Climate Change & Trade Policies

Page - June 4, 2012
We have a problem: our current trade rules are worsening climate chaos

Unfair trade deals like the World Trade Organization (WTO) are increasing unnecessary global trade flows through shipping and aviation that are escalating carbon emissions. 

The rules promote intensified high-carbon factory farming, destruction of natural resources, and more carbon-based energy exploitation. 

And, these agreements go much farther than just setting rules on actual trade in goods between countries. They set limits on how democratically elected governments can govern corporate polluters’ behavior (even within their own countries), and allow foreign governments and even corporations to demand compensation if these limits are not obeyed. 

Unlike the many international environmental treaties, these trade pact limits are strongly enforceable, and strongly enforced. The WTO has ruled against Clean Air Act automobile fuel efficiency standards, Endangered Species Act rules protecting turtles, and dolphin-safe tuna labeling. And those are only the U.S. casualties. New attacks have been launched using WTO and the North American Free Trade Agreement (NAFTA) against Canadian renewable energy and green jobs programs. These cases threaten to set a chilling precedent over other countries, states and localities’ efforts to counter the climate chaos threat. 


Effectively combating our planetary climate crisis will require changes to the underlying manufacturing, energy, farming – and trade – systems that are now fueling carbon emissions. 

We must stop passing more-of-the-same corporate trade deals that limit climate solutions.

We must change existing unfair trade pacts that lock in the carbon-intensive systems of the past.

We must stop our governments from launching trade attacks on other nations’ climate policies.


Educate your community about how unfair trade policy is fueling global warming. The special interests want us to be ignorant about how these deals are destroying our future. 

Tell President Obama: Either it’s Fair Trade or No Deal! • Tell Congress to reject unfair trade deals, for instance one now being cooked up with nine Asia-Pacific countries called the Trans-Pacific Partnership trade agreement.

“The world does not have the time to await judgments on disputes about the potential conflicts between trade and climate change on a case-by-case basis. Moreover, the political sensitivity about this issue in every part of the world is such that leaving WTO jurists to judge such disputes on a case-by-case basis may result in a perilous political overload of the WTO dispute settlement system. So I agree with those who have urged the Members of the WTO to address this issue through negotiation now, so that we can minimize the likelihood of politically controversial litigation later.” – James Bacchus, Former WTO Judge, Member of Congress and U.S. Trade Official, 2010 


The volume of global trade has more than doubled since the 1995 establishment of the World Trade Organization (WTO).  Simultaneously, global inequality has worsened, poverty in the poorest regions has increased, and progress on other human indicators such as education and hunger has stalled or declined.  The increase in trade volumes is no accident. Global shipping and trading firms had a big role in writing the WTO rules, implementing this model of corporate globalization and in pressuring legislatures globally to adopt it. Because corporations skim profit off the top of every shipment they manage, their bottom line is served by increased trade volumes, irrespective of the consequences to us or the environment.

The WTO rules pose serious constraints on how nations may respond to the threat of climate chaos. That’s even the view from some inside the WTO: Mitsuo Matsushita sat on the WTO tribunal that ruled against the U.S. Clean Air Act in 1996.  He notes that, by signing the WTO, governments have already empowered the WTO to “allow Member Nations to challenge almost any measure to reduce greenhouse gas emissions enacted by any other Member.”  Almost every policy that could combat climate chaos is implicated by these “trade” pact rules.

For instance, Wall Street wants to reap windfall profits from any climate solution. That’s why they’ve pushed for “market-based” solutions like cap-and-trade, where carbon emission certificates could be traded like any other financial derivative for their gain. This would only expand the casino economy and create a “green bubble,” like the stock and housing bubbles in the last few decades that cost millions of people their homes and retirements. Yet, under our current unfair trade agreements, emissions credits are considered “investments” or “services.” Any effort to eliminate the credits or impose new safeguards if the experiment goes wrong could be attacked as a violation of trade pact guarantees. This is far from a hypothetical problem. Under the WTO, countries can challenge each other’s domestic laws before international tribunals to force compliance with the global rules. When the agency rules against a nation’s law, the country must water down or eliminate the policy or risk permanent trade sanctions. Because the rules are so lopsided and the tribunals so undemocratic, the attacking country – often acting on behalf of a domestic business – wins 90 percent of the time. 

Now, the Obama administration is attacking Europe’s airline emissions policy in a court case  that could spill over to the WTO. Japan, the European Union and billionaire energy investor T. Boone Pickens have announced that they would challenge the Canadian province of Ontario’s renewable energy program under the rules of the WTO and North American Free Trade Agreement (NAFTA) rules.  The Ontario “feed-in tariff” program enables producers of wind and solar energy to sell that electricity into the Ontario grid at a rate up to six times higher than that paid for conventional energy. But producers must use at least 60 percent Ontario goods and services to qualify. One U.S. trade expert “acknowledged that U.S. state and local programs that provide a bonus for firms that source locally may also violate WTO rules…” 

We cannot survive in a world where renewable energy and Buy Local programs are subject to attack in foreign tribunals. But that is the world of the WTO. We must replace these rules (and the even more extreme deals like NAFTA) if our planet is to survive.