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Environmental outcomes in agriculture: the effects of environment-related provisions in regional trade agreements









Brandi, C. & Schwab, J. 2024. Environmental outcomes in agriculture: the effects of environment-related provisions in regional trade agreements. Rome, FAO.



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    Book (stand-alone)
    Ag-ERPs database: a novel repository of environment-related provisions for agriculture, fisheries and forestry in regional trade agreements 2024
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    The relationship between trade and the environment is intricate. Trade can improve the allocation of production among countries, with an efficiency-enhancing role in natural resources use. Likewise, open markets can improve access to new technologies that make domestic production processes more cost-efficient and reduce the use of inputs as well as other environmentally harmful substances. However, economic growth due to trade expansion can have a direct impact on the environment by increasing pollution and contributing to natural resource degradation. Trade liberalization may also lead to specialization in pollution-intensive activities in some countries, especially when environmental policies are not stringent. In recent years, there has been a significant shift in how trade policies are being approached, with a renewed emphasis on balancing sustainable development and market liberalization to ensure that trade policies and environmental protection are coherent and mutually supportive. Since the establishment of the World Trade Organization (WTO) in 1995, regional trade agreements (RTAs) have become a common option to further liberalize trade, growing significantly in number. RTAs have also expanded rapidly in terms of regulatory coverage and have evolved to directly referencing sustainable development and including provisions linking the environment to the agriculture, fisheries and forestry sectors. Based on novel dataset, this research looks into the trends in inclusion of environmental provisions related to the agriculture, fisheries and forestry sectors (“Ag-ERPs”) in RTAs and provides policy recommendations.
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    Policy brief
    Trends in inclusion of environmental related provisions linked to the agriculture, fisheries and forestry sectors in regional trade agreements 2023
    Agriculture, fisheries and forestry are closely linked to the environment and depend on it for their long-term productivity and sustainability. However, if not properly managed, these three sectors can have a negative impact on the environment. Agricultural trade can also have an impact on the environment, and in recent years there has been a renewed focus on how to balance sustainable development and trade liberalization. Since the establishment of the World Trade Organization (WTO), regional trade agreements (RTAs) have become a common option to liberalize trade and have grown significantly. RTAs have also expanded rapidly in terms of regulatory coverage, making direct reference to sustainable development and including provisions linking the environment to the agriculture, fisheries and forestry sectors. While the trend in the inclusion of environmental provisions related to agriculture, fisheries and forestry (or " Ag-ERPs") in RTAs has fluctuated somewhat since 1995, the average number of such provisions per agreement has increased steadily. This policy brief discusses the relationship between the agriculture, forestry and fisheries sectors, trade and the environment; presents the relevance of environment-related provisions in RTAs; assesses the evolution of Ag-ERPs in RTAs since 1995; shows the role of Ag-ERPs in mitigating the environmental impacts of trade-induced production growth; and introduces the discussion on whether the inclusion of Ag-ERPs in RTAs is the appropriate means to improve and extend the reach of different environmental practices globally.
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    Book (stand-alone)
    Potential conflicts between agricultural trade rules and climate change treaty commitments.
    The State of Agricultural Commodity Markets (SOCO) 2018: Background paper
    2018
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    Climate change – among its many other challenges – also affects the conditions of competition along the whole food value chain. This article posits that many mitigation and adaptation policies imply a differentiation between otherwise identical products but with different carbon footprints. Where imports are affected, there is a potential for trade frictions. The main issue appears to be a climate-smart treatment of like products with different (non-product-related) production and processing methods (ppm). Now that national governments start implementing their commitments under the Paris Agreement on Climate Change, they have to closely look at the trade and investment impact of their Nationally Determined Contributions (NDCs). The NDCs presently available remain silent on concrete measures involving product differentiation according to footprint differences, be it by way of border adjustment measures, subsidies, prohibitions, or restrictions. The non-discrimination principle enshrined in the multilateral trading system can be a problem for such differentiations. No climate-smart agricultural measures have yet been notified to the World Trade Organization (WTO). But several renewable energy programmes have been found to violate WTO rules. Potential problems could arise, for instance, from differentiating tariffs, import restrictions or taxes according to carbon footprint. Conditions of competition might even be affected by labels signalling products with a bigger (or a “climate-friendly”) footprint, or through subsidies and incentives compensating domestic producers subject to emissions reductions, prohibitions, and input restrictions. A second major problem lies in the way the Paris Agreement and the WTO address the Development Dimension. In the Paris Agreement, the Development Dimension is addressed by the notion of Common but Differentiated Responsibility (CBDR), leaving Parties free in terms of how they take development into account in their NDCs. On the other side, the Special and Differentiated Treatment (SDT) foreseen in all WTO agreements for developing country products and services appears incapable of dealing with the global impact of all emissions, regardless of their origin, or with the negative impact on developing country exports to climate-smart markets in developed countries. In conclusion, we suggest that a review of the climate-relevant trade and investment rules is necessary at the international level, involving climate, and agriculture and trade regulators, supported by scientific, economic and legal expertise. The purpose of this review is to avoid litigation jeopardising the implementation of the Paris Agreement. At the same time, such a review must be comprehensive, because the objective is to ensure maximum policy space for climate mitigation and adaptation without negatively affecting other countries, or unduly restricting trade and investment, especially in poor developing countries. Last but not least, this intergovernmental and inter-institutional review is urgent, because the results should provide as quickly as possible the legal security necessary for investors and operators, regulators, NDC developments and reviews, and international standard-setting processes.

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