8:03 AM Jul 5, 1996
ENVIRONMENT DEBATE HEATING UP
Penang, Jul 4 (Martin Khor) -- As the trading nations of the world gear up to the first Ministerial Meeting of the World Trade Organization (WTO) at Singapore, the debate on 'Trade and Environment' is emerging as one of the hottest international issues in recent times. The term 'Trade and Environment' have become code words to encompass a wide range of contentious topics, relating to environmental problems, trade patterns and economic policies. There has been for some time an unprecedented worldwide concern over environmental problems as also a growing awareness that economic behaviour and world trade have contributed to the ecological crisis and that the rules and policies governing world trade may need changes to tackle the environmental crisis. But if these changes in economic behaviour, in the market theories preached and practised, are not done through cooperation, then the chances are that the strong countries (and the strong in every country) will devise policies that would shift the burden of adjustment on to the weaker countries and the poor within each. A multilateral process whereby countries would sit together and agree on fair measures to share the costs is thus clearly better than unilateral actions by the strong. This debate on different ways of handling trade and environment issues have become sharper debated ever since the issue was introduced in the World Trade Organisation in 1994. The WTO has set up a Committee on Trade and Environment (CTE) with a wide mandate to look at several issues and report to the First Ministerial meeting at Singapore which would then decide on any need for modification of WTO rules and/or further work by the CTE and on same or modified terms of reference of the CTE. The CTE has held some ten meetings so far and consultations are being held on a report and/or recommendations for the Singapore meeting. To prepare for this, dozens of meetings are being held around the world. One such meeting, the Asia Conference on Trade and the Environment, was organised by the National University of Singapore and other institutions and held in Singapore in the last week of June. It brought together academics, policy makers and non-governmental organisations from Asian countries, the US and Europe. Many other workshops have been held on the same theme, mainly in Europe and the US, over the past three years. But the Trade and Environment complex of issues, if not managed properly, can become one of the most explosive (in political as well as economic terms) in the international arena. In general, there are strong forces in the North arguing for the right to take unilateral action to stop the import of goods, the production or use of which they interpret to be detrimental to the environment. Developing countries are worried that this is a new kind of "protectionism" aimed at reducing their competitiveness or blocking out some of their exports altogether. But any international policy or set of policies, to be fair to the developing countries, requires that the trade and environment issue should be looked at in the context of "sustainable development". This concept of "Sustainable Development" became popularised in the runup to and at the 'Earth Summit' of 1992, but seems to mean different things to different people. However it is widely taken to contain at least two main elements: environmentally sound and "sustainable" production practices; and the capacity to fulfil basic and human needs of present and future generations. This process of moving the world towards a "sustainable development" path requires at least a certain degree of equity among and within nations. Past and present inequities in control of and access to resources have greatly contributed to resource waste and environmental degradation as well as to the co-existence of great affluence and terrible poverty, among and within nations. Trade has played a crucial role in promoting and extending particular types of technology and patterns of production and consumption across the globe. Many of these are now seen as environmentally unsound, however "efficient" they may be in narrow economic terms. Also, international trade has been characterised by "unequal exchange", in which the commodities exported mainly by developing countries are exchanged for industrial products and services exported by developed countries. In this pattern of international trade, the terms of trade of the South have greatly declined, contributing to the crisis of debt, balance of payments deficits and seemingly persistent poverty. Trade has thus been linked to environmental degradation, international income inequalities, and to continued poverty in many Third World communities. Thus, a major task of sustainable development is the reform of trade. Such a reform will be a complex and very difficult operation, involving major economic and political policies. Of paramount concern to the South in this is that adjustments to take account of environmental imperatives should not be carried out in a manner by which the strong and rich pass the burden on to the weak and poor. And a major issue is whether trade liberalisation has good or bad effects on the environment. Most governments and international agencies, including the WTO Secretariat, have argued that trade liberalisation or "free trade" is the best route to environmental protection. Their reasoning is that trade liberalisation increases wealth and production in every country, and the increased revenues and export earnings that come with it enable governments to spend more on environmental protection measures that curb or eliminate pollution. But, this view ignores the role that resource depletion and unsustainable production and consumption patterns play in environmental degradation, and the role of trade in facilitating these processes and their transfers. If trade liberalisation increases production, and this is based on the same unsustainable economic patterns, then there will greater depletion and degradation of resources. Trade liberalisation can also accelerate the transfer of these patterns to other parts of the world. And, if it were true that trade expansion promotes environmental protection, then the tremendous increase in world trade of the past one or two centuries should have led to a better world environment. Yet the reverse has happened, and the world faces a serious global environment crisis. This drives one to recognise that unbridled trade, based on the present technologies, production, distribution and consumption patterns, has greatly contributed to the environmental problem, and that some of the negative environmental effects of trade have to be dealt with. Many environment groups have argued, that the present patterns of trade have helped accelerate environmental degradation worldwide. As the Northern countries depleted their natural resources, they sought the resources of other territories, subjecting the South countries to export raw materials (and thus to degrade forest, land and mineral resources) under colonial rule. The industrial activities of the North (and now, increasingly in the South) have meanwhile greatly polluted the world's atmosphere, water and land resources, leading to toxicity, pollution, ozone loss, the Greenhouse Effect and global warming. Although trade brings many benefits, its negative effects have to be recognised and tackled. The Paris-based Secretariat of the Organisation for Economic and Cooperation and Development (OECD), the rich nations' club, which has been conducting studies on the environmental effects of trade, and the potential environmental effects of trade in terms of scale, products and structure, has concluded that trade, and trade liberalisation, could have both positive and negative effects. Trade in this OECD view expands the scale of economic activity, which can provide more resources for environmental protection, but can also heighten ecological problems. Trade facilitates the international diffusion of environmentally- beneficial products and services, but is also the vehicle for exchanging goods that harm ecosystems. Trade also influences the international structure of production and consumption that can have positive or negative ecological impacts. The study also concludes that trade liberalisation can also have positive or negative environmental effects in terms of products, scale and structure as well as regulatory effects. (This is the first of a series on trade/environment nexus)