Pascal Lamy on Rio + 10

["Ian Murray" <seamus2001@xxxxxxxx>]

http://europa.eu.int/comm/trade/speeches_articles/spla57_en.htm
Meeting the challenge on trade and sustainability

Rio+10 Conference, Brussels, 10 May 2001

Ladies and gentlemen,

I was delighted to accept your invitation to address this gathering
here tonight on questions of trade and sustainability. Alas, this was
a short-lived joy. Because I quickly realised what formidable task I
had let myself in for.

Not only do I have to speak to you after you have already had a long
day of various interventions and discussions and are looking forward
to your well-deserved dinner, rather than to having to listen to
another speech - I also am at a disadvantage as I haven't had the
privilege to listen to the debates you have had during the day. Well,
I guess I just have to face the challenge as well as I can, and rely
on you filling me in on your work during discussion time.

The Rio + 10 Coalition has shown impeccable timing in scheduling this
conference in the week just before the Commission will adopt its
strategy paper for the Göteborg European Council devoted to
sustainable development. So sustainable development is the flavour of
the month. It has constantly moved up on the EU agenda over the past
year, and the issue is there to stay. Essentially, this is what it
boils down to: it stands to reason that the world cannot indulge in
reckless plundering of the world's resources without regard for the
consequences on the environment or for social equity. We want to
achieve a pattern of economic development that can be maintained in
the short and medium term, and sustained for future generations.

Sustainable development is a declared ambition for both developed and
less developed countries. What contribution can trade policy make to
this aim? We need to ensure that the sustainability benchmark is built
into the thinking of trade policy-makers worldwide. Our policy
measures have to pass a triple test:

will they help social development, especially in developing countries
but also here?
will they encourage stable worldwide growth?
will they pay attention to careful use of resources, and reduce
pollution?
It is hard to hit all three targets at once, but to over-emphasise any
one of them would be to miss the point of sustainable development.

So where does the EU stand, and how does the European Commission play
its role?

The quick and easy answer is that we are already doing a lot. A first
innovation introduced by us ahead of the Seattle Ministerial is the
Sustainable Impact Assessment of the proposed new round of
negotiations: an effort at better informing trade policy makers and
those concerned by it about the impact of trade measures on so-called
non-trade issues. The idea behind conducting such assessments is that
trade policy and trade negotiations do not evolve in a vacuum, but are
linked with other policy areas, and that it is necessary, therefore,
to gain as much information as possible about impacts on growth,
environment, and social aspects.

But this is just the starting point: after informing policy-makers,
policy itself must fulfil the new requirements: trade policy must act
in coherence with policies in other areas, taking into account all
possible impacts. The European Union has set itself a number of
targets in this regard, including the Cardiff decision to work on the
integration of environmental considerations into all major policies of
the EU, and the request of the European Council to the Commission and
Member States to deliver a sustainability strategy in time for the
European Council in Göteborg later this year - with a view to the
World Summit on Sustainable Development. In the midst of all this, the
WTO Ministerial Conference in Qatar later this year will be an
important milestone for trade policy makers.

But these targets are not the only ones: making trade and trade policy
more sustainable is an ongoing process - which does not end with the
events and processes I have just mentioned.

The work that has been done so far (and this includes the preparation
of a working paper on trade and sustainable development by my services
in DG Trade) should therefore also be seen with this perspective in
mind: we have started the process and launched the debate - and the
solutions and decisions that need to be taken will take place as we go
along.

And this task ahead, all of us should work step by step to move the
trade and sustainability agenda forward.

During the past weeks and months my services and I myself have been
speaking to the European Parliament, our Member States, and civil
society organisations to further the debate and spark ideas on this
issue.

This morning, I met with NGOs and civil society representatives to
discuss sustainability in trade policy, and to draw some lessons from
the debate which we have launched with these organisations.

The very organisers of today's and tomorrow's event in the framework
of the Rio+10 Coalition meetings in which we are currently
participating, have been working on the stimulation of discussions and
debate on the issues, and I will address one of the key proposals made
in this context later on.

Work is well in hand, therefore.

But this is just the process. What about the substance? What about the
central issues that have to be considered, if we want sustainable
development to work, and to allow us all to continue to live in
prosperity that is not a mortgage on the future for our children's and
our children's children?

I would advance three key points that are preconditions to making
sustainable development work.

1. Coherence:

Ensuring coherence and co-ordination of Community policies is, I
think, the central challenge we have to meet in order to achieve
sustainable development: We need to put more systematically the
different Community policies (internal and external!) at the service
of strategic priority objectives. Unfortunately, coherence is often
defined the other way around: as an attempt to itnegrate sustianbel
development into the various sectoral policies. But such a
compartmentalisation would run directly counter to the comprehensive,
cross-sectoral approach that the objective of sustainability requires.
Let me take two examples to illustrate this point: poverty
alleviation, and the integration of environment costs in economic
calculations.

Poverty alleviation, I think we all agree, is a central if not the
central development policy question affecting us all. Poverty is the
key issue to solve, and its reductions has potential impacts on many
fronts, from health to food security to social conditions. There is no
way in which we will solve the poverty problem, if we do not allow
trade to play its role in the most beneficial way possible. Trade is
and remains the most powerful motor available to us for building
prosperity. In fact, most recent development policy initiatives, and
reflection on such policy integrate trade and economic development and
do not attempt to advance in one without the other. The recently
concluded new Cotonou agreement with our ACP partners is a good
example for this - as is the Everything But Arms Initiative (EBA).

In environment, much the same is valid: one of the key arguments
brought forward again and again to demonstrate how fallacious are
conventional approaches to trade and globalisation, is to say that
environmental impacts are not part of the costing calculations for
establishing the viability of trading or economic ventures. I have two
comments to make on this: one, on substance, this is not entirely true
anymore, although admittedly, the picture is very mixed: many major
companies in those sectors that have been responsible for the most
controversial pollution cases in the past do undertake, nowadays,
environmental impact assessments as a matter of routine to ensure
sustainability of their work. Many of you must also be aware of the
cooperation of a number of well-known business organisations with
leading NGOs to establish systems that allow more sustainable
approaches to their operation. Don't misread me: I'm not claiming that
this is perfect, and that the problems we face in this respect will
now go away: but the inclusion of environmental elements in costing
and business planning is already a reality in some areas. Governmental
or semi-governmental impact assessments (for example the country case
studies carried out with the support of UNEP) also have a role to
play.

Second, and equally importantly, this implies that environment policy
itself establish the means and techniques to integrate trade elements.
Environment impacts of Human activity, whether they are business, or
otherwise, are costs, and should be treated as such. But as we all
know, the avoidance or reduction of environment impacts also presents
opportunities. Environment policy cannot, therefore, limit itself to
introducing restrictions on economic activity which are aimed at
avoiding negative impacts - it must move forward beyond this limited
approach and assist in developing ways in which human activities,
including trade, can be reconciled with the environment, and end up
making positive contributions to the environment and to
sustainability. One good example of this is the trade in environmental
services, or the certification of environmentally sustainable
products. A more controversial example has been discussed at length in
the context of the climate change negotiations: emissions trading. In
other words, environment policy needs to consider and where possible
integrate trade elements - as well as obviously the other way around.

In similar fashion, we need to look again carefully at the in a sense
artificial conflict between MEAs and trade: what needs to be done is
to find ways and means to achieve dovetailing between the goals of the
MEAs on the one hand, and the benefits of trade on the other side. One
of the more interesting contributions made in this context in our
dialogue with civil society organisations was a paper (from an
environmental NGO) which made the case for not only looking at trade
rules' compatibility with MEAs, but also to verify whether and how
existing MEAs could be compatible with a governance system that needs
both: trade rules and environment rules.

What is my conclusion? Coherence between the policy areas that play a
role with regard to sustainability is a complex and difficult issue,
and not one where we can place the onus on only one side of the
equation: all of us are concerned, and all of us have to contribute.
Trade policy will make its contribution, and as I have hinted at
various moments, we are already well on our way doing so.

2. Multilateralism

Slow progress in the multilateral process has the inevitable
consequence that trading countries will look for faster and easier
ways to improve their place on the world market. Many advocates of
regional and bilateral agreements have appeared on the scene recently,
making the case that perhaps the multilateral process has gone too
far, and further progress could only be made bilaterally or
regionally. The EU itself has always been a strong advocate of
regional trading schemes - unsurprisingly, I'm tempted to say.

But we have always maintained one main argument: regional trade
agreements cannot substitute for the multilateral process. Whilst it
is certainly true that by definition almost, regional and bilateral
agreements allow to fulfil ambitions that would be hard if not
impossible to fulfil at the multilateral level, they also have
limitations, or even dangers with regard to those who do not
participate. Sustainability is a case in point.

Whereas negotiations on bilateral agreements can more easily include
sophisticated elements in the areas of environment, social issues, or
development, on the other hand, the complete lack of such elements at
the multilateral level would place at a disadvantage those who do not
participate in regional arrangements.

In other words, I would make the point that apart from the obvious
drawbacks for non-participants in regional trade agreements from the
economic point of view, there are also clear disadvantages in the area
of sustainable development if nothing is done to raise standards
multilaterally. It becomes easier to exclude countries because they do
not fulfil certain requirements, it becomes easier in particular not
to trade with countries that do not have regulatory conditions that
make products more attractive to consumers in countries with high
environmental standards. It becomes easy not to further support
trading efforts by such countries, since all trade can be done with
those participating in regional or bilateral agreements. Conversely,
it also becomes easier for the less scrupulous to commercially,
environmentally, or socially, exploit those who do not have the
standards and backing of multilateral rules to protect them and would
allow them to develop in a more sustainable way.

If multilateral negotiations are about anything, they are about
inclusiveness. Inclusion of all those who participate in the
international trading system in a negotiation process that is supposed
to raise the standards for all.

3. Governance

I do realise the potential contradiction between the two points that I
just made: if coherence between all concerned policy areas, and
two-way interaction between trade, development and environment
policies is necessary, then logically, multilateral trade negotiations
alone will not do the trick. And there is indeed one element which I
have not mentioned yet, although it is one of my favourite subjects:
this is governance. Managing a system as I have just outlined it,
which encompasses all policy areas that can contribute to sustainable
development, and is based on multilateral negotiation of rules that
will further the objective of sustainable development, such a system
requires solid international governance.

In the trade and economic area, we have a set of relatively
well-functioning governance mechanisms or institutions. The WTO is one
of them, but the Bretton Woods institutions are another example. These
institutions, no matter how well they function, and no matter how far
we can push their operation along the road of the reforms and
improvement that are currently under discussion, can nonetheless not
do all that is expected from international governance to make
sustainable development work.

The WTO is a trade organisation - it's goal should be the formulation,
implementation and administration of trade rules - it goes without
saying that these trade rules should contribute positively to
sustainability as I've just outlined. But we need those organisations
whose job it is to watch over development, environment, social
questions, to play their role, too. I'm sure Klaus Töpfer has a lot to
say on the issue of global governance in the environment field.

In other words, the interaction between policies that I outlined
before, needs to be counterbalanced by interaction and effective work
of the institutions responsible for the various policy areas related
to sustainable development. Each and every player in the field has to
contribute to this process.

Finally, governance also signifies governance at the local level. All
governing entities must make efforts to contribute to systematic,
coherent and disciplined implementation of the commitments undertaken
with the aim to improve sustainable development.

We all need to make efforts, therefore, to reinforce the institutional
and governance structures that we need to support our efforts at
building trade and globalisation on a sustainable footing.

I have spoken a lot about contributions. I want to take this
opportunity to refer to an idea that has been brought forward by the
International Centre for Trade and Sustainable Development, and the
Rio+10 Coalition, who have proposed the setting up of a Sustainable
Trade Centre. This project, which would serve in particular to ensure
that trade in sustainably produced goods from developing countries is
facilitated, has a number of things going for it: it would be a
concrete contribution to the process of making trade in itself
sustainable, it would ease access to developed country markets for
those in developing countries producing sustainably produced goods,
and it would contribute to networking businesses dealing in
sustainable goods worldwide.

I believe such a Centre would be a welcome contribution to the efforts
made by us all to further sustainability in trade and in other policy
areas.

Let me conclude by thanking the organisers of this event for the work
that they have undertaken to make their contribution to the
sustainability and Rio+10 process: without such activities and support
from non governmental actors, the process would be the poorer for it.