DK EDC Policy Brief

8/11/2019 DK EDC Policy Brief

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REGIONALISM VERSUS MULTILATERALISM:

ADDRESSING GLOBAL ENVIRONMENTAL THREATS

CEPS Policy brief, May 2004

David Kernohan and Enrica De Cian


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Table of contents

Table of contents..............................................................................................................2

1. Overview......................................................................................................................32. Trade regionalism: whats new.................................................................................!

3. "lobal environmental #roblems: climate change........................................................$

!. % s&b'global a##roach to global iss&es: a #arado(....................................................$

). *T% and the environment............................................................................................+

).1 Trading bloc,s: the contin&&m from %-EC to the E........................................../

Trade facilitation fora (e.g., ASEAN, APEC)............................................................../

Free-trade areas and customs unions with searate agreements on en!ironmental

co-oeration (e.g. NAFTA and "ercorsur)................................................................./

Economic unions with integrated en!ironmental dimension (i.e., Euroean #nion)11

).2 0nter'bloc, agreements: enhancing environmental #rovisions..........................12

$. Concl&sions................................................................................................................1)

*eferences......................................................................................................................1+

2


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1. Overview

Trade liberaliation and climate change share common themes. The are both globalchallenges calling for a global sol&tion which will re4&ire m&ltilateral coo#eration.Climate change associated with the international e(ternalit of "5" emissions is thefirst case of a tr&l global environmental #roblem and therefore can be tho&ght of as a#rotot#e transborder global threat.

6rom the establishment of the "%TT in 1/!+ global free trade has been #romotedm&ltilaterall thro&gh international trade negotiation ro&nds. The m&ltilateral tradingsstem was legall instit&tionalied in 1//! at the concl&sion the r&g&a *o&nd whenthe 7arra,ech %greement established the 8orld Trade Organiation 98TO the new#illar of global governance in charge of #&rs&ing global free trade.

;mmetricall an ideal sol&tion to global environmental iss&es wo&ld be a7&ltilateral Environment Organiation. 5owever as this is &nli,el to become a realitin the near f&t&re we m&st acce#t m&ltilateral environmental agreements 97E%s as thebest for&m for addressing environmental iss&es. 8hile there are a variet of m&ltilateraltreaties with s#ecific environmental ob


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2. Trade regionalism: whats new?

The 1//@s witnessed the beginning of a new wave of regionalism. 8hile the drivingforce of the old regionalism was an im#ort s&bstit&tion strateg the new regionalism ismore o&tward'loo,ing and generall aimed at #romoting f&rther integration into theglobal econom.

D&ring the first half of the decade several ,e trading bloc,s have consolidated theirintegration #rocess. The E became a f&ll ;ingle 7ar,et and Borth %merica establisheda free trade area 9B%6T%? the %;E%B gro la&nched the %6T% free trade area and isnow contem#lating e(tending this to a c&stoms &nion 9%;E%B economic comm&nit%EC b 2@2@. %longside the vertical dee#ening within*T%s a horiontal #rocess ofinteraction acrossdifferent *T%s also began to ta,e #lace. 6rom the end of the r&g&a*o&nd in 1//! no significant regional bloc,s have emerged b&t rather f&ll'fledged*T%s have started a #rocess of bilateral regionalism either with a co&ntr or with aregion. 5ere we ado#t a broader inter#retation of the term bilateral regionalism orbilateral agreement so as to incl&de not onl co&ntr'co&ntr e(am#les b&t also

region'region and region'co&ntr cases.

;o defined bilateral agreements now acco&nt for more than half *T%s in force andfree trade areas are the #referred config&ration 9see >o( 2.1. The E has #laed aleading role in this #rocess as more than half of *T%s notified at the end of 2@@@ wereconcl&ded b the E. The E has been negotiating bilateral agreements with co&ntriess&ch as 7e(ico Chile Central and Eastern E&ro#ean Co&ntries 9CEECs *&ssiaCanada and is involved in the first interregional agreement with 7ercors&r. The B%6T%#arties are also engaging #rogressivel in bilateral relations: Canada established a 6T%with Chile Costa *ica and the E? ; as well has a 6T% with Chile and ordan.

The c&rrent wave of new regionalism a##ears to have arrived alongside a slow'downof #rogress in m&ltilateral trade negotiations. 0nternational trade ro&nds were 4&ites&ccessf&l at the beginning when dealing with the red&ction of tariff and 4&antitativemeas&res. 5owever as the trade agenda has widened to incl&de new more sensitiveiss&es 9=new areas s&ch as s&bsidies antid&m#ing technical reg&lations and servicesthe length and com#le(it of trade ro&nds have increased as well 9see Table 1.

!

Box 2.1Type ofregional integration

6rom the establishment of the first trade agreement the "%TT in 1/!+ the m&ltilateral trading sstem acce#ts#referential trade agreements that meet the criteria set o&t in "%TT %rt. FF0G and in "%T; %rt.G. *T%s canchoose the following config&ration:Free trade area: trade restrictions are removed within the gro b&t each member retains its own tariffstr&ct&re towards non members.C!to"! #nion: a free trade area with a common e(ternal trade #olic.Co""on "ar$et: a c&stom &nion which also allows for free movement of factors of #rod&ctionsEcono"ic #nion: a common mar,et which also ado#ts common macroeconomic #olicies and harmoniesnational #olicies of member states.

Source$ %oe&man and 'oste&i, * and #rata, .


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Table 2.1 Measuring !e leng! "# ra$e r"un$s

%&ME 'F T(E )'#%* T)&*E &+E%*&*#)&T'%

-%#MBE) 'F E&)S/

"EBEG%%BBECHTO*I%H"EBEG%D0JJOB T%*066; 1

KEBBEDHT%*066;BOB

T%*066;!

TOKHOT%*066;BOB

T%*066;$

*"%HT%*066;BOB

T%*066;L

Jow tariffs have made the e(istence of different reg&lator sstems more visible andnow the main trade concern is how to deal with domestic #olicies 9s&bsides technicalreg&lations #rod&ct standards and domestic reg&lator meas&res 9services andintellect&al #ro#ert rights that can im#act trade and investment flows and red&ce mar,etaccess. The =negative list a##roach &sed so far in addressing tariff and 4&antitativemeas&res is &nli,el to s&it these new iss&es which re4&ire dee#er integration and somedegree of harmoniation 95oe,man and Koste,i 2@@1. Dee#er integration andreg&lator harmoniation are ver hard to achieve m&ltilaterall beca&se in most casesthe involve iss&es of a =bottom' nat&re.

%gainst this bac,gro&nd *T%s are li,el to be a more a##ro#riate for&m in which to

address non'tariff meas&res. The restricted membershi# within an *T% #resents theadvantage of having a smaller n&mber of #laers with #otentiall greater #referenceconvergence. Th&s *T% negotiations can #roceed faster than m&ltilateral ones es#eciallon iss&es that have a strong regional dimension and are #oliticall sensitive which is thecase for man environment'related 4&estions. Therefore s&ccessf&l agreement at theregional level ma facilitate the establishment of and com#liance with m&ltilateralagreements. The lac, of #rogress at the 8TO level on the reg&lation of =new areas fortrade co&ld even constit&te an incentive for the creation of new *T%s 9rata 2@@2."oing beond the assessment of the immediate welfare effects of *T%s recent st&diestherefore em#hasie their s#ecific contrib&tion to the harmoniation of r&le'ma,ing withres#ect to these =new areas.

0n several areas most *T%s are not onl =8TO'com#atible b&t also =8TO'#l&s9OECD 2@@3? ;am#son and 8oolcoc, 2@@3. One s&ch area is environmental reg&lationand #rotection. % 4&estion that needs to be addressed is whether *T%s com#ensate for thelac, of #rogress at the 8TO and whether the are s&ccessf&l in #romoting theim#lementation of global environmental reg&lation.

0f *T%s #rove to be a better for&m in which to deal with non'tariff and domesticreg&lator barriers to trade com#ared to the m&ltilateral sstem there co&ld be a betterchance for more #rogressive environmental trade'related meas&res. 0n fact a broad groof domestic #olices aimed at #rotecting the environment ma have an im#act on trade andfor this reason are #artic&larl controversial 9e.g. eco'labelling and food safetreg&lations environmental standards 0n these sit&ations an international agreementwo&ld be desirable. *eg&lator harmoniation which is on the agenda of man regional

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agreements ma be a first ste# in this direction. 8hat then are the im#lications for thetrade'environmental debate of the #rocess of regional harmoniation

3. Global environmental problems: climate change

Climate stabilit can be viewed as a global =#&blic good which means that there arefew incentives for &nilateral mitigation beca&se these can be fr&strated b theo##ort&nistic behavior 9free riding of other actors who wo&ld benefit from havingcleaner air at ero cost. 5ence in order to be effective climate change mitigation re4&iresa global'coo#erative sol&tion. The fo&ndations of an international a##roach to climatechange were laid down b the B 6ramewor, Convention on Climate Change in 1//!.5owever while the entr into force of the international climate agreement the Koto-rotocol is still &ncertain different local climate a##roaches have now emerged.8hereas the E is stic,ing to the Koto commitment irres#ective of its ratification the; is loo,ing for more long'term strategies.

;ince regionalism has #roved to be more far'reaching in its coverage of domesticmeas&res and environmental reg&lations might it also re#resent a reasonable o##ort&nitfor strengthening the credibilit of controversial climate'related meas&res 0ndeed asgreenho&se gas emissions 9"5"s relate to almost all h&man'economic activities climatemeas&res are li,el to have trade effects. This is the case for e(am#le in energefficienc standards based on #rocesses and methods of #rod&ction 9--7s and of eco'labeling schemes which are li,el to be 4&estioned as disg&ised barriers to trade thatdiscriminate against li,e #rod&cts. Het trade frictions ma be red&ced b establishinginternational common meas&res and methodologies? to this end coo#eration within theKoto framewor, in defining this ,ind of meas&re co&ld red&ce the sco#e of conflictwithin the m&ltilateral trading sstem. 5owever as the Koto -rotocol has et to come

into force *T%s b re4&iring regional harmoniation for e(am#le in #rod&ct standardsand technical reg&lations can re#resent a =second best wa to attain the same o&tcome.

4. s!b"global approach to global iss!es: a parado#?

8e have seen that trade liberaliation and climate change share the commoncharacteristic of being global iss&es: in both cases the first best sol&tion wo&ld be am&ltilateral agreement. 5owever both international trade and climate negotiations are#rogressing slowl. The increasing tensions within m&ltilateralism have been ill&stratedb the brea,down of the 8TO 7inisterial 7eeting ;eattle in 1/// b the fail&re in

Canc&n in 2@@3 b the withdrawal of ; from the Koto -rotocol and b the&ncertainties s&rro&nding the debate over the #ost'Koto architect&re.

-arado(icall it might be more realistic to aim for worldwide coo#eration in ase4&ential wa rather than in a large m&ltilateral ste#. %s regards trade liberaliation it isbroadl acce#ted that regionalism is com#lementar to m&ltilateralism and that it co&lds&ggest to the 8TO how to deal with the controversial new iss&es s&ch as investmentgovernmental #roc&rement and reg&lator meas&res on which it has limited e(#erience.

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;ince regional negotiations are easier and faster to concl&de the coo#erative attit&de ontrade might even s#illover to the environmental domain. 7oreover now that trade tal,sare going dee#er regional trade negotiations offer an o##ort&nit to develo# a morecoo#erative c&lt&re es#eciall in the more sensitive iss&es where co&ntries have oftenbeen more rel&ctant to ma,e concessions d&e to fears of a red&ced abilit to #rotect their

domestic #references.Environmental coo#eration co&ld also come abo&t as a side'effect of reg&lator

harmoniation. On the one hand there is a ris, of =reg&lator regionalism of havingseveral *T%s with heterogeneo&s reg&lator sstems: environmental concerns are dee#lsha#ed b domestic #references and th&s *T%s might be seen as a =fortress in which tobetter #rotect local interests. On the other hand reg&lator harmoniation andconvergence is occ&rring not onl within *T%s themselves b&t also across differentregional bloc,s. 0ncreasingl harmoniation is an im#ortant cha#ter in man tradeagreements es#eciall when involving the E. >eing increasingl lin,ed with eachother *T%s are more li,el to #ave the wa for broader reg&lator coo#eration rather

than close reg&lator regionalism. ;&ch a res&lt co&ld lower the frictions between tradeand the environment as there wo&ld be less criticism against environmental meas&rescommonl established.

> enhancing the o##ort&nities for &sing environmental meas&res regional tradeagreements might be a more #romising channel thro&gh which trade #olicies co&ld have a#ositive im#act on diffic&lt to#ics s&ch as climate change. This #ossibilit will beinvestigated in the ne(t section.

$. %T and the environment%s regional integration has become e(tremel to#ical in the #ast decade the foc&s ofo&r research to#ic is the e(tent to which increasing regional integration will am#lif or&ndermine the m&ltilateral agenda with res#ect to environmental #rovisions.

7ost *T%s follow the lang&age of 8TO r&les recognising the same broad #rinci#lesand e(em#tion cla&ses as the "%TT1. 7an contain lang&age in their #reamblesrecognising the need for environmental #rotection and the achievement of s&stainabledevelo#ment ob


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The degree of harmoniation arrived at varies de#ending on the general motives&nderling a given regional integration #rooas 1///? OECD 2@@3. *T%s can be broadl groed into three =idealt#es according to their sco#e and instit&tional characteristics along a contin&&m of!ertical integration9see 6ig&re 1 r&nning from a #&re trade motivation s&ch as in %-EC

and %;E%B to a f&ll incor#oration of trade with environmental standards s&ch as in theE.

0n addition to the #rocess of vertical integration within regions *T%s are increasingllin,ed with each other bringing abo&t a #arallel #rocess of hori+ontal interaction 9see6ig&re 1 across regions. %s inter'bloc, agreements are b&ilt on the #revio&s integratione(#erience of each *T% the are li,el to be wider in coverage and de#th. ;ince thedeal with new iss&es on which the 8TO is lac,ing in e(#erience the main contrib&tionthe can bring to the m&ltilateral regime is to #rovide a bl&e#rint of how to address non'tariff barriers to trade.

0nter'bloc, agreements b lin,ing different *T%s have the chance to bring abo&t a#rocess of reg&lator convergence across different bloc,s. > enco&raging the ado#tionof common standards that in the long r&n might become international standards bilateralagreements ma even #ave the wa for global agreement on environmental reg&lations.;ince reg&lator #olices are im#ortant environmental #olices harmoniation can bringabo&t a #ositive contrib&tion in terms of environmental #rotection. 0t is m&ch easier toacce#t a meas&re which res#onds to criteria agreed regionall rather than reflectings#ecific national #rovisions.

0n the ne(t section we review vertical integration along three main t#es of *T%s9trade facilitation fora free trade areas and c&stoms &nions economic &nion see alsoTable !.1 and the #rocess of horiontal interaction giving some e(am#les.

%igure 1 Veri&al inegrai"n 'ersus !"ri("nal inera&i"n

Veri&al inegrai"n )i!in RTAs H"ri("nal inera&i"n a&r"ss RTAs

A*E+

ASEAN EU,RUSSIA EU,+ANADA +ANADA,+HILE EU,MER+ORSUR

MER+ORSUR

NA%TA

EU

L


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5.1 Trading blocks: the continuum from APEC to the EU

Trade facilitation fora (e.g., ASEAN, APEC)

Trade facilitating *T%s s&ch as %-EC2 and %;E%B3started as trade initiatives aimedat enhancing regional #olitical stabilit and economic #ros#erit of their members. %-EC

cannot be strictl considered a trading bloc, and its integration #rocess is based on theconce#t of o#en regionalism. %ltho&gh environmental #rotection was not a #riorit when%-EC was originall established s&stainable growth has become a goal at least in#rinci#le and to some degree %-EC has shown an interest in #romoting the com#atibilitbetween trade and environmental #olicies 9Honghai et al. 2@@@.

>eing #artic&larl concerned with economic growth %;E%B fo&nded its #olicies onthe #rinci#le of =grow now clean later 9>oas 1///. Concerns for the environmentemerged grad&all and in 1//! %;E%B la&nched the ;trategic -lan of %ction on theEnvironment. 0n 2@@2 this was followed b the %;E%B Co'o#eration -lan onTransbo&ndar -oll&tion. %ltho&gh not e(#licitl targetted at res#onding to climatechange it can be e(#ected to have #ositive im#lication also in terms of "5"s red&ction.!

Com#liance monitoring does not rel on binding r&les and environmental coo#erationis coordinated b three wor,ing gros on the environment. Het one of the first goals ofthe -lan is to enhance its

instit&tional ca#acit in order to strengthen the environmental enforcementmechanism. %;E%B seems to be more E'minded rather than B%6T%'minded since ithas as#irations to harmonie different environmental #olicies and standards and it is infavo&r of &nderta,ing r&nei 0ndonesia7alasia the -hili##ines ;inga#ore Thailand Gietnam Jaos and 7anmar andN3%ssociation of ;o&th'East %sian Bations. Established in 1/$L it com#rises >r&nei 0ndonesia 7alasiathe -hili##ines ;inga#ore Thailand Gietnam Jaos and 7anmar.!The -lan #rimaril addresses air #oll&tion related to agric&lt&ral bad #ractices and forest management.%;E%B Coo#eration -lan On Transbo&ndar -oll&tionhtt#:MMwww.aseansec.orgML/3L.htmP);trategic -lan of %ction on the Environment 1//!'1//L5tt#:MMwww.aseansec.orgML/)@.htmP

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im#lementation of environmental reg&lations has then been delegated to a s#ecific side'#rotocol the Borth %merican %greement on Environmental Co'o#eration 9B%%EC.

B%6T% members have agreed on a so#histicated instit&tional set' to ens&re theirenvironment'related obligations are res#ected. B%%EC has created the Commission forEnvironmental Coo#eration 9CEC which besides #romoting environmental coo#eration

between the three co&ntries is in charge of investigating cases of la( or non'com#liancethat ma &ltimatel be enforced thro&gh the &se of trade sanctions. The CEC sho&ld alsoeval&ate and monitor the environmental effect of B%6T% and of the bilateral agreementsof its members.

%ltho&gh the B%%EC #rovides a &ni4&e instit&tional basis for effective et fle(iblecom#liance control it is not o#enl aimed at develo#ing common regional environmentalreg&lations. 8hereas the E 7ercors&r 9see below and even %;E%B have re4&iredtheir #arties to coordinate environmental meas&res the B%%EC does not: the CEC has toens&re their enforcement b&t each co&ntr remains free to choose the level of #rotectionthat best s&its its domestic #references. 5owever a de facto #rocess of #erharmoniation towards ; levels is occ&rring 9;am#son and 8oolcoc, 2@@3.

B%%EC instit&tions and a##roaches are then re#licated in the bilateral agreements ofB%6T% members for e(am#le the bilateral Canada'Chile agreement and the bilateralCanada'Costa *ica agreement.

7ercors&r the c&stoms &nion between %rgentina >rail -arag&a and r&g&a wasestablished in the 1//1 b the Tractado de Asuncion$9Onestini 1/// with the &ltimategoal of accelerating the social and economic develo#ment of its members and increasingtheir #artici#ation in the world econom. This is to be achieved thro&gh dee# integrationalong E&ro#ean nion lines rather than the B%6T% model.

Des#ite the stated ambition of #&rs&ing economic growth in a s&stainable wa + a

se#arate environmental agreement the Acuerdo "arco sore "edio Amiente del"ercorsur was reached onl later in 2@@1.LContrar to so#histicated environmentalstr&ct&re of B%6T% 7ercors&r does not have rigoro&s environmental instit&tions:environmental actions are managed and coordinated b the Environmental 8or,ing"ro of the Common 7ar,et 9;"T$ and b the eunion de "inistros de "edioAmiente established in 2@@3. Controversies that arise between 7ercors&r -arties as tothe im#lementation and inter#retation of environmental #rovisions have to be resolvedwithin the 7ercors&r sstem of resol&tion as o&tlined in theProtocol de rasilia ara laSoluci/n de Contro!ersias 1//1.

$0ts instit&tional str&ct&re was defined later in 1//! b the Protocolo de 0uro Preto. The decision'ma,ingbod consists of the ;o&thern 7ar,et Co&ncil 9C7C the Commerce Commission 9CC7 and theCommon 7ar,et "ro 9"7C. The latter is the e(ec&tive bod and it was originall made of ten8or,ing "ros 9Sugruos de traa1o' ;"T.+The -reamble of Tratado de Asuncion establishing the ;o&thern Common 7ar,et recognies that theob


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The reci#rocit and the com#le(it between the trade and environmental #olicies areo#enl ac,nowledged b the environmental agreement of 7ercors&r. The -reamblerecognies that trade and environmental #olicies m&st be com#lementar and nots&bstit&tes beca&se trade liberaliation if wisel managed can be good for theenvironment. 7oreover environmental #olicies have to be neither restrictive nor

distorting for trade in goods and services.Economic unions with integrated en!ironmental dimension (i.e., Euroean #nion)

0n the conte(t of a more #oliticall integrated entit the E offers the mostcom#rehensive coverage of the trade'environment lin,age. 0n 1/L) the ;ingle E&ro#ean%ct 9;E% integrated Comm&nit environment #olic into the Treaties 9%rt. 1+) TEC.;ince then #rotection of the environment has become one of the nions central #olicob


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Table -.1 En'ir"nenal /r"'isi"ns in ra$ing bl"&0s

*ESC)PT'% &SE&% ME)C')S#) %&FT& E#

*&TE 'F

EST&BS(ME%T1/$+ 1//1 1//! 1/)L

MEMBE)S

0ndonesia 7alasia the-hili##ines ;inga#ore

Thailand >r&neiGietnam Jaos 7anmar

Cambodia

%rgentina>rail

-arag&ar&g&a

nited ;tate Canada7e(ico

%&stria >elgi&mDenmar, 6inland6rance "erman

"reece 0reland 0talJ&(emb&rg

Betherlands -ort&gal;#ain ;weden nited

Kingdom 1@ newmember states

E%)'%ME%T&

P)'S'%S

%;E%B ;trategic -lan of%ction on The

Environment 1//!'1//L

%c&erdo 7arcosobre 7edio

%mbiente 2@@1

B%%EC Borth%merican %greement on

EnvironmentalCoo#eration 1//!

%rt. 1+) TEC 1/L)

%STT#T'%S F')

T(E

E%)'%ME%T

Three 8or,ing "rosone on 7E%s

Environmental8or,ing "roof the Common7ar,et "ro

9;"T $

Commission forEnvironmental

Coo#eration A Co&ncil;ecretariat oint -&blic%dvisor Committee.

The Co&ncil of7inisters the E&ro#ean

-arliament theE&ro#ean Commissionthe E&ro#ean Co&rt of

&stice

CM&TE C(&%+E

P'C

%;E%B ;trategic -lan of%ction on Transbo&ndar

-oll&tion 2@@2

Bationalmeas&res

Bational #rograms

The common and co'ordinated climatechange #olices national #olicies

#%FCCC

MEMBE)S(P

0ndonesia the -hili##ines;inga#ore 7anmarCambodia 7alasia

Thailand Gietnam Jaos

Q Q Q

'T'

MEMBE)S(P

7alasia ThailandGietnam Jaos Cambodia

Q 7e(ico Canada Q

5.2 Interblock agreements: enhancing en!ironmental "ro!isions#

;o far we have seen how individ&al trading bloc,s have dealt with the environment ins#ecific and se#arate agreements. 0ncreasingl toda we see bilateral regionalism asdefined above 9see section 2 s&ggesting a trend towards m&ltidimensional agreementsaddressing different items s&ch as trade liberaliation and environmental #rotection

sim&ltaneo&sl. One reason for this is the greater com#le(it of the new trade iss&es.8hile tariffs and 4&antitative meas&res co&ld easil be bro&ght down b the =negativelist a##roach in order to address non'tariff meas&res harmoniation and dee#erintegration are re4&ired 95oe,man and Kostec,i 2@@1. % second reason is that mostinter'bloc, agreements involve co&ntries that have alread had a regional integratione(#erience at home.

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>ilateral agreements established b the E tend to share similar str&ct&resirres#ective of whether the trading #artner is a candidate co&ntr or an overseas #artner.0ndeed the same #attern has been observed in different t#es of agreements 9;ee Table!.2.

Table -.2 En'ir"nenal /r"'isi"ns in !e iner, bl"&0 agreeens

E#3C&%&*&E#3CEEC!

-Erope &gree"ent!/

E#3

ME)C')S#

)

E#3)#SS&C&%&*&3

C(E

ST&)T 'F

%E+'T&T'%S1/+$ 6rom 1//@s 1//) 1//+ 1//+

%'TFC&T'%

T' T(E T'BO OK BO BO OK

TPE 'F

&+)EEME%T

6ramewor,%greement for

Commercial andEconomicCoo#eration 1/+$

-artnershi# %gendaand Trade %nd

0nvestmentsEnhancement

%greement 9T0E%2@@!

6T% o servicesagreement

0nterregional6ramewor, Co'

o#eration%greement

-%C9-artnershi#

andCoo#eration%greement

6T%

E%)'%ME%T&

P)'S'%S

EconomicCoo#eration 1/+$

T0E% s&stainabledevelo#ment?

-artnershi# %genda

Coo#erating on globaland *egional

Challenges 2@@!

Economic coo#eration1//@s

Economiccoo#eration

1//)

Economiccoo#eration

1//+

CC%EC sideagreement

1//+

)E+#&T')

C''PE)&T'%OK OK OK OK BO

>esides trade liberaliation that in most cases covers services investment government#roc&rement and intellect&al #ro#ert rights other areas of coo#eration s&ch as financialinstit&tional c&lt&ral scientific and economic coo#eration are also envisaged.

Environmental coo#eration &s&all falls within the cha#ters dealing with economic

coo#eration b&t the degree of detail varies from case to case. 8hile E'7ercors&r doesnot address s#ecific environmental #roblems the E&ro#e %greements/ and the-artnershi# Coo#eration %greement with *&ssia 9-C% are more com#rehensive and doma,e s#ecific commitments. The E&ro#e %greements as,ed former candidate co&ntries1@

/E&ro#e %greements were signed with >&lgaria the Cech and ;lova, *e#&blics Estonia 5&ngarJatvia Jith&ania -oland *omania and ;lovenia. E&ro#ean Commision 2@@!. >ilateral Trade *elations.Candidate Co&ntries. htt#:MMe&ro#a.e&.intMcommMtradeMiss&esMbilateralMregionsMcandidatesMinde(Ren.htmP1@%t the moment the remaining candidates that have a E&ro#e %greement with the E are *omania and>&lgaria.

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to strengthen their coo#eration in combating &rgent environmental #roblems s&ch asclimate change. The ongoing E'*&ssia negotiations have e(#licitl called forharmoniing environmental standards and reg&lations? among the main #roblems to beconfronted is global climate change. The -C% recommends a s&stainable and efficient#rod&ction and &se of energ.11 The oint 8or, -rogram in 2@@2 to tac,le the

environment strengthened the commitment towards climate change and e(#licitlforesaw "5"s red&ction in the conte(t of the Koto -rotocol.12

0n the E'Canada relations the first commitment to environmental #rotection wasmade in the 6ramewor, %greement for Commercial and Economic Coo#eration in 1/+$in the cha#ter on economic coo#eration. The E'Canada -artnershi# %genda and T0E%in 2@@!13 has enhanced and strengthened the original agreement b adding more s#ecific#rovisions on environmental coo#eration. The -artnershi# %genda has a s#ecific sectionaddressing Coo#eration on "lobal and *egional Challenges. 8ithin this conte(t theim#ortance of environmental coo#eration is ac,nowledged and the E and Canada havecommitted themselves to wor, together in order to bring the Koto -rotocol into force.

The E'Canada trade initiative 9T0E% also addresses s&stainable develo#ment and itre4&ires coo#eration on environmental reg&lations.The Chile'Canada relationshi# has a com#letel different str&ct&re which however

reflects the B%6T% a##roach. %s B%6T% has a side environmental agreement 9B%%ECsmmetricall C%6T% came along with the Canada'Chile %greement on EnvironmentalCo'o#eration 9CC%EC. 0t m&st be said that the environmental instit&tions of the CC%ECare advanced when com#ared to the E bilateral agreements with non candidateco&ntries1!which do not tend to set s#ecific environmental bodies. CC%EC relies onactivities of the Commission for Environmental Coo#eration and the enforcementmechanism different from B%%EC is based on more coo#erative sol&tions instead of onthe &se of trade sanctions.

% common characteristic of most *T%s is the recognition of the val&e of informatione(change technical assistance ca#acit b&ilding training and ed&cation as f&ndamental#ractices aimed at increasing the #erce#tion of environmental challenges and th&s atcreating a more favorable conte(t for environmental coo#eration.

%gainst this bac,gro&nd can inter'bloc, agreements be said to be ca#able ofenhancing environmental #rovisions 8hat is significant is the a##roach b whichbilateral trade liberaliation has addressed environmental #rotection. 8hereas individ&al*T%s have originall limited regional coo#eration to trade and e(tended it to theenvironment onl later inter'bloc, agreements have sim&ltaneo&sl addressed11-C% %rt. $/125owever the most recent E'*&ssia negotiations have moved bac,ward and *&ssias ratification of theKoto -rotocol remains &ncertain.13The E'Canada -artnershi# %genda of 2@@! is based on the former agreements and it was la&nchedalongside the framewor, for the Trade and 0nvestment Enhancement %greement 9T0E% which deals mores#ecificall with trade liberaliation.1!Candidate co&ntries having bilateral agreements with the E e(ce#t >&lgaria and *omania are now new7ember ;tates and therefore share the com#le( sstem of E&ro#ean environmental reg&lations andinstit&tions.

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heterogeneo&s items &sing the same coo#erative a##roach. 7oreover inter'bloc,agreements did la the gro&nd for a grad&al #rocess of reg&lator convergence acrossdifferent bloc,s. 0n the E bilateral agreements reg&lator coo#eration or legislativea##ro(imation is often an o&ts#o,en goal 9Table !.2. B%6T% in #rinci#le r&les o&t theharmoniation of environmental standards and reg&lations? however an internal de facto

convergence towards the ; levels is ta,ing #lace 9;am#son and 8oolcoc, 2@@3.

&. 'oncl!sions

% motivation for this st&d has been to assess the im#lications of an shift awa fromm&ltilateral to regional trade agreements for the tradeMenvironment interface. The recentfail&re at Canc&n has raised fears that =com#etitive liberaliation might &ndermine#rogress at the m&ltilateral level. The world trade sstem can be tho&ght of as a fo&r'wheeled vehicle in which the m&ltilateral ro&te re#resents one wheel the regional ands&b'regional ro&te re#resents another while the &nilateral and bilateral ro&tes re#resentthe other two. Essentiall in this vision the vehicle #erforms best when all fo&r wheels

are driving forward together while #rogress can #robabl still be made when one wheelis o&t of action. This is #artic&larl tr&e now that the trade agenda has dee#ened so as toincl&de domestic reg&lator meas&res on which the 8TO has a limited e(#erience and onwhich global coo#eration is m&ch more diffic&lt than it was for tariff red&ction. *ather*T%s seem to be a =better for&m in which to address these meas&res enhancing thechances for more #rogressive environmental trade'related meas&res.

"oing bac, to the 4&estions mentioned at the o&tset the evidence on *T%s #rovidedhere allows &s to concl&de that *T%s do seem to am#lif the m&ltilateral environmentalagenda. 6irst of all *T% members seem to be more able ens&re environmental #rotectionand in most cases have shown a higher degree of attention to environmental iss&es

com#ared to the 8TO. 0n #artic&lar in three clear areas *T%s have act&all gone beondthe m&ltilateral trading sstem in the sense of incl&ding #rovisions #reventing therela(ation of domestic environmental laws and the enforcement of those laws? in definingthe relationshi# between m&ltilateral environmental agreements and the *T%? and inre4&iring each #art to #eriodicall #re#are and ma,e #&blicl available a re#ort on thestate of its environment.

%s regards different was of addressing environmental #rotection individ&al tradingbloc,s s&ch as %;E%B 7ercors&r and the E have grad&all e(tended regionalcoo#eration from trade towards to the environment b adding a side #rotocol oragreement dealing s#ecificall with environmental #rotection. Contrastingl most inter'

bloc, agreements have encom#assed trade liberaliation and environmental #rotectionsim&ltaneo&sl in the same agreement. Onl the Canada'Chile free trade area relies on aside agreement which was however established along with the trade agreement e(actlfollowing the B%6T% a##roach.

The fear of =reg&lator regionalism does not seem a real one and *T%s canreasonabl be e(#ected to re#resent a =ste##ing stone towards m&ltilateral agreements.*eg&lator coo#eration is of increasing interest not onl within individ&al *T%s b&t the

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#rocess of !ertical integration is #aralleled b growing hori+ontal interactions acrossregions which in the long r&n might lead to a convergence between different reg&latorsstems. ;ince significant environmental #olicies that #romote the red&ction of "5"emissions are reg&lator meas&res 9e.g. energ efficienc standards energ labellingschemes harmoniation can contrib&te to a global res#onse to climate change b

enco&raging in a =bottom' fashion the ado#tion of common standards that in the longr&n ma et become international standards.

0n this #rocess of #romoting reg&lator coo#eration the E is #laing a leading role.5ow far the #olitical stance of the E in #romoting s&stainable trade and reg&latorharmoniation will go is the real iss&e. E&ro#ean member states have discovered thato#erating with a &nified #osition can strengthen their bargaining #ower. 8hat ma be ofinterest is whether the dee#ening of regional integration which is occ&rring in otherregions s&ch as %;E%B and 7ercors&r might have the same e(ternal effect that it had inthe E case. These regions do seem to loo, at the E as an e(am#le to be em&lated. 0fthe E model of #ooling national strengths can s&cceed m&ltilateral regimes co&ld find it

easier to #rogress in the long r&n. %s regards both environmental and trade iss&es itmight become easier to negotiate when fewer actors are #laing on the negotiating stage.

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DK EDC Policy Brief

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