Cleaner environment processes can't be dodged

Post Copenhagen, Indian exporters are more likely to face non-tariff barriers on the grounds of environment. The commerce ministry needs to identify potential areas of conflicts and put in place a mechanism to respond to them.

At present, the United Nations Conference on Climate Change is sharply focused on binding emission reduction targets and on ways to find money to tackle the challenge of meeting the possible targets. Whether agreements will be reached on critical issues is a matter of conjecture but what is definite is that the awareness levels have grown significantly. In future, an argument claiming a right to pursue environment damaging methods to serve the greater goal of poverty reduction is unlikely to be received well.

The tuna-dolphin issue between Mexico and the United States (US) first brought the ‘trade and environment’ issue to the fore in the nineties. Subsequently, the ‘shrimp-turtle’ issue pitted India against the US. Whether trade in goods can be restrained based on the methods used to produce them or based on the environmental damage the methods caused, became a subject matter for much debate at the dispute settlement body at the World Trade Organization (WTO).

The WTO dispute settlement body has affirmed that WTO rules do not take precedence over environmental concerns. WTO’s dispute settlement body allowed a member in 2001 to maintain its ban on the importation of asbestos so it could protect its citizens and construction workers. In the US-India shrimp-turtle dispute, WTO pushed members towards a strengthening of their environmental collaboration; it required that a cooperative environmental solution be sought for the protection of sea turtles between the parties to the conflict.

Efforts of the European Union to bring environmental issues to the centre stage in the WTO negotiations have generally been resisted by India and some other developing countries. As a result, the issue is not a part of the Doha Development Round agenda, although concerns and best intentions have been expressed in the Marrakesh Agreement and some other documents. A Committee on Trade and Environment has been set up at the WTO and it has been giving generally non-controversial reports from time to time.

In the absence of a binding agreement, legal barriers to trade on the grounds of environment may be unsustainable. That is unlikely to stop non-government organisations (NGOs) from calling for boycotts or governments bending to the pressures from the NGOs. The public support for such actions can be much stronger post-Copenhagen than ever before because of heightened awareness levels.

India has generally been taking a moral high ground alleging that richer countries pollute more and so need to be soft on poorer polluters and that no trade barriers can be enforced without legally binding agreements.

Post-Copenhagen, the commerce ministry will have to revisit this stand just as the environment ministry decided to revisit its earlier rigid stand. The two ministries need to work more closely and formulate policies that will stand scrutiny at the global levels and also get acceptance in the domestic constituencies.

Sooner or later, Indian businesses have to reconcile themselves to the reality that the issue of cleaner environmental processes cannot be dodged any more. Exporters, in particular, must accept the inevitable and adopt more environment-friendly processes. They must also enhance preparedness to cope with more and more non tariff trade barriers.

Email: tncr@sify.com