Why trade matters in the fight against climate breakdown
Jean Blaylock looks at the multiple ways that trade deals undermine effective climate action.
During the recent election in the UK, documents outlining the government’s trade talks with the Trump administration were leaked. Among other things, they showed that when the UK raised the issue of climate change, it was bluntly told that the issue was off limits in any potential deal because it is too politically sensitive and a “lightning rod issue”.
This pandering to climate change denial is completely unacceptable in the face of the climate emergency. But beyond this, it’s good to be clear on what the connections between trade deals and climate change are.
Trade deals can make the climate crisis worse, block climate action and undermine a just transition. Trade deals really matter if we are to have any chance of tackling the climate crisis.
Making the climate crisis worse
Trade deals can increase both trade in fossil fuels themselves and in fossil fuel intensive sectors, thus increasing climate change emissions.
The failed EU-US trade negotiations, TTIP, had a chapter specifically on the energy trade, which aimed to increase trade in energy while outlawing discrimination between dirty fossil fuels and renewable energy. Campaigners at the time said it could sabotage climate policy.
In 2018, the EU agreed a very quick mini pact with Trump in an attempt to head off his threats of imposing heavy tariffs. It only covered two things, but those two things are both significant for the climate: gas and soybeans. A fossil fuel, and a fossil fuel intensive crop. Soy is produced on mega plantations, often destroying rainforest and savannah in the process, with heavy use of pesticides and artificial fertilisers which are produced using fossil fuels.
Shipping goods around the world is itself currently a climate problem, as marine fuel oil is one of the dirtiest fossil fuels.
Blocking climate action
We know we must have strong, immediate action to tackle the climate crisis. After lost decades of inertia, we need binding regulation that can make real change happen.
But trade rules are written to promote voluntary self-regulation by industry – exactly the approach that has resulted in continued inaction and business as usual. Throughout the leaked papers from the US-UK trade talks, US officials keep insisting that they only want voluntary industry-led measures.
Whenever actual regulation is mentioned in the leaked papers, the officials emphasise the need for big business to help write the rules. They are pushing for corporations to get early warning of any planned laws, which might mean big business could block proposals before they are even seen by parliament.
That’s not all. If laws and decisions are actually passed to take meaningful climate action, trade rules have another ace up their sleeve: corporate courts. Formally known as ISDS (‘investor-state dispute settlement’), these allow transnational corporations to sue governments outside of the national courts, over decisions that they don’t like. The amounts involved can be massive, and the threat is real.
We’re already seeing this happen on climate. The Netherlands recently took the decision to phase out coal power in the light of climate change, and promptly a German energy company, Uniper, has started threatening to sue in a corporate court. And in Canada, when the province of Quebec introduced a fracking moratorium, energy company Lone Pine used its US-based subsidiary to sue in a case that is still ongoing.
Corporate courts should not exist. They are unjust and illegitimate, and should have no place in trade policy. Yet they are still being included in trade and investment deals, and it is likely that they would be included in a US-UK trade deal.
Undermining a just transition
Tackling climate change will require a transformation of our economy and society. In a change of that scale, we need to ensure that those with least responsibility for the crisis are not the ones that end up paying for it.
Those on the frontlines of the crisis in the global south have contributed the least in terms of historic emissions, with responsibility lying in the global north. Part of balancing this debt should include transferring technologies to the global south to help tackle climate change, and supporting policies that can build a more sustainable future – a global green new deal. Yet trade rules explicitly outlaw technology transfer, and try to limit the flexibility for governments to introduce the active industrial and developmental policies they need.
We also need a just transition that provides decent jobs. Those who currently work in polluting industries should not be penalised – they need to be able to find good new jobs helping to make the transition happen and in new sustainable sectors. To do this, governments need to be able target resources at communities that are likely to be affected. This could be by making it a condition for a company wanting to invest that they create jobs locally. But again, this is something trade rules say is not allowed.
Trade deals have teeth in international law. They override climate agreements, and currently they are a problem for climate action.
We need to change that. A throwaway reference to climate change in a deal does nothing. We need to fundamentally change the way trade deals are done so that they have climate justice at their core. And we also need to stop the trade deals that would make the climate crisis worse.
If we want to have any chance of averting the worst effects of climate breakdown, the direction of international trade policy has to be overturned.
Jean Blaylock is a campaigns and policy manager at Global Justice Now, a UK member of the Seattle to Brussels Network.