Theme: Impact of Environmental Measures for Increasing Southern Exports to the North

Objective: To present the finding of the project, which attempts to understand how environmental requirements, both voluntary and mandatory, can help in promoting exports.

Background
Trade is an engine of growth and sustainable trade, a non-polluting engine. In recent years more and more countries have become aware of the urgent need to ensure safe and sustainable development by reducing environmental pollution. Governments are imposing increasingly stringent measures to ensure that both domestic and imported products are produced, packaged, used and disposed in an environmentally friendly manner. 

The project titled as “Sustainable Production in the Leather Industry as a Tool for Enhanced Market Access” is to study the utility of voluntary environmental requirements in promoting Indian exports. By focussing on one particular sector i.e. leather footwear, this project intends to study whether the increased adoption of environment friendly production in India will lead to higher market access for exporters in European markets.

Context

Why ecolabels?
Environmental labelling consists of measures, both voluntary and mandatory, applied by governments, and sometimes adopted by buyers and sellers, for the purpose of environment protection. The emergence of “Life Cycle Analysis” based eco-labelling programmes (cradle to grave approach) ensures that products, starting from the raw materials they source, to their final disposal, do not harm the environment. Eco-labelling schemes in many countries are developed to promote consumer bias towards environment friendly products. A higher consumer preference for eco labelled products would imply greater market access for such goods and be an additional incentive to businesses to reduce pollution.

Why leather and leather footwear?
The global trade in leather goods has grown almost tenfold in the last 20 years. The industry is one of the most polluting in the world.  It is highly input oriented, requiring extensive processes to arrive at the final output in the form of usable leather.

India is the third biggest leather producer in the world after China and Italy.  With a turnover of US$4bn, the Indian leather industry exports US$2bn worth of leather and leather products (50percent of its total production).  Compared to the last two decades, where a mere 20percent of Indian exports were in the form of value added products, today 80percent of Indian exports are value added products. The value addition is to the tune of 200percent to 500percent. Further, the industry, mostly comprised of small and medium enterprises, employs more than 2.5 million people.

Compared with other developing countries, the Indian industry has been quick to respond to regulations regarding environmental pollutants in general and azo dyes in particular. Amongst other measures, an eco-labelling scheme has been set up in India. This has, however, not been widely adopted, primarily on account of inertia and want of promotional efforts.

Why Europe?
The EU is India’s biggest market for leather and leather products. It accounts for 65 percent of Indian leather exports. Germany alone accounts for 23 percent of exports to the EU. Stronger consumer lobbies and environment groups in the EU and the resultant increase in environmentalism has led more and more EU member countries to adopt stringent environmental standards.  Because of this consistent tightening of environment pollution norms, especially chemical residue in effluents, leather production has been shifting from Europe to countries like India and China. However, with the recent emergence of global environmentalism, these measures are being applied to leather and leather products that are imported from other countries as well. The argument is that poor environment protection in other countries imposes negative externalities for the importing country, whose domestic producers adopt stricter compliance.

The Event
This event is designed to involve trade negotiators, civil society representatives, academics, media and business representatives in a half-day meeting where the findings of the project would be tabled, and views reflected in these deliberations, will be included in the final report.

The Programme

Tuesday, 2^nd November 2004

14:00 – 16:30          Panel Discussion 

After a brief introduction, the lead researcher will present the findings of the project, followed by views represented by two discussants on the project. Subsequent the floor would be open for discussions. The issues to be discussed are expected to lead to a greater understanding of the key questions confronting Indian leather manufacturers, such as; will sustainable production (by adopting eco-labelling) lead to increased costs? Will compliance of eco-labelling standards increase exports to the European market?, what is the difference between the Indian and European eco-labels, and possibilities of mutual recognition?

Invited Speakers
Mark Halle, IISD, Geneva
Ghayur Alam, CDS, India
Hussein Abaza, UNEP, Geneva
Doaa Abdel Motaal, WTO Secretariat
Atul Kaushik, Representative of the Indian Mission to the WTO

Venue:
Room No. XXV
Palais des Nations
8-14, Av. de la Paix
1211 Geneva 10
Switzerland

Organizer:
CUTS International
D 217, Bhaskar Marg, Bani Park, Jaipur 302016, India
Tel: +91.141.228 2821-3,
Fax: +91.141.228 2485
Email: citee@cuts-international.org

In association with the UN NGLS and the Evian Group.

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Outreach Meeting of the project “Sustainable Production in the Leather Industry as a Tool for Enhanced Market Access”

November 2, 2004, Palais des Nations, Geneva, Switzerland

Agenda

November 2, 2004 – Tuesday

14:00 – 16:30   Panel Discussion on Impact of Environmental Measures for Increasing Southern Exports to the North

After a brief introduction, the lead researcher, Dr. Ghayur Alam, will present the findings of the project, followed by two discussants. The floor will then be open for discussions. The talks are expected to lead to a greater understanding of key questions confronting Indian leather manufacturers, such as;

-         Will sustainable production (by adopting eco-labelling) lead to increased costs?

-         Will compliance of eco-labelling standards increase exports to the European market?

-         What is the difference between the Indian and European eco-labels, and what are the possibilities of mutual recognition?

1900-2100 Reception

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Consumer Unity & Trust Society (CUTS)

D-217, Bhaskar Marg, Bani Park

Jaipur 302016, Rajasthan, India

Email: cuts@cuts-international.org

Phone: 91.141.228 2821-3
Fax: 91.141.228 2485