Monday, 18 March 2013

Trade and Environmental Management or the relationship between trade and environment is a complex and highly debated issue. Addressing this relationship is fundamental in order to achieve sustainable development.  As a result of increasing global economic inter-dependence and further trade liberalisation as well as growing pressure on the environment and the use of natural resources, there is an ever growing inter-face between trade and environment. It is widely recognised that trade and environment can be mutually supportive, but, differences remain on effective implementation. The Commission Communication on Trade and Environment, adopted in 1996, underlined that a mutually supportive relationship between trade and environment can occur but is in no way automatic. In fact, trade liberalisation and trade policy have positive and negative impacts on the environment. However, a number of conditions should be met to ensure that the net gains deriving from trade liberalisation will support and reinforce the protection of the environment.

One essential condition for making sure that trade and environment are mutually supportive is to ensure that the trade liberalisation process is paralleled with the development and strengthening of effective and non-protectionist environmental legislation, at national, regional and international levels. Environmental policies could, in turn, provide an incentive for technological innovations, promote economic efficiency and, consequently, improve productivity. Having recognised the need for such policies, one should also ensure that trade rules do not unnecessarily constrain but rather support and promote the ability of countries to develop and implement adequate and non-protectionist environmental measures, at both national and international levels.

Trade policy as such has also a role to play in actively supporting sustainable trade flows and, in particular, environmentally friendly trade. Trade policy and trade related instruments should be further encouraged to act as a sustainable driver by providing incentives for more sustainable trade flows. This is valid at the multilateral level but even more so at the regional and bilateral levels where the identification of positive synergies among trading partners as well as convergence and/or co-operation
should be easier than is the case at the international level. Trade tools could, for instance, be instrumental in making tangible progress towards more sustainable consumption and production patterns. Economic instruments also need to be more actively developed, notably with a view to allow for the necessary internalisation of external environmental costs. In addition, positive synergies between trade, environment and development should be further considered, particularly regarding the elimination of environmentally damaging subsidies and the promotion of environmentally friendly goods and services, with a special focus on those originating in Developing Countries (DCs)

The Multilateral Level

The relationship between trade and the environment is increasingly important in international relations. There are three main aspects to the relationship:
- the environmental impact of trade and trade policies;
- the potential effects of environmental measures on trade flows and
- the use of trade measures to achieve environmental policy aims.

The Rio Conference (1992) was the first international forum where this complex relationship was debated. Since then, this issue has been intensively discussed in the WTO, the OECD and in UNEP. The European Union takes a leading role in these international discussions, in particular in the WTO, so that trade and environment issues can be addressed and resolved. The Committee on Trade and Environment (CTE) of the WTO After Rio, the trade and environment debate was translated into the WTO arena. A WTO Committee on Trade and Environment (CTE) was created in April 1994.

The existence of environmental regimes does not, however, resolve all possible trade-related environmental issues. The trade regime and international environmental regimes are structurally incommensurate. Trade deals with economic relations between individuals and social entities; environment is concerned with natural phenomena. Trade is conceptually unitary; even though it encompasses numerous regimes, these form a reasonably coherent structure because they derive from a single, powerful concept: that trade improves the economic well-being of exporters and importers alike.

Environmental policy is multiform, revolving around a number of major issues and responding to a range of principles that define overlapping levels of action which suggest integration but in practice are difficult to integrate. The structure of international environmental regimes is emerging slowly from a multitude of independently created regimes. Nevertheless, trade and environment are closely linked.

• In economic terms, environmental policy seeks to foster structural economic change to increase the efficiency in the use of natural resources. Trade policy engenders structural economic change by increasing the efficiency in the use of economically relevant resources.

• Trade policy is international by definition since it concerns only goods and services which are traded between countries, and what then happens to these goods and services within countries. Environmental policy has an inescapable international dimension since in some areas countries acting alone are incapable of solving pressing environmental problems, because of their nature or because political boundaries do not match natural ones. Together, economic and environmental policies are currently the most potent forces of change in the international system.

• Trade and environmental management involve the same kind of political bargain. Governments agree internationally to take certain domestic measures which are politically unpalatable but in reality are to their benefit. In exchange, they receive promises from other governments to take equivalent measures which are equally in the interest of the other country and which are then declared to be “concessions.” This peculiar mix of congruence and incommensurability has given rise to much confusion. It is certainly reasonable to emphasize the areas of congruence, both to ensure that viable solutions emerge and to facilitate compromise. However, it is dangerous to overlook the elements of incongruence because the resulting solutions may prove inoperable from the perspective of environmental or trade concerns.

Facts as it is

  • In many countries,environmental law by now represents the largest single body of legislation. The first French Minister of the Environment gave eloquent expression to this complexity by calling his ministry “ le Minstère de l’Impossible.”

  • No instrument other than an outright ban has proven effective by itself in achieving desiredn environmental results

  • To the extent that international measures are not simply the sum of national efforts and require independent assessments, priority-setting and actions, they are subject to the same procedural requirements as local or national decisions. Otherwise the delicate balance which has evolved in many countries risks being distorted by procedural differences at the international level which lead — almost inevitably — to different substantive conclusions. For this reason, international environmental regimes have almost always involved a high degree of involvement by nongovernmental groups — industry, scientists, media and environmental organizations.

  • Political boundaries are meaningless for the environment.

  • Countries which have not established effective mechanisms for public information and participation frequently experience more difficulties in identifying important environmental problems and developing effective policies.

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