Skip to main content

Trade and the environment

Trade and the environment

WTO context

International trade and environment policy focuses on a number of areas where trade and environment interact particularly closely. Prominent examples of this are those international treaties which regulate trade where this is required to protect wildlife or the ozone layer; or where reductions in trade barriers have been undertaken where this promotes the trade, production and utilization of environmentally positive equipment.

The 1994 Marrakesh Agreement, establishing the WTO, refers to the importance of optimally using the world's resources in accordance with the objective of sustainable development and seeking to protect and preserve the environment. The WTO followed the lead of the 1992 Rio Conference on Sustainable development which endorsed the idea of making trade and environment policy and practice as "mutually supportive" as possible. Consistent with this, the role of the World Trade Organization (WTO) in relation to trade and environment is to ensure that environmental policies do not act as illegitimate cover for protectionist policies, and that trade rules do not stand in the way of legitimate domestic environmental protection.

Consideration of trade and environment issues within the WTO centers on the Committee on Trade and Environment (CTE). The Committee's mandate is broad, and provides opportunities for WTO members to raise a wide range of trade and environment issues. The last meeting of the CTE, in June 2016, examined trade and climate change (including a debrief from the UNFCCC Secretariat on the Paris Agreement), environmental provisions in FTAs, fossil fuel subsidies, domestic and international forestry issues and organic agricultural certification, amongst a wider range of issues. Australia, which is Chair of the Environmental Goods Agreement negotiations (see below), debriefed the CTE on that topic.

The Australian government is participating in the negotiation of the Environmental Goods Agreement. This negotiation of 17 WTO members (including the US, China, the EU and Japan) is the largest goods market access negotiation underway in the WTO. Once completed this agreement will result in significant trade liberalisation of an extensive array of goods with environmentally positive performance. In turn this will make it less expensive across the globe to address many environmental problems, including climate change; pollution of air, water and soil; reduction of hazardous waste stockpiles; and monitoring of the environment. The EGA is a significant and topical example of how trade liberalisation can make a very clear contribution to environmental protection.

Further information on the Trade and Environment debate in the WTO

Environmental Goods Agreement

Last Updated: 22 May 2019
Back to top