TWN Info Service on WTO and Trade Issues (Feb22/03)
7 February 2022
Third World Network

WTO: Renewed push to advance climate change related trade initiatives
Published in SUNS #9504 dated 1 February 2022

Geneva, 31 Jan (D. Ravi Kanth) -  Major developed countries including the European Union, Canada, and Australia among others appear determined to use the Doha Development Agenda (DDA) work program on trade and environment for the first time, ostensibly to seek the WTO General Council's approval to discuss their non-mandated, controversial climate change related trade initiatives, said people familiar with the development.

In an air-gram sent to members on 19 January, the director-general Ms Ngozi Okonjo-Iweala informed members that, for the WTO's Committee on Trade and Environment (CTE) meeting on 2 February, several items relating to "the Doha Ministerial Declaration (2001)" have been proposed.

The items include "paragraph 32 of the Doha Ministerial Declaration (2001)", especially the following items:

1. Paragraph 32 of the Doha Ministerial Declaration (2001);

A. Paragraph 32(i): The effect of environmental measures on market access, especially in relation to developing countries, in particular the least-developed among them, and those situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, the environment and development. (Item 6 of the CTE Work programme);

B. Paragraph 32(ii): the relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights. (Item 8 of the CTE Work programme);

C. Paragraph 32(iii): labelling requirements for environmental purposes. (Item 3b of the CTE Work programme);

The DG said the following items in Paragraph 33 of the Doha Ministerial Declaration will be discussed:

A. Technical assistance and capacity building;

B. Environmental reviews (Item 2 of the CTE Work programme);

Under paragraph 51 of the Doha Ministerial Declaration, she informed members that issues "on identifying and debating developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development (appropriately reflected)" will be discussed.

Under other items of the CTE work program, the DG informed members that several other items will be discussed.

They include:

A. Items 1 and 5 on Multilateral Environmental Agreements - Matrix on Trade-related Measures Pursuant to Selected Multilateral Environmental Agreements (WT/CTE/W/160/Rev.9, 19 March 2;021);

B. Item 3(a) on taxes for environmental purposes - Environmental Database 2020 (WT/CTE/EDB/20, to be issued);

C. Item 7 on exports of domestically prohibited goods;

D. Item 9 on the work programme envisaged in the Decision on Trade in Services and the Environment.

The DG sought members' suggestions and proposals on the above slate of issues, including the relations with intergovernmental and non-governmental organizations.

However, the DG did not clarify who proposed paragraphs 32, 33, and 51 of the Doha work program and the CTE work program for discussion.

She did not mention whether she is proposing these items in her own capacity or at the behest of members, said people familiar with the air-gram.

CONTROVERSIAL ANNOTATED AGENDA

Along with the discussion on several issues in the Doha work program on trade and environment, an annotated agenda was also circulated, ostensibly "only for purposes of assisting the Chair, the Secretariat, and participants, in organizing and preparing for the discussions at the forthcoming formal regular meeting of the Committee on Trade and Environment (CTE Regular) on 2 February."

The items proposed for discussion include all the controversial issues that have been discussed only by the members of the climate change related trade initiatives. These items have not been mandated either by the Doha Development Agenda, or multilaterally approved by members so far.

Under "circular economy and plastics," Australia will update " the Committee on the work of the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP)."

New Zealand "will provide an update on the joint Ministerial Statement on Fossil Fuel Subsidy Reform issued in December 2021."

Under the controversial "EU Green Deal," the European Union will provide "an update on trade relevant aspects of the European Green Deal."

The United Kingdom will provide "an update to the CTE on activities related to making supply chains more sustainable."

There are several other items that are in brackets such as "[relevant provisions of the TRIPS Agreement, Paragraph 32(ii) of the Doha Ministerial Declaration - Item 8 of the CTE Work programme]"; [labelling requirements for environmental purposes, Paragraph 32(ii) of the Doha Ministerial Declaration - Item 3b of the CTE Work programme]; and [environmental reviews, Item 2 of the CTE Work programme]".

According to the agenda, "the Secretariat will provide updates on [identifying and debating developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected, Paragraph 51 of the Doha Ministerial Declaration]".

Further, the Secretariat will provide updates on "Multilateral Environmental Agreements (MEAs), Items 1 and 5 of the CTE Work Program" such as "the Matrix on Trade Related Measures", and "the United Nations Framework Convention on Climate Change (UNFCCC)."

The United Kingdom, which hosted COP26 (the Conference of Parties to the UNFCCC) will brief the CTE on the Glasgow outcomes. The UNFCCC will also brief the CTE on COP26.

New Zealand will provide an update on behalf of participants on negotiations towards the Agreement on Climate Change, Trade and Sustainability (ACCTS).

The items of the ACCTS include: (i) [Taxes for environmental purposes, Item 3a of the CTE Work Program]; (ii) [Exports of domestically prohibited goods, Item 7 of the CTE Work Program]; and (iii) [Trade in Services and the Environment, Item 9 of the CTE Work Program].

More interestingly, Canada will provide "an update on behalf of the Coordinators of the Trade and Environmental Sustainability Structured Discussions (TESSD)."

In short, the proponents of the controversial climate change related trade initiatives will use the WTO's Committee on Trade and Environment as a platform for their rather "insidious" initiatives, said a member, who asked not to be quoted.

More disturbingly, the agenda included an annex of the items of the CTE Work Program in 1994, which was never formally accepted by members at the WTO. The only relevant mandate that members have before them is the Doha work program on trade and environment.

However, in what appears to be a rather clever "subterfuge", the proponents seem determined to bring issues that were outside the Doha trade and environment mandate, said people who asked not to be quoted.

As reported in SUNS #9496 dated 20 January 2022, the European Union's move to bring "new environmental topics" to the WTO may prove "counterproductive", according to a policy brief commissioned by the EU.

That policy brief cautioned the EU and its other allies of the controversial climate change related trade initiatives, saying that the "WTO should not be perceived as an institution capable of solving important non-trade problems."

Further, the policy brief said that pursuing trade and environment issues at the WTO would be harmful to the developing countries.

Apparently, the EU has rejected the findings of the policy brief, said people, who asked not to be quoted.

SERIOUS IMPLICATIONS OF THESE INITIATIVES

The three initiatives - the Trade and Environmental Sustainability Structured Discussions (TESSD), the Informal Dialogue on Plastics Pollution and Sustainable Plastics Trade (IDP) and Fossil Fuel Subsidy Reform - are designed to mainly push the trade and environment agenda of the developed countries who are mostly responsible for the high levels of carbon emissions.

These initiatives, without commensurate benefits to the developing countries in terms of climate finance and green technology transfers, will adversely impact the market access available to the developing countries, especially those who lack the capacities to transform their production structures.

The Doha Ministerial Declaration of 2001 has clearly mentioned "the effect of environmental measures on market access, especially in relation to developing countries, in particular the least-developed among them, and those situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, the environment and development."

The impact of these environmental measures on market access of developing countries need to be measured keeping in mind the three goals - trade, environment and development.

However, the proposals put forward under the three initiatives clearly do not speak to the developmental goals, nor will they help increase the market access of developing countries.

The proposals under TESSD, especially those related to the Agreement on Environmental Goods and Services, is nothing but an attempt to revive the stalled negotiations on an Environmental Goods Agreement (EGA) which were halted due to the lack of consensus among countries on what goods should be categorized as environmental goods.

The revival of this initiative provides no guarantee that there will be any resolution to the earlier conflict on what comprises environmental goods. This initiative has added a further complication by including environmental services.

GATS has already identified environmental services and all countries have either taken or not taken commitments on these services depending on their interests and concerns.

But this initiative goes beyond the identified environmental services in GATS and includes more services under environmental services. Instead of negotiating on the Doha mandated issues, such initiatives are diverting the attention of the negotiators and wasting their energies and resources on these negotiations which have already been rejected by consensus.

These initiatives are another attempt by the developed countries to push their trade liberalization agenda in increasing their market access in developing countries.

On plastics pollution and environmentally sustainable plastics trade, seven members have launched an open-ended informal dialogue to which all WTO members are invited to participate.

While there is no doubt that plastic-related environmental pollution needs to be monitored, is the WTO the right institution to do it?

What is required are new technologies, support for the production of substitutes for plastics, improvement in management of waste, and financial support to exporters of plastic products for their production transformation which will automatically lead to environmentally sustainable plastics trade, and not trading rules which can limit the market access of plastic product exporters which are mainly developing countries.

The developing countries need to be cautious in discussing these initiatives, especially within the WTO architecture, as there appears to be a "hidden agenda" of bringing the negotiations on these issues back into the WTO through these random initiatives, said several people, who asked not to be quoted.