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.

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Making headway on agricultural subsidy reform has been identified as one of the central pillars to reducing greenhouse gas emissions in a sector that is responsible for nearly a quarter of global emissions. However, with the global trade system in disarray, multilateral fora paralysed, and the climate clock ticking, agricultural subsidy reform is something of a diplomatic graveyard. The traditional tools of trade liberalization and top-down negotiations have failed to deliver the transformative agenda on agricultural subsidy reform that is needed. Study after study from the OECD, FAO, and World Bank have underscored the importance of removing, reducing, and redirecting agricultural subsidies to reduce environmental impacts, enhance food security, and reduce rural poverty. Despite these analytical findings and repeated calls for reform, progress on eliminating environmentally harmful agricultural subsidies has flatlined.

This is unlikely going to change in the short to medium term as the current focus of trade policy discussions is primarily around bilateral market access deals rather than shoring up a consensus-based global trade rules system. Moreover, addressing climate or environmental concerns is largely not featured in these discussions. While the global community must maintain pressure to reform the World Trade Organization (WTO) and, hopefully, reignite broader subsidy reform efforts, countries must turn to the broader trade policy toolkit already available to better align agricultural trade with net-zero objectives and to complement domestic reforms.

The agricultural sector is one of the sectors that is most vulnerable to climate disruptions with actual and potential impacts on the world’s food systems, the livelihoods of billions around the world, and on the health and sustainability of the planet. As a result, it sits at the heart of both the climate challenge and the sustainability opportunity. In the absence of meaningful progress on subsidy reform, countries can still pursue a range of positive, non-subsidy, trade-related incentives that can serve as scalable drivers of more equitable, resilient, and low-emission food systems. Such measures include sustainability-linked market access preferences, trade-related technical assistance and green trade facilitation, recognition of voluntary sustainability standards, and targeted finance to drive transformation. These approaches, while not substitutes for subsidy reform, can offer a complementary, pragmatic, and politically feasible path forward.

For example, the EU's Generalised System of Preferences Plus and Everything But Arms schemes demonstrate how trade preferences can promote sustainability. These schemes give developing countries a special incentive to pursue sustainable development and good governance. Countries such as Sri Lanka and Bolivia have leveraged preferential access to expand exports of organic spices and quinoa, while Switzerland’s bilateral preferences for certified cocoa have supported sustainable production in Ghana and Peru. These arrangements function as de facto incentives for climate-smart agriculture. Countries can implement preferential schemes for products meeting sustainability thresholds—such as low-carbon certification, deforestation-free sourcing, or agroecological zoning. Tailoring market access to sustainability criteria can influence production practices without violating WTO obligations.

Similarly, recognizing voluntary sustainability standards (VSS) such as Fairtrade, Rainforest Alliance, and VietGAP are becoming embedded in agri-export strategies. Costa Rica's banana exports and Vietnam's fruit sector exemplify how standard alignment can unlock high-value markets. The OECD and FAO recommend that governments formally recognize credible VSS and integrate them into trade agreements and procurement policies.

Export agencies in Chile, Colombia, and Tunisia have begun leveraging sustainability as a market asset. ProColombia’s green coffee campaigns, linked with certification and origin branding, show how reputational value can drive trade advantage. As highlighted in the ITC’s Standards Map, branding and certification can become powerful tools for micro, small, and medium-sized enterprises (MSMEs) entering competitive markets. Customs "green lanes" for certified sustainable goods—as piloted in Kenya’s horticulture sector—can reduce costs and spoilage for climate-aligned exports. Such measures can be embedded in WTO Trade Facilitation Agreement implementation plans, especially for perishable, high-value items. While the proliferation of VSS can create compliance burdens, initiatives like the ISEAL Alliance and ITC Standards Map offer platforms for enhancing knowledge, compliance, and convergence. Governments should pursue bilateral or regional recognition agreements to simplify market access for verified sustainable goods.

At the same time, greater use of public-private partnerships has been demonstrated to be an effective complement to state efforts to drive climate reductions and enhance sustainability in the agricultural sector and food supply chains. Corporates such as Nestlé and Mars are moving ahead of regulation by enforcing sustainability standards through their global sourcing operations. Public-private initiatives like the Cocoa & Forests Initiative illustrate how buyers, governments, and donors can co-invest in sustainable agriculture. These efforts are often more agile than formal trade negotiations and can serve as models for cooperation. 

With respect to finance, public initiatives such as the Global Agricultural and Food Security Program and private initiatives such as AgDevCo provide unique financing and partnership platforms for investing in resilient and sustainable food systems in low-income developing countries. Such projects include certified spice exports in India and organic avocado chains in Kenya. These types of de-risking tools have the catalytic potential of to support low-emission export sectors, especially for MSMEs, and can complement trade incentives by reducing investment barriers for sustainable practices.

Such initiatives can also be complemented by platforms like Trase, blockchain pilots in Indonesia and Colombia, and GS1 traceability protocols, which enable real-time verification of sustainability claims. Traceability is foundational for deforestation-free trade, ethical sourcing, and food safety. Governments can support scale-up by integrating such systems into customs facilitation and labelling regimes.

Trade policy can and must play a key role in the net-zero transition, despite the current turmoil in global trade policy and politics. While multilateral subsidy reform remains elusive, governments are not powerless. Coalitions of the willing can set norms through declarations and cooperative mechanisms, building on a range of existing, successful, and scalable initiatives. The WTO’s TESSD process, the OECD’s work on agriculture, trade, and climate, the FAO’s Strategy on Climate Change, and regional pacts like the African Continental Free Frade Area (AfCFTA) offer strong starting points for developing the data and evidence base and providing the platforms needed for embedding climate-smart agriculture into trade rules. A new generation of trade incentives—grounded in evidence, driven by partnerships, and aligned with sustainability goals—can accelerate progress. As climate impacts mount and food systems face growing disruption, a wide net must be cast in the search for solutions to the climate and agriculture challenge.

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Anthony Cox is Senior Policy Advisor, Ecologic Institute.

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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.

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