Jan. 20, 2023 — By Mathew Carr
This trade and climate coalition (of only about one eighth of world’s countries — but some pretty important ones) is 30 years too late: Rachel Kyte, Tufts
There are already big tensions within it and, from what the EU says below on next steps, it’s not meeting again at ministerial level for a year.
Watch the last 10 minutes of this (all of it if you have time):
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CarrZee readout: The EU is not happy that the Inflation Reduction Act (IRA) in the US requires some “America made” elements — after Europe allowed an increased demand within its borders for America’s Teslas the past several years, for instance.
The US is taking advantage of its partners, while saying it believes in free markets, free trade, climate action and this year-old coalition.
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The European Commission’s Trade Commissioner Valdis Dombrovskis: The US may give a little ground and allow EU companies to provide EVs and raw materials under the IRA (He didn’t quite say it this clearly – have a listen above, see below)
Dombrovskis on discussions with the US about the unfairness of IRA:
“We see progress on some issues, for example on clean-vehicles tax credits. There are some openings indicated from the U.S. Others, for example, on raw materials.”
See more of his quotes here:
EU Press release 19 January 2023 Brussels
Trade and Climate: EU and partner countries relaunch the ‘Coalition of Trade Ministers on Climate’
Today, the European Commission, EU Member States, and 26 partners countries will launch “The Coalition of Trade Ministers on Climate”, the first Ministerial-level global forum dedicated to trade and climate and sustainable development issues. The Coalition will foster global action to promote trade policies that can help address climate change through local and global initiatives.
The Coalition aims to build partnerships between trade and climate communities to identify the ways in which trade policy can contribute to addressing climate change. It will promote trade and investment in goods, services and technologies that help mitigate and adapt to climate change.
A prominent element of the Coalition’s agenda is to identify ways in which trade policies can support the most vulnerable developing and least developed countries that face the greatest risks from climate change.
This high-level political dialogue will see the participation of Trade Ministers from different regions and income levels. Civil society, business, international organisations and climate and finance communities will participate in the Coalition’s work.
The Coalition is open to all interested countries, and so far consists of more than 50 ministers from 27 jurisdictions. The four co-leads are Ecuador, the EU, Kenya, and New Zealand.
The other participants are: Angola, Australia, Barbados, Cabo Verde, Canada, Colombia, Costa Rica, Iceland, Gambia, Japan (Foreign Affairs & Trade), Republic of Korea, Maldives, Mozambique, Norway, Philippines, Rwanda, Zambia, Singapore, Switzerland, Ukraine, United Kingdom, United States and Vanuatu.
The Coalition will provide political guidance and identify trade-related strategies to adapt to changing climate conditions and extreme weather, for instance through the production, diffusion, accessibility and uptake of climate-friendly technologies.
It will focus on finding trade-related solutions to the climate crisis in line with the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Agreement, and the Sustainable Development Goals, whilst supporting ongoing efforts in this area in the World Trade Organization (WTO).
Next Steps
The next Ministerial meeting will take place in the margins of the next WTO Ministerial Conference planned in early 2024.
Background
The Climate Coalition was officially launched during the World Economic Forum Annual Meeting in Davos on 19 January 2022. It aims to identify the ways trade and trade policy can have a positive contribution to the current climate crisis. It will be a forum of high-level political dialogue to foster international cooperation on climate, trade and sustainable development.
For more information
Coalition of Trade Ministers on Climate Website
Op-ed by EVP Dombrovskis and Ministers Prado, Kuria, O’Connor
Quote(s)
The climate crisis is an unprecedented challenge which requires a global response. Trade can help in finding solutions to achieve mitigation and adaptation to climate change, for instance by spreading access to the right technologies and investments. Through this Coalition, we will be able to provide high-level leadership and guidance to boost international cooperation and promote trade policies, initiatives and actions towards climate-resilient economies. Time is of the essence to face the devastating impact of climate change on people and economies worldwide.Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade – 18/01/2023
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Valdis Dombrovskis
Executive Vice-President for an Economy that Works for People; Commissioner for Trade, European Commission
Moses Kuria
Cabinet Secretary for Trade, Investments and Industry, Ministry of Trade, Investments and Industry of Kenya
Damien O’Connor
Minister of Trade and Export Growth, Ministry of Foreign Affairs and Trade of New Zealand
Julio José Prado
Minister of Production, Foreign Trade, Investment and Fisheries, Ministry of Production, Foreign Trade, Investments and Fisheries of Ecuador
The climate crisis is an unprecedented challenge, wreaking devastation across the globe. The latest science tells us that a staggering 1.6 billion people live in climate vulnerable hotspots, meaning that their homes, livelihoods and lives are already at risk. That number could double by 2050.
Time is of the essence. This is why at the November 2022 COP27 climate conference, governments emphasised the urgent need for immediate, deep and sustained reductions of global greenhouse gas emissions by all parties, across all sectors.
The climate crisis is a double-edged sword, with action needed both at global and local level. International cooperation is therefore vital, because no country can solve this crisis alone. Governments, businesses, international organizations, academia and citizens all need to work together. That is why we, as trade leaders from Ecuador, the European Union, Kenya and New Zealand, are launching with over 50other countries a Coalition of Trade Ministers on Climate at the World Economic Forum’s Annual Meeting 2023 in Davos, Switzerland.
The Coalition aims to drive inclusive cooperation among trade ministers in the global response to climate change, including by engaging nationally and internationally with fellow ministers working on climate, environment, finance and development, among others. Connecting the dots is vital to find coherent global solutions.
Together, we aim to provide high-level leadership and guidance to boost international cooperation on climate, trade and sustainable development. We represent different regions, stages of development, trade circumstances and varying exposure to climate vulnerabilities. This diversity, coupled with a commitment to transparency and inclusivity, reflects our commitment to build trust and work together on climate change.
Tackling the climate crisis is an enormous endeavour, and trade can and should play a role in this massive global effort. The Coalition will promote trade and investment that fosters the diffusion, development, accessibility and uptake of goods, services and technologies that support climate change mitigation and adaptation in both developed and developing countries.
Such technologies are critical for many reasons, think of the clean energy transition – solar and wind energy or green hydrogen that can be used in rural communities; or the need for technologies to face climate adaptation related challenges – water disaster management, ecosystem monitoring and restoration, early warning and information systems, amongst others.
As a group, we will identify ways for international cooperation and collective action on trade and trade policy to positively contribute to the global response on climate change, including at the World Trade Organization and in relevant multilateral, plurilateral, regional and sectoral initiatives. Importantly, the Coalition will also identify trade-related strategies supportive of the most vulnerable developing and least developed countries.
To achieve the scale and speed of climate action required, we need to harness innovative technologies, investment and talent from all over the world. We must also ensure that global trade flows, rules and trade policies help to drive down greenhouse gas emissions, enable a just transition and support climate-resilient sustainable development.
Let us be clear: this is no easy task. To achieve the Paris Agreement on Climate Change goals, countries will need to pursue policies that transform the way we produce, consume and invest – this will entail a range of implications for trade.
Transparency, inclusive dialogue and cooperation on the trade dimensions of climate policies will be crucial to avoid trade tensions, while helping to build understanding of domestic realities and identify paths forward.
In Davos, we are meeting with business, non-governmental organizations, experts and international organizations heading climate action initiatives, to explore how our work can accelerate these activities.
This Coalition is just the beginning. We will build alliances and partnerships with climate and finance ministers, as well as other relevant stakeholders, to become a truly global and inclusive platform for concrete actions and ideas.
The world is at a tipping point. We have no time to lose if we want to build economic systems that are climate neutral, resilient and able to deliver sustainable development.
With this Coalition of Trade Ministers on Climate, we are announcing our shared intention to work together on these challenges in the years ahead.
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