By Russel Norman
The eighth General Agreement on Tariffs and Trade (GATT), signed earlier this year, promises to deliver more on free trade than any of its predecessors. Within its 20,000 pages are agreements reducing restrictions on trade in everything from agriculture and manufacturing to services and finances. Overseeing the implementation will be a new organisation, the World Trade Organisation, to be established by January 1995.
Previously, if one country had a gripe about another's "unfair" trading practices (for example, export subsidies) it had to get consensus amongst all the countries on the GATT General Council just to set up a panel to study the complaint. This was no easy matter when the country complained against had a vote, and hence could veto the consensus.
The same consensus rules applied to the adoption of a panel report — put together by free trade "experts" nominated by governments — by the General Council and the application of trade sanctions. The new GATT reverses the consensus rule; consensus is now necessary to stop the setting up of a panel, to stop the adoption of a panel report by the General Council and to stop the application of trade sanctions recommended in a panel report. This makes the procedure fairly automatic once a country makes a complaint; the deciding factor will be the panel.
The environmental impact of this new GATT is that almost any actions which impede "free trade" can be declared illegal and hence attract retaliatory trade sanctions. This includes laws designed to protect the environment, such as restrictions on the importation of rainforest timber from Sarawak.
Dolphins
The most famous example is the so-called GATTzilla versus Flipper case. Under pressure from environmentalists, the United States government had legislated the Marine Mammals Protection Act, which outlawed tuna-fishing practices which killed large numbers of dolphins. One way to catch yellow-finned tuna is to throw nets around a school of dolphins to trap the tuna swimming below. The dolphins are suffocated in the nets and their bodies tossed overboard, while the tuna are kept for sale. In 1988 around 100,000 dolphins were killed in this manner.
When this practice was outlawed in the US, the tuna fleets of Latin American countries continued it. In 1990-1, US import embargoes were placed on tuna caught in such a manner. However, Mexico complained to GATT on the grounds that such embargoes were an impediment to trade and hence illegal. In 1991 the GATT panel ruled in favour of Mexico.
Trade sanctions are an effective mechanism for enforcing a variety of environmental measures. GATT has placed a new obstacle in this path.
Currently, a whole range of environmental measures are being challenged under GATT. These include US fuel economy standards for new cars, US "gas guzzler" tax and the EC ban on the use of growth hormones in beef. Threatened challenges include: US restrictions on drift-netting; export bans on saw logs from Indonesia, the Philippines and the US; the 1990 Consumer Education and Nutrition Food Labelling Act; German packaging recycling laws; California's proposition 65, which requires the labelling of carcinogens.
In the past threatened "free trade" challenges have produced results without the whole process even being completed. For example, Danish bottle recycling requirements were weakened; Canada backed down and accepted US food imports with 30% higher pesticide levels than national laws permitted; and a British Colombia reforestation program was scrapped as an "unfair subsidy to the timber industry".
Who's in charge
None of this is surprising when you look at who in GATT is doing the negotiating. Of the 800 members of advisory committees to the US trade representative on GATT, five were environmentalists, a handful were unionists, and the rest were from business.
The US group Public Citizen (of Ralph Nader fame) studied the membership of the three trade advisory committees which most directly related to environmental, health and safety issues. When they cross-checked with Environmental Protection Agency records they found that five of the 10 biggest dischargers of hazardous waste in the US were members of these committees: Du Pont, Monsanto, 3M, General Motors and Eastman Kodak. Nearly half of all the advisers in the study were found to be from companies listed by the EPA as "potentially responsible parties" for hazardous waste dumping.
The evidence clearly suggests that GATT is facilitating environmental degradation. Nevertheless, the free trade ideologues claim that the GATTzilla versus Flipper example was an aberration, and that free trade can coexist with environmental protection. They propose putting a section into GATT which would give precedence to international environmental treaties. Such a clause already exists in the North American Free Trade Agreement (NAFTA) between Canada, the US and Mexico.
The problems with this argument are: (a) there is plenty of evidence GATTzilla versus Flipper was not a unique attack on the environment under GATT auspices; (b) NAFTA hasn't produced any environmental victories; (c) effective environment treaties are few and far between; (d) it doesn't account for the structural obstacles, such as the trade advisers to GATT, which stand in the way of environmental action.
But the free trade ideologues are worried. Just as they were happily writing up GATT to suit them, GATTzilla versus Flipper hit the fan, and all of a sudden they're on centre stage, vilified as eco-terrorists and dolphin killers. One free tradocrat went so far as to argue that if GATT didn't accommodate to the "greenies," it would be GATT that would eventually lose out!