Challenges to Eco-Labeling Arise in World Trade Talks

LONDON, UK, October 21, 2005 (ENS) - Consumers may lose the chance to make environmentally informed choices, if plans to ban energy efficiency and recycling labels succeed during World Trade Organization talks, warns Friends of the Earth UK.

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The German eco-label, the blue angel (Photo courtesy EU)
A proposal to outlaw energy efficiency labeling is up for discussion at the World Trade Organization's ongoing negotiations. More than 200 similar free trade measures have been put forward and if successful, could deny consumers' access to environmental information on a wide range of products.

Countries including Korea, the United States and China are claiming that eco-labeling damages their competitiveness and acts as a barrier to trade.

Other basic measures countries want revoked include:

Friends of the Earth wants the Prime Minister Tony Blair to use his influence with EU Commissioner for Trade, Peter Mandelson, to ensure the EU opposes these challenges.

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The European flower eco-label is a voluntary scheme designed to encourage businesses to market products and services that are kinder to the environment and easier for European consumers to easily identify them. (Image courtesy European Commission)
Friends of the Earth's trade campaigner, Eve Mitchell, said, "At the moment, shoppers can choose energy efficient appliances, because products are labeled. They can save energy and money on running costs and do less damage to the environment. But these labels could be outlawed, if other countries successfully challenge them in WTO talks. The UK and the EU must reject any attempt to undermine hard won environmental protection legislation.

The EU energy label rates products from A (up to A++ for refrigeration) - the most efficient/least energy used, down to G (the least efficient/most energy used). Currently, by law, the label must be shown on all refrigeration and laundry appliances, dishwashers, electric ovens and light bulb packaging.

The measures being challenged, including the objection to energy efficiency labeling by Korea, are known as non-tariff barriers and fall under the Non-Agricultural Market Access negotiations at the WTO.

Yet as of June 2005, the United States and the European Union were still moving towards harmonizing energy efficiency labels on appliances.

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The Energy Star label could be the basis for harmonizing European and American energy-efficiency standards. (Image courtesy EPA)
The 2005 Roadmap for EU-U.S. Regulatory Cooperation and Transparency issued June 20 by the Office of the U.S. Trade Representative says, "The United States and EC will build on the Energy-Efficiency Labeling Programs for Office Equipment (Energy Star) to encourage energy efficiency while retaining the philosophical basis and market-focused approach of the existing program."

"This program currently covers computers, monitors, printers, fax machines, copiers, scanners, and multi-function devices. Both parties are currently considering the conditions for renewing the Energy Star Agreement."

Energy Star is a voluntary labeling program of the U.S. Environmental Protection Agency and the U.S. Department of Energy that identifies energy efficient products that may display the Energy Star label.

"This year, and into next, the Roadmap says, "the U.S. and the EC will cooperate on revising the specifications for imaging equipment (printers, copiers, scanners, fax machines, mailing machines, and multifunction devices) and computers. The intention of these revisions is to make the specifications more stringent, such that ENERGY STAR qualified models represent the top performers in the market without a sacrifice in features or performance."

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Finland, Sweden, Denmark and Norway use the Nordic Swan eco-label. (Photo courtesy EC)
When it comes to eco-labeling, there is debate on the validity of self-regulation by the producers to promote positive environmental aspects of their products compared to third-party regulation by an independent body.

Though many in developing countries see eco-labeling as a non-technical barrier to trade because it is often linked to environmental agreements, it can actually help promote trade because labeling can offer a means of marketing a particular competitive advantage said Jorge Larson Guerra, a biologist with the National University of Mexico.

There has been a rise of mandatory basic labeling in India, Brazil, Mexico and Central Europe, and there has been expansion in the use of geographical indicators in eco-labeling. Law enforcement of mandatory eco-labeling should be a priority in developing countries to ensure that claims made by labels are legitimate and credible, proponents say.

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Hong Kong's Green Label is administered by the Green Council. (Image courtesy Green Council)
Since its accession into the WTO, China has been working towards standardization on environmental labeling. But China does not believe that environmental labeling should be compulsory because environmental protection can be achieved through voluntary labeling, market regulation and economic means.

Japanese business has acknowledged that eco-labeling is an effective means of promoting environmental conservation, and has pledged its efforts for the disclosure of information to consumers and to a labeling scheme that gains the trust of consumers.

On the other hand, the Japanese business community has raised concerns about labeling based on criteria that favor domestic industry, and that are discriminatory and lack transparency. There is concern about forced compliance with government-imposed regulations calling for eco-labeling as a requirement of green purchasing conducted by government, and government engagement in discriminatory practices of mutual certification of standard eco-labeling.

The sixth WTO Ministerial meeting will take place in Hong Kong, China from December 13 to 18, 2005. UK Secretary of State for Trade and Industry Alan Johnson and Secretary of State for the Environment, Food and Rural Affairs Margaret Beckett are expected to attend.

For more on eco-labels visit the Global Ecolabelling Network, a nonprofit asssociation, founded in 1994 to improve and develop the ecolabeling of products and services worldwide, online at: http://www.gen.gr.jp/members.html