Conducting environmental impact assessments on world trade measures

The purpose of the World Trade Organization (WTO), and regional trade accords such as the North American Free Trade Association and MERCOSUR, is to build neutral trade policies to avoid border or internal restrictions, thus promoting the free flow of goods and capital. Despite the huge volume and rapid growth of global trade, the environmental implications of the new regime are far from fully known. Trade liberalization should lead to the more rational use of resources between countries, thereby leading to greater efficiencies (economies of scale) and increases in global economic growth. However, there is a risk of eroding high environmental standards if lowest common denominators are adopted amongst trading partners. At the same time, trade liberalization could lead to inappropriate resource use and a shifting of environmental pressures from one region to another, not necessarily towards the region where they can best be handled.