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Insight

Climate change and trade remedies

13/10/2021
Climate change is firmly on the international trade agenda and could impact a decision on whether UK trade remedies measures are imposed. 

Businesses involved in trade remedies investigations, and climate interest groups, should be aware how these considerations may arise and plan accordingly.

Industry concerns collated in the World Economic Forum's white paper this month included the impact of tariff barriers on climate-friendly goods, and the need for greater alignment on carbon based trade policies. 

Exporters are particularly concerned about the negative impact that the increase in trade friction from the use of trade remedies and other unilateral trade actions is having on global supply chains. 

Analysis of 45 trade remedies cases involving clean air technologies – such as solar panels and wind turbines– by the International Centre of Trade and Sustainable Development found that the indiscriminate use of trade remedies can raise costs. 

Domestic producers on the other hand would benefit from the protection that trade remedy tariffs provide for environmental industries to grow, thereby diversifying the industry and reducing transport carbon emissions.

Unlike the WTO trade remedies framework, the new UK regime allows for climate considerations to be taken into account as part of the UK Trade Remedies Authority's (TRA) economic interest consideration, and/or by the Secretary of State for International Trade in the public interest assessment.

As explained in the article on the EIT, a unique feature of the new UK regime is that the TRA can only recommend a trade remedy measure when it is in the economic interest of the UK.

Under the legislation, the TRA will be required to take into consideration any climate related submissions that are framed as relevant to the economic interest of the UK, and anyone who has registered an interest in an investigation has the right to make such submissions.

Additionally, parties have the option of making environmental submissions to the Secretary of State for International Trade when she considers whether the measures recommended by the TRA are in the public interest. 

The Secretary of State is required to give due consideration to such submissions, particularly where they can be linked to the Government's commitments under the Paris Agreement, otherwise the Secretary of State may be subject to legal challenge.

Business on both sides of the divide, and other organisations and interest groups, should therefore be aware that climate related submissions may factor in the UK's trade remedy investigations, and be prepared to make the case in their favour. 
 

Fieldfisher's international trade team can help you to incorporate climate related issues arising in trade remedy cases and to effectively engage with the TRA on these matters during an investigation.
 

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