Policy

India on guard as some WTO members try to link environment to trade talks

Amiti Sen | | Updated on: Dec 16, 2021

WTO Director-General Ngozi Okonjo-Iweala joined ministers from supporting countries in welcoming the initiatives | Photo Credit: DENIS BALIBOUSE

These are “illegal” efforts by rich nations to impose conditions on developing nations, say experts

India is watching out as hectic efforts are on at the World Trade Organisation to bring environment at the “heart of trade discussions” — a move that the country has been strongly opposed to. Around 80 member countries, co-sponsoring three environment-related initiatives, on Wednesday, stated that they would work on making trade and trade rules address these problems.

The WTO, too, seems to be in support of the new initiative with Director-General Ngozi Okonjo-Iweala joining ministers from supporting countries in welcoming the initiatives.

The three initiatives, which include the Trade and Environmental Sustainability Structured Discussions (TESSD), the Informal Dialogue on Plastics Pollution and Sustainable Plastics Trade (IDP), and Fossil Fuel Subsidy Reform (FFSR), has the support of over 80 member countries, both developed and developing, per the WTO.

“The WTO has no mandate to intervene in national or international environmental policies. This is because environment can be used as a tool to impose unjustified trade restrictions such as the proposed carbon taxes by some developed nations. Developing countries may also be forced to lower tariffs on so-called environmental goods with dual uses. India will not support such discussions,” an official tracking the matter told BusinessLine .

Carbon border tax

The EU has already announced its plans of imposing a carbon border tax on imported goods from countries with less stringent climate policies. This is to be done in a phased manner from 2026. The US, too, is proposing to follow suit. Developed countries also have been trying to persuade developing countries to reduce tariffs on so-called environment friendly goods, for instance parts for an effluent treatment plant, which could also be used for other purposes.

Making environment a part of the WTO trade talks could add legitimacy to such unilateral trade barriers and market access expansion efforts, say experts.

“Not only are these processes illegal, they are simply efforts by rich countries to impose conditionalities on developing countries and push their own so called environmentally friendly goods and services into our markets,” said Ranja Sengupta from the Third World Network. If the developed nations are so concerned about environment, they should support developing countries through finance and technology transfer, she added.

“Trade, and the WTO, are part of the solution to climate change and environmental degradation. That was the message I took to COP26 in Glasgow a few weeks ago,” the WTO DG said.

The DG pointed out that it was in 1994 that leaders adopted the first decision recognising the “mutual supportiveness” of international trade and environmental action and created the WTO Committee on Trade and Environment (CTE).

However, what is important to note is that one of the principles on which the work of the CTE was based was the recognition that the WTO is only competent to deal with trade.

According to the parameters guiding CTE, the WTO’s only task is to study questions that arise when environmental policies have a significant impact on trade and its members do not want it to intervene in national or international environmental policies or to set environmental standards. Other agencies that specialise in environmental issues are better qualified to undertake those tasks.

Published on December 16, 2021
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