Economic and Social Council

 Distr. GENERAL
5 February 1997
ORIGINAL: ENGLISH

COMMISSION ON SUSTAINABLE DEVELOPMENT 
Fifth session
7-25 April 1997


              Overall progress achieved since the United Nations
                   Conference on Environment and Development

                        Report of the Secretary-General

                                   Addendum

        International cooperation to accelerate sustainable development
           in developing countries and related domestic policies *

                           (Chapter 2 of Agenda 21)

(*  The report was prepared by the secretariat of the United Nations
Conference on Trade and Development (UNCTAD) as task manager for
trade, environment and sustainable development.  In preparing the
report, the UNCTAD secretariat benefited from comments made by the
secretariats of the World Trade Organization (WTO), the United Nations
Environment Programme (UNEP), the Department for Policy Coordination
and Sustainable Development of the United Nations Secretariat, and the
Organisation for Economic Cooperation and Development (OECD).  The
report builds considerably on work undertaken by WTO, in particular
its Committee on Trade and Environment, UNCTAD, UNEP, OECD and other
bodies. )


                                   CONTENTS

                                                            Paragraphs Page

INTRODUCTION ...............................................     1       2

 I.   ANALYSING AND EXAMINING SUCCESS STORIES ..............   2 - 15    2

II.   UNFULFILLED EXPECTATIONS .............................  16 - 25    5

III.  PROMISING CHANGES ....................................  26 - 35    8

IV.   EMERGING ISSUES ......................................  36 - 44   10


                                 INTRODUCTION


1.    The present report reviews progress made in the implementation of
the objectives set out in chapter 2 of Agenda 21 (International
cooperation to accelerate sustainable development in developing
countries and related domestic policies), 1/ since the United Nations
Conference on Environment and Development (UNCED) in June 1992. 2/ 
Progress in the various programme areas of chapter II of Agenda 21 has
not been even.  Although some progress has been made in implementing
programme area B, particularly through intergovernmental
deliberations, progress in other areas has been remarkably slow. 
Moreover, the countries that are marginalized in trade are often those
that are highly indebted and do not have inflows of foreign
investment.  Making trade and sustainable development mutually
supportive could follow a two-pronged approach:  (a) identify
priorities for low-income countries and (b) identify priorities for
middle-income developing countries. 


                  I.  ANALYSING AND EXAMINING SUCCESS STORIES

              A.  Promoting sustainable development through trade

2. Programme area A (Promoting sustainable development through trade)
includes among its policy objectives:  (a) promote an open,
non-discriminatory and equitable multilateral trading system; (b)
promote access to markets for exports of developing countries; and (c)
improve the functioning of commodity markets, and achieve sound,
compatible and consistent commodity policies at the national and
international levels with a view to optimizing the contribution of the
commodity sector to sustainable development, taking into account
environmental considerations.

3. The most significant development since the United Nations
Conference on Environment and Development (UNCED) as regards the
trade-sustainable development nexus has been the adoption of the
Uruguay Round of multilateral trade agreements.  The Uruguay Round
agreements represent a major step by the international community
towards the creation of a securer trading environment via the
construction of a more fully rules-based international trading system. 
At the same time, the Uruguay Round agreements achieved a significant
liberalization of trade by establishing tariff reductions, the
conversion of a wide range of non-tariff barriers to transparent bound
tariffs, the adoption of enhanced and secure market access
commitments, the application for the first time of multilateral rules
and disciplines to agriculture and services, and limitations on the
use of subsidies to promote domestic production and trade.  The
Uruguay Round agreements also established a system of multilateral
trade obligations subject to a common dispute settlement mechanism
that will place most countries at virtually the same level of
multilateral obligation within a relatively short time.

4. The Uruguay Round agreements can be expected to be a positive force
on international trade (on the demand side and consequently on the
supply side as well) and on trade-limited income growth, in two major
ways.  First, once they are fully implemented, the Uruguay Round
Agreement on Agriculture, market access reforms in manufactured and
industrial products, and the phasing out of the Multifibre Agreement
in textiles trade are projected to raise global income substantially
(estimates range from an increase of US$ 40 billion to one of
US$ 215 billion relative to the 1992 base period gross domestic
product of approximately US$ 23 trillion).  East Asian and - to a much
lesser extent - the Latin American developing regions are expected to
benefit considerably from that income growth, which should in turn
enable them to make advances in addressing issues of sustainability
that are otherwise income-constrained.

5. Second, there is a wide range of potential benefits from tariff
reductions and tariffication, strengthened disciplines with respect to
non-tariff measures, and enhanced transparency and stability in the
trade regimes.  Preliminary analysis to date indicates that
significant new trade opportunities are expected to open up for a wide
range of agricultural commodities, including vegetable oils and fats,
oilmeal, rice, wheat and maize, with corresponding income gains for
the exporting developing countries.  In the case of metals and
minerals, the Uruguay Round agreements will improve the prospects for
vertical diversification in developing countries.  At the same time,
the higher proportion of bound tariff rates should stimulate
investment in local processing before export.  All of these factors
should reduce the income-constraint on the adoption of policies
conducive to sustainable development.

6. It is possible, however - and the Uruguay Round agreements have
recognized this - that during the reform programme leading to greater
liberalization of trade in agriculture, the least developed and net
food-importing developing countries may experience negative effects in
terms of the availability of adequate supplies of basic foodstuffs
from external sources on reasonable terms and conditions, including
short-term difficulties in financing normal levels of commercial
imports of basic foodstuffs.  Because of the link between poverty and
practices inimical to sustainable development, particularly
unsustainable cultivation methods, the risk of a negative impact of
the Uruguay Round agreements on the poorest and most vulnerable
countries merits close attention; the World Trade Organization (WTO)
and - within the United Nations system - the United Nations Conference
on Trade and Development (UNCTAD) are monitoring the situation
closely.

7. Other possible sources of loss in the existing benefits of
developing countries arising from the Uruguay Round agreements will be
the erosion of trade preferences in their favour consequent upon the
general tariff reductions, as well as the shifts that may occur in
Generalized System of Preferences (GSP) opportunities as a result of
trade and investment diversion in favour of the constituent members of
proposed, emerging or enlarging areas or groupings of free or
preferential trade, or as a result of special or additional privileges
accorded to those members by GSP-giving countries.  Such costs and
benefits, however, should not be considered separately from the
potential direct and indirect benefits expected to be derived from the
overall positive impact on the world economy of the conclusion and
implementation of the Uruguay Round agreements.  Moreover, since
progress in other areas identified in Agenda 21, such as the provision
of additional financial resources and access to and transfer of
technology, has not been encouraging, it follows that trade
liberalization and improved market access have become even more
necessary as a means of generating finance for sustainable
development.

             B.  Making trade and environment mutually supportive

8. Making trade and environment mutually supportive, inter alia,
includes the following objectives:  (a) to make international trade
and environment policies mutually supportive in favour of sustainable
development, and (b) to clarify the role of the General Agreement on
Tariffs and Trade (GATT)/WTO, UNCTAD and other international
organizations in dealing with trade and environment issues.

9. In the post-UNCED period, intergovernmental deliberations have been
clearly guided by efforts to make trade and environment mutually
supportive in the pursuit of sustainable development.  However, there
are diverging views on the amount of progress that has been achieved,
partly because different paths can be followed to achieve sustainable
development, so that priorities for specific issues related to the
interface between environmental and trade policies differ from country
to country, depending, inter alia, on environmental and developmental
conditions.  Intergovernmental deliberations at UNCTAD, WTO, and the
Organisation for Economic Cooperation and Development (OECD) have
stressed the importance of coordination at the national level and
cooperation at the international level.

10.   Perhaps the most important result of the intensive post-UNCED
intergovernmental deliberations is that, despite differing priorities
across countries as well as differing views on how to deal with
specific trade and environment issues, it has been possible to
maintain the momentum generated at UNCED and to promote increased
awareness and understanding, as well as larger confidence and mutual
respect between trade, environment and developmental communities.

11.   Throughout the post-UNCED debate, Governments and civil society
have reiterated their commitments to both trade liberalization and
environmental protection.  The principles contained in the Rio
Declaration on Environment and Development and Agenda 21, as well as
the principles of the multilateral trading system have been strongly
endorsed; the international community has continued to strongly reject
unilateralism and to seek multilateral cooperative approaches.

12.   Furthermore, intergovernmental organizations, such as UNCTAD,
have given high priority to implementing an environment/trade and
development agenda, as called for in paragraph 2.22 of Agenda 21.


      C.  Providing adequate financial resources to developing countries

13.   Two programme areas specifically identified for providing
adequate financial resources to developing countries are (a) reducing
external debt and (b) promoting foreign direct investment.

14.   The rising trend in the external debt of developing countries has
persisted since 1992, but trends in debt indicators for individual
countries vary considerably.  Even with rising debt stocks, countries
with good economic performance and market access (as exemplified by
some countries in East Asia) have seen their indicators improve. 
Similarly, for middle-income debtor countries in Latin America that
had benefited from Brady deals, the economic situation has also
improved.  In many of the highly indebted poor countries (HIPCs),
however, debt burdens remain unsustainably high.  With respect to the
HIPCs, the endorsement by the international community of the
initiative to establish a comprehensive approach to HIPC debt
problems, which was launched by the World Bank and the International
Monetary Fund at the meeting of the Development Committee in September
1996, marks an important advance.  That initiative aims to ensure that
all creditors provide sufficient relief to allow HIPCs to achieve
overall external debt sustainability, thus enabling them to exit from
the debt-rescheduling process and strengthen their poverty reduction
programmes.  Debt relief is conditional upon debtor countries
establishing a good performance and policy record.  Multilateral
agencies and non-OECD official creditors are also expected to
participate in the initiative.  The Paris Club group of official
creditors (mostly OECD countries) has been providing debt relief
involving 67 per cent debt reduction (Naples terms) since the
beginning of 1995 to a number of low-income countries.  The Paris Club
has now agreed to go beyond Naples terms to provide debt reduction of
up to 80 per cent for countries qualifying for additional relief under
the HIPC initiative.

15.   During the 1990s, foreign direct investment (FDI) has come to
play an increasingly important role with respect to providing
developing countries with sources of long-term capital.  According to
the World Investment Report 1996, 3/ FDI flows to developing countries
in 1995 reached record levels of $100 billion.  In addition,
developing countries have become important outward investors, with
flows reaching $47 billion in 1995.  Those trends are reflective of
the deepening economic ties between developed and developing
countries, and of the growing importance of integrated international
production networks, which hold the promise of contributing to
environmental objectives insofar as the integration of economies
through such networks encourages the transfer and harmonization of
environmentally friendly technologies across borders.  The recent
installation of state-of-the-art production facilities by a number of
automotive producers in Mexico is an example of such a response. 


                         II.  UNFULFILLED EXPECTATIONS

              A.  Promoting sustainable development through trade

16.   As regards commodity trade, upon which many developing
countries - particularly the poorest - remain heavily dependent, the
positive (and potentially negative) impacts of the Uruguay Round
Agreement on Agriculture have been mentioned above.  Aside from the
Uruguay Round agreements, there has been no significant breakthrough
in international cooperation since 1992.  Although six international
commodity agreements (on cocoa, coffee, olive oil and table olives,
sugar, tropical timber and wheat) have been renegotiated and have
entered into force since then, and it is expected that the
renegotiated International Natural Rubber Agreement will soon enter
into force as well, few of those agreements contain action-oriented
provisions that are directed towards improving the environmentally
sustainable characteristics of production or consumption of the
commodity in question.  Some of the more positive developments are
described below.

17.   The International Agreement on Jute and Jute Products contains an
objective to give due consideration to environmental aspects in the
activities of the parties to the Agreement, particularly by creating
awareness of the beneficial effects of the use of jute as a natural
product.  The International Agreement on Olive Oil and Table Olives
also includes a provision for giving due consideration to
environmental aspects at all stages of olive and olive oil production. 
Increased attention to the environmental aspects of commodity
production and processing gave rise to an international seminar on the
environmental aspects of coffee production and processing, which was
organized by the International Coffee Organization. 

18.   Contributing to the process of sustainable development appears as
an explicit objective of the International Tropical Timber Agreement. 
The objectives of the Agreement also include enhancing the capacity of
members to implement a strategy for achieving the exports of tropical
timber and timber products from sustainably managed sources by the
year 2000; the promotion of the expansion and diversification of
international trade in tropical timber from sustainable sources; the
promotion of increased and further processing of tropical timber from
sustainable sources in producing member countries; the encouragement
of industrial tropical timber reforestation and forest management
activities, as well as the rehabilitation of degraded forest land; and
improving the marketing and distribution of tropical timber exports
from sustainably managed sources.

19.   Efforts since UNCED to enhance the developing countries'
capacities to diversify their production away from heavy reliance on a
handful of commodities have not attained notable success.  A proposed
fund for African commodity diversification failed to make progress in
the General Assembly.  Endeavours within UNCTAD have also made little
headway, although member States have recently agreed to study
particular successful experiences as a platform for improved
policy-making in this area.  Similarly, attempts in UNCTAD to pursue
sustainability through the internalization of environmental costs and
benefits into commodity prices have been unsuccessful.


             B.  Making trade and environment mutually supportive

20.   It is widely perceived that mutual understanding between the
trade, environment and development communities is still insufficient,
and that a larger consensus still needs to be built on a common agenda
in order to strengthen the mutual supportiveness of trade, environment
and development.  Insufficient progress has been made in designing and
effectively implementing a wide range of positive measures.  In
particular, little progress has been made on initiatives that favour
countries with only a marginal participation in world trade, in
particular the least developed countries.

21.   In a number of cases, efforts to make trade and environment
mutually supportive have been hindered by lack of progress in other
priorities identified in Agenda 21 that have implications for the
trade and environment interface, in particular financial resources and
mechanisms (chapter 33) and the transfer of environmentally sound
technology, cooperation and capacity-building (chapter 34).


            C.  Providing adequate finance to developing countries

22.   In spite of the HIPC initiative, a rapid solution to the debt
problems of the poorest countries may not be in sight, given the
requirement that qualifying debtor countries establish a good
performance and policy record over three to six years before becoming
eligible for additional relief.  Even in some low-income countries
that are pursuing sound policies, their low level of development -
characterized by structural rigidities, weak institutions and
administration, poorly functioning markets and deficiencies in skills
and infrastructure - have prevented a rapid and strong response to
reform efforts, which may delay the provision of relief under the
initiative.  Moreover, countries in which the implementation of
adjustment programmes has been limited or has been hampered by civil
strife, including a number of major debtors that have accumulated
massive payments arrears, would not seem to be candidates for early
consideration under the scheme even though they are classified as
HIPCs.

23.   Despite the overall positive trend with respect to international
investment, a number of concerns remain.  At the regional level, the
marginalization of Africa with respect to FDI flows remains troubling: 
FDI flows to Africa remained largely stagnant in 1995 at $5 billion. 
Given the continent's substantial capital needs and serious
environmental challenges, that trend is of particular concern. 
Furthermore, it is not clear whether foreign investors have
contributed enough leadership with respect to fulfilling local and
global environmental targets.  Finally, while FDI has contributed
positively to the economic stability of many developing countries, the
increasing importance of international portfolio investment has raised
concern about the possible negative effects that such volatile
investment could have for the stability of developing economies that
are exposed to such flows.


                  D.  Encouraging economic policies conducive
                      to sustainable development         

24.   There is now a consensus that sustainable development requires
both Governments and firms to take the long-term perspective into
their decision-making processes.  There is also a consensus that
policy reforms take a long time to design, implement and yield
results, and that adjustment, particularly in the least developed
countries, is a slow process that needs to take the long view in
dealing with the structural problems of such countries.  However, that
consensus is not always reflected in the way in which structural
adjustment programmes are implemented and funded.  Indeed, those
programmes and the facilities associated with them, such as structural
adjustment facilities or enhanced structural adjustment facilities,
have relatively short horizons:  they are usually provided for one to
three years and performance is assessed every six months, which tends
to shorten the time horizon of policy makers, forcing them to seek
quick results rather than pursue policies that yield results on a
sustained basis.

25.   Similarly, inadequate compensatory financing in the face of
external shocks forces countries to make a swift adjustment in their
balance of payments, which often necessitates, inter alia, a rapid
increase in export earnings that is sometimes attained at substantial
environmental costs.  Such distress exports were particularly notable
among the middle-income debtors in the 1980s, when most of them were
forced to accommodate not only sharp declines in commodity prices but
also cutbacks in lending and mounting debt-servicing obligations.  In
some cases, efforts to attain a swift payments adjustment were an
important reason for further downward pressures on commodity prices
through the fallacy of composition effect.  Similar conditions still
prevail today among the HIPCs.


                            III.  PROMISING CHANGES

             A.  Making trade and environment mutually supportive

26.   Several Governments have taken steps, including through
institutional mechanisms, to achieve greater integration of trade and
environment at the national level, such as by promoting better
coordination between trade and environment ministries.  In a number of
cases, there has been a larger involvement of non-governmental
organizations.

27.   Progress has also been made in improving environmental standards
and management practices to address local, transboundary and global
environmental problems.  Such progress has been possible without
conflict with the provisions of the multilateral trading system or
with the implementation of trade liberalization measures agreed upon
in the Uruguay Round negotiations.  Similarly, unnecessary adverse
impacts on trade have been largely avoided.  Experience has been
gained in the search for cost-effective solutions to environmental
problems and in establishing closer cooperation between government and
industry in environmental policy-making. 

28.   Governments have also taken steps to firmly include Agenda 21
follow-up activities, including in the area of trade and environment,
in the work programmes of GATT/WTO, UNCTAD and other relevant
international organizations.

29.   In the case of GATT/WTO, the preamble to the Marrakesh Agreement
Establishing the World Trade Organization includes, for the first time
in the context of the multilateral trading system, reference to the
objective of sustainable development and to the need to protect and
preserve the environment.  In addition, WTO included several
references to environment within different agreements.  Furthermore,
the Marrakesh Ministerial Decision on Trade and Environment of April
1994 provides a mandate and terms of reference for the WTO Committee
on Trade and Environment, and the Singapore Ministerial Conference
directed the Committee to continue its work under its existing terms
of reference.  

30.   Recently, the United Nations Conference on Trade and Development
at its ninth session (UNCTAD IX) renewed its mandate in the field of
trade, environment and development by endorsing decision 4/1 of the
Commission on Sustainable Development on trade, environment and
sustainable development.

31.   The role of other international organizations has been clarified
by their respective governing bodies.  In addition, the Commission on
Sustainable Development has played an important role in promoting
cooperation and complementarity in the work of WTO, UNCTAD and UNEP,
and in identifying gaps.

32.   With regard to the trade and environment debate, efforts have
been made to achieve a balanced and integrated approach.  In
particular, some efforts have been made to include the development
dimension.  Similarly, several developing countries have taken a more
proactive stance, adding to the debate a number of issues of interest
to developing countries.

33.   In the course of such debate, it has been possible to build
larger confidence in the ability of the multilateral trading system to
respond to environmental considerations and sustainable development
objectives.  Indeed, the WTO Committee on Trade and Environment has
concluded that discussions have demonstrated that the multilateral
trading system has the capacity to further integrate environmental
considerations and enhance its contribution to the promotion of
sustainable development without undermining its open, equitable and
non-discriminatory character; implementation of the Uruguay Round
agreements would represent a significant contribution in that regard. 4/ 

34.   In addition, conceptual and empirical analyses and debate have
helped to set aside some of the early and largely unsubstantiated
fears that trade and environment policies might be incompatible and
thus lead to inappropriate policy choices.


                  B.  Encouraging economic policies conducive
                      to sustainable development         

35.   The primary institutions of the United Nations system dealing
with macroeconomic policies are the World Bank and IMF.  Since UNCED,
IMF has paid increasing attention to the integration of environment
and macroeconomics.  In addition to helping countries to achieve
sustainable macroeconomic and financial stability - a precondition for
sustainable development - IMF assists its members in preparing
three-year policy frameworks that include environmental policies, and
in cooperation with members, integrates the macroeconomic and
financial implications of environmental policies into the policy
dialogue.  Since UNCED, IMF and the World Bank have also initiated
country-specific work to help make countries aware of the feasibility
of integrating macroeconomics and environmental considerations, and
staff regularly report on environmental issues that arise in the
course of their mission work.  Both institutions stand ready to
integrate environmental (and other social) issues into their policy
dialogues with countries, should the national authorities so desire. 
IMF recently explored the scope for further action in the area of
sustainable development in a publication on macroeconomics and the
environment.


                             IV.  EMERGING ISSUES

              A.  Promoting sustainable development through trade

36.   Despite the lack of progress cited above, there has nevertheless
occurred a tangible post-UNCED awakening of concerns about the
relationship between economic growth and the natural environment,
based on the realization that both commodity and industrial production
activities affect the natural resource base.  It has been recognized
that changes in production patterns to make them consistent with
sustainable natural resource use will be more difficult to effect if
environmental costs and benefits are not taken into account in the
prices of products, or if the adoption of environmentally preferable
production methods is not facilitated by market-based approaches. 

37.   At the same time, there is concern among developing countries
that the eventual introduction of environmental conditionalities in
the commodity sector might place an additional burden on commodity
producers and divert resources from normal development programmes. 
Those two related issues would appear to merit future attention,
whether in the context of international commodity agreements or via
other mechanisms.


             B.  Making trade and environment mutually supportive

38.   There is a need to give a new impetus to the debate on trade,
environment and development, based on an integrated and balanced
approach.  Sustainable development should focus on the promotion of
trade and investment, building on synergies between trade
liberalization, economic reform, and improved management of natural
resources and the environment.  There is a need to promote the
involvement of the business community and civil society in the design
of specific enabling measures, including through capacity-building,
especially in the context of environmental practices of FDI.  There is
also a need to undertake further empirical analysis and data
collection to support the debate.


            C.  Providing adequate finance to developing countries

39.   In the context of the HIPC initiative, the concept and definition
of debt sustainability becomes an important issue.  Methodological
questions apart, measurement and criteria used in debt sustainability
analysis require some consideration.  For example, are criteria
flexible enough to take into account different debt situations, in
particular the budgetary burden of debt?  Moreover, in following the
methodology required for debt sustainability analysis, social and
human development factors should be evaluated, and consideration needs
to be given to the problems that debtor countries face in practice.

40.   The principal emerging issues with respect to international
investment and the need for sustainable development concern (a) the
incorporation of countries and regions that have not benefited from
the FDI boom of the 1990s, (b) the potential positive role that
transnational corporations could play in conjunction with Governments
in achieving global goals on emission standards, and (c) the continued
competition among developing countries for foreign capital.  With
respect to the last issue, it remains the case that to date the
benefits of international investment for developing countries and for
sustainable development have been achieved in the context of a process
of liberalization that has motivated transnational corporations to
compete actively for markets in both goods and services and factors of
production.  Governments will therefore increasingly have to consider
and weigh policies with a view to encouraging and fostering healthy
competition, and will have to avoid policies that seek to attract
capital at the expense of openness and competition or that seek to
attract capital on the basis of lowest common denominator variables. 


                  D.  Encouraging economic policies conducive
                      to sustainable development         

41.   In developing countries with a weak industrial base, a rapid and
sustained rise in the levels of income depends on increasing
investment, which has a very high import content.  That in turn
requires an initial reliance on the exploitation of natural resources
for the export earnings needed to finance imports and investment. 
However, such exploitation can be detrimental to sustainable
development if resources are non-renewable, such as minerals, or if
the rate of their depletion exceeds the rate of their renewal, such as
in the case of timber.  The pressure on natural resources will vary
among countries, but it is likely to be greater when imports are
liberalized before a sound and competitive industrial export base is
established.  

42.   Sustainable improvements in growth thus require a shift away from
reliance on natural resource endowments towards a strengthening of the
industrial base.  Successful industrialization experiences show that
that process typically begins with diversification to commodity
processing and shifts to non-traditional agro-exports or
resource-based industries in order to raise the industrial value-added
component of production and exports.  A subsequent step is to develop
labour-intensive industries of relatively low technology, skill and
capital intensity, followed over time by further upgrading into
activities with higher technological and skill content, as profits
from resource-based exports are rechannelled into new investment.  If
such an industrialization path can be attained, the country can reduce
not only its vulnerability to external trade shocks but also its
dependency on limited natural resources for the financing of imports
and investment.  Higher levels of investment and industrial upgrading
can therefore contribute significantly to the protection of the
natural resource base and to a more rational and sustainable use of
primary commodities, especially timber, as well as mineral and other
non-renewable resources. 

43.   Thus, adopting an integrated treatment of the bases of economic
growth, by not only ensuring macroeconomic balance and stability but
also directing attention to the industrial base and incentive
structures, may do much to enhance the viability of policies that
address the environmental and social aspects of sustainable
development in individual countries.


                      E.  Recommendations for future work

44.   Further analysis and debate should focus on issues such as:  (a)
the search for positive incentives to assist developing countries in
upgrading environmental standards, including those related to
non-product-related process and production methods; (b) successful
experience with the internalization of environmental costs in the case
of specific commodities; (c) the effective promotion of access to and
transfer of technology to help resolve trade and environment issues;
(d) policies and measures for maximizing the role that FDI can play in
supporting developing countries in their efforts to achieve the
objectives of sustainable development, including in the context of
multilateral environmental agreements; (e) trade and environment
issues at the regional level, including in the context of regional
economic and trade agreements; (f) the special conditions and needs of
small and medium-sized enterprises in the trade and environment
interface; and (g) the identification of innovative positive
approaches to environmental measures, including in the framework of
multilateral environmental agreements.  Such work should give
consideration to emerging trade and environment issues, for example in
the context of policies in the field of climate change and the
conservation of biological diversity.  In addition, for the least
developed and low-income countries, the possibility of targeting
development aid as well as providing trade concessions for promoting
sustainable development should also be explored.  


                                     Notes

     1/  Report of the United Nations Conference on Environment and
Development, vol. I, Resolutions Adopted by the Conference (United
Nations publication, Sales No. E.93.I.8 and corrigendum), resolution
1, annex II.

     2/  A more detailed analysis is contained in a report entitled
"Trade and environment:  concrete progress and outstanding issues",
which was prepared by the UNCTAD secretariat in response to a request
by the General Assembly contained in paragraph 26 of its resolution
50/95 of 20 December 1995.  The UNCTAD secretariat is also preparing a
paper on trade and environment for an ad hoc expert group meeting on
the implementation of special measures for the least developed
countries in Agenda 21, to be held in New York on 3 and 4 April 1997.

     3/  United Nations publication, Sales No. 96.II.A.14.

     4/  See WTO, report of the Committee on Trade and Environment, 1996
(PRESS/TE 014), 18 November 1996.


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Date last posted: 10 December 1999 17:25:35
Comments and suggestions: DESA/DSD