Free Trade and the Environment Essay

Trade liberalization inspires economic growth, and ensures sustainable prosperity for everyone. The reduction and removing of tariffs has made materialistic goods like food and clothes more available and affordable to countries that are developing and have low GDP per person. For example, the average Kenyan

Prior to 1994, trade and the environment were two entirely separate issues. There were no environmental regulations found in the General Agreement on Tariffs and Trade (GATT) or in the Free Trade Agreement (FTA). Upon the signing of the North American Free Trade Agreement (NAFTA) environmental concerns of North America as a whole were for the first time provided within a side agreement to the NAFTA. Finally there is a trade agreement that recognizes the concerns of North American citizens to maintain a healthy, sustainable environment, where the damaging effects of free trade could be minimized. The NAFTA entailed provisions for stricter environmental regulations

To cut costs, companies relocate their factories to areas with minimal pollution regulations to produce more with lower prices. Without tariffs, “trade without borders” become more much accessible and gratifying multibillion dollar corporations. Free trade agreements such as NAFTA and WTO do not consider the ecosystem and thus, endanger biodiversity and vital natural resources. Globalexchange.org states, the creation of free trade agreements imperil “global diversity by accelerating the spread of genetically engineered crops, … and erodes the public’s ability to protect our planet for future generations.” All in all, the absence of environmental regulations in free trade agreements severely damage the biosphere.

Developing countries tend to have “the most fragile environments” (Baker 197) which is due to the flow of resources dictated by the core. The core, taking advantage of the developmental level developing countries are on, exploit their lack of laws restraining harm to the environment, setting up factories causing even more environmental damage. Thus when comparing the environmental status of a developed country to a developing country there are major differences. These differences are the interaction of the people with the environment, in terms of needs, and the number of factories profiteering from the use and exploitation of natural resources. When this difference is identified then it is easier to assess not only the source but also to create laws prohibiting this exploitation and constructing programs to reverse environmental damages to specific circumstances, helping developing countries to move forward on the developmental scale instead of backwards. If this is taken into account then why is the source causing environmental damage, the core, not stopped? This is due to the dominant ideology stating that with infinite economic growth, eventually the sustainability of the environment will be achieved. The developing countries reinforces this by inviting and encouraging organizations to base their factories in their country which has immediate results, creating a smoke screen

Free trade is the act of exchanging goods or services between countries for minimal tariffs or fees. Between countries, this is a method of exchange that is gaining more and more popularity. By importing and exporting for low fees, free trade is an efficient way to cover up weaknesses in the country and gain on strengths. Free trade is a very controversial topic that is viewed upon differently by many people in many different countries. Some oppose free trade; they feel it will cause production losses or low employment in their country. Many countries also embrace it and believe it helps create a strong and healthy nation. They join in free trade organizations or draft free trade agreements with

Economist have been debating between free trade and protectionism for decades. This debate has been most recently reiterated through President Donald Trump’s announcement that his administration would be taking steps to limit free trade in the United States. The opinion piece “Beware the Trump Trade Trap” by Liz Mair, argues that free trade is positively linked to a country’s prosperity, although most of the population may disagree with this. Mair argues that protectionism would limit consumption, however, it is important to also expand upon these ideas and to remember that free trade encourages prosperity, comparative advantage, and improves economic growth.

Additionally, many environmentalists argue that consumerism has severe affects on the environment and blame it for many issues society is currently facing. Some major concerns about consumerism are that it can cause pollution, land contamination, and forest degradation. The production and waste of products used in consumption is related to pollution. Industrial waste and automobiles are primary examples, as well as waste from industrial agriculture and individual consumer waste. A main issue that exists is the exporting of pollution and waste from developed countries to poorer countries, a process which is done due to the fact that poorer countries have lower standards or exempt from the emission reduction targets (Shah, 2010). Similarly, according to the Chief economist for the World Bank Larry Summers the World Bank should be encouraging more migration of dirty industries to less developed countries, ironically the economic logic behind dumping a load of toxic waste in the lowest wage country is perfect, however there are many countries in Africa that are vastly under-polluted. Their air quality is probably vastly inefficiently low compared to city like, Los Angeles or Mexico City (Robbins, 1999). According to Larry Summers,

Those economically disadvantaged (poor) within a country generally gain from a loose trade. A loose trade is generally a strong positive contributor to poverty reduction. This allows people to exploit their productive potential, assists economic growth, restrains illogical policy interventions and helps to insulate against shocks. This corresponds with a new World Bank study which, used data from 80 countries over four decades, confirmed that openness boosts economic growth and that the incomes of the poor rose one-for-one with overall growth.

One positive implication capitalism has to the natural environment is industrial ecology, a system of chain production and consumption, serving to the lowest environmental impacts in a most environmentally sustainable economy as the main goal of operation (Richards & Pearson, 1998). The Companies in a like to operate in such way because of four major reasons. The most important factor is known as the corporate well-being, for it is determined by higher profits and growth provided by innovations in an industry. Profits are increased from recognizing the production ineffiency costs that comes from wasted inputs and energy losses; this allowing cost savings to increase and ineffiency to decrease. compliance with cleaner technology alternatives such as ones that produce less waste and less energy will provide long term savings which are both beneficial to the environment and the business at hand. A real world example freight company changes their salvaged driving equipment to hybrid vehicles. Money is temporarily lost, but the gasoline and maintenances cost savings will compensate in a long run period of time.

The efficiency of resources allocation is improved by the free international trade, as the higher productivity and increasing in total domestic output of commodities and services are

2009). This in itself shows the high standards of sustainability can be made from free trade (Gidney, M. 2009). Fair trade provides two key benefits that can help with the current world economic crisis. First it provides sustained benefits for producers that can help maintain their business through fluctuations of the world market (Gidney, M. 2009). Second, fair trade helps to maintain fair prices, additional social premium, and long-term partnerships that help provide better living standards for millions of people in over 60 countries (Gidney, M. 2009).

Adam Smith, author of The Wealth of Nations, shows support for free trade and emphasises it as a trade policy which ought to be adopted. Krugman and Obstfeld back Smith's support by stating that the efficiency of trade is increased by free trade and accumulates the national income of countries. Free trade is a theory which suggests that each nation benefits in specialising in an economic activity from which it gains absolute advantage, enjoying absolute superiority over other nations in a specif economical activity (Peng). With free trade follows opportunity, replacing regulation and growth of economic activity. (Rugmann and Collinson).

At first, I will establish the differences between the concepts of free trade and protectionism, the benefits of each of the different policies and cases in which such policies are used, as well as conflicts generated by those political decisions. Then, discuss the terms of international competitiveness so, with both approaches, I can establish a conclusion to the question.

The fair trade concept, based on the idea of both economic activity and social development, is replete with ethical and sustainable echoes. Ransom (2002 p 20) asks, 'can the

Pollution, specifically global warming, is of growing concern to people and governments. It is a controversial issue whose validity is still being debated by scientists. The Kyoto Protocol is an international attempt to address global warming through emissions controls. Traditional neoclassical economic models do not incorporate pollution in rudimentary theories of supply, demand, or pricing, as a result, firms do not consider pollution as a cost of production, which leaves government regulation as the primary method for controlling these externalities. The goal of emissions trading is to allow one business, which can make greenhouse gas emission reductions for a relatively low cost, to sell