Part 2: The Environment
Global economic growth requires increased use of energy and natural resources, often causing adverse environmental effects. While developed economies have imposed relatively stringent environmental protection laws, less developed economies generally have only limited regulations concerning the protection of their environment.
Environmental advocacy groups argue that international trade results in eco-destructive production being shifted to countries with the least restrictive regulatory standards, since this is where the lowest production costs for such firms will be realized. Furthermore, they suggest that increased trade liberalization will make it more difficult for eco-conscious countries to enact stricter environmental laws, since such a move would reduce their ability to compete in international markets.
Advocates of free trade, however, note that the demand for environmental protection rises as countries develop. Individuals who are hungry tend to be more concerned about where their next meal is coming from than about air and water quality. Since free international trade is expected to encourage economic development, it is argued that international trade encourages increased environmental protection.
Those who support free trade also observe that increased trade is often accompanied by increased foreign direct investment. Since foreign direct investment generally involves a technology transfer from developed to less developed economies, developing economies usually adopt the relatively "cleaner" production methods in use in developed economies. This argument suggests that free trade encourages the adoption of more environmentally sound production processes in developing economies.
WEBSITE: For information in the relation between the WTO and the environment visit:
Harvard University Center for International Development
