When India and the European Union finally wrapped up their long-awaited Free Trade Agreement (FTA) last week, it was hailed as a major achievement for global trade. European Commission President Ursula von der Leyen labeled it the “mother of all deals,” a sentiment echoed by India’s Prime Minister Narendra Modi. Many media outlets even called it one of the largest trade deals ever struck.
However, while the trade sections come with strict penalties and obligations, the parts concerning climate action and environmental policies are much looser, focusing on dialogue rather than enforceable commitments.
After two decades of discussions, the agreement aims to reduce tariffs and make it easier for Indian sectors like textiles, leather, and food products to access European markets. Yet, experts see a significant gap in the deal’s treatment of trade versus sustainability.
The Trade and Sustainable Development (TSD) chapter shows this imbalance clearly. While trade-related sections use firm language demanding compliance, the environmental commitments rely heavily on consultations and discussions. According to Aparna Roy from the Observer Research Foundation, “This asymmetry reflects the fact that trade obligations are treated as justiciable economic commitments, while environmental provisions are often positioned as normative or aspirational.”
This distinction is crucial. The enforceable sections use terms like “shall,” which indicate a binding agreement, while the environmental commitments often fall into softer language about cooperation and dialogue. For instance, while the TSD chapter mentions goals like renewable energy and lowering emissions at sea, it tends to emphasize enhancing dialogue rather than mandating specific actions.
Roy points out that this softer language is often used to keep negotiations on track when countries have different priorities. This flexibility can weaken efforts to address pressing environmental issues like greenhouse gas emissions. In contrast, if trade rules are violated, there are stringent mechanisms for dispute resolution.
While the TSD commitments are technically legally binding, enforcement is far less rigorous. They don’t fall under the same stringent dispute mechanisms that protect trade provisions. This has led some to label the TSD measures as “toothless.”
Despite these shortcomings, there’s a belief among some experts that dialogue and monitoring can still yield progress. For example, the EU has successfully implemented mechanisms like the Carbon Border Adjustment Mechanism (CBAM) for carbon-heavy imports. However, whether India can achieve similar results through this agreement remains uncertain.
Both India and the EU do have compelling reasons to work together on environmental issues. As environmental challenges increasingly overlap with trade policies, experts believe there’s significant room for cooperation on sustainable practices. However, global political tensions, particularly around climate change, complicate these efforts. With the U.S. withdrawing from the Paris Agreement, the landscape for global environmental governance is fragile.
Yet, despite rising tensions, there’s still hope for collaboration. Deeper exchanges of regulatory knowledge could lead to better mutual understanding and practices. But it’s crucial for all parties to prioritize shared interests over individual concerns.
As the FTA awaits ratification by the European Parliament, its potential impact on climate action remains uncertain. Experts suggest that while the deal may not directly enforce climate initiatives, it could help align standards, promote transparency, and foster cooperation in clean technology.
Ultimately, genuine climate action will depend less on trade agreements and more on national policies, public investment, and international cooperation in climate finance. Trade agreements can play a role in supporting climate goals, but they cannot replace necessary domestic commitments.
For further insights, you can explore more on the EU’s approach to trade and sustainability at the European Parliament.
