Sustainability Trends, the Significance of Trade, and the Potential Role of RTAs

Magnus BengtssonPrincipal Researcher

Institute for Global Environmental Strategies

OECD and Government of Viet Nam Regional Workshop on Regional Trade Agreements (RTAs) and the Environment, 17-18 September 2014, Ha Noi, Viet Nam

Economic Growth in Developing Asia

High and stable growth

Trade is playing an increasingly important role in Asian economies

West & Schandl 2012

- Very rapid increase in material consumption

- Asia-Pac is now consuming more materials than the rest of the world combined

Consumption of Materials is Soaring: Asia is Leading the Trend

West & Schandl 2012

Each dollar of GDP requires increasing amounts of natural resources.

Asia-Pacific is Becoming LESS Resource Efficient

High Youth Unemployment

Pressure on Governments to Create Jobs Temptation to promote growth and FDI also at the expense of

environmental impacts and human rights violations, such as land grabs

Minimum Wages not Keeping up with Growth

Minimum wage growth and per capita GDP growthin developing Asia-Pacific, 2002-2011

Increasing Inequality in Many Countries

Annual growth rates of income share held by lowest 20% and highest 20% during 1990s and 2000s

Governance Remains a Real Challenge

Asia 7: PRC, India, Indonesia, Japan, Republic of Korea, Malaysia, and Thailand.

Emerging Trend: South-South Trade

• South-south trade is on the increase – raises both opportunities and challenges– China the world’s largest buyer of soy– India buying 20% of traded palm oil, China 16%

• Is there awareness, willingness and capacity in these countries to push for greening of supply chains?

• What role for RTAs?

Questions for Reflection/Discussion

• How are these environmental and social trends related with trade?

• To what extent can RTAs influence these trends? – Risks and opportunities?

• How could well-crafted RTAs help addressing these trends?– Where do you see the greatest opportunities and the

most feasible entry points?– What opportunities exist in the existing integration

processes: TPP, ASEAN Community, and RCEP

Greening Integration in AsiaHow Regional Integration Can Benefit People and the Environment

• Forthcoming report from IGES, Release planned for December

• Reviews how existing integration and cooperation initiatives in Asia contribute to sustainable development

• Makes recommendations for improvementPlease feel free to contact me to receive a copy:

bengtsson@iges.or.jp

Some Tentative Recommendations Related with RTAs

• Sustainability Impact Assessments of new or revised trade and investment agreements. Pooling capacity and expertise regionally could prove beneficial.

• Preferential tariffs for environmental goods and services

• Regional information tools, such as labelling schemes for more sustainable materials and goods

• Ensure that trade agreements allow for, or even encourage, sustainable public purchasing