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title: "GTN Newsletter #27 - Between a shock and a COP"
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| View in browser GTN Newsletter #27 You are reading the 27th edition of the Green Trade Network's newsletter, coordinated by IEEP; this bi-monthly digest acts as a nexus for information and key happenings within the world of Green Trade. If this is your first time receiving it, you can find out more here. Between a shock and a COP: a moment of clarity for Europe on trade and climate  The understanding reached with China on 9 October, under which Beijing is to moderate its exports of hybrid and plug-in hybrid cars, potentially halving projected volumes over four years, shows how large the problem has become for Europe. With a trade deficit of almost €360 billion in 2025, the magnitude of the second China shock leaves no room for half-measures. Nor does it leave room for blurring the line between protecting Europe's industrial base and pursuing sustainability. The deal opens a new phase in relations between the two blocs: an openly assumed protectionism that, in some respects, European industry needs to survive. The EU's credibility on climate and trade has suffered less from what it has implemented in practice than from the unclear, and sometimes inconsistent, policy objectives invoked. In the run-up to COP30 in Belém, the 27 struggled to agree on an ambitious 2040 target, eventually settling on a 90% net reduction, with up to 5% achievable through international carbon credits. In the run up to COP31 in Antalya, and as a lot of countries have perceived the Draghi Report and the Industrial Accelerator Act as signs of a shift away from climate ambition and leadership, the EU must say plainly what it is pursuing and show that these different policy objectives do not contradict each other. The EU CBAM – long at the centre of the dispute over “unilateral measures” - answers a legitimate concern: when one bloc raises its climate ambition faster than others, it risks losing firms, value and emissions along the way. Correcting the imbalance with China or with any other trading partners was never its role. As trilogues on its extension to downstream products get under way next week and until the end of November, CBAM should stay anchored in clear, non-discriminatory and non-arbitrary principles and avoid adopting a punitive approach to anti-circumvention measures. In this respect, the position adopted by the European Parliament is a source of concern. It provides for the ex-ante application of default values to certain regions of origin, thereby reversing the burden of proof for exporters from countries considered at risk of circumvention or resource shuffling. Another concern is the proposed use of CBAM revenues to finance the Temporary Decarbonisation Fund (TDF), which would benefit only European companies. These design aspects are no longer only a matter of diplomacy. On 25 September, the WTO Dispute Settlement Body established a panel at Russia's request to examine CBAM and the free allocation of allowances under the ETS, which Moscow describes as an export subsidy. Eighteen members, including China, India, the United States and Japan, reserved third-party rights.   For the first time, a border carbon measure will be tested in Geneva, and the issues on the table are the same ones partners raise every day. The EU's strongest defence is coherence. A mechanism that clearly tracks carbon costs and prevents leakage can be defended under WTO rules. One that looks like a tool to rebalance trade, or to shield EU producers by largely applying default values, would be much harder to defend. The Industrial Accelerator Act calls for the same clarity. Its "Made in Europe" and investment conditions give it a trade dimension that partners will have noticed. It is still unclear which countries will be treated as equivalent to EU origin, and a free trade agreement alone may not be enough. The Act needs a real external component. That means transparent criteria for trusted partners, a route to equivalence through reciprocal commitments, and openness to green intermediate inputs such as iron or ammonia produced in renewable-rich regions. Linked to Clean Trade and Investment Partnerships (CTIPs), it could help build low-carbon value chains with partners rather than against them. In the coming days, IEEP – in partnership with the Center on Global Energy Policy of the University of Columbia, will release a report on this question and on the mitigation and resilience potential of more project-based CTIPs.   In Bonn in June, the UNFCCC held its first dialogue on trade and climate change. The COP30 Global Mutirão decision mandated three such dialogues, at SB64 (2026), SB66 (2027) and SB68 (2028), with the International Trade Centre (ITC), UNCTAD and the WTO taking part, and a high-level event in 2028. The dialogue however, reached no formal conclusions. Governments broadly agreed that trade can support climate action, but disagreed sharply on what that means in practice. Meanwhile, the Integrated Forum on Climate Change and Trade, launched by Brazil with Australia, brought officials together for the first time. None of these forums, WTO included, will concretely harmonise international carbon footprint policy regimes. They can, however, ease tensions and help turn European principles on CBAM, as developed by the GTN, into global principles. Europe's task is to add carbon diplomacy to its climate diplomacy, and to back common rules with investment in its partners' decarbonisation. An EU “carbon diplomacy” could begin with Canada, which was recently anointed as the Union's first “associate member”. Such a partnership could open the way to mutual recognition of carbon pricing and product carbon footprint methodologies, and to interoperable carbon accounting and MRV (monitoring, reporting and verification) systems. This approach could then be extended through Clean Trade and Investment Partnerships (CTIPs) to a small number of countries where the EU has strong decarbonisation leverage, meaning those for which the EU absorbs a large share of their exports of carbon-intensive goods. The coming weeks and months promise much to discuss. As always, you can count on IEEP and the Green Trade Network for informed analysis and open debate as these developments unfold.   Wishing you a pleasant reading, Pierre Leturcq, Coordinator of the Green Trade Network Tracking the world’s hidden carbon: Launch of the #TradedEmissionsTracker In September, the European Climate Foundation (ECF) and the Institute for European Environmental Policy (IEEP) organised a launch event for the Traded Emissions Tracker, a new tool mapping the carbon footprint embedded in traded goods and highlighting the EU’s role in global supply chain emissions. The event brought together policymakers, researchers and civil society to discuss the insights revealed by the data and their implications for EU climate and trade policy. Watch the recording of the event here.   News from GTN Members IEEP \| Post-FTA briefing: EU-Indonesia Author: Eline Blot One year since negotiations on the EU-Indonesia CEPA concluded. It also examines the agreement’s climate and environmental commitments and what they could mean in practice for critical raw materials, palm oil and marine resources. Read more Veblen Institute \| The Role of French Investors in Investor-State Dispute Settlement (ISDS) (in French) Authors: Mathilde Dupré and Stéphanie Kpenou While recent attention has focused on ISDS claims brought against France, a recent report (FR) by the Veblen Institute examines the other side of the system: the little-known yet significant role of French companies in ISDS. The report provides an overview of French investors’ use of ISDS abroad, based on 75 known investor-State disputes involving French investors. Read more. IISD \| A Turning Point for Digital Trade Policy   Author: Rashmi Jose The e-commerce moratorium expired in March 2026 after WTO members were unable to reach consensus on a further extension at MC14. This report explores what its expiry means for developing economies, tracing the moratorium's history and unresolved scope questions, unpacking the core development concerns, and considering the potential shift toward fragmented plurilateral, regional, and bilateral commitments. Read more. Agora industry \| Greening free trade: how to coordinate cross-border industrial value chains  Author: Karina Marzano Franco  Free trade agreements can do more than reduce trade barriers: They can help building resilient, low-carbon industrial value chains. Agora Industry’s blog argues trade policy must go beyond traditional FTAs, highlighting how targeted cooperation, including the EU’s Clean Trade and Investment Partnerships (CTIPs), can advance net zero. Focusing on green iron, ammonia and methanol, it calls for investment, common standards and multistakeholder action to unlock mutual benefits. Read more. CIDSL \| Past event: The International Symposium on Human Rights, Sustainable Development and the Law The international symposium on Human Rights, Sustainable Development, and the Law was hosted online on July 10, 2026, by the CISDL, the McGill Centre for Human Rights and Legal Pluralism, and global partners. The full programme and more information can be accessed here    In a panel titled "Respecting Human Rights in Business, Trade & Investment for Sustainable Natural Resources Management", CISDL and several GTN colleagues were panellists and examined how international law, trade agreements, and investment frameworks must evolve from voluntary standards to mandatory obligations to protect human rights - instead of hindering their development - as well as advance sustainable natural resource management. You can find the panel recording here.  (Upcoming) IEEP – Center on Global Energy Policy (University of Columbia) \| Towards Resilience-focused Paris-aligned EU trade partnerships (October 2026)  Author: Pierre Leturcq How can the EU use its trade partnerships to accelerate industrial decarbonisation while strengthening the resilience of its supply chains? This report examines the limitations of existing free trade agreements and the potential of Clean Trade and Investment Partnerships (CTIPs) to translate climate commitments into concrete industrial investments. It proposes a framework based on “European decarbonisation leverage” to identify sectors where high embedded emissions, substantial mitigation opportunities and dependence on European demand give the EU greater scope to support cleaner production. Case studies on Moroccan phosphates, Egyptian ammonia, Indonesian nickel processing and South Korean steel illustrate how this approach could guide partnership priorities. The report argues that success will depend on moving beyond political declarations towards project-based cooperation, combining credible demand, targeted financing and regulatory coordination with meaningful benefits for partner countries and democratic scrutiny. The report will be published in October. About the Green Trade Network   The Green Trade Network (GTN) is a group of policy experts from 25 research organisations, ranging from think tanks to NGOs and academia, conducting evidence-based research and outreach activities on the trade and environment nexus. GTN member organisations are based in 9 EU Member States and the United States of America, the United Kingdom, and Switzerland. The GTN aims to collectively promote a European agenda for a better alignment of trade policies and trade-impacting measures with critical environmental and climate objectives. Follow GTN on LinkedIn Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or CINEA. Neither the European Union nor CINEA can be held responsible for them The Institute for European Environmental Policy (IEEP) is an independent sustainability think tank with offices in Brussels. As a not-for-profit organisation with over 40 years of experience, we are committed to advancing impact-driven sustainability policy across the EU and the world. Institute for European Environmental Policy - IEEP, Norrsken House Brussels, 72 Rue du Commerce, 1040, Brussels, Belgium, 022111097 Unsubscribe Manage preferences |
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