As more and more people become aware that global warming poses an existential risk, citizens are putting pressure on their governments to take action, or at the very least appear to be doing action. The European Union has made the first move in the garment sector by announcing that all clothes sold in its territory must meet sustainability requirements. This is a significant step forward for the industry.
“Everyone discusses the weather, but nobody does anything to change it,” you might hear someone say. This was a joke that was written by Mark Twain approximately 150 years ago, and it remained a joke until the end of March 2022, when the European Union (EU) finally decided it was time to do something about the weather, also known as global warming.
Over the course of more than 500 years, international trade served as possibly the greatest impetus for countries’ pursuit of their foreign policy objectives. In and of itself, international commerce was a thing. There were many who advocated for free trade, while others supported protecting the interests of the domestic industry they worked in. However, regardless of whether one favours or opposes trade, no one has ever taken into account how it will impact the world as a whole. As a direct consequence of this, international trade brought up significant difficulties. It also brought forth the practise of mercantilism and colonialism. On the other side, Christopher Columbus’s rediscovery of the new world was an unintended consequence of a failed attempt to locate a new trade route to the Indies. This discovery occurred as a result of an accident.
Trade with other countries served as a justification for nearly everything under the sun.
• If you want inexpensive sugar, you have no choice except to support slave labour.
• If you want tea, you have to agree to accept opium as payment.
• If you’re looking for a quick fashion fix. You can’t deny the reality of global warming.
Up to the onset of the catastrophe brought on by global warming, the slogan of free trade was never called into doubt. The issue at hand is global warming.
The issue of warming caused by human activity is one that must be addressed on a local level.
Over the course of many years, responsible people in both the government and the industry have pleaded with countries and firms to take the steps necessary to prevent global warming, but to no avail.
The leaders of the world would get together on a regular basis to discuss ways to solve the problem of global warming. At these meetings, government officials and top executives from big firms all but promised to slash pollution and greenhouse gas emissions over the course of certain time periods. Unfortuitously, after each occasion, the world’s leaders and senior corporate managers would return to their home offices and government departments, where they would pass their commitments over to the appropriate parties. Unfortunately, those pertinent parties were not businessmen, engineers, or chemists; rather, they were professionals in public relations because it was common knowledge that altering the weather was a practical joke.
The First Steps Towards Change
A Hague District Court decided on May 26, 2021 that Royal Dutch Shell, one of the most successful oil firms in the world, was required to cut its emissions by 45% by the year 2030 in accordance with the ruling. Shell did not file an appeal in response; rather, the company eventually provided the court with a thorough plan outlining the actions that it would take to satisfy the criteria set forth by the court, including a calendar of deliveries. This was the first step toward achieving more sustainability in the overall plan.
The European Union made the following statement on March 30 of this year: “the begging days are over! This issue that affects the entire world will be resolved on a local level!” Starting today, in order to be sold in the EU, clothing must first comply with certain sustainability standards (specific standards to be announced). This will have significant repercussions for the partners in the EU clothing export industry.
This will no longer be restricted to certain manufacturing facilities; rather, it will be implemented across the whole export sector. If it is determined that the electricity, water, or air used in the production of a garment contributes to pollution and is not sustainable, then that garment may be prohibited from being sold in the EU.
Because of this, countries who export garments will need to make significant changes. However, the willingness of the governments of the exporting countries to implement change will be contingent on the following two factors: 1. What percentage of their total exports are comprised of garments? 2. What sorts of adjustments will be expected of them in the future?
In order to better illustrate our point, we shall utilise India as our example throughout this piece.
a.1.2 percent represents India’s proportion of the global apparel market
b.4.4 percent = The proportion of India’s total exports that is comprised of garments
c.1.2 percent is the percentage of total exports that are comprised of garments shipped to the EU.
If we look at Table 1, we can see that as far as India is concerned, garments (4.4% of total exports) are not a primary export product, and that India’s exports to the EU account for only 1.2% of total exports, which means that these exports play a relatively little role in India’s overall trade. The loss of India’s garment exports to the European Union would not be catastrophic for either of those markets.
However, the issues that have arisen as a result of the new strategy of the EU are rather significant. In the past, countries could speak of success (or failure) on a factory-by-factory basis. In the future, however, the measurement of sustainability will be made on a national basis, and imports of products will be limited based on national aggregates. This is in contrast to the situation in the past, in which countries could speak of success (or failure) on a factory-by-factory basis. It will no longer be possible for individual exporters to assert that they are not responsible for the situation.
The European Union (EU) may very probably need to undergo significant transformation in the four primary areas that are listed below.
The World Wildlife Fund (WWF) conducted a comprehensive analysis of India’s cotton farming business a number of years ago. One of the topics of the study was water consumption. It came to the conclusion based on the irrigation procedures that were prevalent during that time that it took 1900 litres of water to produce enough cotton to make a single T-shirt. According to the findings of the study, using the drip system would result in a significant reduction in both the amount of water used and the amount of money spent on electricity to power the irrigation pumps. Due to the fact that, once subsidies from the government were factored in, the cost of electricity for the farmer was effectively zero, the plan was never implemented. In addition, India’s cotton fibre exports have been falling, from a value of 4.5 billion dollars in 2013 to a projected value of 1.4 billion dollars in 2020. Why should one go to the trouble of spending money to bring about change?
• Coal as a source of motive power: As of the year 2020, 71% of India’s electricity was generated by coal, which was far more than China’s 61%, the United States’ 19%, and the European Union’s 10%. This not only contributes significantly to the phenomenon of global warming but also provides an unfair competitive advantage for India’s exports.
• Air pollution PM2.5 (ug/m3): With a ranking of 51.90, India is the third country on the list, behind Bangladesh (77.10) and Pakistan (59.00). This is in comparison to the United States, which has a rating of 9.04.
• Pollution in the water: the Ganges River is the most polluted river in the world. Over two billion and one hundred million people have their most fundamental requirements, including consuming water and preparing food, met by the river.
There are those who will say that this is not fair:
- Factories are not the aggressors but rather the victims of the environmental damage. They are powerless to regulate the origin of the electricity, as well as the factors that contribute to air and water pollution.
- Because of their far higher contribution to the production of greenhouse gases, the United States and China bear a disproportionate proportion of the blame for climate change.
There is no room for dispute that these critics have it right, and it is without a doubt the case that the entire process is unjust.
These points, although being entirely valid, are unfortunately not germane to the discussion. It is almost probable that neither China nor the United States will be on the receiving end of any limitations imposed by the EU. These nations hold an excessive amount of significance. The European Union is going to go after THE LOW-HANGING-FRUIT, which is India and the other Asian countries that export garments. When it comes down to it, fairness doesn’t matter all that much in the arena of international politics and diplomacy.
In the end, everything is determined by how far each party is willing to go in order to achieve their goals.
The citizens of the EU, who view the effects of global warming as an existential risk, are exerting pressure on the EU. It is imperative that the member states are shown to be actively participating. Activist shareholder organisations in the West are exerting pressure on major firms to comply with their demands that compensation for chief executive officers be at least partially linked to the steps the company takes to mitigate the effects of global warming. Taking action against the countries in Asia that are responsible for exporting garments would be regarded as a step in the right direction and would incur minimal or no costs for either the government or business.
On the other hand, the government of India needs to demonstrate to its own people that the country will not give in to the demands of outsiders. Due to the fact that clothes make up such a small percentage of total exports, the government might be willing to stick to its guns and accept the loss.
There is also the possibility that the EU will take no action at all, in which case the Indian government will not be required to take any action.