Is the World Trade Organization Up to the Challenge of Prioritizing the Environment at MC13?

If outsiders were to start reading trade ministers’ briefing notes about the state of play of different discussion areas at the World Trade Organization (WTO), they would be forgiven for feeling confused about the trade and environment/climate change conversations that have been happening—and not happening—over the last 2 years.

Trade officials responsible for this portfolio may have had some of the busiest periods of their professional lives, endlessly running between the meetings of different initiatives and having informal chat after informal chat on the many issues falling under the green umbrella. And yet, all these meetings do not seem to have brought much convergence, even on the basic idea of how such conversations should be conducted at the WTO.

Let’s unpack some of the complexities of revitalizing trade and environment discussions at the WTO and the challenges they face, starting from the most focused discussions and moving to the broadest ones, both in terms of issues and the membership involved.

Fossil Fuel Subsidy Reform

The award for the most unexpected constructive conversation of the year absolutely belongs to Fossil Fuel Subsidy Reform, a 48-strong coalition that managed to structure a great discussion around the necessity and complexity of removing certain fossil fuel subsidies. This topic, which would have been unimaginable several years ago, has attracted a rather solid amount of member support. Ably managed by New Zealand, these talks have begun drilling into the details of different categories of fossil fuel subsidies, the social and economic aspects of reforms, as well as the highly relevant topic of measures taken in the light of energy crises.

Talks have begun drilling into the details of different categories of fossil fuel subsidies, the social and economic aspects of reforms, as well as the highly relevant topic of measures taken in the light of energy crises.

No subsidy discussion would be complete without the necessary reflections about bringing more transparency and better understanding about the quantities and structure of such measures. It appears that fossil fuel subsidy reform has covered that, too, both through talks among members about their own measures, but also about potential future approaches that could boost transparency moving forward. The group has already started discussing the future steps that could potentially be endorsed by the ministers at the WTO’s Thirteenth Ministerial Meeting (MC13).

Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade

Another rather narrowly focused initiative that has kept its 76 members very busy is the Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (DPP). Developing its working program in parallel with the work of the Intergovernmental Negotiating Committee on Plastic Pollution (INC), the DPP was looking for ways its activities could complement the ongoing multilateral negotiations—even if at times that meant consciously focusing on knowledge-building rather than action-oriented activities. While this may have disappointed those whose expectations were set rather high by the December 10, 2021, Ministerial Statement promising to “look for concrete, pragmatic, and effective outcomes … at the latest by MC13,” the initiative’s careful approach has probably given confidence to those concerned about its potential overlap with the INC.

The DPP was looking for ways its activities could complement the ongoing multilateral negotiations—even if at times that meant consciously focusing on knowledge-building rather than action-oriented activities.

Going forward, an important challenge for the initiative may not only be figuring out how to further balance those sensitivities but also finding a way to insert its learnings into the INC process, supporting the negotiators engaged in it. Among the key topics that the DPP has covered, many relevant conversations will be featured in the INC in 2024—for example, about the potential lists or categories of problematic plastics, harmful chemicals, or specific polymers, as well as the issues of better design for greater circularity or extended product life. The summary of some useful discussions about the complexity of substitutes and alternatives may also help INC negotiators, who will be examining the plastics pollution problem from every angle.

Trade and Environmental Sustainability Structured Discussions

As far as the breadth and complexity of conversations go, the Trade and Environmental Sustainability Structured Discussions (TESSD) has really got it all. Over the last 2 years, a 75-member coalition has developed a solid working plan stretching across four working groups and covering every issue that the Committee on Trade and Environment (and some other WTO bodies) were unable even to include on their agendas. From border carbon adjustments and green subsidies to tariff liberalization for environmental goods and the importance of circularity for critical raw materials, TESSD participants have really upgraded the way trade and environment are being discussed at the WTO—and even brought the “climate change” language into the WTO’s meeting rooms (something that would have been absolutely unthinkable just a few years ago). None of that, of course, was built out of the sheer goodwill of the WTO members. TESSD’s agendas were carefully managed to balance the interests and sensitivities of its participants, and its ambition was adjusted to that of its more cautious members.

The inclusive spirit and the readiness to improvise and break some rules have made TESSD the actual focal point on all environmental and climate change issues at the WTO.

The inclusive spirit and the readiness to improvise and break some rules have made TESSD the actual focal point on all environmental and climate change issues at the WTO. And yet the group has repeatedly made it clear that it is not a negotiating or a decision-making forum, and that any expectations should be calibrated in terms of what its deliverables can be. With this—and the appetite of some WTO members to move at least some of the bigger TESSD topics to the multilateral forum—the next TESSD ministerial declaration and its ambition are certainly important to watch, just like its MC13 deliverables will be to read when they are finally published.

Committee on Trade and Environment

The WTO body whose mandate is “identifying and understanding the relationship between trade and the environment in order to promote sustainable development” was mentioned in the MC12 outcome document as the “standing forum dedicated to dialogue among Members on the relationship between trade measures and environmental measures.” Since then, WTO members seem to have been taking some action to reinvigorate multilateral discussions on climate change and sustainable development.

Annual Trade and Environment weeks organized by the WTO Secretariat—modelled after some TESSD sessions and the ever-popular WTO Public Forum—have offered WTO members a chance to engage more in knowledge-building events. Yet the Committee on Trade and Environment (CTE) still has not begun discussions on specific (and sensitive!) topics. The true challenge for the committee will be to prove that not only can it place items on the agenda, but that it can also tackle important emerging topics instead of just examining certain individual measures that are already being discussed by other WTO bodies, even if they are problematic for many members.

The true challenge for the committee will be to prove that not only can it place items on the agenda, but that it can also tackle important emerging topics.

In particular, to add value to ongoing conversations, the CTE will have to find a way to structure its discussions on hot topics such as border carbon adjustments, deforestation-related measures, the environmental impact of large subsidy programs, or how to scale up the production of renewable energy infrastructure to suit the urgency of climate change mitigation needs in ways that not only build knowledge but are also action- or international cooperation-oriented. This is a tall order for the committee, which until recently was frequently challenged by its own members whenever anything even closely related to “climate change” appeared on its agenda.

When trade ministers assemble in the United Arab Emirates for MC13 next month, most of the topics already discussed in at least one of the forums mentioned above will likely be in the back of their minds. The true challenge for the WTO will be not only to dare to list the environment as one of the priority areas for future work but to actually make sure that members agree on the architecture of such work—and then use each of those forums to its full potential to help this important work proceed.