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October 5, 2021 share this Swedish event Exploring opportunities for trade and climate agreements Photo credits: @EnvatoElements tells highlights Participants discussed how trade can help achieve the goals of the Paris Agreement through multilateral and plurilateral efforts. They heard an update on the negotiations on the agreement on climate change, trade and sustainability and considered challenges facing developing countries in achieving the necessary climate ambition found in low-carbon development strategies.
The Swedish Ministry of Foreign Affairs (MFA) organized an event that examined how the World Trade Organization (WTO) can contribute to tackling climate change and to a green recovery from the covid-19 pandemic through multilateral or plurilateral negotiations on issues that are important for climate change. The participants discussed the possibilities for a trade and climate agreement, and what it could contain.
The session was convened as part of the WTO Public Forum 2021 on 1 October.
Robert Watt, Stockholm Environment Institute (SEI), moderated the session. He noted the urgent need and opportunity for international trade institutions to help achieve climate change goals.
Krister Nilsson, State Secretary, Foreign Trade and Nordic Affairs, Sweden, highlighted the forthcoming WTO’s Twelfth Ministerial Conference (MC 12) and the Glasgow Climate Change Conference (COP 26), the arenas that provide opportunities to focus on the subject. He pointed to the previous example of Sweden, which reduced its greenhouse gas (GHG) emissions by 24% between 1990 and 2019 while tripling gross domestic product (GDP) and reforming its export credit scheme in line with climate goals.
Emilie Eriksson, Swedish Board of Trade, passed on the results of their forthcoming report on how the trade regime can contribute to achieving the goals of the Paris Agreement. She said the report focuses on liberalizing trade in environmental goods and relevant services – by lowering tariffs and non-tariff barriers and allowing access to market access – and on reducing subsidies for fossil fuels. With regard to environmental goods and services, the magazine examines which goods and services can be included in an agreement and proposes several new categories. It also discusses how to address non-tariff barriers, for example through mutual recognition of conformity assessments and international harmonization of product standards. When thinking about the legal avenues for an agreement, Eriksson argued that a plurilateral agreement would be preferable, but perhaps difficult to achieve because it requires consensus, and therefore alternatives, such as a reference paper type, are also being explored. She said the magazine will be available in the coming months here.
In the ensuing discussion, Eriksson noted that the need for a critical mass of parties is low in agreements on environmental goods and services, as the parties would benefit from commitments to each other. However, she said that critical mass is crucial for the reform of fossil fuels to ensure that commitments do not lead to leakage of emissions to other producers.
Brett Longley, Ministry of Foreign Affairs and Trade, New Zealand, offered an overview of the work on the Climate Change, Trade and Sustainability Agreement (ACCTS) – a plurilateral negotiation effort currently under way among six WTO members – New Zealand, Costa Rica, Fiji, Iceland , Norway and Switzerland. The background to the ACCTS, he said, is a conviction that trade policy and law can contribute to climate solutions and a recognition that multilateral negotiations are “frightening and protracted if they can be completed at all.” Negotiations, which after six rounds are in the stage of consolidated text, focus on environmental goods, environmentally relevant services, fossil fuel subsidies and voluntary eco-labeling. Longley listed preliminary lessons, including the need for a wide range of participants, a focus on providing in-depth information to negotiators, the value of virtual negotiations and developing countries leading the discussion on development aspects. He noted that the ACCTS is designed to ultimately be open to all willing WTO members and to support multilateral rules and institutions.
Claudia Mvula Pollen, Consumer Unit Trust Society, Zambia, described the challenges facing developing countries in achieving the necessary climate ambition found in low-carbon development strategies. Least Developed Countries (LDCs), she argued, are primarily concerned with development and achieving middle-income status. To the extent that climate goals overlap, these efforts are very much about adapting to climate change, rather than reducing greenhouse gas emissions, which are usually few. Nature-based solutions, such as forestry and agriculture, and blue-coal ecosystems that provide coastal and marine catches of coal are in line with this move, she noted.
Among the significant challenges, Mvula Pollen noted the lack of access to finance, a crippling digital divide and external debt that have ballooned during the COVID-19 crisis. Given their relative lack of fiscal and technical capacity to facilitate a low-carbon transition, she argued, few LDCs are keen to link trade and environmental issues in the WTO, provided their export flows will ultimately suffer.
In the ensuing discussion, she noted that although reduced taxes on environmental goods and services may benefit the least developed countries, the main obstacles to distribution and dissemination are at national level. On that question, Longley pointed out that many LDCs disproportionately rely on tariffs as a source of revenue for the state. [SDG Knowledge Hub Sources] [WTO Public Forum 2021]
Related events Twelfth WTO Ministerial Conference at Glasgow Conference on Climate Change (UNFCCC COP 26)
SDG
13. Climate action
17. Partnership for the objectives
SDG 13. Climate action 17. Partnership for the objectives
Questions
Energy, governance, other energy sources, sustainable development, agriculture and food security, forests and REDD, seas and coasts, economics and investment, climate change, adaptation, constraints
Global partnerships
Funds for implementation, financing, trade with global partnerships
Actor
Stakeholders and larger groups, national government actors
Actions
Meeting measures
Regions
Africa, Europe, Latin America and the Caribbean, Southwest Pacific, Mexico and Central America, South Africa, SIDS, Pacific
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