Can the environment and trade tango?

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: The US and EU proposal to introduce freer trade in green goods and services on the WTO agenda meets with opposition at the climate change conference in Bali.

The US and the European Union (EU) are proposing the introduction of freer trade in green goods and services in the WTO agenda. It prompted a meeting of trade ministers on December 8 on the sidelines of the UN climate change conference in Bali.

According to OECD, global market for environmental goods and services is estimated at more than $550 billion a year, out of which green services account for 65% and green goods 35%. The EU accounts for 30% of this market.

The US-EU joint proposal has invited severe criticism from environmentalists and trade advocacy groups, which allege that it is based on a recent World Bank proposal that suggested “huge gains in trade volumes” from 3.6% to 63.6%. While some of them say that there is no need to introduce an additional proposal when those on the table have not yet been resolved. Developed countries are not yet eager to open up their markets for goods from developing countries. They are also not prepared to reduce their level of farm subsidy and support. The introduction of the new proposals will only complicate and delay the process of trade negotiations, they say.

Environmental groups have criticised the US by saying the country, which has not signed the Kyoto Protocol and other environment treaties, has no right to suggest how other countries should deal with the situation.

India has already made its position clear by opposing the introduction of environmental agenda in trade negotiations. India has said that the criteria of per capita emission by countries should be considered, if the developing countries are called upon to make emission cuts. Union commerce minister Kamal Nath has opposed the idea of terming India as an emerging economy. “We are still a developing country with a large number of poor people,” he said. According to one indicator in the OECD report, released recently in Paris, India is the world’s third largest economy behind the US and China.