WTO Members Review Draft MC12 Declaration on Trade and Environmental Sustainability

WTO members taking part in a new initiative on trade and environmental sustainability provided their first comments on 19 July on possible elements for a joint statement which participants hope to issue at the WTO’s 12th Ministerial Conference (MC12) later this year.

The draft elements for a ministerial statement discussed at the third meeting of the Trade and Environmental Sustainability Structured Discussions (TESSD) underscore the role of trade policy in helping address climate change and other environmental challenges. They also set out commitments on future work and objectives as well as a work programme for the TESSD discussions for 2022.

Launched in November 2020, the TESSD is intended to complement the existing work of the Committee on Trade and Environment and other relevant WTO committees and bodies. The initiative seeks to promote transparency and information sharing, identifying areas for future work within the WTO, support technical assistance and capacity building needs, particularly for least-developed countries, and work on deliverables for environmental sustainability in the various areas of the WTO.

The 19 July meeting began with interventions from international organizations and civil society groups which provided comments on the draft elements.

In the member-only session that followed, participants exchanged views on matters such as what issues should be addressed as part of the future work programme, how best to reflect the interests and priorities of developing and least developed countries in future work, and how to ensure the discussions evolve in a transparent manner with broad participation and input.

Members generally agreed that the draft elements served as a good basis for further work on the ministerial statement. Different views were expressed on what issues should be addressed as part of future work and how to define their scope in the ministerial statement. Among the issues discussed were the liberalization of trade in environmental goods and services and related regulatory issues and non-tariff measures, the transition to a resource-efficient and circular economy, sustainable agriculture, sustainable production and sourcing to protect forests and other ecosystems, and the environmental impacts of subsidies.

Members also discussed whether to launch dedicated discussions on how they could reach long-term climate targets and how to foster the transition to low-carbon economies in order to ensure climate-related trade measures and policies that WTO members may adopt, including border carbon adjustment mechanisms, are in line with WTO rules and principles.

Under other business, New Zealand noted the communication it circulated on 16 July regarding a proposed MC12 ministerial statement on the need for fossil fuel subsidy reform. New Zealand said phasing out inefficient fossil fuel subsidies that encourage wasteful consumption has both social and economic benefits and said it had already received positive comments on the proposal.

Australia also noted the communication it circulated on 16 July on removing barriers to international trade in environmental goods and services. Australia said that action in this area was the most widely mentioned priority of the participants in the TESSD discussions and that there were many reasons for engaging in this area, including reduced costs and increased access to advanced mitigation technologies for achieving environmental objectives.

In her concluding remarks, Ana Lizano of Costa Rica, the co-coordinator (with Canada) of the TESSD initiative, said the meeting helped provide clarity with regards to the draft elements of the proposed ministerial statement as well as whether participants were “on the right track” with the proposed text.

While the text addresses most of the participant's concerns in a pragmatic way, more fine-tuning is required. This is something the participants will address in the coming weeks and months. “We have a very good opportunity to have something meaningful for the membership,” she declared.

MC12 is scheduled to take place in Geneva from 30 November to 3 December 2021.

The next meeting of the TESSD is scheduled for 16-17 September.