Trade and the environment

The paper examines the political and substantive linkages between international trade and environmental protection, arguing that the WTO's current approach is insufficient. It highlights how environmental opposition in OECD countries has influenced major trade agreements like NAFTA and the Uruguay Round, and warns that future rounds may fail without explicit environmental safeguards. The author proposes several reforms, including the creation of a 'Sustainable Development Agenda', a Standing Conference on Trade and Environment, and a formal Agreement on Environment and Trade-Related Environmental Measures (TREMs) to manage distinctions between sustainable and unsustainable products.

• Environmental interests have become a decisive political factor in the ratification of major trade agreements in OECD countries. In the United States, the support of six large environmental organizations was critical for the passage of both NAFTA and the Uruguay Round, while their opposition contributed to the failure of the U.S. Administration's request for 'fast-track authority' and the abandonment of the Multilateral Agreement on Investment (MAI).
• The WTO's Committee on Trade and Environment (CTE) has been largely ineffective because it focuses on the technical impact of environmental regulation on trade rather than the reverse, and it fails to address the broader goal of sustainable development.
• A core conflict between trade and environment is the need for international standards governing processes and methods of production (PPMs). The author argues that trade can only contribute to sustainability if the system allows for distinctions between products produced sustainably and those produced unsustainably.
• The author proposes the creation of an Agreement on Environment and Trade-Related Environmental Measures (TREMs) to establish a rules-based system for environmental distinctions in trade. This would avoid the risks of a case-by-case approach in WTO dispute settlement, which the author claims can create incentives for discriminatory distinctions and weaken the trade regime.
• For developing countries, the decline in commodity prices is a major barrier to sustainable development. The author argues that the WTO must recognize the link between commodity prices, terms of trade, and the sustainable management of the environment to prevent the exploitation of natural resources in the South.
• The author strongly advises against incorporating investment disciplines into the WTO, citing the negative experience of NAFTA Chapter 11. Under NAFTA's investor-state dispute process, almost every government environmental measure has become subject to investor disputes using commercial arbitration procedures that lack openness.

APA

von Moltke, K. (1999). Trade and the environment. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/canberra.pdf

Chicago

von Moltke, Konrad. Trade and the environment. International Institute for Sustainable Development, 1999. https://www.iisd.org/system/files/publications/canberra.pdf.

Wikipedia

{{cite report |last1=von Moltke |first1=Konrad |title=Trade and the environment |publisher=International Institute for Sustainable Development |date=25 August 1999 |url=https://www.iisd.org/system/files/publications/canberra.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vonmoltke1999trade, author = {von Moltke, Konrad}, title = {{Trade and the environment}}, institution = {International Institute for Sustainable Development}, year = {1999}, month = aug, url = {https://www.iisd.org/system/files/publications/canberra.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }