Assessing The Role Of FTA's In Achieving SDG 13 (Climate Action): Evidence From South Asia

Abstract

Promoting economic development through the liberalization of international trade has long been a central theme in global policy discourse. In recent years, Free Trade Agreements (FTAs) have taken on a crucial role in trade negotiations, opening new market opportunities, boosting foreign direct investment (FDI), and supporting regional economic collaboration. As a major economic force in South Asia and a significant actor within the Global South, India has proactively adopted a varied mix of regional and bilateral FTAs to enhance its position as a strategic center for trade and investment. These deals encompass diverse sectors, ranging from tariff concessions to comprehensive partnerships involving services, investment, and intellectual property.

However, with the rising climate crisis faced by humanity, there are concerns of whether the current format of FTAs effectively facilitates the sustainability goals, in particular, the SDG 13: Climate Action. According to the findings presented by the IPCC in 2023, the reduction of greenhouse gas emissions and the enhancement of resilience to climate effects are greatly needed. In the case of India and its South Asian neighbours, which are countries especially susceptible to climate disruptive effects like unpredictable monsoons, coastal flooding and extreme temperatures, there is a necessity to ensure that trade policies are aligned with climate resilience and emission-reduction policies.

Trade and environmental regimes have historically developed in distinct realms, which has commonly resulted in incongruencies in regulation and missed chances to unite them. It is a pressing need to harmonize the trade agreements with the environmental goals by incorporating enforceable standards, facilitating the transfer of green technologies, and establishing carbon tracking systems in the FTAs. Although India is also involved in international climate plans such as the Paris Agreement and its Nationally Determined Contributions (NDCs), the majority of the current FTAs do not provide substantial incorporation with these climate ambitions.

The paper is a systematic inquiry of the incorporation of climate-related commitments in the bilateral and regional FTAs in India, particularly in the South Asia region, in accordance with SDG 13. The study examines the major trade agreements like AIFTA, SAFTA, and Sri Lanka, Nepal and Bhutan agreements to estimate whether the agreements encourage sustainable development and economic growth in low emissions. The article seeks to add to the debate on the need to balance trade growth with climate control by providing specific policy recommendations on how to structure trade in a climate-compatible way.