ll as consumer, environmental, and industry interests—that determine or suggest to a government minister which product categories are eligible for labelling. Within each category the scope of products is defined, and the threshold criteria a product must meet is established with the help of experts. Domestic or foreign manufacturers may, if they so wish, submit products for consideration. If the product meets the criteria of the product category, a label can be obtained and used when marketing the product, in accordance with the terms and conditions of the contract concluded with the committee or administering body.

The main objective of eco-labelling programs is to harness market forces and channel them towards promoting more environmentally-friendly patterns of production. Eco-label provides consumers with easily recognisable symbol, indicating the product environment friendliness has been assessed and approved by certain organisations or governments. Thus, it can help consumers, especial "green consumers" to make informed purchasing decisions. Meanwhile eco-label also leads to higher and higher environment consciousness of consumers. Eventually, the manufacturers will be forced to change their product process into a more environmental friendly process. If the manufacturers don’t improve the image of their product, they will lose their market. Because of its market function, Eco-label is regarded as less trade restrictive measures than bans or outright product regulation. Eco-label has increasingly become an effective instrument for harmonizing the conflict between the free trade and environment protection.

Although the eco-labelling scheme is an effective method to protect the environment with more compatible with the WTO, and most of the labelling scheme is voluntary, it is still argued that it may act as de facto trade barriers. Especially the developing countries think that the labelling scheme may often result in discrimination against foreign producers and is a non-tariff barrier to free trade in fact. They argue that the nature of the labelling scheme is discriminatory because its goal is to select only those product that have significantly less environmental impact compared with other products in their category. And also whether certain processes and production methods are, or not, environmentally sound would depend on how a national label awarding body defines the criteria for a product to be eligible for a label. Another reason for labelling program being viewed as a trade barrier is that it involves requirements that put small and foreign producers at a disadvantage because of the costs involved or other reasons.

In the past years, some disputes have arisen from the labelling schemes. We would like to introduce the dispute of Austria Mandatory Labelling Law. In 1992 in order to protect the tropical forest, the Austria parliament introduced new legislation with the aim of stopping all imports of tropical timber and tropical timber products from areas that were not sustainable managed. It requires all tropical timber and products sale in Austria must carry a label identifying them. The ASEAN24 complained to the GATT's Committee that the law did not required mandatory labelling of other types of wood and wood products imported into Austria or produced domestically. They charged the Austria law was in violation of both the "most-favoured-nation" (MFN) and "National Treatment" provisions of the GATT and was discriminatory, unjustifiable and an unnecessary obstacle to trade. While Austria argued that the labelling requirement did not constitute an obstacle to trade since product labelling per se was not a trade restriction and the law did not impose any quantitative or qualitative restriction on imports from any destination. It also alleged the law was not discriminatory in nature because it applied to any tropical timber or tropical timber product, irrespective of the country of export or origin. However, faced with

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