Reconciling Trade and Climate
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Reconciling Trade and Climate

How the WTO Can Help Address Climate Change

Tracey Epps and Andrew Green

This timely book addresses the interaction between policies addressing climate change and the rules of the WTO. The authors expertly examine the law and economics behind the application of trade rules in the area of climate, including the implications of WTO rules for domestic climate measures, the unilateral use of trade measures to attempt to force other countries to take climate action, and the role of trade measures in multilateral climate agreements. The book argues that while there is a possibility of conflict between international trade rules and progress on climate change, it need not be the case. Thus the major focus is on the ways in which trade measures can aid in addressing climate change.
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Chapter 14: Trade Measures in a Climate Agreement

Tracey Epps and Andrew Green


TRADE, PARTICIPATION AND COMPLIANCE In the previous chapters, we have seen that there is a risk of a WTO challenge to any unilateral action by states trying to ensure that other countries take action on climate change. Moreover, there are questions of the legitimacy of any such action that can be viewed as one state imposing its preferences on another. The Appellate Body has indicated the advisability of multilateral negotiations prior to the use of any trade measures.1 The question arises as to whether there is any hope of using trade measures on a multilateral basis rather than unilaterally, or at least whether there can be a multilateral agreement specifying when such action can be taken. This chapter examines the possibility of including trade measures within a multilateral climate agreement. The Kyoto Protocol and the more recent post-Kyoto negotiations illustrate the concerns about both participation and compliance.2 As international agreements depend on the consent of the parties, countries must view entering into and complying with any agreement as in their self-interest, or at least not significantly against their self-interest. In using any enforcement mechanism, the sanction must be severe enough for each state to view itself as better off bearing the cost of taking climate change action than the cost of the negative incentive.3 However, the remedial provisions also have an impact on the participation rates and the commitments parties are willing to make. As Barrett notes, any post-Kyoto United States – Import Prohibition of Certain Shrimp and Shrimp Products (US...

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