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Trade | 15 October 2020

International trade rules and environmental protection measures

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International trade rules and environmental protection measures

In the light of the climate and ecological crises, trade policy must be made compatible with environmental action. This means trade policy that is premised on minimising consumption-based emissions, the subsidiarity of trade and investment rules to progressive domestic environmental protection and the incentivising of high environmental standards internationally. As such, a range of mechanisms will be needed to encourage trade that furthers environmental ambition and to prevent trade that undermines it.

This paper sets out how well-designed import restrictions are possible under existing World Trade Organization (WTO) rules, and what can be done to adopt a more progressive policy in this space. In particular, it considers what rules apply to measures that differentiate between products based on the process and production methods (PPMs) through which they are made.