Ambassador Tim Groser, New Zealand’s dynamic minister of trade, gave two important speeches this week. The speeches are posted at http://www.beehive.govt.nz/minister/tim+groser.
The first speech is titled “Adapting the International Trade Regime to New Challenges: Climate Change.” The speech was delivered on May 10 to the International Food and Agriculture Trade Policy Council Seminar in Salzburg, Austria.
The second speech is titled “Trade and the Road to Recovery: An Asia Pacific Perspective.” It was delivered on May 13 to the US Chamber of Commerce in Washington, DC.
In the climate speech, Groser discusses the well-known problem that the architecture of the Kyoto Agreement is flawed in that only Annex I countries make commitments. He notes that “Only half of all current emissions now come from Annex 1 countries, and that proportion is falling rapidly with the growth in emerging economies.”
He also looks at four ways that trade rules can help countries shift to low-carbon economic development. First, through liberalization of environmental goods and services. Second through investment liberalization important for enabling technology transfer. Third from reducing environmentally harmful subsidies. Fourth through sustainability standards that “could play a useful role in cutting through the confusion and doubt around the climate benefits of biofuels.”
Perhaps the most cutting edge part of the speech discussed the role of agriculture in GHG emissions. Groser notes that in developing countries agriculture accounts for an average of 27% of emissions. Emissions reductions could be achieved through a large scaling up of investment in research and development, but that has not been happening because agricultural emissions are comparatively small in developed countries which have not devoted sufficient attention and resources to agriculture.
To remedy this problem, New Zealand has taken the lead in establishing a virtual world research center on agricultural greenhouse gas mitigation. Groser’s initiative is to be commended.
Groser also discusses the dangers of a “trade war” over climate measures and expresses interest in hearing ideas about a “peace clause.” Such a peace clasuse could be for measures implemented in a manner broadly consistent with core WTO principles even if technically there might be room for doubt about WTO consistency.”
In the second speech, Groser talks frankly about the erosion of political confidence in globalization and public support for trade. He calls for “increasing the level of ambition” in the Doha Round and for US trade leadership.
With respect to trade and climate, Groser suggests that “in the washup” to the Doha Round, negotiatiators should think about “some type of political commitment” to put in place “a Peace Clause to allow our negotiators time to work through” the many “complexities” in how the “international disciplines on climate change may cut across world trade.”
Optmistically looking ahead to how the WTO should operate after the Doha Round is concluded, Groser suggests that future market access negotiatioons not be separated into agricultural and non-agricultural sectors.
