Recently, consumers have begun to seek out products with environmental labels to ensure their purchases are as environmentally friendly as possible. But these same consumers may soon see fewer such labels. A small but vocal group of industries and trade associations is arguing that these eco-labels are disguised barriers to trade. They want the World Trade Organization to regulate their use.
In 1992, the nations participating in the Earth Summit agreed that one of the most important roles consumers could play in protecting the planet was to make better decisions about the products they buy. Agenda 21, the summit's blueprint for an environmentally sustainable future, encourages governments to expand "environmental labeling ... to assist consumers to make informed choices."
Heeding this call, product labels are being developed that address the environmental impact of products, including how they are produced, used, and disposed of. The labels are generated by government programs such as the US government's Energy Star for energy-efficient computers, and private organizations such as the Mexico-based Forest Stewardship Council or the US Green Seal. There are close to two dozen government and private eco-labeling programs around the world.
Assembling eco-labeling programs is not easy. They require a delicate balance between the interests of producers and consumers. Environmental criteria must be realistic and cost-effective to producers. Simultaneously, consumers must find the environmental criteria sufficiently strong to warrant their purchase.
Another challenge has been to decide how eco-labels apply to products from other countries. As eco-labels multiply in number, the labeling requirements of different programs are apt to become confusing and complex to both consumers and producers. The solution is to find mutually acceptable criteria between eco-labeling programs from different countries. One organization, the Global Eco-Labeling Network, is working with the leading eco-labeling programs to do just that.
Yet some industries and trade associations say these efforts aren't enough. After years of arguing in favor of eco-labeling as an alternative to regulation, they now see eco-labels as a potential impediment to the sale of their products in other countries.
Their antidote of choice is the international trade rules of the Geneva-based World Trade Organization. They want the US government to press the WTO into policing eco-labels for their scientific basis and truthfulness. But the WTO is not, by its own admission, an organization equipped to make such environmental judgments, and expanding the role of the WTO could undermine the domestic jurisdiction of many US federal, state, and local agencies. This isn't to say the WTO has no role in improving eco-labeling programs. It could ensure better communication among eco-labeling programs and a fair public-comment period during their development. In trade parlance, this is called "transparency."
The US government has formally put forward a proposal to ensure that WTO member governments adhere to improved transparency rules to avoid problems with eco-labeling programs. Nevertheless, US officials are dangerously close to changing this position and taking industry up on its recommendation. The National Wildlife Federation and other environmental organizations have asked the US to stand by its current position, noting that "the WTO is not an appropriate forum to make judgments about the validity of eco-labeling programs or the technical, scientific, and marketing issues underlying those programs."
If these industries persuade US officials to change the rules of international trade, the positive impact that "green" shoppers are having on the environment could be undermined. The net result could be the disappearance of one of the most effective market incentives for rewarding sound corporate behavior.
*Rodrigo Prudencio directs the National Wildlife Federation's Trade and Environment Program.