 Hello, and welcome to this session at Davos World Economic Forum 2024, where we're going to talk about calming green trade. At Davos, it is normal that we talk about trade issues, but outside of Davos over the last few years there's been a bubbling up of consternation that in a world that is in a climate crisis, y world that is at war with nature and a world where we are failing to deliver on the sustainable development goals that the conversation between climate and development and trade is perhaps not where it needs to be. I think over the last 24 months we've seen a shift from a conversation around public money from the north being sent to the global south or the global majority through climate finance or aid i'n ddysiwyr i chi'n grannu o'r angenfyniadau ffawr, o'r angenion ar gyfer o dechrau, ar ffawr ar gweithgaps, ar gweithgaps, ar gweithi gyd, i'r angenion cyhydrech rhesbwynt yn gyngorganiaeth gwneud. A so that the trade system, as well as the investment system, the reform of international financial institutions, has to support emerging markets and developing economies in their climate goals as well as in their goals around prosperity. neu ydych yn cael cyfroles cynoedd o'r cyd-nau gyda Diolch yn byw i ddechrau i fynd i'r newydd cyd-nau. Mae gymaintau sydd tyfn roedd o'r clywbiedd gysgr eistedd iawn o ddatun i'r cyfrifrolyniadau. Yn cyfrolyniadau ddiwedd yr un o gyfrifrolyniadau cyd-nau o sîm, o chyfrifrolyniadau, o cerydd, o rhan o gyfrifrolyniadau. Oni, mae gydaill bod nid o'r cyfrifrolyniadau allan â'r yn meddwl, y dyfu dyfu'r uchryf, ychydig i dynion gweithio gael y byddwch yn ddefnyddiad fydd, os yw'r cyffredin iawn yma i'r cyffredin iawn y peth yn i ddiweddol gael'r amgar ar mwyhoi ffynomol. Ond oedd ynddo i'r gorffedd yn Ymffenwyr, ond byddwn gwneud ei ffast honno'r unrhyw eich gorffedd yw peboyffaeth fel gyda'r cyffredin iawn. Ydw i am wneud i'w momentyn y gallwn ei ffynol gael yw'r cyffredin iawn ei gwasanaethau ond y cyhoedd y gallwn i'r cyfan yn ei fath yw'r cyfrannu sy'n ei gilydd ychydig yn ei wneud. Felly, rydyn ni'n meddwl â'r cyfrannu cyfrannu. Esbynbarth Edir, y Ministeri Ffroen Ffair sy'n Gwylwy, Gwunkalys Mathias, y Ministeri Ffroen Cyfrannu Yn Hwyrdd, ac yw Perw, a Yn Perw hwnnw hwnnw'n cyfrannu ar Argyrch, company that is involved in new technologies that breakthrough technologies for the energy sector. You're you're based in the US. Your supply chain is global. Your customer base presumably is global. How do you think about how trade can help you bring solutions for the climate crisis? Absolutely. I totally agree with you, Rachel. Trade needs to be a booster for the economy and a booster for the innovations. It is a very sophisticated system across multi-national collaboration. And I would say there's no other space in the industry like EV that needs the support for trade. And we see that trade need to have the focus and the right priority, which is very important. We know that RA has been a really good booster for the EV industry in the US. And we wanted to also see there is a right focus on the battery and also on the battery supply chain that's been building up. It's definitely like need to have a lot of more discussions about like what is the real priority and what is the real realistic target for us to reach in those markets. And I would say number two is really to drive innovation. We need a lot of support on the government incentives and incentives not only to build infrastructure, but also building a supply chain. It's going to be highly encouraged. And I would say it's not only just a trade system, but also the entire manufacturing system. It's going to be very crucial for innovation. And the third but not the least is really building and empowering the system. Because no government can be self-sufficient without the support from their citizens. So the continued application to the people is very important. Like US is a very open society. And climate change sometimes can be a topic, can be politicized a lot more than what we expected. I know in many countries climate change is a fact. And we know this is the hottest year in history in the world. And we know there's a melting in Arctic and there's also the receding in the reef because of the climate change. But I think in many states we wanted to make sure this is a bipartisan direction we wanted to move in. Because we don't want it to live in a world that we pass along to our generations and we're embarrassed by the fact we're leaving the world that's much worse than what we inherited before. So it's interesting. I live in the US as well. And there's a tendency to sort of see trade as something that's bad or that it has a negative connotation to it sometimes in the domestic debate. And I think that's quite puzzling. So Rebecca Greenspan, who's the head of UNCTAD, always talks about the fact that we need more, better and greener trade and especially for emerging markets and developing economies that's central. So I'm going to come to useful terms today. I mean, UAE is a small country with a global reach. DP World is a global end-to-end logistics provider. You're also part of the first mover coalition. So you're fundamentally integral to all of these supply chains being able to decarbonise. What do you see as the obstacles to that going faster and further? What would you like to see from a trade regime to support you to be able to do more? You know, when you attend a COP, you are really amazed of how bad we are doing. It's amazing. And when you look at trade, trade is very important for the world. Trade is carried 90% by water. There are challenges, of course, in using fuel that's friendly. First of all, it's very expensive. And second, it's not available. And then even it's available, not everywhere you can find storage for it. So when you get somebody like nurse who's building vessels to use alternative energy or friendly energy, that could be three to five times the cost of the fuel. So there is no way people will be encouraged unless I hate to say this, and there is a tax so that on the fuel which is bad for the environment, people have to pay. So as long as everybody is paying the same, people will go to the friendly one because it doesn't cost them. It would be when everybody is doing that's fine. You see, today electrifying, in our ports for them, we electrified the engines better than using the combustion engines. And contrary to what many people think that going green is expensive, actually it saves us a lot of money. In one instance, we almost saved whatever we invested in one year from electric bills because we used to pay higher costs on fuel and all that. And we are not subject to fluctuation of these costs. So in that sense, it's okay. When you come to solar or it's working, but when you come to fuel for vessels, it's a different volume. It needs cooperation of everybody. We are part of the First Movers Coalition. Definitely we have a target of reaching zero by 2050. We have target to reach even some closer targets before the end of this decade. But we definitely need government to be on board, involved because the private sector can't do it alone. So it is interesting, right? So dual fuel ships are now being designed that you're beginning to see the supply of green ammonia and other green fuels, but they have to be in every port where the bulk of trade is moving to and from. So it's started, but we've got a lot further to go. And there are so many challenges. Look at the Panama Canal today with the lower water available. They are down by 30%. That means the vessels are going to now sail longer and compound the problem we have today. These are some of the challenges which we have to deal with. Well, maybe that makes sense to come to you, Minister. There's so Norway, again small country, big trading country, big long history and fossil fuels which helped the country evolve and now big commitments to going green. How do you think about trade and the partnerships that you need, both to decarbonise Norway, but also for Norway to help global supply chains decarbonise? Thank you. Exactly. That's exactly the question. I just want to say we just had a very successful COP in the UAE in Dubai and next month there's a ministerial meeting of WTO in Abu Dhabi. So let's take the spirit of Dubai to Abu Dhabi and see if we can have any equally successful trade ministers or the WTO ministers meeting. But this is really a crucial issue. I believe very much in the goal of more, better and greener trade. It is very much about issues like transport and production because trade is good. Trade helps to, you know, trade has helped to reduce the difference between countries. It brings more people into the modern economy. But it has, potentially, it has downsides. I mean, it means that you build the product slightly cheaper in Asia and you ship it to Europe with a lot of transport emissions and so on. So you need also to look at those issues. And we have, you know, the key issue to much of this is, of course, carbon pricing. Because if we actually had the system of global carbon price, we would not need to introduce, for instance, sea bams, you know, carbon border adjustment mechanisms, which are perfectly necessary for those regions that are trying to step up and actually price emissions but you can't then import through the back door the same type of emissions that you have forbidden at the home. But of course it also has some, it does generate conflict because parts of the developing world are wondering if this is really climate policy or is it actually a way to keep us out. And all of this coincides with the geopolitical trend where I started going to Davos 21 years ago and it was the heyday of globalization. China just joined the World Trade Organization. The sense was the world was opening up. The economy was now free of geopolitical limitations. Now it's all about homes, sourcing, homeshoring, friendshoring, plurilateral agreements, regional agreements. So this heyday of globalization is over. It's not coming back in the old version. I think if it's going to come back it has to be by merging this or the paramount issue of climate to deal with how we produce, how we transport, how we relate to energy, but also by doing that in a way that can open up to the whole world. So we're not ending up, you know, in our own little blocks. And it's not easily done but in order to contribute to that we need to address exactly this issue. How do we continue to believe in the mutual value of an open rules-based trade system while also making sure it's compatible with what we just agreed on in Dubai, which is to accelerate the transition away from fossil fuels and to start build not only the sources of renewable and clean energy but also the grids, the distribution and the actual use of that. How can all this be brought together? And it's not being brought together by itself. And if we live in a trade policy world and a climate policy world it's not going to happen. So connecting these worlds is very, very important. So there has also been sessions here. I think it's the only place that this happens where the sort of critical minerals and mining community sit down with the renewable energy community and we were both in sessions because that's on the critical path to achieving. And of course it opens up all kinds of questions for new markets and basically keeping revenue and keeping wealth in the countries that have extraordinary amounts of renewable energy and extraordinary amounts of minerals and metals and that's emerging markets and developing economies. So this world is starting to look quite different. But then let's come to Peru, right? Vulnerable country to climate change. The World Bank has estimated that actually you could grow your economy by adapting and mitigating climate change effectively. But we're coming out of the warmest year ever, which the insurance industry has calculated probably took about 0.6% of GDP away out of the global economy. So this is difficult to manage. You will need to adapt. Adaptation for Peru is very important because of your vulnerability. How do you see the trade or a green trade regime as being supportive to Peru's prosperity? Let's see. We have the clear idea that sustainable trade and sustainable growth are no longer an option, are just a condition for participating in the market. Some years ago, if we are talking about the 80s, the main barrier was import taxes, not tariffs. In our case, it was about 100% as an average. Now a race is about 2%. So it is not so important. In the next years, the barriers were related to quality standards. And now a race, one of the main issues is related to sustainability. We, for example, as Peru, are a very, very open economy. We have 22 free trade agreements. We are open in South America, Peru, Mexico and Chile are the most open economies. But in most of the cases, we are incorporated in the negotiation issues related to the climate change and sustainability. For example, in the case of the free trade that we have with the European Union, with the UK, with Korea, and we are negotiating also a modernisation of the free trade agreement that we have seen since 2010 with China, incorporating digital issues and incorporating green economy and customs and some other points. And at the same time, we are negotiating with Hong Kong, with India, with Indonesia and in all the cases, the modern free trade agreements incorporate these issues. So it is a must in the business right now. All of them are demand-riving and it is becoming a condition. So it doesn't matter if we agree or not. We have to do it and it is good for everybody and we are working on that now. So let's talk about how we can build this collaboration so that the trade regime is supportive of our climate goals as all countries have agreed. Maybe come straight back to you because you are hosting APEC. So how do you bring this vision or this reality into the APEC discussions this year? Yes, APEC is not a scenario for negotiations but it is a scenario for cooperation but economies are aligned with this idea. Of the total of 21 economies, we have free trade agreements with 14 of them and we are negotiating with two more and in all the cases incorporating these issues. It is very important because in terms of exports, about 60% of our total exports are referred to the mineral products. In Peru, we have 219 social conflicts all over the country. Most of them referring to the mining sector and in almost all the cases related to environment. So it is crucial to have this coordination between the government, the private investor and the community. We have just had two hours ago a meeting with one of the best examples of the things done in the correct way. Kei Abeco is a very important project and we have met with investors and they are a kind of exception. They have done the things in the correct way, organizing everything with the participation of the government and the community and understanding the gaps in the region because it has no sense that you have very important investment in some areas and at the same time they are remaining as the poorest in the country and with a lot of problems related to environment and some other issues such as labour. So it is a key factor and we are working on that and we have now good examples to show. So I think that this is a really good example because when you've got these massive investments coming into traditionally low income and sometimes marginalised communities then that brings with it all kinds of other social issues and environmental issues. So this conversation around how trade can be made to be a positive rather than seen as a negative and it is really important. But perhaps coming to the private sector on the panel, what collaboration would you like to see internationally between governments and the conversation between the public sector and the private sector in order to build a greener trade system that is supportive of both prosperity goals and climate goals? To the point with the conflict, I would say that's very important for us and we wanted to make sure the supply chain is compliant. This is where trade can potentially help is to build more compliant and also transparent supply chain. Something like in Europe has been implemented in the horizon is a battery passport for example and in many other countries in the US we don't have it. Something like that building more transparency among different countries and encourage the collaboration and have a very clear mandate is going to be for so far very important. Number two is investing in the right space and investing in innovation because a lot of this tension is coming from the challenging costs, the challenging poverty, building education into certain communities and bringing awareness to education engineering because a lot of conflicts and a lot of this challenge in mining comes in because of the pollution and the damage to the people's life. If we can make it more efficient and bring more innovation into those process that's going to be encouraging a lot of this happening and the same thing for building batteries and building electric vehicles and if we have a higher efficiency in a battery and with a lower cost that can address a lot of the concerns on climate change and sustainability already. Can I come to you because you hosted COP28 as we've already referred to. That was the first COP to have a trade pavilion which was quite remarkable to think that that was the first time and of course as Minister Ada already said you're hosting the trade ministers meeting next month. Where do you, I mean trade and climate, I mean this is greening trade, this is a big agenda. Where do you think governments should focus and prioritise? What would give us the biggest bang for a buck right now? There are many other contributors to carbon emissions. One of them is delays for example with customs. When they don't speak the same language delays you see trucks sitting for 10 hours working instead of going. So that is a problem. Another one is protectionism. When you have protectionism policies there are certain regulations that prevent trade even though these are non-tariff barriers are happening. So the world have to work together to really remove that. Today one of the largest producers of sulphan is in China but with this kind of geopolitical issues it will impact the ability of people to get the best and the most efficient from China. And with us as a company we work to reduce wherever we come. For example a good example is we established a logistic park in Rwanda and the main port for Central Africa is there but they get their cargo from Dar es Salaam, Tanzania or Mombasa in Kenya. It used to take two weeks and cost between five to seven thousand dollars. When we put this and organise the trade it only take 48 hours. So imagine how much fuel you saved just by organising it and having proper customs in both sides and the cost reduced from 7,000 to 2800 just by organising. In fact the main product in Rwanda for example is tea and coffee and the farmer produced 30% more for waste in case the product gets wasted. We established a cool store and we told the farmers produce what you need, no access and we pick up the cargo from the farmers with special containers and now they don't need to over produce. That's again there are a lot of things we can do as private sector when we are and it's reduced. In Brazil, Brazil is one of the first countries to use biofuel and now we work with the government to use it in the port to reduce emissions. So that's a beautiful example of trade and logistics working to decarbonise and bring greater wealth to a small farmer because they've got a prediction of a cool supply chain etc. So I think these are the stories which get overlooked and I think that's wonderful. So in the industrialised world a return to industrial policy, green barriers coming up or perceived to be so. Great fear in the emerging markets development economy is that somehow in a return to industrial policy that they will be on the outside again. So concern around CBAM, concern around some of the aspects of the inflation reduction act. As a foreign minister in part of the world that caused the climate crisis. What kind of collaboration do you think could have the greatest impact and how do you see this? This is an incredibly important question and I agree with the description that there are reasons why we've seen the return of industrial policy and one of them is that you know when tomorrow looks more or less like today you can let the market fix things but when you have to go through systemic changes where you have to deal with both the chicken and the egg. I mean if you want to do hydrogen green or blue hydrogen or clean hydrogen transport you need to produce the hydrogen, you need to distribute it to the port and to the next port and you have to have the ships so you can't just fix one part of it, it's a big thing and that requires industrial policy and more active state intervention and if as I said if we in our part of the world want to put the price on the externality which is the heating up of the planet we simply have to deal with the issue that we can't allow other countries not to do so but that creates great tension which are true and we who do this need to recognise and understand why and I don't think the answer is not to do it, the answer is to do it in such a way that is inclusive and open and welcoming emerging markets. I mean there is a major potential to reap the benefits of that of countries who haven't so least the least developed countries who haven't actually been through any kind of energy revolution yet can go straight into renewables and then you know pick up their own natural resources don't sell them as resources but use cheap energy and probably cheap labour to develop products which you can then export and you sell the goods and the services more than just the raw materials that's actually a great potential with a number of African countries I think also in Latin America this is a growing discourse that maybe we should stop thinking about just you know selling the commodity but actually doing something with it so and we should support that so we should say that yes we need to put the price of carbon but some of that money will actually be used to help you guys in the south to if you want to to develop to a jet piece and and other partnerships to actually make sure you're part of this new world and I have to say again that you know if we if if if we agreed on a common pricing of the externalities you know carbon emissions and nature loss we could have a free trade system that would still work quite on its own as long as this was a genuine pricing it's not going to happen tomorrow but there are some initiatives out there to try to push that and the the best outcome of the seabam story is that you don't actually need to introduce it because you have inspired all the countries to to to put the price at home which also gives government revenue with many development countries to do well with so it was I'm going to open it up for questions we've got a few minutes from the audience um but one of the I think one of the most important moments or photographs you know at COT was actually the director general of WTO sitting with the managing director of the IMF present the world bank and the head of the OECD so saying we're actually going to start working together again at the political level on carbon pricing uh long overdue and very important um questions from the audience don't be shy professor esti hi i'm dan esti a professor at Yale although um only recently returned after two years in Geneva on succumbent to the world trade organization and I want to ask perhaps all of you but particularly those with European connections um is the push for the carbon border adjustment mechanism helping or hurting the effort to drive sustainability forward through the trade mechanism and here's what I worry about I think the seabam could be arguably said to be conceptually correct you don't want companies getting competitive advantage in traded goods by underperforming against environmental requirements on the other hand and I would argue by the way from a policy point of view it may be essential and yet it seems structurally flawed wouldn't it make sense to fix the sort of unilateralism that uh our colleague from uh Dubai world ports uh Dubai ports uh is suggesting is out there and I think the minister from Peru the same thing and there's a fear that this is emerging as green protectionism and I think that's a devastating conclusion and I wonder why Europe hasn't pulled back and said let's rethink and not make this unilateral find common ways to measure the greenhouse gases agree upon a global social cost of carbon which you've said you wanted yourself and I I wonder whether there shouldn't be acknowledgement of different approaches to climate change so that we're crediting at the border not just explicit carbon pricing but a broader array of efforts uh and fundamentally I wonder whether there shouldn't be a greater commitment to equity uh in the european union framework in a way that would ensure those developing countries feel appropriately taken care of yep minister yeah I mean I think I mean you laid it out very correctly it on on the one hand it is politically necessary and it will happen it has been decided and I think it's very difficult for uh european governments to explain to you know their businesses and and workers that we will have a carbon price of 100 euros probably growing to 200 euros within not so many years but you know it does but but if if you import the same product from somewhere in asia without the carbon price you know they will they will compete you out so that that's politically impossible so that's a real it's a real thing and it's not going to go away however uh it also has all the consequences you described professor it's also correct uh no I think it's important to design it and I know that director general negotiate has also said that look at how you design uh seabam it has to be very clear that if you actually say here's the car I paid in my home country my country just introduced this price or I'm part of some other scheme then you're exempt right this this would be the counterargument to be to being protectionism is that you can fix it at home and we are seeing that some countries are now looking at exploring a carbon price system at home it precisely because it's much smarter to take the money for your government than to see another government in europe taking the money when you export your products so so and and frans timmermans is one of the you know coiners of this idea has said that he he would he would be happy if we didn't actually have to introduce it because it triggered sort of a global move but so then you could ask why would why aren't you just waiting well because we've been waiting too long and and and the space for more emissions in the atmosphere is so limited that you can't wait for a perfect world because it's not coming around the corner but it is a very important conversation to be had and in the meantime let's recognize it's a second best to a global carbon price and we in the north who do this should compensate and and take active measures to make sure that those affected negatively by it can be brought into it but there's also a message to emerging economies in this it don't make sure you're not locking in your economy in the fossil world which the western world is leaving behind because you will believe here we have cheap products we have relatively cheap labour we have an abundance of resources and still we will not get into the market so go for the new rather than the old and at least my government is very ready to be you know to be with them in in developing these old tech transfer and so on to to make this happen but it's a real problem and it's I did not take it away because the professor question remains relevant for all of us yeah that's a very short point to underline in addition to what has been mentioned no a as I mentioned when I was talking about the mining sector in Peru in the case of these issues such as the forestation illegal fishery energy transition food security as a chain etc the solution should be built with the participation of all these stakeholders not because we are in favour of for example the the the proposal of the European Union in terms of the forestation but not in terms of the terms how long it is going to take so it is very important to be in touch with all these stakeholders to establish the real solution so just a small but very I think very important point well we are out of time unfortunately you can see that to build if we're going to achieve the objectives that we set for ourselves as an international community we're going to decarbonise we are not going to leave people behind we're going to give people a chance of prosperity by building a cleaner greener world then we need a trading system that will take us all there which means that unilateralism is going to have a limited impact and a new era of collaboration and cooperation is going to be fundamental at a time when geopolitical tensions are on the rise so we need leaders in the private sector leaders in government leaders in from all all parts of the world and we're going to need really brave leadership in the international organisations that have been the system for the past 80 years and need to reform their systems to be relevant for the next 80 there is much to do the weff is doing a lot on different aspects of this thank you for joining us wherever you are in the world thank you for those of you in the room and please thank the panel