TRADE AND ENVIRONMENT Essays - Economy, International Trade

TRADE AND ENVIRONMENT Essays - Economy, International Trade TRADE AND ENVIRONMENT The links between trade and the environment are multiple, The links between trade and the environment are multiple, complex and important. Trade liberalization It is widely accepted that trade liberalization brings economic benefits through greater efficiency, competition and choice. However its effects on natural environment are more complex. Trade liberalization tends to increase the scale of economic activity, and can lead to production moving to areas with lower environmental standards, both of which can add to environmental problems. Trade liberalization allows firms to take advantage of cross-country differences on environmental regulations, and that falling trade barrier induces pollution-intensive industries to relocate to countries with weaker environmental regulations. Thus the polluting industries move from developed nations with strict and well formulated environmental laws , to poorer or under developed countries where environmental regulations are lax. The relocation of these industries not only negatively affect the country with the high environmental standard, it further aids in the environmental degradation of the country with the lax environmental standards. Environmentalists feel that the situation could worsen , if these underdeveloped or developing countries continue to lower their environmental standards or maintain lax environmental standards to appease business interests. Also, Trade liberalization leads to the unsustainable utilization of natural resources or indiscriminate use of resources to supply for the ever rising needs of production intensive industries. Though Trade liberalization is not inherently good or bad for the environment. Its effects on the environment in fact depend on the extent to which environment and trade goals can be made complementary and mutually supportive. 2. TRANS-BOUNDARY MOVEMENT OF HAZARDOUS AND TOXIC WASTE International Trade has resulted in trans-boundary movement of hazardous and toxic waste. Toxic wastes which are moved across the borders include varieties of toxic substances ranging from municipal wastes to industrial wastes and other hazardous chemicals. In many underdeveloped countries, the regulatory framework and technical infrastructure for appropriate handling of hazardous wastes are as yet in formative stages. These countries are being offered multi-million dollars contracts for accepting wastes from other industrialised developed countries where environmental regulations are more stringent and disposal costs are higher. Moreover, developed countries give assurance to the recipient countries of the harmlessness of toxic wastes and dirty technologies. These situations may lead to environmental and public health catastrophes of unprecedented magnitude in underdeveloped countries 3. LOBBYING AGAINST STRONG ENVIRONMENTAL LAWS International trade is the mechanism through which much of a country's environmental footprint is imposed beyond its own borders. The globalization of economic activity puts pressure on natural resources wherever environmental laws are weak. The essential problem is the weakness of environmental laws, not trade itself. Trade opportunities lead business interests to lobby against effective environmental laws and policies, because they often see the additional costs cutting into their competitive advantage. This lobbying undermines the capacity of a community, or indeed a whole country, to move its economy on to an environmentally sustainable basis 4. EXCESSIVE PRODUCTION SUBSIDIES Production subsidies add an additional element to the mix. In many countries, production is subsidized (overtly or covertly) by governments, which are responding to pressure from business and farming interests or seeking a trade advantage. Such subsidies distort trade, and they usually have adverse environmental effects as well. That is particularly the case with the most widely-used, major subsidies - those for fossil fuels, roading, agriculture, fisheries and timber production. 4. CORPORATE FARMING Corporate Farming or Factory Farmingis a term used to describe companies that own or influencefarmsand agricultural practices on a large scale. Corporate Framing is another important issues that has arisen with ever-expanding free trade. The increased practice of corporate farms in developing countries has resulted in reckless use of pesticide and energy , with complete disregard to its environmental impacts .Factory farming has wrought economic problems, public health concerns, inhumane conditions for billions of animals, and a huge carbon debt on the world's agricultural system. The WTO is often criticized for not allowing barriers to imports based on inadequate environmental standards in countries where goods are produced. 3.