In its first section, this chapter examines the most-favored nation (MFN) principle’s intersection with climate-related trade measures, particularly border carbon adjustments (BCAs). BCAs, applied as carbon tariffs or emissions allowance requirements, potentially contravene the MFN principle by providing market advantages to climate club members over non-members. The evaluation centers on whether products with differing carbon intensities qualify as “like” under WTO rules. If determined to be like, BCAs based on club membership would violate the MFN principle by discriminating against imports based on origin rather than product characteristics. The second section explores the complexities of applying the national treatment principle to climate-related trade measures. Integrating environmental considerations, such as non-product-related processes and production methods (npr-PPMs) and carbon content, complicates the application of this principle. The analysis highlights the role of the likeness test for internal taxes and charges and the principle’s application to directly competitive or substitutable products under internal regulations. The third section examines the role of labels, standards, and certifications as technical regulations under the TBT Agreement and their compatibility with the principles of non-discrimination. They risk de facto discrimination when criteria are set primarily by member states, potentially favoring countries with greater financial and technological resources. The last section explores the intersection of climate-related trade measures and their legal justification under GATT 1994 Article XX, particularly subsections (b) and (g), and the Chapeau. The discussion in this chapter reveals the challenges of aligning international trade policies with climate goals in a legally sound and sustainable manner. It stresses the necessity for coherence between trade obligations and climate commitments, particularly in the context of the WTO Agreements.

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Navigating Non-discrimination in Climate Club Policies

  • Türkan Gülce Budak

摘要

In its first section, this chapter examines the most-favored nation (MFN) principle’s intersection with climate-related trade measures, particularly border carbon adjustments (BCAs). BCAs, applied as carbon tariffs or emissions allowance requirements, potentially contravene the MFN principle by providing market advantages to climate club members over non-members. The evaluation centers on whether products with differing carbon intensities qualify as “like” under WTO rules. If determined to be like, BCAs based on club membership would violate the MFN principle by discriminating against imports based on origin rather than product characteristics. The second section explores the complexities of applying the national treatment principle to climate-related trade measures. Integrating environmental considerations, such as non-product-related processes and production methods (npr-PPMs) and carbon content, complicates the application of this principle. The analysis highlights the role of the likeness test for internal taxes and charges and the principle’s application to directly competitive or substitutable products under internal regulations. The third section examines the role of labels, standards, and certifications as technical regulations under the TBT Agreement and their compatibility with the principles of non-discrimination. They risk de facto discrimination when criteria are set primarily by member states, potentially favoring countries with greater financial and technological resources. The last section explores the intersection of climate-related trade measures and their legal justification under GATT 1994 Article XX, particularly subsections (b) and (g), and the Chapeau. The discussion in this chapter reveals the challenges of aligning international trade policies with climate goals in a legally sound and sustainable manner. It stresses the necessity for coherence between trade obligations and climate commitments, particularly in the context of the WTO Agreements.