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Info Service on Climate Change (Jun24/12) In an email sent to delegates on 12 June, seen by the SUNS, the chair, Ambassador Erwin Bollinger of Switzerland, underscored the need to “improve the dialogue in upcoming CTE meetings (starting with the meeting scheduled for 19 June). Following his bilateral consultations with members since he took over as chair of the CTE, the Swiss envoy indicated that new approaches were being mentioned by some members, adding that proposals would enhance the quality of the discussions. Based on his consultations with members and “also keeping in mind the topics already identified by my predecessor Ambassador Valencia (of Ecuador),” the chair said “there are 9 topics that were mentioned by at least more than one delegation and could potentially be considered for forthcoming thematic discussions.” He suggested the following list of topics: 1. 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 The chair also suggested that members could commence discussions on the first three topics on the list, namely, “trade-related climate measures” (which the WTO Director-General Ms Ngozi Okonjo-Iweala tried hard to bring into the Abu Dhabi Ministerial Declaration but with little success), “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 sessions until the middle of next year.” LACK OF MANDATE At MC13 that concluded in Abu Dhabi on 2 March, 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 (UNFCCC), which just concluded its latest session in Bonn, Germany. Paragraph 15 of the Abu Dhabi Ministerial Declaration merely states: “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. In some way, negotiations on trade and environment seem to be increasingly proving to be like the proverbial group of blind men who have never come across an elephant before and who learn and imagine what the elephant is like by touching it, said a former trade envoy who asked not to be quoted. Earlier, the United States and other industrialized countries, as well as China, had launched negotiations on the proposed plurilateral agreement on environmental goods that failed to materialize in end-2016, after Washington chose not to advance the negotiations in the wake of Donald Trump’s election victory, the envoy said. Now, it is not clear what is going to happen in the upcoming US elections in November, in light of the US having recently imposed 100% duties on a range of “green” goods from China, the envoy added. Nevertheless, the Biden administration has signalled its support for the controversial “Trade and Environmental Sustainability Structured Discussions (TESSD)” and went on to underscore the need 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.” US PROPOSAL Recently, the US called for discussing trade-related climate measures (TrCMs) and the relationship between trade and climate change. The US said “greater coherence and interoperability between different TrCMs could improve their effectiveness in addressing climate change, while also reducing unnecessary costs and trade tensions.” The US has proposed that “WTO members consider a range of options”, including “WTO Member retreat(s)” for discussing several issues. According to the US, the issues to be discussed include: * 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. * Capturing embodied emissions: understanding ongoing work and Member experiences related to data and methodologies used for calculating embodied emissions. The US 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.” Notwithstanding the recent actions taken by the US and the EU against China over electric vehicles, solar panels, and solar cells, China also appears somewhat keen to address trade-related climate measures. In a proposal (WT/CTE/W/263) circulated on 7 June, 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 [in] more substantive, technical, and productive discussions to further members’ understanding and promote collective actions to tackle current environmental and climate challenges,” China said its proposal provides “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 said, “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, saying that “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 added. CONTENT FOR DISCUSSIONS In its proposal, China suggested that discussions could focus on the following areas: * Improving Transparency and Understanding of TrCMs: Share 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. * Enhancing Consistency and Interoperability of Different TrCMs: Understand different data standards and underlying methodologies applied in different categories of TrCMs, with a view to reducing unnecessary data work. * 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. * 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. Citing that “a journey of a thousand miles begins with a single step”, China said that 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. China said: “The aim 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.” In short, there appears to be growing incongruence between the unilateral measures slapped by the US and the EU on China on the one side, and attempts to launch discussions on TrCMs at the WTO, said people familiar with the discussions. +
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