Sustainable Societies

Trade

Domestic and international rules on how goods may be traded according to their environmental impact have much potential significance for environmental improvement everywhere, though they also have the potential to diminish certain "freedoms" in free trade. At the same time, trade liberalization has the possibility of disabling economic growth in developing countries. Though international transactions have enabled developing countries to account for 30% of total world trade, a large share of trade is intraregional and intra-firm, while biases in the system, such as inequitable tariff practices and impossible competition from industrialized states, hinder developing countries. Preferences for environmentally friendly products (EFPs) may offer new opportunities to developing countries, though they may require a more initially expensive and uncharted route toward growth. Demands for environmentally friendly products may be made by nations with the means to invest in more expensive production. For developing nations, such challenges demand that they too must counteract environmental harm done previously by developed nations, whether or not they have the means to do so. Thus, developing countries fear environmental protectionism may be used for trade protectionism. Little progress has been made on policies integrating trade and environment issues, while dismantled economic borders and the trans-boundary effects of pollution require cooperation. Demands for a unanimously agreed-upon approach to trade measures for environmental purposes often mean the least demanding, and thus least effective, arrangement prevails. Little progress will be made until environmental objectives are seen not as a hindrance but as a help to equitable trade and economic growth.