TRADE AND ENVIRONMENT

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The European Union provided members with an update on its carbon border adjustment mechanism and other trade-related aspects of the European Green Deal. The EU said the mechanism aims to address the risk of “carbon leakage,” that is, a situation where companies would decide to shift production to countries with lower carbon costs or would import finished products from these jurisdictions. The EU also indicated that the mechanism would consider efforts of other countries to reduce greenhouse gas emissions. After public consultations and impact assessments, the process for adopting a decision on the mechanism will start in June this year with a view to implementation by 2023, the EU said. The EU also shared information on its initiatives on forest conservation, environmentally friendly food systems (“farm to fork” strategy), and its new overall trade strategy launched in February, which it says puts sustainability at the heart of trade policy.

A number of members called for continued transparency from the EU on the ongoing design of the carbon border adjustment mechanism. Several members emphasized the need to consider different levels of development among countries and to minimize trade distortions. The EU said compatibility with WTO rules and other international commitments are at the core of its ongoing reflections on the mechanism.

Canada reported on discussions from the webinar it organized on 4 March about the issues related to carbon border adjustment. International cooperation is fundamental to ensure that carbon border adjustments can meet climate targets enshrined in the Paris Agreement while ensuring a fair environment for business, Canada said.

National environmental measures

Several developing countries presented their experiences implementing national environmental measures. The Central African Republic discussed its efforts to address plastics pollution. Maldives reported on its initiatives to promote environment friendly products and pursue a green economy. Pakistan presented the experience of a tyre and footwear manufacturing and exporting company, which transitioned into a more sustainable business by tapping solar power.

COP26 and MC12

The Committee heard presentations on preparations for the UN Climate Change Conference (COP26) in November to be held in Glasgow, the United Kingdom.

It also was updated on members' environmental initiatives that aim to make a mark at the WTO's 12th Ministerial Conference (MC12), which is scheduled to take place at the end of this year. Canada, the co-convener with Costa Rica of the Trade and Environmental Sustainability Structured Discussions, shared how their group of WTO members are developing a work plan to guide exchanges ahead of MC12. MC12 is the logical target for the group to aim for articulating the vision of the structured discussions and to deliver a ministerial statement, Canada said.

Morocco reported on the recent meeting of the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade, a group of WTO members for which it is a coordinator.  The group, in its meeting on 29 March, discussed the role of trade and the WTO in tackling plastic pollution. Many noted in the meeting that MC12 offers a new opportunity for the group to demonstrate progress and share a roadmap for WTO work, Morocco said.

New Zealand discussed plans for a joint ministerial statement at MC12 on fossil fuel subsidy reform and provided an update on the ongoing negotiations for an Agreement on Climate Change, Trade and Sustainability (ACCTS).  The fourth round of negotiations concluded last week and parties continue to make steady progress, New Zealand said.

Chair election and other updates

The Committee elected its new chair, Ambassador Manuel A.J. Teehankee of the Philippines, who replaces the outgoing chair, Ambassador Chad Blackman of Barbados.

The Committee was briefed on the latest developments in Multilateral Environmental Agreements (MEAs) dealing with chemicals and waste. The United Nations Environment Programme demonstrated the InforMEA initiative, a one-stop portal for information on MEAs, and its ongoing collaboration with the WTO Secretariat to include trade-related measures pursuant to selected MEAs on its online platform.  The latest update to the WTO MEA Matrix, which provides background information on trade-related measures provided in selected MEAs, was presented and is available here.

The Committee furthermore heard reports on events that members held back-to-back with the CTE meeting. Barbados and Maldives presented on their event titled “Trade, the Environment and Sustainability: A Focus on Green Recovery in a COVID-19 Era.” The United Kingdom provided information on activities related to making supply chains more sustainable. Guatemala reported on the event it co-hosted with Finland and the International Chamber of Commerce (ICC) titled “Sustainable business and circularity — why does sustainability make business sense?”

The WTO Secretariat briefed members on the latest information available on the WTO Environmental Database. Following the update in November 2020, the database now covers information on over 13,200 environment-related measures notified by members under WTO agreements. A summary report of the underlying data was published in March and is available here.

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