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Established in 1995, the World Trade Organization (WTO) aims to reduce barriers to 'free' trade. It enforces about 60 separate trade agreements, settles trade-related disputes, and serves as a forum for ongoing talks to set the rules of trade. The WTO is the product of the Uruguay Round (1986-1994) of negotiations under the old General Agreement on Tariffs and Trade (GATT).
Currently, the WTO includes 153 member countries ranging from "developed" to "developing" to "least developed countries." The latest round of negotiations, called the Doha Round, was launched in November of 2001 and poses serious threats to communities and the environment, including our ability to address climate change. Of specific concern are provisions allowing corporations to sue governments for environmental regulations that impact profit (link to subpage 2 WTO's anti-environmental record).
Doha Negotiations Revived?
The latest round of negotiations has been stalled for years, and most recently collapsed last year due to disagreements over agricultural tariffs. However, among world leaders, hope still remains for a future agreement. At the latest G8 summit, G8 and G5 leaders pledged to conclude the Doha Round in 2010. Yet, it remains far from certain whether the world's largest economies will actually reach a trade deal anytime soon.
WTO and Climate Change
The WTO heavily influences our ability to fight climate change. WTO rules, such as those governing intellectual property rights, will affect the dispersion of low-carbon technology. There is a proposal on the table in the Doha round to open up the energy services sectors of developing countries, which would have disastrous impacts on climate. In addition, policy makers and trade lawyers are debating whether our current trade rules will allow for measures to avoid the relocation of energy-intensive industries to countries with weak regulations on carbon emissions. Countries need the policy space to implement the sweeping changes necessary to tackle climate change without the limitations offered by the WTO's narrow interpretation of trade rules.
For more info, see a recent report by the WTO and the United Nations Environment Programme detailing the relationship between trade and climate change. Or read a news article on the report.
Make Trade Clean, Green and Fair!
A responsible trade policy would open markets and protect the environment -- not put our health and natural heritage at risk. To make trade clean, green, and fair, Sierra Club is urging the Obama administration to take executive action to:
·Open WTO policymaking to citizen participation;
·Fix current trade rules so that they no longer undermine environmental and health standards; and
·Conduct a thorough, objective, and participatory environmental assessment of the WTO.
Global Governance in the WTO
Sacrificing Democracy
The WTO shifts enormous power from local, state, and national governments to unaccountable international bureaucrats. The WTO can review and penalize any act of any government that in any way compromises its trade rules.
Governments must comply. As the WTO charter states: "Each member [country] shall ensure the conformity of its laws, regulations and administrative procedures with its obligations in the [WTO]."
WTO dispute panels consist of three trade lawyers. Only national governments are represented in disputes. Citizens' organizations and state and local governments are locked out, even when their interests are at stake. Proceedings are secret. Rulings are final and binding. A country that loses a dispute must change its domestic law or pay penalties to keep its law in place.
Under the WTO, international trade tribunals can review and impose penalties for any act of any government that in any way compromises trade. The main champions of the WTO are the giant corporations that dominate global commerce. Consequently, these companies made certain that the WTO was given broad powers to foster trade by limiting governments' ability to adopt and enforce standards to protect public health and the environment.
A Partner in Crime: The U.S. Trade Representative
In each case where the WTO ruled against a US environmental law, the U.S. Trade Representative (USTR) lobbied to weaken the law in order to bring it into compliance with trade rules. The USTR does so to increase its chances of getting foreign governments to comply with WTO rulings against their laws.
In addition to specific rulings against health and environmental standards, the WTO also exerts a powerful "chilling effect" on environmental progress. After all, governments are required to bring their laws and regulations into compliance with the WTO rules even when a dispute panel does not issue a specific ruling. In this way, food safety, waste reduction, and invasive pest standards have all been quietly weakened already.
WTO's Anti-Environmental Record
Under the General Agreement on Tariffs and Trade (predecessor of the WTO), a US law to protect dolphins from encirclement and drowning in tuna nets was ruled to be an illegal barrier to trade in 1991. Congress later weakened this law to avoid another clash in the WTO.
In 1998, the WTO ruled against a US law that protects endangered sea turtles from drowning in shrimp nets. The State Department later set new rules that weakened sea turtle safeguards.
To avoid conflicts in the WTO, the US Department of Agriculture refuses to set strong standards to prevent introductions of tree-eating invasive pests. Now the Asian long-horned beetle, a recent arrival, threatens to destroy our sugar maples.
As a result of the WTO and other trade agreements, America is importing more and more of its food. US safety inspectors can't keep up with the growing workload. To accelerate the process, the WTO encourages importing countries to accept the safety systems of exporters, but many imports come from countries where food safety is less advanced. The United States used the WTO to successfully challenge Europe's ban on beef treated with artificial growth hormones despite evidence that hormones in the diet may cause cancer. US food safety laws could be attacked next under these same trade rules.
The WTO has also proven that it is a threat to clean air. In 1996, a WTO dispute panel ruled against the US clean gasoline program designed to reduce smog pollution from cars and trucks. To comply with the decision, the US Environmental Protection Agency issued weaker standards for the program that even it admitted would "...result...in dirtier U.S. air."