Climate Change and Trade in the Pacific Island Countries: The PACER Plus Agreement

By Elizabeth Annis*

            The Pacific Islands are engulfed in an existential crisis. Rising sea levels and other climate change effects threaten their very existence. Perhaps of more immediate concern, these islands have small, vulnerable economies, which place many residents in a tenuous position as they work to achieve a comfortable standard of living for themselves and their families. Against this backdrop of climate and economic challenges, fourteen Pacific Island countries are negotiating a free trade agreement with Australia and New Zealand known as the Pacific Agreement on Closer Economic Relations, or PACER Plus. Climate change and international trade law regimes are intrinsically linked, and at times their objectives conflict. Nevertheless, climate-friendly trade agreements are proliferating. Such agreements provide a useful template for PACER Plus negotiators to ensure the agreement is well-positioned to promote economic development in the PICs without exacerbating climate change threats.

        A. The Impact of Climate Change on the PICs
        B. PIC Leaders Call Upon the International Community to Act
        A. Negotiations and the Draft Text
        B. Critics Argue PACER Plus is Not Climate-Friendly
        A. Establish Separate Chapter or Side Agreement Devoted to Environment
        B. Include Explicit Language in the Agreement to Support Climate Change Response Efforts
        C. Establish Review Process that Proceeds Treaty Adoption
        D. Establish Mechanism to Monitor Agreement’s Implementation
        A. Create Inclusive Negotiating Process
        B. Include a Climate Change Side Agreement
        C. Adjust Existing Treaty Language to Ensure Inclusion of Climate-Friendly Language
        D. Establish a Climate Change Review Body


Small island developing states in the Pacific are entering a state of panic. These Pacific Island Countries (PICs) are struggling to achieve a comfortable standard of living through economic growth. At the same time, these islands are experiencing some of the worst impacts of climate change as rising sea levels threaten their very existence. Amidst these challenges, Australia, one of the world’s largest emitters of carbon dioxide per capita, and New Zealand joined with fourteen PICs to launch negotiations for the revised version of the Pacific Agreement on Closer Economic Relations, PACER Plus. As with other multilateral trade agreements intent on promoting economic development, critics question whether this agreement will only exacerbate climate change threats in the PICs. The United Nations Environment Program (UNEP) explains the rationale supporting this critique by saying, “very familiar are the ways that economic activity—industry, food production, transport—and social developments—population growth, increased urbanization and rising standards of living—contribute to climate change.”[1] Nevertheless, numerous international trade agreements recognize the tension between promoting trade and sustaining the environment by offering solutions to ensure the agreement does not hinder climate change mitigation and adaptation efforts. Beyond ensuring the agreement does no harm, some trade arrangements go one step further and are enlisted as a tool to proactively address climate change. This Note asks if PACER Plus can be employed to combat climate change in the PICs. I argue that, while trade and climate change objectives may at times conflict, PACER Plus is uniquely positioned as an economic development tool that can not only avoid exacerbating climate change but can also mitigate its effects.
In Part II, I provide background on the PICs’ experience with climate change. In Part III, I explore the relationship between trade and climate change and question whether the two must inherently conflict. In Part IV, I review the draft PACER Plus Agreement and the extent to which seems to reinforce or conflict with the climate agenda. In Part V, I review recently concluded regional trade agreements to consider the climate-friendly possibilities for PACER Plus. Finally, in Part VI, I suggest a path forward for PACER Plus as the agreement enters the final stages of negotiations.

I.      Climate Change and the Pacific Island Countries

Climate change has wreaked havoc on PICs. UNEP named climate change and rising sea levels as “undoubtedly the most pressing threat to the environment and sustainable development of SIDs [small island developing states].”[2] Small island developing states emit less than one percent of all global greenhouse gas emissions but are disproportionately impacted by climate change’s effects.[3] Among the SIDs, PICs are especially vulnerable due to their small size, population density, weak infrastructures, and the concentration of economic activities in coastal areas.[4] Some impact is already apparent and theses effects will likely get worse as greenhouse gas emissions will inevitably continue into the foreseeable future. UNEP warns comprehensive climate change mitigation and adaptation strategies are “urgently needed” to support all SIDs.[5]

A.   The Impact of Climate Change on the PICs

Climate change’s effects on the PICs are numerous and varied. Kumi Naidoo, Executive Director of Greenpeace International, expressed alarm “We’re already seeing Pacific communities lose their land and their homes resulting from extreme weather events and the impacts of climate change. This is a growing humanitarian crisis that will only undermine regional stability and security if it is not adequately dealt with.”[6] In particular, some of the risks include rising sea levels, the intensification of extreme, unpredictable weather events, and population displacement.[7]
Rising sea levels are a “major existential challenge”[8] for the PICs. In some areas of the Pacific, sea levels are rising by 1.2 cm per year.[9] This rate is four times faster than the global average.[10] A projection for Kiribati, one of the PICs, estimates that by 2030, sea levels could rise between five and fourteen centimeters.[11] The Marshall Islands, at just six feet above sea level,[12] and Tuvalu, at fifteen feet above, are especially threatened.[13] Former Prime Minister of Tuvalu, Saufatu Sapo’aga, told the United Nations that climate change is equivalent to “a slow and insidious form of terrorism against us.”[14]
In addition to rising sea levels, extreme, unpredictable weather events are frequent and intensifying. The U.N. Office for Disaster Risk Reduction reported in 2013 that more than 110 disasters affected the Pacific region between 2000 and 2011.[15] More recently, Cyclone Pam ravaged the South Pacific on March 13, 2015, and was called “one of the most powerful [cyclones] ever recorded in the south Pacific.”[16] The storm, at its peak, recorded winds up to 165 mph, and reached Port Vila, Vanuatu’s capital.[17] The Australian Red Cross reported that in Port Vila, “humanitarian needs will be enormous. Many people have lost their homes. Shelter, food and water [are] urgent priorities.”[18] Cyclone Pam left twenty-four fatalities in its wake,[19] resulting in heavy flooding in Tuvalu, Kiribati, and the Marshall Islands.[20] In a press briefing at the 21st Conference of the Parties to the U.N. Framework Convention on Climate Change (COP 21), The Tuvaluan Prime Minister, Enele Sopoaga, captured the urgency of the moment for PICs, saying, “Cyclone Pam . . . [was] a timely warning that we need to do something. Here in Paris, we cannot lose this opportunity.”[21] These disasters are likely to continue. The U.N.’s World Risk Index named Vanuatu and Tonga as “global disaster risk hotspots where high exposure to natural hazards and climate change coincides.”[22] Christopher Bartlett, head of the Vanuatu Food Security and Agriculture Cluster, explained the far-reaching impact of frequent natural disasters saying, “The accumulation of natural hazards, wholly inconsistent with normal climate patterns, is beginning to seriously jeopardise food security.”[23]
Partly because of rising sea levels and intensifying weather events, some PIC residents have already migrated, and many more may need to migrate in the near future. Worldwide, by 2050, climate change may displace as many as 250 million people.[24] Indeed, UNEP named the world’s first climate refugees as those 2,600 people relocated from low-lying areas in Papua New Guinea.[25] Because of climate change’s acute affect on the PICs, the likely result is significant population displacement and the need to devote resources and develop coordinated strategies to respond to the existential threats posed.
The PICs’ unique wealth of indigenous and local knowledge can allow them to develop sustainable solutions to mitigate climate change’s effects that also resonate well with local cultures.[26] However, notwithstanding this knowledge, as developing countries, PICs have limited financial and technical resources. As UNEP reports, “The challenges related to extreme events are exacerbated by the lack of capacity and limited financing to effectively implement management strategies”[27] and “[the] lack of skills could severely hamper the ability of SIDS to manage climate change impacts.”[28] Therefore, resource-constrained PICs must rely on outside support to effectively confront climate change threats. However, outside support has proven insufficient.

B.    PIC Leaders Call Upon the International Community to Act

PIC leaders are not satisfied with current international efforts to address climate change. The Federated States of Micronesia’s President, Peter Christian, told the U.N. in 2015, “We must become more cohesive in our actions to bring a useful conclusion to help mitigate the threat of sinking islands and prevent the potential genocide of Oceanic peoples and cultures.”[29] Prime Minister Sopoaga, stated, “We’re simply seeking for the rights of small island states to survive. We feel our security is compromised; survival of the people of the Pacific is compromised.”[30] President Anote Tong of Kiribati added, “What we are talking about is survival, it’s not about economic development…it’s not politics, it’s survival.”[31] At COP21, three PIC leaders held a press conference entitled “COP21: Fate of the Pacific Islands.” The briefing included statements from Tuvalu’s Prime Minister Enele Sopoaga, Palau’s Prime Minister H.E. Tommy Remengesau, Jr., and the Cook Islands’ Prime Minister, Henry Puna. All expressed concern with the negotiations. Prime Minister Sopoaga stated, “We need to do our task as leaders. We cannot shy away and be intimidated.”[32] Prime Minister Remengesau added, “Because we are going to fall short on what needs to be done, it is incumbent upon us to do whatever we can on our own.”[33]
PIC frustrations are particularly high with Australia, a fellow PACER Plus negotiating party. Australia, a signatory to the Paris Agreement,[34] ranks as one of the world’s highest carbon dioxide emitters per capita.[35] Former Australian Prime Minister Tony Abbott pledged to reduce carbon emissions measured in 2005 by twenty-six to twenty-eight percent by 2030, a commitment many environmental groups deem “pathetically inadequate.”[36] Mr. Abbott defended his government’s position by saying, “We can be constructive global citizens when it comes to climate change without clobbering our economy.”[37] Anote Tong, President of Kiribati, called Australia “very selfish” for maintaining its current coal mining practices.[38] President Tong is not alone amongst PIC leaders in his disappointment. The Chief Executive of Greenpeace Australia, David Ritter, explained, “People in the Pacific are very polite but privately the view of Australia is very clear: this is a country not doing enough. There’s a view that Australia is putting coal ahead of people.”[39]

II.    The Relationship Between Climate Change and Trade: Must the Two Conflict?

Against the backdrop of severe climate change threats, the PICs are negotiating PACER Plus, a regional trade agreement. The relationship between climate change and international trade is complex. The notion that international trade will exacerbate climate change is a commonly held belief.[40] For example, if economic development through liberalized trade is pursued at all costs, the resulting increased production and transport of goods by trucks, rail, and sea will raise carbon emissions, thus potentially conflicting with climate change objectives.[41] At any rate, as Henry Derwent, Senior Advisor for Climate Strategies for the E15 Initiative notes, “GHG-heavy fossil fuel-based energy and goods production is, and will for some time continue to be, the most economic choice.”[42] Further, a trade agreement could constrain a government’s ability to enact climate change legislation.[43] If the enacted legislation—for example, subsidies on low-carbon technology—is viewed as unnecessarily trade restrictive, the policy may face legal challenges either at the WTO or within the framework of a regional trade agreement.[44] Thus, there are many ways in which pursuing economic development through liberalized trade can hinder climate change response efforts.
Conversely, climate change strategies can hinder a developing country’s participation in international trade, and consequently, its economic development. Well-intentioned climate change policies, and those that only serve as a disguised restriction on international trade, can disproportionately burden developing countries. Robert Read, Senior Lecturer in International Business at Lancaster University, contends, “Complying with minimum national or international environmental standards is increasingly important for developing countries in order to secure market access for their exports . . . [C]ompliance by SILDEs [small island and littoral developing economies] may require costly modifications to domestic process and production methods (PPMs) or technological upgrading.[45]  For example, climate regulation in country A may involve a certain labeling scheme for all products X to enable consumers to choose based on the products’ carbon footprint.[46] If country B hopes to export product X, it will have to adhere to the technical regulation. Implementing such a labeling requirement necessitates an infrastructure and resources to ensure compliance, which may not be technically or financially feasible for an emerging company in a developing country. If environmental regulations are unnecessarily onerous, developing countries that lack the capacity to comply will face continued exclusion from international markets. This exclusion represents a lost opportunity for countries like the PICs to raise their standard of living.
Despite these many potential conflicts, PACER Plus will not inevitably hinder climate change response efforts simply because it is a trade agreement. The relationship between trade and climate change can be symbiotic, as both share the same objective: sustainable development. Dr. Rafael Leal-Arcas, Trade and Climate Change Expert for the E15 Initiative, explains, “Both trade and climate have irrefutable links to sustainable development, making it a logical step to explore the potential for mutual cooperation and factor this into response measures.”[47] As shown, if the PICs exclusively pursue economic or climate considerations, negative consequences will likely result. Therefore, to ensure the shared sustainable development objective is realized, policymakers must pay sufficient attention to potential conflict areas. This surely requires balancing and prioritizing policy goals. PACER Plus, which is touted as a “development-friendly” agreement, provides a unique opportunity for PIC leaders to discover the appropriate balance between climate change and economic development.[48]

III.  The PACER Plus Agreement: Climate-Friendly?

The PACER Plus Agreement has not yet concluded at the time of this writing.[49] Therefore, it is unclear whether the agreement is climate-friendly because the text is neither final nor public. Even so, available public statements and defined negotiation issues suggest climate change is not a major focus of the agreement.

A.   Negotiations Lack Focus on the Importance of Climate-Friendly Language

As negotiations currently stand, PACER Plus will not explicitly address climate change, rather it will consider it only indirectly. Dr. Edwini Kessie, head negotiator for the PICs, elaborated, “We have not focused exclusively on climate change in the negotiations. However, there is a view that through the opportunities that would be provided by PACER Plus, countries will be in a position to adequately respond to the challenges posed by climate change.”[50] If PIC economies grow as a result of PACER Plus, presumably PIC governments will consequently have more financial resources available to adequately respond to climate change effects.
Despite climate change’s status as “the most pressing threat” to PICs, [51] of the nine negotiating issues identified, only “development assistance” has a direct relation to climate change. Therefore, one might expect climate change assistance to be central in any discussion of development in the PICs. Nevertheless, the description from the Office of the Chief Trade Adviser (OCTA) for the PICs suggests, in the context of PACER Plus, development assistance refers only to the provision of resources to help the PICs fully implement their obligations under PACER Plus, and realize the economic benefits of the agreement.[52] It is not intended to commit Australia and New Zealand to providing financial assistance for climate change response efforts.[53]

B.    Critics Argue PACER Plus is Not Climate-Friendly

While PACER Plus proponents contend the economic gains from the agreement will place the PICs in a better position to address climate change threats, critics are dubious. Considering trade agreements operate to lower import tariffs, the net effect may conceivably reduce government revenue. In this case, PACER Plus governments would have less money available to spend on adequate climate change mitigation and adaptation strategies. Geoffrey J. Bannister and Kamau Thugge, senior economists at the International Monetary Fund, explain, “There is a general concern trade reform may lead to lower government revenues as trade taxes are reduced and that, in an effort to maintain macroeconomic stability, governments may cut social expenditures . . . .”[54] PACER Plus will undoubtedly lower import tariffs PICs collect on goods from Australia and New Zealand. While data for most PICs is unavailable, the World Bank estimates that from 2001-2005, customs and other import duties accounted for 9.7% of Samoa’s tax revenue. Presumably, other PICs are similarly situated, suggesting a high reliance on import tariffs for government revenue.[55] If the revenue lost from import tariffs foregone is not replaced from other sources, perhaps these critics are correct.
Second, critics argue the agreement will constrain the PICs’ ability to regulate environmental policy. Trade agreements generally forbid governments from enacting policies, including environmental policies, that unnecessarily restrict trade. Maureen Penjeuli from the Pacific Network on Globalisation (PANG), a Pacific regional network concerned with promoting economic justice in globalization, argues, “From what we can see from the legal texts, most of the benefits will accrue to Australia and New Zealand and in fact we will tie up most [PICs] government’s ability to regulate, or to regulate in the interests of environment, culture, but also economics.”[56]
            Additionally, critics reference civil society groups’ exclusion from negotiations to suggest PACER Plus is not environmentally friendly. In May of 2015, about forty civil society organizations, including environmental groups, wrote letters to express concerns over the PACER Plus agreement.[57] Noelene Nabulivou, political advisor from Diverse Voices and Action for Equality, argued, “[I]f there really was nothing for us to worry about, then we would be in the consulting room, we would be [] working through the negotiating text.”[58]
OCTA addresses many of these concerns on its website, calling them “myths.”[59] For example, OCTA argues PIC governments will not lose their ability to regulate, saying, “Trade agreements do not compel countries to give up their regulatory powers. Parties are able to amend existing regulations or introduce new regulations.”[60] Further, civil society groups are not entirely excluded from dialogues regarding PACER Plus. These groups are encouraged to attend the “Non-State Actors Workshop on the PACER Plus Negotiations” hosted by OCTA. The workshops provide an overview of the main negotiating issues, the potential costs and benefits of PACER Plus, and an opportunity for these actors to influence the PICs’ chief negotiators.[61]  OCTA contends:
Progress is being made in the PACER Plus negotiations and it is vitally important for the Pacific Island Countries to maintain dialogue with all Non-State Actors to keep them abreast of developments in the negotiations and get their inputs in order to come up with an agreement that will be meaningful and provide the private sector with opportunities to invest and engage in cross-border trade effortlessly.”[62]

These non-state actor workshops demonstrate that, through OCTA, civil society groups do appear to have at least some voice in the PACER Plus negotiations.
            In sum, it is unclear today whether PACER Plus will exacerbate or enhance the PICs’ ability to effectively respond to climate change impacts. Convincing arguments exist on both sides of the debate. Nevertheless, given the severity of the climate change threats facing the PICs and the potential for conflict between trade and climate change, negotiators must make climate change a central concern in negotiations to ensure the final PACER Plus text is not a stumbling block for response efforts. If framed correctly, the PACER Plus agreement will not hinder the climate change response and may even serve as a tool to proactively address the issue. Negotiators must ensure the PACER Plus agreement is truly “climate-friendly.”

IV.  Climate-Friendly Trade Agreements: The Possibilities

Many existing regional trade agreements (RTAs) include innovative climate-friendly provisions, which could serve as useful guidance for PACER Plus negotiators. Dr. Leal-Arcas explains the potential to use RTAs to encourage cooperation on climate change and trade, saying:
Involving major GHG [greenhouse gas] emitters through RTAs and economic partnership agreements that include contingent climate mitigation efforts can be an effective avenue toward reducing GHG emissions and could therefore move both the trade and climate agendas forward harmoniously . . . Regional trade agreements, with their rapid proliferation across the globe, present a logical forum for incorporating climate mitigation provisions.”[63]

He adds, RTAs promoting climate mitigation goals can have strong benefits for economic growth in developing countries, delivering both environmental and trade wins.”[64] Climate-friendly RTAs take many forms, including establishing a complementary side agreement devoted to environmental protection, including explicit climate-friendly language in the trade agreement itself, establishing an environmental impact review process prior to treaty adoption, or even establishing a mechanism to monitor the agreement’s climate change impact throughout implementation. Each of these concepts was explored in-depth by a group of scholars for the International Centre for Trade and Sustainable Development (ICTSD scholars) in a comprehensive report entitled, “Climate Change and Sustainable Energy Measures in Regional Trade Agreements (RTAs).”[65]

A.   Establish Separate Side Agreement Devoted to Environment

Some climate-friendly RTAs include a separate side agreement, negotiated in the same time frame as the trade agreement, specifically dedicated to addressing environmental concerns and promoting cooperation. For example, the Canada-Peru Free Trade Agreement, signed in 2008,[66] is complemented by a separate side agreement signed that same year, and devoted entirely to promoting cooperation on environment issues. This side agreement, entitled the “Canada-Peru Agreement on Environment Cooperation,” includes a provision that explicitly encourages trade and investment in environmental goods and services.[67] Eliminating tariff and non-tariff trade barriers on climate-friendly goods could start a virtuous cycle: as the barriers fall, prices will decrease, thus causing demand to rise, which will in turn spur greater production and even lower prices.[68] A provision in Article 2 states,
“Neither party shall encourage trade or investment by weakening or reducing the levels of protection afforded in its environmental laws. Accordingly, neither Party shall waive or otherwise derogate from environmental laws in a manner that weakens or reduces the protections afforded in those laws in order to encourage trade or investment.”[69]  

Thus, the side agreement pre-emptively acknowledges the potential conflict between trade and the environment, affirming both parties’ desire to maintain regulatory freedom to protect the environment and respect one another’s efforts.
Additionally, the North American Free Trade Agreement (NAFTA) provides another useful example. NAFTA established an environmental side agreement called the North American Agreement on Environmental Cooperation (NAAEC), with a stated objective of promoting sustainable development “based on cooperation and mutually supportive environmental and economic policies.”[70] This provision clearly acknowledges the need to design symbiotic trade and environmental policies where possible. The NAAEC was recently used as a model for an agreement between Australia and Japan.[71]  By negotiating a separate side agreement devoted to the environment, the parties to a trade agreement clearly signify a shared desire to interpret the trade provisions in a manner that is cognizant of other important societal concerns, like climate change; neither environment nor trade objectives are meant to supplant the other.
An environmental side agreement is also worth considering because it can house important capacity-building provisions. ICTSD scholars claim these provisions are useful for establish[ing] institutional arrangements to train officials, advise on policy reform, assist in monitoring and enforcement of environmental provisions and usually include a funding mechanism to ensure financial support for such initiatives.”[72] These provisions can ensure parties to an agreement have the technical and financial capacity required to ensure the environmental protections envisioned by the side agreement are realized. The utility of climate-friendly provisions is diminished if the relevant agencies are not adequately trained to implement the provisions as intended.

B.    Include Explicit Climate-Friendly Language in the Agreement’s Text

Aside from simultaneously negotiating a side agreement focused on the environment, or specifically on climate change, PACER Plus may promote the climate change agenda by including explicit, climate-friendly language in the text of the trade agreement itself. The language may appear in the agreement’s preamble, embedded in the trade and investment chapters as exceptions to certain obligations, or in an entirely separate chapter.
The preambles in many RTAs now include a reference to environment preservation, sustainable development, or even climate change. This serves as a “general statement[] of intent,” ensuring all parties are aware the agreement is not intended to contravene these other values.[73] In U.S.-Australia Free Trade Agreement, the preamble states the parties agree to act, “in a manner consistent with their commitment to high labour standards, sustainable development, and environmental protection.”[74] The U.S.-Singapore Free Trade Agreement also uses the preamble to acknowledge the need to balance economic and environmental objectives to achieve sustainable development noting, “economic development, social development, and environmental protection are interdependent and mutually reinforcing components of sustainable development, and that an open and non-discriminatory multilateral trading system can play a major role in achieving sustainable development.”[75] The Treaty of Asunción, which established a common market between Argentina, Brazil, Paraguay, and Uruguay known as the South-American Comm Market (MERCOSUR), recognizes in its preamble that the economic objectives of the agreement “must be achieved through more effective use of available resources, preserving the environment . . . .”[76] Finally, the preamble to the Canada-Peru Free Trade Agreement also acknowledges the need to balance trade and environment concerns saying, “[we] recognize the mutual supportiveness between trade and environment policies and the need to implement [the] Agreement in a manner consistent with environmental protection and conservation and the sustainable use of their resources.”[77] These non-exhaustive examples demonstrate a popular desire to use the preamble of trade agreements to ensure all parties acknowledge the text is not intended to preempt environmental considerations.
Climate-friendly RTAs also ensure various trade and investment provisions do not supersede environmental concerns by establishing explicit exceptions that permit a country to forgo certain trade and investment commitments when maintaining them contravenes environmental regulations. Exceptions help ensure trade agreements do not require countries to forfeit their ability to regulate to benefit the environment, a concern voiced by some critics of PACER Plus.[78] They give countries the flexibility to address challenges like climate change.
These exceptions are present in many RTAs. For example, the trade agreement between the EU and South Korea explicitly states that any measures taken to facilitate trade “shall not prejudice the fulfillment of legitimate policy objectives, such as the protection of national security, health and the environment.”[79] The EU-CARIFORUM (The Caribbean Forum) Economic Partnership Agreement includes an exception intended to preserve local and indigenous knowledge, which is likely useful for climate change adaptation strategies in the PICs.[80] The exception states the parties must, “respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity.”[81] These agreements show a variety of ways RTAs can ensure potential conflicts between climate and economic objectives do not necessarily result in hindering climate change mitigation and adaptation efforts.
Climate-friendly RTAs also may include a separate chapter devoted to the environment or, specifically, to climate change. Many recent trade agreements follow this trend. For example, the Canada-Peru Free Trade Agreement’s Chapter 17, entitled “Environment,” signaling a commitment to account for environmental concerns to implement [the] Agreement in a manner consistent with environmental protection and conservation and the sustainable use of their resources.”[82] Additionally, the EU-Colombia-Peru trade agreement has a separate chapter devoted to “Trade and Sustainable Development,” which includes Article 275 on climate change. This article reads, in part:
“The Parties agree to consider actions to contribute to achieving climate change mitigation and adaptation objectives through their trade and investment policies, inter alia by:
(a)            facilitating the removal of trade and investment barriers to access to, innovation, development, and deployment of goods, services and technologies that can contribute to mitigation or adaptation, taking into account the circumstances of developing countries;
(b)           promoting measures for energy efficiency and renewable energy that respond to environmental and economic needs and minimise technical obstacles to trade.”[83]

This chapter also houses a provision that reaffirms the parties’ commitment to upholding the standards agreed upon in major international environmental treaties. Article 270 states:
The Parties recognise the value of international environmental governance and agreements as a response of the international community to global or regional environmental problems and stress the need to enhance the mutual supportiveness between trade and environment. In this context, the Parties shall dialogue and cooperate as appropriate with respect to trade-related environmental issues of mutual interest.”[84]

Article 275 specifically acknowledges the importance of existing commitments under the United Nations Framework Convention on Climate Change and the Kyoto Protocol.[85] The inclusion of explicit language affirming the signatories’ commitment to international environmental treaties, helps ensure the trade provisions are interpreted to require some level of balancing between trade and climate concerns in the event the two conflict.

C.    Establish Review Process That Precedes Treaty Adoption

Prior to the treaty’s adoption, establishing a body charged with reviewing the treaty’s possible environmental impacts can also help ensure a final agreement is sufficiently climate-friendly. New Zealand, one major PACER Plus party, already has such a review mechanism in place. Before New Zealand is permitted to become a party to any treaty, a body must perform a “National Interest Assessment” that considers many factors, including potential environmental impact.[86] In addition to New Zealand, the United States, by Executive Order 13141 and its statutory sibling the Trade Act of 2002, established a review process to evaluate environmental factors in the development of all trade agreements.[87] ICTSD scholars explain these assessments are valuable because the results “may assist negotiators to identify the areas where preventive, cooperative or enhancement initiatives could be useful to promote climate-change objectives in a trade or investment treaty.”[88] An effective review process may therefore prevent the adoption of a treaty that does not adequately protect the PICs’ interest in combatting climate change.

D.   Establish Mechanism to Monitor Agreement’s Implementation

A climate-friendly RTA should be subject to regular environmental impact assessments throughout the agreement’s implementation. ICTSD scholars note the popularity of this approach saying, “many developed and developing countries now undertake ex-ante or ongoing environmental, developmental, human rights or sustainability impact assessments and reviews of trade liberalisation policies and draft treaties.”[89] These periodic assessments ensure an agreement remains climate-friendly by providing an avenue through which the balance between climate and economic objectives is continually evaluated and, if necessary, corrected. A side agreement of a particular trade agreement may develop such a mechanism. For example, NAFTA’s environmental side agreement created the Commission for Environmental Cooperation (CEC). The CEC aims to “[promote] information exchange on environmental issues, assess[] environmental impacts of proposed projects and deal[] with complaints from private individuals concerning non-implementation of environmental laws by NAFTA parties.”[90]

V.    PACER Plus: The Path Forward

At the outset of PACER Plus negotiations, Sergio Marchi, Ambassador and Senior Fellow at the International Centre for Trade and Sustainable Development, stressed the importance of negotiators consciously developing a “positive environmental agenda.”[91] Ambassador Marchi’s vision is certainly possible. The diverse strategies in RTAs that ensure the desired economic development through enhanced trade does not weaken a state’s ability to confront climate change threats are a template PACER Plus negotiators can follow as they craft a final agreement. To safeguard a climate-friendly outcome and enhance regional cooperation, PACER Plus negotiators should review these and other existing climate-friendly RTAs and use the strategies employed as guidance for the final PACER Plus agreement. Specifically, PACER Plus negotiators should consider the utility of adopting a more inclusive negotiating process, establishing a side agreement devoted to climate change, adjusting existing trade and investment language to ensure policy space to consider climate objectives, and creating a climate-change review body to examine the agreement for climate effects prior to adoption and throughout implementation.

A.   Create an Inclusive Negotiating Process

A PACER Plus negotiating process that includes civil society groups concerned about the Agreement’s impact on climate change will ensure, as ICTSD scholars believe, “environmental or social concerns that may have been overlooked” will be “considered and addressed in the trade treaty.”[92] Dejo Olowu, Professor of Law at North-West University in South Africa, also extolls civil society’s importance, claiming, “Policy makers must realise the need . . . for the civil society to have a say in international dialogue on ways of tackling global environmental problems.”[93] Including representatives from civil society groups in the negotiating process can ensure a diversity of perspectives on the relative value of economic growth and the environment are represented in the final agreement.
Unfortunately, civil society groups in the PICs, aside from private sector representatives, are not welcome in PACER Plus negotiations.[94] Even so, as previously discussed, these groups can still influence negotiators by attending the “Non-State Actors Workshop on the PACER Plus Negotiations” hosted by OCTA and expressing their views. Still, the forty letters from civil society groups in May 2015 demanding negotiations cease demonstrate these groups continue to feel excluded.[95] To the extent civil society groups aim to express concerns regarding the Agreement’s potential impact on the climate change agenda in the PICs, and the non-state actor workshops provide an insufficient opportunity to be heard, this exclusion might prevent negotiators from reaching an appropriate balance between climate and economic objectives.
Despite objections, secrecy may be necessary and indeed does not necessarily mean the views of civil society groups are not part of the negotiations. Secrecy permits negotiators to make potentially politically unpopular concessions in the interest of concluding a deal in which the benefits accrued to the population as a whole outweigh the costs. And negotiators may already be expressing the same views these civil society groups hope to espouse, only the public is left unaware. Frank Yourn, Executive Director of the Australia Pacific Islands Business Council, describes the experience of fear stemming from this secrecy:
The trouble with trade negotiations is that there is always the fear of the unknown. In 1983 there were fears in New Zealand when they were negotiating a trade deal with Australia but now I think it’s fair to assume that New Zealand would be very glad they entered into those negotiations. I suspect there were fears in Europe when the European Union was being formed and it is now one of the strongest economic communities in the world.”[96]

If involving civil society is impossible due to the need for secrecy, to help overcome the fear that PACER Plus will not sufficiently address civil society’s concerns, PACER Plus negotiators must ensure civil society groups have a meaningful opportunity to voice their views such that all concerned parties feel included in the process. The negotiators might consider holding more frequent non-state actor workshops to create additional opportunities for dialogue between negotiators and civil society groups, and to correct misunderstandings about the agreement. An open line of communication is perhaps the best method to create public support for the agreement, thereby enhancing its overall legitimacy.

B.    Include a Climate Change Side Agreement

In addition to making negotiations more inclusive, PACER Plus parties should take advantage of the regional forum negotiations have established and encourage dialogue about climate change threats in the Pacific by drafting a climate change side agreement that addresses outstanding concerns. After all, the PACER Plus parties are largely the same as those that will inevitably need to coordinate climate change mitigation and adaptation efforts in the Pacific. This agreement would accompany the final PACER Plus text.  A climate change side agreement should include, for example, defined financial and technical assistance commitments from Australia and New Zealand to help the most vulnerable PICs take preventative steps to mitigate impending climate change threats.
A side agreement could also confront imminent climate change migration by establishing a defined procedure for the dignified relocation of displaced PIC residents in the event these island states disappear or become uninhabitable. Authors of a recent handbook on international labor migration lend support for this idea noting that, “[f]aced with the absence of a multilateral treaty and of a global architecture, governments today are turning to bilateral agreements as the preferred mode of migration governance to deal with the cross-border movement of capital and persons.”[97] The PICs have called for the creation of an international body to coordinate the movement of climate change refugees.[98] Perhaps a climate change side agreement is the proper forum for such a creation. Notably, Australia opposed the idea during COP21 negotiations.[99] Nevertheless, the smaller negotiating forum provided by PACER Plus may permit Australia to address its concerns about an international migration governance body ultimately allow it to shape the role of such a body rather than oppose its creation altogether.

C.    Adjust Existing Treaty Language to Ensure Inclusion of Climate-Friendly Language

Negotiators should consider including climate-friendly text in the existing agreement. PACER Plus’ preamble should acknowledge the parties’ commitment to confronting climate change threats and confirm the agreement must not be construed to inhibit mitigation and adaptation efforts nor supersede existing commitments to international environmental treaties. Framing the agreement in this manner demonstrates an overarching dedication to consider climate change impacts when interpreting the agreement’s specific trade and investment provisions. PACER Plus should also include explicit exceptions to the trade and investment provisions that provide the PICs sufficient policy space to enact climate regulations. For example, an exception might state that the facilitation of trade shall not prevent a state from fulfilling legitimate policy objectives, such as responding to climate change threats.

D.   Establish a Climate-Change Review Body

The PICs should establish a body composed of climate experts to review the final PACER Plus agreement prior to adoption and monitor the Agreement’s implementation. To account for each PIC’s limited capacity, a single review body could be charged with protecting the climate interests of all PICs. Perhaps this body could be housed within Vanuatu’s newly formed Climate Change ministry.[100] The body should have an established procedure for accepting complaints from individuals, civil society groups, or other concerned actors regarding the climate impact of the agreement, and should react to such complaints with a rigorous investigation. The review body should be empowered to propose amendments to the agreement and to initiate amendment proceedings if necessary. These adjustments to current negotiation procedures and the agreement text combined with the creation of a review mechanism can ensure PACER Plus does not exacerbate, but rather enhances, climate change mitigation and adaptation efforts in the PICs.

VII. Conclusion

Climate change poses urgent and severe threats to the future prosperity of the Pacific Island countries. Without coordinated and dedicated action to respond to these threats, the already dire circumstances will only intensify. Simultaneously, many individuals in the PICs live in poverty as a result of those countries’ under-developed and vulnerable economies. The PACER Plus agreement represents a unique opportunity to unite the objectives of economic development and climate change mitigation and adaptation efforts into one integrated, international solution. Potential conflicts exist between promoting trade and addressing climate change. Nevertheless, many regional trade and investment agreements already employ innovative strategies to preemptively resolve these conflicts and ensure an appropriate balance is reached. PACER Plus negotiators should recognize that they too need not sacrifice one objective at the expense of they other. Negotiators should use existing relevant agreements as guidance in the remaining negotiations. If these strategies are successfully incorporated, the PACER Plus Agreement can live up to its stated objective of embodying a truly development-friendly agreement that benefits all parties involved.

* Elizabeth Annis received her J.D. in 2016 from Georgetown University Law Center, where she concentrated in WTO law. This Note was written during a semester studying international trade and development at the Graduate Institute of International and Development Studies in Geneva, Switzerland. This note will be published in a forthcoming issue of the Georgetown Journal of International Law.
[1] United Nations Env't Programme [UNEP], Emerging Issues for Small Island Developing States: Results of the UNEP Foresight Process 54 (June 2014), [hereinafter Emerging Issues].
[2] Emerging Issues, supra note 1, at 41.
[3] Id. at viii, 55.
[4] Id. at 41.
[5] Id. at viii.
[6] Sarah Lazare, Most Vulnerable Pacific Islands Demand Global Moratorium on New Goal, CommonDreams (Sept. 8, 2015),
[7] See Emerging Issues, supra note 1, at 16, 45.
[8] Oliver Milman, Pacific nations beg for help for islanders when ‘calamity’ of climate change hits, The Guardian (Oct. 10, 2015, 5:45 PM),
[9] Id.
[10] Id.
[11] Pacific Climate Change Science Program: Current and Future Climate of Kiribati, Int’l Climate Change Adaptation Initiative 7 (2011),
[12] Coral Davenport, The Marshall Islands are Disappearing, N.Y. Times (Dec. 1 2015),
[13] Leslie Allen, Will Tuvalu Disappear Beneath the Sea?, Smithsonian Mag. (Aug. 2004),
[14] Id.
[15] Emerging Issues, supra note 1, at 43.
[16] Angela Bolis, Vanuatu reconstruction moves ahead in the aftermath of cyclone Pam, The Guardian (July 28, 2015),
[17] Jon Erdman, Cyclone Pam: Vanuatu Direct Hit (RECAP), The Weather Channel (Mar. 15, 2015, 4:45 PM),
[18] Sean Morris, Steve Almasy, & Laura Smith-Park, ‘Unbelievable destruction’ reported in Tropical Cyclone Pam’s wake, CNN (Mar. 14, 2015, 11:22 AM),
[19] Cyclone Pam: UN confirms 24 dead and 3,300 displaced in Vanuatu, BBC News (Mar. 16, 2015),
[20] Australia’s inaction on climate change set to dominate Pacific Island talks, The Guardian (Sept. 5, 2015, 8:34 PM),
[21] Cook Islands – COP21: Fate of the Pacific Islands, 2015 UN Climate Change Conf. (Dec. 5, 2015), available at
[22] Emerging Issues, supra note 1, at 43.
[23] Bolis, supra note 16.
[24] Milman, supra note 8.
[25] Emerging Issues, supra note 1, at 45.
[26] Id. at vi.
[27] Id. at 43.
[28] Id. at 8.
[29] Island States threatened by rising seas call at UN for urgent action on climate change, U.N. News Ctr. (Oct. 1, 2015),
[30]Jonathan Pearlman, Australian PM rejects Pacific islands plea for climate action to ensure ‘survival,The Telegraph (Sept. 10, 2015),
[31] Id.
[32] Cook Islands, supra note 21.
[33] Id.
[34] List of Representatives to the Paris Agreement (Apr. 22, 2016),
[35] Pearlman, supra note 30.
[36] Lenore Taylor, Tony Abbott defends 2030 emissions target criticized as ‘pathetically’ low, The Guardian (Aug. 11, 2015, 1:44 AM),
[37] Pearlman, supra note 30.
[38] Milman, supra note 8.
[39] Milman, supra note 8.
[40] See, e.g., The Trade and Climate Change Linkages, Int’l Ctr. for Trade and Sustainable Dev. (May 30, 2011), climate_change_brief_for_unfccc-secretariat-final.pdf.
[41] Id. at 1 (“[T]rade can directly and indirectly affect climate change. For example, international transport, an essential component in trade, is a direct contributor to greenhouse gas emissions . . .”).
[42] Henry Derwent, What Has Climate to Fear from Trade?, The E15 Initiative, Int’l Ctr. for Trade and Sustainable Dev. 1 (Aug. 2015),
[43] Markus W. Gehring, et al., Climate Change and Sustainable Energy Measures in Regional Trade Agreements (RTAs): An Overview, Global Platform on Climate Change, Trade and Sustainable Energy, Int’l Ctr. for Trade and Sustainable Dev. 12, Issue Paper No. 3, (Aug. 2013),
[44] Id. at 5 (“New climate regulations . . . may directly contradict key principles of WTO law, which prohibit arbitrary, unjustifiable or disguised restrictions on international trade . . .”).
[45] Robert Read, Trade, Economic Vulnerability, Resilience and the Implications of Climate Change in Small Island and Littoral Developing Economies, Programme on Competitiveness and Sustainable Dev., Int’l Ctr. for Trade and Sustainable Dev. 23, Issue Paper No. 12, (June 2010), /2010/07/trade-economic-vulnerability-resilience-and-the-implications-of-climate-change-in-sildes.pdf.
[46] Change Linkages, supra note 40, at 3.
[47] Rafael Leal-Arcas, Working Together: How To Make Trade Contribute to Climate Action, Global Platform on Climate Change, Trade and Sustainable Energy, Int’l Ctr. for Trade and Sustainable Dev. 1 (Nov. 2013), at ter eenhouse gas emissions…ev., e 'all three were in title in paragraph.onveys: there is a PACER agreement in place already
[48] Pacific Island Countries to Redouble Efforts to Conclude the PACER Plus Negotiations in 2016, Off. of the Chief Trade Advisor, (last visited May 21, 2016).
[49] Fiji to Host 13th PACER Plus Inter-sessional Meeting, Off. of the Chief Trade Advisor, (last visited May 21, 2016). Launched in 2009, thirteen negotiations, or “inter-sessional meeting[s,]” were held thus far with the most recent in December 2015. The agreement is set to conclude by June 2016. The final text must then be ratified by the parties’ legislatures before entering into force by, ideally, 2017. Dr. Edwini Kessie, the Chief Trade Adviser for the Pacific Island Countries, discussed the agreement’s progress saying, “The negotiations are in a decisive phase with a few issues left to be resolved by the Parties. At the forthcoming inter-sessional meeting, the Parties will identify possible landing zones which would enable them to bridge the gaps in their negotiating position.” Id.
[50] E-mail from Edwini Kessie, Chief Trade Adviser, Office of the Chief Trade Advisor, to author (November 17, 2015 13:53 CET) (on file with author).
[51] Emerging Issues, supra note 1, at 41.
[52] Development Assistance, Off. of the Chief Trade Advisor, (last visited May 21, 2016) (defining “development assistance” as “development or foreign aid…[granted] to achieve economic growth and sustainable development.”).
[53] See id.
[54] Geoffrey J. Bannister & Kamau Thugge, IMF, International Trade and Poverty Alleviation, 38(4) Fin. & Dev. (Dec. 2001), Of note, these economists go on to refute this claim that trade reform reduces government revenue in developing countries, and explain their belief trade reform will actually increase government revenues. See generally id.
[55] World Bank, Customs and other import duties (% of tax revenue), (last visited June 7, 2016).
[56] Civil societies, trade unions raise concerns over PACER-Plus, Radio New Zealand Int’l (May 6, 2015 8:06 AM),,-trade-unions-raise-concerns-over-pacer-plus.
[57] Id.
[58] No NGO contribution to PACER-Plus talks ‘concerning’, Radio New Zealand Int’l (May 7, 2015),'concerning'.
[59] PACER Plus: Benefits for Pacific Island Countries, Off. of the Chief Trade Advisor (last visited May 21, 2016).
[60] PACER Plus, supra note 56.
[61] Non-State Actors have their say on PACER Plus, Off. of the Chief Trade Advisor, (last visited May 21, 2016).
[62] Id.
[63] Leal-Arcas, supra note 47, at 2, 6.
[64] Id. at 2.
[65] Gehring et al., supra note 43.
[66] Gehring et al., supra note 43, at 13.
[67] Canada-Peru Agreement on Environment Cooperation, Can.-Peru, art. 2(6), May 28, 2008, 2009 Can. T.S. 16. [hereinafter Canada-Peru Environment Agreement].ote 64,ntt r Canada-Peru Agreement]ired audio link, so need a source that suppact language of hte ER agreement in place already.
[68] Cf. Change Linkages, supra note 40, at 1.
[69] Canada-Peru Environment Agreement, supra note 67, at art. 2(4).
[70] North American Agreement on Environmental Cooperation, Can-Mex.-U.S., Sept. 8, 1993, 32 I.L.M. 1480.
[71] Gehring et al., supra note 43, at 7.
[72] Id. at 8.
[73]  Gehring et al., supra note 43, at 11.
[74] Id. at 10.
[75] Id.
[76] Id. at 10, iv.
[77] Id. at 11.
[78] Gehring et al., supra note 43, at 12 (explaining that, “To accommodate such [health, environment, and conservation of natural resources] policies, [] many RTAs contain provisions that establish exceptions, or ‘windows,’ in trade policy. Such exceptions may be particularly relevant for adaptation, mitigation and financing measures to respond to climate change in developing countries”).
[79] Id.
[80] Id. at 13-14.
[81] Id.
[82] Canada-Peru Free Trade Agreement, Can.-Peru, art. 1701(2), May 29, 2008, 2009 Can. T.S. No. 15 Vol. II.
[83] E.U.-Colombia-Peru Free Trade Agreement, Colom.-E.U.-Peru, art. 275(5), May 31, 2013, 2012 E.U. 735.
[84] Id. art. 270(1).
[85] Id. art. 275(1).
[86] Gehring et al., supra note 43, at 9.
[87] Id. at 8.
[88] Id. at 9.
[89] Id. at 8.
[90] Gehring et al., supra note 43, at 7.
[91] Keith Wilson, Report on the 2010 Public Forum, Session 18: Regionalism’s role in integrating the Pacific into the global trading system, World Trade Org. (Sept. 16, 2010),
[92] Gehring et al., supra note 43, at 8.
[93] Dejo Olowu, Environmental Governance Challenges in Kiribati: An Agenda for Legal and Policy Responses, 3 L. Env’t. & Dev. J. 259, 268 (2007). 
[94] NGOs, media locked out of PACER-Plus talks, Radio New Zealand Int'l (May 6, 2015, 7:35 AM),,-media-locked-out-of-pacer-plus-talks.
[95] Civil societies, supra note 56.
[96] Non-State Actors, supra note 61.
[97] Summary of The Palgrave Handbook of International Labour Migration  (Marion Panizzon et al. eds., Palgrave Macmillian 2015), (last visited June 4, 2016).
[98] Milman, supra note 8.
[99] Id.
[100] Vanuatu’s New PM creates Climate Change ministry, Pacific Climate Change Portal (May 21, 2013, 6:52 PM),’s-new-pm-creates-climate-change-ministry.


Post a Comment