Trade and Sustainability in Global Economic Governance
The integration of trade and sustainability has become a contentious issue within global economic governance and is likely to be a focal point in upcoming World Trade Organization (WTO) Ministerial Conferences.
India's Stance on Non-Trade Issues
- India, along with other developing nations, has historically opposed the inclusion of non-trade issues in the multilateral trading system.
- The Singapore Ministerial Conference in 1996 marked a significant moment when such issues were strongly resisted by developing countries.
- The Doha Round reduced ambitions on non-trade matters, removing labor standards and narrowing the scope of environmental issues.
Developed Countries' Strategies
- Developed countries have pursued sustainability issues through various free trade agreements and plurilateral arrangements at bilateral and regional levels.
- The U.S. uses stringent, sanction-based dispute mechanisms, while the EU has shifted towards stronger enforcement in recent FTAs.
India's Evolving Approach
India has gradually incorporated comprehensive trade and sustainability chapters in FTAs, starting with the India-Japan FTA in 2011, using soft enforcement mechanisms.
Environmental Credentials and Challenges
- India has been a party to major Multilateral Environmental Agreements (MEAs) and is advancing in adopting green technologies.
- Unilateral environmental measures, especially from the EU, are impacting India's export competitiveness, notably with the Carbon Border Adjustment Mechanism (CBAM).
Choices at the WTO
- India faces three choices: maintain non-engagement, accept developed-country agendas, or actively shape the trade-sustainability interface by building coalitions.
- The focus should be on establishing multilateral principles that recognize equity, proportionality, and diversity in policy.
Conclusion
India must participate actively in shaping sustainability norms within trade to ensure that developing-country interests are protected and represented.
