Need to address trade and climate change linkages

Trade ministers agree on need to address trade and climate change linkages

Trade ministers meeting on the margins of the UN Framework Convention on Climate Change (UNFCC) Meeting in Bali agreed that it was critical to address the linkages between trade and climate change policies, Trade Minister Phil Goff said today.

“There is a cost to addressing the global warming threat, which the Stern Report estimates at around 1 per cent of world GDP.

“However, the cost of not addressing it is much higher – Stern estimating it at as much as 20 per cent of global GDP – as well as the obvious, potentially catastrophic, environmental costs,” Phil Goff said.

“The focus of our meeting in Bali, which was attended by 30 invited countries, was on how action taken in the area of trade can contribute to the goals of reducing global carbon emissions, and increasing environmental sustainability.

“Recognition of the compatibility between trade and environmental sustainability is not new. Both the WTO’s founding agreement and the UN Framework Convention on climate change recognise the relationship between the two.

“The two documents are compatible, and it is important that climate change negotiations have built into their mandate from the outset, the WTO principles of non-discrimination, transparency and science-based rule making.”

Ministers also agreed on the importance of ensuring that legitimate environmental protections were not undermined by protectionist measures masquerading as environmental standards, Phil Goff said.

“There remains in some quarters, the often self-serving view that trade, through transportation of goods, is damaging to the environment. This is the basic premise of ‘food miles’ advocates.

“To the contrary, WTO goals of removing market distortions such as subsidies and barriers to trade are environmentally friendly – through ensuring production that is the most resource-efficient and sustainable.

“New Zealand dairy and meat may have to travel about 18,000 kilometres to markets in the United Kingdom and Europe. However, scientific studies show that when the carbon costs of the full life-cycle of those products are analysed the carbon footprint on New Zealand products is significantly lower than competing local products,” Phil Goff said.

“There are a number of steps that can be taken in trade negotiations, which can benefit efforts to reduce global warming and promote economic and environmental sustainability.

“The first is to promote the removal of trade barriers to climate-friendly goods, services and technologies. This is an area currently under negotiation in the WTO.

”Second, we should work to remove climate and environmentally unfriendly subsidies. This is an area where WTO negotiations can make a contribution right now.

“A clear example of this exists with the multi-billion dollar subsidies large countries provide their fishing industries, which encourages over-capacity and over-fishing, leading to the catastrophic decline in global fish stocks.

“Removing these subsidies - an area currently under negotiation by the WTO Rules negotiating group - removes from smaller developing countries unfair competition. This will have both development and environmental benefits.

“Third, government procurement policies should legitimately take into account climate friendly goods and services.

“Fourth, while multilateral responses will be central to solving global problems, bilateral and regional Free Trade Agreements should include complementary environmental chapters or parallel agreements.

“Fifth, we need robust international standards and processes for analysing and verifying carbon footprints. New Zealand, for example, is working with the United Kingdom to set out how the carbon costs of a product relating to its full life-cycle – and not just transport to market – can be calculated.

“Finally, our approach to mitigating greenhouse gas emissions should look first at creating positive incentives for developing countries and ways of facilitating technology transfer to assist this process.

“I hope that the outcome of the Bali Trade Ministers’ meeting will feed considerations on the relationship between trade and climate change into wider discussions and negotiations on global warming, so that trade policy contributes to environmentally sustainable practices,” Phil Goff said.

ENDS