Event

Demystifying the EU's Carbon Policies and Impact on Trade

Overview

The International Trade Centre (ITC) hosted a webinar on ‘Demystifying the EU’s carbon policies and impact on trade' on Thursday, 19 May from 14H00 - 16H00 CET. This was the second webinar in ITC's ‘Unpacking the EU’s Green Initiatives' webinar series.

In today’s increasingly complex, fast-paced and highly regulated world, the ability of countries, producers, traders and service providers to access markets and take advantage of the opportunities provided in trade agreements is premised on the ability to be aware of and adapt to environmental rules and requirements. For developing countries, however, such environmental regulations are often perceived as obstacles to their business. Accordingly, targeted support is required for developing countries, particularly SMEs, to understand and comply with these regulations, ensure that it does not become a barrier to trade, and enable businesses to leverage opportunities arising from green and sustainable trade.

The EU has been pioneering efforts to facilitate this transition to green and sustainable trade through a host of regulatory initiatives. ITC's first webinar in this series introduced the various EU regulatory initiatives underway to facilitate the green transition covering the measures to achieve carbon neutrality, develop sustainable supply chains, and strengthen trade in sustainable products, among others. In the second webinar, ITC will delve into the specific EU policies and regulatory initiatives being implemented to achieve the carbon neutrality through trade.

The European Green Deal sets out a framework for Europe to achieve net zero greenhouse gas emissions by 2050 (in other words – carbon neutrality). An intermediate target has been set to reduce GHG by at least 55% by 2030 compared to 1990 levels, and the EU’s ‘Fit for 55’ package was introduced as a series of interconnected proposals to achieve this goal. Rules are being created to achieve these goals, including through mechanisms to reduce emissions, investments in green technologies, and trade. Regulatory initiatives with direct trade implications - such as the Carbon Border Adjustment Mechanism (CBAM), the EU Renewable Energy Directive, and the revision of the Emissions Trading System, are all examples of measures proposed by the European Commission in this context. These carbon regulatory measures may pose market access risks for exporting SMEs, but also present business opportunities for companies in identifying and reducing carbon footprints now to gain secure, preferential trade access later. Overcoming these risks and leveraging business opportunities, however, requires significant actions by SMEs to be able to assess and reduce their carbon footprints, and demonstrate their carbon credentials in a manner compliant with the prospective EU regulations.

At this webinar, ITC presented the EU’s carbon related regulations in the context of its application in the trade policy framework, and domestic measures required by developing countries to create a conducive framework for businesses, particularly SMEs, to align with carbon related regulations and become more competitive players in the market.

The presentations delivered at the webinar are attached.

Presentations:

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Programme

Opening Remarks

Understanding the EU’s Carbon Policies

The presenters will provide a brief recap of the EU Green Initiatives – and explain how the EU’s proposed climate-related policies are structured in the context of these Initiatives; with a focus on those specific proposals that might have trade impacts (renewable energy directive, carbon border adjustment mechanisms, deforestation-free products, etc.)

Paolo Vergano

Partner – FratiniVergano

Diving into the EU’s Carbon Border Adjustment Mechanism (CBAM)

This session will focus on the EU’s CBAM – explain the objective and operation of the CBAM, the measures to be taken by developing countries seeking to export to the EU market; how this mechanism is likely to evolve, including what measures are being adopted by other jurisdictions in this regard. The presenter will also provide insights into expected impacts on developing countries trade based on the products covered under the EU’s CBAM regulation; and why it is still important for developing countries to stay engaged in light of future trends in this field.

Aaron Cosbey

Expert – Climate Change and Sustainable Transition

Q&A session

Implications of climate policies for SME competitiveness

This session will address the challenges and constraints faced by SMEs in complying with the climate-related regulations of their trading partners and implications this can have on SME competitiveness. Drawing on the findings of ITC’s SME Competitiveness Outlook 2021 on ‘Empowering the Green Recovery’, the presenter will discuss the scope for augmenting the climate competitiveness of SMEs in developing countries through carbon footprinting, notably through supportive regulatory approaches and through ITC’s green technical assistance programming.

Sarah Mohan

Associate Programme Officer – Research and Strategies for Export, International Trade Centre

Q&A Session

Closing Remarks

Speakers

4 speakers

Victoria Tuomisto

Programme Officer – Trade Facilitation and Policy for Business,International Trade Centre

Ms. Tuomisto is supporting implementation of trade facilitation related technical assistance programmes at ITC. Prior to ITC, she was engaged at The Economist in the Economist Intelligence Unit and in the Economist Corporate Networks. She has published on several articles/reports on trade facilitation reforms, addressing barriers to cross-border trade, and strengthening regional integration.

Paolo Vergano

Partner – FratiniVergano

Mr. Vergano is an expert on international trade law issues of market access, technical barriers, custom regulations, and rules of origin. He has been involved in dispute settlement at consultation, Panel and Appellate Body level, and advised countries in WTO accession. He advises Governments/private interests on agricultural and services negotiations at multilateral, regional and bilateral level.

Aaron Cosbey

Expert – Climate Change and Sustainable Transition

Mr. Cosbey is a development economist with 30 years’ experience in the law and economics of sustainable development, particularly in the areas of trade and investment, with current work in the areas of climate change, trade policy, and green industrial policy. He is a Senior Fellow with the European Roundtable on Climate Change and Sustainable Transition, a Senior Associate with the International Institute for Sustainable Development, and a Senior Associate with the Inter-Governmental Forum on Mining, Minerals, Metals and Sustainable Development.

Sarah Mohan

Associate Programme Officer – Research and Strategies for Export, International Trade Centre

Ms. Mohan is a Programme Officer with ITC’s SME Competitiveness Survey Team. Prior to ITC, she worked at the International Centre for Trade and Sustainable Development as a Program Officer on Trade and Environment, and as a Program Officer on Policy and Public Engagement for USC Canada – Seeds of Survival.