The Guise of Climate change and Protectionist Trade Laws

Protectionism involves any attempt by a country to impose restrictions on trade in goods and services. Countries resort to protectionism in ways that are not obvious and meddle with the forces of a free market (demand and supply) for the benefit of their domestic economy.

Protectionism is illegal under the WTO rules; but developed countries, with support from radical green NGOs (funded by them), have adopted restrictive trade policies on the ground of environmental concerns with respect to their trade with developing countries.

Green NGOs originally emerged as influential agencies in identifying environmental and health hazardous products, produced or manufactured by humans, but now are being used by developed countries to safeguard their business interest under the guise of environmental issues.[1]

To stop the entry of products from developing countries to compete with their domestic products, restrictive environmental compliance for all kind of products- Agri, Auto, Electrical and Electronics etc, are put in place, which are very difficult for developing countries to meet due to non-availability of high technology and cost-effectiveness.

Radical green NGOs and monopoly-rent-seeking businesses have partnered with governments for imposing statutes and regulations to demonize certain products and use discriminatory double standards. For example, EU and U.S. regulations have unjustifiably categorized a number of agricultural production methods as “illegal” or a “threat to biodiversity.”

Trade restrictive measures by the U.S. and E.U. on the production of forestry products, GMOs, palm oil and many other traded products in the developing countries hinder future job creation, and higher living standards as tens of millions of men and women rely on the jobs and economic growth that export industries provide.

The Forest Stewardship Council (FSC) funded by EU countries and by dozens of green NGOs, was established to promote the responsible management of the world’s forests. FSC certification has now become a scheme that disproportionately protects the interests of Western paper producers to the detriment of the developing world.

FSC certification requires producers to provide meticulously updated management plans and monitor forest conditions. The technologically advanced West faces far fewer hurdles in complying with the standards that it lays down than the still-developing African and Asian Counties.

The lack of FSC certification can impair the image of a company’s products across the board other than the fact that complying with these requirements makes the otherwise cheap foreign products less competitive in the market.[2] 

Links between the Green NGOs and their allies in the governments of developed countries points undoubtedly towards mala fide intentions of developed countries. Environmental groups and other NGOs have formed alliances with European Commission directorates, U.S. government agencies, and U.S. and European agribusinesses. European Commission gave more than 66 million to environmental NGOs between 1998 and 2009 and about 600,000 to WWF Europe in 2009.[3] The campaigns of these NGOs, may not directly support Europe’s domestic industries, but undoubtedly helps to shame their foreign competitors.

U.S. federal government has imposed a ban on import of illegal timber and timber products by way of amendments to the Lacey Act[4]. The regulations impose more barriers to the entry into the U.S. market in the name of environment protection. These new compliance requirements assert that the same economic and technological advancement in the Western world are the norm in the developing world. The expensive due diligence requirements put developing-world competitors, at a distinct disadvantage as they will lose their competitive advantage because of cheaper labour and more widely available resources.

Ironically, homegrown U.S. wood products will not be subject to these new requirements, which means that the U.S. Congress has de facto subsidized domestic timber-related products.[5]

At present, it appears that measures taken by developed countries to tackle climate change has definitely a protectionist purpose and has been adversely affecting the business interest of developing countries.

WTO has to ensure that green protectionism is put in check and only those policies which safeguard the business interests of all stakeholders are allowed for governance of free international trade.

[1] The Heritage Foundation,“Green Protectionism“, August 11, 2010, at http://www.heritage.org/environment/commentary/green-protectionism.

[2] Editors of E/The Environmental Magazine, “Which Wood Should We Buy?” The Daily Green, April 1, 2010, at http://www.thedailygreen.com/environmental-news/latest/sustainable-wood-460410 (November 18, 2010).

[3] Ooi Tee Ching, “Billion-Dollar Trade War Fuels Vegetable Oil Politics,” Business Times, October 23, 2010, at http://www.btimes.com.my/Current_News/BTIMES/articles/jemut/Article (November 18, 2010).

[4] The Lacey Act, 16 U.S. Code §§ 3371–3378 (2010).

[5] International Network for Environmental Compliance and Enforcement, “Recent Amendments to U.S. Lacy Act Should Help Protect Forests Worldwide,” October 23, 2008, at http://www.inece.org/climate/ClimateComplianceAlert_LaceyAct.pdf (November 18, 2010).


ABOUT THE AUTHOR

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TANVI SINGH

Tanvi Singh is a fourth-year Law student pursuing B.Com. LL.B. (Hons.) at Gujarat National Law University. Tanvi believes that deductions and deliberations must be made sincerely based on well-researched information. Her academic interests are in the field of International Trade Law, Law and Economics, Contracts and Arbitration.

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