World Trade Organization (WTO) members discussed trade aspects of the European Green Deal and heard presentations from several developing countries on their national environmental initiatives at the meeting of the Committee on Trade and Environment (CTE) on 30 March 2021.
WTO announced Updates were also provided on ongoing preparations for the United Nations Climate Change Conference (COP26).
The European Union (EU) has briefed members on its proposed Carbon Border Adjustment Mechanism (CBAM) and other trade-related aspects of the European Green Deal. This mechanism aims to address the risk of “carbon leakage,” the EU explained; companies would shift production to countries with lower carbon costs or import products from those jurisdictions. The mechanism would also consider other countries’ efforts to reduce greenhouse gas (GHG) emissions. The EU indicated that decision-making on the Carbon Border Adjustment Mechanism is expected to begin in June 2021, following public consultations and impact assessments, with a view to implementation in 2023.
Several members called for “continued transparency” from the EU on the design of this mechanism. Others stressed the need to consider different levels of development and minimise trade distortions. The EU also reported on its initiatives regarding forest conservation and the “farm to fork” strategy, as well as its new trade tactics, which “put sustainability at the heart of trade policy”.
Canada presented discussions from a March 4 webinar on issues surrounding border carbon adjustment (BCA), saying international cooperation is critical to ensuring such measures can meet the climate goals of the Paris Agreement while ensuring a fair environment for business. Several developing countries reported on their efforts to implement domestic environmental measures.
Preparations for COP26 and MC12
The CTE took note of updates on the organization of the 2021 United Nations Climate Change Conference (COP 26) planned for November in Glasgow, United Kingdom. The Committee also received updates on members’ environmental initiatives that “aim to make a mark” at the Twelfth WTO Ministerial Conference (MC12), scheduled to be held in Geneva, Switzerland, in late 2021.
Canada, in turn, highlighted efforts by WTO members involved in the Trade and Environmental Sustainability Structured Discussions (TESSD) to develop a work plan to guide exchanges ahead of MC12. It described MC12 as the “logical target” for the group to articulate the vision of the structured discussions and deliver a ministerial declaration.
Morocco then referred to the March 29 meeting of the Informal Dialogue on Plastic Pollution and Trade in Environmentally Sustainable Plastics, a group of WTO members where it acts as a coordinator. The meeting addressed the role of trade and the WTO in combating plastic pollution, with many members seeing MC12 as a “new opportunity for the group to demonstrate progress and share a roadmap for the WTO’s work.”
New Zealand outlined plans for a joint ministerial statement at MC12 on fossil fuel subsidy reform, and briefed members on ongoing ACCTS talks, the fourth round of which recently concluded. Parties “continue to make steady progress,” it said.
Updates were also heard on the latest developments in the Multilateral Environmental Agreements (MEAs) related to chemicals and waste. Events held by members in the margins of the ETC meeting and the latest information available in the WTO environmental database were also reported.
For its part, the United Kingdom provided references on activities to make supply chains more sustainable; finally, Guatemala reported on the event it organized jointly with Finland and the International Chamber of Commerce (ICC) entitled "Sustainable business and circularity: why does sustainability make business sense?"
The Committee on Trade and Environment is the permanent forum dedicated to dialogue between governments on the impact of trade policies on the environment and of environmental policies on trade.
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