Bonn Climate Conference 2026: Developing countries push back against climate-linked trade measures at UNFCCC dialogue

The first-ever United Nations Framework Convention on Climate Change (UNFCCC) Dialogue on Trade and Climate was held on June 13, 2026, on the sidelines of the 64th Sessions of the UNFCCC Subsidiary Bodies (SB64), also known as the Bonn Climate Change Conference. The dialogue marked the launch of a new process created under the outcome of the 30th Conference of the Parties (COP30) to the UNFCCC in Belém, Brazil, last year.

Scheduled to take place annually, the dialogue was created in response to concerns raised by developing countries over the increasing use of trade-related climate measures and their potential impacts on development, market access and equity.

The session brought together governments, observer groups and international organisations, including the World Trade Organization (WTO), the International Trade Centre (ITC) and the United Nations Conference on Trade and Development (UNCTAD), to discuss opportunities, challenges and barriers related to international cooperation on trade and climate.

While presentations from international organisations highlighted the potential of trade to contribute to countries’ climate objectives, interventions from developing country groups placed the spotlight on growing concerns that climate-linked trade measures are creating new burdens and barriers for developing economies.

Opening presentations by WTO, ITC, and UNCTAD

The WTO presentation stressed that the technologies, goods and services required for decarbonisation move through global value chains, and that climate measures increasingly carry trade implications. It highlighted the organisation’s decades of work on trade and environment, new transparency initiatives, and a voluntary information-sharing exercise on climate-related trade measures.

Several developing countries used the same session to argue that existing trade institutions have failed to adequately address concerns over climate-related trade restrictions. The ITC, in its presentation, sought to ground the discussion in the realities faced by businesses, particularly small and medium enterprises.

UNCTAD’s presentation highlighted its recent analysis of developing countries’ nationally determined contributions, which found that hundreds of trade-related measures have already been incorporated into national climate plans. It said the growing use of climate-related trade measures could affect the competitiveness and market access of developing countries.

Developing countries’ concerns

The discussion was organised around three guiding questions: how trade can support climate action, how climate action can avoid adverse impacts on sustainable development, and how international cooperation can address challenges at the trade-climate interface.

Responding to all three questions, the G77 and China, the largest bloc of developing countries, warned that such measures were often being designed “without due consideration of their impacts in developing countries” or of the principles of equity and common but differentiated responsibilities and respective capabilities (CBDR-RC).

It highlighted challenges associated with “reporting requirements, certification, traceability, cost and market access, cross-border impacts, competitiveness and increased cost of imports and exports”. Rather than treating these measures as technical instruments, the group framed them as a development issue requiring assessment, transparency and support.

Alongside the G77 and China, the African Group, the Arab Group, BASIC, Like-Minded Developing Countries, India, Egypt, Indonesia, Iran, Kuwait, Russia, the Philippines and Least Developed Countries all raised concerns about the growing use of trade-related climate measures, though from different angles.

Common themes included rising compliance costs, market access restrictions, threats to industrialisation, concerns over equity and common but differentiated responsibilities and respective capabilities, and the need for finance, technology transfer and capacity building. Many also called for a systematic assessment of the impacts of such measures within the UNFCCC.

Some of the sharpest criticism came from the Arab Group, which framed climate-related trade measures as a challenge to both equity and sovereignty. The group argued that while Annex II countries account for roughly 55 per cent of historical emissions, compared with less than 2 per cent from the 22 Arab states, developed countries have failed to meet climate finance commitments and are instead imposing unilateral measures such as the EU’s Carbon Border Adjustment Mechanism, Corporate Sustainability Due Diligence Directive, Corporate Sustainability Reporting Directive, Digital Product Passport and European Union Deforestation Regulation.

Citing IMF estimates, it claimed such measures could generate annual welfare gains of $141 billion for developed countries while imposing losses of $106 billion on developing countries, with only limited emissions reductions. “Instead of finance to developing countries, we are now witnessing finance extracted from developing countries,” the group said.

The European Union offered a markedly different reading of the trade-climate nexus. It argued that trade rules, standards and sustainability requirements are critical for scaling clean technologies, reducing decarbonisation costs and building resilient supply chains.

Far from being disguised trade barriers, the EU maintained, such measures are legitimate responses to environmental externalities and unsustainable economic dependencies. While the EU offered the clearest defence, others, including Switzerland and New Zealand, also identified opportunities in trade measures.

India questioned the framing of the dialogue itself. It argued that the guiding questions failed to reflect the spirit of Article 3.5 and diverted attention from what it viewed as the central issue: the growing use of unilateral trade measures in the name of climate action. In effect, India argued that the dialogue was looking at these measures as solutions before examining the problems they create.

A third category of countries, including Independent Association of Latin America and the Caribbean (AILAC) and South Korea, adopted a more conciliatory position, focusing on improving the fairness and transparency of climate-related trade measures.

Purpose of the dialogue

Developing country groups generally argued that the dialogue should evolve into a substantive process that generates concrete outcomes, rather than serving as a platform for general exchanges of views.

They called for a systematic assessment of the impacts of trade-related climate measures on developing countries, analytical support from international organisations, regular reporting, cumulative learning across the three dialogue sessions, and potentially a more permanent institutional space within the UNFCCC.

In contrast, most developed countries viewed the dialogue more as a platform for information sharing, transparency, exchange of experiences and identification of cooperative opportunities at the trade-climate nexus, with less emphasis on scrutinising specific measures or negotiating outcomes.

WTO versus UNFCCC debate

A key point of contention was the institutional home for these discussions. The BASIC bloc (Brazil, South Africa, India, and China), Russia, the Philippines, Like-Minded Developing Countries and the Arab Group appeared to argue that climate-related trade measures cannot be assessed solely through a trade lens and should be examined within the UNFCCC against principles such as equity, CBDR and development impacts.

Several interventions suggested that trade institutions may be equipped to assess the mechanics of such measures, but not their consistency with the objectives and principles of the climate regime.

By contrast, Canada, Switzerland, New Zealand, the Republic of Korea and the European Union favoured a more cautious approach, emphasising complementarity with the WTO.

The Chairs of the Subsidiary Body for Implementation and the Subsidiary Body for Scientific and Technological Advice will now consider the interventions and submissions before determining the next steps for the process.