WTO - Tackling Trade-Related Climate Measure

Colombia, one of the richest biomass countries, has cautioned about the rising wave of international tensions if trade-related climate measures are not properly addressed at the World Trade Organization.

At a workshop convened on the margins of the WTO’s Committee on Trade and Environment meeting on Wednesday, Colombia’s trade envoy Ambassador Mauricio Alberto Bustamente Garcia suggested that differences in the approach to trade-related climate measures (TrCMs) could generate international tensions that need to be managed properly.

Otherwise, there could be negative effects that could undermine climate efforts and marginalize vulnerable economies and affect the functioning of the multilateral trading system, he is understood to have warned.

Colombia, he said, will work hard for international cooperation on trade “to ensure such measures are WTO compatible and development-friendly,” while managing the overall climate ambition.

During the workshop, the forum on Trade, Environment and United Nations Sustainable Development Goals, presented a detailed report on “principles for consideration in the design and implementation of TrCMS and policies.”

Discouraging Trade that Contributes to Climate Change
The report underscored the need for discouraging production and trade that contribute to climate

change, including “market-correcting measures on imports” contained in the border carbon adjustment and import restrictions or bans on high emissions intensity products.”

According to the report, “encouraging production and trade that support climate change mitigating and adaptation,” including trade preferences or market access concessions on goods complying with specific climate requirements.

More importantly, for addressing both mitigation and adaptation, it is important to remove “tariffs and non-tariff measures on climate-friendly goods, services, and technologies, and prohibit the use of trade remedies on climate-friendly goods.”

Among the approaches suggested for addressing TrCMs, the report says “a key part of the approach is that the different principles of International Law relevant to TrCMs should be understood as cumulative and simultaneously applicable in a mutually supportive and coherent manner, giving full effect to all relevant parts of International Law, in so far as possible.”

Paris Agreement
Surprisingly, the report’s findings are apparently not properly anchored in the principles laid out

in the 2015 Paris Climate change agreement, especially the common but differentiated responsibilities and capacities, said people familiar with the report.

In contrast to the TESS report, China has called for dedicated meetings at the WTO to address the challenges posed by The European Union’s carbon border adjustment mechanism and other border adjustment measures that are on the anvil.

On Tuesday, China held a seminar on “energy transition and the role of trade policy” during the WTO’s environment week. While sharing China’s experiences, China’s trade envoy to the WTO Ambassador LI Chenggang pointed out that “China’s experiences with energy transition had shown that open and inclusive international trade environment has positive significance on improving accessibility and affordability of environmental goods and services.”

Ambassador LI emphasized that “China is ready to support the WTO to play a better role by enhancing coordination of trade policies and promoting the reduction of trade barriers. By doing so, the WTO can actively contribute to global low-carbon development especially for the developing countries.”