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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The intersection of trade, climate, and sustainable development sits at the very nexus of our collective future. The climate crisis is no longer a distant threat; it is a present reality, reshaping economies, disrupting supply chains, and testing the resilience of nations.

This urgency is the very drumbeat of our time. For many, especially on the African continent, this is not a future scenario but a lived reality of drought-stricken farmlands, climate-displaced communities, and immense pressure on economies that did the least to cause this crisis. 

At the core of this urgent and essential discussion lies a fundamental truth: trade is not peripheral to the climate fight. It is central. Trade rules shape the global flows of the very goods that will power the green transition. These rules govern the exchange of clean technologies, the distribution of critical minerals and the resilience of our food systems.

The questions that remain are: Who bears the adjustment costs? Who captures the value? And, how can small, vulnerable economies participate? The following three guiding questions can help untangle these critical concerns in relation to the opportunities and challenges of trade cooperation for climate action, resilience, and justice.

The Policy Landscape is Being Radically Reshaped

We are witnessing a rapid expansion of climate-aligned industrial policies, from massive investments in clean tech and critical minerals to the modernization of national grids. For example, the global race in battery technology and electric vehicle (EV) supply chains is not just about building a single factory—it is also about creating entire ecosystems, where a single policy can trigger a wave of investments in new EV and battery plants across a single country. 

Concurrently, we see the growth of product-specific sustainability rules, for example the EU deforestation regulation—which represents a shift from the verification of a product to policing the production process across the supply chain. These are no longer niche standards. They are becoming market gatekeepers, which redefine competitiveness. We have moved from voluntary ecolabels to mandatory and legally enforceable regulations that determine whether a product can even enter a market.

This is just one example of many. Soon, the carbon intensity of a good may be as important as its price and quality in procurement decisions and consumer choice.

Furthermore, the emergence of measures like the EU's Carbon Border Adjustment Mechanism and the rise of “carbon clubs” signal a fundamental shift towards pricing carbon into international trade, creating a new layer of regulatory complexity.

Institutional Cooperation is Evolving in Response

Looking at institutional evolution, the African Continental Free Trade Area (AfCFTA) provides a powerful illustration of how deeper regional integration is proactively shaping a sustainable future. Work is advancing on the AfCFTA Protocol on Women and Youth in Trade, deliberately ensuring the green economy is inclusive from the start. Furthermore, there is active and strategic work—what we might call the development of “AfCFTA Green Rules of Origin”—focused on designing our origin criteria to actively promote regional value chains in sustainable sectors, such as solar energy and battery assembly. To this point, we can think of an example of ongoing discussions in the context of the African Union calling for leveraging trade for a green and sustainable recovery. These initiatives are welcome because they create the political mandate necessary for innovative ideas, such as the African Green Stimulus Programme. This is not passive integration; it is a conscious effort to use our trade rules to ensure Africa participates as a producer and innovator, not just a consumer, in the green global economy.

Moreover, the increase in plurilateral initiatives on green goods, standards and supply chains demonstrates a move away from a one-size fits all approach. There are several examples to think about here: for instance the Agreement on Climate Change, Trade and Sustainability. Such arrangements, which respond to specific trade and climate concerns, are welcome. 

However, while we champion this plurilateral innovation, we must be equally clear that it complements rather than replaces our multilateral imperatives. Certain challenges, by their very nature, demand universal participation. The World Trade Organization (WTO) fisheries subsidies negotiations are a prime example. Finalizing a comprehensive agreement to curb harmful subsidies that drive overfishing is a quintessential global public good. 

 A Powerful Climate Justice Lens is Now Central to the Debate

There is now heightened and quite justifiable attention on the distributional impacts of these shifts. We are now acutely aware of the risks for MSMEs, least developed countries, and small, vulnerable economies—from the erosion of trade preferences as economies decarbonize to the high cost of complying with new due diligence expectations on supply chains. The conversation is no longer only about environmental efficiency. It is also, and importantly, about who benefits, and who is left behind. All our solutions should be designed with equity at their core.

As we map this new territory, we must recognize a fundamental truth: opportunity and challenge are two sides of the same coin. The vast promise of the green transition is inseparably linked to stark pitfalls that we must overcome.

To begin with the opportunities which are present, these are multiple. Firstly, we can achieve immediate impact by focusing on interoperable standards and conformity assessment. Promoting mutual recognition agreements would dramatically cut compliance costs, especially for MSMEs, and accelerate the diffusion of green technologies. 

Secondly, we can save lives and livelihoods by leveraging trade facilitation for adaptation goods. This is where trade rules can have the most immediate impact. Climate change is causing a present-day crisis: crops are failing, floods are displacing our communities, and heatwaves are now claiming lives. Adaptation is no longer about long-term planning, it is about urgent response. We must therefore treat adaptation goods with the same priority and urgency that we afford medical supplies during a pandemic. Expedited customs clearance and applying zero or low tariffs to essential goods are only a few examples which represent a direct investment in resilience.

Lastly, with respect to critical minerals with shared value, trade and investment rules should do more than extract raw materials. They must catalyze responsible investment, diversify processing, and ensure tangible local benefit-sharing.

What are the challenges we must manage?

One is the risk of fragmentation. The very plurilateral and/or bilateral initiatives we welcome can well become exclusionary. We risk a fractured global economy of conflicting standards. The antidote is not to halt these initiatives. Rather, it is to consciously build inclusivity into their DNA right from the start.

The second challenge we face is subsidy races and trade tensions. As we may all be aware by now, well-intentioned policies can escalate into harmful subsidy races if they lack transparency and notification. We have witnessed how local content requirements can create new conflicts, and further, the global scramble to dominate the industries of the future. “Green” subsidies must therefore be managed wisely, and this primarily requires enhanced transparency and notification at the WTO. Let us encourage green subsidy peer reviews so that we promote best practices and ensure our collective ambition accelerates, and does not fracture, the global transition.

To ensure a truly just transition, our priorities should be focused on areas where cooperation yields the highest impact for both climate and development:

1. We must champion transparent and development-compatible measures, which pay due regard to the core principle of common but differentiated responsibilities and respective capabilities.
2. We must build interoperability and trust by driving mutual recognition agreements on conformity assessment and harmonizing carbon accounting methodologies.
3. We must elevate the adaptation agenda from rhetoric to reality. Climate justice demands that we treat adaptation with the same urgency as mitigation.

To conclude, the message is clear: the intersection of trade and climate is no longer a peripheral niche. It is the new frontier of our global economic system—a frontier fraught with risks, but abundant with opportunity.

We have a choice before us. We can allow this transition to be driven by fragmentation and a narrow scramble for competitive advantage, which will inevitably lead to greater inequality and instability. Or, we can choose the path of conscious cooperation, to build a system that is inclusive, equitable, and effective.

This means writing trade rules that compress our climate timelines, not elongate them. It means ensuring that the burdens of adjustment are shared fairly, and the opportunities of the green economy are open to all: from the largest economies to the smallest, most vulnerable nations.

This work is not just about trade and environment. It is about peace, prosperity, and justice in a world being reshaped before our eyes. We are, quite literally, trading into our common future.

Let us ensure it is a future we can all be proud to share.

* This article is derived from a presentation at a panel on Opportunities, challenges, and pathways for enhanced cooperation on trade, climate, and sustainable development at the TESS TCSD Conference 2025.

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Ambassador Amina Mohamed is Chairperson of the Trade Negotiations & Investment Forum (TNIF). TNIF is a think tank, committed to promote the continued relevance and effectiveness of the multilateral trading system and of regional trade initiatives, with a special focus aimed at addressing the particular concerns of developing and least developed countries.

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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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