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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
2018Also available in:
No results found.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. -
Book (stand-alone)Trade, food security and climate change: conceptual linkages and policy implications 2018
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No results found.Agriculture is not only a contributor to climate change, it will also be severely affected by climate change. Some effects of warming on crop yields, increased weed and pest occurrences and the effects of extreme events (e.g. floods, storms, droughts) on agricultural production are already observed. These are likely to intensify in the future leading to declines in agricultural production in many parts of the world, fluctuations in world market prices and an increased number of people at risk of food insecurity. The paper provides an overview of the complex relationships between climate change and agricultural trade, their connection with food security and possible policy implications. While there is no clear evidence on the net effect of trade on Greenhouse Gas (GHG) emissions, trade could play an important role in climate change adaptation for ensuring food security. High-latitude countries can expect productivity gains from climate change and could export a part of their surpluses to adversely affected countries. Low-latitude countries will be most severely affected in terms of production losses and may need to buffer these losses through increased food imports. Open markets could ease the exchange between food surplus and food deficit regions. Potential environmental externalities and financial and distributional impacts on developing countries would need to be further investigated and, if necessary, accounted for through targeted policy measures. The first domestic climate policies proposed by the countries as part of their obligations under the Paris Agreement suggest close interlinkages with World Trade Organization (WTO) rules. They would need to be coordinated and reconciled at international level to promote climate change mitigation, while, at the same time, ensure the free tradability of food as a crucial adaptation measure to climate change -
Book (stand-alone)Domestic Support Measures in the Context of Adaptation / Mitigation to Climate Change
The State of Agricultural Commodity Markets (SOCO) 2018: Background Paper. Rome
2018Also available in:
No results found.Climate Smart Agriculture (CSA) has been promoted as a key approach in addressing the effects of climate change. First launched in 2009, CSA refers to agricultural technologies that are well suited to increase farmer livelihoods in the face of a changing climate by 1) raising agricultural productivity; 2) building resilience of livelihoods and farming systems; and 3) reducing carbon emissions. While government implementation of mitigation and adaptation policies may be an effective means to help address climate change, concerns arise, if CSA policies run counter to international trade disciplines. In particular, CSA policies could come into direct conflict with WTO trade rules, if these policies serve to insulate domestic producers from competition. Thus, they could potentially distort production and trade. This paper examines CSA policies in the context of the WTO agreements, including domestic support disciplines under the WTO Agreement on Agriculture.
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