The paper seeks to provide an overview of the present state of debate on trade, environment and the GATT for developing countries. Potential for green protectionism and relevant GATT rules are discussed in three areas: i) environmental product regulations including eco-labeling and other product measures with effects on production processes and border adjustment of environmental taxes; ii) extraterritorial use of trade measures to influence environmental behavior in other countries; and iii) the use of trade measures with international environmental agreements. The conclusion of the Uruguay Round will have a number of direct and indirect effects on trade and environment and the GATT debate on it.
overview of the state of play in the present debate in GATT on trade and environment from the perspective of developing countries. It considers main sources of green protectionism, and to what extent present GATTrules deal with them. It also discusses the links of the Uruguay Round agreements with the environment. The central theme is that the threat of green protectionism is exaggerated, as traditional trade barriers remain more important. To deal with the threat, relevant GATTrules will be reviewed in the near future along with other initiatives. The conclusion of
This paper presents a broad overview of trade protection in industrial countries from the 1970s to the present. The emphasis of such measures has shifted from the protection of agriculture and basic manufacturing industries, where many industrial countries had lost (or never had) comparative advantage in the 1970s and 1980s, toward the protection and promotion of high-technology sectors in recent years. The new forms of protection--particularly subsidies and antidumping rules--have not necessarily contravened GATT rules, arid the Uruguay Round fell short of reigning in such interventions. While these more recent trade interventions might in principle have an economic justification under certain conditions, theoretical, empirical, and practical considerations call for great skepticism about the desirability and efficacy of such policies. The next challenge for world trade negotiators is to contain the pressures for intervention in these areas. This is a Paper on Policy Analysis and Assessment and the author(s) would welcome any comments on the present text. Citations should refer to a Paper on Policy Analysis and Assessment of the International Monetary Fund, mentioning the author(s) and the date of issuance. The views expressed are those of the author(s) and do not necessarily represent those of the Fund.
trade barriers is still small compared with traditional trade barriers against developing country exports.
To prevent the threat from becoming a reality, the paper contends that developing countries have an interest in seeing that some GATTrules are reviewed, while others are maintained. First, in some areas, existing GATTrules may be too flexible and may not cover all potential environment-related product measures. Further discussion is likely to take place on how to shield eco-labeling from protectionist abuse; how to deal with measures that resemble product