Green barrier disguises face of protectionism
By Huang Qing
Updated: 2007-08-15 07:19

The European Union's Framework Directive on Eco-design Requirements for Energy Using Products (EuP), or the third-generation "green barrier", was implemented on Saturday.

The EuP standard puts stricter environmental requirements on energy-using products' life cycle assessment and, therefore, exercises restrictive influence on those products' design, manufacture, use, maintenance and retrieval.

Compared to the EU's two earlier green barrier directives, the EuP directive imposes stricter requirements, has a wider scope and will have a greater impact on the business of relevant firms.

Green barriers are an economic phenomenon, which emerged this century as environmental-protection awareness grows ever stronger across the globe. Europe is an area where environmental protection consciousness runs highest and, consequently, related undertakings take on an aura of sacredness.

It is against this ideological background that the EU has promulgated its green barrier directives. Thanks to the fact that environmental problems pose a serious threat to mankind and that sustainable development and green consumption represent the trend of the times, the barriers do have some virtue.

But behind the morality facade, I fear some protectionist considerations are at work.

Dictated by globalization necessities, the world's industrial structure is undergoing a major realignment and some manufacturing operations are moving to the developing world, of which China is a part.

However, the rapid expansion of manufacturing industries in these countries rouses worries from developed countries. In this context, the developed nations put in place green and technological barriers one after the other, in a bid to hold an advantageous position over the competition.

By setting up green technological standards, developed countries automatically push up the cost of developing nations' exports by large margins and, in turn, weaken their competitive power.

Besides enjoying technological advantages, developed countries maintain an edge over developing nations in testing technologies. So the latter, apart from bearing larger production costs, have to pay large amounts of "soft costs" in the forms of testing and certification fees.

In addition, the green barriers serve to make the deteriorating environment in developing countries all the worse.

Developing countries generally implement lower environmental standards than developed ones. And transnational corporate giants, all of which are headquartered in developed countries, shift energy-consuming and high-polluting operations into developing nations through making investments, or simply dump non-green products into these nations.

The green barriers, therefore, make developing countries shoulder double baggage - the worsening environment caused by dumped goods and by engaging in energy-consuming and high polluting production operations.

The green barriers, which are actually a new type of trade barrier, have gained acceptance from the World Trade Organization. They can steer clear of many trade rules and render the competitors speechless. And the latter stand little chance of winning any case on trade disputes arising from the implementation of the green barriers.

Generally, there are no unified international standards to follow in working out green requirements. Developed countries that enjoy the right to formulate them, are thus automatically placed in an advantageous position. In many cases, what they say goes.

In view of all this, the green barriers are a kind of one-way green tax levied on the developing world.

Developing countries are caught in a green dilemma. On the one hand, going green represents the trend of the times and ecological civilization and sustainable development are the common aspirations of all mankind. On the other, they are at a green disadvantage, having insufficient capital and backward technologies. Worse still, they also have disadvantages in social awareness, education and social organization.

Confronted by the green barriers, what can companies in developing countries do?

In business it is all about the survival of the fittest, so these firms must adapt to the changing situations and respond to the challenges. This means they must raise the environmental standards of their products.

In the face of the green barriers, the developing world should have more say in green affairs.

For example, it should push developed countries to shoulder the historical responsibilities for global warming and make better use of the compensation mechanisms for carbon-discharge reduction.

Also, they should appeal more strongly for lowering the threshold of environmental-protection technology transfer and put stricter controls on the shift of energy-consuming and high polluting operations.

The world's environmental problem today is to a fairly large extent a product of the past. Developed countries, in the course of their industrialization, wrought damage to the global environment. This is a historical debt they should pay. Moreover, their way of life today should also be held responsible for the worsening environment.

It is unfair to make the developing world shoulder all the historical responsibilities or pay the historical debt. Developed countries should take more responsibility for global environmental protection.

The author is a council member of the China Foundation of International Studies

(China Daily 08/15/2007 page10)