In June 2022, the World Trade Organization (WTO) Members agreed on the Ministerial Outcome Document, which marked for the first time the recognition of the importance of the multilateral trading system in addressing the triple global environmental crises of climate change and related natural disasters, biodiversity loss, and pollution by the international trade community.

To keep the momentum, the trade community gathered in Geneva for the WTO Trade and Environmental Sustainability Structured Discussions (TESSD) to explore how trade can contribute to promoting the economic, social, and environmental dimensions of the UN Sustainable Development Goals.  UNECE participated in these discussions and shared its workstreams supporting the circular economy transition. Responding to the call of several WTO Members to build sustainable supply chains, UNECE presented its work on traceability and transparency of global value chains in the garment and footwear sector and the UNECE initiative and toolbox “The Sustainability Pledge”, emphasizing that “traceability of products – from raw component to point of purchase – can be a key enabler for companies to identify, monitor and manage environmental and social risks along the supply chain, as well as to formulate sustainability claims properly”. It further highlighted the need for interoperability and standardization to avoid fragmentation of existing initiatives and standards among various industries. Building on this, UNECE plans to expand this initiative to other sectors, such as Agri-food, Extractives and Critical Raw Minerals.

UNECE also briefed the WTO TESSD on the recent high-level side event to the UNECE Steering Committee on Trade Capacity and Standards on “Accelerating the Circular Economy Transition: Policy Options for Harnessing the Power of Trade and Economic Cooperation”, which took place on 27 June 2022. The discussions among developed and transition economies, with contribution of international experts, elaborated on the circular economy and trade nexus, while sharing successful experiences and existing challenges for the circular economy shift. While highlighting the importance of the circular economy transition, several speakers stressed the critical need to ensure that these environmental measures do not turn into barriers to trade. This discussion was part of the UNECE Circular STEP initiative, initiated within the framework of the UNDA project “Accelerating the Transition towards a Circular Economy in the UNECE region”.

The WTO TESSD discussions stressed the impact of non-tariff measures on trade in environmental goods and called for greater regulatory cooperation and harmonization of standards. Similar concerns were voiced by UNECE member States during the recent meeting of the UNECE Steering Committee on Trade Capacity and Standards on 27-28 June, which called on UNECE to consider integrating environmental and circular economy considerations into the analysis under UNECE Studies on Regulatory and Procedural Barriers to Trade. In addition, many references have also been made to tools supporting circular economy such as public procurement, private-public partnerships and digitalization, which is especially relevant for the upcoming 70th session of the Commission in 2023.

The international trade community called for more action to transition to the circular economy at different levels, including through building related institutional infrastructure to drive national environmental policies, especially in transition economies. In this regard, the UNECE series of national dialogues in its transition economies, including the recent National Policy Dialogue on the Circular Economy in the Agri-Food Sector in Serbia, contribute to this effort.

The WTO TESSD brought together WTO Members and many of the key actors in trade and environment, including UNECE, the Forum on Trade, Environment & the SDGs (TESS), OECD and the World Bank Group.