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What is Green Trade? Let the UK tell us...

This week, we were told that Green Trade is crucial to growing the UK economy, achieving net zero and driving our future prosperity. So the words of the UK International Trade Secretary in a speech.

But what actually is Green Trade?

We enquired with the Trade Secretary. At her recent speech, she gave important insights. Let's review.

In a nutshell, the UK Green Trade Strategy is centered around four key principles: 1) Building a green industrial base Specifically, this means that funds will be allocated to the development of wind, hydrogen, and electric vehicles in the UK amongst others. High-value green investments will be encouraged, which will increase the country's appeal to international businesses. All of these eco-friendly products should be produced in the UK in order to help the country's economy by creating jobs and supply networks. There are already many investment opportunities available in this country, and you can learn more about them by visiting the so-called Investment Atlas.

2) Boosting green exports Britain wants to promote green product exports to create employment, boost productivity, and gain global expertise. Low-carbon sectors might export £170 billion by 2030. The UK has huge promise in renewable energy, green finance, sustainable construction, and precision agriculture. To achieve this goals businesses need money. UK Export Finance helps companies get financing to grow exports. Businesses can use the Export Development Guarantee to acquire high-value loans to boost production and exports. 3) Liberalising green trade Use the independent trade policy to liberalise green trade – a critical new tool in the UK’s armoury. Green Tariff The uk introduced the UK Global Tariff after Brexit. This reduced prices and boosted the green economy by removing duties on 100 environmental goods.

Green Trade Agreements

Free trade agreements and demolishing barriers to green trade will be essential. The UK-Australia trade deal is a good example. It goes further on climate than any previous one: It removes tariffs on low-carbon goods, including lithium batteries. The deal encourages green industry cooperation. Another example is the UK-New Zealand FTA as it removes tariffs on the most environmental goods. For future FTAs, the domestic and international trade and environmental goals will likely influence if a deal can be struck. Let's look out for trade deals with India, Mexico, Israel, Canada, Switzerland, and the GCC and assess how serious the UK gets about Green Trade.

4) Greater alignment of trade and environmental policies

Following the UNFCCC ministerial-level conference COP26 in 2021, which also addressed the link between trade and environmental policy, the 12th WTO trade ministers meeting (MC12) in Geneva is quickly approaching.

MC12 is significant because it will discuss the impact of global warming on trade via environmental policies. As countries become more aware of climate change, they implement policies that may harm other countries. Climate-related trade protectionism may disproportionately affect the least developed countries. As a result, the WTO must ensure that countries address climate and environmental issues in a way that does not negatively impact trade with other countries. All while effectively combating and mitigating the effects of climate change.

Takeaway The UK is defining Green Trade and showcase its importance with a four part comprehensive strategy. This includes investment in eco friendly goods and technology, boosting green exports, liberalising carbon friendly goods (aka reducing duty to zero) and linking trade and environmental policy in a clever way without creating new trade distortions that could harm other countries.

What's encouraging is that the UK has realised that protecting the environment and fighting climate change is not contrary to growing the economy and creating jobs. The opportunity arises from cleverly combining both. The UK has a strategy for it and this is to be welcomed.

But - the key question remains - can the UK make a sufficiently large impact to make a difference for climate, environment, jobs and prosperity? Time will tell!

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