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TIPAT and RCEP: different approaches in environment and climate change

The Comprehensive and Progressive Trans-Pacific Partnership Treaty (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) have markedly different approaches to the environment and climate change, according to a UNCTAD report.

While the RCEP says almost nothing on both issues, the CPTPP contains some 137 environmental provisions.

So these two new trade agreements vary markedly in terms of their level of ambition, including in relation to the climate and the environment.

First of all, the CPTPP is a free trade agreement between Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which entered into force on December 30, 2018.

The CPTPP has been in force for six members since December 30, 2018 (Australia, Canada, Japan, Mexico, New Zealand and Singapore), while for Vietnam its validity began on January 14, 2019 and for Peru, the September 19, 2021. The remaining three members (Brunei, Chile and Malaysia) have not yet ratified the agreement.

Likewise, this treaty covers approximately 500 million people and 15% of world GDP and trade.

Moreover, on November 15, 2020, China signed the RCEP with 14 other Indo-Pacific countries. This free trade agreement is the most comprehensive agreement in history: it covers 30% of the global economy, trade and population.

Environment

The TIPAT contains provisions that require Parties to effectively enforce national environmental laws and prohibits the relaxation of environmental laws to encourage trade and investment.

It also, according to UNCTAD, contains non-binding commitments that lay the groundwork for the Parties to collectively address a series of environmental challenges related to trade, such as protecting the ozone layer and fighting illegal wildlife trade.

In addition, the CPTPP has a separate chapter on the environment.

In particular, the CPTPP is the first trade agreement to include binding commitments that prohibit the granting of certain types of fisheries subsidies that negatively affect overexploited stocks.

While there is no reference to the term climate or climate change in the TIPAT, energy efficiency, renewable energy, sustainable infrastructure development, and deforestation are listed as areas of interest for cooperation.

For example, some of the climate-related provisions of the CPTPP state that Parties:

  • Affirm their commitment to implement the multilateral environmental agreements to which they are party and maintain a dialogue on the negotiation and implementation of the relevant multilateral environmental agreements.
  • Agree to cooperate on actions to support the transition to a low emission economy and, as appropriate, engage in capacity building activities. Areas of cooperation may include: energy efficiency, development of profitable and low-emission technologies, and alternative, clean and renewable energy sources.
  • They will strive to address any potential obstacles to trade in environmental goods and services and may develop bilateral and plurilateral cooperation projects on environmental goods and services.

Dispute settlement

The environmental chapter of the CPTPP is subject to an enforcement mechanism that includes a three-step consultation process for Parties seeking to resolve any disputes that arise.

If the Parties are unable to resolve a dispute through consultations, they may use the procedures of the Dispute Resolution Chapter of the CPTPP.

While the CPTPP incorporates a significant number of provisions related to environment and climate, most of the clauses are based on cooperation, consultation and best effort and lack specificity.

 

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