These dynamics are now surfacing in multilateral forums, particularly the UNFCCC, where debates on unilateral trade measures highlight concerns around competitiveness and equity. Extending beyond such measures, the trade–climate interface spans critical minerals, industrial policy, and technology access.
The authors— Trishant Dev, Shimukunku Manchishi (African Future Policies Hub), Rudrath Avinashi, and Avantika Goswami—note that for developing countries, this convergence presents a structural challenge.
“Many remain dependent on primary commodities and low-value-added manufacturing, limiting their ability to benefit from emerging green value chains. While advanced economies leverage fiscal space, technology, and industrial policy to lead in clean technology production, developing countries face constraints, including high cost of capital, limited access to technology, weak industrial bases, and restrictive trade and intellectual property regimes. These asymmetries risk locking them into extractive roles in the new green economy, while exposing them to new trade barriers and compliance burdens,” they write.
The brief, they add, identifies key systemic gaps in the current global governance architecture.
These include policy gaps arising from the mismatch between trade rules and climate objectives, particularly in areas such as emissions-based measures, technology access, and industrial policy tools.
There are also governance gaps stemming from the lack of an institutional platform to address trade–climate interactions holistically, with the WTO and UNFCCC operating under distinct and often incompatible mandates.
And finally, the authors also identify knowledge gaps that persist regarding the distributional impacts of trade-related climate measures, especially on developing economies and vulnerable sectors.
Key takeaways
“In this context, the newly established trade and climate dialogues under the UNFCCC, alongside discussions in other multilateral fora, present a critical opportunity to address these challenges. The brief proposes thematic areas for structured engagement, including trade in critical minerals and clean technologies, green industrial policy space, climate-related trade measures, and investment governance.”
The document concludes by outlining key principles for an equitable trade–climate agenda:
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Placing development and structural transformation at the centre;
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Operationalising differentiation;
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Preserving policy space for green industrialisation;
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Treating climate technologies as global public goods;
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Prioritising multilateral, cooperative approaches over unilateral measures.
Addressing the trade–climate nexus through these principles is essential to ensure that the global transition to a low-carbon economy is not only rapid, but also just and inclusive for developing countries, the authors conclude.
