WTO Ministerial Conference in Singapore: Environmental Diversity versus Harmonization

Abstract

1. IntroductionIn December,1996,a newera of the international trade regime started with the firstWTO Ministerial Conferencein Singapore.Substantialprogress hasbeenachievedin freeing trade in information technology products and a North-South collision oninternational labour standards has been averted. However, these successes over-shadow the apparant stagnation in the area of trade and environment. At last, aftermanyyearsofintensivediscussions,manyhadhopedthatthefirstWTOMinisterialConferencewouldaddressthissensitivepolicyfield.Outofthewiderangeofissuesthat can be dealt with under this heading, two figure prominently: trade measurespursuantto multilateral environmentalagreementsandeco-labellingschemes.Thisnote, firstly, tries to explain why exactly these two issues draw most of the atten-tion of policymakers, and secondly, discusses how these issues can be resolvedagainst the background of established welfare theory. It also tries to make clearwhy the ministers in Singapore pussyfooted around these issues and only decidedthat the WTO Committee on Trade and Environment has to continue its explora-tory work. To come to grisp with these issues, insights from the literature on thetrade-environment interface are first summarized in eight propositions.2. Propositions on Trade and EnvironmentBefore setting forth the propositions,it is good to knowthat in analyticalstudies ontrade and environment, the following distinctions are usually made. First, there areon the one hand local and national environmental problems, and on the other handtransboundary, i.e. international and global environmental problems. The formerrefer to externalities caused by domestic environmental distortions that do notexpell beyond national borders. The latter refer to environmental problems thataffect welfare both in the home country and in one or more foreign countries,