UNEP-WCMC Trade Hub

On June 16, the TRADE Hub co-organised the first webinar of its new “Nature-positive trade” series. This webinar focused on identifying opportunities for sustainable agriculture and biodiversity with a view to support the Kunming-Montreal Global Biodiversity Framework adopted by countries in December 2022. These discussions took place as part of the World Trade Organisation (WTO) Trade and Environment Week. The event was a collaboration between the Trade, Development and Environment Hub (TRADE Hub), UN Environment Programme Trade and Environment Hub, the World Trade Organisation (WTO), the Convention on Biological Diversity (CBD), United Nations Conference on Trade and Development (UNCTAD) BioTrade Initiative, and the International Trade Centre (ITC). TRADE Hub Communications Officer, Aisha Niazi details ways trade, biodiversity and agriculture communities can collaborate to drive forward nature-positive trade.

Biodiversity is a trade issue

Speakers from a range of international organisations, working across the trade, biodiversity and broader environment spaces, united under one call to action: that of collaboration and breaking down siloes to ensure that biodiversity is integral to the thinking that informs trade negotiations.

“To truly succeed in sustainable trade, multilateral dialogue and international cooperation continue to be vital… trade and environment ministers must sit at the same table to make sure any multilateral agreement contributes to also biodiversity protection”, said moderator, Marianne Kettunen.

In the context of this webinar, Marianne defined nature-positive trade as a “trade with an aspiration to proactively work towards contributing to the goals and targets of the Global Biodiversity Framework”. The GBFs Target 10 calls for sustainable agriculture, fisheries and forestry, providing a strong entry-point for this webinar. Speakers later determine measures to support the uptake of biodiversity-friendly practices that drive progress towards achieving Target 10.

We need trade and environment ministers at the same negotiating table

“Current unsustainable consumption patterns are driving 1 million species to extinction” stated Anja von Moltke, in what was her final event as Senior Programme Management Officer at UNEP.

Anja kicked off the day’s discussions by providing three clear calls to action to address the biodiversity crisis from a trade policy perspective:

These recommendations were supported by Beatriz Fernandez, Associate Programme Management Officer at UNEPs Trade and Environment Hub, who confirmed that “trade can and should be part of the solution to advance sustainability, strengthen the resilience of food systems, and support the GBF and socially sustainable economic development”.

She identified three ways trade policy can support these goals:

We already have a strong understanding of sustainable agricultural practices

The next speaker, Monica Kobayashi, Programme Management Officer at the Secretariat of the Convention on Biological Diversity (CBD), noted that while the trade-related discussions at CBD have traditionally focused on trade of wild species, the importance of trade in connection to sustainable agricultural production, especially in relation to Target 10 of the Kunming-Montreal Global Biodiversity Framework (GBF), is widely recognised and accepted within the organisation.

She highlighted the GBF as an opportunity to connect these dots and bring better knowledge on sustainable practices and biodiversity-relevant trade instruments. The framework’s predecessor, the Aichi biodiversity targets adopted 12 years ago, led to the creation of a common set of guidelines across agricultural practices such as sustainable soil management and the diversification of crop systems. This knowledge base sets a strong foundation to be built upon when discussing the kind of agricultural practices trade should strive to advance.

WTO rules do not stand in the way of countries adopting biodiversity measures

“WTO rules do not stand in the way of countries adopting specific biodiversity measures” clarified Svetlana Chobanova, Legal Officer for the WTO Secretariat. Countries can adopt specific biodiversity measures so long as they are not protectionist.

In fact, since 2009, more than 1700 agreements and measures adopted across the WTO members have included support for ecosystems.

Cedric Pene, Counsellor at the Agriculture and Commodities Division of the WTO Secretariat, reminded the audience of the WTOs Agreement on Agriculture, enacted in 1995. Under this, all members agreed on the need to address environmental challenges in agricultural policies, and many have national programmes battling biodiversity issues.

Target 18 of the GBF sets the goal of reducing harmful incentives, including subsidies, by at least $500 billion per year. Policymakers need to understand which subsidies are harmful to biodiversity, and what constitutes such “harm” before the negotiating process begins; this is an opportunity for the biodiversity community to join hands with the trade community by providing data and definitions to trade negotiators.

Sustainability standards should not work in siloes

Sustainability standards are a major trade instrument to support biodiversity, and can be found in a variety of forms, such as codes of conduct, protocols or broad guidelines. The International Trade Centre (ITC) has a database containing most of these standards to make them accessible to different stakeholders.

Shemima Amarsy, Advisor on Sustainability Standards and Value Chains at ITC, argued that the main barrier to the adoption of these standards is a lack of enforcement. There are over 300 different sustainability standards; rather than working in siloes, biodiversity and trade communities should collaborate to better harmonise standards, so they are complimentary to one another. This includes accounting for local realities so they can be better enforced.

Biotrade is one initiative working to provide a set of guidelines for the sustainable trade of biodiversity-based goods and services. BioTrade presents a set of principles for anyone to adopt – they have been used to develop international standards and private certifications.

Lika Sasaki, Programme Management Officer at UNCTAD BioTrade, presented four practical takeaways from her work on guiding principles:

Subsidies are a key trade-related issue

“Subsidies are trade-related issues to the extent they affect the cost of production of goods and competitiveness in markets” clarified Christophe Bellmann, Head of Policy Analysis and Strategy at TESS.

Countries can largely set their own subsidies, but the WTO will often step in when a country’s subsidy affects a neighbouring state’s market access. Subsidies impact trade as they guarantee a minimum price for farmers, which encourages higher production, and those who benefit from subsidies may displace those without them on competitive markets.  However, if subsidies are minimally trade distorting, then they are more likely to be unconstrained.

Phasing out harmful subsidies is a goal aligned with GBF Target 18 which calls to “eliminate, phase out or reform incentives, including subsidies, harmful for biodiversity, in a proportionate, just, fair, effective and equitable way, while substantially and progressively reducing them by at least $500 billion per year by 2030, starting with the most harmful incentives, and scale up positive incentives for the conservation and sustainable use of biodiversity.”

But which subsidies are harmful to biodiversity?

There is no universal agreement on what makes an agricultural subsidy harmful. So, what do we need to do to create consensus on the contents of harm?

Christophe suggested a similar model for agriculture as was used for fisheries. The WTOs Agreement on Fisheries Subsidies, adopted in June of 2022, led to a set of disciplines dedicated to understanding the sustainability impacts of fisheries subsidies – this model can be mirrored for agriculture, with teams of experts determining the impacts of agricultural subsidies on biodiversity.

Moreover, the WTO could decide to remove environmentally damaging agricultural subsidies, regardless of their trade impact. In this case, environmental degradation would be considered independently to trade distortion.

Facundo Calvo, Agricultural Policy Analyst at IISD, added that WTO members must first agree on a definition of subsidies that are harmful to biodiversity. He noted that there is a strong literature on subsidies damaging to the environment in general, but the identifying and demonsrating the link to biodiversity remains weaker. Therefore, it is key to define damage to be able to act on it.

The theme of collaboration threaded through all of the day’s discussions as a key step forward. Trade and biodiversity communities must come together to find ways to embed biodiversity within trade policy- and decision-making.

The summary has been produced by TRADE Hub. It does not necessarily reflect the views of the organizations co-operating under or participating the webinar series. We regret any errors or omissions that may have been unwittingly made.