WTO addresses common questions about trade and the environment

WTO addresses common questions about trade and the environment

WTO's latest report addresses common questions about trade and the environment. Image credit: Pixabay.

The World Trade Organisation (WTO) has issued a new report titled Short Answers to Big Questions that explores trade’s impact on the planet, the policies that governments enact to protect it and the role of the WTO regarding environmental issues.

“Environmental issues are woven into the history of the multilateral trading system. But the role of trade and the WTO on the environment is complex, and as a result, it is not always well understood,” Deputy Director-General Alan Wolff noted. “The short answers to the big questions that we are launching today serve as signposts that can guide us on the road towards a WTO that works better for people, the planet and prosperity in the 21st century.”

Wolff continued: “The debate on trade and the environment is likely to become even more prominent in the years ahead. One big reason is the COVID-19 pandemic, which has pushed environmental issues up the local, national, regional and global policy agendas.”

He said the current crisis calls for a collective response on trade that fosters sustainability, inclusiveness and resilience.

The publication provides easy-to-understand answers to some of the key questions in the trade and environment debate, such as whether restricting trade would help the environment, whether to buy local, and whether governments can subsidise green technologies.

Trade and environment issues

The publication underlines that, while more economic activity and transportation can have an impact on the environment, by promoting development, economic efficiency and the dissemination of environmentally friendly goods and services, trade helps countries use resources efficiently and pursue sustainability objectives.

It emphasises that WTO rules do not prevent ambitious environmental action and that governments are widely using trade measures to protect the environment.

In cases where an environmental measure restricts trade, the publication explains four of the checks provided under WTO rules to ensure the measure is not disguised protectionism nor creates unjustifiable or arbitrary discrimination. Such a measure must be: coherent and justified by a legitimate environmental objective, not to protect domestic sectors; fit-for-purpose in that it effectively contributes to the objective; mindful of the impact on other countries and part of a holistic environmental policy; and flexible in considering alternative measures to achieve the same outcome. Several WTO dispute cases highlighted in the publication confirm the importance of these considerations.

The publication ends by looking at the role of the WTO in furthering WTO members’ sustainability objectives. It underlines that rules-based trade provides predictability for global commerce and contributes to a coherent approach to environmental trade policies. The WTO also provides an important forum for members to debate trade and environment issues and to work towards achieving the UN’s Sustainable Development Goals.

Download the full report here.

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