The government’s green trade report recognises the environmental challenge

This post is by Dr Carolyn Deere Birkbeck, director of the Forum on Trade, Environment and the SDGs (TESS) and senior research associate at the University of Oxford’s Global Economic Governance Programme.

The recent Green Trade report from the UK Board of Trade marks an important step in the development of the UK’s approach to international trade as it recognises the critical relevance of trade and trade policies to the big environmental challenges of our time.

As hosts of COP26 and an open trading nation, the UK’s approach to trade sends a very visible message about how it intends to support a global green transition.  The good news is that this agenda is pushing against an open door in this country.  Policy makers in government and parliament, as well as environmental and business stakeholders, know there is a real imperative – at home and overseas – for trade to support environmental action. 

This report is a promising start; it covers environment and trade intersections on topics ranging from climate change, transport emissions and plastic pollution to illegal wildlife trade and environmentally harmful subsidies to fossil fuels and fisheries. It underlines the need for trade policies to support a green industrial revolution, highlighting the economic opportunities that green trade can produce, and that some trade flows and policies can undermine environmental goals.

Promoting green trade would support UK businesses
The report also offers several solid recommendations on what the government can do to advance green trade. Among these, it calls on the UK promote trade in environmental goods and services. Liberalisation of this trade is one way UK businesses can be supported to deliver on global environmental goals, including on climate action, while also helping companies abroad to access the technologies a low carbon transition requires. A central challenge, however, is to do this in ways that support efforts around the world, especially in developing countries, to build their green sectors and industries, and to export their environmental goods and services as well. 

The report also signals ways the UK could contribute to a global green trade transition. It is right that we need a wholesale green transformation away from business as usual in the global economy.  Nowhere is this more critical than in agriculture and farming.  

The Board of Trade highlights the urgent need to tackle the climate and nature crises together, but by focusing only on the greenhouse gas intensity of agriculture and farming it gives a deeply misleading impression. Global food and farming systems produce 29 per cent of greenhouse gas emissions and drive 70 per cent of terrestrial and 50 per cent of freshwater biodiversity loss.

The idea advanced in the report, that some industrial meat producers could be sustainable producers, because they are relatively ‘carbon efficient’, ignores their wider pollution impacts and the biodiversity loss associated with industrial meat production, while also neglecting animal welfare and public health issues.  

A related shortcoming is that the report does not offer any recommendations on how UK trade policy could bolster the international co-operation needed to ensure international markets reward the vital transition to sustainable agriculture and tackle the drivers of deforestation.

The report is a clear signal that the UK can and should lead a green trade agenda
At a time when the government is dashing to advance multiple trade deals, this report should be seized as a positive and clear signal of the need for the UK to put environmental issues at the heart of its trade agenda, and to lead on green trade internationally.  

In a recent report for Chatham House and WWF,  I identified six pathways for greening the international trade system.  A core argument of that report is that governments need to develop coherent national approaches to environment-trade intersections. In so doing, they need to focus on harnessing not only trade, but also trade policies, to help provide incentives for, and enable, green economic transformation both at home and across the world, and to move away from unsustainable patterns of production and trade.

Two major steps the UK should take
There are two major steps the UK should take this year to move this agenda forward.  First, it needs a national trade strategy that sets out how its trade ambitions will support domestic environmental laws and policies, and how it will deliver on its international environment and development commitments.

Specifically, it should adopt a trade policy that articulates the following: a set of environmental priorities as the starting point for any future trade negotiation; credible processes for parliamentary and stakeholder review of trade deals; a commitment to cross government consultation on trade policy; and a requirement that sustainability impact assessments are used to inform government decision making, before and after trade deals are signed.

Second, the policy should clearly state the government’s commitment to upholding UK environmental standards in trading relations. Strong, credible environmental laws at home – and around the world – are a central foundation for a greener global economy and for raising environmental standards elsewhere. In this regard, the development of robust core environmental standards for all food sold in the UK must be prioritised, as indeed it should be for all products.

Doing the work at home to forge a credible green trade policy and get environmental standards right, will win the UK respect and set the stage for it to play a leadership role, working internationally to galvanise other governments to use trade and trade policies to tackle urgent environmental challenges. 

The UK is uniquely placed to work with developing countries
On the international trade stage, where concerns about economic competitiveness and development dominate, realising the Board of Trade’s vision of “fair green trade” will require commitment to understanding and addressing the sustainable development priorities of developing countries.

With its links to the Commonwealth and its strong legacy of assisting developing countries, the UK is in a unique position to build coalitions, although it will face important questions about recent cuts in development aid and how it can do more with its G7 partners to deliver on climate finance.

More dialogue with trading partners will be important to ensuring that the UK’s green trade agenda is truly ‘best in class’ and extends what is possible, while building the international alliances central to a global green trade agenda. On the international front, a top UK priority for this year should be to help galvanise support for a strong Ministerial Statement on Trade and Environmental Sustainability at the WTO’s Ministerial Conference in November, working with other governments to produce a statement that is ambitious, accompanied by a clear work plan, and engages the majority of the WTO’s members.

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