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Reforming the WTO is a Long and Complicated Process

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Since early autumn 2018, the issue of reforming the World Trade Organization (WTO) has become an increasingly visible item on the global economic agenda. It was one of the central questions posited in the final communique of the G20 Summit that took place in Buenos Aires on November 30 – December 1, and the parties intend to tackle it again at the next meeting in Tokyo.

The WTO is traditionally considered the third institution of the Bretton Woods system. However, while the first two – the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) – started functioning shortly after the end of World War II, it took 47 years of excruciating negotiations to create the third part, a universal trade organization. The establishment of the WTO in April 1994 following the Uruguay Round of negotiations (1986–1993) should rightly be considered the greatest event in economic relations in the 20th century. However, the tremendous success had a certain reverse side: contradictions and issues between member countries remained. This predetermined the future need to reform the WTO.

Trade Wars are a Signal for Action

The problem of the institutional reform of the WTO has been discussed at the level of experts for at least the last 15 years. However, it has never gone beyond the scope of an academic discussion, and for serious reasons too. The older generation of trade diplomats and experts remembers all too well the excruciating negotiations at the Uruguay Round, which were accompanied by crippling crises and contradictions between the parties. Hammering out compromises was a Herculean task, and the agreement on establishing the WTO crowned those compromises.

It is precisely because of these features of the WTO’s protracted birth that representatives of various countries, recognizing the need to reform the organization, were fully cognizant of how difficult and risky such a reform will be in practice. That is why each and every time discussions ended the same way: the GATT/WTO system has been functioning for 70 years, and even though it has its problems, no one can guarantee that a reform will not make things worse. Nowadays, the situation has been noticeably radicalized due to the new U.S. protectionist policies and the trade wars it started “with the entire world.”

The Administration of the 45th US President has embarked upon a course of open criticism and attacks on universal trade rules. In late February 2017, the United States Trade Representative (USTR) delivered the Trade Policy Agenda and Annual Report to Congress. The document emphasized that given the “unfair trade practices” of other countries, the United States can disregard the WTO rules and conduct a more “aggressive” trade policy in protecting its national interests.

On June 1, 2018, Washington imposed increased import tariffs on metals from the European Union, Canada and some other countries to 25 per cent for steel and 10 per cent for aluminium. The current U.S. administration believes that domestic steel production has fallen sharply in the recent years, and this threatens national security. However, Europe and Canada see the legal justification for Washington to increase tariffs as being completely unacceptable.

Partners Reject U.S. Protectionist Measures

Within the WTO, each country has its commitments based on the rules developed during the Uruguay Round. These rules allow import restrictions in three very specific situations: in cases of dumping; the use of illegal subsidies; and if there is a threat to national industries due to a sharp increase in imports. In each case, the damage from the above-stated actions of a supplier country must be substantiated. The damage is assessed in the course of an appropriate transparent investigation that involves all the parties. The current U.S. measures do not fit into any of these scenarios, and instead it is being justified by “reasons of national security.” This, however, gives the matter an entirely different legal twist.

The WTO legal framework does stipulate restricting market access for reasons of national security: appropriate measures are possible in cases of illegal trade in weapons and nuclear materials, the danger of armed conflicts, a terrorist threat, etc. Therefore, in such cases, every state itself determines the measures for restricting access to its market under Article XXI of GATT, which is devoted entirely to “reasons of national security.” The difficulty with applying Article XXI of GATT is that its application mechanism is still not quite specific; a state that introduces restrictions under this article acts as the ultimate judge in the dispute.

The United States offers a very subjective formulation of “reasons of national security” that is clearly detached from the current international rules. Washington sees a threat to national security in the sharp drop in domestic metal production, even though such a situation is essentially a consequence of regular international competition.

European countries and Canada were shocked by the fact that the United States imposes tariffs against them out of “reasons of national security.” As the President of the European Commission Jean-Claude Juncker emphasized, “these unilateral U.S. tariffs are unjustified and at odds with World Trade Organization rules. This is protectionism, pure and simple.” President of France Emmanuel Macron called the U.S. administration’s decision illegal and mistaken. Prime Minister of Canada Justin Trudeau spoke rather sharply at the June 2018 G7 Summit in Quebec calling Washington’s measures “punitive,” “unacceptable” and “insulting.”

Following repeated attempts to convince Washington that its protectionist measures were unfounded, in late November 2018, the European Union, along with China, Canada, Norway, Mexico, Russia and Turkey, and then India and Switzerland filed a complaint against the United States with the WTO’s Appellate Body concerning the illegality of the steel and aluminium tariffs imposed by the United States. In the complaint, the plaintiffs intend to challenge the U.S. tariffs as protective and simultaneously prove that the United States cannot invoke reasons of national security. This demarche against the United States by nine countries at once is a rather convincing proof that the WTO’s leading members are resisting Washington’s attempts to revise the existing rules of international trade.

Thus, the U.S. administration believes that it can protect its domestic market and ensure its foreign trade interests on the basis of its domestic trade legislation. Over the course of 2018, Washington primarily invoked two legislative acts. Under the Trade Act of 1974, the United States can impose penalty tariffs on countries that discriminate against American goods. The second is the 1962 Trade Expansion Act that allows the United States to restrict import of goods that would “threaten to impair the national security.” This act served as a legal justification for Washington to increase import tariffs on steel and aluminium starting June 1, 2018.

Europe, Canada and Japan believe that using legal acts that are over 50 years old is odd at the very least, since in the intervening decades, international economic regulations have changed drastically, the principal change being the emergence of a full-fledged multilateral regulation institution, i.e. the WTO, which was to a great degree promoted by the United States. Strictly speaking, the moment the WTO became operative in January 1995, the United States did not invoke the provisions of those domestic acts since it believed itself to be bound, like other WTO members, by the WTO’s commitments.

Every Side has its Arguments on Reforming the WTO

In March 2018, the United States Trade Representative Robert Lighthizer presented the latest version of the U.S. administration’s annual agenda in trade policies. The agenda concerns such issues as reforming the WTO, trade agreements with other countries and the application of U.S trade laws. The document is critical of the trade policies of previous administrations and simultaneously claims to reach a qualitatively new level in trade policies under the Trump administration.

Lighthizer’s report states that the U.S. administration is dissatisfied with the existing rules and their application in such areas as labour conditions, competition policies and the medical equipment market. It notes the investigations of U.S. officials into China’s violations of U.S. intellectual property rights. In essence, the report justifies instances of applying U.S. trade laws from the 1960s–1970s in order to protect national security interests, which cannot but cause concerns, since these laws are applied separately from the WTO rules and the commitments that the United States has undertaken as part of the organization.

As for the current multilateral negotiations at the Doha Round, Washington has specific grievances in that area, which may be considered justified to a certain extent. For instance, the United States is not satisfied with their highly stilted character, the impossibility of achieving new agreements other than at the biennial WTO ministerial conferences, and what the United States views as the outdated agenda of the Doha Round.

What is more, in recent years, the United States has not hidden its displeasure with the position of a large group of countries within the WTO which, having joined the organization as developing countries, continue to see themselves as such today, despite the fact that they have made significant progress in a number of economic sectors and even outstripped certain developed countries. In addition to this, many developing countries have non-transparent trade policies. Consequently, those WTO members de facto use privileges that Washington deems to be unjustified, which blocks progress in developing new WTO rules and also impedes further liberalization. This is the essence of Washington’s approach to reforming the WTO: eliminate unjustified and unfair privileges held by a group of developing countries that today essentially paralyse the multilateral trade system.

As for the other major player in international trade – the European Union – it has assumed a highly proactive stance on the issue of reforming the WTO. The European Union was the first to publish a list of specific proposals (a concept) on reforming the WTO. Analysing the entire list is rather a task for trade policy experts. It would therefore be appropriate to single out the key points. Even though the European Union’s stance was originally a direct consequence of the wrongfully protectionist measures of the United States towards European manufacturers, the document contains no direct or indirect complaints against Washington, which is largely reasonable, since reforming one of the key institutions of global economic management is too grave an issue to start it by settling scores with an old trade partner.

Essentially, Brussels shares Washington’s position on the matter, as well as its grievances against that group of developing countries that has reached a rather high level of economic development, but has no wish to part with their previously gained privileges

The EU proposals also note that today’s discussions are frequently dominated by the opinion that global trade rules somehow impede trade and, therefore, developing countries need to be exempted from both current and future rules. In fact, today, the differences between developed and many developing countries are not quite as pronounced as they were 25 years ago, when the WTO was established, meaning that the above-mentioned opinion is fundamentally wrong. Obviously, some flexibility in enforcing the compliance of developing countries with the WTO rules should be preserved, but only in those cases where it is necessary. The proposals put forward by Brussels contain specific mechanisms for tackling this task.

The EU concept focuses heavily on modernizing the WTO’s Appellate Body, a crucial organ in the mechanism of resolving disputes within the WTO. The European Union’s stance on the matter was supported in November by Canada, India, Norway, New Zealand, Switzerland, Australia, South Korea, Iceland, Singapore, Mexico and China.

In its proposals on the Appellate Body, Brussels largely takes Washington’s grievances against its current functioning into account. In particular, the European Union proposes limiting the appeals term to 90 days, which had been stipulated earlier, yet the parties often failed to comply with the requirement.

The EU concept also contains a series of initiatives on bolstering the multilateral trade system and improving the efficiency of the WTO.

China, which has been striving to form a united front with other countries that condemn Washington’s protectionism, has also called for a reform of the WTO.

While supporting WTO reform, China has thus far limited its actions to fairly general statements, stressing that the importance and inviolability of the WTO’s basic principles and rules. It would seem that Beijing is unlikely to be unconditionally receptive of Washington’s demands that current privileges for developing countries in the WTO be abolished. In contrast, China will rather put forward the need to fight protectionism, which is a threat to free trade.

As for Russia, it wholeheartedly supports the idea of reforming the WTO. President Vladimir Putin and Minister of Economic Development Maxim Oreshkin recently declared this stance. Russia’s trade diplomacy has quite good positions to take an active part in the process.

In conclusion, we need to emphasize that the nascent process of reforming of the WTO cannot be simple and quick, since the list of problems is too variegated. Above, we have outlined only some of these problems. At a certain stage, the most difficult problem will likely be that of transforming the decision-making system. The consensus mechanism that has been in effect in the GATT/WTO for over 70 years clearly hampers decision-making today, as the organization boasts 164 member countries. However, abolishing this mechanism will not be easy either. This is probably the main challenge to the incipient WTO reform.

First published in our partner RIAC

Professor of World Economy and International Affairs Department at Higher School of Economics, Leading Researcher at RAS Institute of World Economy and International Relations (IMEMO)

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Iron Fist for Pacific East

Stephen R. Nagy

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“Americans performed three very different policies on the People’s Republic: From a total negation (and the Mao-time mutual annihilation assurances), to Nixon’s sudden cohabitation. Finally, a Copernican-turn: the US spotted no real ideological differences between them and the post-Deng China. This signalled a ‘new opening’: West imagined China’s coastal areas as its own industrial suburbia. Soon after, both countries easily agreed on interdependence (in this marriage of convenience): Americans pleased their corporate (machine and tech) sector and unrestrained its greed, while Chinese in return offered a cheap labour, no environmental considerations and submissiveness in imitation.

However, for both countries this was far more than economy, it was a policy – Washington read it as interdependence for transformative containment and Beijing sow it as interdependence for a (global) penetration. In the meantime, Chinese acquired more sophisticated technology, and the American Big tech sophisticated itself in digital authoritarianism –‘technological monoculture’ met the political one.

But now with a tidal wave of Covid-19, the honeymoon is over.” – recently diagnosed prof. Anis H. Bajrektarevic on these very pages.

Following lines are a gross-detail insights into a mesmerising dynamic engulfing lately Far East and eastern Pacific.

Currently, China escalated its economic coercion against Australia by imposing two tariffs on the import of Australian barley. The first is a 73.6 % tariff on the agricultural product and the second, an additional 6.9 % arguing that the Australian government subsidies its farmers to grow this lucrative crop. Seen in tandem with the beef import ban on four Australian abattoirs, Beijing is pressuring Canberra hard to drop its calls for an independent COVID-19 (C-19) investigation and enforcing painful economic pain on Australia for what Beijing perceives as intolerable behaviour to a country that has “benefitted so profoundly” from trade with China. 

These actions raise serious questions for Japan and its friends. How does Japan respond to such a clear demonstration of punitive economic coercion against one of Tokyo’s closest friends in the region? What about other interested parties? Do Canadian, American, and other agricultural exporters take advantage of Australia’s thorny relationship with Beijing as Brazil did in the midst of the US-China trade war by exporting soya beans and other agricultural products?

Looking at the short term, especially in the wake economic damaged caused by the C-19 pandemic taking, the logic of expediency to quickly deliver economic goods to the struggling agricultural industry is sensible.

In that scenario, those countries with amicable relations with China would fill the vacuum being created by economic coercion against Australia. The candidates include Brazil, Russia, amongst others.

In the mid to long term, this sends the wrong message to states that engage in economic coercion. The message being sent here is that countries that are vulnerable to punitive economic measures have little choice to relent to Chinese or others states demands as other states will not collectively stand up to blatant economic coercion.

One by one, what can be done?

Japan and other liberal democratic states cannot make up for the sheer volume of agricultural and other exports that the Chinese market consumes. Even if they could open their markets as a temporary alternative, there would still be a huge gap. Nevertheless, an agreement to buy goods from a targeted state may relieve some of the economic pressure being applied by coercive states.  

Duanjie Chen of Canada’s MacDonald Laurier Institute correctly points out that Beijing practices economic coercion in a sophisticated and well-worn manner, by discreet to evade World Trade Organisation (WTO) disputes, precise calculation for maximum impact, and they are tailored to split western allies.

To lessen the effectiveness of these practices, Japan and other like-minded states need to mindful of these patterns and build multilateral mechanisms to create more resilience against punitive economic tactics.

In the first area, discreet to evade WTO disputes, Japan and other middle powers need to work collectively to close the WTO loop holes such that they cannot be exploit to deliver painful economic messages to states that are deemed to cross Beijing’s red lines.

To accomplish this task, WTO reform is crucial and that means collectively lobbying the US to work with allies to reform the WTO such that it functions better and can protect member states from economic predation.

If consensus cannot be achieved to reform the WTO, then like-minded states should consider a scrap and build approach that starts with like-minded countries but aims to achieve the same objectives.

The 2nd area Chen identified was the precise calculation for maximum impact. Japan felt this in 2010 with the rare-earth embargo, an embargo that hurt its high-tech firms and automobile industry. Australia is feeling this now with its beef and barley industries beings targeted. Canada felt similar measures against its canola, soya and pork industries in the wake of Ms Meng Wanzhou arrest. The tactics even included the hostage diplomacy of Michael Kovrig and Michael Spavor who are still detained to this day.

Mitigating this hard-line approach requires a multilevel approach and multilateral cooperation. At the first level, like-minded states need to brainstorm and commit to collective and equal reciprocation of the economic coercion. For instance, collective stopping the export of a key or key ingredient, components or otherwise to China until the respective coercion stops.

Here agricultural products come to mind. The growing middle class in China also has a growing appetite for the high quality and safe agricultural from countries like Japan, Australia, Canada, the US, and the EU. These like-minded states should find ways to collectively limit their agricultural exports when one or more of its members are subject to economic coercion. China is vulnerable in other areas as well.

Reputational costs are also critical levers that should be collectively applied as well. Chen mentions withdrawing membership from the Asian Infrastructure and Investment bank (AIIB) as a possible measure. I would add MoUs signed with the BRI, and 3rd country infra-structure projects as well. These are crucial institutions that China has invested both treasure and political resources in to bolster its international credentials as a provider of global public goods.

Of Ban and Japan

Japan would play a key role here in that Beijing has assiduously courted Japan to join the BRI and 3rd country infrastructure as a way to build credibility for the BRI infrastructure projects. Without partners, China’s signature initiatives cannot be internationalized, and China will not recognized as a globally admired and responsible stakeholder.

Another key initiative to be collectively adopted by Japan and other countries in their trade negotiations with Beijing is a clause that expressly forbids economic coercion on Japan and or its allies. This kind of clause could be included in other trade agreements and negotiations that Beijing deems critical to its socio-economic development.

Thinking creatively, Japan and like-minded countries such as Canada, Australia, South Korea and others should think about ways to introduce their own “poison pill” into trade agreements. The US did this with he USMCA FTA between Canada, Mexico and the US by the inclusion of a clause in which the US had veto over Canada and Mexico’s other free trade partners, in particular if either entered a free trade deal with a with a “non-market country”, i.e. China.

In this hypothetic “poison pill” or let’s call it “Musketeer Clause”, trade agreements would include a clause that required partners to collectively respond to economic coercion of one of its members by applying diplomatic, economic and other pressure on the offending actor. This could be a collective boycott, collective lobbying in international organizations, collective reciprocal tariff increase, etc. In short, an embodiment of The Musketeers motto of One for all, all for one.

The third area that needs be addressed is the tactics deployed to tailored to split western allies. The above hypothetic clause would go far in doing that by creating as grouping of like-minded states that are interested in protecting their national and collective interests.

This will not be enough. With China being the largest trading partner of Japan, South Korea, Australia and many ASEAN states, an economic re-balancing must take place in which states collectively socially distance themselves from China. Here, the key that they are less dependent on bilateral relations for economic prosperity and more dependent on a balanced, multilateral trade relations with a collection of like-minded, rules-based countries and China.

Complete decoupling from China is not realistic considering the level of integration of our economies. It is also not in the economic or security interests of the states in questions nor the global community. What is in the interests of Japan, Australia, South Korea, Canada and other middle powers and smaller powers is finding ways to buttress a rules-based international order and to push back against a track record of punitive economic policies. 

Resistance is not futile. Victims of economic coercion need to channel their own Winston Churchill and epitomize the his views on never giving up in the face of force.

“This is the lesson: never give in, never give in, never, never, never, never—in nothing, great or small, large or petty—never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.”

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Bangladesh’s Graduation: A Ray of Hope for India’s Garment Industry?

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Authors: Ms. Prerana Manral and Mr. Shreyansh Singh*

A report was released by the World Trade Organization (WTO) on May 8th highlighting the implications of graduation of Least Developed Countries (LDCs) on their trade participation. By virtue of their status as LDCs, these countries enjoy access to international support measures such as development financing, preferential market access, technical assistance etc. WTO also obliges LDCs with certain carve outs such as Special and Differential Treatment (S&DT) to increase their participation in global trade.  The LDCs are graduated to developing country status if they meet the threshold levels for at least two of the three indicators i.e. Gross National Income (GNI), Human Assets Index (HAI) and Economic Vulnerability Index (EVI) for two consecutive triennial reviews. Interestingly, in 2018 Bangladesh became the first country to meet the thresholds for all the three indicators and if it meets these thresholds again for the second triennial review in 2021, it will be eligible for graduation in 2024.

In such a scenario, Bangladesh will lose some of the benefits provided to LDCs by developing and developed countries like the preferential market access which presently accords Bangladesh a competitive edge over Indian products. One of the key labor-intensive sectors which contributes significantly to the exports of both Bangladesh and India is garments industry. In 2009, both the countries almost had an equivalent share in the world market, however in 2018 India was left far behind Bangladesh. India’s total garment exports stood at 21 billion USD whereas Bangladesh’s exports were at 40 billion USD in 2018. 

Bangladesh’s garment sector, due to its LDC status, currently enjoys a duty-free access to markets of Europe and other developed countries. Specifically in EU markets, goods from Bangladesh are covered under “Everything But Arms” (EBA) preferential arrangement which provides zero percent duty on all the products except arms and ammunition. On the other hand, India loses out due to 9% average tariff on garments under the Standard GSP scheme of EU. Further, under the SAFTA and APTA Agreements, India also provides similar duty-free market access to LDCs which along with the removal of quantitative restrictions has exponentially increased Bangladesh’s garments exports to India leading to a tough time for the domestic industry even in the internal market.

Source: Authors’ calculation based on data available on World Integrated Trade Solution

The major markets for India and Bangladesh garment exports are the EU, Australia, Canada and Japan. Trade estimates of garment products clearly show that India’s export in terms of value is significantly less than that of Bangladesh. Since 2010, India’s total share of exports grew by 9.4% whereas Bangladesh’s exports skyrocketed by 141% in these markets. The major reasons behind Bangladesh’s exemplary export performance are tariff exemptions and lower wage labor market which provides impetus to narrowly beat its competitors in the international market. The analysis done in the report reveals that 70% of Bangladesh’s overall export is covered under LDC-specific preferences.

At this juncture a possible graduation of Bangladesh will lead to termination of such preferential access granted exclusively to LDCs which may provide an opportunity for Indian exporters to grab a larger share. However, to maximize the gains arising from this development India needs to prepare a robust action-plan. Firstly, low cost inputs such as cheap power, land and raw materials will have far-reaching effects in enhancing the export competitiveness. Secondly, India should focus on mass scale production of garments in order to achieve economies of scale to bring down its cost of production. Presently, the production is limited majorly to small-scale enterprises which lack capital intensive technology. This in turn negatively affects the quality and time of production which are crucial factors in tapping the domestic and international markets. The improvement in these parameters would help Indian exporters to move up the value chain in terms of creating brand value for its superior quality products. Another overdue policy action could be cutting the import duties on high-quality machinery required for better production. In addition to this, a fiscal stimulus is required to boost the ecosystem in wake of Covid-19 pandemic.

Lastly, to offset the preferential access enjoyed by its competitors such as Vietnam, Bangladesh etc. India should identify its partners and strategically negotiate FTAs for lower tariffs and Non-Tariff Measures (NTMs) to obtain better market access for Indian exports. Needless to mention, India will only be able to reap the benefits arising from Bangladesh’s graduation (due in 2024) if it sows the right seeds today. Effectuating such policies especially at a time when corporate taxes are slashed to match that of India’s competitors along will definitely send a positive signal for investment in the sector from the top global garment companies.  

*Authors are Research Fellows at Centre for WTO Studies, Indian Institute for Foreign Trade. Views expressed are personal.

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Post-Pandemic Economies and Environment

Dr.Abid Rashid Gill

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The cleaner air in cities, the burgeoning biodiversity and dramatic shift to less pollution-intensive lifestyle across the globe indicate the scope of the environmental improvement that can be achieved in just days. This is what we need to adhere to navigate the current pandemics:COVID-19 and environmental degradation. The environmental issues as we know do not seem to wait for a more convenient time, we therefore must deal it and Covid-19 pandemic concurrently. It is a very fatal disease and has incited urgent response all over the world. The governments, businesses and industries have been forced to deal with the pandemic in an unprecedented way.

According to the experts, this pandemic has provided us with the opportunities to deal with other crises also. We can take a transnational leap towards a sustainable society that produce minimum wastes and emissions. How we deal with current pandemic will also set our environmental trajectory for the centuries to come. The changes in our behaviour that we are experiencing nowadays and some of which may instilus permanently have a far-reaching impact on the environment. Our consumption and travel patron are more responsible: driving less car, attending online meetings rather than taking flights. Equally, it indicates that considerable dent on emissions and wastes products can be made without disturbing too much economic growth.

However, according to International Renewable News Agency (IRENA), for the long-run substantial reduction in the emissions of the toxins, huge and lasting changes are needed in the way how energy is produced and consumed. Though China and India two major growing economies, observed 25% and 30% reduction respectively during the months of lockdown. However, a shift towards low-emission society cannot be accomplished only via individual choices instead it involves reimagining the ways our urbane centres are built and organised, how roads are laid out so that moving without cars become easier, how provisions for walking, cycling and public transport is mad. There is a need for complete overhauling theway we grow, manufacture, trade, consumes and the way we travel.

Cities of Western Europe have been leading this transition by introducing innovative infrastructure projects: Milan has allocated 35 Km street for pedestrians and cyclists; Brussels has created 40km of a new path for cyclists and France has subsided cycling. Also, the Mayor of London started taking measures to build a car and buses free streets and bridges. Similarly, many cities are working on the circular economy where wastes are minimized through reuse and recycling. Following the footsteps of these cities, Pakistan also needs to devise pro-environmental urbane policies and mobility models.

Many studies such asYaron Ogen, 220 and  Dario Caro, 220 indicate a strong link between COVID-19 death rate and an increase in emissions. Especially in North Italy and Spain, the high death rate from COVID-19 is seen to be associated with high air pollution in cities. Curtailing the pollution, therefore, would reduce general health burden and prevent any future pandemic may not prove to be so lethal. It has been learnt from the pandemic that early actions to contain the virus were more effective than trying to deter when the virus has spread. The same is also true for the environmental issues as Prof. Stern of Brentford claimed in 2006 that “countries needed to spend 1% of their GDP to stop greenhouse gases rising to dangerous levels. Failure to do this would lead to damage costing much more, the report warned – at least 5% and perhaps more than 20% of global GDP”.

Eventually, it is time for governments to forge with the private sectors to produce a sustainable economy. After this pandemic is over, the businesses, the industry, and individuals would plead to governments for state support. The governments should have an agenda of a sustainable economy while pouring money into the economy as aid packages. Governments should use this opportunity and must take a long view to utilize the stimulus packages. To an extent, the impact of COVID-19 on the environment is the functions of a kind of fiscal stimulus will be adopted in post-pandemic. Ideally, we should avoid a post-2008-09 financial crisis when fiscal measures of China government boosted the emissions by 6% (World Bank,2020). Rather, a more successful model of South Korea should be borrowed where stimulus package of 2008 included investment in natural conversation, energy efficiency, renewable energies, and sustainable transportations.

The COVID-19 virus is a global issue that requires a global response asall states are sharing data, experiences, equipment, and resources to deal with this pandemic. This same spirit of international collaboration is needed to produce the viable solution of the environmental issues. An inclusive global programme collaborated by rich and poor nations that ensures sustainable production can ensure low-emissions economies across the globe. The post-pandemic economies should be navigated in a way that protects people and planet and avoids any ecological destruction that leads to viral diseases. This pandemic can be taken as a mandate to build a new world from its broken parts.

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