Export Promotion, Trade, and the Environment: Negotiating Environmental Standards for Export Credit Agencies Across the Atlantic

Marcus Schaper, Reed College

Abstract

Conflicts between trade and environmental concerns are becoming increasingly salient. GMOs (e.g. Keilbach, Bernauer and Aerni in this volume Bernauer 2003; Isaac 2002; Toke 2004), hormones in beef (e.g. Josling, Roberts, and Hassan 1999), leg-hold traps (e.g. Princen 2002), and chemicals regulation (e.g. Selin in this volume) have all proven their potential to create transatlantic conflict. Common to these challenges are the effects of behind-the-border environmental standards on international trade. What is intended as a domestic measure of environmental or consumer protection can also represent a non-tariff barrier to trade by excluding goods, which do not meet the standards from market access. Much of the trade-environment literature focuses on the relationship of multilateral environmental agreements and the WTO rules (e.g. Eckersley 2004), the compatibility of national regulation with the WTO regime (e.g. Petersmann and Pollack 2003), or the effects of standards in one polity on those in another (cf. Vogel 1995, 1997; Busch and Jörgens 2004; Jacob et al. 2005). Less attention is paid to the harmonization challenge on the national level, in the international environmental politics literature, despite experiences with regulatory harmonization in the EU context (Héritier, Knill, and Mingers 1996; Knill and Lenschow 1998, 2000).

This chapter focuses on the US’ and Germany’s role in OECD negotiations on environmental standards for export credit agencies (ECAs) and how the reconciliation of their conflicting positions paved the way for agreement during the fall 2003 negotiations of the OECD’s Export Credit Group (ECG). In the case of environmental standards for ECAs such a narrowing of transatlantic relations and OECD politics is defensible because the US and Germany were the key players in these negotiations with each side representing the extremes of the range of preferred outcomes. The US pressed for binding international standards and a transparent review process, while the German red-green government blocked these throughout most of the negotiations, preferring to maintain the status-quo. Only when the German government’s position shifted to one cautiously endorsing binding standards and transparency, could agreement be reached in December 2003. Most other OECD members’ stances gravitated around either the German or the US position.