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Climate change and the potential relevance of WTO rules

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Note: This webpage is prepared by the Secretariat under its own responsibility and is intended only to provide a general explanation of the subject matter it addresses. It is in no way intended to provide legal guidance with respect to, or an authoritative legal interpretation of, the provisions of any WTO agreement. Moreover, nothing in this note affects, nor is intended to affect, WTO members' rights and obligations in any way.


In addition to regulatory measures, national, regional or multilateral initiatives to deal with climate change involve the adoption by governments of price-based measures such as taxes and tariffs, market-based mechanisms as well as a variety of other measures including subsidies. As they relate to trade, these measures may be subject to WTO rules and procedures. The design of climate change programmes and the pursuit of international cooperation in this field will need to take into account the potential trade impact of these measures and the relevance of members' rights and obligations under WTO rules.

Broadly speaking, WTO rules and jurisprudence (the WTO “tool-box” of rules) that relate generally to environmental issues (including GATT Article XX, the PPMs (processes and production methods) issue, and the definition of a like product) are relevant to the examination of climate change measures. The general approach under WTO rules has been to acknowledge that some degree of trade restriction may be necessary to achieve certain policy objectives as long as a number of carefully crafted conditions are respected. A number of WTO rules may be relevant to measures aimed at mitigating climate change. These include:

  • disciplines on tariffs (border measures), essentially prohibiting members from collecting tariffs at levels greater than that provided for in their WTO scheduled consolidation

  • a general prohibition against border quotas

  • a general non-discrimination principle, consisting of the most-favoured-nation and national treatment principles.

  • rules on subsidies

  • rules on technical regulations and standards, which may not be more restrictive than necessary to fulfil a legitimate objective. Technical regulations and standards must also respect the principle of non-discrimination and be based on international standards, where they exist. There are also specific rules for sanitary and phytosanitary measures which are relevant for agricultural products.

  • disciplines relevant to trade in services, imposing general obligations such as most-favoured-nation treatment, as well as further obligations in sectors where individual members have undertaken specific commitments.

  • rules on trade-related intellectual property rights. These rules are relevant for the development and transfer of climate-friendly technologies and know-how.

Introduction
The impact of trade opening on climate change
> Activities of the WTO and the challenge of climate change
 

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