A green trade organization is the need of the hour – analysis
The first years of the 21st century witnessed universal economic growth. The foundations of globalization seemed to be strengthening. The 2008 financial crisis raised some awkward questions. Critics like Nobel Prize winner Eric Maskin argued that it has only benefited a select few. As countries, including major economies, faced rising unemployment and inequality, a political class propagated inward-oriented policies, rather than expanding the domains of globalization to shore up growth prospects.
On the other hand, with greater awareness and instances of natural disasters, many demanded urgency to tackle the climate crisis. There were calls to adopt a “sustainable approach” to achieve development goals that achieve high economic growth without negatively affecting prospects for future generations. The Paris Climate Agreement demonstrated that the leadership of various countries can collaborate to address the effects of the climate crisis. However, like global trade, the climate crisis action agenda also witnessed the breakdown of the consensus, such as the withdrawal of the United States (USA) from the Paris agreement.
The coronavirus pandemic has shaken the foundations of the world order. It has taught global leadership that there is no alternative to mutual coexistence, or in the words of Thomas Freidman, “the world has become even flatter.” Globalization will undergo a radical redesign. Countries will strengthen their local manufacturing capabilities for “essential products and services,” while at the same time also seeking to find alternative locations as a buffer for their existing supply chains.
As the world witnessed prolonged blockages with minimal human interface and movement, the planet entered a “self-healing” mode. The post-Covid-19 world offers an invaluable opportunity to incorporate greener policies for economic recovery. This also offers us a golden opportunity to create greener and more balanced rules-based global trade.
As the World Trade Organization (WTO) celebrates its silver anniversary this year, the Green Trade Organization (GTO) can act as its most appropriate extension. While the activities and rules of the WTO mention conservation of the environment, there is a definite margin for further concrete action on this front.
Under the GTO, the WTO rule-based order can be expanded to assimilate the facets of trade from the perspective of the climate crisis.
One, the “greening” of production supply chains: the GTO will focus on ensuring that it is awarded to developing countries, the global south, which are often used in the less productive stages of the supply chain (for the acquisition of raw materials and agricultural products) effective protection of anti-climate policies that aim to expand profits at the cost of the planet.
Two, Intellectual Property Rights (IPRs) on climate crisis mitigation products and services: Over the years, the IPR regime has witnessed dramatic growth in the technology and pharmaceutical sectors. Today we realize how important human health is to the progress of a nation. For its global equitable access, we need to develop a robust IPR framework related to the climate crisis solutions that are unfolding around the world.
Three, the taxonomy and accounting framework to promote ecologically balanced production processes: this area has witnessed the adoption of various effective measures, especially in developed countries, such as the Emissions Trading System (ETS) and the Credit framework. Carbon. However, in many parts of the world, there is still an absence of a credible institutional framework that promotes the use of green accounting and tax-based policies.
Four specialized dispute resolution mechanisms on climate crisis issues: As global trade and services systems become more complex in a world increasingly vulnerable to the climate crisis, there is a significant increase in international disputes over climate change. climate crisis. You will need a mechanism that creates an enabling legal framework to help resolve these problems, both domestically and internationally.
In the past, efforts have been made to establish similar structures within the WTO regime. In July 2014, Canada, along with other WTO members such as China, the European Union, Japan and the United States, began negotiations for a new WTO plurilateral agreement on environmental goods that sought to eliminate tariffs on a range of goods. environmental. However, as governments around the world implement aid packages and create a favorable climate for economic activities, the time has come for a “Green Trade Framework” that promotes the use of greener production technologies and systems. . The GTO should lead to tremendous positive externalities for the planet, such as decreased exploitation of natural and man-made resources, especially in low- and middle-income countries; an improvement in the standard of living with the fall in the levels of contamination; transparent and accountable protocols and systems for dealing with the effects of climate change induced by global trade activities.
Over the years, globalization has helped fuel economic growth and reduce extreme poverty. The coronavirus pandemic has made it clear that we must look beyond short-term solutions. We cannot ignore climate action. But it is creating a sustainable and inclusive planet by providing citizens with an appropriate platform to undertake economic activities in an ecologically responsible way. The creation of a Green Trade Organization is a step in the right direction.
Jayraj Pandya is pursuing a master’s degree in advanced global studies at the Po University of Sciences, Paris
The opinions expressed are personal.