UNCTAD trade officials said late Tuesday afternoon that a new Forum on Trade and the Green Economy will be established and will hold its first session in December under the auspices of UNCTAD. The Forum will have as one of its objectives the resolution of conflicts involving trade rules and government environmental measures before they progress to more formal dispute–settlement mechanisms.
The Forum will be scheduled to meet twice a year, giving a panel of experts the opportunity to moderate and suggest solutions, the UNCTAD Trade and Development Board (TDB) was told.
The intent is to have “an institutional space. . . not to legislate, but to reduce frictions and perhaps to reduce trade disputes,” said Guillermo Valles, Director of the Division on International Trade in Goods and Services, and Commodities (DITC), UNCTAD.
Attempts to establish and expand the “green economy” recently have included a range of government measures around the world that mandate or require companies to procure inputs from domestic rather than imported sources, said Lucas Assuncao, Head of the Trade, Environment, Climate Change, and Sustainable Development Branch of DITC. Rules also have been set by some countries and regional markets on fees, permits, or markets for carbon emissions – regulations that can increase costs for the domestic firms subject to them.
Domestic-input requirements indicate by law that firms must produce goods or obtain inputs for their goods from sources that have produced them according to domestic standards for protecting the environment. The domestic requirements are often linked to other policies, such as subsidies or “feed-in” tariffs designed to give domestic green businesses a head start. Imported inputs may not be produced according to such environmentally friendly standards. Driving the trend are such factors as care for the environment and the wish to create “green” jobs.
“Everybody – or almost everybody – is using measures like this,” Mr. Assuncao told the TDB.
It is hoped that the Forum “can ascertain the economic and environmental effectiveness of these measures”, discover to what extent they encourage local value addition and competitiveness, investigate links to other green policies and measures, investigate the impacts of these rules and regulations on trade, and discuss various approaches to reconciling the measures with rules on free trade, Mr. Assuncao said.
“We see a role for UNCTAD in reducing these frictions,” he said, adding that the World Trade Organization “has welcomed the idea and agreed to participate informally at the expert level,” along with several other agencies.
The format of the Forum is that a panel of experts will discuss relevant issues with delegates and trade officials, he said. The expert hearing may be followed by a “diplomacy dialogue” to give national delegations a chance to engage with the experts.
With the involvement of academics, policy economists and trade officials, it is hoped that solutions may emerge that save such issues from going before more formal dispute–resolution mechanisms, such as those at the World Trade Organization, Mr. Assuncao said.