Principles for consideration in the design and implementation of trade-related climate measures and policies

An international expert group on international law relevant to trade and climate

The Forum on Trade, Environment & the SDGs (TESS) has convened an international expert group to draw together and provide guidance on principles from international law relevant to the design and implementation of trade-related climate measures and policies.

Context

Faced with the urgent need to take action to tackle the climate crisis while adapting to the effect of climate change and building resilience, governments and stakeholders are exploring a range of options to harness trade and trade policies. Already, governments are implementing or considering a range of trade-related climate policies, including border measures, a range of green industrial policies, and initiatives to decarbonize supply chains and promote rapid scale-up and accessibility of environmental goods, services and technologies key to climate action. Alongside, there are a range of calls for reform of international trade rules to respond to the urgent and unprecedented challenges posed by the climate crisis.

As governments seek to harness trade and trade policies for climate action, a core challenge is how to accelerate climate action while ensuring approaches that are fair and account for different national circumstances, level of development and vulnerabilities, in line with international law and an open economic system. International cooperation on climate and trade also faces the reality that governments adopt different national regulatory approaches to tackling shared global challenges. International environmental agreements have typically been framed to accommodate these differences. For example, under the Paris Agreement, countries have considerable discretion to set their own Nationally Determined Contributions (NDCs), and to decide what policies and legal instruments they will adopt.

As countries grapple with these challenges, differences in approach between jurisdictions are generating international tensions, including in the trade arena, with significant consequences for the multilateral trading system as well as for international cooperation on climate and sustainable development. There are important concerns about around competitiveness, carbon leakage, predictability and transparency, and also that trade-related climate measures could marginalize economies and businesses unable to comply with new requirements, leaving them behind in the transition to a low carbon economy, and frustrate the international cooperation required to achieve the world’s climate goals. At the WTO, such tensions undermine the trust required for participation in an inclusive, transparent and effective manner in discussions of trade and sustainability, and, more generally, to cooperate in bringing about an inclusive and just global green transition in which all societies can thrive.

At the World Trade Organization (WTO), these tensions play out in discussions in a range of Committees, including the WTO Committee on Trade and Environment (CTE), the Council for Trade in Goods and the Committee on Technical Barriers to Trade (TBT). Recognition of the need to find pathways forward has spurred 76 WTO Members to co-sponsor a 2021 Ministerial Statement on Trade and Environmental Sustainability calling for “dedicated discussion on how trade-related climate measures and policies can best contribute to climate change and environmental goals and commitments while being consistent with WTO rules.” At a December 2023 high-level stock take meeting, co-sponsors of the initiative further agreed to “hold exchanges on the development and implementation process of trade-related climate measures, especially on the trade considerations involved in their design”.

Rationale & purpose of the International Expert Group

As a contribution to these discussions, TESS has been working with partners to convene an international expert group to provide guidance on principles from international law relevant to the design and implementation of trade-related climate measures and policies.

The starting point for this project is that there is no shared understanding of principles and considerations governments should use when designing, implementing and debating trade-related climate measures and policies. Fundamentally, these measures are legal hybrids; their design and the debates about them draw from the worlds of both international environmental law and international trade law, as well as from principles of public international law, human rights law and commitments to sustainable development that have been agreed by the international community.

This group aims to identify a core set of well-established and internationally recognized principles of international law relevant to climate change and trade, reflect on their interpretation and relevance, and to provide guidance on their policy implications in terms of the design of trade-related climate measures.

The vision is that shared understandings on these principles could:

• Bolster inclusive international cooperation on the design and operationalisation of trade-related climate measures.
• Reduce tensions and avoid politically charged disputes at the WTO which could have major systemic consequences for the multilateral trade system and undermine ambitious, effective climate action.
• Inform discussion in the WTO context, such as in the Committee on Trade and Environment (CTE) and in the Trade and Environmental Sustainability Structured Discussions (TESSD), and potentially serve as a basis for cooperation among Members.

As noted above, this work takes place in the context of calls and proposals for the reform of trade rules to respond to the urgent and unprecedented challenges posed by the climate crisis. Alongside this project, TESS is thus continuing a parallel track of activities with a range of international partners to contribute to and spur engagement on where and how trade rules and policies need to be rethought, reformed, updated or clarified to drive ambitious climate action at speed and scale in ways that support the inclusive international cooperation vital to climate-resilient development and fair and just transitions.

Composition & work of the International Expert Group

The international expert group draws together over 20 leading international legal experts from the environment, trade, and public international law communities (see list of experts members below), participating in their personal capacities. The group is diverse in terms of its gender and geographic representation, with an explicit focus on bolstering cooperation and engagement among experts from leading academic institutions in both developed and developing countries.

To inform and strengthen reflection on principles that resonate with policymakers and build support for their eventual uptake, their work includes a series of consultations and roundtable discussions with a range of international legal and policy experts from academic, governments, IGOs, think tanks, and stakeholder organisations.

A report of the International Expert Group is planned for late Spring 2023.

International Expert Group members

Professor James Bacchus (USA), Center for Global Economic and Environmental Opportunity, University of Central Florida

Mr. Ujal Singh Bhatia (India), Council on Economic Policies

Professor Daniel Bodansky (USA), Sandra Day O’Connor College of Law, Julie Ann Wrigley Global Institute of Sustainability’s School of Sustainability, Arizona State University

Professor Umberto Celli Junior (Brazil), Ribeirão Preto Law Faculty, University of São Paulo

Professor Jennifer A. Hillman (USA), Georgetown Law Center, Georgetown Institute of International Economic Law, Georgetown University

Mr. Nicolas J.S. Lockhart (United Kingdom), World Trade Institute, University of Bern

Professor Gabrielle Marceau (Canada), Faculty of Law, University of Geneva

Professor Makane Moise Mbengue (Senegal), Faculty of Law, University of Geneva

Dr. Dan Bondi Ogolla (Kenya), Member, Africa Group of Negotiators Expert Support (AGNES-Africa), Former Director of Legal Affairs, United Nations Framework Convention on Climate Change (UNFCCC)

Professor Nilufer Oral (Turkey), Centre of International Law (CIL), National University of Singapore, Singapore

Professor Jacqueline Peel (Australia), Melbourne Law School, The University of Melbourne, Australia

Dr. Jan Yves Remy (Barbados), Shridath Ramphal Centre for International Trade Law, The University of the West Indies, Barbados

Hon. Min. Justice David Unterhalter (South Africa), Faculty of Law, University of Cape Town, Acting Justice of the Constitutional Court, South Africa

Professor Dr. Qin Tianbao (China), Research Institute of Environmental Law (RIEL), Wuhan University, China

Dr. Margaretha Wewerinke-Singh (The Netherlands), Grotius Centre for International, Legal Studies, Leiden University, The Netherlands

Professor Dr. Peter L.H. Van den Bossche (Belgium), World Trade Institute, University of Bern, Switzerland

Professor Jorge E. Viñuales (Argentina), Faculty of Law, Clare College, University of Cambridge, United Kingdom

Professor Margaret A. Young (Australia), Melbourne Law School, The University of Melbourne, Australia

Professor Dominic Coppens (Belgium), Faculty of Law, Maastricht University, Netherlands