Identifier
Created
Classification
Origin
05SANJOSE2822
2005-12-12 12:45:00
UNCLASSIFIED
Embassy San Jose
Cable title:  

MODELING THE ELEPHANT: OECD/OAS GLOBAL FORUM ON

Tags:  SENV ETRD EAID CS 
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UNCLAS SECTION 01 OF 03 SAN JOSE 002822 

SIPDIS

STATE PLEASE PASS TO AID
STATE PLEASE PASS TO USTR
AID FOR JGARRISON
EPA FOR PAM TEEL
WHA/OAS FOR DAN MARTINEZ
EMBASSY SAN SALVADOR FOR GSCHADRACK AND ANNE DIX

E.O. 12958: N/A
TAGS: SENV ETRD EAID CS
SUBJECT: MODELING THE ELEPHANT: OECD/OAS GLOBAL FORUM ON
TRADE TAKES UP TRADE AND ENVIRONMENT CAPACITY BUILDING

UNCLAS SECTION 01 OF 03 SAN JOSE 002822

SIPDIS

STATE PLEASE PASS TO AID
STATE PLEASE PASS TO USTR
AID FOR JGARRISON
EPA FOR PAM TEEL
WHA/OAS FOR DAN MARTINEZ
EMBASSY SAN SALVADOR FOR GSCHADRACK AND ANNE DIX

E.O. 12958: N/A
TAGS: SENV ETRD EAID CS
SUBJECT: MODELING THE ELEPHANT: OECD/OAS GLOBAL FORUM ON
TRADE TAKES UP TRADE AND ENVIRONMENT CAPACITY BUILDING


1. Summary: The OAS/OECD Global Forum on Trade session on
Technical Assistance and Capacity Building for Trade and
Environment was held in San Jose November 3-4. Panels
addressed market access, needs and priorities, and other
issues related to trade and environment capacity building.
Common themes included the need for policy coherence;
problems linked to the proliferation of certification
programs and market access standards; access to information
and technical expertise; the usefulness of a South-South
dialogue; and the need for small producers to become
entrepreneurs. Descriptions of successes - ranging from
Indian electronics producers to Kenyan farmers and Mexican
lobster fishermen- leavened discussions of problems with
reminders of the opportunities trade can bring. End
summary.


2. The Organization for Economic Cooperation and
Development (OECD),the Organization of American States
(OAS),and GOCR co-hosted in San Jose a November 3-4 forum
on Technical Assistance and Capacity Building for Trade and
the Environment, part of the OECD Global Forum on Trade
series. In his opening remarks, OECD Deputy Director for
Trade Kenneth Heydon encouraged participants to prioritize
among the factors that determined the success or failure of
environment-related trade capacity-building. Panels
addressed Environmental Requirements and Developing Country
Market Access; Needs and Priorities for Technical Assistance
and Capacity Building (TACB); Experiences in Environmental
Requirements and TACB; Environmental Goods and Services; and
Opportunities for Exporting Environmental Goods and
Services. Participants included government trade and
development aid agency officials; NGOs; certifiers and
others active in cleaner production; private sector
representatives active in certified sustainable production;
and academics.


3. The wide-ranging discussions in San Jose were frank but
largely upbeat in assessments of opportunities. Common
themes among many of the presentations included:

-- Policy coherence: Inconsistent market requirements among
major consumers created problems for producers. Developed

country technical agencies encouraged diversification, but
their trade rule-makers took decisions with little
consideration for the impact on small producers overseas. A
proliferation of sustainable production certification forced
producers to seek expensive multiple certification or to
forgo promising markets.

-- Transforming small producers into small businessmen:
Many small producers were ill-equipped to deal with the
demands of the international market place. Basic financial
management and other business skills were lacking. Small
businesses were discouraged by a maze of rules, changing
market access demands, and unforeseen quality requirements.
In other instances, small producers could not shake the
subsistence mindset, abandoning the discipline of the
contract for irregular production.

-- Access to information: Developing country producers
risk being sand-bagged dockside because notice of changing
market access requirements failed to get to the grower. The
impact could be ameliorated if developed and developing
countries assessed the impact of proposed rule-changes and
disseminated those findings.

-- South-South Dialogue: Participants were inspired by
sharing success stories, and saw particular value in
networking among developing countries for fresh insights on
managing familiar problems.

Environmental Requirements and Developing Country Needs
--------------


4. World Wildlife Fund (WWF) Director for the Center for
Conservation Innovation Jane Earley, Costa Rican National
Forestry Finance Fund (Fondo Nacional de Financimiento
Forestal - FONAFIFO) Ricardo Ulate, and Chilean Trade
Negotiator Edda Rossi discussed environment-related market
access issues linked to certification, multilateral
environmental agreements, and trade agreements,
respectively. United Nations Conference on Trade and
Development (UNCTAD) contractor Rene Vossenaar described its
project for strengthening developing country capacity to
negotiate and formulate Trade and Environment Policy. While
the UNCTAD project boosted capacity to address trade
negotiations, encouraged national dialogues, and (in Asia)
stimulated interaction with the private sector, it also
highlighted the lack of resources available to policymakers
for institutional and policy follow-up, heavy workloads for
small teams, and (in Central America) limited cooperation
with regional bodies. Project participants promoted access
to information; encouraged trade negotiators to consider
greater technical assistance to developing countries to meet
new environmental standards; and recommended
developed/developing state assessments of the impact of new
trade measures.


5. Earley expressed concern over the conflicting
requirements of multiple certification programs and
expensive multiple certification for small producers. (WWF
is conducting studies on these two points.) Efforts at
harmonization or mutual recognition between programs have
not made much progress. Demand is being driven by big
retailers; certification schemes are rarely directed at
consumers. Features of successful programs included
stakeholder participation; transparency and good governance
in addressing environmental issues; metrics to measure
progress; a focus on performance; and establishment of
minimally acceptable performance levels.


6. Ulate addressed the challenge of applying to local
conditions the tools and goals derived from multilateral
agreements like climate change and biodiversity. He warned
that the estimated 50 international agreements, and the
processes, reports, and obligations that they create,
challenged the limited capacity of many States. Rossi noted
that cooperation under free trade agreements (FTAs) helped
balance developed countries' concerns about competition
based on lower environmental standards, developing country
concerns about potential environmental barriers to trade,
and market interest in price, quality and high environmental
standards. She encouraged FTAs to define the principles
needed to encourage sustainable development and to establish
consultative mechanisms. In her view, FTA-related
environment cooperation priorities should take into account
prior cooperation; characteristics of principal forms of
economic activity; weaknesses in environmental management;
national priorities; and chief international priorities or
commitments.

Learning from Experience: Identifying Needs and Priorities
--------------


7. Representatives of donors, recipients and international
agencies identified needs and priorities. Claudia de Windt
of OAS and Cecilia Pineda with the United National
Environmental Program (UNEP) demonstrated the potential for
international commitments to spur action at the national and
local levels of government. They pointed out that capacity
building works best if the beneficiaries lead, "owning" the
process, and that policy is more likely to last with an
intersectoral approach to mitigate changes in personnel and
policy shifts. Public participation and South-South
dialogue are also important elements in ensuring that
beneficiaries make the most of their aid. A range of
examples and programs were discussed:

-- Presentations by African organics/sustainable producers
and Indian electronic manufacturers highlighted common
themes, including the lack of credit with which to upgrade
standards; conflicting rules for market access; the lack of
a premium for sustainably produced goods; and the challenge
in providing a reliable supply to large retailers,
particular when the supplier's subsistence expectations
collides with contractual demands.

-- Yemi Oloruntyi of the Marine Stewardship Council joined
Mario Ramade Villanueva to discuss certification of the
sustainable managed Baja California lobster fishery, which
accounts for 65 percent of Mexico's lobster exports. Key
constraints included a limited range of certifiers and weak
capacity for collecting and analyzing fisheries science
data.

-- Colombian Ministry of Environment Green Markets official
Laura Rodriguez promoted in-country demand for local eco-
products. Sectors included ecotourism; recycling (50,000
families rely on recycling 470,000 tons of paper, metals,
bottles, and plastic),and power (36 wind and solar power
firms complement the efforts of 300 small hydro producers.)

-- Chantal Carpentier of the U.S.-Mexico-Canada Commission
for Environmental Cooperation addressed the identification
and development of green markets. The CEC applied a
geographic information systems (GIS) tool to plot
biodiversity, development patterns, and other factors to
identify promising areas for greenmarket production and
demand promotion strategies.

-- Highlighted Central America experiences included a
presentation by EPA official Pam Teel on EPA's El Salvador
projects; a joint United Nations Industrial Development
Organization (UNIDO) -Honduras presentation on methyl
bromide and its alternatives; and AID and Swiss support for
Costa Rica's National Center for Cleaner Production. This
last showcased a regional market for industrial by-products;
best hotels practices; and revolving credit programs. Also
of particular interest were UNIDO's findings on the non-
tariff reasons that Central America exports were refused
entry into developed country markets - product
characteristics failed to meet applicable standards;
inappropriate methods of production; inappropriate packing
material; and labeling problems.

Environmental Goods and Services
--------------


8. OECD Trade Directorate official Ronald Steenblik
provided a basic introduction to environmental goods and
services. In its small sample of environmental projects,
OECD found that waste management projects typically imported
about 25-30 percent of environmental goods, primarily
specialty items. (Most items were non-specialty and
procured locally.) Tariffs and customs clearance delays
were identified as the chief obstacles for imported
environmental goods; tariff exemption requests proved a
cumbersome tool. Steenblik explained that the market for
environmental goods and services is driven by ever-tighter
regulations; corporate social responsibility; and the
competitive advantage of farming out specialized services to
firms who spread certain costs among clients.


9. Grant Ferrer, President of Environmental Business
International, criticized trade negotiators for sacrificing
"hard" environmental services talks in favor of "easy"
progress in environmental goods negotiations. In his view,
the distinction is artificial. The lack of progress in
defining trade in environmental services clipped the
potential benefits of liberalized trade in environmental
goods. Discussion also highlighted the problem of "dual
use" and defining the end use for goods that could serve
both environmental and productive ends.


10. COMMENT. The Forum featured little discussion on how
to influence developed country trade policy or the conduct
of global trade negotiations. Instead, it was particularly
useful in opening doors to new contacts and ideas. The
range of featured topics and experiences brought to mind the
old tale about sightless wise men who, when presented with
an elephant, deduced the whole from a particular part -
handling the trunk, one called it a snake; touching the leg,
a second argued it was a tree; feeling the ear, a third
concluded it was a giant bat; and so on. Like the sightless
wise men, conference participants were aware of the impact
of trade and environment on their particular specialty or
activity. The Forum succeeded in linking the specialists'
experiences to the broadest trends and issues under
negotiation in international fora, and, in so doing, modeled
the whole of the elephant. END COMMENT.

LANGDALE