A deal is emerging at the World Trade Organization talks taking place in Seattle that is set to be a disaster for the natural environment. By late yesterday evening, it appeared that every single issue environmental campaigners have been fighting over for the past year or more is being lost in favor of increased trade and commercial interests.

Despite the powerful objections raised by thousands of demonstrators on the streets this week and despite President Clinton’s promise to integrate environmental concerns fully into the trade negotiations, a deal is being struck by U.S. and EU negotiators that defies all environmental logic, expert advice, and public opinion.

"This meeting is heading toward environmental disaster," said Brent Blackwelder, President of Friends of the Earth USA. All the indications show that the situation is extremely grim.

It now appears likely that the EU will accept a US proposal, which the EU had originally opposed, to establish a WTO working group on biotechnology products - a move that is set to seriously undermine the development of a strong international Biosafety Protocol that would have allowed countries to ban imports of genetically engineered food and seeds on health and environmental grounds.

Although the issue will only definitively be decided at the end of the negotiations, the EU Trade Commissioner, Pascal Lamy, signaled yesterday that the EU had caved in to U.S. pressure. "The EU cannot stand alone," against the U.S., he said. "If we do that, we will not get what we want" on other issues. Despite protests from European Environment ministers, who voiced their opposition Wednesday to the adoption of a biotech working group at the WTO, Lamy was defiant.

"If one thinks that negotiations consist of getting 100 percent of what one wants, then effectively one needs another negotiator if the current one cannot achieve that goal." It also became clear yesterday that the EU has accepted a U.S. proposal to reduce tariffs on non-agricultural products, including wood, fish, gems and jewels, chemical and energy products, possibly by 2004. Commissioner Lamy’s official spokesman told the World Trade Observer that the EU wants "a balanced market access package," which he said "could include elements that are of particular interest to certain countries."

The U.S. drive to reduce tariffs on wood products however is predicted to increase wood consumption and lead to increased logging and deforestation in biodiversity hotspots such as Indonesia and Malaysia, whose forests are already disappearing at a frightening rate. Similarly, the tariff reduction package that the EU is now conceding is predicted to lead to increased fisheries depletion, environmentally-destructive mining, chemical pollution and greenhouse gas emissions.

In return for EU support for the U.S. tariff liberalization initiative and proposed biotechnology working group, it emerged yesterday that the US is increasingly likely to accept the EU’s proposed MAI-style investment agreement. According to Ronnie Hall of Friends of the Earth International, the investment issue is now being discussed by the working group on what is called the Singapore issues. "It is definitely on the table." This development is serious because the proposed agreement on investment is likely to introduce rules on ‘expropriation’, ‘performance requirements,’ and ‘national treatment’ that would severely restrict governments’ ability to protect the environment.

Expropriation rules could be used to classify public health or environmental laws or increases in taxation as illegal forms of ‘expropriation’ of profits from planned investments. Performance requirements rules could prevent governments imposing investment conditions on foreign corporations, such as labeling products, limiting exports of natural resources, and other environmental requirements.

The application of national treatment rules to investment, meanwhile, would prohibit governments from targeting subsidies and support to local, environmentally-sustainable businesses, as foreign-based corporations would have to be treated as if they were national or local companies.

If, as it now seems likely, the U.S. does agree to EU demands for such an investment agreement, it will be the outcome of a backroom deal between the two major trading blocks.

For Ronnie Hall of Friends of the Earth, "The EU isn’t going to support a working group on biotechnology unless it gets something very significant back from the US in return." And that ‘something’ is investment. She is certain that "there is going to be a stitch-up between the EU and the US where investment, biotech and forests are all in the final declaration. When we came to this meeting the EU was holding strong on biotechnology and the U.S. wasn’t interested in investment. Now it looks like it is all going to cave in."

Defending this deal made behind closed doors, EU Trade Commissioner Lamy’s official spokeman told the World Trade Observer that "in a negotiation there are certain areas that we attach great importance to, and to secure our negotiating position in certain areas we will obviously have an open mind in other areas, where initially maybe we would have preferred not to go."

Environmental groups are appalled by such horse-trading. "The substance of the agreements being made here is completely the opposite of what governments said they would agree to before they came," said Tony Juniper of Friends of the Earth UK. "This is called the World Trade Organization," he said, "because every matter of principle and every democratically- made decision is tradable."

Even worse news came for environmental campaigners when it emerged yesterday that the issue of reducing environmentally-damaging subsidies for industrial fishing was close to falling off the agenda at the WTO talks, following determined opposition from the EU, Japan and Korea. In addition, all attempts to protect Multilateral Environmental Agreements from possible challenge using WTO trade rules are being resolutely rejected by the United States, which says that the issue is non- negotiable.

Furthermore, the removal of support from small-scale environmentally-sustainable agriculture in Europe and Japan seemed increasingly likely late yesterday following the removal of the key word ‘multifunctionality’ (used to assert the right to maintain support for agriculture on environmental and societal grounds) from the draft text on agriculture, and the insertion of the word "elimination" with regard to all export subsidies for agriculture.

From an environmental perspective, the situation for the environment at the Seattle trade talks now seems very bad indeed. In the words of Brent Blackwelder, "The violence you have seen outside cannot compare to the violence being done inside to the environment and to the people of this Earth."

Environmentalists are calling on all governments to stop the negotiations leading towards a new round. Instead, "We need a full independent review with the full participation of civil society to establish which bits of the trade system need reform," said Tony Juniper. "It would be in everybody’s interest to do that." For Dan Seligman, Trade Specialist at the U.S. Sierra Club, "The fate of the WTO hangs in the balance." If the WTO does not change, "it will continued to be viewed as an illegitimate institution by the vast majority of people and it will not be able to succeed."