- UK urged to play a vital role at the G7 to energise green
trade agenda
- Carbon leakage warning as UK revealed to have highest net
carbon imports per person in the G7
- UK can unlock trade deal with US by working with Biden on
climate action
- G7 and COP26 must be a ‘major turning point’ in global trade
diplomacy
Ahead of the G7 leaders’ summit in Cornwall, the IPPR think tank
is urging the UK to spearhead efforts to rewrite the rules of
global trade.
Beyond promoting equitable growth, this new trade agenda should
involve wider policy objectives on areas such as tackling the
climate and nature crises, strengthening employment standards and
promoting democracy and human rights.
In a new report analysing the state of international trade, the
think tank says that since the end of the Trump presidency, there
is now significant scope for improved global trade diplomacy and
an opportunity for the US and UK to work closely together.
IPPR argues that the UK would have a strong ally in forging this
new approach to trade in President Joe Biden. This agenda would
strengthen the ‘special relationship’ and boost the
chances of a new post-Brexit trade deal, according to
the report.
IPPR also warns that without building international agreement on
this new green trade agenda, there are risks of carbon leakage -
where energy-intensive industries in countries with stricter
climate policies decide to relocate to countries where rules are
looser.
New analysis reveals that the UK’s net
carbon dioxide imports are the highest in the G7 per
head at 2.4 tonnes per capita, making
this an issue the British government must urgently address. IPPR
says carbon imports must be part of countries’ net zero emissions
targets.
At the G7 and COP26 summits IPPR urges the UK and US to work
together to:
- Advocate for reform of the World Trade
Organisation (WTO) to support the green trade agenda.
This should include reducing barriers to trade in environmental
goods such as wind turbines and solar panels. The two countries
should also promote the idea of a ‘climate
waiver’ to allow countries more flexibility to take
climate action, such as subsidising green industries, without
incurring the risk of trade disputes and tariffs.
- Work with trade partners to develop joint principles
for ensuring that carbon leakage does not
undermine emissions reduction targets, including
considering the possibility of carbon border taxes.
- Forge a UK-US trade deal that sets a
new global standard for trade deals, with unprecedented
environmental, climate, and social ambitions. It should be the
‘greenest trade deal in history’, according to
the report. IPPR suggests such a deal could include robust
‘non-regression clauses’ to prevent either country backsliding on
high labour and environmental standards.
The report concludes that establishing this new positive model of
international trade is also vital for restoring trust and
addressing concerns that the existing model of global trade has
contributed to a series of social, economic, and environmental
harms. This year’s G7 and COP26 summits in the UK are critical
for resetting the global trade agenda.
Marley Morris, IPPR associate director, said:
“With a new administration in the US and the beginnings of an
independent trade policy in the UK, now is the time to revitalise
the ‘special relationship’ with a joint trade agenda to promote
climate action, tackle inequality, and safeguard human
rights.
“As the UK hosts the G7 and COP26 summits this year, there is
a window of opportunity for the government to take on a global
leadership role. The UK should make the most of this by working
with the US and other trade partners to spearhead efforts to
rewrite the rules of global trade. Taking this opportunity could
help liberalise trade in environmental goods, address the risks
of carbon leakage, and pave the way for an environmentally
ambitious trade deal with the US.”
ENDS
NOTES TO EDITORS
- The IPPR paper, Towards A Progressive US-UK Trade
Partnership by Marley Morris and Shreya Nanda, will be
published at 0001 on Wednesday 9 June. It will be available for
download at: http://www.ippr.org/research/publications/towards-a-progressive-us-uk-trade-partnershi
p!
- Fig 1: Net carbon dioxide emissions ‘imported’ per head, G7
countries (average of the years 2009-2018)
Source: IPPR analysis of Global Carbon Project (2020) and
World Bank (2019)
- This briefing is the first output of a 12-month IPPR project
on US-UK trade and sketches out a starting point for a US-UK
relationship which embeds shared climate, nature and social
ambitions. In the following stages of the project, we will focus
on developing our framework for a progressive US-UK trading
partnership in greater depth.
