Written evidence submission from Compassion in World Farming (COP0009)

1. I am writing on behalf of Compassion in World Farming UK, which specialises in issues relating to the environment associated with animal farming, addressing both climate change and animal welfare aspects. We are represented at COP 26 as official Observers and will be discussing the interaction of trade and climate change with delegates there.

2. We should like briefly to address the “green trade” issue discussed in your introduction to the inquiry, specifically:

“The Government has identified opportunities to use international trade and investment to further environmental goals. For instance, the Government is working at the World Trade Organization to promote ‘green trade’, with a view to liberalising environmental goods and services, mitigating carbon emissions, setting standards and supporting a circular economy.”

3. This emphasis on green trade is clearly welcome, but it is important to recognise the tension between liberalisation of trade and setting standards. While an objective to use trade to facilitate the transfer of green technology is admirable, concerns about perceived non-tariff barriers and possible WTO action in practice have a chilling effect on countries seeking to upgrade standards.

4. Fears and uncertainties about whether certain climate-related trade measures would be compatible with the WTO rules are impeding the adoption of measures that are necessary if countries are to be able to meet net zero targets.  Countries are reluctant to impose restrictions on their own businesses if they cannot place such constraints on imports as this would undermine domestic producers.  Similarly, countries are hesitant about restricting imports that are damaging to the climate as they fear WTO challenges by their trading partners.

5. It is vital for all countries to introduce carbon pricing mechanisms to help reduce greenhouse gas (GHG) emissions.  However, countries are concerned that if they adopt such mechanisms, their own producers will be vulnerable to cheap polluting imports from countries that do not have carbon pricing schemes.  Equally, countries fear that if they introduce carbon pricing, domestic producers may move to other countries that do not utilise carbon pricing mechanisms. Countries should introduce carbon pricing mechanisms and support them with carbon border adjustment mechanisms.  These could be defended under GATT Article XX (see below) provided there is no element of discrimination that favours domestic producers over imports or gives more favourable treatment to some exporting countries over others.

6. Concerns about the compatibility of climate-related trade measures with the WTO rules are acting as barriers to countries taking measures needed to address climate change.  In order to address this problem, the UK must join with other key economies in urging the WTO to clarify what can be done under its rules and indeed to amend those rules when they impede measures that are needed to tackle climate change.  Securing changes to the rules is likely to be a slow process, hence the need for clarification of what kind of measures are compatible with the WTO rules.
7. GATT Article XX[1] sets out a range of exceptions to the WTO free trade rules.  Though these exceptions do not include anything directly applicable to climate change three of them may well enable a country to defend trade measures that aim to address climate change.  These exceptions are for measures:

“(a) necessary to protect public morals;

(b) necessary to protect human, animal or plant life or health; …

(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.”

8. To give an example in our area of expertise, it is estimated that 14.5% of global human greenhouse gases come from the livestock sector (more than the entire transport sector). A substantial part of this in the UK and Europe is traced back to intensive farming, which commonly requires the import of soya, leading to deforestation in South America on a massive scale in order to grow the feed for the farms. However, if a government were to restrict the sale of meat produced by methods that involve feeding substantial amounts of soya to the animals, it may potentially risk being regarded as being in breach of the GATT rules.  This said, it may be able to defend its restriction under the Article XX exceptions relating to (i) the protection of human life or health and (ii) the conservation of exhaustible natural resources.

9. Nonetheless it would be helpful for Article XX to be expanded to more clearly allow the taking of measures designed to tackle climate change and other pressing issues such as biodiversity loss. Therefore, the UK Government should lobby the WTO to widen the range of permitted exceptions provided that they are applied in a non-discriminatory manner and serve to raise environmental or animal welfare levels. This would encourage countries to take initiatives in introducing new environmentally friendly standards which, when seen to be successful, could then be adopted by other countries, leading to the global improvements that the Government is seeking.

September 2021