Mobilization of Trade

Basis for action: "To develop and implement economic incentives that are supportive of the Convention’s three objectives at local and national levels, consistent and in harmony with the other relevant international obligations"...Strategy for resource mobilization, objective 2.4

"To fulfil the implementation of the provisions of the Monterrey Consensus on mobilizing international and domestic funding as related to biodiversity"...Strategy for resource mobilization, objective 3.6

"Mindful of the potential of Aichi Biodiversity Target 3 to mobilize resources for biodiversity, decides to consider modalities and milestones for the full operationalization of this Target at its twelfth meeting, with a view to their adoption"... Decision XI/4, paragraph 8

Indicator: Resources mobilized from the removal, reform or phase-out of incentives, including subsidies, harmful to biodiversity, which could be used for the promotion of positive incentives, including but not limited to innovative financial mechanisms, that are consistent and in harmony with the Convention and other international obligations, taking into account national social and economic conditions

Doha negotiations related to biodiversity, WTO agreements and biodiversity measures, trade in sustainable development

The Monterrey Consensus
The Monterrey Consensus provides an international framework of resource mobilization for broad development purposes, within which the strategy for resource mobilization for biodiversity should be considered. Recognizing its importance, the ninth meeting of the Conference of the Parties adopted the Bonn message on finance and biological diversity, as an input of the Convention on Biological Diversity to the Follow-up International Conference on Financing for Development to Review the Implementation of the Monterrey Consensus held in Doha from 29 November to 2 December 2008. The Bonn message was posted on the website of the Follow-up International Conference, but was not referred to in the Doha Declaration on Financing for Development. Nevertheless, the Monterrey Consensus and the Doha Declaration outline a balanced approach to considering all the elements of financing for biodiversity, including mobilizing domestic financial resources for development, mobilizing foreign direct investment and other private flows, international trade as an engine for development, increasing international financial and technical cooperation for development, external debt, and enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.

This page collects information on trade and biodiversity, including:
Doha negotiations related to biodiversity
  • Environmental goods and services
  • The WTO and multilateral environmental agreements
  • Fisheries subsidies
  • Agriculture
  • Industrial goods
  • Services
  • Trade facilitation
  • WTO Committee on Trade and Environment
  • Working Group on Trade and Transfer of Technology
  • Special and differential treatment
  • Least-developed countries
  • Small economies
  • TRIPS and the Convention on Biological Diversity

WTO agreements and biodiversity measures
  • GATT Article XX on General Exceptions
  • The WTO Agreement on Technical Barriers to Trade (which deals with technical requirements) and the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (dealing with food safety and animal and plant health)
  • The WTO Agreement on Subsidies and Countervailing Measures
  • The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
  • The plurilateral WTO Agreement on Government Procurement
  • Enforcement mechanism and WTO jurisprudence
  • Transparency, monitoring and surveillance mechanisms of the WTO
  • Trade opening and growth

Sustainable development and trade
  • Rio Declaration and Agenda 21
  • Johannesburg Plan of Implementation
  • The future we want

“...In a world without artificial economic borders, goods can come and go. Trade can take place freely. In that world, a country with an arid climate need not use its scarce water resources to grow water intensive crops that it can instead import. Because of trade, it can save its precious little water. Similarly, in that world, a country with limited access to the sea need not deplete its fish stock to feed its population. Because of trade, it can import fish for its food supply, and manage its own fisheries sustainably. Trade can allow for a more efficient allocation of all resources, including the natural. Contrary to the perception of some members of the public, it can be a friend, and not a foe, of conservation.”
WTO Director-General Lamy speech to the 2005 WTO Symposium on Trade and Sustainable Development

Doha negotiations related to biodiversity

Environmental goods and services

A major focus of work has been on liberalizing trade in goods and services that can benefit the environment – goods like solar panels and solar water heaters, hydropower turbines and equipment for biogas production, and services like environmental consulting or soil conservation services and nature and landscape protection services. Removing tariff and non-tariff barriers in these areas can improve access to products and services which directly impact on the protection of air, water and soil, and conservation of natural resources.

By reducing barriers to trade in environmental goods and services, the negotiations could improve access to a broader range of cheaper and more efficient goods and services that can help meet environmental goals. Increasing the use of environmental goods and services can yield a range of benefits, including reduced air and water pollution, resource conservation and improved energy efficiency.

Market opening in these sectors can also be a powerful tool for economic development by generating economic growth and employment and helping spread the valuable skills and technology embedded in such goods and services.

The WTO and multilateral environmental agreements
As part of their work on trade and environment, WTO members are negotiating ways to ensure a harmonious co-existence between WTO rules and specific trade obligations in various agreements that have been negotiated multilaterally to protect the environment. There are over 250 multilateral environmental agreements (MEAs) currently in force and around 20 include trade provisions (such as bans, licensing requirements, and notification, packaging or labelling requirements).

WTO members have long recognized the need for “coherence” among international institutions in addressing global environmental challenges. While there has been no conflict between trade and environmental regimes – and the WTO’s Appellate Body has repeatedly confirmed that the WTO can take other bodies of international law into account when interpreting its own rules – the negotiations on the WTO-MEA relationship provide a unique opportunity for creating synergies between the trade and environment agendas at the international level. In this regard, the WTO’s work is directly relevant to Rio Principle 12 which, among other things, expresses the preference of nations that environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on international consensus.

Fisheries subsidies
The fisheries chapter of the Doha Round demonstrates how the trade and environmental agendas can meet, as eliminating trade distortions can help conserve the natural resource. In the negotiations, WTO members are aiming to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries. The mandate reflects the increasing attention being paid in many international forums to the grave problems of overcapacity and overfishing in today’s modern fisheries fleets, and the role that subsidies could play in contributing to those problems. While the negotiations are on-going (for example, members have very different views as to whether, and if so which, subsidies in fact contribute to overcapacity and overfishing, and what sorts of disciplines should apply to different kinds of subsidies), multilateral disciplines could help ensure the sustainability of fish stocks so all countries, including fishing-dependent developing countries, can have long-term access to a reliable supply of fisheries resources.

Agriculture
Agriculture has traditionally been a highly protected sector in some countries. While agriculture makes a significant contribution to the economies of many countries, including a large number of developing countries, many of the world’s agricultural producers are disadvantaged in the world trading environment because of high tariff barriers and competition from other producers that receive high levels of domestic or export-related support. Not only are efficient agricultural producers deprived of the development benefits of trade, but over-production in certain parts of the world due to production-linked subsidies can have negative environmental effects. A reduction in protection and support can therefore lead to important gains for both developed and developing country agricultural producers, including environmental benefits.

In the agriculture negotiations, WTO members are committed to achieve substantial cuts in tariff barriers and trade-distorting domestic support. They have also already agreed as part of the overall package to eliminate agricultural export subsidies. The negotiations could therefore have a profound impact. They would lead to a more efficient allocation of global resources and production. They would increase trade opportunities for developing countries with competitive agricultural sectors, and this could lead to important income gains for these countries. In addition, LDCs would enjoy significant improvements in market access for their agricultural products, in particular from the implementation of a duty-free, quota-free decision taken by members in 2005.

Many existing and newly emerging forms of subsidies in the agriculture sector can result in damage to the environment by encouraging a faster pace of land conversion, loss of forests and loss of biological diversity. It is critical for sustainable development that as part of the agriculture negotiations, members persevere in tackling these harmful subsidies.

Industrial goods
Important market access opportunities can be expected for developed and developing countries in the non-agricultural area. Trade in industrial products accounts for more than 90 per cent of world trade in goods and encompasses some key products of export interest to many developing countries. Thanks to previous rounds of trade negotiations, tariffs in developed countries on industrial products are today on average relatively low. However, this average can sometimes hide remaining high tariffs on products in which developing countries have a particular stake. Also, the reduction of non-tariff barriers (NTBs) that affect international trade has been considered important. In on-going negotiations in the area of NTBs, countries are, among other things, considering ways of increasing the transparency of such measures (for example, by improving on existing notification procedures and finding ways of further enhancing the use of international standards). A reduction in both tariffs and non-tariff barriers to industrial trade could provide important export opportunities for developing countries, helping them in their goals for growth, poverty alleviation and sustainable development.

Services
Services – such as transport, finance, telecoms and law – have become the most dynamic segment of international trade and opening services markets can provide many new opportunities to both developed and developing countries. The Doha mandate instructs that the services negotiations shall be conducted with a view to promoting the economic growth of all trading partners and the development of developing countries and LDCs. In the negotiations, developing countries have voiced their interests in several sectors and modes of supply, in particular cross-border supply and the temporary movement of professionals across borders. From an environmental perspective, services activities may have both negative and positive impacts. Examples of negative environmental impacts may include contamination arising from transportation or over-use of natural resources caused by mass tourism. On the other hand, various services activities aim to protect the environment and prevent or remedy pollution, such as treatment of waste water and remediation of soil, water and air.

Trade facilitation
The WTO’s commitment to supporting the international community’s work on sustainable development and poverty reduction also takes the form of cutting distortive red tape. The aim of the trade facilitation negotiations is to make transactions more efficient by making it easier to move, release and clear goods across borders. Simplifying border procedures would allow for a better allocation of scarce resources and result in important efficiency gains. Governments would then be able to dedicate more resources to other development goals, both in terms of manpower and with respect to their financial investments. There would also be a significant decrease in trade transaction costs. The work on trade facilitation could also increase government revenue by enhancing transparency, reducing corruption and boosting legitimate trade.

WTO Committee on Trade and Environment
Through the Doha Development Agenda, sustainable development has become a standing item on the agenda of the WTO’s Committee on Trade and Environment. The Committee has been looking at the subject sector by sector, especially in the following areas of the negotiations: agriculture, market access for non-agricultural products, rules, services, fisheries subsidies and environmental goods and services. The Committee also looks at a range of issues relevant to environmental requirements and market access, including environmental taxes and labelling, and sustainability aspects of trade in sectors such as forestry and energy.

Working Group on Trade and Transfer of Technology
In the global economy, technology and innovation help producers to achieve economies of scale and better product quality, improve competitiveness and increase their share of niche markets. No country can move up the development ladder without having built a sound technological base. Pursuant to a mandate contained in the Doha Ministerial Declaration, the WTO Working Group on Trade and Transfer of Technology is examining the relationship between trade and transfer of technology, while also considering steps that might be taken within the WTO’s mandate to increase flows of technology to developing countries. Considerable analytical work has been undertaken. Recommendations that the Working Group may come up with could have immense development potential, and help put developing countries on the path to sustainable development.

Special and differential treatment
WTO members have been undertaking a review of all special and differential treatment (S&D) provisions for developing countries in the WTO agreements, with a view to making them more precise, operational and effective. For trade – and trade liberalization – to deliver economic growth and development, the constraints that prevent poorer countries from integrating into the international trading system must be addressed. Developing countries continue to negotiate S&D in different areas of the Doha Round negotiations. A positive outcome to the negotiations under the S&D work programme would play an important role in providing developing countries and LDCs with further flexibilities in their multilateral trade obligations. It would allow a more development-oriented integration into the multilateral trading system and help them reach their development goals, including sustainable development.

Least-developed countries
Ministers in Doha recognized that the integration of LDCs into the multilateral trading system requires meaningful market access, support for the diversification of their production and export base, and trade-related technical assistance. Since the adoption of the Doha Development Agenda, the Sub-Committee on LDCs has been implementing a work programme for LDCs. Activities carried out under this programme are giving WTO members a better understanding of the trade and development challenges of LDCs and contributing towards the goals of poverty alleviation and sustainable development in LDCs. One important aspect of the Sub-Committee’s work is to regularly review the market access conditions of LDC exports. Greater market opening creates opportunities for increased trade and investment, bringing in technology, resources and other benefits that contribute to sustainable development in LDCs.

Small economies
Small economies face particular challenges. The main concerns of the small vulnerable economies (SVEs) relate to what they consider is their high vulnerability, concentration of exports in a few products, high transportation costs to reach their main markets, and a general lack of capacity. SVEs would like to receive treatment comparable to that extended to weaker and vulnerable members of the WTO. A work programme on small economies was launched with a mandate provided in the Doha Ministerial Declaration, with the objective to “frame responses to the trade-related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and not to create a sub-category of WTO Members.” The SVEs have made various proposals to the Doha negotiating groups and have also made proposals for decisions by regular bodies of the WTO.

TRIPS and the Convention on Biological Diversity
The Doha Ministerial Declaration called on negotiators to look at the relationship between the Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement and the Convention on Biological Diversity (CBD). This work is to be guided by the public policy objectives and principles set out in the TRIPS Agreement and taking fully into account the development dimension. Work is taking place on proposed amendments to the TRIPS Agreement that would link the CBD principles of prior informed consent and equitable sharing of benefits. This amendment, which proposes a disclosure mechanism, has been opposed by several members, who advocate instead the use of the contract system and other measures to achieve the same ends.

GATT and biodiversity measures
Policy instrument Price and market mechanisms e.g. environmental taxes, trading schemes, to internalize environmental costs, e.g. for greenhouse gas emissions
Key WTO agreement General Agreement on Tariffs and Trade
Some countries have used market mechanisms such as taxes and tradable permit schemes to put a price on pollution or on the over-exploitation of natural resources. These instruments have helped guide consumers and producers towards decisions that result in less pollution or waste or a slower depletion of natural resources. And they have given firms incentives to find innovative ways of tackling environmental challenges.

The design of environmental taxes and trading schemes has far-reaching implications for the cost to participants, the impact on trade, and effectiveness in terms of helping the environment. The extent to which price and market mechanisms affect international trade depends, among other things, on the impact of these instruments on production costs and on the prevailing market structure. The imposition at the domestic level of a price on environmental damage can raise concerns that polluting industries will relocate to countries with less strict environmental regulations. To minimize this risk, ways to adjust the environmental cost at the border have been debated. However, such adjustments would need to avoid adverse impacts on international trade without undermining the intended environmental benefits of the taxes and trading schemes.

Several WTO disciplines may come into play if a green tax, trading scheme or related adjustments affect international trade. These may include key disciplines of the GATT and WTO agreements relating to non-discrimination (i.e. GATT Article I on most-favoured-nation treatment and Article III on national treatment), elimination of quantitative restrictions (GATT Article XI) and disciplines on technical barriers to trade. For example, the national treatment principle may be particularly relevant when an environmental tax is applied differently to domestic and foreign producers; the most-favoured-nation principle may be relevant where an environmental tax is applied differently to producers from various exporting countries. GATT Article XX on General Exceptions sets out a number of specific instances in which WTO members may be exempted from GATT rules, subject to certain conditions being fulfilled.

The WTO Agreement on Technical Barriers to Trade (which deals with technical requirements) and the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (dealing with food safety and animal and plant health)
Policy instrument Environmental requirements e.g. product and production specifications, voluntary and mandatory, characteristics and performance level, labelling and conformity assessment, to improve resource use and reduce pollutants, e.g. for energy efficiency, waste minimization, forestry management
Key WTO agreement Technical Barriers to Trade Agreement
Countries have relied on environmental requirements to improve the use of resources and to reduce pollutants – by setting technical specifications to improve energy efficiency or emissions performance, minimize waste, improve forestry management, or enhance the protection of soil, wildlife and natural habitats. The type of environmental requirement used depends on the desired environmental outcome, the level of governmental involvement and the availability of technological solutions to address specific problems. There are countless examples of environmental requirements in both developed and developing countries – in the form of product and production method specifications, voluntary and mandatory requirements, specific characteristic and performance-level requirements, labelling requirements and conformity assessment procedures. Typically, environmental requirements are based on process and production methods, including life cycle analysis. New types of initiatives that are often voluntary have also emerged in response to consumer concerns, such as food miles programmes and carbon footprint labelling schemes. Environmental requirements may affect international trade, especially if they are used to shield domestic producers from international competition, or when they are discriminatory. As countries continue efforts to “green” their economies, environmental requirements increasingly will become significant determinants of access to foreign markets. The design of the measures, how transparent they are, and issues related to their harmonization or recognition can all give rise to concern.

The key WTO instrument governing environmental regulations and standards is the Agreement on Technical Barriers to Trade (TBT Agreement). The TBT Agreement aims to balance concerns related to the trade impact of environmental and other requirements against the wider public policy goals these requirements serve. The Agreement sets out rules to ensure such measures are non-discriminatory and do not create unnecessary obstacles to international trade. It also urges WTO members to use international standards as a basis for their own regulations and standards, in recognition of the fact that environmental requirements can create trade barriers when they differ from country to country.

The WTO Agreement on Subsidies and Countervailing Measures
Policy instrument Support programmes e.g. R&D, fiscal, price and investment measures, to promote development and deployment of environmentally friendly technologies
Key WTO agreement Subsidies and Countervailing Measures Agreement

Many countries have relied on government support to foster innovation and the deployment of green technologies. Governments grant support to encourage a switch towards activities that cause less pollution, or to promote the development and deployment of green technologies. Renewable energy is increasingly important in green government support programmes. Apart from renewable energy, green government support is also geared towards industrial pollution control, sustainable agriculture and forestry, water and soil protection, efficient use of energy and natural resources, and waste management.

The support can take several forms and there are countless examples in both developed and developing countries. Governments may provide financial assistance through non-repayable grants, preferential credit and loan guarantees. They may provide preferential tax treatment, or adopt price support measures such as feed-in tariffs (a regulated minimum price that must be paid for renewable energy fed into the national electricity grid by private independent producers) to secure preferential prices for environmentally sound practices and industries. Green support may be targeted at any stage of the production process – from support for research and development of green technologies to support for firms’ output and producers’ incomes. Governments often support consumer demand for environmental goods and services.

Government support for green goods and technologies may affect the price and production of such goods. Such policies reduce production costs, leading to lower prices. These may make it harder for other countries’ exporters to compete in the subsidizing country, or make the exports of the subsidizing country more competitive abroad. Some countries may also support domestic firms with the installation of more environmentally friendly technologies, thus enabling these firms to maintain international competitiveness. Unlike support linked to production, government support for consumption will not affect international trade provided that it does not distinguish between domestic and imported goods or services.

The key WTO instrument governing support programmes is the Agreement on Subsidies and Countervailing Measures (SCM Agreement). In addition, the WTO Agreement on Agriculture contains a category of permissible green subsidies, known as Green Box, which could allow countries to pursue green economy policies in agriculture. The SCM Agreement aims to strike a balance between the concern that domestic industries should not be put at an unfair disadvantage by competition from foreign goods benefiting from government subsidies, and the concern that countervailing measures to offset those subsidies should not themselves be obstacles to fair trade. The rules of the SCM Agreement define the concept of “subsidy”, establish the conditions under which WTO members can use subsidies, and regulate the remedies (countervailing duties) that may be taken against subsidized imports. Provided certain rules are respected, the Agreement leaves members room to encourage green technologies.

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
It provides a framework for applying the intellectual property system to promote access to and dissemination of green technologies, and provides policy space to promote public interest in sectors of vital importance to socio-economic and technological development, as well as specific incentives for technology transfer and exclusions of environmentally damaging technologies from intellectual property (IP) protection.

The plurilateral WTO Agreement on Government Procurement
Policy instrument Green procurement e.g. adoption of technical specifications and evaluation criteria that promote the procurement of environmentally friendly goods and services, to promote sustainable consumption and production through use of public purchasing
Key WTO agreement Government Procurement Agreement
Green public procurement is increasingly used by governments to promote environmental policies. Public authorities use their purchasing power actively to encourage the production and use of environmentally friendly goods and services. As government procurement accounts for a large share of economic activity, about 15-20 per cent of GDP on average in both developed and developing economies, public entities that adopt green procurement policies can make an important contribution to sustainable consumption and production.

The main WTO rules governing government procurement are laid down in the WTO Agreement on Government Procurement (GPA) which provides disciplines on non-discrimination and transparency in procurement of covered goods and services by designated governmental entities. Participation in the GPA, a plurilateral agreement within the WTO framework that applies only to parties that have accepted the Agreement, provides legal guarantees of access to the parties’ covered government procurement markets by the goods, services and suppliers of all parties.

The forthcoming revision of the text of the Agreement will explicitly state, for greater certainty, that parties and their procuring entities may prepare, adopt or apply technical specifications to promote the conservation of natural resources or protect the environment. Parties may also evaluate offers received based on environmental characteristics set out in notices or tender documentation.

Enforcement mechanism and WTO jurisprudence
WTO rules are enforced through a legally binding dispute settlement mechanism, backed up by WTO case law. The jurisprudence shows how environmental issues are integral to the system of trade rules. Since the entry into force of the WTO in 1995, the Dispute Settlement Body has dealt with a number of environment-related measures. Such measures have sought to achieve a variety of policy objectives – from conservation of sea turtles from incidental capture in commercial fishing to the protection of human health from risks posed by asbestos or used tyres.

The jurisprudence confirms that WTO rules allow for the addressing of environmental concerns and provide for an appropriate balance between, on the one hand, the right of members to take regulatory measures, including trade restrictions, to achieve legitimate policy objectives and, on the other hand, the rights of other members under basic WTO disciplines.

Transparency, monitoring and surveillance mechanisms of the WTO
Several WTO agreements require WTO members to inform each other about new or forthcoming trade-related measures, including agreements addressing technical requirements, sanitary and phytosanitary measures, subsidies and agriculture. The value of the WTO’s transparency platform for a green economy is particularly evident in the TBT Agreement, under which members must share information on any draft mandatory technical regulation and conformity assessment procedure that may have an impact on trade, by notifying the WTO. The notification process is an important tool to help members obtain information about measures contemplated by others under a green economy banner, before these measures result in negative trade consequences.

To illustrate the wide scope of the transparency exercise, between the establishment of the WTO in 1995 and mid-2011, approximately 13,500 notifications were submitted to the TBT Committee by developing and developed countries alike. Of these, around 18 per cent were about measures related to the environment, in particular requirements on product characteristics and performance, conformity assessment procedures, labelling requirements, and requirements linked to bans. These measures target key areas of a green economy, including soil, air and water pollution abatement, conservation of wild fauna and flora, energy efficiency and conservation, waste reduction and management.

The WTO’s contribution to transparency goes beyond the exchange of information. Full transparency also requires an understanding of what is being notified. This is where the WTO’s unique system of “peer review” in committees and other bodies comes into play. These deliberations provide a transparency forum that helps WTO members avoid trade disputes.

The experience with technical requirements is again a good example of how the WTO helps ensure that requirements to support a green economy do not create unnecessary obstacles to trade. Between 1995 and mid-2011, around one-fifth of the 317 specific trade concerns raised by WTO members in the TBT Committee were about measures related to the environment. Concerns are typically about whether the design or application of a particular measure creates an unnecessary barrier to trade, the need for more clarification about the aim of a measure, and the use of international standards. Concerns also cover measures related to pollution, collection and recycling, eco-design and packaging.

WTO tools can be used to monitor national measures with trade impacts, including green economy policies, so as to improve understanding and dialogue and avoid trade tensions. The WTO’s surveillance tools have been particularly useful in recent years. When the financial and economic crisis erupted in 2008, many worried that the kind of protectionism that triggered the Great Depression would emerge again. Thanks in large measure to the multilateral trading system which provides both the foundation for countries to maintain their commitment to open trade and a platform to ensure transparency in trade policy developments, protectionist pressures have so far been largely held in check.

At the end of 2008, the WTO set up a system to monitor trade measures taken during the crisis by G-20 economies. This monitoring mechanism has proven to be a highly useful transparency tool and bolstered political resolve to resist protectionism. For example, the most recent report (October 2011) indicates that during the 2008-09 global crisis, G-20 economies were for the most part able to resist protectionist pressures, but their collective commitment is being tested by weaker economic growth, high unemployment and fiscal austerity. These WTO monitoring mechanisms could be utilized to focus on green economy measures with trade impacts, so as to enhance understanding and dialogue and avoid risk of trade tensions.

Trade opening and growth
Greater trade openness leads to a more efficient allocation of natural resources. Trade stimulates growth and raises income levels which over time can help increase demand for a better environment. Trade can also improve access to green goods, services and technologies needed to reduce pollution and energy use, or help develop them. The current Doha Round of trade talks would further strengthen the contribution of trade to sustainable development and green economy objective.

Growth

Trade openness leads to a more efficient use of resources and stimulates growth and income levels. This supports conservation, sustainability and efforts to eradicate poverty.

Trade promotes production efficiency via specialization, exploitation of economies of scale, technology transfer, and enhanced competition. Openness helps countries compete by not only offering new opportunities for sales (i.e. exports), but also making available to producers the widest range of inputs at the highest quality and lowest prices (i.e. imports). While the link between trade, growth and sustainable development is clear, different studies present varying perspectives of the extent to which trade openness impacts growth.

While openness to trade exposes countries to developments in other economies, including the risk of trade and financial contagion, it also makes faster recovery possible: an economy that is more open is more resilient because it is less constrained by the limits of domestic demand.

Trade plays a key role in helping the environment, in part because it serves as a channel for green technology transfer. Openness to trade provides access at lower cost to a greater variety of imported goods and services involving environmentally friendly technologies. It also increases the size of the markets for producers of final goods and suppliers of components, thus raising the returns from innovation for those involved in the production networks involving green goods. The ability to market innovations globally makes it possible to increase specialization and provides incentive to produce green goods requiring intensive research. These benefits of more open trade highlight the importance of the Doha Round negotiations which aim, among other things, to reduce barriers to trade in environmental goods and services.

Moreover, higher incomes associated with trade opening can increase the general public’s demand for a cleaner environment. Increased incomes give people greater opportunity to improve their lives, for instance by making the quality of their environment better. In addition, demand for an improved environment can provide incentives for firms to improve production technologies, adopt greener production methods, and develop greener products and services.

For rising income to lead to improvements in the environment, governments must respond to the public’s demand with the appropriate policy framework.

Developing countries
Agenda 21 put special emphasis on promoting an international trading system that takes account of the needs of developing countries. One of the WTO’s basic aims is to ensure developing countries get the trade opportunities that will enable them to grow and develop, thus helping in the fight against poverty.

Trade openness has already helped developing countries play a bigger role in the global economy. From 1990 onwards, the volume of exports from developing countries grew considerably faster than exports from developed countries, as did the share of developing countries’ exports in the value of total world exports. Trade between developing countries, South-South trade, also increased.

Trade and Sustainable Development

Rio Declaration
Principle 12
States should cooperate to promote a supportive and open international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation. Trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus.

Agenda 21
2.9 Governments should continue to strive to meet the following objectives: (a) To promote an open, non-discriminatory and equitable multilateral trading system that will enable all countries - in particular, the developing countries - to improve their economic structures and improve the standard of living of their populations through sustained economic development; (b) To improve access to markets for exports of developing countries;... (d) To promote and support policies, domestic and international, that make economic growth and environmental protection mutually supportive.

Johannesburg Plan of Implementation of the 2002 World Summit on Sustainable Development
4....This will require urgent action at all levels to: (a) Continue to promote open, equitable, rules-based, predictable and non-discriminatory multilateral trading and financial systems that benefit all countries in the pursuit of sustainable development. Support the successful completion of the work programme contained in the Doha Ministerial Declaration.”

The future we want
26. States are strongly urged to refrain from promulgating and applying any unilateral economic, financial or trade measures not in accordance with international law and the Charter that impede the full achievement of economic and social development, particularly in developing countries.

58. We affirm that green economy policies in the context of sustainable development and poverty eradication should: (h) Not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade, avoid unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country and ensure that environmental measures addressing transboundary or global environmental problems, as far as possible, are based on international consensus;

78. We underscore the need to strengthen United Nations system-wide coherence and coordination, while ensuring appropriate accountability to Member States, by, inter alia, enhancing coherence in reporting and reinforcing cooperative efforts under existing inter-agency mechanisms and strategies to advance the integration of the three dimensions of sustainable development within the United Nations system, including through exchange of information among its agencies, funds and programmes, and also with the international financial institutions and other relevant organizations such as the World Trade Organization, within their respective mandates.

130. We emphasize that well-designed and managed tourism can make a significant contribution to the three dimensions of sustainable development, has close linkages to other sectors and can create decent jobs and generate trade opportunities. We recognize the need to support sustainable tourism activities and relevant capacity-building that promote environmental awareness, conserve and protect the environment, respect wildlife, flora, biodiversity, ecosystems and cultural diversity, and improve the welfare and livelihoods of local communities by supporting their local economies and the human and natural environment as a whole. We call for enhanced support for sustainable tourism activities and relevant capacity-building in developing countries in order to contribute to the achievement of sustainable development.

142. We reaffirm the right to use, to the fullest extent, the provisions contained in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), the Doha Declaration on the TRIPS Agreement and Public Health, the decision of the General Council of the World Trade Organization of 30 August 2003 on the implementation of paragraph 6 of the Doha Declaration, and, when formal acceptance procedures are completed, the amendment to article 31 of the TRIPS Agreement, which provide flexibilities for the protection of public health, and in particular to promote access to medicines for all and encourage the provision of assistance to developing countries in this regard.

173. We reaffirm our commitment in the Johannesburg Plan of Implementation to eliminate subsidies that contribute to illegal, unreported and unregulated fishing and overcapacity, taking into account the importance of this sector to developing countries, and we reiterate our commitment to conclude multilateral disciplines on fisheries subsidies that will give effect to the mandates of the World Trade Organization Doha Development Agenda and the Hong Kong Ministerial Declaration to strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of World Trade Organization fisheries subsidies negotiation, taking into account the importance of the sector to development priorities, poverty reduction and livelihood and food security concerns. We encourage States to further improve the transparency and reporting of existing fisheries subsidies programmes through the World Trade Organization. Given the state of fisheries resources, and without prejudicing the Doha and Hong Kong ministerial mandates on fisheries subsidies or the need to conclude these negotiations, we encourage States to eliminate subsidies that contribute to overcapacity and overfishing, and to refrain from introducing new such subsidies or from extending or enhancing existing ones.

193. We highlight the social, economic and environmental benefits of forests to people and the contributions of sustainable forest management to the themes and objective of the United Nations Conference on Sustainable Development. We support cross-sectoral and cross-institutional policies promoting sustainable forest management. We reaffirm that the wide range of products and services that forests provide creates opportunities to address many of the most pressing sustainable development challenges. We call for enhanced efforts to achieve the sustainable management of forests, reforestation, restoration and afforestation, and we support all efforts that effectively slow, halt and reverse deforestation and forest degradation, including promoting trade in legally harvested forest products. We note the importance of such ongoing initiatives as reducing emissions from deforestation and forest degradation in developing countries, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries. We call for increased efforts to strengthen forest governance frameworks and means of implementation, in accordance with the non-legally binding instrument on all types of forests, in order to achieve sustainable forest management. To this end, we commit to improving the livelihoods of people and communities by creating the conditions needed for them to sustainably manage forests, including by strengthening cooperation arrangements in the areas of finance, trade, transfer of environmentally sound technologies, capacity-building and governance, as well as by promoting secure land tenure, particularly with regard to decision-making and benefit-sharing, in accordance with national legislation and priorities.

203. We recognize the important role of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, an international agreement that stands at the intersection between trade, the environment and development, promotes the conservation and sustainable use of biodiversity, should contribute to tangible benefits for local people and ensures that no species entering into international trade is threatened with extinction. We recognize the economic, social and environmental impacts of illicit trafficking in wildlife, where firm and strengthened action needs to be taken on both the supply and demand sides. In this regard, we emphasize the importance of effective international cooperation among relevant multilateral environmental agreements and international organizations. We further stress the importance of basing the listing of species on agreed criteria.

260. We note that the aid architecture has changed significantly in the current decade. New aid providers and novel partnership approaches, which utilize new modalities of cooperation, have contributed to increasing the flow of resources. Further, the interplay of development assistance with private investment, trade and new development actors provides new opportunities for aid to leverage private resource flows. We reiterate our support for South-South cooperation, as well as triangular cooperation, which provide much-needed additional resources to the implementation of development programmes. We recognize the importance and different history and particularities of South-South cooperation, and stress that South-South cooperation should be seen as an expression of solidarity and cooperation between countries, based on their shared experiences and objectives. Both forms of cooperation support a development agenda that addresses the particular needs and expectations of developing countries. We also recognize that South-South cooperation complements rather than substitutes for North-South cooperation. We acknowledge the role played by middle-income developing countries as providers and recipients of development cooperation.

271. We underline the need for enabling environments for the development, adaptation, dissemination and transfer of environmentally sound technologies. In this context, we note the role of foreign direct investment, international trade and international cooperation in the transfer of environmentally sound technologies. We engage in our countries as well as through international cooperation to promote investment in science, innovation and technology for sustainable development.

D. Trade
281. We reaffirm that international trade is an engine for development and sustained economic growth, and also reaffirm the critical role that a universal, rules-based, open, non-discriminatory and equitable multilateral trading system, as well as meaningful trade liberalization, can play in stimulating economic growth and development worldwide, thereby benefiting all countries at all stages of development as they advance towards sustainable development. In this context, we remain focused on achieving progress in addressing a set of important issues, such as, inter alia, trade-distorting subsidies and trade in environmental goods and services.

282. We urge the members of the World Trade Organization to redouble their efforts to achieve an ambitious, balanced and development-oriented conclusion to the Doha Development Agenda, while respecting the principles of transparency, inclusiveness and consensual decision-making, with a view to strengthening the multilateral trading system. In order to effectively participate in the work programme of the World Trade Organization and fully realize trade opportunities, developing countries need the assistance and enhanced cooperation of all relevant stakeholders.

  • United Nations
  • United Nations Environment Programme