Eco-Labeling

Eco-labeling program has been increasingly popular, which means the use of labels in order to inform consumers that a labeled product is environmentally more responsible relative to other products in the same category. In market with consumer preference for "green" products, a label serves as a promotional instrument. It works through raising consumer awareness about the environmental effects of the product, and thus changing consumer behavior as well as the manufacturing design of products in favor of environmentally relatively friendly products and technologies. Moreover, it is conceived as a market-oriented instrument, which does not establish any binding requirements or bans, thus has the least trade-restrictive effects.Beginning with the green revolution, the article first discussed the conflicts between environment protection and multilateral trade, through some leading cases in WTO. The article reveals the conflict between trade measures for environment protection and the primary objective and the chief rule of the WTO. It is argued that, to date, the connections between environment and trade within the framework of the WTO, in effect, remain unsolved and controversial. To further address this issue, other suggestions have been made which are either hard to reach or impractical. Thus eco-labeling with least trade-restrictive effects is recommended which is aiming to protect environment through market forces.Having emerged as an alternative to trade measures, Eco-labeling itself, argued by developing countries, may arouse problems to international trade. Thus in the third part of the article, the possible negative effects of eco-labeling is discussed. And a study on the actual effects of the program on market and trade is made, which indicates that it has not had a significant impact on the market access. And the study. does not reveal hard evidence of changes in trade flows arising from the selected eco-labeling programs.The forth part is the focal of the discussion, which focused on "three relationships" and "one trend"— the relationship between eco-labeling program and trade barriers, the WTO and other international organizations, and its development trend. This part of discussion demonstrates that eco-labeling in its present form is neither a law nor mandatory practice, thus it cannot be considered as a trade barrier. Debate on the compatibility of eco-labeling and WTO seems to be more complicated. Eco-labeling is classified into product-related-PPMs (process and production methods) based eco-labeling and npr-PPMs (non-product-related-PPMs) based eco-labeling. In each case, its compatibility with the WTO is discussed. International mutual recognition is the trend of eco-labeling, which proves to be effective in environment protection, trade promotion, and is of help to address problems in the current labeling programs highlighted by developing countries. Thus the foregoing discussion indicates that in spite of the problems in the current labeling schemes, eco-labeling can be the future resolution to reconcile environment and multilateral trade.Based on the foregoing discussion, the author makes an account of the successful eco-labeling program in practice. Canada's Environmental Choice Program (ECP). Attentions have been paid to its impact on developing countries. Implications for developing countries are particularly discussed in the end of this section.Finally, attentions are focused on China's eco-labeling program. Deficiencies in the current program are highlighted. In face of the increasing popularity of eco-labeling and its trend of international mutual recognition, efforts should be launched to further improve China Environmental Labeling and strive to catch the trend of international mutual recognition.