Missed opportunities in Geneva – the WTO meeting and climate change

Trade ministers came together last week in Geneva for the first meeting of the World Trade Organisation – the organisation that sets the rules of global trade – in over four years. The pressure was well and truly on for the WTO to agree something meaningful, and therefore justify its existence.

Creator: WTO/Jay Louvion (Studio Casagrande) Licence details.

Talks to update global trade rules have been stalled since 2001, with the EU, US and other high-income countries holding up progress on developing country priorities. And in recent years, the US has brought the WTO system for settling complaints about broken rules to a standstill, claiming that the system has stopped it defending itself from unfair competition.

So, unsurprisingly, the handful of agreements and statements coming out at the end of last week have been sold by the WTO and its supporters as a big success. But are they? This week, we’re giving a rundown of what the WTO achieved on climate – next week we’ll look at the WTO response to two other global crises impacting workers and producers in the Global South: food shortages and the Covid pandemic.

How the WTO gets in the way of climate action

Current WTO rules block essential climate action. They have already prevented governments supporting domestic renewable energy sectors – with the EU challenging UK policies to support domestic offshore wind companies only this year. And they will increasingly block developing countries from producing cheaper versions of the newest green technology – from solar panels to irrigation systems – through long-lasting patents held by companies in developed countries.

That’s why, in the run up to the WTO meeting, thousands of Traidcraft Exchange supporters called on the UK Government to call for a ‘climate waiver’ – an agreement to lift WTO rules that block climate action. We know that shifts in Government policy take time and resolute pressure from citizens, so we knew it was unlikely that the UK would support this bold step at last week's meeting. But we also know it’s crucial, whenever opportunities arise, to make the case for a UK approach to trade which puts climate action first. And with the help of our supporters, we’ll continue to do so.

So what did we get out of the UK and the WTO on climate?

First off, there were no negotiations or agreement on climate – not surprising given the desperation to get an agreement on other issues. We do applaud the Government’s efforts, alongside other countries, to ensure the relationship between trade and climate change was mentioned at all – at the very end of the meeting summary. But it’s worrying that such a pressing issue led only to a vague pledge that WTO member countries would support developing countries through ‘technological innovation’. And that references to the Paris Agreement – the global deal to limit emissions – and to last year’s UK-hosted COP26 climate conference, were cut entirely from the official report.

However, when it came to another chance to demonstrate leadership, the UK showed definite room for improvement. The UK Trade Secretary, Anne Marie Trevelyan, made only a brief mention of climate change in her WTO speech, when explaining how ‘green trade’ driven by countries such as the UK can lead the way. This draws on her speech last month on the subject, which also focused on the opportunities for increasing UK exports of ‘green goods’ and boosting foreign investment into green projects in the UK.

Such a simplistic pursuit of 'win-wins' for the environment and the UK economy is optimistic at best. More than exports of UK electric vehicle batteries or trips abroad by UK hydropower engineers, it’s the underlying skills and technologies that must be shared with developing countries, backed by massively increased amounts of money for climate action in these countries. And this must be supported by a raft of other steps on trade from countries like the UK. We need an end to government support for fossil fuels. We need targets for cutting 'offshored emissions' – those released during the production of goods we import from other countries – plus leeway for developing countries from any ‘carbon taxes’ put on these goods while they decarbonise. And of course, we need a WTO climate waiver.

Following COP26 at the end of last year, the UK was part of three pledges by smaller ‘informal’ groups of WTO member countries covering some of these issues – including ‘green trade’ and, encouragingly, ending some types of support for fossil fuels. Last week in Geneva, we saw these groups report on their plans to meet and ‘take stock’ of the situation.

Another, even smaller group of countries – the EU, Ecuador, Kenya and New Zealand – also came together in Geneva to launch a new ‘Coalition of Trade Ministers for Climate’. It’s encouraging to see the first dedicated forum for bringing trade ministers together to talk about climate, something for which we have called.

These smaller groups must prove they can deliver genuine action, incorporate developing country priorities, and spur wider reform across the WTO, if the institution is to regain any credibility in dealing with global challenges. Such considerations will also apply to the UK’s position chairing the WTO’s committee on trade and the environment – a role with potential, but one that must be used in pursuit of the right goals.

On climate at least, Geneva saw a big missed opportunity for the WTO to prove itself and for the UK to step up and demonstrate its commitment to aligning trade and climate policy. The next WTO meeting will likely be at the end of next year, by which time the urgency for meaningful climate action will only have increased. There’s no more time for missed opportunities.