DDG: Wolf: Short Answers to Big Questions on the WTO and the Environment



DDG Alan Wolf | World Trade Organization

Good afternoon and welcome to the launch of the booklet “Short Answers to Big Questions on the WTO and the Environment”.

I would like to thank Daniel Ramos and Ludivine Tamiotti, who are the main authors of the booklet, as well as colleagues from the Trade and Environment Division and other Divisions in the house who made contributions to it. You’ve done a great job!

Environmental issues are woven into the history of the multilateral trading system.

But the role of trade and the WTO on the environment is complex, and as a result, it is not always well understood.

Is trade good or bad for the environment? Does the WTO prevent governments from protecting the environment? How can the WTO support its Members’ efforts to green their economies?

These are very important questions which deserve our close attention. Not least because they are linked with broader efforts to restore confidence in:

  • A WTO that lives up to the spirit and letter of the Marrakesh Agreement, its founding document. In its opening paragraph, the Marrakesh Agreement enshrines sustainable development as an overarching principle of the WTO.
  • A WTO that contributes fully to the achievement of the 2030 Agenda for Sustainable Development. The Agenda looks to trade and the WTO to turn the 17 Sustainable Development Goals into reality.
  • And a WTO that continues to deliver benefits reaching far and wide, as ever more frequent and extreme weather events expose the vulnerability of the supply, transport and distribution chains that make trade possible in the first place.

Trade, environment and COVID-19

The debate on trade and the environment is likely to become even more prominent in the years ahead.

One big reason is the COVID-19 crisis, which has made very clear how nature, human health and the economy are intimately connected.

Many have argued that environmental degradation, such as biodiversity and habitat loss and climate change will make potential zoonotic outbreaks like COVID-19 more common in the future. Others have noted the disruptions to our lives from the pandemics might be a sign of what is to be expected in a climate affected future.

The backlash from nature is all around us, from wildfires and droughts to hurricanes and floods.

Calls for ambitious action to safeguard our environment, especially from young people, are growing louder by the day.

At the same time, the pandemic has put huge additional strains on the global trading system — in fact, on the whole global economy.

Trade tensions are on the rise and continued escalation risks having a major economic impact.

How we respond will be crucial because a strong and effective global trading system needs to be a key part of the global response to the pandemic and efforts to build back greener and better.

Three signposts

The short answers to the big questions in the booklet that we are launching today serve as signposts that can guide us on the road towards a WTO that works better for people, planet and prosperity in the 21st century.

I would like to highlight three key signposts that are outlined in the booklet.

  • The first is that trade and environmental sustainability have always been and will remain closely intertwined.

The booklet reminds us that governments already use trade measures to achieve environmental goals.

Examples of measures include preferential tariffs for green goods, energy efficiency requirements for household products, licensing schemes to limit trade in endangered animals and plants, taxes on hazardous chemicals and incentives schemes for low-carbon technologies.

What’s more, our data here at the WTO show that this trend has been intensifying over time.

Today, almost 1 in 6 notifications of trade measures to the WTO is about measures related to the environment, compared with 1 in 12 when the WTO was created 25 years ago.

So we cannot shy away from the debate on trade and environmental sustainability.

There is a responsibility that must be borne by the whole international policy community to listen to concerns, find solutions and facilitate collaboration not just among governments, but also consumers, the private sector and other stakeholders.

The idea of today’s publication can be traced back to the 2018 event that kicked-off the WTO and UNEP partnership.  WTO and UNEP have joined forces to provide a platform for interested stakeholders from all sectors of society to exchange ideas, showcase successful experiences and improve understanding of how trade can more effectively help bring about sustainable development.

  • This brings me to the second signpost: WTO rules have not prevented governments from adopting measures to tackle environmental challenges.

The booklet distils the complex legal questions that have arisen in some environment-related WTO cases into a few key considerations:

  • In environment-related WTO cases, the environmental goal was never the issue. Instead, the disputes focused on the protectionist and arbitrary aspects of the measure. Those protectionist aspects may in fact have worked against the goals of the measure in question by preventing trade from playing its full role in promoting the most efficient solution to a given environmental challenge.
  • In line with this, WTO cases have shown that WTO members have the freedom to differentiate between polluting and greener products. There is one caveat: in doing so, they must avoid unjustifiable or arbitrary discrimination.

This is one of the key contributions of the booklet, to correct  serious misperceptions about the implications of WTO rules for environmental action.

  • The third and final signpost is that protecting the environment and participating in global trade can and must go hand in hand.

As the booklet notes, the impact of trade-opening on the environment is complex and depends on many factors.

However, closing off trade would not necessarily result in a better environment.

What matters from an environmental perspective is not whether goods and their components cross national borders to reach the final consumer.  What matters instead is the environmental impact of those goods at every stage of their life cycle, from production and packaging to transport, use and disposal.

We may achieve a better environmental outcome by producing goods wherever it is most environmentally efficient to do so and allowing trade to match global supply and demand.

This requires trade approaches that pull us in the direction of sustainability.

Recent WTO work on trade and environment

A growing number of WTO members recognize this reality.

We have seen a marked increase in the level of engagement in the Committee on Trade and Environment, a unique forum dedicated to enhancing our dialogue on trade and environment issues.

Partly as a result, we have also seen the rise of coalitions around specific environmental topics such as the circular economy, plastic pollution, fossil fuel subsidy reform and clean technologies.

This is the right way to go, because trade policies have a huge potential to support sustainability.

The current crisis calls for a collective response on trade that fosters sustainability, inclusiveness and resilience.

The WTO Secretariat is here to support WTO members in their search for flexible, creative and pragmatic solutions.

The booklet that we are releasing today is an effort in this direction.

Thank you all for joining us. I look forward to the discussion.

Ambassador Alan Wolff began his four-year term as WTO Deputy Director-General on 1 October 2017. Formerly Senior Counsel at the global law firm Dentons, he is one of the world’s leading international trade lawyers. He has been engaged to resolve some of the largest international trade disputes on record. For the last six years, he has served as the Chairman of the National Foreign Trade Council (NFTC) which today represents hundreds of American companies who employ millions of workers. He is Chairman of the Board of the Institute for Trade and Commercial Diplomacy (ITCD).

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