DEPUTY DIRECTOR-GENERAL ALAN WM. WOLFF

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On behalf of the WTO, I wish to extend a very warm welcome to our distinguished speakers and those of you all around the world joining us today.

It is fair to ask why, with the world facing the most serious health crisis in a century and the worst economic crisis of our lifetimes, with years of hard-won development progress at risk of being reversed, it is important to put a focus on sustainable trade now.

I would point to three main reasons.

The first reason is that we are facing at two global crises, affecting the whole planet, not just one.  While both are existential, the most immediate crisis is COVID-19, and for the individual it is a matter of life and death, as well as the ability to work, to run a business, to invest.  The second crisis can seem remote, but it is not, because what we do today, this year and next, will shape the future of humankind. 

  • The pandemic has become a stark reminder that nature, human health and the economy are not separate, they are intimately connected.
  • Scientists tell us that environmental degradation, not least biodiversity loss and climate change, will make potential zoonotic outbreaks like COVID-19 more common in the future. This assessment has enormous implications for the trading system — in fact, for the whole global economy.
  • The disruption and immense suffering caused by COVID-19 foreshadows the costly damages that climate change may inflict on all countries, especially the poorest.
  • Climate and other disruptions increasingly affect global value chains. McKinsey projects that companies can now expect supply chain disruptions lasting a month or longer to occur every 3.7 years on average, from all causes, with the most severe events taking a major financial toll.  Industry and agriculture must be more prepared, but those who are involved in public policy must also be more prepared.

Trade officials cannot remain oblivious to this new reality.

The second reason why it is important to put a focus on sustainable trade now is that trade policies have a strong potential to affect the much-needed economic recovery.

And that economic recovery can be one that works for our planet and for people everywhere in more than one way.

The right trade policies would help us not only to get back on track and recover some of the time lost to the crisis from an economic perspective, but also to shift toward a more sustainable and inclusive future:

  • When trade and environmental policies work in concert, they help unlock opportunities for workers and business, not least the estimated US$26 trillion that can result from bold climate action by 2030.(1)
  • When trade and environmental policies work in concert, they help make green goods and services better and more affordable all around the world.
    • Solar energy is becoming the cheapest source of electricity generation in many parts of the world and the cost of offshore wind as a source is coming down dramatically.  
    • Trade has played an important role in allowing producers to reap the benefits of economies of scale, stimulating competition and investment, and fostering innovation.  It provides not only efficiency through specialization across national borders, it also makes possible sharing of the benefits of technological breakthroughs. 
  • When trade and environmental policies work in concert, they help create green and decent jobs.  80 million jobs expected in renewable energy and energy efficiency are expected to exist by 2050 worldwide.

The third reason why we must focus on sustainable trade is that times of crisis often open windows of opportunity for action.  Major global economic crises have often been met with a burst of energy to improve the trading system. The world is in crisis once again, and we have an opportunity to respond by reforming the WTO.

The WTO's founders saw sustainable development as a goal of the WTO and global trade cooperation as a means to unleash growth, alleviate poverty, raise living standards and ensure full employment, while also protecting our natural environment. 

WTO Members, supported by a proactive Secretariat, must rise to the challenge, and find ways to reduce the harmful health and economic effects of the COVID-19 pandemic while addressing the sustainability challenges.

Future generations will judge how well we did.

It is fair to ask what the WTO is doing concretely to make trade work better and greener for our planet, its people and their well-being.

I would highlight three areas where the WTO has acted in support of sustainable trade.

In the area of creating rules to serve these objectives:

  • WTO Members have launched negotiations to curb harmful fisheries subsidies – in an agreement that would help protect our marine environment.
    • The world's peoples need to know that these negotiations will succeed and deliver results soon.
  • 90 WTO Members have engaged in making trade rules fit for the global digital economy.  There are countless ways in which the digital economy serves and will serve the environment – delivering sustainable agriculture, reducing pollution, forecasting weather.  Trade makes these tools available across borders.
  • In the not too distant past, Members have sought to lower the cost of going green by reducing trade barriers to environmental goods.
    • A group of 46 WTO Members had been working towards an Environmental Goods Agreement before negotiations were suspended in 2016.
    • The agreement aims to eliminate duties on key environmental goods, such as those needed in the transition to a clean, circular economy. It includes, for example:
      • Machines to sort waste and break down hard-to-recycle materials, along with the critical inputs to produce biodegradable plastics;
      • Insulation materials for energy efficient buildings and water-saving equipment to help farmers adapt to more frequent droughts; and
      • The key components of smart grids and weather forecasting instruments.
  • Redoubling efforts to restart and promptly conclude these negotiations is even more important now, as we confront the worst economic crisis of our lifetimes. Trade opening in environmental goods and services would spur productivity, investment and innovation. We can support economic recovery and improve the environment at the same time.

The second area where the WTO has acted is promoting dialogue and cooperation.

The WTO was designed to provide a place for its Members to deliberate, to solve problems, to meet challenges.  The last few years have seen an important change in how WTO Members approach trade and environment discussions. The many events this week are just the latest sign of this.

Serious engagement on pressing issues has helped to improve transparency, build trust and cooperation and raise awareness of the growing impact of climate risks on the way we do business and trade.

The WTO Committee on Trade and Environment is a forum dedicated to promoting a better understanding of what these developments mean for trade, and how the WTO should respond.

Members have used this forum successfully to identify possible action areas.  For example:

  • Trade and circular economy — how to strengthen the supply chains that make recycling and other resource-saving activities possible efficiently and safely;
  • The removal of environmentally harmful distortions, including an initiative by a group of WTO members to reform fossil fuel subsidies.
  • Initiatives by groups of Members to intensify work on trade and plastic pollution and to start structured discussion towards concrete trade action on environmental sustainability. Both initiatives will be launched tomorrow.

The third area of the WTO that I would highlight is inclusiveness, which is essential if we want to make progress on sustainable trade.

The WTO's Aid for Trade initiative provides a good foundation for sustainable and inclusive trade. It can galvanize investment to boost the ability of the smallest and poorest countries to benefit from the rapidly expanding green economy.

Aid for Trade can help small and medium enterprises in developing countries to meet new standards so that they can become part of climate-friendly, circular value chains.

WTO Members have shown growing interest in “greening” Aid for Trade:

  • Of the US$340 billion disbursed under Aid for Trade between 2006 and 2016, around one-third — US$112 billion has been allocated to projects with an environmental goal.
  • And earlier in the year, WTO Members endorsed a new work programme for the next biennium which identifies the circular economy as a focus area.

Another way to bolster inclusiveness is to strengthen collaboration among not just governments, but also with the private sector, consumers and other stakeholders.

For these purposes, the WTO and UNEP decided to join forces to bring the trade and environment communities closer together.

Today's event is another sign of our positive collaboration. I am very encouraged by the strong commitment from our Members to turn the vision of sustainable trade into reality.

This is a time for action.

Notes

  1. Global Commission on the Economy and Climate (2018), Unlocking the Inclusive Growth Story of the 21st Century: Accelerating Climate Action in Urgent Times, available at: https://newclimateeconomy.report/2018/. back to text

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