Academic journal article Strategic Review for Southern Africa

Trade and Climate Change: Constructing a Multilateral Agenda for Africa

Academic journal article Strategic Review for Southern Africa

Trade and Climate Change: Constructing a Multilateral Agenda for Africa

Article excerpt

ABSTRACT

Climate and trade issues lie at the intersection of two of the world's most contested multilateral negotiations--the United Nations Framework Convention on Climate Change and the World Trade Organisation's Doha Round. With their complex inter-linkages, there is still no clarity about the rules governing trade and climate change. Within the context of shifting global competitiveness from North to South and West to East, African countries are concerned about the rise of 'green protectionism' and the possibility of unilateral punitive trade measures to support domestic climate action in Europe. This article explores some of these concerns by focusing on the potential trade impact of EU climate policies on Africa, specifically border tax adjustments on commodity exports and carbon standards and labelling for consumer goods. The article provides some ideas on how Europe and Africa can cooperate in the United Nations Framework Convention on Climate Change to build better understanding of the adverse impact of these climate measures on Africa's growth and development prospects.

1. INTRODUCTION

Climate and trade issues lie at the intersection of two of the world's most contested multilateral negotiations--the United Nations Framework Convention on Climate Change (UNFCCC) and the World Trade Organisation's (WTO) Doha Round, in which both Africa and the European Union (EU-27) have been vociferous participants. Although the climate and trade agendas have evolved independently of each other, they both share the same objective of sustainable development. Given the complex intersections of trade and climate change (see UNEP/WTO, 2009) and their real impact on economies and societies, it is imperative that the international community establishes mutual coherence between these two global regimes, particularly as they apply to Africa, the world's poorest region.

Just as the Preamble to the WTO Agreement recognises the importance of seeking to "protect and preserve the environment" (WTO, 1995), so Article 3.5 of the UNFCCC states that: "measures taken to combat climate change ... should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade" (UN, 1992). (1)) The Doha Ministerial Declaration, now over a decade old, states specifically that "the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, and acting for the protection of the environment and promotion of sustainable development can and must be mutually supportive" (WTO, 2001). Although the Doha Round has been effectively deadlocked since July 2008 (Narlikar and Vickers, 2010), its stated aims are certain to inform any revival of the Round, or any future global trade round.

However, African negotiators in the UNFCCC have raised concerns about the likely proliferation of climate measures that will adversely impact on the continent's production and trade (AGN, 2011b). As African countries seek to industrialise and diversify their commodity-dependent economies to capture greater gains from global trade, (2)) they confront the spectre of 'green protectionism' in their main trading partners in the North, particularly the EU and the United States (US). These climate measures range from emission trading schemes and border tax adjustments, to subsidies and non-tariff barriers (NTBs), both public and private. (3)) For Africa, it is important to situate the rise of 'green protectionism' in the appropriate structural context, namely the relative shift in global growth and competitiveness from North to South and West to East. While the post-2008 global crisis and recession have left most developed regions with high levels of debt and weakened competitiveness, the rising economies of the South have emerged stronger from the crisis with stable and sustainable debt levels, and increased competitive positions. Africa, already the second fastest growing region in the world economy after Asia, is widely billed as the next source of global economic growth, trade and investment, after the BRICS--that is, Brazil, Russia, India and China (see McKinsey Global Institute, 2010). …

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