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.

-----

Faced with the urgent need to tackle the climate crisis, many governments are implementing or considering trade-related measures with climate objectives (trade-climate measures). These measures range from standards and regulations to subsidies, public procurement policies, and labelling schemes as well as internal taxes or border carbon adjustments.

Although they have impacts on trade, the design and implementation of such measures primarily occur at the domestic level, often with limited attention to their potential effects on third countries. As a result, differences in approaches and methodologies reflecting distinct contexts, priorities, and policy goals are creating a growing patchwork of uncoordinated national, bilateral, and regional efforts in addition to supply chain or sector-specific initiatives as well as public-private partnerships. 

There is growing concern that the fragmented nature of these trade-climate measures, combined with poor transparency and coherence, may generate not only competitiveness tensions among trading partners but also add compliance costs for businesses, create unnecessary barriers to trade, and place the burden of adjustment on developing countries. Developing countries also express frustration that methodologies and approaches adopted in their countries are not adequately considered or recognized as equivalent in more advanced economies.

At the World Trade Organization (WTO), a broad range of members has expressed readiness to enhance cooperation around such measures; intensified discussions have been prompted by the growing number of proposals circulated by WTO members since 2023, including by the African, Caribbean and Pacific Group of States (ACP), the African Group, Australia, Chile, China, Colombia, Japan, New Zealand, Republic of Korea, United Kingdom, and United States. Building on these proposals, there are discussions underway among WTO members on the potential for an outcome on this topic ahead of the 14th WTO Ministerial Conference (MC14) in March 2026—possibly in the form of a soft law approach aimed at fostering enhanced transparency or encouraging members to follow guidance in the design and implementation of measures.

Analysis of the proposals circulated by WTO members to date highlights several different rationales (or objectives) that are being pursued through calls for cooperation. These can broadly be organized around the concepts of enhancing (i) coherence, (ii) transparency, (iii) interoperability or equivalences, and (iv) development or equity.

The concept of coherence is often invoked in discussion of trade-climate measures to convey the view that such measures should be understood as legal hybrids, meaning that their design and implementation should draw in a coherent manner from different regimes of international law—including those relating to the environment, climate change, and international trade, along with general principles of public international law and commitments to sustainable development. Transparency generally relates to the availability of information about new measures, including through WTO notifications, but also during the design process and throughout the implementation phase. Interoperability usually refers to the ability of different systems, such as climate-related standards and policies, to work together effectively and efficiently, for example through the use of common carbon accounting methodologies or by aligning reporting requirements. It can be linked to discussion of the opportunity to recognize as equivalent measures or methodologies that fulfil adequately the same objective even if their design differs. Finally, concepts of equity and development are invoked primarily by developing countries due to concerns about the trade and development impacts of trade-climate measures, including the adjustment costs associated with compliance, as well as about how such measures interact with or impact the balance of responsibilities and obligations among countries established under the global climate regime.

Regardless of the goal pursued, discussions on international cooperation on trade measures with climate objectives have mostly focused on four aspects: (i) principles of international law relevant to trade-climate measures; (ii) processes and practices for the development and implementation of measures (often referred to as “good regulatory practices”); (iii) design features of specific measures; and (iv) technical aspects.

Levels of Cooperation on Trade-Climate Measures

At the broadest level, achieving international cooperation could be advanced by establishing high-level guidance on general principles for the formulation of trade-climate measures. An example of this approach is the “voluntary, non-binding and non-exhaustive list of guiding principles for consideration in the design and implementation of measures related to trade and sustainable development” agreed at the G20 Trade and Investment Ministerial Meeting in October 2024. 

A number of governments have also expressed interest in establishing high-level voluntary guidance for the regulatory processes and practices related to the development and implementation of trade-climate measures. This approach aims to develop shared understandings of “good regulatory practices” to be followed in the design and implementation of trade-climate measures—for example the list of common practices compiled by the co-convenors of Trade and Environment Sustainability Structured Discussions (TESSD) at the WTO. 

At a more detailed level, options for cooperation can be promoted through the identification of particular policy design features. These are typically associated with specific policy instruments such as border carbon adjustments or carbon standards and climate-related labels. They may include approaches to define product or geographical coverage, the use of default values, procedures for accepting equivalences or crediting for third country policies, as well as aspects such as exemptions or transition periods. 

Finally, at a more technical level, cooperation can focus on aligning methodologies and processes while allowing countries to pursue distinct policy goals and designs. This usually relates to aspects such as emissions equivalency, sectoral definitions, carbon pricing metrics, or methodologies for measuring or accounting for embedded carbon emissions as well as for reporting and verification.

The following table provides illustrative examples of issues that could be the object of international cooperation at each of these levels.

Examples of Issues Raised Internationally as Requiring Cooperation and Guidance

At present, issues of trade and climate arise in a broad range of WTO committees, and governments are considering a range of pathways for collaboration. Of particular relevance are discussions underway in WTO Committee on Trade and Environment, where members are actively exploring opportunities for international cooperation that could take the form of an outcome in advance of MC14. These discussions cover a range of issues pertaining to good regulatory practices, design features, and technical aspects, as well as transparency and development considerations.

To address one of the specific cross-cutting dimensions of trade-climate measures, a number of governments have circulated a proposal for non-binding guidance on methodologies for measuring embedded greenhouse gas emissions (see for example WT/CTE/W/269/Rev.3). Such an outcome at the multilateral level could constitute a significant first step towards alleviating trade tensions, reducing fragmentation, and facilitating fair and equitable transitions to a net-zero future. On the road to MC14, a key priority will be for governments to redouble their efforts to reach convergence on appropriate scope and focus of such guidance, including how best to sustain cooperation on issues of transparency, policy design, and development, and to enhance dialogue on how to embed wider cooperation at the WTO on trade, climate, and sustainability, including in the context of WTO reform.

Beyond the WTO, there are a number of collaborative efforts and processes seeking to address and provide leadership or guidance on elements of this agenda, including in the UNFCCC, Climate Club, the OECD Inclusive Forum on Carbon Mitigation Approaches (IFCMA), the Coalition of Trade Ministers on Climate, the G20, the BRICS Laboratory for Climate, Trade, and Sustainable Development, and a range of sectoral collaborations and private sector initiatives.

A key priority will be to connect the dots between these processes in order to ensure productive dialogue at the political and technical level that can deliver concrete solutions that are coherent, politically supported, and technically robust. The proposal by Brazil in the context of its COP30 Presidency to launch a new Integrated Forum on Climate Change and Trade (IFCCT), offers a promising signal of how seriously governments view the need for enhanced dialogue and focused collaboration that brings together climate and trade policymakers and expertise. 

* This article is derived from a briefing note published by TESS in September 2025 on Fostering enhanced international cooperation on trade-related measures with climate objectives at the WTO: Coherence, transparency, development, and interoperability.

----------

Christophe Bellmann is Head of Policy and Analysis, TESS.

Carolyn Deere Birkbeck is Founder and Executive Director, TESS.

Yasmin Ismail is Senior Policy Advisor, TESS.

Brian Kelly Nyaga is an independent policy analyst specializing in international trade and carbon markets.

-----

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.