Clarification of the relationship between WTO rules and environmental policy is interpreted to mean that negotiations would lead to the identification of common agreed principles for trade and environmental agreements (e.g. PPP, a version of the precautionary principle), and that the use of these principles would be better legitimised with the WTO rules framework. The impact of these clarifications within the EU would be concentrated in particular sectors, and would occur mainly in the economic sphere, resulting largely from the application of the principles to imports. To the extent that European producers could conform to the environmental standards being applied in conformity with the agreed set of principles, there would be a net economic gain in terms of import-substitution production. The environmental gains would be widely distributed in different country groups. Social benefits in terms of the application of human health protection may be linked to the application of the precautionary principle.
2. The liberalisation of trade could lead to increased economic gains and environmental losses. If, however, environmental rules were effectively applied, there could be a net environmental gain, with the elimination of subsidies which encourage over production and over-use of pollution-intensive and resource-intensive products.