Environmentally damaging trade

Trade can and does harm the environment. Where environmental issues are not incorporated in economic prices and decision-making, trade can magnify unsustainable patterns of economic activity and resource exploitation. Conflicts between trade liberalization and environmental protection have already arisen, and the disturbing and short-sighted emerging pattern seems to be that national environmental protection measures are being challenged on the grounds that they erect barriers to trade.

Given the expected growth in world trade in the coming decades, and the pressure for action to counter increasing environmental depredation, future conflicts seem more, not less, likely to arise. In a 1998 speech to WTO, the Executive Director of UNEP denounced the dichotomy between trade liberalization and protectionism as obsolete. The real challenge will be to ensure that future trade liberalization is pursued with a view to maximizing overall human welfare, he said. This must include effective and cost-efficient management of the environmental resources and environmental quality on which human livelihoods and human health depend (Töpfer 1998).

In 1994, developed countries are anxious that General Agreement on Tariffs and Trade (GATT) will erode hard-won environmental standards, while developing countries fear that these standards are protectionism and disguise. Clashes between GATT and high-profile international environmental treaties include the Montreal Protocol on curbing substances which damage the ozone layer, the CITES Convention on trade in endangered species, and the Basel Convention on trade in hazardous waste.

The World Trade Organization (WTO) ruled that the United States could not discriminate against imports of shrimp caught without the use of turtle excluder devices which allow sea turtles to escape from shrimp nets (WTO 1998). Similar attempts to protect dolphins and sea birds from the effects of industrial-scale fishing practices have also been struck down (GATT 1991).