Green Economy Measures and Relevant WTO Rules Key WTO Agreement Key policy instrument Key objective Environmental requirements, e.g. Product/production specifications, voluntary/mandatory, characteristics/ performance, labelling Improve resource use & reduce pollutants, e.g. for energy efficiency, forestry management TBT Agreement Internalize env’tal costs, e.g. for GHG emissions Price & market mechanisms, e.g. environmental taxes, ETS GATT Promote development & deployment of green technologies Support programs, e.g. R&D, fiscal, price and investment measures SCM Agreement Green procurement,e.g. adoption of technical specifications & evaluation criteria that promote procurement of green goods & services Promote sustainable consumption and production GPA
Green Economy Measures and Potential Trade Impacts May increase production costs of domestic firms Border adjustments ? Relocation of production to a country that does not apply an equivalent instrument?
Green Economy Measures and Potential Trade Impacts May lower costs for producers, leading to lower green product prices May reduce exporting countries’ access to the market of the subsidizing country or may increase the exports of the subsidizing country
Green Economy Measures and Potential Trade Impacts Increasingly significant determinants of access to foreign markets Concerns related to inadequate design, insufficient transparency, lack of harmonization or mutual recognition
WTO: A framework for advancing sustainable development Living standards, full employment, using the world's resources sustainably & protecting the environment Objectives Policy space for necessary trade-related measures for legitimate objectives such as the environment, subject to conditions aimed at avoiding hidden protectionism System of rules Institutions & Monitoring Mechanisms 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 Enforcement Mechanism & WTO Case Law Leads to more efficient allocation of natural resources, stimulates growth and raises income levels, improves access to green technologies Core Mission of Trade Opening
Transparency, Monitoring & Enforcement Mechanisms of the WTO The WTO is a repository for trade-related policy information and a forum for deliberations Technical requirements Members inform each other about new or forthcoming trade-related measures Sanitary and phytosanitary measures Subsidies Agriculture measures
Transparency, Monitoring & Enforcement Mechanisms of the WTO Technical Barriers to Trade Agreement Example… 1995 to mid-2011: 13500notificationssubmitted to the TBT Committee, an average of 800 measures notified per year 18% about measures related to the environment 1995 to mid-2011: 317 specific trade concerns raised in the TBT Committee, an average of 19 concerns raised per year 1/3 about measures related to the environment
Transparency, Monitoring & Enforcement Mechanisms of the WTO Trade Policy Review Mechanism Protectionism 2008: WTO Monitoring Mechanism Legally-Binding Dispute Settlement Mechanism
International Co-operation on Green Economy Measures The WTO Committee on Trade and Environment is the right forum to foster international co-operation on trade-related green economy measures Coverage includes The effect of green labelling schemes on market access Sustainability aspects of trade in individual sectors such as forestry and energy
Policy Space for Green Measures related to Trade Under certain conditions, Members can adopt trade-related measures aimed at protecting the environment WTO rules, as confirmed by case law the right of Members to take regulatory measures to achieve legitimate policy objectives Essential to maintain a balance between the rights of other WTO Members under basic trade rules
Policy Space for Green Measures related to Trade 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.