One of the most important challenges in 2016 will be developing mutually reinforcing international trade and climate policies, seeking synergies in the global market place for economic growth and environmental innovation. Yet difficulties remain. Nowhere is this more evident than in the controversy swirling around the Trans-Pacific Partnership, a free trade agreement between 12 Pacific-Rim countries representing 40 percent of global GDP, and the perception by some groups that TPP could impede climate action. USCIB champions free trade, investment and climate action, and supports TPP and other free trade agreements, along with the United Nations Paris Agreement, and is uniquely placed to advocate for the important links between them.
USCIB participated in a panel on January 19 organized by the Columbia Center on Sustainable Development (CCSI) about the effects of TPP on domestic and international climate change policy. While much of the discussion focused on TPP’s investment chapter, Norine Kennedy, USCIB’s vice president for strategic international engagement, energy and environment, urged panelists to consider TPP as a whole in economic and environmental terms, especially in the context of the recently concluded UN Paris Agreement, which will require substantial investment, finance and technology cooperation to meet ambitious objectives for greenhouse gas reduction.
Claire Reade (Arnold & Porter) argued TPP goes above and beyond the environmental protections found in previous trade agreements and would facilitate the transfer of clean technologies, Moreover, it will provide recourse for U.S. companies of all sectors, such as clean energy and green technology, in cases of discriminatory or unlawful treatment by host governments. However, Ben Beachy (Sierra Club) and Lise Johnson (CCSI) stated concerns that the agreement’s Investor-State Dispute (ISDS) mechanism would increase legal actions against governments and hinder environmental regulations among TPP parties.
Kennedy argued that investors require security and protection to make the investments needed to implement the Paris outcomes, and ISDS through TPP is an important part of that. “Both the UN Paris and TPP agreements are too important to fail,” Kennedy said, and reminded the group of President Obama’s final State of the Union Address highlighting the need for both rapid climate policy implementation and ratification of TPP.
The TPP agreement’s 30 chapters cover issues ranging from market access, to intellectual property rights, to labor standards. TPP offers opportunities to strengthen climate action via provisions on capacity building, regulatory coherence, anti corruption and rule of law.
“TPP is a must-have for climate action,” Kennedy concluded. “It’s part of the bigger picture of policy and market infrastructure for climate-friendly economic activity.”