Grete Knudsen, Norwegian Minister of Trade and Shipping

International Trade and Sustainable Development

Opening address at Third Environment Northern Seas (ENS), Stavanger Conference Seminar 23-24 August 1995

It gives me great pleasure to welcome you all to the third Environment Northern Seas, ENS, and in particular to this seminar on international trade and sustainable development.

The general focus of ENS'95 is on environmental challenges and opportunities. The cross-sectorial approach chosen by this conference is well-suited for its purpose: Namely to create a constructive basis for addressing the challenges arising from the many-faceted task of contributing to sustainable development. By bringing together representatives from governments, academic institutions, non-governmental organisations and business, we hope to enrich and bring balance into the discussions.

The goal of "sustainable development" which is also reflected in the preamble of the agreement establishing the WTO, has developed into becoming an integral part of our vocabulary. This is to my understanding a strong and important indicator of our common dreams as well as priorities with respect to what kind of society we would like to live in. Quality of life depends on more than economic progress. Political stability, social security, equal opportunity and room for cultural expressions and experiences are other elements. In order to contribute to sustainable development, economic growth based on trade in goods and services is still necessary. This might not, however, be sufficient in order to bring about the society we would like to live in. The content of growth would also have to be taken into consideration. This implies that the focus has to be moved from quantity to the quality of growth itself.

It is important to make sure that economic growth does not undermine the contribution of other elements to the overall objective of sustainable development, and the environment. Consequently, it is important make sure that the trade rules give ample room for environmental concerns.

In certain cases use of trade measures for environmental purposes is necessary to achieve the goal of sustainable development. Such measures are already in place, for example in the form of restrictions on trade in hazardous waste and on substances that deplete the ozone layer.

At the national level, governments can choose among a range of policy options and instruments. The use of economic instruments is one possibility. High levels of environmental protection, as a result of government policies and consumer influence, can have positive effects on the competitiveness of individual producers and countries. Governments must respond to increased awareness among consumers. This might spur technological change and promote new industrial sectors and new market niches. When environmental costs are internalized, through including environmental costs in the price of the product or service, trade liberalisation will hopefully induce a more environmentally friendly utilization of natural resources.

International cooperation is called for when national policies cause transboundary pollution. I believe we all agree that transboundary regional and global environmental concerns are most effectively addressed through international cooperation.

The relationship between trade and environment has been on the international agenda for some time. Work in this field is presently being carried out in a number of international organisations.

The focus of this work will gradually be shifted to the WTO, being a rule-making body. The aim is to make trade policies and environmental policies mutually supportive and to promote their compatibility so as to contribute to sustainable development.

The work on trade and environment in the WTO will not, however, entail any change in the distribution of basic responsibility between the trade and the environmental communities. The formulation of environmental policies as such, will remain the prerogative of the environmental authorities. In this context it is important to note that the work presently being pursued in this field only addresses the interface between trade policy and environmental policies.

This raises a number of issues: - How should the interaction between trade and environmental concerns be organized? - How should the internationally shared commitment to sustainable development and trade be dealt with within the WTO system? - How could account of environment standards be taken in the WTO? - To what extent should the developed world contribute financially to the realization of substainable development in developing countries?

Answers to questions such as these should develop through international dialogue. Enviromnental concerns must be integrated into the formulation and implementation of other policies.

For example, the task of the WTO Committee on Trade and Environment is to clarify whether existing trade rules gives sufficient room for environmental measures. At the same time we must ensure that environmental considerations are not used as a pretext for introducing protectionist measures.

The new WTO structure has a far wider scope than the GATT, as it also includes trade in services and intellectual property rights. The relationship between the environment and trade in services is an area which requires closer attention in order to identify problems and challenges. Transportation is a case in point where environmental effects are directly linked to trade in services. Increased transportation of goods easily leads to pollution. To counter such negative effects, there is a particular need for creative thinking and innovation in this field. There is also a need to look at the relationship between environmental concerns and trade-related aspects of intellectual property rights.

In our work on trade and environment as a whole, the concerns of developing countries must be taken seriously. Their particular institutional and technical capacity problems, which make it difficult to address trade and environmental challenges, should be met with positive measures, including technical and financial assistance. The transfer of technology and expertise will help countries to adapt to new environmental requirements, and to participate in multilateral efforts to protect the global environment.

The globalisation of the economies and the widening of the trading system through the WTO agreements are increasingly having an impact on domestic policies. The application of internationally agreed trade rules influences people's daily lives in a variety of ways. It is not surprising that many feel the need to be better informed of what is going on within the WTO. This is particular the case in the field of trade and environment. We recognize that non-governmental organisations might provide valuable input to ongoing work in the WTO, given their expertise in various relevant areas. On the other side, non-governmental organisations would benefit from knowing how the WTO "really works". It is however important to remember that increased transparency does not change the fact that decisions in the WTO are taken by Governments.

So far, most of the input provided by non-governmental organisations on WTO matters is made at national level. We should, however, also explore how non-governmental organisations at the international level could provide input to the work of the WTO. I know that a number of organisations have views on topics being discussed in the trade and environment field. Generally, I also see a need for the social partners to be more involved in the work of the WTO. I note that the WTO General Council is presently discussing possible arrangements for consultation and cooperation with non-governmental organisations, recognizing that this issue is a general one which goes beyond the field of trade and environment.

Sustainable development is a constant challenge to governments and international institutions as well as to the business world. Hopefully, this conference will help to do away with the perception, still held by some, of environmental concerns being a threat to the business community, by shedding light on business opportunities and indicating how the environmental sector could support the commercial interests of enterprises. Within several sectors, the environmental aspect has already been incorporated. One example is the insurance sector, where environmental criteria are increasingly included in insurance contracts. Another example is the emergence of voluntary "eco-label" schemes, designed to inform consumers of the environmental implications of their purchases. In the context of growing public environmental awareness, such schemes could benefit an enterprise by giving it a competitive edge.

From a Government's point of view, involving businessleaders and employees in the work on trade and environment could help to give a much-needed boost to this important process. The business community has found many ways of addressing various environmental issues, which might prove useful in our efforts to identify alternative solutions. In addition, a great deal of time and effort could be saved if industry itself - within each line of business - made efforts to anticipate possible environmental problems and prevent them from occurring in the first place.

Norway, in conjunction with the other EFTA countries, was instrumental in placing trade and environment on the international agenda in 1990. We will continue to play an active role in the various international fora dealing with trade and environment.

Various groups have voiced concern that the trade rules have negative environmental effects by promoting non-sustainable trade patterns and preventing the use of trade measures for environmental purposes. The WTO Committee on Trade and Environment is now completing a first round of discussions of all items of its agenda. I understand, however, that this process has, so far, not revealed any great number of negative effects on the environment, that could be characterized as direct consequences of the multilateral trade rules.

In order to further this process, it is extremely important to make sure that the analyses reveal all the main problems. No stone should be left unturned. Consequently, the time is now ripe for all parties to come forward with their views on the possible negative effects that the trade rules might have on the environment. I therefore urge all of you, representatives of governments, non-governmental organisations, including social partners and academic circles, to voice your concerns and suggest ideas for solutions.

I trust that the WTO Committee will be able to present some concrete results in this field to the first WTO Ministerial meeting in late 1996 in Singapore, as a basis for appropriate action by the Ministers.

Recent experience has shown the importance of looking ahead, being in the very front with respect to policy measures as well as research and investment. For example, the comprehensive Norwegian regulations for the offshore sector created a necessity to develop new technologies in order to meet new standards. Although involving increased costs, this has given Norwegian firms a competitive edge, i.a. in the field of technology for surveilance of pollution at sea. Remarkable examples of actors that have proven their ability to divert from the common way of thinking in the field of environment technology, can be studied at the ENS exibition next door. One lesson to be learnt from this is that good ecology pays off, also economically.

As my concluding remark, I would like to stress that in order to contribute substantially to the objective of sustainable development, new thoughts and new ideas are called for. I hope you will take this challenge by making this seminar provide a valuable impetus to the ongoing discussions on trade and environment and that your stay in Stavanger will be a pleasant one.