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Is the climate crisis really on the WTO’s agenda?

Is the climate crisis really on the WTO’s agenda?

WTO climate crisis

Ministerial statements will be made at the Ministerial Conference that address environmental issues for the first time since the establishment of the World Trade Organization (WTO). fisheries subsidies reformIt has been in negotiations for close to 20 years. 

Trade ministers from 164 member states of the WTO were meant to gather from 30 November at Geneva, Switzerland for the 12th Ministerial Conference (MC12) until 3 December — this has now been postponed because of the emergence of the Omicron coronavirus variant. No new date has been set.

The WTO is an intergovernmental organization that manages the global system of trade rules. It is also a forum for negotiating international trade agreements. The Ministerial Conference is the highest decision-making body of the WTO and usually takes place every two years, but hasn’t occurred since 2017.

Carolyn Deere Birkbeck is the director of the Geneva-based Forum on Trade, Environment and the Sustainable Development Goals, stated during a media briefing on the MC12 last week that although the environment is not an item on the official agenda of MC12 (except for the fisheries subvention), this conference is important because the statements of the member states are acknowledging the bilateral relationship between international trade and environmental crisis. 

WTO climate crisis
A model of the LEAP turbofan airplane engine is displayed at the General Electric booth at China International Import Expo (CIIE), in Shanghai, China on Monday, 8th November 2021. During the opening ceremony of the CIIE, President Xi Jinping stated that China would continue to be open and seek cooperation from international organisations like the United Nations and World Trade Organization. (Photo: Qilai shen / Bloomberg via Getty Images

“They’re stressing the importance of environmental sustainability as a central issue for the WTO agenda. That’s big news” said Birkbeck. “And also they are saying not only that international trade and trade policy can support environmental and climate goals, but that it must.”

Birkbeck said that, while they don’t commit any country to a specific act or regulation, these statements are significant because it shows that the environment crisis will have economic, trade and political impacts on many countries. He also mentioned how natural disasters, climate shocks, and other factors will affect production and supply chain.

Birkbeck, however, mentions that trade policies and subsidies can be harmful to our environment but can also be part the solution.

These declarations relate to sustainability. ministerial statement on trade and environmental sustainability, ministerial statement on trade and plastic pollutionYou can also find out more about a ministerial statement on fossil fuel subsidy reform.

Birkbeck explained, “These declarations are joint initiatives of member states committed to a belief that the WTO should act more on the environment,” initiatives that see a subsection of members come together to promote dialogue or discuss specific outcomes for a topic. 

Nearly half of member states participate in at least one of the statements. South Africa is not included in any of these statements. Birkbeck said that participation shows how difficult it is for environmental concerns to be addressed within the trade context. 

Birkbeck said, “In my personal view, it’s vital that we have more developing country participation in all of these initiatives.”

Harro van Asselt, a researcher with SEI Oxford Centre and professor of climate law and policy at the University of Eastern Finland, said that the statement on fossil fuels opens the door to developing countries’ concerns. 

Van Asselt said that these statements indicate, “that the specific needs and conditions of these countries need to be taken into account, as well as minimisation of the possible adverse impacts on their developments in a way that protects the poor and affected communities.”

Consider the implications that South African exporters will face from the introduction of carbon border taxes. Also, consider the recent plans to eliminate fossil fuel subsidies. COP26(UN Climate Change Conference), one could assume that WTO would consider this push for climate to be on its trade agenda seriously.

We don’t know if that will be the case. 

Negotiations to eliminate subsidies for fisheries, which amount to $22-billion in total, are still not complete and have taken nearly 20 years to reach their conclusion.

WTO climate crisis
A visitor takes a photo at a Caterpillar booth during the China International Import Expo, (CIIE), in Shanghai, China on Monday, 8th November 2021. (Photo: QilaiShen / Bloomberg via Getty Images

Van Asselt emphasized the importance of most recent estimate by the OECD was that fossil fuel subsidies amounted to $351-billion in 2020 — “which may be down from 2019 when it was $478-billion US dollars, but it’s also very likely that subsidies are again rebounding in the wake of the pandemic”, said van Asselt.

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Although it may not be financially viable in the short term. However, keeping fossil fuels prices artificially low for customers will force us into a high-carbon future.

Van Asselt explained, “we know increasingly that fossil fuel subsidies not only have a major impact on the budgets of different countries, but also on environmental issues, because they encourage and induce fossil fuel production of fossil fuel consumption, which ultimately leads to greenhouse gas emissions… and they can really significantly hamper and delay the energy transition that is needed.”

Internationally, the climate crises is not on any trade agenda. And considering the economic consequences of eliminating fossil fuel subsidies as an example, it may not be anytime soon.

However, the fact that these ministerial declarations will be considered by the MC12 is a significant step forward for climate movement.

“There’s a sense that the WTO can’t stand by the wayside while these environmental issues become more and more dominant as a priority for national governments and also on the global agenda,” reflected Birkbeck.

“Not being part of that push to drive forward a greener global economy makes the WTO seem to be sort of out of date, or out of touch with the key priorities and concerns of many governments around the world.” DM/OBP

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