Policy

Green goals should be decoupled from trade, says Goyal

Our Bureau New Delhi | Updated on June 14, 2021

WTO DG argued that tariff policy on environmental friendly products needed to be re-considered

Trade policies and green goals need to be decoupled and developed countries should not use the interplay of trade and climate change to create hindrances in the path to prosperity for poor and lesser developed countries, Commerce & Industry Minister Piyush Goyal said at the ‘UN Trade Forum 2021’ on Monday.

WTO Director General Ngozi Okonja-Iweala agreed with Goyal that positive support to environmental goods and services should not be used as a barrier to trade but said that tariffs needed to be brought into sync with what is happening in the environment today.

Goyal, who participated virtually in the meeting, pointed out that many countries which had developed and brought prosperity to their people had enjoyed the carbon space that was available to have low cost energy. “It will be very unfair today if we try and bring trade policy or barriers and foist it upon the developing world or LDCs,” he said.

It is important that there should be differentiated responsibilities for the less developing and developed world, the Minister said. “The developed countries have to fulfil the commitments made at the Paris Summit (UN Climate Change Conference in 2015) particularly related to capital and technology. I can assure you that India would love to do better than what it has committed there,” he said.

In fact India is one of the few countries to monitor its progress and submit bi-annual reports to the UNFCC, Goyal said.

Tariff policies

Instead of trade measures, the UN and other multilateral agencies like UNFCC should focus on bringing the world together to fulfil their commitments towards climate change. “So I do believe we have to decouple trade policies and our green goals. Let trade policy look for more inclusive growth all over the world. Let us all work towards climate justice and sustainable lifestyle,” he added.

Responding to Goyal’s speech, the WTO DG said that she agreed that positive support to the environmental goods and services should not be used as a barrier to trade and there were concerns of developing countries around that. However, she emphasised that sustainable development was embedded in the purpose of the WTO and there was a need to rethink some of the trade policies to bring them up to date with environmental needs.

“One area is to look at some of our tariff policies. Because it has not yet been brought into sync with what is happening in the environment today, we have many countries that impose tariffs on environmentally friendly goods,” Okonjo-Iweala said.

Giving an example of clean cooking stoves, she said that average tariff applied by countries on the item was about 6.5 per cent and additional taxes almost doubled the price of clean cooking stoves. “There are 4 million premature deaths of mostly women due to the polluting cooking stoves. We should look at what sort of tariff policies we have on environmentally friendly goods,” she said.

Published on June 14, 2021

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