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By Kensington Speer, Intern, CUTS International Geneva

A roundtable convened by the International Institute for Sustainable Development (IISD) and partners discussed the role of trade and the Multilateral Trading System (MTS) in climate change mitigation and adaptation. The meeting took place during the IISD’s Trade and Sustainability Centre, which was held in parallel with the Twelfth Ministerial Conference (MC12) of the World Trade Organization (WTO).

The event consisted of two parts. Alice Tipping, Lead, Sustainable Trade, IISD, moderated the first part of the session. Speakers presented the progress made in tackling climate change in the MTS through various WTO initiatives.

Mary Ng, Minister for International Trade, Export Promotion, Small Business and Economic Development, Canada, discussed the work of the Structured Discussions for Trade and Environmental Sustainability (TESSD), including their informal working groups on Environmental Goods and Services (EGS), trade-related climate action , circular economy and environmentally harmful subsidies. She emphasized the initiative’s goal of creating an international trade policy to facilitate the “transition to climate-neutral resource efficiency and circular economy while achieving the SDGs”. Ng pointed out that TESSD will conduct a high-level inventory in late 2022.

Wendy Matthews, Department of Foreign Affairs and Trade, New Zealand, spoke at the WTO on Fossil Fuel Subsidy Reform (FFSR). She explained how fossil fuel subsidies distort trade and investment decisions and make it more difficult for renewable energies to compete in the energy market. Recent advances towards such reform, she said, include increased membership and co-sponsorship of FFSR at the WTO, recognition of the need for FFSR at the Glasgow Climate Change Conference and the move away from fossil fuel use by many Asia-Pacific Countries. Matthews hoped that more specific FFSR guidelines would be made before MC13.

Daniel Legarda, Deputy Minister for International Trade, Ecuador, discussed the WTO Informal Dialogue on Plastic Pollution and Clean Plastics Trade (IDP). Legarda called on the WTO to address plastic pollution, highlighting the recent UN Environment Assembly (UNEA) resolution that launched the process towards an international legally binding instrument on plastics. He noted that the IDP working groups will meet in July 2022 to have more structured discussions on plastic pollutants.

Aik Hoe Lim, Director of the WTO’s Trade and Environment Division, stressed that the founding agreement of the WTO “fixes” the link between trade and the environment. He said the WTO’s Committee on Trade and Environment (CTE) is acting as an “incubator for new directions related to the circular economy, plastic pollution and climate change,” including the original proposal for the ongoing MC12 fisheries subsidy negotiations.

Ieva Baršauskaitė, Senior Policy Advisor, IISD, moderated the second part of the session. Panellists discussed how multilateral trade initiatives protect biodiversity, help curb overfishing, enable adaptation to climate change, facilitate the decarbonization of industries and economies, and help reduce plastic pollution.

Beatriz Fernandez, Associate Program Management Officer, Environment and Trade, UN Environment Program (UNEP), explained how trade can play a role in protecting global biodiversity. She cited removing subsidies, preventing trade that harms biodiversity and tackling deforestation as ways the WTO can use trade measures to help conserve biodiversity.

Isabel Jarrett, manager of The Pew Charitable Trusts, said the MC12 fisheries negotiations are a “historic opportunity to show that multilateral trade can deliver environmentally sustainable outcomes.” She stressed the need for a binding agreement that could serve as a “blueprint for future agreements and WTO reform” and called for creative thinking and negotiating strategies on the issue.

Prerna Prabhakar, Program Associate, Council on Energy, Environment and Water (CEEW), outlined three characteristics of the trade-environment nexus:

  • The economies of scale: exports lead to an increase in emissions;
  • The compositional effect: trade in environmental goods and services (EGS) benefits the environment; and
  • The technology effect: Trading partners exchange environmentally friendly technologies.

Prabhakar advocated harmonization of EGS product classification, reduced EGS tariffs, technology sharing to build capacity, and investment in an environmentally literate workforce.

Jan Yves Remy, Director of the Shridath Ramphal Centre, University of the West Indies, stressed that Small Island Developing States (SIDS) – some of the countries most affected by climate change – deserve a central voice in shaping green trade policies. Remy listed five ways to achieve this goal: 1) identifying trade-environment links in SIDS; 2) harmonization of climate protection agendas of international organizations; 3) coordination between WTO work programmes; 4) maintaining climate change as a separate issue of interest at the WTO; and 5) the WTO recognizes SIDS as a “separate negotiating group”.

Pierre Leturcq, Senior Policy Analyst, Institute for European Environmental Policy (IEEP), highlighted the Border Carbon Adjustment (BCA) as a legitimate mitigation policy within the framework of the Paris Climate Agreement and advocated its adoption at multilateral level. He acknowledged that the EU’s BCAs are currently “sub-optimal”, with the potential to be “chaotic and uncoordinated”, leading to exclusionary bilateral deals and entailing unnecessary adjustment costs for developing countries.

Carolyn Deere Birkbeck, Director of the Forum on Trade, Environment and the SDGs (TESS), discussed how the WTO’s trade measures can prevent plastic pollution. She said trade in plastic waste often goes to countries with poor waste management, noting that WTO members have made progress on the issue through IDPs working to assign “concrete, pragmatic results” to reducing plastic pollution achieve. She also stressed that circular economy policies, import restrictions and bans on harmful plastics, international policy harmonization and strengthening amendments to the Basel Convention on plastic waste can prevent plastic pollution.

The IISD organized the June 14, 2022 Roundtable in partnership with TESS, UNEP, The Pew Charitable Trusts, The Shridath Ramphal Center at the University of the West Indies, IEEP and CEEW.

MC12 met June 12-15, 2022 in Geneva, Switzerland. [IISD Trade and Sustainability Hub] [IISD Knowledge Hub Sources]

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