Europe Struggles to Set Environmental Standards for Trade Agreements

  
The European Union's attempt to revise and simplify its General System of Preferences program has highlighted the difficulties of setting trade standards for environmental concerns. As reported in BRIDGES Weekly Trade News Digest of (June 19, 2001), to be eligible for tariff concessions, beneficiaries of the arrangement would have to be in compliance with all International Labor Organization (ILO) conventions that contain core labour standards. Conversely, those committing "serious and systematic" violations of the ILO standards would risk losing their GSP status.

The ILO provisions are objective standards that have a long track record of application. In contrast, there are few if any recognized international environmental standards. "On the question of environment," BRIDGES reports, "the regulation stipulates that incentive arrangements will be granted to qualifying developing countries 'which effectively apply domestic legislation incorporating the substance of internationally acknowledged standards and guidelines concerning sustainable forest management (SFM).'" The regulation does not specify precisely which certification standards will qualify, given that so many such certification systems are either actively in use or in the development stage. It does stipulate that certification standards used in the scheme must be "credible"; however, in the regulation's non-binding "explanatory memorandum," the International Tropical Timber Organization is recognized as a possible SFM standard, without precluding other certification systems from consideration.

The European experience is important to watch in the US as the debates over incorporating environmental standards are discussed in Congress during the Trade Promotion Authority debates.