The trade system and climate action: ways forward under the Paris Agreement

The document examines the tension between international trade rules and national climate policies, arguing that while trade rules are often seen as barriers to climate ambition, they can also facilitate the deployment of clean technologies. It proposes five key steps to create a more climate-friendly trade regime: an authoritative interpretation of GATT Article XX, the inclusion of climate expertise in WTO dispute settlement, the use of regional trade agreements to test climate rules, the pursuit of plurilateral deals like the Environmental Goods Agreement, and increased institutional coordination between the WTO and UNFCCC to enhance transparency.

• The international trade system is currently fragmented, with a diminishing role for the WTO and an increase in regional trade agreements. This has led to a rise in WTO dispute settlement cases concerning national climate policies, particularly those promoting renewable energy investments, highlighting a systemic conflict between national approaches and the WTO's non-discrimination obligations.
• To clarify exceptions to trade obligations and signal WTO support for member climate policies, the authors suggest an authoritative interpretation of Article XX of the General Agreement on Tariffs and Trade (GATT).
• Regional and mega-regional trade agreements, such as the Transatlantic Trade and Investment Partnership (TTIP), are identified as promising tools for introducing and diffusing climate protection rules to prevent a regulatory race to the bottom.
• Plurilateral agreements can facilitate the trade of climate-friendly goods and services. A specific example is the Environmental Goods Agreement, being negotiated by the EU, China, Japan, the United States, and others, which aims to remove trade barriers for goods essential for climate and environmental protection.
• Transparency regarding the implementation of Nationally Determined Contributions (NDCs) could be improved through better coordination between the UNFCCC and the WTO, potentially via a new Committee on Trade, Environment and Climate Change or by enhancing existing mechanisms like the Trade Policy Review Mechanism.

APA

Droege, S., van Asselt, H., Das, K., & Mehling, M. (2016). The trade system and climate action: ways forward under the Paris Agreement. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2016/11/Trade-and-Paris-Agreement-Summary.pdf

Chicago

Droege, Susanne, Harro van Asselt, Kasturi Das, and Michael Mehling. The trade system and climate action: ways forward under the Paris Agreement. Climate Strategies, 2016. https://climatestrategies.org/wp-content/uploads/2016/11/Trade-and-Paris-Agreement-Summary.pdf.

Wikipedia

{{cite report |last1=Droege |first1=Susanne |last2=van Asselt |first2=Harro |last3=Das |first3=Kasturi |last4=Mehling |first4=Michael |title=The trade system and climate action: ways forward under the Paris Agreement |publisher=Climate Strategies |date=October 2016 |url=https://climatestrategies.org/wp-content/uploads/2016/11/Trade-and-Paris-Agreement-Summary.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{droege2016trade, author = {Droege, Susanne and van Asselt, Harro and Das, Kasturi and Mehling, Michael}, title = {{The trade system and climate action: ways forward under the Paris Agreement}}, institution = {Climate Strategies}, year = {2016}, month = oct, url = {https://climatestrategies.org/wp-content/uploads/2016/11/Trade-and-Paris-Agreement-Summary.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }