[A2k] TWN Bali Update: TRADE MINISTERS PROPOSE MORE INTENSIVE TRADE-CLIMATE ENGAGEMENT

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Title : TWN Bali News Update No.8
 Date : 11 December 2007

 Contents:
TWN BALI NEWS UPDATE  NO. 8

11 December 2007
Published by Third World Network
www.twnside.org.sg


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TRADE MINISTERS PROPOSE MORE INTENSIVE TRADE-CLIMATE ENGAGEMENT


Nusa Dua, Bali, 10 Dec (Martin Khor) =AD A two-day meeting of trade ministe=
rs
to discuss trade and climate change ended Sunday with conclusions from the
Chair, Indonesian Trade Minister Mari Pangestu.

According to a press release from the Indonesian Trade Ministry, the meetin=
g
agreed that there should be intensive high-level engagement and interaction
on the issue of international trade and climate change.

This may include the holding of a high-level meeting on the issue of trade
and environment under the WTO, or in parallel with other international
meetings, such as UNCTAD XII.

Future hosts of the conference of parties of the UN Framework on Climate
Change (UNFCCC) were also encouraged to hold further dialogues as a Trade
Ministers=B9 platform on the issue of international trade and climate chang=
e,
and to look at the possibility of holding a joint session with finance and
development Ministers.

The engagement between the WTO and UNFCCC should be strengthened and
enhanced through information exchange mechanisms with the view to better
improve the mutual supportiveness of international trade and climate change
objectives.

These were the main recommendations of the Informal Trade Ministers=B9
Dialogue on climate change, which was held in conjunction with the meetings
of the UNFCCC and the Kyoto Protocol taking place in Bali.

Ministers and officials from 32 countries attended the meeting, as well as
WTO Director General Pascal Lamy and UNCTAD Secretary General Dr. Supachai.
Two of the prominent Ministers who attended were United States Trade
Representative Susan Schwab and Brazil=B9s Foreign Minister Celso Amorim.

Notable absentees were Indian Commerce Minister Kamal Nath and European
Trade Commissioner Peter Mandelson.  However Portugal, who holds the EU
presidency, sent its Economic Minister Antonio Jose de Castro Guerra, while
China was represented by a senior official.

Among the other countries who were represented at Ministerial level were
Switzerland, Australia, New Zealand, Sweden, United Kingdom, Singapore,
Korea and Finland. Senior officials came from China, India, Japan, Pakistan
and Argentina, Brunei and other countries.

At a press conference on Sunday, a clash took place between Schwab and
Amorim over the US-EU proposal to eliminate tariffs on hundreds of
environmental goods and to have countries to commit to liberalise
=B3environmental services.=B2

Amorim criticized the US for the list of =B3environmental products=B2 which
should have their tariffs eliminated, according to the Jakarta Post.  Schwa=
b
said the elimination of tariffs on products such as wind turbines and
hydrogen fuel cells would increase trade and the use of clean technologies
by up to 14% a year.

But Amorim was not impressed.  =B3I think the list is incomplete and won=B9=
t do
much for climate change.  It=B9s not proven what the effects of the goods o=
n
climate change are,=B2 he said.

It was unfortunate that ethanol was excluded from the list drawn up by the
US and the EU, said Amorim, even though Brazil had been using ethanol for 3=
0
years.  =B3It is very strange, if the real objective is climate change, tha=
t a
product with a proven record, with statistics that is universally accepted,
is not on the list.=B2

The open clash between the two Ministers at the press conference was a
reflection of the sharp exchanges between them on the same issue, at the
Ministerial meeting, according to a participant of the meeting.

Mari Pangestu said that this is a first meeting among trade ministers on
climate change issues. In the past, discussions were on the technical level
in Geneva, which limit the focus of discussion on environmental goods and
services.

=B3This meeting is special because Trade Ministers as policy makers have
conducted open and in-depth discussions on important issues on climate
change which has become the concern of the world,=B2 said Mari Pangestu.

Three main issues discussed in the dialogue were: (1) Issues faced in trade
and climate change; (2) Mechanism and policy instruments on climate change
and sustainable development; and (3) Common objectives of trade and climate
change.

Among the issues addressed in the dialog were development and poverty
eradication, technology transfer, Clean Development Mechanism (CDM), produc=
t
standard/labelling, financing and energy efficiency.

Mari Pangestu underlined the importance of concerted multilateral efforts t=
o
address climate change issues for the future of sustainable development. It
was stressed that international trade, development, and climate change are
mutually supportive.

The press release said it was recognized that poor and developing countries
are the most vulnerable from the effects of climate change and yet they hav=
e
limited resources and technical capacity to address the challenges.

In this context, it was stressed that protecting and managing climate syste=
m
for the benefit of present and future generations of humankind is a problem
for all, and cannot be effectively undertaken partially or unilaterally.
The meeting also underscored the needs for concerted efforts at the
multilateral level, and that international trade plays an important role in
this regard.

In undertaking multilateral actions, the dialogue emphasized the need to
fully respect multilateral principles that exist in both the climate change
and international trade context. Such principles include the common but
differentiated responsibilities and respective capabilities,
non-discrimination, transparency, science and rules based, and special and
differential treatment.

The dialogue raised concerns on the lack of adequate studies or empirical
evidence on the effect or inter-linkages of international trade with climat=
e
change and impact on development and poverty eradication.

While the dialogue generally agreed on the important role of international
trade in global economic development and welfare, there was however still a
divergence of views on how best trade can help to mitigate and adapt to
climate change, whilst keeping development objective in mind.

The press release added that a variety of trade related policy options and
mechanisms were discussed such as measures and management of carbon
footprints, reducing or eliminating barriers for environmental goods and
services whose functions is to mitigate and facilitate adaptation, the
critical role of technology transfer for developing countries in mitigating
and adapting to climate change objective, the role of intellectual property
rights (IPRs) in ensuring a more effective technology transfer, reducing or
eliminating subsidies that have adverse impact on climate change, and
developing an efficient market based trading regime.

It was also stressed that whatever policies or mechanisms implemented to
combat climate change must be taken in such a way as to minimize adverse
social and economic impacts, and in a manner that is compatible with
international trade rules so as it would not constitute a means of arbitrar=
y
or unjustifiable discriminations or a disguised restriction on internationa=
l
trade.

This informal dialogue underlined a mandate given under the Marrakesh
Agreement and the Doha Declaration, to better mainstream issues related to
the environment to the rules of the multilateral trading system.

It was recognized that addressing climate change through enhancing the
development and capacities in particular for developing countries was of
equal importance to mainstreaming environment to the multilateral trading
system. In this context, the contribution of multilateral trade regime to
climate change would be the successful and balance conclusion of the DDA
(Doha Development Agenda) negotiations, including the implementation of the
environment mandate.

The ministers suggested the following proposals:

1) The urgent and successful conclusion of the Doha Development Agenda
negotiations, including the environment mandate.

2) More comprehensive study and better empirical evidence on the linkages
and interface between international trade development, and climate change,
to enhance understanding and to enable Trade Ministers to take informed and
more appropriate actions.

3) Intensify high-level engagement and interaction on the issue of
international trade and climate change. This may include of holding
high-level meeting on the issue of trade and environment under the WTO, or
in parallel with other international meetings, such as UNCTAD XII.

4) Encourage future hosts of UNFCCC COP meetings to hold further dialogues
as Trade Ministers=B9 platform on the issue of international trade and clim=
ate
change, and to look at the possibility of holding a joint session with
finance and development Ministers.

5) Strengthen and enhance engagement between the WTO and UNFCCC through
information exchange mechanisms with the view to better improve the mutual
supportiveness of international trade and climate change objectives.

In a press statement issued on Sunday, Lamy said a deal on climate change
could not be struck through the WTO but should come through an environmenta=
l
forum.

Said Lamy:  =B3Until a truly global consensus emerges on how best to tackle
the issue of climate change, WTO members will continue to hold different
views on what the multilateral trading system can and must do on this
subject.=B2

Besides the trade ministers=B9 meeting, Bali is also hosting a meeting of
selected finance ministers on Monday and Tuesday, at which the World Bank
president Robert Zoellick will also be present.

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