In the era of the climate crisis and global warming at an unprecedented rate, the need for sustainable trade is becoming increasingly crucial. Sustainable trade aims to make trade efficient from a socio-environmental point of view. The emphasis is on minimizing damage to the environment and maximizing gains for all. Yet international trade laws and policies remain lagging behind in these areas.
Currently, international trade is a major source of environmental degradation and has failed to integrate sustainable development goals. One of the guiding principles of international trade benefits all parties involved. And that is the goal of trade policies. But is a trade deal really good if it degrades our natural resources and pollutes the environment? Is it worth encouraging pollution-intensive business activities? These are questions that our trade policy makers tend to ignore.
In the short term, unsustainable trade could lead to economic gains, but in the longer term, the social and environmental cost may be too great to ignore. The continuation of such business practices will exacerbate inequalities, resource degradation, water scarcity, food insecurity and poverty and other aspects of climate-related crises. It is too high a price to pay. We must then move to sustainable business practices
Towards the end of the last century, demands for “greening the GATT” arose. Shortly after, the GATT was replaced by the World Trade Organization, but progress on sustainability remained insufficient. Although the WTO has incorporated several environmental provisions into its functions, these remain insufficient given the gravity of the climate crisis. Today’s business practices have the potential not only to worsen the climate crisis, but also to reverse the gains from climate change mitigation. We must therefore do more to protect our environment.
A green perspective must also include safe business practices.
Trade policies and laws can be an effective tool to drive climate action and have the potential to ensure compliance with climate agreements. But it’s no secret that treaties like the Paris Agreement have failed to put in place effective compliance mechanisms. Since trade revolves around maximizing mutual economic benefits, people are ready to make adjustments. Trade policies and rules must therefore make climate-friendly products and technologies more beneficial by removing all tariff and non-tariff barriers. Likewise, higher tariffs and quotas should be imposed on carbon-intensive imports to discourage them.
Other provisions include the removal of unsustainable subsidies on carbon-intensive products and technologies. At the same time, subsidies on the depletion of resources such as fishing must also be removed, while a smooth transition through subsidized green technologies and products will prove to be effective.
In addition, international environmental standards must be observed in the production and trade of commodities, for example the application of emission standards is effective in controlling emission levels during the production of goods.
An important aspect of trade is to ensure equitable development by granting preferential status to developing countries in the form of lower tariffs, etc. Likewise, providing assistance to developing countries in the form of green finance, grants, technology transfer and capacity building will not only lead to clean and sustainable development and trade, but will also help them to grow. gain competitive advantage. The concerns of developing countries that remain can be addressed through the measures mentioned.
Last but not least, the inclusion of environmental groups in trade negotiations is a vital step in ensuring that all trade agreements meet the criteria for sustainability and do not pose a threat to our environmental future. Because international trade affects our lives, we are important stakeholders in trade negotiations. No deal is fair if it ignores the stakeholders. In this case, environmental groups represent our needs and ensure that our planet is protected from harmful trade deals. There is no better way to put environmental concerns on the table than through the inclusion of interest groups.
Current business practices are not fair because they ignore environmental and social costs. It is high time the world took a holistic approach to climate change. Thus, the harmonization of trade and environmental policies is the need of the moment and should not be delayed any longer. It must be undertaken at the international, regional, national and local levels. Building sustainable trade will lead to universal gain by amplifying environmental protection and climate change mitigation.
The writer is an economist, environmentalist and passionate about sustainable development.
Posted in Dawn, December 21, 2021