Trade and Climate in the WTO: What Can We Learn from Preferential Trade Agreements

This briefing examines how Preferential Trade Agreements (PTAs) can serve as policy tools and 'laboratories' to promote climate action and inform multilateral negotiations at the World Trade Organization (WTO). It argues that while PTAs often have a broader scope for environmental provisions than the WTO, many current provisions remain vague and weak, requiring improved design in areas such as fossil fuel subsidies, environmental goods, and investment protections.

• Preferential trade agreements (PTAs) can accelerate the green transition by reducing harmful subsidies, incentivizing green transitions, and promoting the diffusion of environmental technologies. They act as experimental spaces where successful provisions can later inspire WTO multilateral negotiations, such as how the CPTPP's fisheries subsidies rules preceded the WTO's Agreement on Fisheries Subsidies.
• To strengthen climate protection, PTAs should focus on three specific types of provisions: eliminating or phasing down fossil fuel subsidies with transparency and special treatment for developing countries; liberalizing environmental goods and services by removing both tariffs and non-tariff barriers; and shielding climate policies from legal challenges by creating treaty-wide exceptions or carving them out of investor-state dispute settlements.
• The effectiveness of climate provisions in PTAs can be enhanced through five key recommendations: prioritizing win-win solutions (such as environmental exceptions in all chapters), increasing non-state actor participation, boosting capacity building for low- and middle-income countries, improving data and ex post impact assessments every 5 or 10 years, and strengthening compliance and enforcement mechanisms.
• Despite legislative gridlock at the WTO, new dynamics are emerging to align trade and climate policies, including the Trade and Environmental Sustainability Structured Discussions (TESSD) and the Coalition of Trade Ministers on Climate, which includes over 60 trade ministers.

APA

Morin, J.-F., & Brandi, C. (2024). Trade and Climate in the WTO: What Can We Learn from Preferential Trade Agreements. Forum on Trade, Environment, & the SDGs. https://tessforum.org/latest/trade-and-climate-in-the-wto-what-can-we-learn-from-preferential-trade-agreements

Chicago

Morin, Jean-Frédéric, and Clara Brandi. Trade and Climate in the WTO: What Can We Learn from Preferential Trade Agreements. Forum on Trade, Environment, & the SDGs, 2024. https://tessforum.org/latest/trade-and-climate-in-the-wto-what-can-we-learn-from-preferential-trade-agreements.

Wikipedia

{{cite report |last1=Morin |first1=Jean-Frédéric |last2=Brandi |first2=Clara |title=Trade and Climate in the WTO: What Can We Learn from Preferential Trade Agreements |publisher=Forum on Trade, Environment, & the SDGs |date=17 September 2024 |url=https://tessforum.org/latest/trade-and-climate-in-the-wto-what-can-we-learn-from-preferential-trade-agreements |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{morin2024trade, author = {Morin, Jean-Frédéric and Brandi, Clara}, title = {{Trade and Climate in the WTO: What Can We Learn from Preferential Trade Agreements}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2024}, month = sep, url = {https://tessforum.org/latest/trade-and-climate-in-the-wto-what-can-we-learn-from-preferential-trade-agreements}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }