On March 13th -14th 2025, the International Seminar on Green Trade Policy and RCEP, co-organized by the Centre on Contemporary China and the World (CCCW) of the University of Hong Kong, the Institute of Finance and Sustainability (IFS), and the Capacity-building Alliance of Sustainable Investment (CASI), was held on the campus of the University of Hong Kong (HKU).  The seminar was supported by Hong Kong Green Finance Association, Sprinkles (HK) Charity Foundation, Hong Kong Shippers’ Council, International Climate Initiative, and SIPA. This note provides a brief summary of key takeaways from the seminar.  

Jointly moderated by Dr. Ma Jun, President of the Institute of Finance and Sustainability (IFS) and former Co-Chair of G20 Sustainable Finance Working Group, and Mr. Edward Yau, former Secretary for Commerce and Economic Development of Hong Kong, the event convened more than 50 leading policymakers, scholars, and researchers from across 10 RCEP member states to discuss the feasibility of introducing a green trade arrangement within the RCEP. The seminar featured distinguished speakers including, among others, Dr. Mari Pangestu, Vice Chair of Indonesia’s National Economic Council and former Minister of Trade (TBC); Virasakdi Futrakul, former Deputy Minister of Foreign Affairs of Thailand; George Hara, former Japanese Ambassador to the UN and advisor to the Japanese Prime Minister; Dr. Andrew Sheng, Distinguished Fellow at the Asia Global Institute and former broad member of Khazanah Nasional Berhad, Malaysia; Mr. Tang DingDing, Honorary Chairman of Green Trade and Investment Committee of China Academy of Environmental Science and former Director General of International Department of China’s Ministry of Ecology and Environment; Yao Ling, Director of the Institute of European Studies, Academy of International Trade and Economic Cooperation, Chinese Ministry of Commerce; Maggie Wong, Permanent Secretary for Commerce and Economic Development, Hong Kong S.A.R ; Yang Jun, Professor in the Department of Trade at the University of International Business and Economics (UIBE), Peter Burnett, CEO of the China Britain Business Council; and Professor Li Cheng, Founding Director of the Centre on Contemporary China and the World (CCCW).  

Key Discussions and Insights

Professor Li Cheng underscored the importance of free trade and regional economic integration amid rising global protectionism and geopolitical tensions. He highlighted RCEP’s role as a stabilizing force in global trade and in boosting regional economic growth and fighting climate change, calling for a strong green trade policy. Professor Li also expressed optimism about Hong Kong’s future in RCEP, emphasizing its financial strength, regional economic ties, and potential role in advancing green and inclusive trade policies.

Dr. Ma Jun, who initiated a research project on green trade for RCEP in 2024, stated that “against the backdrop of the US withdrawing from the Paris Agreement and raising tariffs on all other countries, Asia should take bold initiatives in defending the free trade system and leading in climate actions. Adopting a green trade arrangement in RCEP is the right thing to do in the right time.” Ma Jun presented four key messages based on his team’s preliminary findings. First, he proposed a green free-trade initiative that would cut both tariffs and non-tariff barriers on a list of broadly defined green goods and services.

 Second, he emphasized that the broadly-defined green list should include not only green (environmental) goods, but also green (environmental) services, as well as low-carbon goods and services such as low-carbon steel, cement and iron ore, as well low-carbon services such as low-carbon aviation and shipping. Third, he stressed that non-tariff barriers could be several times costlier for importers/exporters, making their reduction just as crucial as lowering tariffs to ensure the full benefits of green trade liberalization. Finally, he showed that based on initial results from a CGE model in a IFS-UIBE-PKU joint study, a well-designed green trade policy can enhance economic growth in each and every RCEP member countries, while accelerating the pace of decarbonization in the region.  

Mr. Edward Yau discussed how trade and environmental policies, if aligned effectively, can drive global progress. He described RCEP’s significance as the world’s largest trade bloc, bringing together economies of varying development levels to create a platform for economic synergy and potential expansion. While RCEP initially focused on trade liberalization without strong environmental provisions, Yau argued that this presents an opportunity to integrate green trade policies, citing successful precedents such as the Agreement on Climate Change, Trade, and Sustainability (ACCTS). He also emphasized Hong Kong’s unique role as a financial and trade hub, advocating for its proactive participation in RCEP’s green trade initiatives.

Dr. Mari Pangestu stresses the urgent need for climate action, particularly for developing nations that are most vulnerable to climate risks. She argued that economic growth and sustainability are not trade-offs, and climate actions are essential for long-term prosperity, stressing that inaction now would result in far higher costs for future generations. She called for reducing tariffs and non-tariff barriers on environmental goods, ensuring developing economies have a say in shaping trade regulations, and leveraging regional frameworks like RCEP to promote clean energy investment and sustainable economic policies. Pangestu also highlighted the importance of securing financing for green initiatives, advocating for blended finance models, carbon pricing, and regional cooperation to drive an inclusive green transition.

Panel Discussions

Following the keynote speeches, three rounds of in-depth discussions were held on important topics including the feasibility of integrating green trade elements into the RCEP framework, the challenges, and opportunities of balancing economic growth with sustainability.

The panel began with Professor Yang Jun of Dr. Ma Jun’s research team presenting preliminary findings from a Computable General Equilibrium (CGE) model estimating the economic benefits of lowering both trade and non-trade barriers to green trade. The results showed that in all plausible scenarios, all RCEP members would benefit from green trade policies in economic terms.  In particular, the economic benefits (in terms of percentage increase in GDP) for a green trade arrangement to smaller, low-income countries in RCEP could be significantly higher than the benefits accrued to the largest economy China, underscoring the role of China as an “anchor” for such as green trade arrangement.

Andrew Sheng highlighted the RCEP’s role as a collective platform for promoting green trade and sustainability among its member nations. He noted that countries like Malaysia could benefit from green trade initiatives but must enhance infrastructure, compliance, and awareness to maximize opportunities. He emphasized carbon pricing, green financing, and phasing out fossil fuel subsidies as essential steps for funding a sustainable transition, stressing that regional cooperation through RCEP is key to ensuring access to green markets and trade infrastructure. Sheng also called for a mindset shift toward recognizing the interconnectedness of human and natural systems, urging collective action within RCEP to drive institutional and policy changes for a greener economy.

Mr. Edward Yao noted that although the RCEP made only limited reference to environmental issues when it was first signed, this very fact creates policy space and institutional flexibility for incorporating green provisions in the future. He suggested that Hong Kong could leverage its financial strengths to develop green financing mechanisms, support the implementation of regional green projects, and act as a bridge between Chinese and international companies — by promoting regional mutual recognition of green standards, information disclosure, and certification systems. Moreover, Hong Kong could take the lead in practices such as green bonds, carbon market development, and environmental information platforms, thereby offering RCEP member states replicable, best-practice experiences.

Path Forward: Integrating Green Trade into RCEP Agenda

 The seminar concluded with an agreement that further discussions will be needed on how to integrate green trade policy elements into the RCEP framework. Participants explored specific opportunities to initiate green trade discussions under RCEP’s working groups and integrate the topic into its formal agenda, and discussed the roles can be played by China, Indonesia, Australia, and Malaysia on agenda setting within the RCEP.  Participants agreed that the Chinese green trade research team led by Dr. Ma Jun would be joined by policy advisors and scholars from Indonesia and Australia, in order to agree on a set of more realist definitions of green goods and services and working assumptions of tariff and non-tariff barriers reduction schedule.