Trade and climate no more a trade-off

India’s argument that the World Trade Organisation (WTO) should not negotiate rules on non-trade subjects like climate change is as old as it is flawed. That climate change is emerging as the most important global challenge is something India clearly understands and reflects in other fora. It is no longer possible to insulate ‘vanilla’ trade from sustainable trade. Rather than oppose, India must ensure that decisions in the WTO are compatible with multilateral climate agreements. It must engage in framing rules that take into account different economic and technical capabilities of countries, particularly developing countries, including itself.

Sticking to a position developed at a time when environmental and climate considerations were not central to economic activity puts India at a disadvantage. It also makes it sound guilty of not preaching what it has started to practise. It is short-sighted to deny that climate change, pollution and biodiversity loss do not have trade dimensions. The biggest economies have announced their intention to transition to a net-zero economy. Some like the EU are in the process of framing policies and regulations that will underpin this transition. India, too, has set its goal by 2070. Which makes it sotto voce admit that trade can’t be insulated from reducing greenhouse gas emissions in its economy. At the same time, it must be acknowledged that developing countries will require more time and support to make the transition. Trade is central to growing economies, improving lives and livelihoods. Trade should be synced to this purpose of making the transition to a circular economy.

As a country that is extremely vulnerable to climate change and focused on growing its economy, India, of all economies, must ensure that international trade rules facilitate – even accelerate – its transition. It must ensure that the rules do not impede its growth and development in a sustainable manner. By playing the game, it must ensure that the rules are fair. It can’t do that by playing spoilsport.


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