ibid.). Voluntary standards, as we know, have no legal force. This means they must not be prescriptive. Based on this, Bennett argues that ISO 14020 which makes references to PPMs in eco-label usage is prescriptive and discriminatory and hence a serious barrier to trade (Bennett, 2000). This point may be challenged since standards are laid down criteria, which give a product a certain status and anyone who decides to adopt the standard even voluntarily is expected to follow the laid down criteria. What is questionable is whether conformity of PPMs with product characteristics has to be verified in the importing country or exporting country. It is obvious that this can be done only in the importing country (Wessells et al., 2001). Nevertheless, the FAO says that eco-labeling in the fisheries sector is likely to be invariably awarded based on npr-PPMs, especially those associated with harvesting methods such as type of gear used, impacts on the marine habitats, compliance with management system and health 5

Applying to both domestic and foreign goods equally.

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of the stock of origin (ibid.). This supports the concept that eco-labeling demands LCA, which includes PPMs and npr-PPMs. C. PROBLEMS WITH CHAIN OF CUSTODY (COC) IN ECO-LABELING The forestry sector has been chosen as a case for discussion in this section to demonstrate the effects of COC. The supply chain of the wood industry from the forest to the consumer is very long and may be unique for each product. It is difficult to get consumers to trust a product claiming certification of a sustainably managed forest status from this inordinately long process. So, to authenticate to consumers the integrity of these claims, many forest certification schemes incorporate COC assessment in their schemes. So throughout the various stages of ownership, processing and transportation between the certified forest and the final consumer, COC may involve tracking and documenting the product (Hansen, 1997; Hansen and Heikki, 1999; Cumbo and Smith, 2001; Brian, 2002). Some forest certification schemes demand independent third-party certification of COC, and a product can only carry an eco-label if all transfers of ownership from the forest to the consumer have COC certification (Hansen, 1997; Kiekens, 2000). This means that an eco-labeled piece of furniture in a retail shop must have had COC certification from the forest owner, the sawmill owner and the secondary processor (Cumbo and Smith, 2001; Brian, 2002; Anderson and Hansen, undated). The area of the world forest that is certified increased dramatically from little more than 20 million hectares at the beginning of 2000 to about 150 million hectares in January 2004 (Oliver, 2004). However, all the certification schemes, for example the Forestry Stewardship Council (FSC), the Sustainable Forestry Initiative (SFI), the Canadian Standard for Sustainable Forest Management (CSA) and the Program for the Endorsement of Forest Certification Schemes (PEFC) have special COC certification requirements and ecolabel usage, hence making their application very complex (Anderson and Hansen, undated). Various obstacles to adoption of COC and eco-labeling have been observed. Some examples include technical challenges, high costs, unwillingness of companies to bear the costs of certification, imbalance between supply of labeled products and demand, low demand for labeled wood products and the existence of more than one certification body and their numerous and complex COC requirements (Vlosky and Ozanne, 1998; Cumbo and Smith, 2001; Oliver, 2004). Forest certification is a complex and costly process and most of the certification done so far in the tropics or developing countries has been very small and successful only through public funding (Kiekens, 2000; Oliver, 2004). A study by Vlosky and Ozanne (1998) revealed that many US forest products manufacturers are not willing to bear the costs of COC. Chain of custody may be difficult for products such as paper and composite products that are obtained from various sources (Kiekens, 2000; Rickenbach, Fletcher and Hansen, 2000). The length

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of the certification process may also discourage domestic buyers from buying timber from tropical and developing countries (Merry and Carter, 1997). D. STANDARDS AS BARRIERS TO TRADE A standard is defined as a: ``document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method.'' (WTO, undated)

``Process standards specify the type of production process or emission reduction equipment that polluting plants must install (e.g., a specific type of scrubber, pipe, water purification device and so on)'' (Folmer and Gabel, 2000). ``Product standards define the characteristics of potentially polluting products such as chemicals, detergents, fertilizers, automobiles and fuels'' (ibid.). According to Case, each eco-labeling scheme must have three main components to be fair: the validity of the standard used, the process used to set the standard and the standard verification process (Case, 2004). In countries where there are no government-endorsed multi-attribute eco-labels, many private eco-labeling programs may spring up with variances in their standards. In the United States, for example, lack of government supported eco-labeling programs has led to a profusion of more than 40 US eco-labels (excluding all the food labels). The number of eco-labels continues to increase as private companies, trade unions, and nongovernmental organizations create their own labeling programs and standard requirements. Lack of harmony would definitely affect foreign importers (Case, 2004). The forest certification schemes have differences in their standards, which cause a big problem in adoption. For instance, FSC has so complex a standard requirement that stakeholders find it difficult to adopt (Oliver, 2004). In addition, self-certification with random auditing, independent third-party certification and independent third-party certification with on-site audits are different categories of standard setting and obligation which may make international trade cumbersome since it is sometimes difficult to determine which is best for economic gains and market penetration (Case, 2004). Although ISO 14000 is applicable to all countries and contains good information on the application of ISO 14001 for example, adoption of the standard is limited mainly to developed countries. Only a little over 30 developing countries have eco-labeling programs; this is woefully inadequate. A 2003 World Bank report on ``Standards and Global Trade'' has admonished African governments on the need for them to adopt international standards to be able to compete in the global market. The report says, ``some trade standards are set by international agreement, others by importing countries, and still others by market demand'' (Saleson and Rios, 2003). So, to be competitive in the global market, African firms have to upgrade their facilities to meet global standards; for example, by investing in better processing,

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cooling and storage facilities. Out of about 200 licensed fresh fruit exporters in Kenya, only four companies dominate the export market because only they are able to adopt high standards in infrastructure improvements and quality control. Similarly, in Nigeria the government is trying to promote awareness among consumers and producers on the importance of standards, international standards and new equipment acquisition to enhance international trade (Saleson and Rios, 2003). Setting stringent standards discourages exporters, except that customers want products of such standards. E.

P ROBLEMS WITH CREDIBILITY

Using environmental labels that lack credibility can negatively affect international trade. Different eco-labels in one product category exist. These labels are invariably not equal and do not have the same meaning (Potts and Haward, 2007). They are created by different organizations for different purposes. Some of them have high credibility whilst others have no meaning at all (Heissenbuttel et al., 1995; Kiekens, 2000; Case, 2004). Credibility of the certifying organization is important for consumers to be convinced about the claims made by eco-labels (Heissenbuttel et al., 1995; Teisl et al., 2002). According to the International Center for Trade and Sustainable Development (ICTSD), establishing the credibility of existing eco-labeling programs will prevent the proliferation of mediocre programs or too demanding standards set by environmental organizations, large corporations, and other bodies (ICTSD, 2000). A publication by Freese and Schubert (2004) contends that genetically modified (GM) foods and crops are not well tested and regulated before they get labeled. According to the authors the picture that emerges from their study of US regulation of GM foods is a ``rubber-stamp'' ``approval process'' designed to increase public confidence in, but not ensure the safety of genetically engineered foods (Freese and Schubert, 2004). Meanwhile, the United States is the world's largest exporter of GM crops and accounts for almost two-thirds of all biotechnology crops such as GM soy and GM corn planted globally. This demonstrates lack of trust in labeling schemes and loss of credibility (Freese and Schubert, 2004) and could mean that the required lifecycle assessment is not performed or not strictly adhered to. F.

CERTIFICATION AND LABELING COSTS

The extra cost an organization or a country incurs in environmental protection can alter its comparative advantage. Stringent environmental standards could lead to countries or organizations losing their comparative advantage in certain products and no longer export such goods. If factors of production are mobile, countries with stringent environmental policies could shift their production facilities to countries with less demanding environmental policies. This could be detrimental if the effect is global but probably beneficial if the effect is local and easier to correct (Hanley et al., 2001).

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Compliance with different foreign technical regulations and standards would likely lead to significant costs for producers and exporters in many areas. Some of these include costs in translation of foreign regulations, hiring of technical experts to explain foreign regulations, adjustment of production facilities to comply with the requirements and the need to prove that the exported product meets the requirements of foreign regulations (WTO, undated). For example, Samartex Timber and Plywood Company, a leading timber firm in Ghana, has spent more than US$ 100,000 to undergo chain of custody assessment and other certification requirements but has not been able to reach labeling status yet (Eshun, 2007). The abundance and diversity of certification schemes increase costs of certification and lower the market value of individual labels (Oliver, 2004). There are both direct and indirect costs associated with certification and they vary significantly (Rickenbach, Fletcher and Hansen, 2000; Cumbo and Smith, 2001; Humphries, Vlosky and Carter, 2001). For example, an FSC field assessment or ISO audit can cost US$ 3,000±7,000 for a 200-acre parcel aside the indirect costs of certification (Rickenbach, Fletcher and Hansen, 2000). Certification is a costly activity that can preclude some countries and firms from having access to some markets (Kiekens, 2000). Testing costs for PPM based requirements are very high. For example, the technology needed for testing for genetically modified organisms (GMOs) in food products is very costly, so markets demanding GMO-free eco-labels cannot be entered easily by exporters who cannot afford such expensive testing facilities. ISO standards setting procedures are also very expensive and time-consuming for delegates involved in setting the standards. These constraints make it difficult for developing countries to be largely represented in the standards setting process (UNEP/IISD, 2000; Runnalls, undated). In addition, eco-labeling schemes which demand high standards in COC, PPMs and LCA may require installations of new production facilities and other equipment, as has occurred at Samartex Timber and Plywood Company in Ghana (Eshun, 2007), which may increase costs (Wessells et al., 2001).

G. PROBLEMS FACED BY DEVELOPING COUNTRIES Eco-labeling may be difficult for developing countries to adopt. Increased demand in environmental standards would result in a shift in production to countries, which are able to keep to those standards. This means developing countries, which are unable to keep to these high environmental standards because of economic reasons, will lose competitive advantage and subsequent loss of market access. Besides, higher production means higher income and higher ability to respond to environmental protection demands. This scenario is illustrated by the environmental Kuznets curve in Figure 2. To support Kuznets' theory, Hanley et al. quotes Beckerman (1992) as follows. ``The only way to attain a decent environment in most countries is to become rich'' (Hanley et al., 2001). Simon Kuznets developed the Environmental Kuznets Curve (EKC)

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FIGURE 2: ENVIRONMENTAL KUZNETS CURVE Source: Hanley et al. (2001), p. 130.

theory, which is an inverted U-shaped relationship between income levels and the equality of income distribution. The same kind of relationship has been found to exist between income levels and environmental quality by the advocates of the EKC theory. ``The EKC theory states that as per capita incomes grow, environmental impacts rise, hit a maximum and then decline'' (ibid.). Y* represents the turning point of the curve. Before Y*, emissions are rising and environmental quality is falling because of escalating consumption of resources, land clearance and manufacturing. For incomes above Y*, damage to the environment drops and environmental quality improves because of increasing incomes and environmental consciousness, government regulations, technological advancements and changing from manufacturing to services or high-tech industries (Hanley et al., 2001). It is clear from the analogies above that eco-label usage, which demands various procedures, criteria satisfaction, COC obligations, PPM obligations, LCA application and others may be too costly for developing countries to afford and hence may lose their comparative advantage to developed countries. This has already shown up in the case where many African countries find it difficult to export fisheries and fisheries products to Europe, the United States or Japan because of stringent and expensive Sanitary and Phytosanitary (SPS) standards which cover fisheries products based on PPMs (ICTSD, 2000). A survey conducted by the Energy Research Institute, India, shows that a medium-sized firm in India would need US$ 20,000±30,000 to be able to adopt some part of the ISO 14000 series labeling certification (Manoj, 2004). Developing countries are very little involved in trade with eco-labeled goods (ibid.). Given the current rate of growth of imports and exports in developing countries and their capital flows to other countries (UNCTAD, 2004), it is apparent that increasing growth in demands by developed countries for eco-label usage would markedly affect trade trends with developing countries. For example, Samartex Timber

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and Plywood Company in Ghana, is currently under pressure from some of their foreign buyers to get their products certified to ensure a continuous future loyal relationship. Refusal of the company to respond to such demands could jeopardize its position in the marketplace (Eshun, 2007). Developing countries have less financial resources and inadequate technical expertise and hence are not able to adapt to unceasingly changing rules and regulations (BourkeY and Leitch, 1998). Larger firms in developed countries that are able to bear costs of certification, COC, LCA and other related costs of eco-labeled and non-eco-labeled products are likely to overpower smaller firms in developing countries (Wessells et al., 2001). Developing countries feel that proliferation of private labeling schemes may not augur well for them because of differences in standards. Proliferation of private schemes hinders participation and monitoring, and increases costs (ICTSD, 2000). Eco-labeling based on life-cycle assessment demands satisfaction of environmental conditions that exist in both the importing country and the exporting country which makes the whole eco-labeling process complex. If local industry determines which products should bear labels, foreign countries may be discriminated against. Furthermore, if exporters have to comply with conformity assessment procedures and certification schemes of the importing countries, they may be discriminated against. Developing countries have expressed dissatisfaction that they have not been involved in the design of eco-labeling schemes and have the hope that their involvement would foster fairness and harmony (Manoj, 2004). According to the National Economic Development and Labor Council of South Africa (NEDLAC), various OECD and UNCTAD studies have shown that no major trade problems in eco-label usage have occurred but an increasing use of eco-labels, particularly in the footwear, pulp and paper and textiles industry and others, could be a difficult task for developing countries to adopt, and may pose a barrier to international trade in the future. Other difficulties for developing countries are lack of access to information on foreign labeling programs and the cost involved in hiring foreign experts to elucidate on standards that may be enigmatic (NEDLAC, 2003). IV. ADDRESSING BARRIERS TO ECO-LABELING AND INTERNATIONAL TRADE The WTO has the responsibility of ensuring order in international trade. It is its duty to address problems ensuing from eco-labeling and international trade. The WTO, which plays an active role in dispute settlement between countries is encouraged to address problems, such as disagreement of states on PPMs and nprPPMs, discrimination, and stringent standard procedures which are seen as protectionist actions against other countries. This would lead to international trade order and cooperation. The following discussions may be helpful in addressing some of the problems that arise in international trade with the use of eco-labels.

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A.

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SETTING INTERNATIONAL STANDARDS

The International Standards Organization (ISO) is the institution responsible for setting and harmonizing standards. The ISO 14020 family is responsible for standards in environmental labeling. These include ISOs 14021, 14024 and 14025 (ISO 14021, 1999; ISO 14024, 1999; ISO 14020, 2000; Jensen, 2000; ISO 14025, 2006). Standards have to be clearly defined, identifiable and regularly monitored to ensure order in international trade. Private regulators must make sure that their standards do not deviate from the ISO 14020 requirements. Standards must be easy to understand and they must not have changing meanings irrespective of who does the certification (Case, 2004). To fulfill its functions, the ISO is encouraged to consider environmental, technological, economic and political factors in its standards setting process (Folmer and Gabel, 2000). However, since political, environmental and technological conditions vary from country to country it may be difficult to operate solely on international standards. The procedure for setting international standards could be influenced by small or large organizations or environmental groups provided their contributions are unbiased (Bennett, 2000; Oliver, 2004). Since eco-labeling has already gained grounds and is going to be continued, it is advisable to seek intergovernmental consent including the FAO, WTO, ISO and other recognized institutions to develop international labeling criteria that are non-discriminatory (ICTSD, 2000). States can help in promoting the use of international standards and reduce barriers to trade if they ensure that the formulation processes of technical regulations incorporate extant international standards or important parts of them (Wessells et al., 2001; Cabarle and Dieterle, 2006). B.

RECOGNITION OF NATIONAL STANDARDS

It is important to recognize national standards and develop their equivalencies that can be accepted bilaterally (NEDLAC, 2003). Harmonization of standards may be an obstacle to the progress of developing countries. Developing countries do not support the idea that environmental standards be the same in all countries (ICTSD, 2000). Of course, it is true that all countries do not have the same environmental conditions. One good example is the institution of the Ghana Forest Standard in collaboration with the Forest Stewardship Council (FSC) and other stakeholders, which describes certified forests as having been managed in a sustainable way (Eshun, 2007). C. OVERCOMING PPM PROBLEMS Process and production methods are very important in eco-labeling. Nonproduct-related aspects of eco-labeling are also very important. The disagreement that normally ensues among interest groups in eco-labeling and international trade comes mainly from npr-PPMs. Some people have the notion that npr-PPMs are excluded

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from the requirements for eco-labeling but from the definition of the term ``ecolabeling'' which applies LCA, it is inferable that both product-related PPMs and nprPPMs criteria need to be satisfied. It is pertinent that all stakeholders revisit the definition of eco-labeling and get a clearer meaning of it. However, it is obvious that environmental conditions are not the same in all places so prerequisite to LCA, all the environmental variables need to be defined and equivalents developed. It is possible to have differences in variables used for LCA calculations and these differences may cause problems if input and output variables are not well defined and interpreted. The WTO, ISO, governments and other interested organizations need to work in consultation to develop equitable variables and equivalences in eco-labeling procedures. D. ADDRESSING CHAIN OF CUSTODY (COC) CONSTRAINTS The Forest Stewardship Council (FSC), whose initial actions did not consider the economic interests of forest stakeholders, has improved its scheme to encourage the admission of more and smaller forestland owners. So, in 1999, it reduced the limit of certified raw material in labeled solid and composite wood products from 100 percent to 70 percent. Later in 2002, it developed group COC certification guidelines to enable smaller firms to certify their forests and products (Oliver, 2004). The FSC is currently helping Ghana to certify its forests based on local conditions and meeting international standards at the same time (Eshun, 2007). Recently, the Program for the Endorsement of Forest Certification schemes (PEFC) has also developed group COC certification, which is seen as cost effective and easily adoptable by small firms. Under the new COC scheme, certified wood can be procured from different countries using different national certification schemes and labeling programs with only one COC system. The certified material then bears the logo of the PEFC. To meet WTO and ISO standards setting and acceptability requirements, the new standard was formulated in consultation with the public and other stakeholders. Third-party certification has also been incorporated in the PEFC certification scheme. This is expected to bring fairness in certifying forests and labeling forest products internationally (PEFC, 2004). Because of financial constraints, forest and forest products certification in the tropics (mostly developing countries) is being done in phases. The first phase includes recognition of national standards and certification to the national laws. Other elements of sustainable forest management will then be introduced in a gradual process until applicants are ready for full certification. The phased or stepwise approach in certification has begun and is advancing. The Malaysian Timber Certification Council (MTCC) has pioneered such a move, and the African Timber Organization (ATO) is also developing a Pan African Certification Scheme (PACS), which would be adopted by African timber producers (Oliver, 2004). Chain of custody assessment is expected to be easier and cheaper in the future with growing information technology. For example, smart tags being used in other

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production sectors to track goods and their components could be employed in assessing COC. The tags have serial numbers, which can be read with the help of the Internet by a sensor to determine their composition, origin and any other information that is necessary. Adoption of this technology would markedly reduce costs incurred in COC assessment (Oliver, 2004). Nevertheless, building bridges between the existing forest certification schemes would enhance harmony, unity and progress. E.

CREDIBILITY

According to Folmer and Gabel, to ensure credibility of labeling, and to win the trust of consumers the awarding agents must be reputably certified and accredited. This means all the certification bodies such as the FSC, GMO testing bodies and the EU eco-labeling programs must certify products which meet high environmental standards and uphold efficient monitoring and sanction guidelines (Folmer and Gabel, 2000). The certification schemes should meet well defined and established criteria set by competent bodies (Folmer and Gabel, 2000), and the verification process should also be based on the requirements of the standards (Case, 2004). Certification bodies should be ready to make their financial stand, evaluation criteria and standard setting and monitoring procedures overt to win the trust of consumers (BSDGLOBAL, 2002). Government participation in eco-labeling schemes enhances the legality and credibility of the schemes among stakeholders. It also allows public involvement in setting new standards and adoption of international standards, which ensures uniformity and credibility (BSDGLOBAL, 2002). This may be seen in the efforts the EU is making to harmonize and unify labeling standards among its Member States by introducing the EU flower to be the single label representative of all existing labels in the EU (Goss, 2004). A single government recognized labeling program can help reduce the increasing number of private eco-labels which have a lot of differences and whose credibility may be questionable (Case, 2004). For Wessells et al., credibility means that the results of the process are the same in similar situations and certifying bodies remain independent of influences from manufacturers, no parties are sidelined in developing the eco-labeling program, and full consultation of all stakeholders is enforced to ensure transparency (Wessells et al., 2001). F.

ASSISTING DEVELOPING COUNTRIES

Assisting developing countries in various ways can be a major step towards global adoption of eco-labeling. The WTO requires developed countries to assist developing countries in developing technical regulations and standards (WTO, undated). It is worth noting that some African fishing companies are working in a sustainable safe environment and are therefore capitalizing on eco-labeling schemes to hit market targets. Meanwhile, there is still much to be done. The World Wildlife Fund (WWF), which is affiliated to the Marine Stewardship Council, has been involved in projects in

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developing countries towards sustainable and cost-effective certification of fisheries (ICTSD, 2000). The WWF is also working through the Global Forest and Trade Network (GFTN) and in collaboration with the US Forest Service to provide training and technical support in developing forest management plans to help developing countries such as Ghana meet the goals of certification. Other international organizations and non-governmental organizations are also actively involved in helping developing countries meet certification goals (Eshun, 2007). Developing countries also need a more lenient treatment considering their weak financial stand (Wessells et al., 2001). They may need financial assistance to change existing facilities to more efficient ones. It may also be helpful to explain standards to them at lower costs. It is advisable to consult and involve developing countries in all standard setting processes. V.

DISCUSSION

Eco-labeling is a very important environmental tool and market determinant. It is very important to note that an eco-label is different from an ordinary environmental label. Whereas eco-labels are awarded through third-party certification and life-cycle assessment, environmental labels are awarded only through either of these attributes or none of them. So, Type II environmental labeling, which is a self-declared labeling (non-third-party certified) and not provided through LCA is simply, environmental labeling. Type III environmental declaration applies LCA but does not judge products; it only gives certain characteristics of the product, for example, composition, and hence is also simply environmental labeling. There is the likelihood that some people wrongly call all the three types of labels, eco-labels. If the scientific basis of validation, avoidance of unnecessary barriers to trade, LCA application and others are well adhered to, and an eco-label made for the products, one would get a clear distinction between eco-labels and environmental labels. From the definition of life-cycle assessment, it is clear that all the environmental aspects of a product throughout all stages of its life are considered. This means that from extraction through manufacturing, packaging, transportation, marketing and use to waste management, recycling and final disposal the environmental impacts of the product are not supposed to be negative. A product that meets this requirement in addition to other requirements for eco-labeling qualifies to bear an eco-label. It is clear that products that bear eco-labels have been made in such a way that during their production there were acceptable levels of emission to the atmosphere, soil, human and animal habitats and so on. In life-cycle assessment both product-related PPMs and nprPPMs are embedded. So as it stands, the use of eco-labels is not supposed to conflict with the WTO principles. It is obvious from the numerous benefits accrued from eco-labeling that its usage needs to be continued. As mentioned earlier, the ultimate aim for eco-labeling is to curb market failure arising from asymmetries of environmental quality information.

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Increasing interest of consumers in environmental goods is an indication that demand and supply can change according to their interest. In this regard, an eco-label must be obtained genuinely and its implications well construed. Governments need to promote eco-labeling by explaining its importance to the populace. This is even a cheaper way of environmental safety and assurance than regulation controls which are more costly to governments. Looking at the myriad number of existing technical regulations, succumbing to international discipline is necessary to reduce the number to fewer, affordable, but efficient and internationally agreed upon ones. The TBT Agreement of the WTO or the standards code ensures that international order is maintained through the conformity assessment procedures. The TBT Agreement sets boundaries within which countries should operate. It clearly declares and maintains order within the international trade arena. What may pose a problem is the variation in the variables that may be considered in carrying out the life-cycle assessment since all countries do not have the same environmental conditions. As the TBT principles propose, countries should mutually recognize standards of their trade partners, compute equivalences for inputs of technical regulations, ensure transparency, respect the code of good practice, ensure bilateral relationships and avoid discrimination. However, given the large number of a variety of regulations and standards, countries need to adopt recognized standards such as the ISO 14020 series and ISO 14040. The differences and the numerous private labeling schemes create difficulties in understanding the different labeling programs and standard requirements. This could pose untenable problems to exporters who may sometimes be in a maze as to which methods to apply. If each country is to have its own standard setting criteria a product which is produced to be exported to ten countries, for example, would have to meet the standard requirements for each of these ten countries. This may be impossible. So the ISO standards, which are internationally required, would be the best to adopt. Standards need to be simple, easily applicable and economically affordable. Developing countries need to be more committed to ISO standards, take part in all the consultative meetings and adopt ISO standards to make them competent in the global market. Environmental organizations, trade associations, companies, governments and other stakeholders need to work together in a team to develop more reliable labeling programs. The less private labels there are, and the more government-supported labels there are, the more the credibility. The more stakeholders adopt ISO standards, the more the credibility, transparency and trust. Proliferation of eco-labels made through different criteria is not likely to achieve expected results. Eco-labeling organizations need to be accredited, or special accredited organizations should be the only authorities to confer eco-labeling eligibility on applicants. Cost of installations to meet new standards, cost of setting standards, meetings of consultative groups and hiring technical experts are sometimes difficult to afford. Nevertheless, without such actions, mediocre products will dominate the market. There needs to be a balance between economic constraints and environmental

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responsibility. If developing countries lag behind in improved environmental responsibility, and production shifts from developed countries to developing countries because of the existing lower environmental costs, the developing countries will become havens of pollution, exacerbating the problem. It is advisable that developing countries show more commitment to environmental responsibility and clean production technology. On the other hand, if production shifts to developed countries because of their ability to produce clean products, developing countries will lose competitive advantage. This also further admonishes developing countries to endeavor to adopt clean technologies to maintain a good position in the competitive market, and explains why Samartex's forest certification initiatives are laudable. Since eco-labeling is authenticated through LCA, the environmental conditions in the exporting and importing countries need to be considered. The inventory and extraction phase of LCA must consider the situation in the exporting country while the impact phase must consider the situation in the importing country. This is quite cumbersome and needs full consultation between the exporting and importing countries. VI. CONCLUSIONS Eco-labeling is a very important tool that has many benefits including helping consumers to determine the environmental status of products. In totality, eco-labeling promotes sustainable management and development. The definition of eco-labels according to ISO and WTO principles includes life-cycle assessment. This means that both npr-PPMs and product related PPMs have to be satisfied. In this regard, it is expected that COC, TBT, PPMs requirements and international standards pose no problem to trade. However, for international trade, data is needed from both the exporting and importing countries to be able to obtain accurate results for phases such as inventory, extraction and impact in the LCA calculation process. Collection of data from the countries involved and the whole LCA process may be complex and expensive. There is the need for consultation and collaboration between the countries involved, and WTO and ISO need to find ways of making the process simpler, feasible and affordable. If the eco-labeling process is accurately followed, it is supposed to pose no barrier to international trade. It has been revealed that developing countries find the adoption of eco-labeling difficult and costly. However, it is expected that countries trade in goods in which they have comparative advantage and lower opportunity cost. So, advocates of eco-labeling may trade more in such goods. Nevertheless, there is the possibility of non-participants losing market access because of competition. This means that some barriers may exist. Also, some countries would likely create stringent environmental requirements on the pretext of environmental responsibility that might be barriers to international trade. It is important that countries adopt international standards such as the ISOs 14020, and 14040 to ensure uniformity in eco-labeling. Besides, other countries should respect

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national standards and there should be negotiation if necessary. An example of this has been seen in Ghana where the FSC is considering Ghana's standards in conjunction with international standards to establish the Ghana Forests Standard of certification. It is also important to assist developing countries technically as the WWF and other organizations have initiated. Finally, differences in environmental, political, and technological conditions in countries are likely to have an impact on the implementation of international standards. This means various countries need to be represented in ISO committees on international standards setting. However, it may be difficult to operate solely on international standards, so national regulations should be well examined and equivalences developed in bilateral trade transactions. References Amacher, G.S., E. Koskela and M. Ollikainend (2004), Environmental Quality Competition and Eco-labeling, 47 Journal of Environmental Economics and Management 2, 284±306. Anderson, C., and E. Hansen (undated), Forest Certification: Understanding Eco-label Usage and Requirements. Oregon State University, Department of Wood Science and Engineering, available at: (visited 2 May 2007). Bagozzi, R.P., J.A. Rosa and F. Coronel (1998), Marketing Management (Saddle River, NJ: Prentice Hall). Bennett, D. (2000), ISO and the WTOÐA Report to the International Confederation of Free Trade Unions (ICFTU) Working Party on Health, Safety and Environment, available at: (visited 13 April 2005). Bourkey and Leitch (1998), Trade Restrictions and Their Impact on International Trade In Forest Products, Excerpt, FAO Report, available at: (visited 15 April 2005). Brassington, F., and S. Pettitt (2000), Principles of Marketing (2nd edn: Pearson Education). Brian, P. (2002), Forest Certification: Is There a Confusion in Standards?, Asian Timber (November±December). BSDGLOBAL (2002), Markets: Eco-labeling. Business and Sustainable Development, available at: (visited 5 July 2007). Cabarle, B., and G. Dieterle (2006), Forest Certification Assessment Guide: A Framework for Assessing Credible Forest Certification Systems/Schemes (WWF/World Bank Global Forest Alliance). Carter, D.R., and F.D. Merry (1998), The Nature and Status of Certification in the United States, 48 Forest Products Journal 2, 23±28. Case, S. (2004), Eco-labels: Making Environmental Purchasing Easier?, 12 Government Procurement Journal 3, 32±36.

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