A Sustainability Toolkit for Trade Negotiators:

Trade and investment as vehicles for achieving the 2030 Sustainable Development Agenda

1. Why Is Sustainable Development Important for Trade and Investment Agreements?

The premise of this toolkit is that negotiators want to ensure that trade and investment agreements are helping facilitate the necessary transition to a green economy, helping to achieve sustainable development. That, of course, is a rebuttable premise and bears questioning. Why exactly is it important for trade and investment agreements to contain the sorts of elements discussed in this checklist?

One answer is that we have a number of declarations that commit us to ensuring that trade and sustainable development are mutually supportive. The Marrakesh Agreement Establishing the WTO reads:

“Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.”1

Similarly, the Doha Ministerial Declaration launching the Doha Development Round reads:

“We strongly reaffirm our commitment to the objective of sustainable development, as stated in the Preamble to the Marrakesh Agreement. We are convinced that the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, and acting for the protection of the environment and the promotion of sustainable development can and must be mutually supportive.”2

The UN Framework Convention for Climate Change has language aimed at the same sorts of ends:

“The Parties should cooperate to promote a supportive and open international economic system that would lead to sustainable economic growth and development in all Parties, particularly developing country Parties, thus enabling them better to address the problems of climate change. Measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.”3

The same sort of language appears repeatedly in other trade, investment and environmental treaties. The global community is committed to ensuring harmony between trade and sustainable development.

At a deeper level, however, it bears asking why states have undertaken those commitments. The answer is that trade and investment flows are not ends in and of themselves, but rather are means to an end: enhanced human well-being. Any conceivable definition of human well-being will go beyond immediate personal wealth to include, among other things, preservation of the environmental services that underlie our economy and future development: long-term well-being, or sustainable development. So if trade and investment law and policy are to achieve their full potential for enhancing human well-being, they must be aligned with priorities that go beyond simply increasing flows of goods, services and funds.

That need for alignment is strongly recognized in the Sustainable Development Goals (SDGs)—the global community of nations’ overarching long-term framework for progress, agreed to in 2015 by the UN General Assembly. The SDGs describe trade as a key means of implementation, along with finance, technology and capacity building.4 The companion agreement in the so-called post-2015 agenda, the Addis Ababa Action Agenda on Financing for Development, calls trade an “engine for development,” and pledges: “We will integrate sustainable development into trade policy at all levels.”5

In both agreements, trade’s powerful potential for poverty alleviation is highlighted. That potential rests on the ability of trade and investment to restructure economies, and therein lies the heart of the connection to the green economy. The structural changes wrought by trade and investment can be good from an environmental perspective, moving economies towards greater efficiency and wider dissemination of environmentally friendly technologies. But they can also be bad for the environment, perpetuating and intensifying investment in polluting and resource-intensive economic activities. As such, it is important that trade rules allow national governments the flexibility to adequately protect the environment. This need is all the more important in light of the movement of trade rules “behind the border,” expanding from governing tariff levels to governing how states regulate in areas such as services, investment, intellectual property rights, government procurement, subsidies and other important elements of the domestic regulatory regime.

Beyond simply removing barriers to environmental protection, trade law and policy can also play an important role in actively supporting environmental policies. This is obvious at the level of modern RTIAs, where dedicated chapters on environment and sustainable development are a regular feature, and where there is increasingly a desire to help make progress in trade-related efforts such as conservation of biodiversity, dissemination of environmental goods, addressing climate change, protecting the ozone layer and other environmental priorities.

Why is sustainable development important for RTIAs? The answer is rooted in RTIAs’ powerful economy-wide potential for change, coupled with the urgency of our need to address environmental issues. Different states will find different appropriate responses to the nexus of the two policy areas but, at a minimum, negotiators of trade and investment agreements should be aware of their options for environmental provisions. The present checklist aims to fill that need.

  • 1

    Preable, first recital.

  • 2

    Paragraph 6.

  • 3

    Paragraph 3.5.

  • 4

    Goal 17: Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development.

  • 5

    Paragraph 82.

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