climate change

The WTO and the environment — will the 2020s be different in terms of trade policies that are environmentally supportive?

· November 4, 2021 · 12th Ministerial Conference, climate change · , , , , · No Comments

With the world rapidly approaching the point of no return on rising temperatures, can an organization like the WTO characterized by negotiating paralysis play a meaningful role in seeing that trade rules support sustainable growth and a livable planet in a timely manner?. Recent history would suggest the answer is no or at least not in a timely manner.

Fisheries subsidies negotiations have dragged on for more than two decades, suggesting that even if a robust trade and environment work program is agreed to at the WTO’s 12th Ministerial Conference, the chances of meaningful progress in the current decade are modest at best.

The negotiations for an environmental goods agreement amongst 17 countries and groups accounting for 90% of trade in environmental goods which began in 2014 was essentially discontinued in 2016 despite the obvious global benefit from tariff reductions on the trade in goods that can improve the environment. While many have urged the restart of the talks, it is unclear whether talks will restart and how quickly they could conclude.

There are no ongoing negotiations to address the need to reduce the carbon footprint of industry and agriculture despite some 69 countries having adopted some form of carbon price and the impending start of carbon border adjustment measures (“CBAMs”) by some WTO Members. A global agreement on a carbon price is aspirational at this point without negotiations agreed to or started. Countries working to reduce carbon emissions are concerned about “leakage” of production and jobs to countries with low standards ensuring that there will be CBAMs imposed by some. Some WTO Members are threatening retaliation if such measures are adopted. So the 2020s will likely be a period of conflict among WTO Members on the topic instead of being a period of time in which the WTO and its Members are able to make a critical contribution to controlling the global warming crisis.

Efforts at plurilateral agreements (so-called Joint Statement Initiatives or JSIs) which include some in the environmental area (e.g., marine plastics pollution) are not certain to become part of the WTO, facing opposition from India and South Africa and others.

So recent history does not shout out that the WTO will play an important role in addressing the existential threat flowing from global warming.

This is not to say that the WTO Director-General isn’t advocating for trade to play its role in addressing the problems. Moreover, the Secretariat is attempting to generate information on the role trade can play in addressing global warming through a series of information notes. See, e.g., WTO news, DG Okonjo-Iweala highlights trade’s role in ambitious and just climate action at COP26, 2 November 2021, https://www.wto.org/english/news_e/news21_e/clim_02nov21_e.htm; WTO news, WTO issues information briefs on trade, climate, related issues with COP26 talks underway, 3 November 2021, https://www.wto.org/english/news_e/news21_e/clim_03nov21_e.htm. The press release reviewing DG Ngozi’s statement is copied below.

“Trade can and must make a contribution to a comprehensive climate action agenda, Director-General Ngozi Okonjo-Iweala declared in her engagements with world leaders and stakeholders at the United Nations COP26 Climate Summit in Glasgow, Scotland, highlighting the need for ambitious yet fair commitments that ensure a green transition that is just and inclusive to all economies.

“The Director-General highlighted trade and the WTO’s role in a wide breadth of approaches to climate action in her panels and bilateral meetings, covering carbon emission reductions, the conservation of forests as critical carbon sinks, climate adaptation, and finance.

“On carbon reduction and pricing, she championed a coordinated approach at the high-level event organized by Canada and the Carbon Pricing Leadership Coalition, saying: ‘Let’s move towards a global carbon price. We have a great deal of fragmentation and we are hearing increasingly from businesses that they are finding regulations difficult to navigate and sometimes it results in higher prices for consumers and others. We also have members who are afraid this measure is somehow disguised protectionism which will prevent them from selling products abroad. Their issues need to be respected as we develop these systems.’

“’The WTO provides a forum where we can initiate this dialogue and involve developing and least-developed countries in the conversation. Leaders should task the International Monetary Fund, Organisation for Economic Co-operation and Development, World Bank and the WTO to work together and come up with a global approach,’ she said.

“Halting deforestation and establishing sustainable markets for agriculture must also be part of the comprehensive trade and climate agenda, she said at a session of the World Leaders Summit on Forests and Land Use, organized by the United Kingdom, host of COP26, and the UN Framework Convention on Climate Change. WTO members have already notified an increasing number of policies relating to forestry management (514 measures from 2009 to 2019) as well as sustainable agriculture management (over 1,200 measures). However, more action is needed, such as reforming subsidies that create perverse incentives for market actors to deplete natural resources, the Director-General said.

“At the Africa Adaptation Acceleration Summit, moreover, the Director-General said: ‘Adaptation for Africa must be a priority for the international community. This region contributes the least to emissions but suffers the most. Climate finance for Africa to meet adaptation costs must be ramped up.’

“’We also need to put in place trade policies to cushion against and adapt to the negative impacts of climate change. Trade is part of the solution,’ she said, noting the need for trade to ensure food security in the face of climate threats, provide access to adaptation technologies, and create synergies in Aid for Trade and climate finance.

“The Director-General will also underline the importance of support for developing countries and least developed countries (LDCs) at the 3 November event organized by the United Kingdom on mobilizing climate finance.”

The five information papers released from the Secretariat on November 3, 2021 are:

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°1, MAPPING PAPER: TRADE POLICIES ADOPTED TO ADDRESS CLIMATE CHANGE, https://www.wto.org/english/news_e/news21_e/clim_03nov21-1_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°2, CLIMATE CHANGE IN REGIONAL TRADE AGREEMENTS, https://www.wto.org/english/news_e/news21_e/clim_03nov21-2_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°3, TRADE RESILIENCE IN THE FACE OF A RISING BURDEN OF NATURAL DISASTERS, https://www.wto.org/english/news_e/news21_e/clim_03nov21-3_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°4, CARBON CONTENT OF INTERNATIONAL TRADE, https://www.wto.org/english/news_e/news21_e/clim_03nov21-4_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°5, AFRICA UNDER A CHANGING CLIMATE: THE ROLE OF TRADE IN BUILDING RESILIENT ADAPTATION IN AGRICULTURE, https://www.wto.org/english/news_e/news21_e/clim_03nov21-5_e.pdf.

A former Deputy Director-General of the WTO, Alan Wolff, in comments to the Harvard JFK School last week, identified a third required outcome of the WTO’s 12th Ministerial Conference (besides a statement on trade and health and the conclusion of the fisheries subsidies negotiations) to be —

“3. A clear pledge to deal with trade and climate, and other environmental issues (marine plastics pollution, fossil fuels, etc. – this last, probably unspecified).

“• The effort is likely to take the form of an open plurilateral negotiation, a joint statement initiative. This is now a path more often chosen, as agreement among 164 disparate sovereigns is becoming close to impossible to achieve.”

See Defining Success for MC12, Notes for remarks of Alan Wm. Wolff, Peterson Institute for International Economics, Harvard JFK School, 29 October 2021, https://www.piie.com/sites/default/files/documents/wolff-2021-10-29.pdf (page 3).

While the start of a JSI on trade and climate is the most that can be hoped for at the Ministerial, even if achieved, the question will be can progress be made quickly enough to affect global warming. The fact that the scope of any such negotiations is uncertain strongly supports the view that efforts at the WTO on a plurilateral or multilateral basis will be too limited and too late to make a difference.

This will likely mean any meaningful movement will be implemented by individual Members or potentially small groups and probably occur outside of the WTO. In the absence of global or plurilateral agreements, actions by individual Members will be needed but almost certainly not enough.

Let’s hope that the above analysis proves too pessimistic. For our children and grandchildren, a lot depends on a global robust response to global warming in many policy areas, including trade.

The WTO’s 12th Ministerial Conference in Late November – early December 2021 — the struggle for relevance

· September 18, 2021 · 12th Ministerial Conference, agricultural trade, Appellate Body reform, climate change, COVID-19 vaccinations, electronic commerce and digital trade, Fisheries Subsidies negotiations · No Comments

As the end of year 27 approaches since the WTO commenced operation, the struggle for relevance in a significantly changed world continues for the organization that is supposed to be the negotiating forum for international trade rules and for ensuring compliance with such rules. The current Director-General of the WTO has been working with Members to try to achieve positive results by the 12th Ministerial Conference scheduled to commence on November 29. The jury is out on whether WTO Members will be able to find sufficient common ground to permit a successful Ministerial.

While there has been broad agreement by WTO Members that reform is needed, there is no agreement as to what reform is needed as the 164 WTO Members have long since lost a common vision of the mission of the WTO. The lack of a common vision has been complicated by the rise of nonmarket economies like China and the abandonment of market principles by many either in sectors or more broadly.

A consensus system for decision making stifles rapid movement in addressing new challenges/opportunities and has permitted delay to characterize all aspects of the business undertaken at the WTO. For businesses, the WTO is not where pressing new issues get resolved or even addressed as a general matter.

Rules on electronic commerce are being pursued by a group of willing Members with questions and challenges presented by those not wishing strong rules to be pursued on a plurilateral basis. The same is true for other plurilateral initiatives of potential importance to updating the rule book.

The only multilateral negotiation ongoing, on fisheries subsidies, has dragged on for 20 years and remains mired in an effort by many to escape the disciplines being proposed to save marine life in the oceans.

Efforts from the Doha Development Agenda to continue reform and liberalization in agriculture have had some successes in terms of curbing export subsidies but has not been able to deliver significant liberalization through tariff reductions and have faced pressure from India and others to roll back the liberalization agreed to in the Uruguay Round through special rules on some topics. It is unclear that Members will actually find the desire to move agriculture forward by the 12th Ministerial.

The many trade challenges flowing from climate change are not yet central to the efforts of the organization but will increasingly occupy governments and companies and will complicate ensuring the relevance of the WTO moving forward.

While the COVID-19 pandemic has presented challenges to the operation of the WTO in terms of in person meetings and presented challenges and opportunities to have trade rules facilitate movement of medical goods versus compound trade problems flowing from efforts to control the pandemic, the effort by India, South Africa and others to get a broad based waiver to TRIPS obligations during the pandemic has generated little forward movement in terms of getting more vaccines to low- and middle-income countries while occupying a lot of band width in terms of Member energies at the WTO.

As is increasingly clear, while there have been production issues for some companies and while India’s need for vaccines in country led to its cutting off exports to COVAX and many countries, vaccine production in 2021 will exceed 10 billion doses (UNICEF’s COVID-19 Vaccine Market Dashboard visited on September 15, 2021 showed 6.077 billion doses as having been distributed by that point with capacity to produce vaccines at 4.5 billion in the first half of 2021 and 8.6 billion in the second half of 2021). In late June 2021, the International Federation of Pharmaceutical Manufacturers and Associations presented information at a WTO event that COVID-19 vaccine production in 2021 would likely be 10-12 billion doses. Similarly, the CEO and Founder of Airfinity prepared estimates for the WTO which showed global production could reach 11.856 billion by the end of the year. See WTO News, COVID-19 Vaccine Supply Chain and Regulatory Transparency Technical Symposium, June 29, 2021, https://www.wto.org/english/tratop_e/trips_e/technical_symposium_2906_e.htm (talking points of Ms Laetitia Bigger, Vaccines Policy Director, International Federation of Pharmaceutical Manufacturers and Associations and presentation of Mr Rasmus Bach Hansen, CEO and Founder, Airfinity.

Thus, the pressing issue for getting the world vaccinated is getting vaccine doses produced distributed to markets in need. That need has not and is not likely to be met through efforts at large scale waivers from TRIPS obligations which will not change the reality on the ground in 2021-2022.

The WTO along with the WHO, IMF and World Bank have held various events and issued joint statements seeking greater production, addressing production bottlenecks and getting expanded investments in areas of the world with limited supplies. Many governments and many manufacturers have provided some level of cooperation in expanding production and shipments to low- and middle-income countries. See, e,g,, International organizations, vaccine manufacturers agree to intensify cooperation to deliver COVID-19 vaccines, 16 September 2021, https://www.wto.org/english/news_e/news21_e/covid_16sep21_e.htm.

On dispute settlement, the two tier system embodied in the Dispute Settlement Understanding has unravelled as a range of important concerns raised by the United States over the last two decades have not been addressed meaningfully by WTO Members, leading to U.S. blockage of replacing Appellate Body members over recent years and the inability of the Appellate Body to consider appeals once the number of members declined below 3. While many WTO Members continue to seek a restart of the Appellate Body, it is clear that there will be no restart without serious reform. Such reform is unlikely to be achieved in the short term. The European Union which has been one of the challenges in terms of meaningful DSU reform has been making statements that they are now ready for fundamental reform. See, e.g., Financial Tribune, EU Calls for Urgent WTO Reforms, September 18, 2021 (“Dombrovskis said he was ready to consider a major shake-up of the WTO’s dispute settlement system, news outlets said.”), https://financialtribune.com/articles/international/110329/eu-calls-for-urgent-wto-reforms. So while the EU’s apparent changing view will be helpful, it is not clear if it will be sufficient to change the dynamics in Geneva.

Conclusion

There is a lot of work going on in Geneva with efforts to conclude the fisheries subsidies negotiations and achieve some resolution on the TRIPS waiver issue by the Ministerial in late November. There has also been progress made in various plurilaterals but questions have been raised as to whether plurilaterals can occur within the WTO if there is not consensus to include. The reform proposals on issues like industrial and agricultural subsidies, state owned enterprises, eligiblity for special and differential treatment and many others will not be resolved by the Ministerial and will not likely be part of an agreed agenda going forward. Agriculture and dispute settlement will be unlikely to see significant (agriculture) or any (dispute settlement) movement by the Ministerial.

Thus, while the jury is out on whether the WTO will remain relevant in a rapidly changing world, the challenges the WTO faces are daunting and the odds don’t favor success in today’s environment. Being an optimist, I am hopeful that the above analysis will prove wrong and the 12th Ministerial will start the process of a more relevant WTO. Here’s hoping.

_______________________________

This is my first post since May 17. I have been taking care of personal business the last four months and had included a note in the “About” page indicating my next post would be in September.

USTR speech on trade and the environment

· April 16, 2021 · climate change · , , · No Comments

Ambassador Katherine Tai spoke on April 15, 2021 at an event sponsored by the Center for American Progress (“CAP”). Her speech provided a glimpse into the Biden Administration’s expectation for the role trade can play in addressing climate change.

While the speech does not include any reference to a carbon tax or border adjustment mechanism to help address carbon leakage or call for a resumption of the Environmental Goods Agreement negotiations, it nonetheless provides an identification of some of the issues of pressing concern including illegal logging, over fishing (tied in large part to fisheries subsidies), and pollution of oceans (including massive amounts of plastic dumped in the oceans), air and water.

Amb. Tai’s speech also reviews the active engagement by the Biden Administration in pushing for greater ambition among trading partners in reducing emissions, including next weeks Summit on Climate. Special Envoy for Climate John Kerry has been meeting with world leaders ahead of the Summit to seek more aggressive action by major emitters. For the United States, legislation enacted to date and being pursued by the Biden Administration has the ability to make major contributions to reduced emissions by the United States.

Amb. Tai reviews the historic failure to include strong environmental protections in trade agreements and the need to change that going forward as well as reflecting on progress in the United States over the last fifteen years in addressing environmental issues in trade agreements. The world needs to do better. “Going forward, trade has a role to play in discouraging the race to the bottom and incentivizing a race to the top. We must conserve the resources we do have – and work with our trading partners to do the same – to both mitigate and adapt to climate pressures.” See USTR, Remarks from Ambassador Katherine Tai on Trade Policy, the Environment and Climate Change, April 15, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/april/remarks-ambassador-katherine-tai-trade-policy-environment-and-climate-change. Ambassador Tai’s full speech is copied below.

“Thank you, John, for that very kind introduction. You have worked tirelessly to protect the environment and stop climate change throughout your career. 

“Your leadership, and the great work of so many brilliant leaders here at the Center for American Progress, has fundamentally changed how our country, and the world thinks about these issues. 

“We owe you a debt of gratitude, and I know that we can count on your vocal advocacy in the days ahead.

“It’s an honor to join you today and lay out my vision for using trade policy to address one of the biggest challenges we face.  

“The science indicates that, the window of opportunity to prevent a catastrophic environmental chain reaction on our planet is closing fast. And the United States must be a leader in the collective effort to work toward a global solution. 

“From his first days in office, President Biden has taken action to restore American leadership. He and Vice President Harris have made clear that protecting our environment and addressing climate change are core pillars of the Administration’s Build Back Better agenda. 

“The President immediately rejoined the Paris Agreement and signed a sweeping Executive Order to begin tackling the climate crisis. The President made it abundantly clear that we will take a ‘whole-of-government’ approach to address this challenge – and that we’re going to re-engage the world from a position of strength. 

“As we do so, we will be mindful of our commitment to environmental justice in addressing climate change, recognizing that this collective challenge requires a collective solution. What we do here at home must be reflected in what we do abroad. Our domestic efforts cannot lead to the exportation of polluting industries to countries with lower standards.

“The historic investments in the American Rescue Plan are already helping to stabilize the economy and bring the pandemic to an end. The American Jobs Plan is the next step in our effort to reimagine and rebuild a new economy. 

“It will invest in our infrastructure, create good paying jobs, and position the United States to out-compete any other nation.  The President’s plan recognizes the critical nexus between these investments and the climate crisis, and it would support the innovation and technological breakthroughs that will make our country the leader in clean energy technology and jobs.

“These plans are only one part of our strategy. 

“Next week, the President will welcome 40 world leaders to a Summit on Climate to underscore the urgency – and economic benefits – of taking collective action.  The United States will also announce an ambitious 2030 emissions target as our new Nationally Determined Contribution under the Paris Agreement.  

“President Biden has urged leaders to use the Summit as an opportunity to announce even bolder ambitions.  Comprehensive action is the only way forward, and this challenge must be at the center of U.S. foreign policy, national security, and economic policy. 

“USTR sits at the intersection of all three areas, and I am honored to lead this agency and the dedicated public servants who will answer the call.  

“During my confirmation hearing, I made clear that protecting our planet would be a top priority. For too long, we believed that trade liberalization would lead to a gradual improvement in environmental protection as countries grew wealthier from increased trade flows. 

“But the reality is that the system itself creates an incentive to compete by maintaining lower standards. Or worse yet, by lowering those standards even further. 

“Many companies make sourcing decisions based on these artificially low costs, creating pressure on competing countries to ask if they, too, should suppress environmental protection to attract investment. 

“This is what people mean when they say the rules of trade promote a race to the bottom. 

“Fortunately, the investing community is demanding more information about companies’ climate and other environmental risks. CAP knows this issue well, having hosted Acting SEC Chair Allison Herren Lee just last month, as the Commission steps up its work on corporate disclosures around environmental and social governance. 

“Even as investors take a greater interest in companies’ environmental risk exposure, the multilateral trading system has no rules to address the corporate incentive to participate in the race to the bottom. Rather, the environmental protection measures of WTO members are exposed to challenge. 

“While countries can avail themselves of what amounts to an affirmative defense, that defense has proven difficult to invoke successfully. This is part of the reason why, today, the WTO is considered by many as an institution that not only has no solutions to offer on environmental concerns, but is part of the problem. 

“For many decades, efforts to integrate environmental concerns through trade agreements were largely dismissed as wrongheaded, bleeding heart attempts to incorporate “social issues” in the trading system. According to this line of thinking, environmental issues are either irrelevant, or tangentially related, to economics or trade.  

“The view that environmental issues are not an inherent part of trade ignores the reality that the existing rules of globalization incentivize downward pressure on environmental protection. This puts countries with higher environmental standards at a competitive disadvantage. That is not a social issue: it is an economic incentive. 

“It doesn’t have to be this way. 

“For nearly fifteen years, the United States has enjoyed bipartisan support for including basic, enforceable labor and environmental rules in bilateral and regional trade agreements. This bipartisan support exists precisely because these issues are economic, not social. 

“The goal is to ensure that we and our trading partners are engaged in fair competition that does not suppress environmental protection. The United States has been, and remains, the leader in rewriting trade rules so that they move us toward this model of fair competition. 

“USMCA is the most recent example of our own evolution. The updated agreement now includes the most comprehensive environmental standards of any U.S. trade agreement – and, I would argue, any trade agreement. Critical environmental provisions reflected in the USMCA include strong rules to address:

“•    wildlife trafficking, 
“•    illegal logging and fishing, 
“•    fisheries subsidies 
“•    marine litter, and
“•    air and water pollution

“I am all too aware that however laudable the rules, they must actually be enforced. 

“Environmental groups have complained for years that chronic lack of enforcement of these rules fundamentally undermines the effort. They are right. 

“I am committed to enforcing the rules of USMCA and our other agreements to ensure not only that we follow through on our promises to protect the planet, but that we protect workers against this kind of unfair competition. 

“And while I think the United States, Mexico, and Canada should be proud of USMCA’s progress, I know that the agreement does not go nearly far enough in addressing the economic costs of our environmental challenges through trade.  The most glaring omission is the failure to explicitly acknowledge climate change.

“Going forward, trade has a role to play in discouraging the race to the bottom and incentivizing a race to the top. We must conserve the resources we do have – and work with our trading partners to do the same – to both mitigate and adapt to climate pressures. 

“Based on years of experience pushing forward with environment rules in trade, there are two practical issues that immediately come to mind: putting a stop to illegal logging, and addressing overfishing that is destroying the marine ecosystem. 

“We have made some progress on illegal logging and the associated trade in illegally harvested timber products in previous trade agreements and through various regional dialogues. We can do more. 

“The forests are our planet’s lungs, and we should use trade policies and trade enforcement actions to protect them. But we have to be mindful that we will only truly address the global scale of this problem through global rules. 

“We have also started to address fisheries and our oceans in our trade agreements, whether through disciplines on the massive subsidies that promote overfishing, or through provisions that address the millions of tons of plastic and other forms of pollution that are destroying the marine environment. But again, we will only truly address the global scale of the problem through global rules. This is why the fisheries negotiations at the WTO are so critical.

“Beyond disciplines that discourage harmful behaviors, we can also create rules that promote positive ones. 

“For climate mitigation, developing innovative environmental technologies, goods, and services and cultivating strategic international supply chains for trade will be key.  From clean energy, to low-emission vehicles, and other technologies, reliable access to these goods and services will be essential for our transition to net zero by 2050. 

“That’s why I was so committed to helping resolve a big trade dispute between SK Innovation and LG Energy Solutions, two South Korean companies who make electric batteries here in the United States. The settlement, reached last weekend after significant engagement with a range of stakeholders, was a big win for American workers, the environment, and our competitive future.

“We need a strong, diversified, and resilient supply chain of electric vehicle batteries in America to meet the growing global demand and to expand U.S. manufacturing of clean energy vehicles. This settlement puts the country in a stronger position to drive innovation and growth of clean energy technology.
 
“As we consider strategically devised supply chains and trade in environmental goods, we must also be mindful that using clean energy throughout the supply chain is an essential, and perhaps underappreciated, element of delivering on our commitment to address the full range of practices that compromise the climate.

“For too long, the traditional trade community has resisted the view that trade policy is a legitimate tool in helping to solve the climate crisis. As we have so often seen with labor issues, there is a certain refuge in arguing that this is all a question of domestic policy, and that we need not tackle the daunting task of building international consensus around new rules. 

“But that dated line of thinking only perpetuates the chasm that exists between the lived experiences – and expectations – of real people on the one hand, and trade experts on the other. My job is to bridge that chasm and push for trade reforms that translate into meaningful change in the lives of farmers, ranchers, factory workers, parents, children – not just in the United States, but around the world.

“Many of these people – and many of our businesses – realize that tackling climate change and our future prosperity are connected. 

“For example, climate-friendly and sustainable agricultural production is essential to meeting our climate and sustainability goals. Our farmers and ranchers can lead the world with innovative carbon conservation practices. Secretary Vilsack has proposed ambitious ideas, including expanding the use of cover crops and making carbon capture a mainstream conservation practice. I am eager to work with him to help make these practices the new global standard. 

“I am also fortunate to be working with a strong Biden-Harris team of visionary leaders charting this course on climate change. Special Envoy Kerry, Gina McCarthy, the President’s National Climate Advisor, EPA Administrator Regan, Energy Secretary Granholm, Commerce Secretary Raimondo – and many more dedicated public servants across the administration are committed to making a difference. 

“CAP research has highlighted many of the ideas these colleagues have brought to national climate policy from innovative state governments– North Carolina, Michigan, Connecticut, and more.

“But as I close my remarks I cannot forget arguably the most important voice in this effort. You. 

“From day one, I made it clear that we are not going to do business as usual.  I’ve challenged my team to be thoughtful and innovative in building trusted relationships with stakeholders who haven’t had an established seat at the table or been at the table at all.

“We want a robust dialogue.  We expect justice and equity to be on everyone’s agenda, and we welcome creative solutions to the massive challenges we face with the environment, with climate change, and trade as a whole.  

“Your voice, your perspectives, your priorities, and your values matter. We need to hear from you. We need to lean on your expertise, and we want your ideas.  

“By engaging new – and all too frequently silenced – voices and encouraging fresh, collaborative thinking, we can forge consensus and find solutions that we never knew existed.  Together, we can foster U.S. innovation and the production of new technology, while promoting resilient renewable energy supply chains.

“This work has the potential to unlock new opportunities for U.S. companies who can help reduce emissions and adapt to climate change.

“Our bold, collective action can create enormous new economic opportunities and good paying jobs for all Americans while building the industries of the future.  And we will not overlook our obligation to take on centuries of discrimination, oppression and bigotry. Racial justice and equity must be central to the conversation. 

“The intersection of environment, climate change, labor, and trade are key to our collective ability to compete, innovate, and create livable wage jobs that will provide hope and opportunity for future generations and underserved communities.  This is why I believe that trade policy is an essential and strategic part of the solution to these huge challenges.  

“I look forward to working with all of you in the days ahead to meet the moment.  I’m ready, and I hope you are too.

“Thank you.”

Conclusion

The Biden Administration is making a major effort to improve the U.S. environmental performance and help lead the global effort to save the planet from global warming. The Administration approaches major issues from a “whole of government” view point. The U.S. Trade Representative yesterday presented a glimpse of how the U.S. will seek to use trade agreements and trade negotiations to support environmental sustainability.

Having watched GATT Contracting Parties and the business community dismiss the need to address labor and environmental aspects of trade during and after the Uruguay Round, I can only say “it is about time for meaningful action”. Trade can and must be examined through an environmental sustainability lens. The world having let climate change spin out of control has a limited time to make the changes needed to ensure a sustainable environment for future generations. It will take a whole-of-the-world focus and engagement to make a difference.

INTELLECTUAL PROPERTY AND INNOVATION: MAKING MSMES COMPETITIVE IN GREEN TECH

· February 27, 2021 · climate change · , , , , , , , , , , , · No Comments

Climate change is a major global concern. Indeed, the UN has indicated there is less than a year for countries to get serious about saving the planet by getting their updated national climate action plans (NDCs) submitted. See Time, ‘If This Task Was Urgent Before, It’s Crucial Now.’ U.N. Says World Has 10 Months to Get Serious on Climate Goals, February 26, 2021,https://time.com/5942546/un-emissions-targets-climate-change/; UN Climate Change, Greater Climate Ambition Urged as Initial NDC Synthesis Report Is Published, 26 February 2021, https://unfccc.int/news/greater-climate-ambition-urged-as-initial-ndc-synthesis-report-is-published (“’2021 is a make or break year to confront the global climate emergency. The science is clear, to limit global temperature rise to 1.5C, we must cut global emissions by 45% by 2030 from 2010 levels.  Today’s interim report from the UNFCCC is a red alert for our planet. It shows governments are nowhere close to the level of ambition needed to limit climate change to 1.5 degrees and meet the goals of the Paris Agreement. The major emitters must step up with much more ambitious emissions reductions targets for 2030 in their Nationally Determined Contributions well before the November UN Climate Conference in Glasgow,’ said UN Secretary-General António Guterres.”).

While the largest polluters — China and the United States — haven’t submitted updated NDCs, the Biden Administration is planning on hosting a climate summit in the summer and plans on having more ambitious plans for the U.S. prepared by that time. See Roadmap for a Renewed U.S.-Canada Partnership, February 23, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/23/roadmap-for-a-renewed-u-s-canada-partnership/ (“The Prime Minister and the President expressed their commitment to have their two countries work together on cooperative action ahead of the US-hosted Leaders’ Climate Summit that will allow both countries to increase their climate ambition. The President, in addition to acknowledging Canada’s new strengthened national climate plan and its globally ambitious price on pollution, reiterated his aim to have ready the US nationally determined contribution (NDC) in advance of the Summit and welcomed the Prime Minister’s aim to announce the enhanced 2030 emissions target for its NDC by the Summit as well.”).

At the World Trade Organization, many countries are anxious to explore ways that trade can facilitate addressing the challenges from climate change. Because of the large share of employment around the world by micro-, small- and medium’sized businesses (MSMEs), such businesses are playing and will have to play a critical role in adopting technologies to permit reduction of pollutions threatening the planet.

On February 25, 2021 a group of WTO Members (largely developed countries) submitted a communication to the WTO membership outlining ways that MSMEs can use intellectual property to green their businesses. See INTELLECTUAL PROPERTY AND INNOVATION: MAKING MSMES COMPETITIVE IN GREEN TECH, COMMUNICATION FROM AUSTRALIA, CANADA, CHILE, THE EUROPEAN UNION, JAPAN, SINGAPORE, SWITZERLAND, THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU, THE UNITED KINGDOM AND THE UNITED STATES, IP/C/W/675 (26 February 2021). The paper lays out the purpose of the communication in its introduction copied below.

“1. Some of today’s critical global challenges include climate change, biodiversity loss, environmental degradation and food security. As an example, climate change matters to our health and increases the risk of infections and pandemics.1

“2. Several international efforts such as the Sustainable Development Goals (SDGs), the Convention on Biological Diversity, the UN Framework Convention on Climate Change and the Paris Agreement are designed to address these challenges. In this context, the role of Green Technology2 is important to provide new alternatives to address these challenges and create opportunities that have economic, social, and environmental benefits, as underscored by the framework of the SDGs. Of these, several underline the importance of Environmentally Sound Technologies (ESTs) for the accomplishment of the above objectives.

“3. Micro-, Small and Medium-sized Enterprises (MSMEs) can play a pivotal role in this change towards more sustainability. As they provide for more than 50 percent of employment (G20/OECD, 2015), they can constitute core engines of innovation and growth. MSMEs working in the green tech sector represent key economic actors in the effort towards finding solutions to address the abovementioned global challenges. The role of intellectual property rights (IPRs) to enhance the competitiveness of MSMEs should be looked at closely. IPRs enhance the dissemination and protection of innovations – which is key for MSMEs, including those in the green tech sector (Friesike, Jamali, Bader et al, 2009). This submission presents IPR approaches for making MSMEs more competitive in green tech.

“1 Harvard T.H Chan School of Public Health: https://www.hsph.harvard.edu/cchange/subtopics/coronavirus-and-climate-change/ (last consulted: 09.01.2021).”

The communication then provides information on international and national approaches to helping SMSEs obtain IP protection and/or obtain through license or otherwise existing IP technologies to address greening their businesses. For example, on international approaches, the communication reviews the role WIPO and WTO play in providing easy access to lots of information on intellectual property systems of many countries. WIPO has set up support through WIPO Green to facilitate collaboration on environmentally sound technologies (ESTs) including what technologies are available for licensing, etc.

“5. One important initiative to accelerate the development and dissemination of ESTs is WIPO GREEN, a marketplace designed to connect providers and seekers of ESTs. All technologies listed in the online database of WIPO GREEN are available for license, collaboration, joint ventures, and sale. In addition to establishing a network of various partners, WIPO GREEN contains a database of IP experts, supports acceleration projects in different countries and produces briefs and seminars for various green tech areas. It is thus particularly valuable for MSMEs, given that it facilitates the diffusion of their technologies and provides information to technology providers and seekers in all countries.”

The communication from the WTO Members also includes information on the Technology Mechanism provided by the United Nations Framework Convention on Climate Change and provides information on classification of green technology patents by WIPO, the European Patent Office (EPO) and US Patent and Trademark Office (USPTO).

On national approaches Members can take, the communication focuses on actions the national patent office can take.

“12. There are several ways for IP offices to assist MSMEs in making the best use of IPRs.

“• IP offices can provide basic guidance and assistance on various IPR aspects. By preparing reader-friendly IP material, including patent and trademark basics, examination overviews, information on patent searching and resources on legal assistance that could be used by inventors and businesses in the green tech sector, individual questions and needs may be met.

“• IP offices may provide support in the form of assisting applicants with patent searches, landscape analyses and also facilitate free legal assistance.

“• Specifically with a view to promoting ESTs, IP offices could consider accelerated patent examination procedures for such green tech patent applications. This process shortens the time between application and grant, enabling MSMEs to attain financial support more quickly.

“• Customized workshops, seminars, or awards for the best green tech inventions may also help to make MSMEs that are involved in the green tech sector more aware of the benefits that the IP system may hold for them.”

The complete communication is embedded below.

W675-1

Conclusion

While there are presently limited environmental negotiations going on at the WTO (fisheries subsidies), the global race to address a warming world requires greater focus by WTO Members on the role trade can play to improve the global response. Restarting the environmental goods negotiations is one obvious area for negotiations. Addressing carbon leakage through national laws and international negotiations is another. Encouraging collaboration to spread green technology requires no negotiations but is a potentially important component in the global response. Hence the February 25 communication is a valuable contribution to increasing the global focus on how to address the challenges of a warming planet.

WTO initiatives on trade and the environment — likely to receive a warm welcome under a Biden Administration

· November 17, 2020 · climate change, trade and environment · , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

The challenges facing the world from climate change are staggering and getting worse. While the Trump Administration withdrew the United States from the Paris climate agreement, a Biden Administration will have the U.S. rejoin and work with other nations to find solutions to the pressing problems.

Today in Geneva, two initiatives were announced by groups of WTO Members. One addresses trade and environmental sustainability and was presented in a communication from 49 Members. Communication on Trade and Environmental Sustainability, WT/CTE/W/249 (17 November 2020). Neither the U.S., China, India, Brazil nor South Africa are on the communication though most developed countries and other Members are initial sponsors. The communication is embedded below.

W249

The second initiative was the launch of an informal dialogue on plastics pollution and environmentally sustainable plastics trade. Seven Members are launching the informal dialogue. All Members are welcome to participate. The seven Members involved in the launch are Australia, Barbados, Canada, China, Fiji, Jamaica and Morocco. Only Australia, Canada and Fiji are part of both initiatives. The press release from the Secretariat on today’s initiatives included the following discussion of the plastics initiative.

“The dialogue is borne out of the recognition of the need for coordinated action to address the rising environmental, health and economic cost of plastics pollution and the importance of the trade dimension as a solution.

“Proponents aim to circulate their communication soon. * * *

“Ambassador Xiangchen Zhang of China said at the online event that possible subjects for discussion include improving transparency, monitoring trade trends, promoting best practices, strengthening policy coherence, identifying the scope for collective approaches, assessing capacity and technical assistance needs, and cooperating with other international processes and efforts. Ambassador Nazhat Shameem Khan of Fiji said they hope this informal dialogue will encourage discussion and exploratory work on how the WTO can contribute to efforts to reduce plastics pollution and transition to a circular, more environmentally sustainable plastics trade.”

Deputy Director-General Alan Wm Wolff spoke at today’s event and identified a range of initiatives that have been looked at by the Committee on Trade and Environment, or that could be, that could help move forward both initiatives including resuming talks at eliminating tariffs and non-tariff barriers on environmental goods and services, reforming subsidies on fossil fuels, promoting a global circular economy, addressing the carbon content of traded products and other actions.

The press release and DDG Wolff’s remarks are embedded below.

WTO-_-2020-News-items-New-initiatives-launched-to-intensify-WTO-work-on-trade-and-the-environment

WTO-_-2020-News-items-Speech-DDG-Alan-Wolff-DDG-Wolff-remarks-on-the-Structured-Discussions-on-Trade-and-Environmental-Sustainability

Likely U.S. engagement in a Biden Administration

Because addressing the challenges from climate change are a core priority for the incoming Biden Administration, I would expect that once the new trade team is in place, the U.S. will become involved in both of the initiatives and other activities at the WTO on the importance of finding rules and solutions to pressing trade and environment issues.

The Biden team almost certainly supports most if not all of the items identified in paragraph 1 of the Communication (WT/CTE/W/249), including the importance of multilateral environmental agreements, that there is an urgent need for action on climate change, that trade and environmental objectives and policies should be mutually supportive, that trade and trade policy need to support efforts to reach the Sustainable Development Goals, among others. Similarly, the Biden Administration will presumably strongly support the four areas of activity identified in paragraph 2 of the Communication:

“2. Therefore, express our intention to collaborate, prioritize and advance discussions on trade and environmental sustainability, including by:

“intensifying our work to share experiences and best practices; promote transparency, dialogue and information sharing along the full value chain of products and materials;

“strengthening coherence at the national and international level with a view to identifying areas of common interest and for future work within the WTO, in order for WTO to address more effectively sustainable development issues;

“working in cooperation with relevant international organizations and relevant actors, including the private sector, to identify and support technical assistance and capacity building needs of Members, and in particular least-developed countries (LDCs).

“working on possible actions and deliverables of environmental sustainability in the various areas of the WTO.”

Similarly, I would expect the Biden Administration to have an active interest in working with industry and other governments to address the challenges of plastics pollution, although U.S. interests are likely to be more action oriented than the items teed up by China at today’s announcement.

Conclusion

For years, many Members have fought focusing energies at the WTO on issues involving trade and the environment. With the climate change crisis and consequences being felt around the world, it appears that many or most WTO Members are appreciating the need for the WTO to play its role in addressing sustainable development and the climate change challenge.

With a new U.S. Administration, the U.S. should be a very active participant in moving the WTO and its Members forward.

An environmental read on the five candidates for the WTO Director-General slot

· September 29, 2020 · climate change, Selection of WTO Director-General · , , , , , , , , , · No Comments

A British-based press publication on climate change released a story today looking at the position on climate change of the five candidates being considered in the second round of consultations at the WTO to become the next WTO Director-General. The publication, Climate House News says this about themselves, “Climate Home News is an independent news site specialising in the international politics of the climate crisis. Our London-based editorial team coordinates deep reporting from around the world on the political, economic, social and natural impacts of climate change. Our coverage of UN climate talks is essential reading.”

Today’s article can be found here: Climate Home News, 29 September 2020, African green reformer tipped to win UN trade leadership race, https://www.climatechangenews.com/2020/09/29/african-green-reformer-tipped-win-un-trade-leadership-race/.

While crediting H.E. Yoo Myung-hee of the Republic of Korea and the Rt Hon Dr. Liam Fox MP of the United Kingdom for speaking out on the need for fisheries subsidies reform, the article singles out H.E. Amina C. Mohamed of Kenya and Dr. Ngozi Okonjo-Iweala of Nigeria as the two candidates who appear committed to raise the profile of climate change within the WTO if selected as the Director-General. The fifth candidate, H.E. Mohammad Moziad Al-Tuwaijri of Saudi Arabia, was noted as having made no statements on climate change.

“Both women used their written candidate statements to call for environmental reform of the WTO’s trade rules, while their three opponents from Korea, the UK and Saudi Arabia, have said little about climate change.”

“Mohamed, who has held cabinet roles including foreign affairs in the Kenyan government since 2013, said the economic recovery must ‘take account’ of issues like climate change. The WTO should be reformed to ‘support our shared environmental objectives’ and encourage diffusion of clean technologies, she said.”

“Okonjo-Iweala, former finance minister for Nigeria, said that ‘the WTO appears paralysed at a time when its rule book would greatly benefit from an update to 21st century issues such as ecommerce and the digital economy, the green and circular economies’. She said she wants to reach ‘optimal complementarity between trade and the environment’.”

The article spends a fair amount of space on carbon pricing as an important initiative and notes Minister Mohamed’s comments that “the WTO could replicate carbon pricing initiatives like the EU’s ‘on a grander scale.”

Whether increasing the role of the WTO in addressing climate change is an issue of concern to many WTO Members, it certainly is to some and should be to many. Because trade and the environment is not a prominent area of ongoing WTO negotiations (other than fisheries subsidies), it is not surprising that all of the candidates seeking the Director-General position have not spoken extensively on the issue. Thus, one cannot necessarily draw the conclusions that the article suggests about three of the candidates. Being a member-driven organization, a candidate to become the next Director-General can not be faulted for focusing on the issues of stated concern by Members. Under the current WTO structure, it is not clear what influence a Director-General can have on subjects that Members will focus on.

Nonetheless, ensuring sustainable development (including how trade can help achieve global needs to address climate change) is important to businesses, workers, consumers, NGOs, and the global population. It can and should be a factor that Members of the WTO consider in who gets selected as the next Director-General — i.e., commitment to sustainable development and passion for making trade a positive contributor to solving climate change. More importantly, it must be a factor that Members consider in deciding on areas of negotiation and reform of the WTO in the months ahead.