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- At COP30 in Belém, Brazil, trade issues took unprecedented prominence in climate negotiations, which led to the creation of a three-year United Nations Framework Convention on Climate Change (UNFCCC) dialogue on trade.
- This outcome is primarily attributable to Brazilian and Chinese diplomacy and the United States’ absence from negotiations.
- It is far from certain whether the heightened focus on trade issues within the UNFCCC system will resolve deep divisions among the parties, but Brazil’s decision to launch a separate forum to discuss climate and trade issues points to the need for creative approaches.
Many governments and stakeholders have long recognized international trade as a key enabler of climate progress. Recently, however, trade-related issues have begun to figure prominently at the annual Conferences of the Parties (COPs) of the United Nations Framework Convention on Climate Change (UNFCCC). This culminated in the establishment at COP30 in Belém, Brazil, within the overarching Global Mutirão Decision, of a formal dialogue on climate and trade issues over the next three years. While governments have agreed to come to the table, they remain sharply divided over how trade should be used to advance climate goals.
Why Now?
The international regimes governing trade and climate, anchored in the World Trade Organization (WTO) and the COP, have operated in parallel since the mid-1990s, with neither exerting significant direct influence on the other. This insularity is not surprising in the case of the trade system: none of the binding legal agreements that comprise the WTO system references climate change. Institutionally, the WTO has been, and remains, the sole multilateral body with an explicit mandate to regulate international trade and adjudicate trade disputes. The UNFCCC, by contrast, calls for an “open international economic system” and warns that climate policies should not serve as a “disguised restriction on trade.” Yet, trade has occupied a marginal position in international climate negotiations: until Belém, it had never been mentioned in a formal COP declaration, and it is absent in both the Kyoto Protocol and the Paris Agreement.
Two recent developments have increased the salience of trade in the international climate regime and vice versa. First, an increased emphasis on reducing industrial emissions in national climate policies and the rapid expansion of clean-energy markets have intensified concerns about how decarbonization will impact economic competitiveness. In response, governments have devised hybrid policies that have both trade and climate elements—commonly referred to as trade-related climate measures (TrCMs). The highest profile of these, the European Union’s Carbon Border Adjustment Mechanism (CBAM), has attracted intense criticism from many developing economies, largely focused on its alleged unilateral character and the high costs of compliance, even as it has laid a foundation for industrial decarbonization in Europe and raised the profile of carbon pricing globally. This criticism has unfolded against the backdrop of failed climate finance pledges to the Global South and the rise of green industrial policies in the Global North. In this context, TrCMs have become flashpoints in the perennial debate over how equity should be operationalized within the international climate regime.
Second, dysfunction within the WTO, specifically related to its negotiating process and dispute-settlement mechanism, has prevented the development of multilateral trade rules that can help balance climate ambition with the interests of trading partners. The absence of such rules has increased trade tensions around the TrCMs and placed the WTO system at loggerheads with the political economy of decarbonization in many countries—most notably the United States.
A Bridging Attempt
Ahead of COP28 in Dubai, the United Arab Emirates, developing countries, led by the BASIC grouping of Brazil, India, China, and South Africa, sought to include what they called “unilateral trade measures” (UTMs) on the formal negotiating agenda. The defeat of that proposal generated significant acrimony that carried over into COP29 in Baku, Azerbaijan. At the latter COP, the parties again declined to include UTMs on the negotiating agenda, but agreed to add them to the work plan of the Katowice Committee of Experts on the Impacts of the Implementation of Response Measures (RM KCI). When Brazil assumed the presidency of COP30, it sought to avoid these procedural disputes by incorporating UTMs and other contentious issues into its presidential consultations, which unlike formal agenda items, need not produce a decision or outcome. In other words, trade was not guaranteed a place in any COP30 negotiated texts.
The Mutirão—the name of which derives from an indigenous word for “collective effort”— emerged as the principal vehicle for formally recording the outcomes of presidential consultations. With respect to trade, it restates the UNFCCC principle that climate change measures should not be a disguised restriction on international trade. The text also instructs UNFCCC subsidiary bodies to hold a dialogue on “opportunities, challenges and barriers” around trade at the next three mid-year climate conferences in Bonn (2026–2028) followed by a “high-level event” in 2028. Of note, the Mutirão requests WTO participation in this dialogue—the first COP declaration to do so formally.
Three factors appear to have played an outsize role in shaping the Mutirão’s language on trade.
The first was Brazil’s presidency. Belém marked the first time since trade-related issues emerged within the UNFCCC that one of the principal critics of so-called UTMs held the COP presidency. In this capacity, Brazil pursued an ambitious diplomatic agenda to maintain its critical negotiating posture while nudging parties towards a meaningful resolution to the agenda fights that marred previous COPs. The Mutirão outcome is, in this sense, a victory for Brazil in particular—but whether it will endure remains to be seen.
The second factor was China’s strong advocacy. Beijing has historically not sought the spotlight in COP negotiations, but at Belém it took a leading role in injecting trade language into the Mutirão. China’s interest in the trade-climate issue is two-fold: it has strong objections to the EU CBAM, but its greatest concern is new trade barriers affecting exports of clean energy goods—as embodied by the Trump administration’s assertive use of tariffs. Minister Li Gao, the lead of China’s COP30 delegation, expressed satisfaction with the Mutirão’s trade outcome, having previously lamented policies that fragment supply chains and increase the costs of green products.
The final factor was the absence of the United States. Other than the European Union, the United States has been the most prominent jurisdiction opposing trade discussions under the UTM framework. In Belém, Washington’s absence following the Trump administration’s withdrawal from the Paris Agreement appears to have contributed to the Mutirão’s balanced outcome, which reflected concerns about UTMs but also sought dialogue around opportunities.
A New Forum
Separate from the Mutirão, Brazil launched at Belém the Integrated Forum on Climate Change and Trade (IFCCT) as a new platform for climate and trade officials to discuss common interests. Currently, the IFCCT is in a consultative phase aimed at defining the scope, structure, and modalities of the forum, with a goal to issue formal terms of reference by mid-2026. All UNFCCC parties and WTO members have been invited to join the forum.
In his announcement of the IFCCT at the WTO in September 2025, COP30 President André Aranha Corrêa do Lago emphasized that with the forum Brazil aims to create space for dialogue that it believes is unlikely to arise through WTO or UNFCCC processes alone: “The Forum’s mandate is not to produce binding outcomes or legal text. Its value will be measured differently: in the quality of the ideas it generates and in the trust it fosters.”
Analysis
The Mutirão marks an evolution in the role of trade issues in the UNFCCC system. In a narrow sense, developing countries saw consensus shift slightly towards their position of further integrating trade into international climate discussions. However, underlying disagreements around trade remain unresolved.
Whether the dialogue established in the Mutirão can meaningfully address these disagreements is an open question. The creation of new fora and negotiation tracks within the UNFCCC has tended to park rather than confront contentious issues. The Bonn meetings may help preempt future agenda fights over trade, opening the door to discussion of other key issues. In addition, the careful framing of the dialogue’s scope—which does not reference UTMs—provides an opportunity to identify issues at the nexus of climate and trade that lend themselves to constructive conversation and cooperation.
Yet Brazil’s decision to launch the IFCCT while it was leading the presidential consultations that established the Bonn dialogue points to the challenges of working within the UNFCCC system to shape consensus around controversial topics. History suggests that the Bonn convenings will reproduce the fraught dynamics and dug-in talking points heard in Belém and in Baku and Dubai before it. Governments with a good faith interest in compromise and cooperation around the climate/trade nexus will need to think creatively to break the current stalemate—and it is far from clear that either the climate or trade regime can produce such creativity on its own.
