The Rationale
   The Problem
Some Examples
   A Way Forward    
WWF logo Some Examples

A forest that is clear-cut instead of selectively felled represents not only a loss of biodiversity, but of livelihoods too. If the destroyed forest fails to regenerate, local and indigenous communities are deprived of the timber and the non-timber resources such as medicinal plants, fruits and wild animals that are a source of food or income. The farmer downstream from the forest has his crops washed away by ensuing floods. The fish stocks of coastal fishing communities are depleted by sedimentation of inshore waters and reefs. The economic impacts on others and the increase in poverty resulting from clear-felling a forest can be more significant in sustainable development terms than the loss of biodiversity. Yet the enterprise which fells the forest in this way reaps a larger financial profit, and will be more competitive in world markets regulated by WTO rules.

Pollution from a chemical factory not only kills the fish in the river, it also makes the water unfit to drink for the human community that lives downstream from the factory. Like the farmer and fisherman below the forest, that community bears the costs of the PPM, but almost none of the benefits unless they work in that factory. Their health suffers and they may even loose livelihoods based on the resources provided by the river. In this way the wrong PPM can widen the inequities in income distribution within and between countries. Yet those who own the factory will reap a larger financial profit, and will be more competitive in international trade shaped by the WTO.

Even labelling schemes, which indicate to consumers that traded goods have been produced in socially acceptable or ecologically friendly ways, may soon fall foul of WTO rules. Some countries are manoeuvering in the WTOs Committee on Trade and Environment to open the way to formal WTO challenges to governmental or even non-governmental voluntary labelling schemes based on PPMs. Fair trade labels, such as that of Max Havelaar for coffee, others for socially and ecologically friendly bananas, organically grown food, and sustainably produced timber, are consequently increasingly under threat from the WTO.

The only place where the PPM issue appears in the report of the WTOs Committee on Trade and Environment is where it has been put by the governments which are trying to attack PPM-based eco-labelling, including voluntary eco-labels. In the vacuum left by NGOs, governments are doing what they want on PPMs in this case defending a domestic forestry industry which in many places has environmentally destructive forestry practices.

One of the many reasons for the lack of agreement is that those from the South fear the prospect of a new kind of protectionism cloaked in environmental or social concern. Imports from developing countries could be discriminated against on the real or imagined basis that the PPMs in that country were more environmentally damaging or socially unjust.

This is a real concern for the South, given the record of Northern countries on using trade restrictions simply to protect domestic industry. However, it should not paralyse international civil society on the issue of PPMs. In an ever more rapidly globalizing economy, with new investment liberalization agreements following hot on the heels of ever more numerous and powerful free trade agreements, it is imperative that those in countries with the dirtiest and, for them, the cheapest PPMs are not allowed to be the most competitive. Otherwise the globalization process will help drive most of the worlds people into poverty, and its environment to destruction.



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