This article is part of a Synergies series on climate and trade curated by TESS titled Addressing the Climate Crisis and Supporting Climate-Resilient Development: Where Can the Trading System Contribute? Any views and opinions expressed are those of the author(s) and do not necessarily reflect those of TESS or any of its partner organizations or funders.

-----

Sustainable development is recognized as a core principle of the World Trade organization (WTO). The preamble of the 1994 Marrakesh Agreement establishing the WTO states that the organization should conduct its activities “allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development.” In 2001, the Doha Ministerial Declaration of the 4th WTO Ministerial Conference reaffirmed this commitment, recognizing that the pursuit of sustainable development was fully consistent with an open multilateral trading system. At the 12th WTO Ministerial Conference (MC12) in June 2022, members in the Outcome Document recognized “global environmental challenges” and noted “the importance of the contribution of the multilateral trading system to promote the UN 2030 Agenda and its Sustainable Development Goals.”

In spite of this lofty political goal of operationalizing the complementarity of trade with sustainable development, WTO pursuits in this policy arena have been modest, at best. Following MC13 in early 2024, many observers were disappointed with the failure of governments to reach outcomes that advance sustainability objectives.

Most members, however, have demonstrated their willingness to engage on sustainability and trade at the WTO. For example, statements at MC13 from the Organization of African, Caribbean and Pacific States (OACPS), the Pacific Group, and the LDC group, drew attention to concerns about the environmental crises and the need for enhanced cooperation on a range of sustainability-related topics. The member-led initiatives on plastic pollution, fossil fuel subsidy reform, and trade and environmental sustainability issued statements and work plans. There also is general accord on the need to revitalize the work of the Committee on Trade and Environment.

In short, the level of ambition of using trade to advance sustainable development in a multilateral setting can be raised. Yet this impetus is running against strong geopolitical and political headwinds that are threatening the trade and sustainability agenda.

In this broader context, a number of ideas and frameworks have emerged to recalibrate the multilateral trading system by placing the pursuit of sustainable development at its core. Proposals have also emerged for developing countries to craft their own sustainable trade agenda, with A Sustainable and Inclusive Trade Agenda for CARICOM (Caribbean Community) being prominent. This comprehensive agenda proposes focusing on policy coherence, aligning trade policies with environmental and social objectives, capacity building to enhance institutional and regulatory capacity, and strengthening intra-regional trade to build resilience.

The OACPS could seek to replicate this coherent cluster of policies across its diverse membership. OACPS members already contribute to WTO trade and sustainability as can be evinced from Cabo Verde, Chad, Fiji, The Gambia, Maldives, Senegal, and Vanuatu co-sponsoring the ministerial statement on trade and environmental sustainability, while Barbados, and Fiji are two of the six coordinators that championed the ministerial statement on plastic pollution.

The OACPS has long focused on delivering the WTO development dimension through increased flexibilities on tariff liberalization reduction commitments in agricultural and industrialized goods coupled with the delivery of trade capacity building measures. However, the group’s more muscular effort was best expressed by its collaboration with the EU to craft a new architecture on special and differential treatment as captured in Section II of the WTO Trade Facilitation Agreement (TFA).

The OACPS could support the emergence of an ambitious WTO trade and sustainability agenda by pursuing the following plan.

First, seek to negotiate a plurilateral agreement (similar to the Government Procurement Agreement with benefits limited to parties) on trade and sustainability. Given the expanse of sustainability disciplines, the initial phase should seek to support green industrialization with thrust on market access for both goods and services, trade regulatory measures (including disciplines on subsidies), and trade-related technical assistance. The TFA (and the Investment Facilitation for Development Agreement) could be replicated in terms of non-industrialized members being able to self-designate their level of readiness to adopt commitments.

Second, a rendez-vous clause could be inserted to later address a raft of additional built-in agenda items such as sustainable tourism, food security, the blue economy, and renewable energy. The inclusion of these commercially relevant sectors would serve to increase the level of ambition and resultantly enhance the impact of trade on OACPS sustainable development.

Third, establish a dedicated trade-related technical facility to enhance sustainable development in developing and least developed countries. Industrialized countries have long resisted empowering the WTO to deliver trade-related technical assistance. That resistance notwithstanding, the WTO manages the Enhanced Integrated Framework (EIF), Standards and Trade Development Facility (STDF), and the Trade Facilitation Agreement Facility (TFAF). The WTO has also launched the Cotton Partnership with AFREXIMBANK, Better Cotton Initiative, FIFA, ILO, ITC, and UNIDO to support African cotton farmers capture greater value from their exports. A dedicated facility to promote trade and sustainability could be modelled on the EIF with its institutionalized partnership among least developed countries, donors, and multilateral agencies. International development partners such as the Accelerated Partnership for Renewables in Africa, Global Development Initiative, ITC, OECD, UNIDO, UNCTAD, WIPO, and World Bank could constitute core membership of this trade-related technical assistance platform.

Fourth, establish a platform to facilitate strengthened coherence between trade and all facets of global sustainability initiatives. This would entail a clearing house to ensure consistency between the UN Sustainable Development Goal agenda, climate change negotiations (UNFCCC), agricultural development (FAO), industrial development (UNIDO), trade and development (UNCTAD), shipment of hazardous waste (UNEP), and financing for development (slew of international financing institutions, development banks, and donors). In addition to securing increased coherence, deployment of this approach would also arrest OACPS members’ challenges reflected in both weak trade and sustainability governance frameworks and limited negotiating capacity.

Fifth, develop innovative solutions to trade capacity building measures aimed at enhancing green industrialization in OACPS countries. UNIDO has crafted a number of programmes to promote sustainable industrial development in developing and least developed countries, most notably, the Green Industry Initiative, Green Industrial Policy Programme, and Partnership for Action on Green Economy. One approach worth replicating is the EU strategic partnerships on critical raw materials.

For example, the EU signed a memorandum of understanding (MOU) with Namibia in November 2022 to develop the southern African country’s green hydrogen. The partnership combines trade (local value content), mobilization of private investment complemented by both Global Gateway and European Investment Bank financing, and the development of value chains (support infrastructure and industrial capacities). The MOU also offers the promise of both technology transfer and skills partnership to promote sustainable industrialization. It should be recognized that the EU interest in critical raw materials is triggered by its need to strengthen economic security. However, the major global trade and development partner’s approach of integrating trade, investment, infrastructure, and logistics support measures is worth extending to the overall pursuit of sustainable development in OACPS countries. This EU approach embedded in these strategic partnerships on critical raw materials could also serve to inform effective implementation of the Samoa Agreement where circularity, green industrialization, beneficiation, and the blue economy are recognized as key elements in pursuit of sustainable development.

The EU’s pursuit of Clean Trade and Investment Partnerships (CTIPs) could also be a useful model to foster green industrialization partnerships in OACPS countries. These EU instruments will seek to establish expansive frameworks for partnerships with third countries on energy, critical raw materials, technology, trade, and investment with the aim of securing improved EU access to raw materials, clean energy, and clean technology. Similar to the bloc’s strategic partnership on critical raw materials, the innovation of CTIPs rests with combining the promotion of private sector investment with public financial guarantees, new public procurement rules, guaranteed offtake agreements, and trade-related technical assistance. The EU and South Africa recently agreed to launch CTIP negotiations to, inter alia, develop cleaner supply chains and support battery production in the major African economy while developing regulatory cooperation.

These five elements of an OACPS approach to prosecuting a strengthened trade and sustainable development agenda in the multilateral trading system reflects the acute vulnerability of climate change on the group’s members. This vulnerability is most intensely manifest in small island developing states (SIDS) that are heavily impacted by the climate emergency. Beyond this, most OACPS countries experience heavy commodity dependence, with UNCTAD reporting that 81% of landlocked developing countries, 74% of least developed countries, and 61% of SIDS are commodity-dependent. Promoting an integrated green industrialization agenda in the WTO presents the OACPS with the chance not only to mitigate the pervasive impact of climate change but also escape this commodity dependence.

OACPS efforts to advance its trade and sustainability agenda within the WTO should be complemented by massive undertakings to bolster renewable energy production. It is well recognized that the availability of reliable and cost-efficient renewable energy remains a sine qua non to promote beneficiation and industrialization from mining, extraction, and processing in OACPS countries. However, the value of renewable energy extends to other main economic sectors as showcased in a recent IRENA report on agri-food value chains in Guinea. But perhaps the best indicator of the link between trade and sustainability might emerge from the Democratic Republic of Congo. Imagine leveraging the OACPS member country’s immense cobalt holdings (source of 70% of global cobalt exports) to locally develop lithium batteries to bring electricity to a society where the electrification rate currently stands at 19%.

Major trading partners such as China, the EU, and the United States have demonstrated the robust return of industrial policy. It therefore becomes essential that OACPS countries embrace this opportunity to develop national and regional/continental strategies to advance green industrialization. In that context, the group can build on two major policies, namely a Position Paper on Critical Raw Materials and a Revised Private Sector Development Strategy. The 2023 African Leaders’ Declaration on Climate Change and Call for Action represents another important contribution that could inspire the development of a coherent trade and sustainable development strategy in other polities. However, as documented in the policy paper on a sustainable and inclusive trade agenda for CARICOM, many OACPS countries and regions lack an integrated policy on trade and sustainable development. Addressing this key OACPS policy lacuna constitutes the highest priority before a concerted pitch can be made in the WTO.

----------

Junior Lodge is a former Assistant Secretary-General, Sustainable Economic Transformation and Trade, Organisation of African, Caribbean and Pacific States, and former CARIFORUM Trade Negotiator.

-----

Synergies by TESS is a blog dedicated to promoting inclusive policy dialogue at the intersection of trade, environment, and sustainable development, drawing on perspectives from a range of experts from around the globe. The editor is Fabrice Lehmann.

Disclaimer

Any views and opinions expressed on Synergies are those of the author(s) and do not necessarily reflect those of TESS or any of its partner organizations or funders.

License

All of the content on Synergies is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license. This means you are welcome to adapt, copy, and share it on your platforms with attribution to the source and author(s), but not for commercial purposes. You must also share it under the same CC BY-NC-SA 4.0 license.

If you would like to reuse any material published here or if you have any other question related to Synergies, send an email to fabrice.lehmann@graduateinstitute.ch.