India, backed by several developing nations, opposed the introduction of the issue of environment sustainability and trade for discussion, at the recent senior officials meeting at the WTO, on the grounds that the matter was “too premature” to be taken up by Ministers at the 13th WTO Ministerial Conference in February 2024. It also expressed its concerns on such issues being used as a barrier to trade.

“There were attempts made at the WTO senior officials meeting to bring in issues like environment sustainability and trade for further discussing these at the MC 13. India opposed it arguing that there are multilateral environment platforms where the matter is already being discussed. At such platforms, there are Nationally Determined Contributions taking into account every country’s profile and historical emissions. By linking it to trade, sustainability issues should not be allowed to be used as a barrier to trade,” a source tracking the matter told businessline.

Tool for trade restrictions

India has always opposed global talks on environment issues at the WTO as it fears that environment can be used as a tool to impose “unjustified trade restrictions” such as the proposed carbon taxes by the European Union under its Carbon Border Adjustment Mechanism (CBAM), the source said. There is also a concern amongst several developing countries that pressure may be applied on them to lower tariffs on the so-called environmental goods with dual uses.

The topic of trade and environmental sustainability was placed on the agenda for discussion on the second day of the two-day WTO senior officials meeting on October 23-24. “India said it was premature to bring up the matter for discussion as only one member, which is the EU, had come up with a paper on this. It had to go through the regular committees and brainstormed there before it is brought up to the senior officers or Ministers. It also registered its concerns on the proposed move,” the source said.

There is already a WTO’s Trade and Environment Committee, which was set up at the end of the Uruguay Round in 1994. It underlined the principle that the WTO was only competent to deal with trade and was not an environmental agency. In environmental issues its only task is to study questions that arise when environmental policies have a significant impact on trade. If the committee does identify problems, its solutions must continue to uphold the principles of the WTO trading system.

However, 50 WTO members, in November 2020, simultaneously launched the Trade and Environmental Sustainability Structured Discussions to “intensify work” on trade and environmental sustainability at the WTO. The membership stands at around 71 now, but a majority, including India, are not part of the discussions.