UK and US joining forces on climate action at G7 may boost trade deal chances
The UK government could boost its chances of a new post-Brexit trade deal by working with President Joe Biden to spearhead climate action at the G7, according to a new report from think tank IPPR.
Biden would be a strong ally to the UK in ‘rewriting the rules of global trade’ to focus on wider green policy objectives, the IPPR said in its latest report.
Items on a new green trade agenda could include tackling the climate and nature crises, strengthening employment standards, and promoting democracy and human rights.
The UK and US have the opportunity to negotiate the ‘greenest trade deal in history’ post-Brexit that could include ‘non-regression clauses’ to prevent either country backsliding on the high environmental standards agreed, the think tank suggests.
IPPR argues the UK and US also have the chance to advocate for reform of the World Trade Organization (WTO) at the G7, to make it easier for countries to combat climate change.
This would include promoting the idea of a ‘climate waiver’ to allow countries more flexibility to take climate action, such as subsidising green industries, without incurring the risk of trade disputes and tariffs.
Shreya Nanda, economist at IPPR and co-author of the think tank’s report, said: “It’s important for both richer and poorer countries to be able to set ambitious environmental targets domestically that are not then undermined internationally.”
“By working to establish a coordinated green approach to trade, the risk of some countries being penalised for taking stronger environmental measures would be reduced.”
Following from the strong signals sent by the G7’s landmark deal to crack down on tax avoidance by major tech companies, the think tank argues a new global standard can now also be applied to climate action.
IPPR associate director and co-author of the report Marley Morris said: “As the UK hosts the G7 and COP26 summits this year, there is a window of opportunity for the government to take on a global leadership role.”
“Taking this opportunity could help liberalise trade in environmental goods, address the risks of carbon leakage, and pave the way for an environmentally ambitious trade deal with the US.”
Biden and Johnson will meet at the G7 summit in Cornwall this weekend.