WTO Public Symposium 2003: Ecolabelling

Background and Debates:

What is ecolabelling? "'Ecolabelling' is a voluntary method of environmental performance certification and labelling that is practised around the world. An "ecolabel" is a label which identifies overall environmental preference of a product or service within a specific product/service category based on life cycle considerations. In contrast to "green" symbols or claim statements developed by manufacturers and service providers, an ecolabel is awarded by an impartial third-party in relation to certain products or services that are independently determined to meet environmental leadership criteria." (1)

The subject of ecolabelling falls under the WTO agreement on Technical Barriers to Trade (TBT).  According to this agreement, Members cannot use technical regulations or standards to deny market access to or discriminate against imported goods (except when they are operating by an internationally accepted set of standards/regulations). However, the TBT also states that "no country should be prevented from taking measures necessary to ensure... the protection of human, animal or plant life or health, [or] of the environment... at the levels it considers appropriate.”

Currently there is no universally accepted standard for ecolabelling.  Many countries have adopted their own standards for ecolabelling, which are manifested in labels put upon products such as "recyclable," "made from recycled products," and so on. This technically is not discrimination on the part of the country, because consumers then make their own decisions about which product to buy.  Apparently, as long as a country applies these standards equally to all domestically produced goods and across all imported goods, and as long as the labels apply only to the characteristics of the actual good, it will not be in violation of WTO rules. There is, however, a question of whether the WTO should create its own or adopt a set of ecolabelling standards to clear the confusion created by many different sets of standards.

One of the stickiest points about the topic of ecolabelling, however, relates to processing and production methods (PPMs) which are not related to the product's characteristics (non product-related PPMs, or NPR-PPMs).  We all realize that although a product itself may not harm the environment during or after its use, the method in which it was produced or processed may have had harmful effects on the environment. The TBT only explicitly permits standards and regulations applied in the name of environmental protection only as regards the actual physical properties of the good -- not the good's production process. The legality, therefore, of ecolabels on PPMs is contested under WTO law.

The Debates:

In the broadest terms, perhaps, it is developed countries who advocate the adoption of ecolabelling and developing countries who oppose it.  The EU and Canada, in particular, would like to see PPM ecolabels made legal, and to hold further discussions on the possibility of creating or adopting a set of standards within the WTO for ecolabels.  Developing countries oppose ecolabelling for several reasons.  First, the environmental problems which face developed countries (such as shortage of natural resources) do not necessarily face developing countries.  Therefore, distinctions made on the basis of how much natural resources were consumed in the process of creating a product might unnecessarily bias a consumer against products made in a developing country where that resource is in abundance.  Second, the process of testing goods to apply an ecolabel may be too costly for developing countries. Finally, developing countries fear they may not have a voice in creating the ecolabelling standards, or that a process of adopting or creating a set of standards would not be transparent.

The US, however, is nervous that such standards could result in discrimination against its GM agricultural exports. The US opposes clarification of the WTO position on ecolabelling.

Additional Resources:

Geographical Indications - information about the protection of regional product names

Food and Agriculture Organization of the United Nations

IISD: Environment and Trade Handbook