The commerce ministry is taking a pre-emptive shot at proposed policies in the US and the European Union,aimed at using environmental standards as platforms for implementing trade barriers with the developing world. Speaking at the release of a report by Indias Centre for WTO Studies,commerce secretary Rahul Khullar said the developing world must separate environmental issues from trade policies if relations between them and the developed world are to remain economically stable.
Khullar and joint secretary Rajiv Kher,both WTO negotiators,said border tax adjustment (BTA) measures will unfairly tax those developing countries with less stringent carbon emission policies than their developed counterparts. Bills such as the US House of Representatives clean energy and security act 2009 will impose such a BTA on India if it becomes law. Environment is a separate subject and trade is a separate subject; the WTO is for trade and there are multilateral forums for environment and thats where they go, Khullar said. When you try to blend them,the mix can be combustible.
A similar EU policy will begin imposing import duties based on Indias carbon footprint from 2013 onwards,however a duty schedule has yet to be outlined,according to the report. These unilateral trade measures,taken in a protectionist manner,are likely to be held incompatible with the WTO rules, reads the document. This will spark a trade war and will lead to massive,justified,WTO-legal retaliation by the affected countries. The American legislation,also known as the Waxmen-Markey bill,has been tabled in the US Senate. Efforts to contact US Congressman Ed Markey were unsuccessful.