Advancing Multilateral Discussions on Trade-Related Climate Measures

Communication from China

The following communication, dated 7 June 2024, is being circulated at the request of the delegation of China.

_______________

1  Introduction

1.1.  There is a growing interest among WTO members in Trade-related Climate Measures (TrCMs) with significant trade implications. Since last year, the majority of proposals submitted by members to the Committee on Trade and Environment (CTE) have been related to TrCMs. Additionally, more items on the CTE agenda are now related to TrCMs.

1.2.  Discussions have started at the multilateral level. With a view to engaging more substantive, technical, and productive discussions to further members' understanding and promote collective actions to tackle current environmental and climate challenges, this communication provides some reflections and suggestions on how to advance multilateral discussions on TrCMs.

2  Reflections and Suggestions

2.1.  Secretariat's Work. The Secretariat should draft a compilation based on members' submission and list members' concerns and interests, with a view to identifying commonalities of members' interests, proposals and concerns on TrCMs. Additionally, as the Secretariat has conducted research on environment-related provisions in RTAs[1], it would be useful for the Secretariat to provide a background note on recent developments in the environment-related provisions in recent RTAs and bilateral trade agreements. Such compilation could inform the membership and serve as a reference for future discussions.

2.2.  Hybrid Approaches to Discussions. In parallel to the current discussions in the CTE, more scenario-based, solution-oriented technical-level discussions could be held. These discussions could take place through the ongoing series of thematic meetings under the CTE, informal meetings led by the CTE Chair, or other multilateral working streams such as technical working groups, workshops, or retreats with appointed facilitators. When necessary, the discussions could be done jointly with other relevant committees or stakeholders. Members are also encouraged to organize workshops on TrCMs from different perspectives. Such discussions should be reported to the CTE for transparency purposes.

2.3.  Suggested Content for the Discussions. Taking into account members' proposals, discussions could focus on the following areas:

- Improving Transparency and Understanding of TrCMs. Share national experiences and practices in designing TrCMS, with a view to developing guidance for policy design of TrCMs[2]. Discussions could be organized category by category, for example, economic instruments (including carbon pricing, carbon taxes and carbon border adjustment mechanisms), regulatory instruments (including regulations, standards, labelling), and other instruments (including green procurement, technology cooperation, technical assistance and capacity building). Further breakdowns within each category could be made if necessary.

- Enhancing Consistency and Inter-operability of Different TrCMs. Understand different data standards and underlying methodologies applied in different categories of TrCMs, with a view to reducing unnecessary data work.

- Reducing Potential Trade Frictions. Analyze the potential trade frictions caused by different measures and discuss approaches to minimize trade and market access impact for members.

- Promoting the Diffusion of Goods, Services, or Technologies. Find cooperative ways to support the diffusion of climate-related goods, services or technologies for the transition to a carbon-neutral global economic and trading system.

3  Next Steps

3.1.  A First Step. A journey of a thousand miles begins with a single step. Recently, China submitted to the TBT Committee a proposal to convene a thematic meeting to explore the role of the TBT Agreement in decarbonization.[3] The aim is to re-examine the tools for decarbonization-related work under the TBT Agreement and provide guidance to members on reducing technical barriers to trade. The communication also encourages members to share their domestic good regulatory practices on decarbonization and identify topics of common interest for further discussion in the TBT Committee. This is China's latest effort to advance the discussion on TrCMs at the WTO in a more substantive, technical, and, hopefully, productive way.

3.2.  More Ideas Welcome. We welcome members' concrete ideas on how to advance the discussion on TrCMs at the multilateral level. We hope that the multilateral discussion on TrCMs will proceed in a well-organized and expeditious manner based on members' suggestions.

__________