INF/TE/SSD/R/16  
 
17 April 2023 
(23-2739) Page: 1/7 
Trade and Environmental Sustainability Structured 
Discussions  Original : English  
 
  
TRADE AND ENVIRONMENTAL SUSTAINABILITY STRUCTURED DISCUSSIONS  
INFORMAL WORKING GROUP  MEETINGS  
HELD ON 16-17 MARCH  2023 
1  Remarks by the TESSD Coordinators  
1.1.  The Coordinators , Canada and Costa Rica, outlined the way forward recalling  the priorities 
arising from  the High -Level Stocktaking Event held on 2 December 2022 and the Statement by 
TESSD Co -Conven ors. They also reminded  TESSD co-sponsors that they could consider sharing their 
statements to further enhance transparency.  
2  Working Group on Trade -related Climate Measures (TRCM)  – 16 March  (a.m.)  
Review of c arbon measurement standards  and measures intended to lead to a reduction in carbon 
emissions in the iron and steel sector  
2.1.  The Secretariat briefed on the event "Trade Forum for Decarbonization Standards" that took 
place on 9 March 2023, which aimed to promote coherence and transparen cy in the steel sector.  
The event included participation by the private sector, industry associations, think tanks, and other 
international organizations to discuss the connections between trade and decarbonization standards 
in the steel sector . The event aimed to foster a more coherent and transparent approach to carbon 
measurement based on international standards . The Secretariat also presented on decarbonization 
standards in the iron and steel sector based on the Trade and Climate Change Information brie f 
no. 7.1 The presentation highlighted the challenges of proliferation and fragmentation of 
decarbonization standards on climate and trade issues, as well as the importance of promoting 
coherence and bringing developing country perspectives into the decar bonization discussions.   
2.2.  As part of the discussions, Members reacted to the presentations and respond ed to the 
following questions:  
 
• What are the trade implications of the trend towards proliferation and fragmentation of 
carbon measurement standards in the iron and steel sector?  
 
• In which ways can carbon measurement standards be used to support the development of 
trade-related measures aimed at decarbonizing the iron and steel sector?  
 
• How can Members best cooperate with the private sector a nd among each other, including 
at the WTO, to promote coherence and to maximize both climate and trade benefits?  
 
• What are specific challenges facing developing countries? How can these be addressed : 
(i) in the standards development stage ; and (ii) in the implementation stage when 
measuring process and product emissions?  
 
2.3.  Several Members took the floor to discuss implications of the proliferation of carbon measures, 
the importance of cooperation, and challenges faced by developing countries . One Member 
advocated for Mutual Recognition Agreements (MRA s) on decarbonization standards at a multilateral 
level, while another noted that establishing a common understanding of low carbon steel products 
should account for different levels of developme nt, particularly since access to climate finance was 
 
1 https://www.wto.org/english/tratop_e/envir_e/trade -climate -change_info_brief_no7_e.pdf . INF/TE/SSD/R/16  
 
- 2 - 
 
  constrained, and also stressed the importance of including developing country perspectives. 
Members also shared their experience on cross -cutting inter -ministerial collaboration at the national 
level, no ting that a sound multilateral environment was crucial for decarbonizing the steel sector, 
and pointed to significant investments planned to promote green sectors.  
2.4.  A number of Members emphasized the need for harmonization and a common approach to 
reduce t he risk of creating additional barriers to trade, underlined the positive role of WTO in 
supporting the exchange of methodologies for calculating embedded emissions  and as a forum for 
dialogue and promoting coherence on carbon standards, and suggested that  the Industrial Deep 
Decarbonization Initiative (IDDI), the International Energy Agency (IEA), the International 
Standards Organization (ISO), and the Organisation for Economic Co -operation and Development 
(OECD) could be helpful forums. Certain Members al so stressed the importance of collaboration to 
reduce duplication of work across different organizations, and emphasized the need for clear carbon 
accounting methodologies as well as interoperability of standards.   
Exchange on the development and implement ation process of trade -related climate measures  
2.5.  The WTO Secretariat briefed Members on the TBT Thematic Session on regulatory cooperation 
focusing on the topic of climate change, which took place on 7 March 2023. The session highlighted 
that regulatory mea sures were increasingly used in Members' efforts to tackle climate change, but 
such measures c ould create trade barriers if not designed and implemented with reference to the 
TBT Agreement 's principles and international standards. The session also highligh ted the importance 
of maintaining global regulatory cooperation, increasing harmonization of technical requirements 
based on international standards, and promoting mutual recognition where possible to reduce 
duplication and divergences in regulatory measur es.  It was noted that these efforts  could support  
increased  trade in products and technologies needed to address climate change. The key role of the 
TBT Committee in achieving these goals, taking into account the needs of MSMEs and ensuring the 
effective participation of developing countries in the standard -setting process, was noted.   
2.6.  As part of the discussions, Members reacted to the briefing  and respond ed to the following 
questions:  
 
• What processes (e.g. consultations, data gathering exercises ) and principles do you follow 
in the development and implementation of trade -related climate measures?   
 
• Do members consider a range of policy options to address specific problems? What 
mechanisms exist for evaluating the potential effects and impacts of those policy options?  
How do you balance climate and trade considerations in this process?  
 
• What processes do you have in place to enhance transparency in the regulatory process?  
 
• Following the implementation of a policy, what processes do you have to evaluate the 
impacts and effectiveness of a policy in meeting its stated objectives?  
 
2.7.  Several WTO Members took the floor to share their experience s regarding processes and 
principles in the development of TrCMs. Many Members noted that public reporting and stakeholder 
consultation were key principles to their national regulatory approach es. Singapore noted that it had 
launched the Singapore Green Pla n 2030, which included TrCMs, and which were developed based 
on consultations with industry and citizen stakeholder groups . Some Members  noted that they had 
a transparent regulatory system that emphasize d interagency processes, evidence -based 
decision -making, public consultations, and impact assessments , while another Member  mentioned 
that it ha d extensive processes for developing, promulgating, and implementing new regulations 
that were governed by law, including public consultation and transparent rule -making procedures. 
One Member also noted that the regulatory approach taken for TrCMs  was the same as for other 
measure s.  
2.8.  Some Members  highlighted that they had established a partnership with industries, including 
the processing, maritime, construction , and property industries, to reach climate targets. Members 
also shared TrCMs in the pipeline su ch as carbon pricing, voluntary and mandatory product 
standards, labelling and procurement measures, and a potential carbon border adjustment 
mechanism. One Member emphasized that administrative burdens should not create barriers to trade INF/TE/SSD/R/16  
 
- 3 - 
 
  and that sufficie nt time should be provided to implement the shift , and  encouraged Members to 
engage plurilaterally and multilaterally.   
2.9.  Two stakeholders took the floor to provide comments on the working group on TrCM (IISD, 
TESS) TESS stated that the sectoral focus on the  iron and steel sector highlighted the challenges 
facing companies, especially MSMEs in developing regions to comply with carbon accounting and 
measurement requirements, including the lack of available data, poor transparency of differing 
requirements amon g trading partners, limited participation of developing country governments and 
businesses, financing, and lack of affordable access to relevant technologies. It noted that the WTO 
could play an important role in fostering inclusive and effective internati onal cooperation and 
coordination. IISD informed members about its upcoming reports on voluntary standards, successful 
deforestation measures implemented by developing country government s, and policy briefs on 
development and implementation of border carbo n adjustment measures.   
3  Working Group on Subsidies  – 16 March  (p.m.)  
Environmental effects and transparency  
3.1.  The Food and Agriculture Organization (FAO) presented on the environmental effects of 
agricultural subsidies. FAO noted that it was important to dif ferentiate between different types of 
support and subsidies, as not all types of support could be considered subsidies and not all subsidies 
were recorded in the metrics of support. It further noted the necessity of considering the impacts of 
harmful subsi dies and taking account of three dimensions: the condition of the country, instruments 
such as payments to inputs, as well as the products themselves.  
3.2.  Paraguay made a presentation on good agricultural practices and environmental programmes 
under paragraph  12 of Annex 2 of the Agreement on Agriculture. The presentation assessed all 
questions raised in the Committee on Agriculture for environmental programmes included in the last 
10 years to identify concerns raised by Members regarding notified programmes. Further, Paraguay 
proposed to elaborate a questionnaire similar to the Dialogue on Plastics Pollution (DPP), in which 
Members could provide more information on their measures, their environmental objectives, identify 
trade-offs between environmental object ives, and provide more information on the results of 
environmental measures.  
3.3.  As part of the discussions, Members reacted to the presentations and respond ed to the 
following questions:  
 
• How can the environmental effects and trade impacts of agricultural subsidies be identified?  
 
• What are information gaps to better understand these impacts , and how could transparency 
and data availability on agricultural subsidies be enhanced?  
 
3.4.  Several Members discussed the issue of identifying agricultural su bsidies and their impact on 
the environment. Members acknowledged the complexities of agricultural subsidies and their effects 
on the environment, underlined the importance of moving to less distorting and environmentally 
harmful forms of subsidies, noted that removal of such subsidies may not have the intended effect, 
and suggested leveraging the expertise and outputs of several international organizations such as 
FAO, the World Bank, the OECD, and the International Food Policy Research Institute (IFPRI) w hich 
were working on this issue. Certain Members noted the impact of subsidies on the food system and 
stated that some kinds of support for farmers were inefficient, but also emphasized the need to 
account for poverty alleviation and food security when dis cussing the issue. A Member stated that 
agricultural subsidy policies should take into account the impact on production, trade, and the 
environment, while another Member noted that environmental effects and trade impacts were 
different concepts and needed to be treated separately.  
3.5.  Regarding the issue of data availability and transparency to identify information gaps, one 
Member emphasized the importance of quantifying environmental effects to evaluate the benefits of 
climate -smart agricultural practices, w hile another Member called for better analytical modelling to  
capture the  impact s of different types of subsidies. A Member highlighted the need to provide specific 
information including Green Box subsidies at the WTO.      INF/TE/SSD/R/16  
 
- 4 - 
 
  Subsidy design  
3.6.  Brazil and the Eur opean Union presented their experiences in promoting environmental 
sustainability in agriculture. Brazil discussed its use of subsidies to support sustainable agriculture 
initiatives, including the National Alcohol Program, the Agriculture Climate Risk Zon ing policy, and 
the Low Carbon Emission Agricultural Plan. These policies ha d resulted in increased productivity 
yield, negative correlation between land use, land -use change, and forestry (LULUCF) and 
agriculture, and reduced subsidies in the long term. T he European Union focused on the 
environmental sustainability of its Common Agricultural Policy, which ha d shifted towards protecting 
the climate while reforming the policy. The European Union ha d reduced greenhouse gas emissions, 
decreased the use and ris k of chemical pesticides and sales of antimicrobial agents, and increased 
organic farming.  
3.7.  As part of the discussions, Members reacted to the presentations and respond ed to the 
following questions:  
 
• How do you consider possible environmental effects and trade impacts in the design of 
agricultural subsidies?  
 
• What kind of agricultural subsidies can be beneficial to the environment?  
 
• How do you balance environmental and trade considerations?  
 
3.8.  Several Members took the floor  to discuss the consideration of environmental and trade effects 
in subsidy design  based on the above -mentioned  questions . One Member stated that each Member 
should identify and evaluate environmentally harmful subsidies and reorient them towards 
environmentally positive ones. It also referred to the OECD's PINE database as a tool to identify 
environmentally positive subsidies. Relatedly, a nother  Member stated that presentations from 
Members about their country -specific program mes could help understand the unique challenges they 
faced and tailor solutions to their specific needs . Another Member noted that it systematically 
evaluate d the environmental impacts of agricultural policy measures, including via quantitative 
models. It also noted that agricultural subsidies c ould be beneficial to the environment, as they c ould 
help provide public goods such as biodiversity preservation and greenhouse gas reduction.  The 
United Kingdom  stated that it was  undergoing significant reforms of agricultural policy and spending 
to align the sector with national objectives for improving the natural environment and meeting the 
national target of net zero greenhouse gas emissions by 2050. The reformed approach aim ed to 
encourage farmers and land managers to provide environmental goods and services  such as habitat 
restoration, improved water quality, natural flood management, and woodland creation.  
3.9.  Two stakeholders took the floor to provide comments on the working gro up on subsidies (IISD, 
TESS). TESS stated that sustainability dimension of subsidies could complement the ongoing 
negotiations in the special session of the Committee on Agriculture, noted that defining what 
constitutes environmentally harmful subsidies wo uld be challenging, and suggested identifying 
unequivocally environmentally harmful practices and prioritizing action on any form of subsidies 
supporting them.    
4  Working Group on Environmental Goods and Services  – 17 March  (a.m.) 
Services  
4.1.  The WTO Secretar iat presented on renewable energy services and related services that 
supported the sector. It explained the challenges in defining renewable energy services using the 
Services Sectoral Classification List, and illustrated the different types of services th at were 
supporting the renewable energy supply chain. It also pointed to the limited data on renewable 
energy services trade. As governments implemented various policies to encourage renewable 
energy, horizontal measures relating to investment, land use, p rofessional licensing or movement 
of natural persons could act as barriers to trade in renewable energy services.  
4.2.  As part of the discussions, Members reacted to the presentations and respond ed to the 
following questions:  
 INF/TE/SSD/R/16  
 
- 5 - 
 
  • What services are important for th e development, installation and operation of renewable 
energy projects ? How do these services either (i) contribute directly to climate change 
goals or (ii) support environmental goods  in achieving climate goals ? 
 
• What role does trade in  these  services  play to develop the renewable energy sector? What 
are the main barriers to trade in these services?  
 
• What are specific examples of such services applying to the solar energy sector?  
 
4.3.  Several Members took the floor to discuss what services were im portant for renewable energy 
projects and related barriers to trade in this sector. Several developing Members noted that 
renewable energy development cannot be separated from services support, such as identification, 
site evaluation, engineering, construc tion, operation, and maintenance. Another Member also listed 
architectural, certification, and urban planning important in the renewable energy context . Other 
Members also highlighted the importance of various professional services for renewable energy 
deployment, such as technical testing, and financial and insurance services. One Member noted that 
environmental ly related services should include installation and assembly work, recycling, lending, 
and leasing.  
4.4.  Members also discussed the role of trade in ser vices in develop ing the renewable energy sector  
and touched on related trade barriers . Some Members stated that trade barriers hindered the 
efficient deployment of renewable energy technologies, and called for the examination of bottlenecks 
in regulations and technical standards. For instance, some Members noted that foreign architects 
and engineers faced strict licensing and certification requirements that could affect solar energy 
service providers . Other barriers mentioned, inter alia , include nationalit y requirements, limitation 
of stay of foreign service providers, limited recognition of third -country diplomas , investment 
screening procedures , economic needs test s, restrictions on  foreign equity or types of commercial 
presence , and discrimination regarding registration, licensing, procurement policies and subsidies. 
It was also suggested that the work of OECD on the Services Trade Restrictiveness Index (STRI) 
would be useful in identifying relevant trade barriers.  
Goods  
4.5.  LONGi Green Energy Technology Co. Ltd. shared its activities in the solar energy sector, 
highlighting trade -related challenges and opportunities. The United Kingdom presented how value 
chain analysis could be useful in building an evidence base on the role of environm ental goods and 
services and related policies in promoting renewables, since it provided a unifying conceptual 
framework for understanding a wide array of policy issues relating to environmental goods and 
services. Further, the United Kingdom also proposed  that the TESSD facilitators, with support from 
the WTO Secretariat, build and maintain a living summary document.  
4.6.  As part of the discussions, Members reacted to the presentations and respond ed to the 
following questions:  
 
• What are key goods to allow  solar energy  to achieve climate change goals? 
 
• What are the main bottlenecks in supply chains or barriers to the dissemination of these 
goods?  
 
4.7.  Several WTO Members took the floor to discuss key goods for solar. Members listed solar 
energy systems , energy s torage batteries , solar -powered appliances and equipment, such as solar 
water heaters and solar power electric generating, solar panels, silicon, silicon wafers, solar cells, 
and PV modules  as key goods of solar. Singapore stated that the APEC List of Envi ronmental Goods 
and the Singapore -Australia Green Economy Agreement contain specific examples of these goods. 
A Member identified polysilicon, smart -grid technologies, and technologies for large quantum storage 
as critical raw materials in the renewable en ergy industry, while another Member noted the 
importance of value chain approach in identifying systematically related goods and services, stating 
that in many cases, ex -outs could be considered since HS nomenclature often did not differentiate 
between env ironmental goods and other goods.  
4.8.  Members also took the floor to discuss bottlenecks and barriers to dissemination environmental 
goods. Some Members highlighted  the need to expand the proportion of renewable energy INF/TE/SSD/R/16  
 
- 6 - 
 
  generation, and highlighted trade barrier s. A Member stated that it had found the value chain 
approach, suggested by the United Kingdom, useful for identifying related goods and services. One 
developing Member emphasized the need for technical assistance and capacity building for 
developing count ries. Members also identified technical regulation and non -trade related barriers as 
challenges to solar deployment, along with dependence on critical minerals, bottlenecks and 
regulatory challenges in the supply chain, and lack of infrastructure and know -how to support 
distribution. Members highlighted the importance of making research useful for Members with less 
technical capabilities, and mapping value chains to identify decision points and barriers.     
Developing country perspectives  
4.9.  The International Solar Alliance (ISA) presented on promoting access to and deployment of 
solar energy technology in developing countries. ISA briefed Members about its programmes and 
three strategic priority areas: advocacy and analytics, capacity building, and project imp lementation. 
It further noted that it was organizing a Global Startup Challenge to attract entrepreneurs from the 
African region, with the first leg of the challenge being launched during the UNFCCC 27th Conference 
of Parties.  
4.10.  As part of the discussions, Members reacted to the presentations and respond ed to the 
following questions:  
 
• How can trade in goods and services help developing countries with access to and 
deployment of solar energy technology?  
 
• What are the challenges and needs of developing countr ies and LDCs to use trade to 
develop the solar energy sector?  
 
4.11.  Some Members noted that certain developing countries not only wanted to import green 
technologies but also become producers, and that trade in environmental goods and services allowed 
countries  to access technologies, bring investments, and speed up skill training through the 
movement of labour. Members also noted that developing countries faced challenges such as 
reduced access to expertise , and that trade in services could help these countries  access experts, 
and local communities could benefit  from knowledge transfer.  
4.12.  Several Members took the floor to exchange on the opportunities and challenges for 
developing countries regarding the access to and deployment of solar energy technology. Members  
noted the importance of transitioning towards green energy for developing countries and noted that 
trade could offer solutions to challenges such as supporting the deployment of solar energy 
technology, enabling access to specialist service providers, and  transferring knowledge. A Member 
highlighted that challenges of weak infrastructure, poor financing conditions, insufficient human 
capacity, and trade barriers, led to higher costs and delayed deployment of solar products. Some 
Members also noted that whi le the solar industry in most parts of the world was dependent on 
imports, some developing countries continued to implement trade barriers and restrictions.  
4.13.  Three stakeholders took the floor to provide comments on the working group on subsidies 
(IISD, TESS , UNCTAD). IISD stated that its report titled "How Can Trade Policy Maximize Benefits 
from Clean Energy Investment?" analyzed trade policy choices that developing countries could make 
to promote the use of renewable energy. According to IISD, the report hi ghlighted that reducing 
trade barriers in renewable energy components would decrease project costs, increase deployment 
of renewable energy, and emphasized the role of renewable energy installations in climate change 
adaptation efforts. TESS discussed the importance of building an evidence -based approach to 
environmental goods and services using value chain analysis. It supported the United Kingdom's 
proposed methodology and noted that the focus should be beyond tariff barriers, to incorporate a 
range of ot her aspects including services and NTM at different stages of the value chain.   
5  Working Group on Circular Economy – Circularity  – 17 March  (p.m.) 
5.1.  The OECD presented a report on trade policies to promote the circular economy, focusing on 
lithium -ion batteries, while the National Board of Trade Sweden – Kommerskollegium presented a 
study on trade rules for a circular economy regarding used lithium -ion batteries. The WTO Secretariat 
reported on the mapping of measures related to the circular economy in the WTO, with a focus on INF/TE/SSD/R/16  
 
- 7 - 
 
  measures relating to batteries. Glencore and Contemporary Amperex Technology Co. Limited (CATL) 
also presented on their activiti es regarding circularity of batteries and trade related challenges and 
opportunities. Closing the Loop presented on trade -related challenges in developing countries 
regarding battery recycling.  
5.2.  Members discussed the role that trade and trade policies playe d in national strategies and 
policies to promote circularity in batteries. Some Members stated that trade played a key role in 
creating opportunities for battery recycling, and a reasonable trade policy could promote the circular 
economy of lithium batteri es by reducing the pressure on resources and the environment. A Member  
emphasized the need for focusing on upstream sectors like design for better traceability of battery 
components. The European Union shared information on its December 2022 legislation th at aimed 
to make all batteries placed on the EU market more sustainable, circular, and safe. The new 
regulation brought forward both the EU's circular economy and zero pollution ambitions by making 
batteries sustainable throughout their entire lifecycle – from the sourcing of materials to their 
collection, recycling, and repurposing. Switzerland noted that it had a regulation on batteries, the 
Chemicals Risk Reduction Ordinance (ChemRRV), which contained provisions on the recycling of 
traction batteries.  
5.3.  Members also discussed the role that WTO could play to support in coordinating technical 
regulations, monitoring trade policies, improving the recycling capacity of developing countries, and 
compiling a wish list to bring together trade, environment, and reg ulatory communities in TESSD. 
Some Members noted that trade policies could either facilitate or hinder the circular economy, 
depending on regulations and tariffs, by influencing the movement of used batteries across borders, 
the availability of second -life applications, and the development of recycling infrastructure. One 
Member highlighted the need for harmonized definitions, standards, and regulations to promote 
circular value chains. Some Members cautioned that trade barriers and export restrictions coul d 
decrease incentives for recycling or refurbishment and lead to illegal trade flows. Members also 
stated that trade could play a vital role in creating opportunities for transparency and traceability, 
recycling and reusing batteries.  
5.4.  Members further discussed tools and collaborative actions to support developing and LDC 
Members in addressing challenges along the lifecycle of batteries. These Member pointed out that 
the circular value chain in the battery sector involved coordination of technic al regulations, 
implementation of trade policies, and enhancing recycling capacity of developing members. To 
address concerns raised by enterprises, one Member suggested to collaborate with other 
international and regional organizations. To ensure the cont inued use and recycling of batteries, a 
Member stated that transparency and standardization in product design were necessary. Members 
emphasized that collaborative action was required to support developing and LDC Members in 
addressing challenges along the  lifecycle of batteries.   
5.5.  Two stakeholders took the floor to provide comments on th is working group (TESS, World 
Economic Forum). TESS noted  that the discussions on circular economy should continue to focus on 
policies, particularly trade -related circular economy policies, and identify possible approaches to 
address challenges faced, with a focus on best practices and lessons from current experiences. 
According to TESS, this approach would inform future work on best practices, voluntary actions, and 
partner ships relevant to the design and implementation of trade -related circular economy policies 
and measures as envisaged in the TESSD ministerial statement.  The World Economic Forum (WEF)  
suggested that  trusted trader schemes could support  trade-related effort s for a circular econom y.   
__________