Vesile KulaçoğluDirector, Trade and Environment Division,WTO

Vesile KulaçoğluDirector, Trade and Environment Division,WTO

HARNESSINGTRADEFORSUSTAINABLEDEVELOPMENTANDAGREENECONOMY

Trade and Sustainable

Development

Rio Declaration(Principle 12)

UNFCCC (Article 3.5)

WTO(Preamble, MarrakeshAgreement)

2

Objectives Rules

Enforcement Transparency

WTO

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Objectives

System of rules

Institutions & Monitoring Mechanisms

Enforcement Mechanism & WTO Case Law

Core Mission of Trade Opening

Living standards, full employment, using the world's resources sustainably & protecting the environment

Policy space for necessary trade-related measures for legitimate objectives such as the environment, subject to conditions aimed at avoiding hidden protectionism

Ensure predictability, monitor implementation & enable action if measures impact on trade

Confirms a balance between Members’ right to take trade related environmental measures & the rights of other Members under WTO rules

Leads to more efficient allocation of natural resources, stimulates growth and raises income levels, improves access to green technologies

Privatestandards• Market

fragmentation?

Taxes and othermarket tools• Border

adjustments?

Subsidies• Trade distortions?

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Price and market mechanisms

Border adjustments ?Relocation of production to a country that does not apply an equivalent instrument?

May increase production costs of domestic firms

Environmental requirements

Concerns related to inadequate design, insufficient transparency, lack of harmonization or mutual recognition

Increasingly significant determinants of access to foreign markets

Green Support Programs

May reduce exporting countries’ access to the market of the subsidizing country or may increase the exports of the subsidizing country

May lower costs for producers, leading to lower green product prices

Technical regulations and standards•Agreement on Technical Barriers to Trade

Taxes and other market instruments•General Agreement on Tariffs and Trade

Subsidies•Agreement on Subsidies and Countervailing

Measures

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Environmental requirements, e.g. Product/production specifications, voluntary/mandatory, characteristics/ performance, labelling

Environmental requirements, e.g. Product/production specifications, voluntary/mandatory, characteristics/ performance, labelling

TBT AgreementTBT Agreement

Price & market mechanisms, e.g. environmental taxes, ETSPrice & market mechanisms, e.g. environmental taxes, ETS

GATTGATT

SCM AgreementSCM AgreementSupport programs, e.g. R&D, fiscal, price and investment measuresSupport programs, e.g. R&D, fiscal, price and investment measures

Key WTO Agreement

Key WTO AgreementKey policy instrumentKey policy instrument

Improve resource use & reduce pollutants, e.g. for energy efficiency, forestry management

Improve resource use & reduce pollutants, e.g. for energy efficiency, forestry management

Internalize env’tal costs, e.g. for GHG emissionsInternalize env’tal costs, e.g. for GHG emissionsPromote development & deployment of green technologies

Promote development & deployment of green technologies

Key objectiveKey objective

Green procurement, e.g. adoption of technical specifications & evaluation criteria that promote procurement of green goods & services

Promote sustainable consumption and production

GPA

Objectives Rules

Enforcement Transparency

WTO

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Right to adopt measures to

achieve legitimate objectives

Rights of others under basic trade

rules

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WTO rules, as confirmed by case law

Essential to maintain a balance between

Under certain conditions, Members can adopt trade-related measures aimed at protecting the environment

the right of Members to take regulatory measures to achieve legitimate policy objectives

the rights of other WTO Members under basic trade rules

WTO jurisprudence has confirmed that WTO rules do not trump

environment, as long as…

several carefully crafted conditions are respected…

which seek, among other things, to ensure that green measures are

not applied arbitrarily and not used as disguised protectionism.

Objectives Rules

Enforcement Transparency

WTO

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Trade Policy Review Mechanism

Legally-Binding Dispute Settlement Mechanism

2008: WTO MonitoringMechanism

Specific trade concerns

Trade policy reviews

Monitoring

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The WTO is a repository for trade-related policy information and a forum for deliberations

Members inform each other about new or forthcoming trade-related measures

Technical requirements

Sanitary and phytosanitary measures

Subsidies

Agriculture measures

1995 to 2011: 14200 notifications submitted to the TBT Committee, an average of 830 measures notified per year

Technical Barriers to Trade Agreement

Approximately 15% about measures related to the environment

1995 to 2011: 330 specific trade concerns raised in the TBT Committee, an average of 19 concerns (new and old) raised per year

Approximately 22% about measures related to the environment

The WTO Committee on Trade and Environment is the right forum to foster international co-operation on trade-related green economy measures

Coverage includes

Sustainability aspects of trade in individual sectors

such as forestry and energy

The effect of green labelling schemes

on market access