Even though the Paris Agreement itself does not include any trade-related provisions, trade has the potential to play a major role in the implementation of the response measures enshrined by the Parties in their Nationally Determined Contributions (NDCs), while creating opportunities for many countries to achieve changes in the structure of their economies.
Accordingly, this study, developed for UNCTAD as part of the TradeLab project directed by Prof. Joost Pauwelyn, seeks to achieve a better understanding of the impacts of the actual response measures contained in the NDCs on economic diversification, including their interactions with existing trade rules, in order to build mutual supportiveness between the climate and trade regimes while also contributing to broader sustainable development objectives. The analysis is conducted in three parts. First, the study seeks to identify all the response measures contained in the INDCs/NDCs that appear to interact with existing trade rules. Second, the study investigates the potential of the response measures identified in the INDCs/NDCs to have domestic and cross-border effects on economic diversification. Third, the study examines the role of Free Trade Agreements (FTAs) in supporting such a potential through the incorporation of climate-related measures in the international trading system.