EU’s carbon border tax will render ongoing FTA negotiations ineffective, says GTRI's Ajay Srivastava

The EU's proposed carbon border tax, set to be implemented from 2026, would cause significant trade disruption, weaken obligations under the World Trade Organisation (WTO) and render existing free trade agreements (FTA) ineffective, according to Ajay Srivastava, former Indian Trade Service officer and founder of the Global Trade Research Initiative. Developed countries led globalisation with zero or low tariffs, but the proposed 20-35% tariffs on carbon-intensive products will make exports more expensive and developing nations will suffer the most. The tax will also be extended to all products by 2034, with each consignment charged varying rates based on emissions intensity.

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