Trade, Environment and Culture in the Next Trade
Round
The next WTO trade negotiation round will be an important stage for
determining the extent and direction of globalization in the early part of the
21st century. This round will need to address non-economic issues, especially
environment and culture. Many would prefer to leave behind such nagging but
unresolved issues such as environment and move on to new liberalizations in
emerging products and markets. Are these negotiators, acting on the behalf of
ordinary people in extraordinary times, equipped to handle such momentous
decisions? Unfortunately, their focus is so trade oriented the answer is
probably no.
1. The Next WTO Round
Renato Ruggerio, director of the WTO, suggests calling the next set of
trade negotiations the "Millennium Round", since the onset of the talks would
roughly coincide with the year 2000. (Hopefully, no one will confuse this
trade liberalization effort with the "Millennium Bug", another lingering
problem.) There are already signs that these issues are becoming part of the
debate on the substance of the round. Surprisingly, some of the greatest
proponents of national cultural rights (such as France) oppose including
culture in the Millennium Round for fear of losing national sovereignty on the
issue. France opposes including cultural matters in the upcoming round,
although they have supported policies to include labor and environment.
The shaping of the next round of multilateral trade negotiations is now
underway. In May, 1998 the EU gave its chief negotiator, Sir Leon Brittain,
permission to seek the beginning of talks in 1999. The United States is
committed to a new round but waivers between endorsing an ambitious "big
round", similar to the broad scope of the Uruguay Round, and a "small round",
which might focus on a few limited sectors, especially unfinished business in
agriculture and services. Some developing countries, such as Malaysia, oppose
a new round altogether. Further economic problems around the world may make a
"big" round less likely.
Charlene Barshefsky, US Trade Representative said that besides finishing
negotiations on services and agriculture, other issues include government
procurement, competition, tariff cutting, electronic commerce, and corruption.
"Nothing is off the table at all." However, few expressed desire for open
ended trade talks such as the Tokyo and Uruguay rounds.
The Uruguay Round agreement set aside services so an agreement could be
finalized bad left services and agriculture aside for later negotiation due to
the contentiousness of issues in these two sectors. Services 2000 is that
left-over negotiation. One area where the United States will focus is on
better dispute settlement for services, which has yet to face serious legal
tests. The U.S. loss in the Fuji film case showed how difficult it is to
prove some type of trade barrier existing in a services situation. The U.S.
will also push services agreement in other regional agreements.
Freedom to invest and trade in audio-visual services almost stopped the
completion of the Uruguay Round. It is alleged by some in industry that
Mexico is planning legislation that would limit foreign broadcasts to a
maximum of 30 percent of movies shown there. Already there are limits to the
amount of foreign commercials on television (3 minutes per hour). Some Latin
American countries have limits on foreign ownership of movie theaters.
The Millennium Round promises the opportunity to engage in these
important issues of culture and environment. The outlook on the round is
colored by differing views from the developing and developed countries.
Developing countries accuse the developed of hypocrisy in pushing for more
rules relating to trade and environment, while they themselves tend to ignore
the rulings. They point to the example of the United States which lost a WTO
case (to four east and south Asian countries) in 1998 over its policies
requiring imports of shrimp to reduce related sea turtle deaths. The United
States may well refuse to honor the decision and simply accept the penalties.
That environmental diversity is declining is truly a problem. Cultural
diversity is also declining partly as a result of the decline in environmental
diversity. These declines have often been associated with deforestation or
other types of large scale land use changes that have forced the relocation of
traditional peoples and the land they live on. Specific types of resource
extraction such as oil produce the same result.
Individual cultures are becoming extinct at a rate comparable to that of
the environments and the species within them. Of the world's 6,000 languages
"half will likely disappear within a century as speakers are driven off their
territories and assimilated into dominant societies." As these cultures are
lost so too is a knowledge of many species, and their uses, and more
importantly how they might sustainably be used in an economy. These
indigenous peoples also claim homes in areas where there is the greatest
amount of biological diversity, especially in tropical areas. In fact, one-
quarter of all prescription drugs in the United States are derived from
plants.
There is a growing consensus of opinion that trade should not grow at
the direct expense of the environment or culture. There are some basic ideas
elucidated in the Rio Declaration and in the WTO's Trade and Environment
Committee (and elsewhere) that lay out some of the basic guidelines for
regulation of trade as it relates to the environment. However, firm
principles with respect to culture have not been crafted.
The concept of environmental protection as a reasonable justification
for altering trade patterns is already present in multilateral trade issues.
Therefore, the suggestion of broaching the issue of culture is not so
fantastic. It is already apparent that what constitutes free trade, and fair
trade, is itself culturally bound. John Jackson puts this contradiction
nicely:
If a nation can avoid the importation of goods from a poor third
world country where the method of production is moderately
dangerous to humans, why would a nation also be able to prohibit
the importation of goods produced in an environment that differs
in many social and cultural attributes from its own
society?...Other countries may have a somewhat different view of
the trade-offs between economic and welfare values of production,
and human life or health.
2. Spill-over Principles in Trade, Environment and Culture
The Canadian Initiative intends to legitimize non-tariff measures in the
WTO taken for cultural reasons. The United States and France have committed
themselves to the inclusion of environmental and labor issues in the WTO
agenda. The inevitable conclusion is that the WTO will eventually need to
directly address non-tariff measures and to treat them in some general system
or framework. This framework will need to rest on some foundations or
principles. These principles should be general enough that they can apply to
both a variety of non-tariff measures, including cultural and environment
issues (and perhaps even labor), in a generic way.
Perhaps principles can spring from the twin goals of preventing
extinction and providing for diversity in both cultures and environments. AT
the same time, basic trade principles would apply. One normative approach to
crafting regimes and rules related to culture, especially in the context of
protecting it, would be to use the concepts and precepts already developed
that intend to protect the environment. This approach would provide the added
advantage of concentrating rule-making. Otherwise, cultural rules might be
based on specific cultural principles, for example, and could not take
advantage of prior environmental efforts. The disaggregation of NTBs into
specific codes will tend to fragment WTO disciplines and also make agreements
more limited. Here are five basic principles that can apply to both culture
and environment in the context of WTO principles. These principles can be a
blueprint for WTO negotiations in the Millennium Round.
a. The Principle of the Right to Survive
Every culture and environment has the right to survive and thus a WTO
contracting party may choose to enact survival measures that impact imports.
The principle of preventing environmental extinction clearly conforms with the
GATT Article XX stipulation regarding the "conservation of natural resources"
and can be certified through the CITES categories based on the degree of
endangerment. The principle of the Right to Survive would permit violations
of Most Favored Nation (MFN) trade WTO disciplines if a particular culture or
species is at risk of extinction. If a type of beluga whale is threatened
with extinction, or the Eskimo culture who prey on them, then the contracting
party could ask for exemptions from WTO disciplines to assure survival.
Although there now exists some environmental standards, setting cultural
standards may be much more difficult. Perhaps one need is a Convention on the
International Trade in Endangered Cultures (CITEC), especially with reference
to artifacts and intellectual property. Creating CITEC will involve a most
difficult task in declaring principles of cultural uniqueness and
anthropological and technical definitions of proof. The scientific focus that
now exists will not disappear. Rather, it may become the means for
determining standards of proof in environment and culture cases but from a
standpoint more from social than the physical sciences. The obvious problem
is that these standards soon fall into levels of high scientific uncertainty
and a need to develop a vast group of new concepts and indicators in order to
adequately judge issues and fairly settle disputes.
2. The Principle of Diversity
All cultures not only have the right to survive, they also have a second
related right, which is found in the Principle of Diversity. The Principle of
Diversity provides that survival is meant in the broadest possible sense.
Thus, the goal is to attain the highest level of "genetic" diversity, which
means not only general species survival but also as many sub-species as
possible (or as many sub-cultures as possible). The greater diversity also
implies the most differences from the environmental or cultural norm.
The issue of survival may be a dependent on a particular or a general
set of cultural or environmental requirements. Thus, this position provides
for a wide range in determining cultural excess. For environments, this is
the difference between species and habitats. For cultures, this means the
difference between customs and values. As this general policy promotes the
most number of environments, so too does it promote the most number of
cultures. The Principal of Diversity can lead to considerable controversy; it
would permit some exceptions to trade rules where a cultural norm in one
country is prohibited to people of that country elsewhere. Can Saudi Arabia
refuse to allow the importation of wine to be used in a church by Catholics
living in Saudi Arabia?
3. The Principle of Least Distortion
In trade disciplines, the general orientation is towards those measures
which achieve their results in a manner that causes the least trade distortion
in an economic sense. Many of the key GATT and WTO agreements mean to
preserve this principle, especially in removing distortion between foreign and
domestic operators in a country (existing transparency and non-discrimination
trade principles). The Principle of Least Distortion would also apply to
trade where culture and environment are at issue.
Because there are reasons to accept exemptions to trade disciplines on
the basis of culture and environment, there also need to be standards for
economic efficiency. Adopting inefficient policies to achieve cultural
objectives serves little purpose. Adopting unfair programs to gain cultural
advantage in third country markets should also be addressed by principles.
Distortion is also a key issue in third country markets. Cultural or
environmental goods could no more be dumped in third markets than televisions,
steel or computer chips. Thus, neither France nor the United States could
overly or in excess subsidize their cultural exports to China. An alternative
would be to require a minimum level of subsides in major projects, following
the principles of the 1980s Gentlemen's Agreement on construction subsidies.
4. The Principal of Sustainable Cultures
Cultures have the right to exist in diverse circumstances, but also may
need to keep pace with current developments in perception and reality.
Cultures are not static, nor are they without consequence. In some instances,
a cultural custom may be found to harm an environmental species or even a
labor practice. Somehow a priority of and timetable for change must be
addressed and this may become enshrined in the dispute settlement process.
The Principle of Sustainability recognizes that cultures and environments
should survive but may need to change.
How much change would differ by culture and time period. Some "Heritage
Cultures", perhaps even linked to existing "Heritage Sites", may be exempt
from trade rules. By time designation, some cultures or habitats might be
deemed as "Traditional" or "Ancient" and therefore would be allowed to survive
intact. For those cultures that are not "Ancient", but "Modern", they can
receive some types of temporary protection, but would be expected to be
economically, environmentally, and culturally self-sufficient after a limited
period of time. This might follow an import surges model, like Section 201 of
U.S. trade law, that provides temporary trade remedies based on significant,
short-term increases in trade flows.
5. The Principal of Ownership
Individual cultures and the material representations of those cultures
can be owned in the sense that they can belong to a specific country or
environment. If flowers from Madagascar are part of a cure for cancer, then
perhaps some percentage of the trade should be taxed or otherwise set aside to
maintain and cultivate the crop in a general way, especially if the crops are
wild versus being domesticated; this to preserve genetic diversity. Here, the
key word is wild insofar as this is where the stocks of greatest chemical and
cultural diversity is to be found. This might follow the arrangement of bio-
diversity sample collection between Costa Rica and the Merck company.
Perhaps one solution would be the recognition of environmental and
cultural ownership rights. By transferring the ownership principle to
species, then perhaps they can acquire rights in a legal setting.
Corporations in the United States have the legal standing of people. If
something invented can have legal standing, it is not hard to believe that a
species and their populations might seek equivalent standing, or at least
representative standing.
Beyond adoption of such principles there is also a need top change
technical procedures for dealing with non-economic cases that culture and
environment represent. The evolution of trade disciplines promises to be a
complex exercise and difficult in differentiating legitimate and proportional
protective measures from those that mean to unfairly provide economic,
cultural or environmental advantages.
While new principles may need adoption, the mechanisms and abilities to
protect environment and culture may already exist under WTO disciplines.
Although the exact nature of dispute settlement in the WTO has yet to evolve,
and these considerations especially need to include the methodology for
calculation of the cost-benefit trade-offs.
If countries want to adopt standards that intend to protect environment
and culture, they can choose to do so. They must however pay a cost. The
cost, is that the exporter countries, who was promised a trade market, would
be denied concessions that were agreed to under the Uruguay Round. Therefore,
the party denied exports because of the protection of environmental or
cultural interests, can withdraw concessions of a roughly equivalent amount.
The United States lost a WTO case on shrimp and sea turtles in 1998 and
has indicated that it amy well simply pay the concessions cost rather than
endanger more turtles. Will Canada agree to pay the cost for supporting more
country western singers? The benefits of the Electronic Conjunction are
greatly sought after but who will pay the costs?