KEY
CONSIDERATIONS FOR TRADE-RELATED CLIMATE MEASURES:
SUGGESTED APPROACHES TOWARD A SUSTAINABLE FUTURE
COMMUNICATION
FROM THE REPUBLIC OF KOREA
The following
communication, dated 21 March 2025, is being circulated at the request of the delegation
of the Republic of Korea.
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1 LEVERAGING TRADE FOR CLIMATE ACTION: ADVANCING SUSTAINABLE
DEVELOPMENT AND ECONOMIC PROSPERITY
1.1. The climate crisis has emerged as a
critical and pressing concern for the global community, necessitating immediate
and collective action. Given the urgency of addressing this crisis, WTO Members
have been implementing a comprehensive range of actions aimed at reducing
carbon emissions, accelerating low-carbon transitions, and fostering
climate-resilient development pathways. Recognizing the substantial role of
anthropogenic activities in driving climate change, a system-wide approach is
vital to ensure the coherence and effectiveness of these measures.
1.2. In this context, trade can serve as
a powerful engine for climate action by fostering economic development while
also supporting the transition to net-zero emissions. At the same time, varying
national strategies to combat climate change should be considered within the
multilateral trading system. This would ensure climate action is pursued in a
manner that supports – rather than restricts – trade, investment, and business
activities. By embracing an open and facilitative trading environment, WTO
Members can generate tangible economic benefits, support workforces, and drive
sustainable growth while effectively addressing the climate emergency.
2 TRADE-RELATED CLIMATE MEASURES: CURRENT DEVELOPMENTS AND DISCUSSIONS
2.1. An increasing number of WTO Members
are either adopting or considering a diverse array of trade-related climate
measures (TrCMs) to meet their climate objectives. The landscape of TrCMs is
broad, complex, and constantly evolving, with new approaches rapidly emerging.
A key challenge is to balance robust climate ambition with trade-related
instruments that ensure fairness, transparency, and proportionality, while
avoiding unnecessary barriers to trade. Indeed, TrCMs should be designed to
foster a favorable trade environment by promoting fair competition and
inclusivity while, where appropriate, minimizing potential negative
consequences to the greatest extent possible.
2.2. WTO Members are actively engaging
in numerous discussions and submissions related to TrCMs across various WTO
bodies, like the Committee on Trade and Environment (CTE) and the Committee on
Technical Barriers to Trade (TBT). Notably, the United States (_WT/CTE/W/260), China (_WT/CTE/W/263), Japan (_WT/CTE/W/264), and Djibouti on behalf of LDCs (_WT/CTE/W/266) have submitted papers. In
addition, two thematic sessions on TrCMs have taken place in the CTE (_RD/CTE/265 and _RD/CTE/288), providing Members with the opportunity to
present their perspectives, share national experiences, and explore areas for
collective action.
2.3. Building on these discussions, this
proposal seeks to set forth suggested approaches to TrCMs, which aim to provide
Members with a structured yet flexible guide to help ensure coherence across
different policy frameworks. Recognizing that the applicability of suggested
approaches may vary depending on the specific measure and national context,
these approaches are intended as a valuable reference for policymakers.
3 OUTLINING SUGGESTED APPROACHES FOR TRADE-RELATED CLIMATE MEASURES
3.1. To minimize the negative consequences arising from fragmented
climate measures on trade, while applying the measures non-discriminatorily, it
is important to establish a set of shared considerations that promote
consistency, interoperability, flexibility, and transparency.
3.1 Consistency and Interoperability
3.2. A lack of consistency and interoperability may be perceived as a
barrier to trade and can undermine collective climate objectives. Collective
efforts among WTO Members are therefore essential to develop a common
understanding of TrCMs and to avoid a fragmented patchwork of measures.
3.3. Members are encouraged to consider adopting international standards
for measuring carbon emissions. Members are encouraged to explore ways to
enhance interoperability across national systems, such as through mutual
recognition of measurement, reporting and verification (MRV) frameworks, while
considering effective carbon prices, be it explicit or implicit prices, where
possible.
3.2 Reasonable Flexibility
3.4. It is important to reduce unnecessary administrative burdens as we
seek to achieve proportionality between environmental benefits and regulatory
costs. Members may consider options like exemptions, including de minimis
thresholds, or grace periods to mitigate the impact on vulnerable businesses
such as micro, small and medium-sized enterprises (MSMEs). Additionally,
conducting impact assessments for MSMEs – especially those from least-developed
countries (LDCs) – can help design measures in a fair and equitable manner.
3.5. Members are encouraged to ensure protection of business
confidentiality, by, for example, providing reporting options (e.g., allowing
exporters, not limited to importers, to report the relevant information
directly) and limiting the scope of required information to only what is
necessary for environmental purposes.
3.3 Transparency
3.6. Transparency is particularly crucial in addressing climate change, a
global challenge that requires widespread access to information for Members,
stakeholders, and civil society. Given the far-reaching implications of TrCMs,
ensuring transparency is essential to fostering trust, accountability and
effective policy implementation. Clear, accessible and timely information on
the rules and procedures of TrCMs helps businesses understand regulatory
frameworks, assess market opportunities, and anticipate compliance costs.
3.7. To promote transparency and robust consultations before implementing
TrCMs - while preserving current WTO notification requirements - Members are
encouraged to consider ways to better enhance the identification of notified
measures and to improve transparency for those TrCMs not currently subject to
such requirements.
3.8. Members are encouraged to provide sufficient opportunities for both
domestic and international stakeholders to submit feedback and have their views
meaningfully considered during the development of measures. In addition,
Members are encouraged to, without discrimination, allow reasonable time for
relevant stakeholders to prepare for the implementation of measures whenever
such measures are revised or changed.
4 Way Forward
4.1. With a view to developing inclusive and multilateral approaches, we
propose intensifying practical discussions in the WTO CTE, in collaboration
with other relevant committees, including the WTO TBT Committee. While
considering discussions within other international organizations, such as the
Organization for Economic Co-operation and Development Inclusive Forum on
Carbon Mitigation Approaches (OECD IFCMA) and the International Organization
for Standardization (ISO), we should focus on practical outcomes that yield
tangible benefits for global trade and industries.
4.2. Furthermore, to promote inclusive trade-related climate action,
discussions on trade, environment and capacity-building within the CTE,
together with relevant WTO bodies, should be enhanced. This could include
capacity-building and knowledge sharing efforts to support mutual understanding
among Members with respect to TrCMs, while taking into account the perspectives
expressed by LDCs (_WT/CTE/W/266).
4.3. Ahead of the 14th WTO Ministerial Conference (MC14), we
hope to deliver concrete outcomes, such as inclusive and multilateral
approaches for TrCMs. By strengthening cooperation and shared goals, the WTO
can play a critical role in achieving sustainable prosperity and inclusive
growth. We stand ready to constructively engage with all WTO Members on this
journey.
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