Terms of eco-friendly trade
J. Sri Raman

Environmental Requirements and Market Access: Reflections from South Asia.
Ed. Nagesh Kumar and Sachin Chaturvedi, Academic Foundation. Pages 264. Rs. 695.

Environmental Requirements and Market Access: Reflections from South Asia.No aspect of national or international life has remained the same after the emergence of environmentalism and through its rapid growth in the recent period. Just three decades ago, no one expected green politics to acquire a great political role in the West or a Medha Patkar to make even a slight but significant difference to Indian politics. Nor did anyone expect environmental clearance to become an essential pre-requisite for the launch of industries and economic projects everywhere. International trade could not have remained untouched by the tide of environmentalism either.

Even votaries of totally free trade today do not envisage freedom for it from environmental factors. In fact, it is the free-market West that is seen as seeking strict enforcement of environmental standards and regulations in global trade and it is the developing countries that are perceived as demanding relaxation of these standards and regulations in the interest of a new, discrimination-free world economic order.

The volume under review reflects largely the latter viewpoint, while dealing in considerable detail with what has emerged as a vital issue for the developing world in the period of globalisation. As the subtitle shows, the book looks at the issue particularly from a South Asian point of view, but its thesis is likely to touch a cord of approval in the rest of Asia, Latin America and Africa as well.

The massive data, which this collection of papers by a host of experts presents, certainly makes this a valuable reference work. But it leaves an issue of internal importance for developing nations and economies largely uncovered.

Most of the contributors to the volume see the package of environmental requirements which the exporters of developing countries encounter as merely or mainly restrictive trade practice. The chief argument is the unaffordable cost of compliance with these requirements for exporting industries and agencies. The paper by Sachin Chaturvedi and Gunjan Nagpal notes, for instance, that the "costs of upgrading sanitary condition in the Bangladesh frozen shrimp industry to satisfy EU and US hygiene requirements is estimated to be $17.6 million. The total industry cost that is required to maintain Hazard Analysis Critical Control Point (HACCP) is $ 2.2 million per annum." Several other examples can surely be cited.

It would be unfair to portray the environmentally motivated trade regulations as only ploys to put South Asian and similar other exporters out of business. The outbreak of the Mad Cow Disease, after all, led to the enforcement of crippling restrictions in the rest of Europe to Britain’s beef exports. It would be unrealistic, however, to imagine that vested interests in the West would not try and convert the environmental regulations into a camouflage.

Chaturvedi and Nagpal, talking of the need to "distinguish between precautionary and protectionist ETBs (environment-related trade barriers)", recommend the rule: "The greater the number of countries notifying a particular ETB for the same product, the greater the probability of this being a precautionary measure rather than a trade restrictive measure." In other words, when only a single country or a group of countries imposes an ETB, it is likely to be a non-tariff barrier.

Jurgen Wiemann of the German Development Institute recognises the possibility of such foul play when she suggests a practical way out. She suggests that insurance companies can be "involved in what they specialise in, i.e. risk assessment and insurance against risks." They can be asked to asses the public health risks in a certain import and, if they are reluctant to cover these risks with insurance, the importing country can invoke the "precautionary principle" against the product concerned.

It is also true that collectively expressed western concerns over environment protection while dealing with the developing countries’ trade, often sound less than altruistic. The West, after all, has been charged with and found guilty of the practice of "dumping" with no consideration for the extensive damage done to developing countries. Limiting ourselves to South Asia, we can recall the example of the toxic waste shipped by a US-based firm to Bangladesh in 1992. The damage was discovered only after the shipment, disguised as fertiliser had been distributed to farmers across the land.

There, however, is another way of looking at the issue, one that the establishment cannot be expected to encourage actively. The environmental standards and regulations in international trade are also expected to protect the environment in the producing and exporting countries concerned. The rhetoric of the rulers of many developing countries against trade inequalities and inequities does not really conceal their callous disregard for the environmental concerns and consumers’ rights at home.

It is only the paper on Pakistan, by Shaheen Rafi Khan and Toqeer Ahmad, which talks about the cost of non-compliance with standards and regulations for the people of the exporting nation. It cites a study in 1992 showing that 9 per cent of the workers in the five ginneries in Sindh suffered from severe byssionosis caused by chemicals and a survey of the tannery clusters of Kasur near Lahore where the effluents have decreased the local farm produce by 50 per cent.

The paper on India, recalling the official introduction of an ‘eco-mark’ in 1991, records: "While eco-labelling in other countries are gaining popularity, the initiative taken by the Government of India is still waiting for a breakthrough." Very few takers, in other words, for the environment-friendly tag.