WTO Talks Trade and Climate Change

The new chair of the World Trade Organization’s Committee on Trade and Environment has shared ideas on how to advance thematic sessions on few topics in the complex and controversial arena of trade and climate change – where there is no clear mandate from the WTO’s recent 13th ministerial conference, said people familiar with developments.

In a June 12 email sent to delegates to the WTO’s Committee on Trade and Environment, seen by our correspondent,, Chair Erwin Bollinger of Switzerland underscored the need to “improve the dialogue in upcoming CTE meetings, starting with the meeting scheduled for June 19.

Following his bilateral consultations with members since he took over the new assignment, the Swiss envoy indicated that new approaches were being mentioned by some members, adding that the proposals would enhance the quality of discussions.

Based on his consultations with members and “also keeping in mind the topics already identified by my predecessor Ambassador Valancia (of Ecuador),” the chair said “there are 9 topics that were mentioned by at least more than one delegation and could be potentially be considered for forthcoming thematic discussions.”
He suggested the following list of topics for further discussions. They include:

Trade-related climate measures;
2. Technology transfer;
3. Sustainable agriculture;
4. Biotrade and nature-positive trade;
5. Energy transition;
6. Subsidies;
7. Environmental goods and services;
8. Intersection between trade and environment regimes and
9. Principles - Circular economy.

Three Topics First

The chair also suggested that members could commence discussions with the first three topics such as “trade-related climatic measures,” “technology transfer” which has been repeatedly raised by developing countries and “sustainable agriculture” which has been recently proposed by Brazil.

According to Ambassador Bollinger, discussions on the first three topics “would provide enough predictability and time for the organization of thematic session until middle of next year.”

At MC13 that concluded in Abu Dhabi on March 2, trade ministers failed to provide any specific mandate on controversial issues such as trade and climate change, an issue that is being addressed by the United Nations Framework Convention on Climate Change which is currently in session in Bonn, Germany.

In paragraph 15 of the Abu Dhabi Ministerial Declaration, it is stated: “In recalling the objectives in the Marrakesh Agreement and in recognising the role that the multilateral trading system can play in contributing towards the achievement of the UN 2030 Agenda and its Sustainable Development Goals, in so far as they relate to the WTO mandate, we underscore the importance of trade and sustainable development in its three pillars – economic, social and environmental.”

However, there is no clarity yet on how the mandated language in paragraph 15 would translate into hard negotiations.

Earlier, the United States and other industrialized countries, including China, launched negotiations on a proposed plurilateral environmental goods agreement that failed to materialize in end-2016, after Washington chose to not advance the negotiations in the wake of the Trump victory.

The Biden Administration has signaled its support for the “Trade and Environmental Sustainability Structured Discussions (TESSD)” and went on to underscore the need to “to harvest discussions that began in the TESSD, broaden them, and develop, where possible, concrete and practical policy options and tools that can support WTO Members’ needs.”

Recently, Washington called for discussing trade-related climate measures and the relationship between trade and climate change.  The United States said that “greater coherence and interoperability between different TrCMs could improve their effectiveness in addressing climate change, while also reducing unnecessary costs and trade tensions.”

The United States has proposed that “WTO members consider a range of options”, including a “WTO Member retreat(s)” for discussing several issues.

The issues to be discussed include:
a. Interoperability of TrCMs: understanding ongoing work and Member experiences to identify common elements across different types of TrCMs, including on options and strategies to support interoperability and coherence among different measures. This would include discussion of interoperability between different carbon price and non-price measures and outcomes from the two approaches.

b. Capturing embodied emissions: understanding ongoing work and Member experiences related to data and methodologies used for calculating embodied emissions.

The United States said that the “intent of this communication is to recognize that WTO Members are already designing and implementing TrCMs to respond to the climate crisis, and that a great deal of important discussion and analysis has already taken place at the WTO and elsewhere.”

In a proposal circulated on June 7 (WT/CTE/W/263), China argued that “there is a growing interest among WTO members in Trade-related Climate Measures (TrCMs) with significant trade implications.”

“Since last year,” according to China, “the majority of proposals submitted by members to the Committee on Trade and Environment (CTE) have been related to TrCMs. Additionally, more items on the CTE agenda are now related to TrCMs.”

It argued that “discussions have started at the multilateral level. With a view to engaging more substantive, technical, and productive discussions to further members' understanding and promote collective actions to tackle current environmental and climate challenges.”

China’s Proposal

In its proposal, China provided “some reflections and suggestions on how to advance multilateral discussions on TrCMs.”  According to China, “the WTO Secretariat should draft a compilation based on members'
submission(s) and list members' concerns and interests, with a view to identifying commonalities of members' interests, proposals and concerns on TrCMs.”

Additionally, China says, “as the Secretariat has conducted research on environment-related provisions in RTAs (regional trade agreements), it would be useful for the Secretariat to provide a background note on recent developments in the environment-related provisions in recent RTAs and bilateral trade agreements. Such compilation could inform the membership and serve as a reference for future discussions.”

China suggested “hybrid approaches to discussions” “in parallel to the current discussions in the CTE, more scenario-based, solution-oriented technical-level discussions could be held.”  

“These discussions could take place through the ongoing series of thematic meetings under the CTE, informal meetings led by the CTE Chair, or other multilateral working streams such as technical working groups, workshops, or retreats with appointed facilitators. When necessary, the discussions could be done jointly with other relevant committees or stakeholders,” China said.

It suggested that discussions could focus on the following areas in its proposal. The areas include:
A. Improving Transparency and Understanding of TrCMs by sharing national experiences and practices in designing TrCMS, with a view to developing guidance for policy design of TrCMs. “Discussions could be organized category by category, for example, economic instruments (including carbon pricing, carbon taxes and carbon border adjustment mechanisms), regulatory instruments (including regulations, standards, labelling), and other instruments (including green procurement, technology cooperation, technical assistance and capacity building). Further breakdowns within each category could be made if necessary.”

B. Enhancing Consistency and Inter-operability of Different TrCMs. Understand different data standards and underlying methodologies applied in different categories of TrCMs, with a view to reducing unnecessary data work.

C. Reducing Potential Trade Frictions. Analyze the potential trade frictions caused by different measures and discuss approaches to minimize trade and market access impact for members.

D. Promoting the Diffusion of Goods, Services, or Technologies. Find cooperative ways to support the diffusion of climate-related goods, services or technologies for the transition to a carbon-neutral global economic and trading system.

China said it recently “submitted to the TBT (technical barriers to trade) Committee a proposal to convene a thematic meeting to explore the role of the TBT Agreement in decarbonization.”

“The aim,” said China, “is to re-examine the tools for decarbonization-related work under the TBT Agreement and provide guidance to members on reducing technical barriers to trade. The communication also encourages members to share their domestic good regulatory practices on decarbonization and identify topics of common interest for further discussion in the TBT Committee.”