Green trade will be the focus of this year’s WTO Public Forum. Here’s everything you need to know

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Ian Shine, Senior Writer, Forum Agenda

• The ways trade can contribute to a greener and more sustainable future will be the focus of the WTO’s Public Forum, 12-15 September.
• Sessions will include The Route to Transport Decarbonization, Green Energy Investments in Africa and Promoting Smallholders’ Inclusion in the Advancement of Green Trade.
• For the latest on international trade and sustainability, read Forum Agenda and sign up for the monthly Trade Sketchings newsletter on LinkedIn here.

First there was globalization. Then came talk of deglobalization. Are we now heading for greenbalization?

“The future of trade is green,” says World Trade Organization (WTO) Director-General: Ngozi Okonjo-Iweala. “Trade can support national and international efforts to keep the ambition of limiting global warming to 1.5°C alive.”

The specific ways in which trade can contribute to a greener and more sustainable future will be the focus of the WTO’s Public Forum on 12-15 September.

Taking place at the WTO’s headquarters in Geneva, Switzerland, the Public Forum will feature around 90 interactive sessions, with topics including The Route to Transport Decarbonization, Green Energy Investments in Africa and Promoting Smallholders’ Inclusion in the Advancement of Green Trade.

Developments in international trade and sustainability are well covered by Forum Agenda and the Forum’s monthly Trade Sketchings newsletter on LinkedIn, which you can sign up to here.

Here’s a round-up of some of the green trade highlights of this year, to get you up to speed ahead of the WTO Public Forum.

Supply chains: The social dimension needs more attention

Efforts towards socially sustainable supply chains are not only a moral imperative, but also indispensable for ecological, legal and economic reasons.

While the global electrification of the automobile industry will support the environmental side of sustainability, it will also massively multiply demand for raw materials, increasing dependency on mining industries with poor human rights records and other environmental issues.

Ensuring social sustainability in these areas not only supports human rights, but also tends to lead to more diversified and more resilient supply chains. Deeper evaluation and transparency when it comes to supply chains also allows companies to make decisions based on a more in-depth factual analysis. However, supply chain due diligence requirements need to be carefully implemented, to avoid these becoming a paperwork exercise with little impact.

What does the green subsidy race mean for trade and the climate?

Green subsidy schemes, such as those rolled out by the US and EU, encourage private-sector climate action, but they also risk leaving developing and emerging economies behind. They could also lead to trade tensions that hurt green technology supply chains.

Local production requirements for batteries and electric cars have been criticized as trade-restrictive practices that violate agreements underpinning the multilateral free-trade system.

We asked five experts to weigh in on what the subsidies underlying the US Inflation Reduction Act and EU Green Deal Investment Plan mean for the future of climate change and trade.

Zero-emission cargo ships: How could they work?

https://cdn.jwplayer.com/players/XzmT7ypo-ncRE1zO6.html

Foreign direct investment must align with climate goals

Developing countries need almost $6 trillion to implement their pre-2030 climate commitments. Foreign direct investment (FDI) has a role to play in meeting these needs – we call this “climate FDI”, meaning investment that is aligned with and supportive of climate goals.

However, climate FDI flows are below their potential in many developing economies. That can be for a range of reasons, potentially linked to investor concerns unrelated to climate, or sector-specific where projects are capital intensive or offer long time horizons for a return on investment.

The World Economic Forum’s Guidebook on Facilitating Climate FDI suggests four categories of measures that can help change this.

Climate FDI flows are below their potential in many developing economies. Image: World Economic Forum

Trade buzzwords: What are friendshoring, nearshoring, reshoring and offshoring

https://cdn.jwplayer.com/players/x8vjyXMq-ncRE1zO6.html

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What is the World Economic Forum doing on trade facilitation?

The Global Alliance for Trade Facilitation is a collaboration of international organisations, governments and businesses led by the Center for International Private Enterprise, the International Chamber of Commerce and the World Economic Forum, in cooperation with Gesellschaft für Internationale Zusammenarbeit.

It aims to help governments in developing and least developed countries implement the World Trade Organization’s Trade Facilitation Agreement by bringing together governments and businesses to identify opportunities to address delays and unnecessary red-tape at borders.

For example, in Colombia, the Alliance worked with the National Food and Drug Surveillance Institute and business to introduce a risk management system that can facilitate trade while protecting public health, cutting the average rate of physical inspections of food and beverages by 30% and delivering $8.8 million in savings for importers in the first 18 months of operation.

What are trade ministers doing to address climate change?

A Coalition of Trade Ministers on Climate was launched at the World Economic Forum’s Annual Meeting in Davos this year.

It brings together trade ministers from over 50 countries with the aim of boosting international cooperation on climate, trade and sustainable development.

The Coalition co-chairs from Europe, Kenya, New Zealand and Ecuador told us more about what the initiative plans to do, and how it hopes to do it.