Trade and Environmental Sustainability Structured Discussions

Plenary Meeting, 4 December 2024

Informal summary by the Co-Convenors[1]

The plenary meeting of the Trade and Environmental Sustainability Structured Discussions (TESSD), held on 4 December 2024, was chaired by the TESSD Co-convenors Ambassador Nadia Theodore (Canada) and Ambassador Ronald Saborío (Costa Rica). The morning session offered an opportunity for Members to tack stock of progress made since MC13 and exchange on priorities and possible outcomes towards MC14. The afternoon session covered development perspectives and policy solutions on trade and environmental sustainability through a panel discussion with five Ambassadors from developing Members and a fireside chat moderated by DDG Paugam with the two Co-convenors and the CTE Chair. Around 100 participants joined the discussions in hybrid format. Following the meeting, a reception sponsored by German Cooperation celebrated the conclusion of a successful year of TESSD work in 2024.

1  Introductory remarks

1.1.  Ambassador Saborío commended Members for their constructive engagement and hard work in TESSD, allowing them to collectively advance their knowledge and shared understanding. He recalled that the TESSD Ministerial Statement guided Members to find those areas where trade policy can best support their efforts in achieving their environmental and climate goals, and it encouraged Members to identify concrete actions that they could take to expand the opportunities for environmentally sustainable trade. During the meeting, the Co-convenors and Members welcomed the announcement by the Philippines to join TESSD as its 78th co-sponsor.

1.2.  WTO Deputy Director-General Jean-Marie Paugam commended TESSD for firmly establishing itself as an incubator within the WTO for generating new ideas and practices for addressing the intersection of trade and environmental challenges. He noted that the topics covered by TESSD had resonated at COP29 in Baku, Azerbaijan, and that TESSD had enormous potential to demonstrate that trade policy could effectively address the global crises of climate change, biodiversity loss and pollution. He invited Members to reflect on how to translate their discussions and experiences into concrete actions, and encouraged Members to work towards meaningful and impactful results for MC14.

2  Stocktaking and way forward towards MC14

Priorities and possible outcomes towards MC14 in Working Groups[2]

2.1.  The Facilitators of the four Informal Working Groups (WGs) provided a summary of the discussions that took place in the meetings of 15-16 April (_INF/TE/SSD/R/23), 17-18 June (_INF/TE/SSD/R/24), and 29-30 October 2024 (_INF/TE/SSD/R/25).[3] They also outlined possible priorities for 2025 and outcomes towards MC14 (Room document _INF/TE/SSD/RD/15). Gratitude was conveyed to Ariel Marie Quek (Singapore) as it was her last meeting in her role as Co-facilitator of the Working Group on Trade-related Climate Measures.

2.2.  In the WG on Trade-related Climate Measures (TrCMs), Members had engaged in the sharing of experiences on the use of TrCMs aimed at achieving specific climate change objectives, including the decarbonization of the buildings and construction sector as well as adaptation to climate change. On the way forward, it was proposed that Members would continue with work related to the climate objectives of: (a) clean energy transition; (b) climate change adaptation; and (c) decarbonization of industry and transport, including carbon measurement methodologies and standards. Regarding outcomes, the WG planned to work towards a compilation and mapping of policy measures shared by Members, and the identification of practical ways to enhance cooperation.

2.3.  Members broadly supported the proposed outcome in the WG on TrCMs. Acknowledging the contribution of TESSD to the revitalization of work in the Committee on Trade and Environment (CTE), Members encouraged the WG to continue playing a complementary role, while avoiding duplication of work carried out in the CTE. Two Members suggested reducing the number of WG meetings to reflect progress in the CTE and reduce workload. Another Member highlighted the importance of technical assistance and capacity building for developing countries and MSMEs in the area of TrCMs.

2.4.  In 2024, the WG on Environmental Goods and Services (EGS) continued work on renewable energy on marine and geothermal energy as well as regulatory cooperation and quality infrastructure systems, and added discussions on water management technologies under the objective of climate change adaptation. On the way forward, the Facilitator proposed that the WG would continue an objective-based approach and examine sector-specific issues involved in the promotion and facilitation of trade in EGS, deepening work on renewable energy and adding other sectors/technologies, including sustainable agriculture, while also addressing horizontal issues such as regulatory measures and development. On possible outcomes, it was proposed that the WG would further develop the Analytical Summary (_INF/TE/SSD/W/24/Rev.7), including the indicative TESSD list of EGS, and explore opportunities for collaboration and concrete actions that Members could undertake to promote and facilitate trade in EGS, including consideration of the possibility of guidelines, case studies or recommendations.

2.5.  Members broadly supported the further development of the Analytical Summary as an outcome document of the WG on EGS. A number of Members expressed interest in working towards a non‑binding reference list of EGS. Related suggestions included the need for support from a critical mass of Members for more technical work, to focus on methodological issues and criteria for the identification of environmental goods, and to work towards a common definition of environmental goods as a first step as there was still a need to clarify the objective and scope of work on a list of goods. A Member stressed that this process should not perpetuate past efforts like the Environmental Goods Agreement (EGA) negotiations as this could stall momentum and encourage unresolved debates. Members supported continuing with sector-specific work, with one Member expressing interest in sustainable agriculture, while also covering horizontal issues such as non-tariff barriers and regulatory issues. The need to facilitate fair and equal access to technologies was underlined by one Member.

2.6.  In the WG on Subsidies in 2024, Members continued their work on the potential positive and negative environmental effects of subsidies, and the sharing of experiences with subsidy design and consideration on how to enhance transparency and data availability. Discussions covered sustainable aviation fuels, green industrial subsidies and policy incentives along critical minerals supply chains. For 2025, the Facilitators mentioned that a number of Members had expressed interest for work to cover agricultural subsidies, biodiversity and industrial subsidies. The WG would aim to further enrich discussions by the involvement of varied stakeholders, including the private sector. Regarding outcomes, the WG would further develop the compilation of experiences and considerations into guidelines and/or best practices for subsidy design. The WG planned to also work towards a set of recommendations on how to enhance transparency and data availability.

2.7.  Members broadly supported working towards best practices for subsidy design as an outcome, while one Member did not support possible work on guidelines and two other Members pointed to the need for and possible difficulty in achieving consensus on guidelines. Several Members also expressed support for further work on transparency, while one Member noted that the Committee on Subsidies and Countervailing Measures (SCM Committee) would be the appropriate forum for such work. Members expressed different sector priorities, ranging from agricultural subsidies to industrial and related green subsidies. Some Members suggested to take into account and not duplicate ongoing work in other WTO bodies and initiatives on agricultural subsidies and fossil fuel subsidies.

2.8.  In the WG on Circular Economy – Circularity in 2024, Members had discussed trade-related aspects of circular economy along the entire lifecycle, sharing experiences on trade-related policy programmes enabling circularity in construction materials as well as the transport sector, including batteries for electric vehicles. In terms of the way forward, the WG planned to build on its mapping of trade and trade policy aspects along the product lifecycle, and focus work on priority sectors (e.g. electronics, batteries, renewable energy, textiles) and develop a compilation of sector-specific trade aspects and best practices as an outcome. The Facilitators also proposed that the WG would work towards a set of high-level and non-binding guidelines on circular economy and trade.

2.9.  Members broadly supported working towards a compilation of trade aspects and best practices for circular economy for priority sectors. Several Members also supported work on cross-sectoral guidelines, while one Member stated that it could not support such work. A suggestion was made to explore the nexus between environmental goods and services and circular economy. One Member mentioned that circular economy was a theme that could be lifted to the CTE.

Co-convenor proposal for TESSD output for MC14[4]

2.10.  The Co-convenors proposed a possible output for MC14 in the form of a factual and user‑friendly publication that would reflect on the evolution and contribution of TESSD to environmental sustainability and trade, consolidate the substance and key messages generated by the WGs and, where appropriate, offer relevant guidance and recommendations (Room document _INF/TE/SSD/RD/16). The output would be a publication intended for all Members participating in trade and environment work in the WTO as well as for a broader audience of policymakers and stakeholders.

2.11.  The proposal for a TESSD publication for MC14 received broad support from Members. Two Members expressed reservations regarding the inclusion of recommendations or guidance for domestic policymaking, as compared to guidance for TESSD as an initiative. One Member underlined the need to further clarify the objective and value added of the proposed output, while another Member suggested to further work on the structure of the deliverable, including possible cross‑sectoral issues. A suggestion was also made regarding the publication format, where a concise physical publication could be accompanied by an online part containing more substantive detail and Members' experiences.

3  Trade and environmental sustainability: Development perspectives and policy solutions

3.1.  As a continuation of the plenary TESSD meeting in the morning, the afternoon was dedicated to discussing developing country perspectives on trade and environmental sustainability as well as opportunities for identifying and pursuing trade policy solutions in the WTO. The afternoon session was attended by capital officials participating in the WTO Advanced Thematic Course on Trade and Environment.

3.1  Development perspectives on trade and environmental sustainability – national and regional experiences

3.2.  A panel, moderated by Carolyn Deere Birkbeck, Executive Director, Forum on Trade, Environment and the SDGs (TESS), with Ambassador Matthew Wilson (Barbados), Ambassador Jean-Pierre Baptiste (Chad), Ambassador Sofia Boza Martinez (Chile), Ambassador Nella Pepe Tavita-Levy (Samoa) and Ambassador Pimchanok Pitfield (Thailand) discussed national and regional policy experiences with trade and environmental sustainability and developing country priorities for work in the WTO, including TESSD and its four Working Groups.

3.3.  Ambassador Wilson of Barbados emphasized the need for financing and policy space to align trade with sustainable development, highlighting debt and water scarcity as key challenges. He stressed the importance of partnerships for regional technology transfer and that revisiting WTO rules were vital for enabling green transitions. He highlighted that TESSD was a forum to share experiences, learn and borrow from replicable solutions and build domestic capacity through knowledge exchange. He expressed interest in work on carbon standards, and circular economy and e-waste, while also suggesting further collaboration between TESSD and the informal WGs on Gender and MSMEs.

3.4.  Ambassador Baptiste of Chad highlighted the urgency of adaptation to climate change to Chad and other least developed countries (LDCs). He noted that Chad's national adaptation plan aimed at improving living conditions while preserving natural resources and adapting to climate change, focusing on climate-resilient agriculture, reversal of deforestation and desertification, and development of renewable energy. He emphasized the role of international trade and the African Continental Free Trade Area (AfCFTA) in driving green investments, energy transition and food security in Africa. Regarding work in the WTO and TESSD, he expressed interest in the topics of climate change adaptation, sustainable agriculture and investment and technology to exploit their green comparative advantage, and technical assistance to help firms in Africa comply with TrCMs implemented by third countries.

3.5.  Ambassador Boza of Chile highlighted environmental clauses in Chile's trade agreements which had strengthened Chile's commitments to biodiversity, climate action and regulatory rights. She highlighted that platforms like TESSD helped to better understand the crosscutting elements in areas such as circular economy, climate change, energy and other sectors, and options for trade to contribute to sustainable development. She underscored the need to strengthen mutual understanding on synergies between trade and environment. As a knowledge platform, TESSD had been very useful to Chile's domestic inter-ministry mechanism, examining trade impacts and solutions in relation to circular economy as well as biodiversity loss, climate change, pollution and hazardous waste. She highlighted the contribution of TESSD in strengthening dialogue among Members as well as with stakeholders, and encouraged that more experts from domestic institutions be involved in TESSD.

3.6.  Ambassador Tavita-Levy of Samoa said that agricultural exports had declined since the 1990s, while new industries like fishing, tourism and manufacturing had emerged, which all faced climate change threats. In response, Samoa had promoted biodiesel use, banned single-use plastics since 2018, and was a leader in sustainable tourism. She expressed interest in the work on environmental goods and services, circular economy and subsidies in TESSD, which could support her region in pursuing its trade and environmental sustainability agenda.

3.7.  Ambassador Pitfield of Thailand shared that rising sea levels and temperatures had disrupted Thailand's agricultural sector, and highlighted the importance of climate adaptation. Thailand was focusing on promoting green technologies and partnerships. However, getting technology transfers and capacity building, as well as high investment and operating costs, had proven to be a hurdle. She emphasized that work on sustainable agriculture should be given attention in TESSD, in addition to carbon credit schemes and standards harmonization. She also suggested that adaptation measures should be given more attention as compared to mitigation.

3.2  Fireside chat on trade policy solutions for environmental sustainability and the WTO

3.8.  A fireside chat, moderated by DDG Paugam, with TESSD Co-convenors – Ambassador Saborío (Costa Rica) and Ambassador Theodore (Canada) – and the CTE Chair, Ambassador Bollinger (Switzerland) discussed opportunities in the WTO, including in the CTE and TESSD, for trade policy to better contribute to achieving climate change and environmental objectives. It highlighted how TESSD could turn its roadmap towards MC14 into tangible outcomes, focusing on the value added of TESSD, its vision towards MC14, and how to get there.

3.9.  Ambassador Saborío highlighted TESSD's steady progress in fostering dialogue and inclusivity through its four WGs, benefitting all Members, including developing Members. In his view, TESSD allowed experience sharing between Members that in turn supported capitals to take informed decisions on trade and environment adapted to their own realities. He mentioned the aim of TESSD was to support and complement multilateral work. As such, TESSD had been an incubator of ideas and building bridges, outlining common views in different areas. He highlighted the importance of the four WGs to structure substantive, technical work and share experiences, as well as the important role of stakeholders, who supported discussion with facts and science. Finally, he shared the idea of a TESSD publication to act as knowledge capital.

3.10.  Ambassador Theodore emphasized TESSD's steady progress in supporting the CTE by fostering trade and environmental sustainability through gradual steps. She highlighted that the WTO and its Members had to deliver concrete solutions to showcase that the WTO and trade offered solutions to combat climate change, and for environmental sustainability. She outlined the path towards big objectives may be made of "tangible bite-size goals". To get there, she suggested ingredients of success: addressing the development dimension (including climate adaption, but also how trade could be a catalyst for investment, technology, infrastructure and capacity building), as well as a collective, multi-stakeholder approach.

3.11.  Ambassador Bollinger conveyed his view of TESSD's contributions to CTE: he highlighted the momentum to revitalize the CTE, and that TESSD had done substantive work that the CTE could benefit from, including on TrCMs, but also possibly on other topics. He further noted the complementarity between environmental initiatives and multilateral work, and that the former had been very active at MC13 while no multilateral statement on trade and environment had been issued at MC13. He mentioned his current task of engaging with Members on the way forward towards MC14, and that recent submissions on TrCMs could lead to concrete progress in the CTE. Finally, referring to his participation as CTE Chair at COP29, he reiterated that it was important to have trade people at such events, and that COP30 would be a milestone towards MC14, where it would be important to deliver on trade and environmental sustainability.

3.12.  Chad and Vanuatu intervened stressing the capacity constraints of LDCs and the importance of technical assistance and capacity building. As a reason for their engagement as co-sponsors, they highlighted the positive dynamic and complementary role of TESSD, allowing developing countries and LDCs to share experiences and build capacity regarding the use of trade policies for environmental sustainability.

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