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

The document examines how preferential trade agreements (PTAs) can be designed to accelerate the green transition and influence WTO policy. It identifies three key areas for climate-focused provisions—fossil fuel subsidies, environmental goods and services, and investment protections—while noting that many current PTA provisions remain vague. The authors recommend focusing on win-win solutions, increasing non-state actor participation, boosting capacity building for low- and middle-income countries, improving impact assessments, and strengthening enforcement mechanisms. Finally, it suggests that PTAs can act as testing grounds for innovative rules that can later be multilateralized through WTO initiatives like the Trade and Environmental Sustainability Structured Discussions (TESSD).

• Preferential trade agreements (PTAs) can act as experimental laboratories for innovative trade policies that can later be replicated in other agreements or inspire multilateral negotiations at the WTO. An example is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which included fisheries subsidies rules before the WTO concluded its own Agreement on Fisheries Subsidies.
• To effectively promote climate protection, PTAs should focus on three specific types of provisions: eliminating or phasing down fossil fuel subsidies with transparency; liberalizing environmental goods and services by removing both tariffs and non-tariff barriers; and shielding climate policy from legal challenges by creating treaty-wide exceptions or carving out climate measures from investor-state dispute settlement.
• Current climate-related provisions in PTAs are often insufficient, described as vague, weak, and lacking innovation. To improve effectiveness, the document recommends five key actions: prioritizing win-win solutions, promoting non-state actor participation, increasing capacity building for low- and middle-income countries, improving data and impact assessments, and fostering stronger compliance and enforcement.
• Capacity building and financial assistance for implementing environmental provisions are currently underutilized in PTAs; only 14% of 775 examined agreements include provisions on technical assistance and capacity building, and only 10% include commitments for technology transfer or finance.
• Despite legislative gridlock at the WTO, new dynamics are emerging to align trade and climate policies, such as the member-led 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} }