INF/TE/SSD/R/2  
 
10 June 2021  
(21-4785) Page: 1/12 
Trade and Environmental Sustainability Structured 
Discussions  
 Original: English  
 
WTO TRADE AND ENVIRONMENTAL SUSTAINABILITY STRUCTURED DISCUSSIONS  
MEETING HELD ON 26, 27 AND 28  MAY 2021 
Informal s ummary by the Coordinators1 
1.1.  The second plenary meeting of the Trade and Environmental Sustainability Structured 
Discussions (TESSD) was held on 26, 27 and 28 May 2021. The meeting was chaired by the TESSD 
Coordinators  (Canada and Costa Rica ). The agenda for the meeting was contained in WTO docu ment 
INF/TE/SSD/CN /2, circulated on 1 1 May 2021. In keeping with TESSD's open, transparent and 
inclusive  approach , all WTO Members had been invited to attend the meeting.  
1.2.  The meeting on 26 and 27 May 2021 comprised panel sessions on: (i) environmental good s 
and services; (ii) green Aid for Trade; (iii) fossil fuel subsidy reform; (iv) trade -related climate 
measures, including border carbon adjustments; and (v) greening trade, with a focus on circular 
economy, and priorities for developing countries. WTO Mem bers and stakeholders participated in 
the panel sessions. The final programme of the panel sessions is contained in Annex I of this 
document. Annex II of this document contains a short summary of the main issues raised during 
each panel session.  
1.3.  On 28 May 2021, WTO Members  considered  the following questions , which had been circulated 
by the Coordinators in advance of the meeting (see WTO document INF/TE/SSD/CN/ 2/Add.1) : What 
are potential MC12 trade and environmental sustainability deliverables?  What priori ties should be 
pursued by TESSD in the post -MC12 period?  How can we ensure that work in TESSD and/or other 
environmental sustainability initiatives at the WTO are as inclusive as possible?  
1.4.  Several Members noted that the panel discussions on 26 and 27 May had provided a wealth of 
relevant information and useful insights , while helping Members to identify issues in need of further  
consideration . Moreover, the panel discussions had highlighted TESSD 's role  as a venue that brought 
together a broad range of developed and developing Members and stakeholders to discuss key trade 
and environmental sustainability issues . The discussions had also underscored TESSD 's role  as an 
incubator of ideas and potentially, a platform for the development of benchmarks on trade and 
environmental sustainability. The discussions had revealed the value of pursuing an open and 
inclusive dialogue with stakeholders, which had provided many useful perspectives on the broad 
range of issues  that were being considered by TESSD participants . 
2  WHAT ARE POTENTIAL MC12 TRADE AND ENVIRONMENTAL SUSTAINABILITY 
DELIVERABLES?  
2.1.  Several Members said that a key potential outcome for MC12 would be an overarching 
statement on trade and environmental sustaina bility supported by a wide range of WTO Members. 
It was noted that the overarching statement should refer to any additional  topic-specific statements 
delivered at MC12 on relevant environmental sustainability issues.  
 
1 This summary, prepared and circulated under the Coordinators' responsibility, is being shared with a 
view to providing delegations with a re cord of the discussions and assisting them in reporting back to their 
capitals. It provides a non -exhaustive, illustrative review of the issues addressed by Members at the meeting.  INF/TE/SSD/R/ 2 
 
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  2.2.  TESSD participants highlighted a broad range of elements that should be included in the 
overarching statement, including : the mutual supportiveness between trade and environmental 
sustainability; the positive contribution of the rules -based multilateral trading system to global 
environmental and climate goals; the need to consider the environmental, social and economic 
dimensions of sustainable development; the importance of mainstreaming environmental 
sustainability across  WTO activities ; the need to strengthen transparency and ensur e 
complementarity between TESSD work and other parts of the WTO, including the C ommittee on 
Trade and Environment  (CTE) ; and the need to consider the interests, priorities and concerns of 
develo ping countries, especially  the least-developed countries  (LDCs) . 
2.3.  Several Members said that the overarching statement should identify areas of work for the 
post-MC12 period , possibly  in the form of a roadmap, work plan or  action list . In this regard, it was 
noted that WTO Members should be ambitious yet realistic  while focusing on operational and 
pragmatic ideas that could be implemented  quickly after MC12 . One Member noted that TESSD 
should stay away from controversial issues  and instead focus exclusively on issues likely to generate 
consensu s. TESSD participants mentioned  several  possible areas of work  such as : trade liberalization 
in environmental goods and services, including tariff s and regulatory issues; the reform of fossil fuel 
subsidies and other env ironmentally harmful subsidies, including in agriculture; circular economy , 
plastics pollution , biodiversity, deforestation and other issues related to sustainable supply chains ; 
greening Aid for Trade ; and transparency and policy dialogue on trade and env ironmental 
sustainability . 
2.4.  Several Members expressed interest in launching at MC12 a dedicated discussion within TESSD  
on carbon leakage and the trade impacts of climate -related measures , including on developing 
countries . It was noted that the proposed dedicated discussion should facilitate a broad and holistic 
exchange of experiences and  best practices  on carbon pricing and tools (such as border carbon 
adjustments) to help mitigate and address carbon leakage , among other  issues.  
2.5.  To organize the work towards defining relevant work areas, some Members suggested the 
creation of topic-specific working groups comprised of technical experts . Working groups would 
regularly report back to the TESSD plenary to ensure full transpar ency and promote cross -
fertilization between them. Ideally, one or two interested delegations  would lead the work of each 
working group , whose composition should be as inclusive as possible.  
2.6.  TESSD participants received a briefing on behalf of the coordinators of the Informal Dialogue 
on Plastics Pollution and Sustainable Plastics Trade (IDP)  on the discussions held at IDP's last 
meeting on 29 March 2021, which had focused on the topics of transparency and international 
cooperation. IDP's next meeti ng, scheduled for 21 June 2021 , would focus on policy coherence, 
assessing capacity and technical assistance needs and identifying the scope for collective 
approaches . IDP participants would also continue work towards a n outcome for MC12. It was noted 
that IDP was open to all WTO Members. The group intended to be part of broader WTO discussion s 
to advance environmental sustainability , and as such, its work and the work of TESSD were 
complementary and mutually supportive.  
3  WHAT PRIORITIES SHOULD BE PURSUED BY  TESSD IN THE POST -MC12 PERIOD?  
3.1.  Several Members stated that post -MC12 work should prioritize the liberalization of trade in 
environmental goods and services. On environmental goods, it was noted that work should aim 
towards the resumption of negotiations after M12 on the basis of commonly agreed principles , 
parameters  and modalities , which should draw from the lessons of past experiences, including the 
Environmental Goods Agreement  and other relevant initiatives . It was noted that the focus should 
be not only on tariffs but also regulatory issues  and non-tariff measures , and that Members should 
consider staged approaches which could progressively expand the number of products  under 
consideration . 
3.2.  Regarding environmental services, several Members  said that TESSD offered a venue to 
consider complementary initiatives to support the work on environmental services in the Special 
Session of the Council for Trade in Services (CTS -SS), including work on the definition of services  
relevant to the environment . Some M embers expressed interest in work that would result in the 
launch of negotiations on trade in environmental services after MC12. It was noted that the work on INF/TE/SSD/R/ 2 
 
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  environmental goods and services  should consider  the potential interests, priorities and concerns  of 
developing countries, including LDCs , including technical assistance and capacity building  needs.  
3.3.  Several Members  highlighted  environmentally harmful subsidies as an additional area of work 
for the post -MC12 period.  It was noted that a topic-specific  statement on fossil fuel subsidy reform 
for MC12  was being prepared and Members were encouraged to support it.  Several Members also 
referred to the useful role that TESSD could play to foster discussion and improve understanding of 
the envir onmentally harmful effects of agricultural subsidies , given the central role of agriculture in  
achieving sustainable development  in all its dimensions.  
3.4.  Several Members expressed interest in additional work on sustainable supply chains, with a 
possible focu s on transparency, best practices, principles and analytical work . Among the specific 
focus areas mentioned were the transition to a regenerative and more circular economy  and the 
challenge of combatting plastics pollution , the role of supply chains in ena bling a transition to a net 
zero economy  and the need to support efforts by developing countries to comply with environment -
related supply chain requirements . Members also referred to broader topics of interest, including 
biodiversity , forestry and agricul ture, including the role of environment -related standards and 
regulatory measures  in agricultural trade . Some Members also underlined the key importance of 
deepening discussions on Green Aid for Trade, including how it can support efforts on climate 
adaptation and mitigation.  
3.5.  Some Members stated that work within TESSD should be consistent with  WTO rules , the 
UNFCCC and the Paris Agreement , and that measures to tackle climate change should not be 
unjustifiably discriminatory or protectionist. It was al so noted that any climate or environmental 
sustainability approaches should consider Members' specific national circumstances. In this regard, 
one Member stated that discussions among TESSD participants should not aim for negotiations but 
should instead pr omote the exchange of experiences on topics where convergence among Members 
was possible . 
4  HOW CAN WE ENSURE THAT WORK IN TESSD AND/OR OTHER ENVIRONMENTAL 
SUSTAINABILITY INITIATIVES AT THE WTO ARE AS INCLUSIVE AS POSSIBLE?  
4.1.  Members stated that openness and t ransparency were essential elements to ensure 
inclusiv eness . TESSD meetings should continue to be open to all WTO Members, and all WTO 
Members should be encouraged to participate  in TESSD . In addition, TESSD participants should 
continue the practice of per iodically reporting on their progress to the CTE. It was especially 
important to hear the priorities, needs and concerns of  developing countries, including LDCs , and to 
improve co -operation and coordination between trade and environmental policy officials . Member 
engagement at the bilateral or small group levels was also seen as important to enhance 
inclusiveness.  It was suggested to circulate presentations and non -papers in advance of TESSD 
meeting s, or to structure meetings in a way that would provide del egations with more time between 
the panel sessions and the technical discussion among officials.  
4.2.  Some Members underscored the importance of reinforcing inter -institutional linkages between 
TESSD and relevant Multilateral Environmental Agreements and enhanc ing co-operation with other 
relevant international organizations. Some Members also noted the importance of continued 
engagement with a broad group of stakeholders , including the private sector, academia and 
non-governmental organizations . To strengthen tr ansparency and engagement with stakeholders, 
some Members called for: a public webpage on TESSD activities and documents; the submission of 
unrestricted documents, whenever possible; and open invitations to stakeholders to submit written 
contributions on p ossible areas of work.  One Member noted that  TESSD should avoid organizing 
Members -only meetings , while another Member said that each meeting should have at least one 
segment open to stakeholders.  
  INF/TE/SSD/R/ 2 
 
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  ANNEX I  
 
PROGRAMME OF SESSIONS HELD ON 26 AND 27 MAY 2021  
 
 
26 MAY 2021  
Welcome from Ambassador Gloria Abraham Peralta (Costa Rica), TESSD co -Coordinator  
 
SESSION 1: ENVIRONMENTAL GOODS AND SERVICES  
15:00 TO 18:10 
Moderator: Ana Lizano , Counsellor, Permanent Mission of Costa Rica to the WTO)  
 
Background on environmental goods 
Presentations by:  
 
• Andrew Martin , Senior Adviser to the Australian Minister for Trade, Tourism and Investment 
and former Chair of the Environmental Goods Agreement negotiations  
 
• Aik Hoe Lim, Director, Trade and Environment  Division, WTO 
 
• Alexey Vikhlyaev, Head a.i. , Trade and Environment Branch , UNCTAD  
 
• Crispin Conroy, Permanent Observer , International Chamber of Commerce to the 
United  Nations Office at Geneva  
 
 
Background on environmental services  
Presentations by:  
 
• Marie Isabelle Pellan, Counsellor, Trade in Services and Investment Division, WTO  
 
• Etienne Boisjoli, De puty Director, Services Trade Policy Division, Global Affairs Canada  
 
• Christophe Bellman, Senior Policy Advisor, International Institute for Sustainable 
Development  (IISD)  
 
 
Other initiatives and where do we go from here?  
Presentations by:  
 
• James Lester, Legal Adviser & Second Secretary, New Zealand Permanent Mission to the 
WTO, Geneva  
 
• Catherine Rissel, New Zealand Deputy Chief Negotiator – Agreement on Climate Change, 
Trade and Sustainability  (ACCTS)  
 
• Kazunari M orii, Counsellor, Permanent Mission of Japan to the United Nations Office and 
other International Organizations in Geneva  
 
• Dajung  Park, Deputy Director , Ministry of Trade , Industry, and Energy  (MOTIE), Republic of 
Korea  
 
• Ahmed Wisam, Senior International Relations Officer, Multilateral Environmental 
Agreements Unit, Environment Department, Ministry of Environment, Climate Change and 
Technology, Maldives  
  INF/TE/SSD/R/ 2 
 
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  27 MAY 2021  
SESSI ON 2: GREEN AID FOR TRADE  
10:00 TO 11:30  
Moderator : Carolyn Deere Birkbeck , Director, Forum on Trade, Environment & the SDGs and Senior 
Researcher, Global Governance Centre, Graduate Institute  
 
Presentations by : 
 
• Olivier Cattaneo, Head, Policy Analysis and  Strategy Unit, Development Co -operation 
Directorate, OECD  
 
• Michael Roberts, Head, Aid for Trade Unit, Development Division, WTO  
 
• Ambassador Chad Blackman, Permanent Representative of Barbados to the WTO  
 
• Pasi-Heikki Vaaranmaa, Director, Trade Policy Unit, Ministry of Foreign Affairs of Finland  
 
• Rashid Kaukab, Executive Director, CUTS International, Geneva Office  
 
• Stacey Mills -Smith, Consultant, UNEP  
 
• Vanessa Erogbogbo, Chief, Sustainable and Inclusive Value Chains, ITC 
 
 
 
SESSION 3: FOSSIL FUEL SUBSID Y REFORM  
11:30 TO 12:30  
Moderator: Alice Tipping, Lead, Sustainable Trade and Fisheries Subsidies , IISD  
 
Panellists:  
 
• Vangelis Vitalis, Deputy Secretary (Trade and Economic), New Zealand Ministry of Foreign 
Affairs and Trade  
 
• Lourdes Sanchez, Senior Policy Adviser, IISD  
 
• Harro van Asselt, Affiliated Researcher , Stockholm Environment Institute and Professor , 
Climate Law and Policy, University of Eastern Finland  
 
 
 
SESSION 4: TRADE -RELATED CLIMATE MEASURES, INCLUDING BORDER CARBON ADJUSTMENTS  
15:00 TO 1 6:00 
Moderator: Carlos Vanderloo, First Secretary, Permanent Mission of Ca nada to the WTO 
 
Panellists:  
 
• Doug Forsyth, Director General, Global Affairs Canada  
 
• Nathalie Bernasconi -Osterwalder, Executive Director, IISD Europe  and Senior Director, 
Economic Law & Policy  and Aaron Cosbey, Senior Associate , IISD 
 
  INF/TE/SSD/R/ 2 
 
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  SESSION 5: GREENING TRADE (WITH A FOCUS ON CIRCULAR ECONOMY)  
AND PRIORITIES FOR DEVELOPING COUNTRIES  
16:00 TO 17:30  
Moderators: Malena Sell, Leading Specialist, Circular Economy for Biodiversity, Sitra  
 
Presentations by:  
 
• Angélica Romero  López , Deputy General Director for Multilateral Economic Affairs, 
Undersecretariat for International Economic Affairs, Chile 
 
• Gustavo Guarín Duque , Counsellor, Permanent Mission of  Colombia to the WTO  
 
• Nilgün Tas, Deputy Director, Department of Environment, and Chief, Industrial Resource 
Efficiency Division, UNIDO  
 
• Shunta Yamaguchi, Policy Analyst, Environment Directorate, OECD  
 
• Karsten Steinfatt, Counsellor, Trade and Environment Division, WTO  
 
• Crispin Conroy, Permanent Observer , International Chamber of Commerce to the 
United  Nations Office at Geneva  
 
 
CLOSING SESSION  
Remarks by Ambassador Stephen de Boer (Canada) , TESSD co -Coordinator.  
 
_______________INF/TE/SSD/R/ 2 
 
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  ANNEX II  
 
SUMMARY OF PANEL SESSIONS  
1  SESSION 1 : ENVIRONMENTAL GOODS AND SERVICES  
1.1.  Speakers recalled the compelling rational e for trade opening in environmental goods and 
services, noting that international trade played a key role in reducing costs, spurring innovation, 
facilitating investment and accelerating the deployment of environmental technologies  across 
borders , including the key technolog ies needed to achieve the goals of the Paris Agreement and the 
Sustainable Development Goals  (SDGs) . This rationale had underpinn ed the Environmental Goods 
Agreement (EGA), which had sought to build on APEC's successful work on environmental goods. It 
was noted that the 18 EGA participants1, which represented a large majority of global exports of 
environmental goods, had made significant progress before negotiations stalled in December 2016 
due to a combination of challenges  related to the inclusion in the  EGA list of a few key products and 
the reality of political dynamics that were emerging at the time.  
1.2.  Speakers identified several factors that had contributed to the progress made in the EGA 
negotiations, including its pragmatic, bottom -up approach, which focused on  engaging with  experts 
to hear their views on environmental challenges and the technologies needed to address them , and 
allowing EGA participants to nominate products of interest within 10 broad environmental categories. 
The list of nominated products had been streamlined over a series of negotiating sessions to ensure 
that the final EGA list would be environmentally credible and enjoy broad support.  This work had 
benefitted significantly from the work of an EGA  customs working group , which provide d technical 
support to ensure that environmental goods could be identified by their objective characteristics and 
"classified" at the border, so the final agreement would be workable for customs administrations.  
The EGA process had benefitted from broad buy -in from both Geneva and capital -based negotiators  
as well as Geneva ambassadors . Moreover, it had received significant political support, as  reflected 
in statements by the G20, APEC and others . 
1.3.  Speakers recalled some of the technical challenges arising in the context of environmental 
goods trade negotiations, including the absence of an internationally agreed definition of 
environmental goods , the broad nature of descriptions in the Harmonized System which were not 
always sufficiently specific to match the specificity of environmental goods, and the dual use nature 
of many environmental goods. Nonetheless, speakers noted that several technical options were 
available to overcome some of the se challenges . For example, environmental goods negotiators 
could : use existing definitions of environmental goods as references ; agree on broad categories of 
environmental interest ; narrow down the product des criptions to appropriate (national) tariff line 
codes,  including by referring to international standards; and setting threshold share s for 
environmental use to determine whether to include particular good s with multiple uses . 
1.4.  Speakers highlighted a broad range of issues to be considered if Members decided to embark 
on future environmental goods trade negotiations, including product coverage (i.e., narrow or 
broad); the scope of trade liberalization (i.e., whether to focus on ta riffs only or also non -tariff 
barriers and services); and the rapid evol ution of environmental technologies. Several speakers also 
highlighted the need to establish a broad coalition of Members in support of negotiations and the 
importance of building trust and confidence through proper dialogue  focused on issues of particular 
interest to developing countries.  It was also noted that the trade policy community should step up 
its co -operation with the World Customs Organization.  Stakeholders, including the bu siness 
community, stood ready to support Members in efforts to liberaliz e trade in environmental goods 
and services.  
1.5.  On environmental services, speakers provided background on the history of WTO market 
access negotiations on environmental services and pres ented an update on the environmental 
services initiative under discussion at the Council for Trade in Services Special Session (CTS -SS). 
 
1 The following WTO Members took part in EGA negotiations: Australia; Canada; China; Costa Rica; 
European Union; Hong Kong, China ; Iceland; Israel; Japan; Korea; New Zealand; Norway; Singapore; 
Switzerland; Liechtenstein; Chinese Taipei; Turkey; and the United States.  INF/TE/SSD/R/ 2 
 
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  They also identified options to address some of the key issues raised in previous talks, particularly 
regarding the def inition and scope of environmental services for purposes of trade liberalization.  
1.6.   Speakers noted that despite comprising a growing share of world services trade, environmental 
services remained one of the least -committed sectors under the GATS. The classi fication used by 
most Members to schedule GATS commitments in this sector was based on a narrow definition of 
environmental services as including mainly infrastructure services (namely sewage, refuse disposal 
and sanitation) which were traditionally provid ed by governments or through public private 
partnership schemes under conditions of monopoly. This definition did not accurately reflect the 
environmental industry today where the private sector had come to play a more prominent role. The 
development of en vironmental regulation and the increasing awareness of the environment 
internationally had boosted the demand for other (non -infrastructure) environmental services 
supplied on a business to business basis thereby creating more opportunities for trade in th e sector.  
1.7.  Other service sectors also contributed to environmental and sustainability goals (such as 
architecture, design, engineering, consulting, construction, etc.) and some Members considered that 
the scope of the discussions should be expanded to incl ude these "related" services. The session 
highlighted various approaches or criteria that could serve to guide future discussions on the 
identification of relevant services. In this context, speakers emphasized the complementarity 
between environmental ser vices, goods and technologies, and shared their perspectives on practical 
ways of dealing with issues related to the classification of environmental services, including the 
treatment of "dual use" services.  
1.8.   The environmental services initiative led by Au stralia, Canada, Mexico, New Zealand, 
Switzerland, the United Kingdom and Korea in the CTS -SS had given rise to an exchange of views 
among Members on their market access interests and aspirations against the backdrop of relevant 
trade, policy and market de velopments. The proponents of this initiative considered that the 
emergence of new technologies had opened a range of new possibilities to provide environmental 
services on a cross border basis, and that the deployment and use of environmental services cou ld 
support economic growth, including for MSMEs.  
1.9.  Recent discussions in the CTS -SS had contributed to improving Members' understanding of the 
specific challenges others were facing, either in relation to the different sectors and modes under 
discussion or in potentially taking on new commitments. Proponents were currently exploring 
different avenues on how to continue moving the discussion forward and intended to take -stock of 
the process by MC12. It was suggested that a bridge should be maintained between the initiatives 
in CTS -SS and in TESSD given the potential synergies between them.  
1.10.   TESDD participants were also briefed on relevant initiatives and proposals  on environmental 
goods and services . It was noted that APEC member economies were seeking to build on previous 
successes on environmental goods trade by developing an updated and expanded list of 
environmental goods for reference purposes . Such a list could serve as a global benchmark and a 
long-term pathfinder for future bilateral, plurilateral o r multilateral work on environmental goods 
trade. In the context of the negotiations on an Agreement on Climate Change, Trade and 
Sustainability (ACCTS), Costa Rica, Fiji, Iceland, New Zealand, Norway and Switzerland were seeking 
to remove tariffs on envir onmental goods . To this end, they were considering nominations of 
environmental goods  that: enhance d economic performance through green growth and jobs ; 
reduc ed water, soil and air pollution ; promote d the transition to a low emissions and climate resilient  
economy ; and contribute d to addressing global, regional and domestic environmental challenges, 
including climate change, marine and oceans management, and protection of biodiversity , among 
other environmental goals . ACCTS participants had used the APEC an d EGA co -chairs list as a starting 
point and were working towards a consensus list of environmental goods. Regarding environmental 
services, ACCTS participants sought to establish new and binding commitments for environmental 
services. They were working on  identify ing a list of services that expanded  the definition of 
environmental services beyond CPC 94  and had started to consider text proposals using the GATS 
as the basis for  their discussion . 
1.11.   Two presentations outlined proposals on the way forward on env ironmental goods and 
services, as reflected in recent proposals by Australia, Korea and Singapore2 and Japan3. A third 
 
2 WTO document INF/TE/SSD/W/9.  
3 WTO document INF/TE/SSD/W/10.  INF/TE/SSD/R/ 2 
 
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  presentation called on WTO Members to consider tying trade preferences to sustainably sourced fish 
and fish products as a way to discourage environmentally harmful practices that undermined marine 
resources and to support  efforts in SIDS and other developi ng countries to build back better from 
the COVID -19 crisis.  
2  SESSION 2 : GREEN AID FOR TRADE  
2.1.  Speakers highlighted the key role of Aid for Trade in supporting efforts by developing countries 
to achieve the Sustainable Development Goals. Progress had been made  towards integrating 
sustainability considerations into Aid for Trade, including by putting more emphasis on gender, 
digitalization, MSMEs and the environment, along with economic diversification and structural 
transformation. Aid for Trade needed to adapt  to mounting environmental pressures such as climate 
change and biodiversity loss, which had important implications for international trade, and to the 
rise of global value chains, digitalization and services in trade. Several speakers noted that 
mainstrea ming environmental considerations into Aid for Trade could help developing countries 
capture synergies between trade, environmental sustainability and sustainable development , build 
economic and climate resilience and accelerate the recovery from the econo mic fallout of the 
COVID -19 pandemic.  
2.2.  Interest in how Aid for Trade could better integrate environmental considerations had been 
increasing in recent years. For example, some indicators suggested rising demand from developing 
countries to use Aid for Trade  to support efforts to achieve specific environment -related SDGs. 
Environmental sustainability, including the transition to a circular economy, was a focus in the Aid 
for Trade work programme for the 2020-22 biennium under the theme "Empowering Connected, 
Sustainable Trade" . Speakers also highlighted the need for better data to capture the environmental 
dimension in Aid for Trade. It was noted that the current method  of relying on Aid for Trade project 
managers to link specific Aid for Trade projects with environmental "markers " needed improvement. 
The OECD was using Artificial Intelligence tools to develop a better understanding of the 
environmental dimension of Aid for Trade projects.  
2.3.  Several speakers called for adopting a bottom -up, collaborative approach that would put a 
focus on multi -stakeholder ownership and coordination at national, regional and international levels. 
Sharing relevant experiences, conducting analytical work, develo ping methodologies, and 
strengthening dialogue were concrete ways to  make progress  towards green  Aid for Trade . More 
broadly, aligning trade and environmental policies and avoiding the use of environmental measures 
for protectionist purposes were also cons idered to be important in this regard. Prescriptive 
approaches that did not take into consideration specific national circumstances, as well as the use 
of environmental performance criteria as a condition to access Aid for Trade should be avoided. 
Several speakers also called for ensuring that SIDS and other developing countries that were 
particularly vulnerable to economic and climate shocks would have adequate access to Aid for Trade.  
2.4.  Speakers identified several focus  areas to strengthen the environmental  dimension of Aid for 
Trade, including the circular economy, voluntary sustainability standards; climate adaptation and 
climate -smart approaches to infrastructure, energy and agriculture; and the nexus between climate 
change, transport, tourism and trade, particularly in SIDS. Moreover, it was noted that increased 
regionalization called for greater focus on strengthening the governance of regional value chains. It 
was also important to raise awareness among MSMEs about the business opportunities resulting 
from sustainability, and to provide them with adequate technical capacity and finance to manage 
growing environmental risks and help them seize green trade opportunities. Several speakers 
highlighted the need to develop new instruments to better leverage of ficial development assistance 
and to crowd in private capital.  
3  SESSION 3: FOSSIL FUEL SUBSIDY REFORM  
3.1.  Speakers discussed why the WTO had a role to play in disciplining fossil fuel subsidies. It was 
noted that fossil fuel subsidies could have trade effects , for example when a subsidy strengthen ed 
the competitive position of the subsidized producer (direct effects) or the downstream producers 
that use d subsidized fossil fuel products as inputs (indirect effects). Fossil fuel subsidies could affect 
trade in renewable energy products. Speakers also noted that t he WTO had significant experience 
in disciplining subsidies  and that action at the WTO on fossil fuel subsidies would promote sustainable 
development , in line with the Marrakesh Agreement Establishing the WTO . The discussion also INF/TE/SSD/R/ 2 
 
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  explored why existing WTO rules, particularly the Agreement on Subsidies and Countervailing 
Measures (SCM Agreement), had limited potential to effectively address fossil fuel subsidies.  Among 
other considerations, it was noted that the SCM Agreement focused on the trade distorting effects 
of subsidies and did not consider the social and environmental externalities associated with fossil 
fuel subsidies.  Speakers emphasized that any effort s to address fossil fuel subsidies at the WTO 
needed to be part of a coordinated and concerted global effort.  
3.2.  With respect to the nature and magnitude of fossil fuel subsidies , it was noted that the value 
of fossil fuel subsidies  in 2019 was at least US$ 4 68 billion, significantly more than  subsidies to 
renewable  power generation and other energy . Petroleum products received more than half of all 
fossil fuel subsidies , followed by electricity, natural gas and coal . The bulk of subsidies were directed 
at fossil fuel consumption  and took the form of price interventions, tax policies and direct grants . It 
was noted that fossil fuel  subsidies  undermined efforts to transition to sustainable energy systems 
and achieve climate goals. Many countries had already embarked on fossil fuel subsidy reform, which 
had freed up resources to invest in health, infrastructure and education , or to support recovery 
efforts from the economic crisis caused by the COVID -19 pandemic . Speakers highlight ed the 
importance of transparency and the significant progress achieved on improving data and knowledge 
on fossil fuel subsidies , including  in the context of APEC  peer reviews , the OECD and the  IEA, as well 
as non -governmental organizations and academia.  The development of a methodology to support 
national reporting efforts under SDG indicator 12.c.1 w ould further contribute to transparency . 
3.3.  Several speakers noted that addressing fossil fuel subsidies would be an important contribution 
of the WTO to tackling the climate crisis  and to  counter  the public's growing perception that trade 
harmed the environment . COP 26 and MC12 were important milestones to demonstrate that trade 
could be a driver of positive climate and environmental outcomes . Possible avenues included  
unilateral trade reform , free trade agreements , for example the Comprehensive and Progressive 
Agreement for Trans -Pacific Partnership (CPTPP ), which had established disciplines on harmful 
fisheries subsidies , and plurilateral initiative such as the ACCTS , which sought to use trade rules as 
a way of reforming and eliminating fossil fuel subsidies . The WTO had an important role to play, 
including through the enhancement of fossil fuel subsidy notifications , policy dialogue and exchange 
of national experience s in the CTE, peer review in the Trade Policy Review Mechanism  and the 
improvement of multilateral subsidy disciplines.  It was noted that the issue of fossil fuel subsidy 
reform was sensitive for some WTO Members and that the WTO did not have a mandate to discuss 
this issue. Some speakers called for a holistic discussion of environmentally harmful subsidies at the 
WTO that would comprise relevant subsidies in agriculture, fisherie s and other sectors.  
4  SESSION 4:  TRADE -RELATED CLIMATE MEASURES, INCLUDING BORDER CARBON 
ADJUSTMENTS  
4.1.  Speakers highlighted the growing momentum around the world towards net -zero emissions 
commitments and the resulting movement towards the adoption of instrum ents against carbon 
leakage, a term which referred to the increase of greenhouse gas emissions in other jurisdictions as 
a result of climate policies in  a jurisdiction. It was noted that border carbon adjustments (BCAs) 
were one possible instrument to avoi d leakage. Speakers warned that BCAs, which could take many 
different forms, carried a risk of protectionism, depending on their design and implementation. It 
was suggested that multilateral discussions on principles and best practices related to BCA regim es 
and more broadly, to approaches to prevent carbon leakage, were needed to minimize the risk of 
protectionism. As a forum with near -universal membership to promote agreement on what 
constitutes best practice in trade -related policies, the WTO in general,  and TESSD in particular, were 
ideally placed to host discussions on principles and best practices related to BCAs. It was noted that 
the multilateral trading system had in the past played a role in this regard, for example in the context 
of the GATT Worki ng Party on Border Tax Adjustments.  
4.2.  Speakers referred to specific plans by WTO Members to put in place BCAs, including in Canada, 
the European Union and Japan. In response, several speakers recalled the importance of ensuring 
the consistency of BCAs with W TO principles and rules, and stressed the need to avoid unjustifiable 
discrimination and protectionism. Speakers also recalled the principle of common but differentiated 
responsibilities enshrined in the UN Framework Convention on Climate Change and called  on all 
Members to live up to their commitment to support developing countries in their transition to a 
low-carbon economy. Members planning the adoption of BCAs were urged to exercise caution and 
to proceed in a transparent manner, not least by ensuring t wo-way communication and dialogue on 
the methodologies underpinning specific BCA regimes. It was also noted that , to the extent that INF/TE/SSD/R/ 2 
 
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  BCAs enabled more ambitious climate policies, they could also result in opportunities for trade in 
low-carbon and other gre en goods, including f or developing countries.  
5  SESSION 5 : GREENING TRADE (WITH A FOCUS ON CIRCULAR ECONOMY) AND 
PRIORITIES FOR DEVELOPING COUNTRIES  
5.1.  The session focused on the transition to a circular economy as  an example  of broader efforts 
to shift towards more sustainable trade. Speakers highlighted the wide range of efforts across 
countries to promote circularity, including in Chile, which had recently introduced extended producer 
responsibility scheme s for tyres, househ old and vehicle batteries, packaging and electric and 
electronic equipment , along with measures to tackle plastic pollution and a national strategy on 
organic waste. Chile was also considering a proposed circular economy roadmap which envisaged 
the creatio n of 180.000 jobs . The business case for resource efficiency, which was at the heart of 
the circular economy, was sound and speakers referred to specific projects that had demonstrated 
the economic and environmental benefits resulting from investment in re source -saving technologies . 
It was noted that without additional policies, material use would double by 2060, with all the negative 
environmental effects that this entail ed. 
5.2.  The shift from linear to circular production and consumption patterns  required a t ransformation 
of value chains at national, regional and global  levels . International t rade, underpinned by an open 
and transparent rules-based trading system, would play an important role in the transition to a 
circular economy, including by allowing compa nies with circular business models to reap economies 
of scale. OECD modelling, for example, had shown that adopting circular economy policies would 
lead to an increase of 50% in recycling output and exports. It was therefore important to align trade 
policies with circular economy goals. This would strengthen the incentives face d by producers and 
consumers to shift from linear to circular  production and consumption patterns . Nonetheless, many 
trade barriers continued to impede trade in key areas of the circular economy, including reuse and 
repair, remanufacturing and recycling. The sectors most affected by these measures include d cars 
and car parts, machinery, clothing and medical devices. It was noted that  the removal of trade 
barriers woul d have to be accompanied by additional measures to ensure that trade in waste and 
scrap, second -hand goods, secondary raw materials and remanufacturing would not result in adverse 
environmental  and health  consequences or be used as a cover for  low imports of quality, hazardous 
or illegal  products.  
5.3.  Speakers highlighted several opportunities to increase international co -operation  on trade and 
circular economy,  including : improving transparency and traceability  along value chains; developing 
definitions and cl assifications of relevant products and materials ; intensifying regulatory 
co-operation to avoid fragmentation resulting from the growing number of standards  related to the 
circular economy ; and improving market access conditions for key service s that under pin the circular 
economy.  It was noted that the WTO had an important role to play  and that p ast and current 
WTO work, for example on policy dialogue in the CTE, peer review of technical regulations in the 
Committee on Technical Barriers to Trade, and discussions on market access for remanufactured 
goods  in the Non -Agricultural Market Access negotiations , could serve as a useful reference s. 
Speakers also underscored the importance of technical assista nce and capacity building to help 
developing countries seize opportunities from circular value chains. The extensive work of UNIDO 
was noted in this regard . Speakers also underscored the key role of finance for a successful circular 
transition and the need  to align  financial reporting requirements  with the circular economy  goals and 
principles . It was noted that the business community stood ready to support Members in efforts to 
deepen discussions on trade and circular economy, including through an upcoming  study 
commissioned by the International Chamber of Commer ce. 
5.4.  On a broader note, it was noted that discussions on sustainable trade had to put more emphasis 
on the implementation challenges fac ed by  developing countries . Many NTMs, including SPS and 
TBT measures, hindered access to sustainable supply chains by small and medium sized enterprises 
and smallholder farmers in developing countries. It was important to step up i nternational 
co-operation to address these barriers and help ensure that agricultural supply chains would continue 
to operate efficiently and would offer opportunities for developing countries to accelerate the 
recovery from the economic fallout of the COVID -19 pandemic . Trade -related sustainability 
measures should not result i n unjustifiable discrimination or protectionism.  Greater convergence 
across sustainability requirements in different markets would reduce costs for  developing country 
producers, who often equated sustainability with extra costs and risks and lacked the fin ancial 
resources to comply with proliferating sustainability requirements in export markets.  INF/TE/SSD/R/ 2 
 
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  6  CLOSING SESSION: REMARKS BY AMBASSADOR STEPHEN DE BOER (CANADA), TESSD 
CO-COORDINATOR  
6.1.  Ambassador de Boer thanked the speakers and participants, noting that their p resentations, 
comments and questions had sparked fruitful discussions between stakeholders and WTO Members 
and had provided useful insights on possible ways forward. This two -way conversation was at the 
heart of what TESSD was trying to achieve . The discus sion on environmental goods and services 
had deepened participants' understanding of the history of those files, what was currently happening 
and possible next steps. He noted that there was significant interest in exploring work on 
environmental goods and  services and that it would be appropriate to start thinking seriously about 
how TESSD could translate this interest into realistic next steps.  The discussion on greening Aid for 
Trade had underscored how strengthening the environmental dimension of Aid fo r Trade would not 
only help address climate -related challenges but would also support broader development goals in 
areas like MSMEs and gender . Progress in this area hinged partly on strengthening multi -stakeholder 
engagement and breaking down silos, two f unctions that TESSD was well -suited to fulfil. He 
recognized that d iscussions on fossil fuel subsidy reform and BCAs were sensitive for some 
WTO Members . At the same time, those discussions had clearly demonstrated why it was important 
and relevant to consider these issues in the context of the WTO, particularly to achieve greater policy 
coherence to wards  meeting climate objectives . The last session on greening trade from a developing 
country perspective showed that the circula r economy was becoming an increasingly relevant and 
pressing issue for TESSD to consider from a trade policy perspective.  
6.2.  An over-arching message across the five different sessions had been the need to deepen 
discussions , break silos , and think about realistic and pragmatic ways forward to demonstrate that 
trade policy can contribute to address climate change and other environmental sustainability 
challenges . He highlighted that there was a clear opportunity for TESSD to provide the umb rella and 
structure to help participants move in that direction. He closed by saying that he looked forward to 
the next day's discussion amongst WTO Members on how they saw next steps in the lead up to MC12 
and thereafter. He encouraged TESSD participants to start shaping the contours of what they hoped 
to deliver at MC12 and said that it would be important to circulate at least a skeleton of a TESSD 
MC12 deliverable before the WTO summer break. A meeting would be called in late July to discuss 
the skeleton  and next steps.  He thanked the WTO Secretariat for its support to make the May 
meeting a reality.  
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