Environment and Climate Change Provisions in Trade Agreements

The Project at A Glance

Trade agreement negotiations have become increasingly complex in the last decades with the addition of new emerging issues, such as the promotion of labour standards, environmental protection, human rights and public health, gender equality and Indigenous People, amongst many other issues.

In the context of the ongoing trade negotiations of the ASEAN-Canada FTA, International Economics provided technical support to the ASEAN Secretariat to address the inclusion of environmental and climate change-related provisions in FTAs, a topic for which there are wide divergences in ambition between the negotiating parties.

The project was part of the Expert Deployment Mechanism for Trade and Development (EDM) program, funded by GAC and implemented by Cowater International.

What We Found

International Economics supported ASEAN Member States to improve trade policies and fostering sustainable trade, prosperity, and poverty reduction in the region by preparing a research paper focusing on environment and climate change provisions in trade agreements, identifying options, challenges, best practices, and opportunities for integrating environmental protection and climate change considerations.

Our team identified valuable insights for member states into the evolving landscape of environment and climate change provisions in trade agreements. ASEAN, with its diverse economies and ecosystems, requires a flexible approach to environmental commitments, ensuring inclusivity and effectiveness. Existing regional strategies like the ASEAN Socio-Cultural Community (ASCC) Blueprint 2025 guide policy focus areas such as biodiversity conservation, sustainable cities, and climate change adaptation. All ASEAN Member States have ratified Multilateral Environmental Agreements (MEAs), forming the basis for sustainable development in trade agreements. Cooperation is vital for inclusive implementation, focusing on policy dialogue, capacity building, and sharing best practices. Transparent processes and dispute resolution mechanisms enhance environmental governance within RTAs, fostering accountability and compliance. Flexible provisions in trade agreements allow member states various negotiation options while maintaining comprehensive coverage of environmental and climate change issues.

Our Strategy and Impact

The team conducted a comprehensive review of documents and literature, analysing environment and climate change provisions in selected FTAs. Case studies were used to illustrate trends and implications of different provisions, including dispute settlement mechanisms and penalties.

The Paper was presented to ASEAN Member States’ trade and environment officials during a seminar in Jakarta in January 2024. Discussions at the seminar covered topics including the interaction of trade and environment regimes, prevalence of environment provisions in trade frameworks, and examination of substantive environmental provisions in FTAs.

Our Core Solutions

The cross-cutting nature of trade is such that it requires a comprehensive, integrated, and inclusive framework. While well-designed trade policies are vital to delivering long-term benefits for economies, so is the need for effective implementation.

At International Economics, we support the public and private sectors in navigating the policy and negotiation landscape regarding international trade. This includes establishing robust monitoring and evaluation framework through sophisticated real-time dashboards and reporting systems to ensure the best outcomes. We provide advocacy services to empower delegations and negotiators to participate effectively in trade negotiations and deliberations and advocate for their countries’ interests and positions.