When green values meet world commerce

WTO weighs how much environmental standards should shape global trade.

A year ago, Home Depot sent a message to its wood suppliers: Start sending us Douglas fir, plywood, and mahogany that meet international "green" standards.

Since Home Depot is the largest home-improvement business in the world, the message reverberated like the sound of an ax in the forest. Hundreds of vendors started searching for wood companies that respect the rights of indigenous people, avoid clear-cut logging, allow their workers to organize unions, and don't pollute.

But is Home Depot's new preference for green two-by-fours and molding an impediment to trade? Or is the giant retailer's move something all consuming nations should start to require?

The issue of green standards promises to be one of the most contentious debates facing the World Trade Organization (WTO), as it begins negotiating a trade agenda for the next millennium. The spur, say environmentalists, came when environmental standards were left out of the debate over the North American Free Trade Agreement.

"We now realize the economy and the environment are linked," says Daniel Esty of the Yale Center for Environmental Law and Policy in New Haven, Conn. "The environment has to be carefully addressed in the new round."

To make this point, thousands have converged on this environmentally aware community, where they are arguing that increased trade and economic activity is bad for the environment. At the very least, they want a moratorium on a new trade pact until an environmental-impact study can be completed. Business groups have set up newsrooms to offer sound bites that they, too, care about the environment - but also want to make money and provide jobs.

Both sides are adept at using statistics to bolster their case. Businessmen point to a 1996 World Bank study that found open (nontariffed) economies grow twice as fast as closed ones.

"There is a strong correlation between environmental performance and the national income of the citizens," says Scott Miller of US Trade in Washington. "Rich countries protect the environment more than poor ones."

Not so, say environmentalists, who argue that transnationals from rich countries are exploiting poor countries.

Logging is one of the most contentious issues. The US will present to the WTO a plan to remove all tariffs on forest products, initially in the developed world, later for developing countries.

"Our concern is that it would lead to increased logging in some of the most sensitive and biological forests in places like Malaysia, Chile, and Indonesia," says Antonia Juhasz, head of international trade and forest products for the American Lands Alliance.

Forest-products organizations, however, counter that a Clinton administration environmental-impact study concluded that removing tariffs on logging would increase consumption only 2 percent by 2010 and would increase logging activity by only 0.5 percent.

"Environmentalists are incensed they did not get the answer they wanted," says Michael Klein of American Forest and Paper Association, a Washington lobbying group.

Environmentalists are also concerned that the forestry industry will try to block the certification arrangements that companies such as Home Depot are turning toward. "The Home Depot campaign has terrified the forest industry," says Ms. Juhasz, adding that the companies fear such programs will be implemented nationwide. "The companies will get certification outlawed as a nontariff barrier."

She cites a Minnesota decision to increase the recycled content of paper it buys for state business. But Canadian companies complained they would be ineligible under the new requirement. They threatened to take the issue to the WTO, says Juhasz, if Minnesota did not change its standards.

Environmentalists blame the WTO for other decisions they say hurt the environment. For example, the US required all imported shrimp be caught using special nets that allow sea turtles to escape. "The sea turtle is the best example of the conflict between trade and the environment," says a press release from the Sea Turtle Restoration Project based in San Francisco.

But business groups say the US sea-turtle law was flawed. The issue went to the WTO, which ruled the US law was a nontariff barrier to trade.

Mr. Esty says there's a middle ground to this trade and environment debate. For example, he argues that eliminating tariffs on agricultural products and phasing out trade-distorting subsidies would benefit the environment since it would make land use more efficient. And he would like to see the WTO eliminate all tariffs on goods and services that protect the environment.

"The old school greens said world growth stresses the environment, but the new paradigm says growth can be beneficial if it is done in ways that are good for the environment."

That's one of Home Depot's goals. But meeting that goal is not easy. A year after asking more than 5,000 suppliers to buy green-certified wood products, there is only one such item available in all Home Depots - a special-order mahogany door.

"It's something we hope to work with our suppliers over time," says Kim Woodbury, manager of environmental systems for the Atlanta-based company.

(c) Copyright 1999. The Christian Science Publishing Society