WTO Members Deepen Discussions on Trade and Environmental Sustainability

WTO members taking part in the Trade and Environmental Sustainability Structured Discussions (TESSD) held the first round of in-depth discussions on 17-18 May on four specific issues under the TESSD heading.

Inaugural meetings of the informal working groups took place on the themes of environmental goods and services, trade‑related climate measures, circular economy - circularity, and subsidies. Participants in the TESSD discussions agreed to set up informal working groups on the four issues as part of a 2022 work plan agreed earlier in the year.

Reflecting the inclusive nature of the discussions, the informal working group meetings received presentations and inputs from representatives from other international organizations as well as stakeholder groups. In addition, Tajikistan announced its co-sponsorship of the TESSD initiative, increasing the number of co-sponsors to 72.

The Working Group on Environmental Goods and Services discussed members' priorities regarding objectives and sectors as well as how trade in environmental goods and services can help in achieving environment and climate goals. Carlos Guevara of Ecuador and Helga Helland of Norway served as facilitators for the discussions.

A presentation was made by the International Renewable Energy Agency (IRENA) on trade-related challenges and opportunities for developing countries in the renewable energy sector to achieve climate objectives.

Members exchanged views and shared their experiences regarding challenges and opportunities for trade in environmental goods and services, including considerations regarding supply chains, technology, services, and technical and regulatory elements as well as challenges hindering the ability of developing and least developed countries to engage in and maximize benefits from trade in environmental goods and services.

In summing up, the facilitators said the discussions "illustrated the number of issues related to how trade in environmental goods and services can help achieve our climate and environmental goals … Sharing views is at the heart of TESSD and we hope that the exchanges will bear fruit to help us make progress on possible outcomes."

The Working Group on Trade-related Climate Measures discussed measures and policies, including regulatory requirements, that members were pursuing and the related objectives, design characteristics, and potential trade implications. Jean-Marie Meraldi of Switzerland and Göksu Tülümen of Turkey served as facilitators for the discussions.

The World Bank made a presentation on measuring carbon pricing and carbon content of production and transport. The United Nations Industrial Development Organization made a presentation on the Industrial Deep Decarbonisation Initiative (IDDI) and the challenges and opportunities for developing countries in decarbonizing their manufacturing industry and participating in low-carbon markets.

Members also reacted to a discussion paper by the United States on climate change and the circular economy.

The facilitators thanked the participants for their contributions, which they said would contribute to the further understanding of climate measures and policies and possible trade implications. "We have also heard about the challenges developing countries are facing regarding the implementation of trade-related climate measures," they added.

The Working Group on Circular Economy – Circularity discussed members' experiences and lessons learned from efforts to advance circular economy goals and the opportunities and challenges linked to trade and trade policies. The discussions touched on issues such as reducing unsustainable resource use, promoting resource efficiency, sustainability, safety across product lifecycles, restoring and regenerating ecosystems, and minimizing waste. Olivia Cook of Chile and Kazunari Morii of Japan served as facilitators for the discussions.

Presentations were made by the International Chamber of Commerce and various corporations providing a business perspective on opportunities and challenges with regard to trade-related aspects of the circular economy. A presentation was also made by the World Economic Forum on possible vertical and horizontal approaches for circular trade, including possible solutions for improving e-waste recycling as well as what trade policy can do to support the momentum towards a global circular economy.

The facilitators said many members "recognise the circular economy as an important policy objective for environmental sustainability, while setting different policy scopes and employing various policy tools at the national level."

The Working Group on Subsidies focused on questions relating to fossil fuel subsidies and agricultural subsidies, including how the environmental effects and trade impacts of relevant subsidies can be identified. Sveinn K. Einarsson of Iceland served as facilitator for the discussions.

The Organisation for Economic Co-operation and Development (OECD) provided an overview of the OECD Inventory of Support Measures for Fossil Fuels, methodologies for evaluating fossil fuel subsidies, and existing information and information gaps relating to such subsidies. The United Nations Environment Programme (UNEP) provided an overview of a joint report by UNEP, the UN Food and Agriculture Organization and the United Nations Development Business on agricultural support measures in the context of environmental sustainability.

The facilitator said the presentations and discussions have "been helpful to understand the information that is available to assess the environmental effects and trade impacts of subsidies". He encouraged members to "focus discussions on where they are the most relevant and where TESSD can contribute the most to these debates".

At the start of the meeting, several members took the floor to express their strong opposition to the invasion of Ukraine. The Russian delegate responded by saying that the WTO was not the proper venue for a discussion of this nature.

The TESSD discussions were launched in November 2020 with the aim of complementing the existing work of the WTO's Committee on Trade and Environment and other relevant WTO committees and bodies. In December 2021, 71 members co-sponsored a TESSD Ministerial Statement which sets out future work for the initiative in areas such as trade and climate change, trade in environmental goods and services, circular economy, sustainable supply chains, capacity building and technical assistance for sustainable trade, and subsidies. The initiative seeks to promote transparency and information sharing, and to work towards deliverables for environmental sustainability in these areas.

Additional formal TESSD meetings are tentatively scheduled to take place on 19-20 July and 26-27 October, with further informal working group meetings tentatively scheduled for 27-28 September.