Skip to main content

Making climate change and trade mutually supportive

supportive

A few years ago, the relations between the climate and trade communities were marked by mutual ignorance at best, and more often by deep hostility. The climate community did not want to be hindered by trade constraints. The trade community was so afraid of the damage that climate policies could do to the multilateral trade regime that it was adamantly opposed to any consideration of such concerns. Mutual destruction looked inevitable. Now things are changing. The trade community is realizing that climate change concerns will be high on the political agenda for a long time to come. The climate community is realizing that climate policies will face fierce opposition from four-fifths of human kind if it costs too much in terms of growth and of trade, its main channel.

However, many fears and doubts still abound. The trade community remains obsessed by the host of putative conflicts raised by creative trade lawyers, forgetting that other domains of international trade law are full of conflicts that have never materialized. The climate community has not yet fully realized how easy a prey it is for protectionist interests, at great cost to climate change goals. For example, the European Commission (2009) has formulated a list of industries with “significant risk of carbon leakage” that includes sectors such as manufacturing of wines, clocks, bicycles and underwear. These quite surprising outcomes are easy to explain; one of the criteria used by the European Commission for drawing up the list is the importance of trade for the sectors examined. This criterion, driving the selection of 80 per cent of the sectors in the list, has nothing to do with climate change, but it is honey for protectionist- minded sectors.

Download Publication

Share this publication