Role of the MTS in promoting coherence between trade & green economy policies

Rio de Janeiro, 19 June 2012 Role of the MTS in promoting coherence between trade & green economy policies Ludivine Tamiotti Counsellor, WTO Trade and Environment Division, Ludivine.tamiotti@wto.org ICTSD Trade and Sustainable Development Symposium at Rio+20 CISDL-Panel 3: International Trade and the Green Economy

Rules Trade opening Objectives Institutions and monitoring Enforcement

Rio Declaration (Principle 12) Trade and Sustainable Development Johannesburg Plan of Implementation WTO (Preamble, Marrakesh Agreement)

Key policy instrument nvironmental requirements, e.g. roduct/production specifications, oluntary/mandatory, characteristics/ erformance, labelling Price & market mechanisms, e.g. environmental taxes, ETS Support programs, e.g. R&D, fiscal, price and investment measures Green procurement, e.g. adoption of technical specifications & evaluation criteria that promote procurement of green goods & services Key objective Improve resource use & reduce pollutants, e.g. for energy efficiency, forestry management Internalize env tal costs, e.g. for GHG emissions Promote development & deployment of green technologies Promote sustainable consumption and production Key WTO Agreement TBT Agreement GATT SCM Agreement GPA

Environmental requirements Increasingly significant determinants of access to foreign markets Concerns related to inadequate design, insufficient transparency, lack of harmonization or mutual recognition

Price and market mechanisms May increase production costs of domestic firms Border adjustments? Relocation of production to a country that does not apply an equivalent instrument?

Green Support Programs 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

Environmental requirements Improve resource use and reduce pollution Impede market access? Taxes and other market tools Address environmental externalities Border adjustments? Subsidies Promote green technology innovation and diffusion Trade distortions?

Rights of others under basic trade rules Right to adopt measures to achieve legitimate objectives

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

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

Technical Barriers to Trade Agreement 1995 to mid 2012: 14951 notifications submitted to the TBT Committee, an average of 835 measures notified per year 1995 to 2011: 330 specific trade concerns raised in the TBT Committee, an average of 19 concerns raised per year 18% about measures related to the environment 1/3 about measures related to the environment

Trade Policy Review Mechanism 2008: WTO Monitoring Mechanism Legally-Binding Dispute Settlement Mechanism

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

WTO rules, as confirmed by case law Under certain conditions, Members can adopt trade-related measures aimed at protecting the environment Essential to maintain a balance between 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 which seek, among other things, to ensure that green measures are not applied arbitrarily and not used as disguised protectionism. several carefully crafted conditions are respected