High-Level Stocktaking event of the WTO Trade and Environmental Sustainability Structured Discussions (TESSD)

Your excellencies,
Ngozi Okonjo-Iweala, Director-General of WTO
Pamela Coke Hamilton, Executive Director of the ITC
Nadia Theodore, Ambassador and Permanent Representative of Canada to the WTO, and TESSD Co-convenor
Ronald Saborío, Ambassador and Permanent Representative of Costa Rica to the WTO and TESSD Co-convenor
Ladies and gentlemen,

Dear friends,

These structured discussions have perhaps never been as important as they are today.

When the TESSD were announced on November 2020, the world was already in crisis, ravaged by a pandemic which has so far taken over 20 million lives around the world. Two years later, the situation is now markedly worse. The pandemic is still not over. Climate change is hitting harder every year. A cost-of-living crisis is increasing poverty and hunger at record speed. And geopolitics, not economics, is now in the driving seat of globalization.

Last month we had the COP in Sharm el Sheikh, which I believe was a very good COP despite what some media headlines suggested. In Egypt, the Global South came together as one voice. Thanks to that, we now have a loss and damage fund which has still to prove itself, but which is a very important step forward in the discussions. Adaptation for the first time was given the amount of attention and focus that it merits. And most importantly, this COP in Egypt made clear that there is a development perspective to the climate transition, and that this perspective cannot be ignored.  

As part of this development perspective to the climate transition, there is an important chapter on trade, which will be crucial to deliver the new global supply chains on renewables, the decarbonized maritime industry, and the clean blue economy we need to meet our Sustainable Development Goals.

These structured discussions are therefore a microcosm of our COPs, which they cross-fertilize. During the TESSD meetings held so far, participants have discussed topics such as trade-related climate measures, sustainable supply chains, environmental goods and services, circular economy, fossil fuel subsidy reform, and sustainable food and agriculture.

During these discussions, the perspective, opportunities, and challenges for sustainable trade for developing countries and LDCs have been considered across all these topics. Among the 74 WTO members participating in these structured discussions, there are countries from all regions and all levels of development. These structured discussions are therefore of this time and for this time, sharing the essential qualities needed to confront the challenges ahead.

Your excellencies,

UNCTAD agrees on the four main challenges these structured discussions should tackle going forward: trade-related climate measures, environmental goods and services, the circular economy, and subsidies. I would like to briefly share some ideas on each of these four areas.

On Trade-Related Climate Measures,

As we know, due to climate disasters, many developing countries will face significant challenges to maintain production, and related employment and export levels in the agriculture, fishing, and tourism sectors over the coming decades. Therefore, developing countries need to enhance their trade resilience ex-ante through adaptation measures and actions that reduce exposure and risk.

Trade negotiators could begin work to elaborate a ‘climate waiver’ allowing countries to make use of trade-enabling climate policies under their Paris Agreement commitments and UNFCCC obligations. This may require that WTO members revise their understanding of the principle of non-discrimination of like products.

On Environmental Goods and Services (EGS),

UNCTAD welcomes progress by the TESSD in finding ways to accelerate action on renewable energy, energy efficiency and climate change adaptation. Environmental goods and services must include those related to the sustainable use of biodiversity and oceans, as well as plastic substitutes and organic agriculture.

A nature-based approach would fully align current discussions with the SDGs and would widen them to encompass a broader set of goods and services of export interest to developing countries. In this later aspect, Members of the UN Global System for Trade Preference among developing countries could explore the idea of launching a new round of negotiations for a sectoral agreement on environmental goods.

On the Circular Economy,

We support developing countries in creating more circular economies through our Sustainable Manufacturing and Environmental Pollution programme, thanks to the support of the United Kingdom. In this regard, it is essential that we come up with a clear understanding on criteria for life cycle analysis, increased capacity in pollution reduction, waste management and recycling.

As part of this effort, we must support the Informal Dialogue on Plastics where we have put forward a specific plastic trade database.

And finally, on subsidies:

Recent OECD and IEA data show that fossil fuels subsidies doubled to 700 billion dollars last year, from 362.4 USD billion in 2020. We can expect these subsidies to keep growing this year, as a result of the energy crisis caused by the war in Ukraine. This is a very worrisome trend that can derail our climate negotiations, especially if most subsidies are enacted by advanced economies. Measuring and effectively notifying environmentally damaging subsidies is an essential first step here. A second and more significant step would be to shift these harmful subsidies to positive and sustainable activities such as the Green Climate Fund, and renewable energy support programmes.

 

Your excellencies,

UNCTAD will remain actively engaged in the TEESD process, to which we will seek to imbue a global development perspective to trade and the environment.

Two years after the start of this ambitious project, we remain as committed as on the first day, and as strong in our belief that these structured discussions are the right way forward in these difficult times. I therefore extend all of my support and that of the institution I represent, to our partners, participating member countries, and co-convenors. Thank you.