China introduced its proposal to deepen multilateral discussions on the trade aspects and implications of environmental measures which have wide ramifications. China noted that trade policies are increasingly used to fulfil environmental goals and that the WTO is an important forum for trade policy deliberations. China proposed to use the Committee as a platform and suggested members start with discussions on the European Union’s Carbon Border Adjustment Mechanism at the June CTE meeting. The EU said it would study the proposal, noting it has been outlining CBAM in detail and responding to members’ questions in recent years, and that it intended to hold a dedicated information session in the coming months.
Colombia presented a document on the “principles and parameters that should guide and support policies and measures on trade and environment.” Colombia said there needs to be greater participation by developing countries in the proceedings of the Committee and proposed that members consider principles such as international cooperation, common but differentiated responsibilities between developed and developing members, and the principle of non-discrimination. Colombia invited members to an informal special session to discuss these principles and establish an action plan.
The European Union drew members’ attention to its February proposal to the WTO General Council entitled “Reinforcing the deliberative function of the WTO to respond to global trade policy challenges,” which includes a suggestion to deepen discussions in the CTE about environmental trade measures. The EU highlighted three areas as priorities: trade policy and state intervention in support of industrial sectors; global environmental challenges; and trade and inclusiveness. The EU said it intends to reach out to members on the best way forward to continue the discussions and enhance deliberations in the Committee in light of their submission.
Several other members also voiced their suggestions and views over improving the work of the Committee and the wider efforts of the WTO. Many members expressed support for enhancing transparency and deepening dialogue on domestic measures taken for climate and other environmental objectives. Several members called for closer coordination among WTO bodies on environmental matters. Members debated applying the principle of common but differentiated responsibilities depending on an economy’s level of development.
India presented a paper on the increasing use of environmental measures as protectionist non-tariff measures. India said it was concerned about four areas in particular: carbon border measures; environment-based management of minimum residue limits (MRLs) in agriculture; deforestation-related measures; and import restrictions based on the green content of commodities.
Paraguay briefed members on its analysis of members’ notifications of agricultural subsidies for environmental programmes, voicing its concern over potential “greenwashing” of government support. Paraguay suggested holdingdiscussions on improving the environmental effectiveness of these policies in the CTE and proposed that members use questionnaires to provide more information on their environmental subsidies for agriculture.
Several members provided information on environmental measures currently under domestic deliberation. The European Union provided information on European Commission’s proposal for a regulation on packaging, with the objective of reducing packaging waste. It also provided updates on other features of the EU Green Deal, noting that CBAM will be subject to the EU’s internal legislative process which will be finalized in May 2023, and that the EU regulation on deforestation will enter into force in May or June 2023.
The United Kingdom provided an update on its Due Diligence Legislation which requires businesses operating in the UK to ensure supply chains are not contributing to deforestation. The UK also reported that it is preparing to launch consultations this spring on possible policy options, including a carbon border adjustment mechanism, to mitigate against “carbon leakage” as economies take on differing carbon emission reduction commitments. Delegations were invited to participate actively.
Updates from initiatives
New Zealand provided an update on behalf of the participants in the negotiations on the Agreement on Climate Change, Trade and Sustainability (ACCTS). New Zealand said the current round of negotiations is taking place between 16 February to 26 March. New Zealand highlighted the chapter on best practice guidelines for voluntary eco-labelling, noting that this was a novel addition to free trade agreements. Members are working to conclude negotiations this year.
Kenya briefed the Committee on the launch of the Coalition of Trade Ministers on Climate last 19 January on the margins of the World Economic Forum in Davos. Kenya noted the coalition brings together 56 ministers from diverse regions and levels of development to coordinate efforts to tackle climate change through trade policy. Kenya invited more members to join the coalition.
Deputy Director-General Jean-Marie Paugam provided a summary on the event entitled “Trade Forum for Decarbonization Standards” held on 9 March in the WTO.
The Committee heard statements from the Secretariat of the Convention on Biological Diversity, the United Kingdom, the European Union and China on trade-related outcomes from the UN Biodiversity Conference (COP 15), in particular the significance of the Kunming-Montreal Global Biodiversity Framework.
The United Nations Environment Programme (UNEP) provided a summary of the joint event held on 14 March with the WTO entitled “Nature-positive trade for sustainable development: How can trade-related policies and measures support the implementation of the Kunming-Montreal Global Biodiversity Framework?” The discussions underscored that all targets in the new Framework could be supported by trade policies and that the WTO must adopt a holistic and comprehensive approach towards biodiversity. At the multilateral level, several ongoing trade policy discussions offer opportunities for improved cooperation and synergies between the global biodiversity, trade, and sustainable development agendas, including at the level of the CTE and the environmental initiatives.
Members also heard a presentation from the UN Division for Ocean Affairs and the Law of the Sea (UNDOALOS) on the recently agreed High Seas Treaty.
The WTO Secretariat presented its latest annual report on the Environmental Database (EDB) with a topic-specific focus on biodiversity. Members welcomed the report and made suggestions on improving the EDB to make it even more useful for the membership.
Members elected Ambassador José Valencia of Ecuador as the new CTE chair at the end of the meeting. Ambassador Valencia replaces United Kingdom Ambassador Simon Manley as CTE chair.
The Committee’s next meeting will be held in the week of 12 June.