Archived press release

Mandelson's secret WTO "court" for trade disputes

21 April 2006

The European Union is pushing for a new permanent fast track "court" to settle trade disputes within the World Trade Organisation (WTO) [i], new documents have revealed following trade negotiations in Geneva today. Friends of the Earth Europe criticised the proposals, which it said would threaten environment, development and safety standards world-wide.

The proposal, put forward by EU Trade Commissioner Peter Mandelson, would allow trade experts to resolve disputes over domestic regulations and standards swiftly behind closed doors, without the involvement of any other parties.

Friends of the Earth said the proposals would make it easier for the EU to eradicate export taxes, including those used by developing countries to conserve natural resources and to promote local economies and employment. It could also increase European industry's freedom to invest in developing country markets. Furthermore, it is highly likely to be used by other countries to follow-up on their existing challenges to European legislation relating to, for example, the regulation of chemicals, the labelling of wood products and the control of emissions from vehicles[ii]

Friends of the Earth Trade Campaigner Eve Mitchell said:

"What is shocking about this EU proposal is the way is blatantly favours the interest of industry even thought he EU's own commitment to environmental protection and poverty eradication could be undermined, if the proposal were accepted. This is a direct attack on democracy, environment and development. That Europe tabled it is outrageous."

The paper, seen by Friends of the Earth, complains that the limits countries put on trade often cut into profits or make trade too difficult for industry, and that the existing - and highly controversial - WTO Dispute Settlement Mechanism is too burdensome. The EU says that business needs a new way to "reduce the risk of new [regulations] arising in the future; and facilitate more rapid resolution of [conflicts over regulations]".

The EU's proposal is designed to facilitate `mutually acceptable'/ agreements between trade experts[iii], about how to modify or otherwise deal with the offending measures, even if they are legal under the WTO/[iv] and with no requirement for external consultation. Furthermore, the EU proposes that the whole process should be wrapped up in 90 days. Compare this to the three years that have so far been spent deliberating over genetically modified food, following the US complaint about European restrictions (these kind of measures could easily fall under this new proposal).

Friends of the Earth views the proposal as highly dangerous and argues that the WTO is not a competent authority to judge the legitimacy of trade restrictions designed to protect people and their environment.

Notes

[i] "Concept paper: Improving WTO means to reduce the risk of future NTBs and to facilitate their resolution", drafted and presented to WTO members this week by the European Commission, seen by Friends of the Earth Europe

[ii] At the last WTO Ministerial in Hong Kong committed to submit specific negotiating proposals on non trade measures (NTMs) as part of the non agricultural market access negotiations as swiftly as possible. For further information about NTMs that countries have notified (and may challenge) please see research by Friends of the Earth International at www.foei.org/trade/nama.html. The analysis proves a breath-taking array of challenges to labelling and certification requirements; national standards and regulations; export restrictions; restrictions on foreign investment and measures to promote local economic development. The EU's stated ambition in relation to NTMs is to remove export taxes considered to promote "higher-value added production in domestic industries". Key areas of interest are "textiles, leather, skins and hides; minerals and metal products; as well as woods and forestry products", Non-Tariff Barrier Notifications, European Communities, TN/MA/W/46/Add.12, 24 May 2005. The US and Japan are currently challenging measures that prevent foreign investment in the automobile industry, for example.

[iii] The procedure proposed requires mutual consent to the agreed outcome by both parties, but does not require the trade experts involved to consult with non-trade experts (who could be expected to support the challenged regulations more forcefully).

[iv] "The purpose of the panel of experts shall be to assist the parties in bringing clarity to the possible trade effects arising from the NTB in question and reaching a mutually agreed solution, without reference to the legality of the NTB"/

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Published by Friends of the Earth Trust