How is and how should environmental regulation be allowed for in the formation of international trade policy?

Résumé du document

In 1994, 'the Committee on Trade and Environment' was created within the World Trade Organisation. Meeting three times a year, and composed of all WTO members plus some observers, its creation testifies of a need to take into account environmental issues into the formation of an international trade policy. Ever since the creation of the GATT in 1945, to most recent times, and the creation of WTO, free trade has been recognised as the main goal to be achieved regarding international trade, as it sustains economic growth. Therefore, it is true that the multiple exchanges has boosted the economy all world.

Extraits

[...] Stevens , The Environmental Effect of Trade, World Economy, July 1993 * D.C. Esty, Greening the GATT, Institute for International Economics, London * A. Butler, Environmental Protection and Free Trade: Are They Mutually Exclusive?, World Economy, July 1993 * A.Jaffe, Environmental Regulation and the Competitiveness of the US Manufacturing, Journal of Economic Litterature, June * K.Anderson, The Greening of World Trade Issues, Harvester-Wheatsheaf * R. Perman, Natural Resource and Environmental Economics, Pearson, Harlow T.M. Swanson, The Economics of Environmental Degradation, Edward Elgar Publishing Limited, Cheltenham p.22 T.M. [...]

[...] Moreover, the impact of environmental regulation on free trade is not the same depending on what type of activity sector it is applied to. As A. Jaffe showed, not all environmental protection regulations have the same costs and benefits[8]. Therefore he advises that environmental priorities be established on the careful balance of benefits and costs. Thus, even though in principle tempering free trade is not a good way to set up an effective environmental regulation, however in some cases the opportunity had to be studied, on the basis of a cost-benefit analysis. [...]

[...] Stevens , The Environmental Effect of Trade, World Economy, July 1993 D.C. Esty, Greening the GATT, Institute for International Economics, London p.45 A. Butler, Environmental Protection and Free Trade: Are They Mutually Exclusive?, World Economy, July 1993 A.Jaffe, Environmental Regulation and the Competitiveness of the US Manufacturing, Journal of Economic Litterature, June K.Anderson, The Greening of World Trade Issues, Harvester-Wheatsheaf p.19 www.wto.org D.C. Esty, Greening the GATT, Institute for International Economics, London p.227 R. Perman, Natural Resource and Environmental Economics, Pearson, Harlow p D.C. [...]

[...] However by setting low environmental standards, don't we take the risk to encourage environmental dumping? Are nations likely to engage in a race to have the lowest environmental standards so as to maximise their comparative advantage? Game theory shows that is very unlikely that a government deliberately sets low environmental standards in order to gain a competitive edge, for low environmental standards reflect broader economic and social problems.[5] Moreover, bilateral exceptions to free trade are often considered as an ‘hidden' measure of protectionism that invokes environmental issues to protect one domestic economy[6] from the competitiveness of another one as it may be the case of the refusal of the European Union to import American GMO corn, on the one hand invoking public health whilst on the other they cultivate more and more of it. [...]

[...] Free trade and environmental regulation are not mutually exclusive. There is a growing need for integration between trade and environment. Unfortunately, the current debate takes place in the extremes, opposing free traders to environmentalists who argue without listening to each other. If trade restriction should not be introduced to temper free trade for it is ineffective, more global policies on environmental standards should be gradually introduced and imposed to a community of countries that could be compared to the one that exists around the WTO. [...]