Policy Analysis

Nature-Positive Trade for Sustainable Development

International cooperation and the alignment of trade policies with environmental regulations, removal of harmful subsidies, and promotion of sustainable practices can help address the biodiversity crisis. Marianne Kettunen emphasizes the potential of trade in supporting conservation, sustainable use, and restoration.

By Marianne Kettunen on July 17, 2023

There is increasing recognition of the role that trade and trade-related policies play in addressing the biodiversity crisis. Trade can exacerbate biodiversity degradation and loss, but it also has the potential to support conservation, sustainable use, and restoration—benefiting sustainable development.

Trade can exacerbate biodiversity degradation and loss, but it also has the potential to support conservation, sustainable use, and restoration—benefiting sustainable development.

The Kunming-Montreal Global Biodiversity Framework, adopted in December 2022, provides a fresh reference point for (re)examining the relevance of trade policy to the global biodiversity agenda and exploring how implementing the new agenda could support both sustainable trade and sustainable development. The growing focus on the environment and sustainable development at the World Trade Organization (WTO) also presents an opportunity to discuss how trade policy can contribute to the global biodiversity agenda.

The trade policy arena offers various opportunities to strengthen cooperation on trade and trade-related policies and measures that align with global biodiversity objectives and the United Nations 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) by 2030. Sustainable trade can be part of the solution.

Realizing these opportunities requires building a shared understanding between biodiversity and trade stakeholders on the use of different trade and trade-related policies and measures. This understanding is crucial to ensure that these policies and measures deliver benefits across all three agendas of biodiversity, sustainable trade, and sustainable development.

How Are Trade and Trade Policies Relevant to Global Biodiversity Targets?

Examining how trade can support the global biodiversity framework (and vice versa) calls for attention to how trade and trade-related policies contribute to this framework’s concrete objectives and targets.

A systematic review of the Kunming-Montreal Global Biodiversity Framework targets indicates that trade and trade-related policies and measures are relevant to achieving all targets in the global biodiversity framework.

For example, sustainable supply chains supported by trade-related policies can benefit the sustainable management and use of ecosystems and biodiversity resources (Target 10). Similarly, Targets 7, 8, and 16 on pollution, climate change, and sustainable consumption, respectively, all stand to gain from any enhanced trade-related cooperation to curb emissions and pollution. Finally, the ongoing discussions on subsidies in the trade policy arena have a direct bearing on the delivery of Target 18 on eliminating, phasing out, or reforming incentives harmful to biodiversity, including implementation of the WTO Agreement on Fisheries Subsidies.

In addition, trade policy plays a direct role in addressing wildlife trade (Target 5) and preventing the spread of invasive alien species (Target 6) and living modified organisms (Target 17) through trade.

Underpinning policy action across the board, concerted efforts to integrate biodiversity-related goals and considerations into technical assistance and capacity building for sustainable trade, including through aid for trade, could contribute to the delivery of the targets on resource mobilization, capacity building, and transfer of technology (Targets 19 and 20). Finally, Targets 14 and 15 on policy integration and businesses disclosure and compliance are likely to have concrete implications in the trade domain, including how countries develop, pursue, and implement their international trade policies, including those focusing on commodity-specific supply chains.

What Trade-related Policies and Measures Are Relevant?

There is a need to identify concrete trade-related policies and measures that can be used to support the delivery of different targets of the global biodiversity framework, either by discouraging unsustainable or encouraging sustainable practices and trade. Identifying available options and evaluating their opportunities, challenges, and feasibility will enable countries to consider suitable trade and trade-related policies to implement the global biodiversity framework with a view to reaching positive outcomes for both biodiversity and wider sustainable development.

There is a need to identify concrete trade-related policies and measures that can be used to support the delivery of different targets of the global biodiversity framework.

Countries have various options for trade policies and measures. These include supporting tools and processes such as border measures (e.g., tariffs and trade restrictions) and those applied as part of national frameworks or business operations (e.g., voluntary standards for biodiversity-friendly products, mandatory environmental requirements for traded goods and services, or economic incentives such as subsidies). Aid for trade, financial assistance and capacity building, stakeholder involvement, and trade flow and impact information are also relevant policy tools. See UNEP and TESS for more information.

In addition, regional trade agreements (RTAs) are also increasingly used to support biodiversity objectives. RTAs can facilitate Target 14 on the integration of biodiversity into different policy domains, with benefits foreseen across several other targets. For example, they could include provisions for preferential access for biodiversity-friendly products, promotion of regulatory cooperation and environmental requirements, and establishment of biodiversity safeguards. Finally, RTAs could strengthen impact assessments, stakeholder engagement mechanisms, and monitoring of implementation to promote good regulatory practices and a positive trade agenda for biodiversity and the environment.

The Road Ahead: Advancing in and cooperating on nature-positive trade

The Kunming-Montreal Global Biodiversity Framework, coupled with the growing interest in the environment and sustainable development as part of trade policies and measures, presents windows of opportunity to explore how the global trade, biodiversity, and sustainable development agendas could be more mutually supportive.

At the multilateral level, ongoing trade policy discussions offer opportunities for improved cooperation and synergies between global biodiversity, trade, and sustainable development. Relevant discussions are taking place across numerous WTO committees, including those on Trade and Environment, Technical Barriers to Trade, and Sanitary and Phytosanitary Measures. There are also specific opportunities to support cooperation through member-led initiatives at the WTO such as the Trade and Environmental Sustainability Structured Discussions and the Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade. Enhanced cooperation between the Convention on Biological Diversity (CBD) and WTO secretariats in the context of the global biodiversity framework could support the identification and discussion of key options, challenges, and opportunities by governments and stakeholders.

In parallel, governments are also engaging in specific sectoral or supply chain initiatives, including the Forest, Agriculture and Commodity Trade Dialogue. Such government-to-government or government-to-business dialogues can play an important role in encouraging international collaboration on trade, biodiversity, and sustainable development on several key commodities (e.g., palm oil, cocoa, timber, and soya), with potential impact on WTO discussions and the CBD.

Synergies and cooperation across biodiversity, trade, and sustainable development policy-making at the international level will rely on enhanced collaboration at the national level in ways that ensure an integrated approach that can be reflected consistently in international processes.

Moving forward, a strategic vision for delivering benefits for both biodiversity and sustainable trade could form an integral part of national biodiversity strategies and action plans, with suitable indicators to help monitor progress in their implementation. These strategies and action plans could require processes that support better policy coherence between trade and other policies at the national level, including by engaging environmental, biodiversity, and sustainable development institutions and actors in trade decision making. They could also endorse conducting sustainability impact assessments to guide trade policy strategies and negotiations with trading partners.

International cooperation will be important to ensure that policies in the trade and the biodiversity spaces do not undermine each other.

Finally, where governments are considering the use of trade policies and measures to support delivery of biodiversity goals, international cooperation will be important to ensure that policies in the trade and the biodiversity spaces do not undermine each other and that they support sustainable development.

In a world economy dominated by highly integrated supply chains, addressing transboundary environmental challenges such as biodiversity loss will benefit from coherent policy approaches and cooperation across jurisdictions. Developing economies in particular have highlighted the importance of transparency, consultation, and international cooperation in designing environment-related trade policies while recognizing different responsibilities and national sovereignty over natural resources.

The benefit of international cooperation is especially high for policies aimed at removing perverse incentives, such as environmentally harmful subsidies in the agriculture or fisheries sectors, and fostering trade in environmentally preferable products and services, including those supporting the conservation and sustainable use of biodiversity. Similarly, ensuring that environmental regulations, standards, and conformity assessment procedures are applied in ways that ensure transparency, fairness, and interoperability across countries (e.g., through harmonization or mutual recognition) would minimize trade frictions. It could also support the raising of environmental standards across jurisdictions. Improving coherence would also support producers trading internationally by providing clear signals of priorities and potential rewards for investment in—and business opportunities linked to—sustainable production.

The Nature-Positive Trade for Sustainable Development webinar series runs from June 2023 to March 2024 and aims to support such understanding through sharing of information and knowledge and exchanging views and ideas among experts and institutions. Key institutions working in the intersection of biodiversity, trade, and sustainable development cooperated on the series, including the UKRI GCRF TRADE Hub, UNEP, WTO, CBD, UN Conference on Trade and Development BioTrade Initiative, and the International Trade Centre.

Marianne Kettunen is a senior policy expert and adviser on sustainable development and the environment working for the Trade, Development and the Environment Hub. This article is based on United Nations Environment Programme (UNEP) and the Forum on Trade, Environment & the SDGs (TESS) (2023). Nature-positive trade for sustainable development: Opportunities to promote synergies between the Kunming-Montreal Global Biodiversity Framework and work on sustainable trade at the WTO. UK Research and Innovation Global Challenges Research Fund (UKRI GCRF) Trade, Development and the Environment Hub (TRADE Hub), UNEP, and TESS.

Policy Analysis details

Focus area