Does the Doha Round matter to Trade & Climate Change issues?

What is the link, if any, between the Doha Round and progress in linking trade & climate
change concerns? Are we losing or gaining anything in the trade and climate intersection by not concluding the Doha?

It is helpful to perhaps divide this link into two separate categories. One concerning
what is concretely at the table at the present moment and another regarding what may be lost in somewhat broader sense if the non-progression of Doha lingers on, thus also encompassing the time after Doha. Regarding the first category, Doha does not seem to bring all that much to the table. The obvious area of focus is Environmental Goods and Services (EGS). There does not, however, actually exist a specific climate change category of environmental goods in the Doha negotiations. Renewable energy is a category and there is a proposal put forth by Saudi Arabia to also make carbon capture and storage a separate category, but there is none specifically targeting climate change as such. Concretely speaking, some informal calculations that have been made on what a complete liberalization of all environmental goods and services in the negotiations would actually mean show rather scant results in and of themselves. Performing complete tariff-liberalization of the 153 products in the Harmonized System (HS) that are on the so-called ‘Friends’ list has shown to be of marginal climate change mitigation relevance. Of concern is that out of the products on the list that seem to be most climate relevant, the threat to their wider dissemination seems not to be tariffs, but rather non-tariff barriers (NTB). Thus, an initial appraisal of even highly successful EGS negotiations seem to show that the impact on climate change is limited at best. It is of course important to interject with a reminder that this does not mean there would not be other very beneficial environmental effects resulting from such successful negotiations. However, in relation to the challenge of climate change and considering what is actually on the negotiating table at the moment, the Doha Round cannot be called an exceedingly important set of negotiations for the trade and climate intersection.

With regards to the possibility of creating new channels of interpretation and
coordination in the WTO and MEA intersection, there is also little real progress likely to be
made from the Doha side of things. The UNEP and WTO secretariats have already had
official coordination channels open for years, so any further contribution from Doha in this
respect would be soft at best. Regarding what is on the table in the negotiations for climate
change purposes, slight though it may be, the effects of Doha non-progression will depend on the specifics of that non-progression. In any event, there is likely to be a good deal of anger from developing countries, and least developed countries (LDCs) in particular. There is a feeling among these nations that the main stumbling blocks to Doha progression is not a result of their actions or demands and that they are unfairly losing potential from the Doha package due to tensions and differences between the developed nations and the advanced developing nations.

In the case of continued non-progression or even breakdown of negotiations, whatever salvaging package that may be adopted in its stead will also likely leave a complex aftermath for developing nations to deal with. The difficulty would lie in establishing a different prospect for progress that has balance for this part of the negotiations. This may not sound too dramatic, but this balancing act contains many strategic negotiating concerns that may not be entirely intuitive to address. Put simply, everything in the negotiations is connected to everything else. No matter what form a hypothetical attempted salvaging of the Doha may take at this point, whether it be ‘mini-deals’, sectoral deals or even plurilateral and bilateral deals, the point is that it is difficult to just ‘make a deal’ on EGS both inside the round due to the larger tensions associated with it, but also outside of it due to balancing concerns. Most environmental goods and services are produced in developed countries and China, with many countries not necessarily willing to single out this area and liberalize further in a way that would create commercially unattractive conditions for their own infant industries. Thus, it would not be unexpected for developing countries to demand further balancing measures to further their own green industrialization if the EGS negotiations were to be singled out in some way, regardless of the ultimate fate of Doha. For example, demands for greater flexibility on TRIPS in the way of performance requirements and greater flexibility on subsidies for clean energy development and green industries may be cautiously predicted as prioritized areas for such demands. It is important to remember that for developing countries, the issue of EGS in the Doha falls somewhere between industrialization and green industrial policy, and this is clearly reflected in negotiations.

Looking from a broader paradigm of what continued Doha non-progression may mean, there are certain areas that from a climate change perspective, and indeed from a trade perspective also, might be made significantly harder to pursue if Doha is not concluded successfully. Subsidies are one of those areas, for example determining the appropriateness and delimitations of subsidies in green energy promotion. Progress regarding greater flexibility in TRIMS for certain climate change relevant energy requirements would perhaps also be affected negatively. The lack of a coherent negotiation frame surrounding these, especially subsidies, which may result from a failing Doha will likely make any progress in ‘singling out’ much more difficult. Regarding these specific areas there is a relatively good level of problem insight, most everybody seems to agree that subsidies regulations are in need of improvement, and here climate change concerns has a potentially easier time of simply being swept along the tide of more general trade concerns. However, with regards to areas that tend to be very important to the environmental movement yet whose status in actual negotiations seem to be all but intractable, such as border carbon adjustments and PPM carbon standards, a failure of Doha would likely transform an already herculean task into more or less a virtual guarantee for multilateral non-progression for the foreseeable future.

This is of course presupposing that there at all even exists a fundamental opportunity for negotiating balance with regards to these measures in a multilateral setting, something that is still up for debate.

Ultimately, what may be more important than the direct link between Doha and climate
change is the general link between the WTO and Multilateral Environmental Agreements
(MEAs). Concluding Doha may send a positive signal to other negotiations and dispel some
of the cynicism that now envelops both negotiations, thus providing some general momentum for multilateralism. For purposes of combating climate change and removing trade from being an obstacle to it, this is probably much more important than the actual topics being discussed in the Doha Round.

I’ll be continuing this discussion in a few posts to come.


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