Environmental Management: Principles and practice

BOX 5.2  The positive and negative effects of free trade on
environmental management
Free trade might help environmental management through:
♦ ending tariff barriers that raise produce prices, causing farmers to overstress
land for profit;
♦ reducing the dumping of cheap US and European food surpluses, which, by
making it difficult for developing country producers to get a fair price,
discourage them from leaving land fallow or investing in land improvement,
erosion control, etc.;
♦ removing restrictions that make it difficult for developing countries to produce
and sell finished wood products to developing countries. This should give
much better profits and reduce logging;
♦ harmonizing standards and co-ordinating trade impacts on the environment
on a global scale;
Free trade might harm environmental management because:
♦ much existing or proposed environmental legislation could be interpreted
as illegal non-tariff trade barriers. There is thus a reduction in controls
which discouraged logging, trade in endangered species, use of cattle
growth hormones like BST, etc.;
♦ trade liberalization may lead to increased specialization of production that
may over-stress a resource or environment;
♦ the struggle to keep down costs to be competitive may mean exports are
expanded to compensate and resources or the environment are put under
stress;
♦ reduced import restrictions will remove opportunities to counter trade in
hardwoods, endangered species, etc. (see Box 5.3);
♦ there may be increased opportunities to sell commodities like beef, sugar,
etc., and this might encourage increased forest clearance and poor land
management in countries that are keen to boost production;
♦ producers may think twice about spending money on pollution control or
other forms of environmental management if another country does not, and
they are competing with it to sell similar goods, on otherwise equal terms
(Ritchie, 1992);
♦ it may be less easy, without the threat of trade restrictions, to get countries
to reduce carbon dioxide emissions or other pollution;
♦ poor countries may reduce domestic food prices, import grain, and raise
more export crops like soya (e.g. as happened in Brazil);
♦ any domestic support for the peasantry in developing countries or
poorer farmers in developed countries could be interpreted as unfair
protection. Small farmers might become marginalized and then damage
the land trying to survive;

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♦ larger farmers, encouraged by free trade to practise industrial (agrochemical-
using) agriculture to produce export crops, may damage the land;
♦ there is a risk that foreign inputs and MNC controls will increase, leading to
more dependency;
♦ if free trade leads to reduced home production there is a risk of problems if
overseas supplies fail;
♦ it could be difficult to pass and enforce national environment and resource
management or health protection laws.
1985–1986, the last, the Uruguay Round, should have run from 1986 to 1990 but
failed to reach agreement until some years later (Raghavan, 1990; Anon., 1992). Things
had stalled over cutting subsidies to agriculture: in particular the French farming lobby
was opposed to the 1992 Blair House Agreements to reduce farm subsidies. In 1993 in
Tokyo the Quad Group of GATT (Japan, USA, Canada and the EC) agreed to abolish
or reduce many tariffs, effectively agreeing new world trade rules.
Free trade can lead to environmental damage: when the Roman Empire adopted
it grain prices seem to have fallen, prompting large landowners with many slaves to
practise more ruthless commercial farming, while smaller agriculturalists were forced
out of business. Richard Cobden was aware of the environmental implications for
the UK of freeing up trade by the repeal of the Corn Laws (1846) (legislation which
had protected farmers from falling wheat prices)—with free trade landowners drained
and cleared more land and intensified land use.
While free trade may bring some benefits, then, there are worries that it causes
environmental problems (Boxes 5.2 and 5.3). Difficulties outlined in Box 5.3 continue,
e.g. in April 1998 the WTO were still in disagreement with the USA over restricting
imports of shrimps caught with nets that endanger wildlife (The Times 28 April 1998).
The main problem is that signatory countries have less control over imports because
most quotas and controls are outlawed (Bown, 1990; Westlund, 1994). There are also
worries that free trade could favour developed countries’ biotechnology (Raghavan,
1990; Acharya, 1991).
GATT established a Disputes Panel to resolve problems but so far it has not
been effective enough at dealing with environmental issues. Interest in further greening
free trade has resulted in a growing literature (Sorsa, 1992; Esty, 1994; Marsh, 1994;
Rugman and Kirton, 1998). GATT set up a group on Environmental Means and
International Trade, and bodies like the OECD are keen to harmonize free trade and
environment (De Miraman and Stevens, 1992; Zarsky, 1994). It would also be wise
to seek greater co-ordination between the various free trade organizations and the
UN Commission on Trade and Development (UNCTAD).
In 1985 the 85 signatories of GATT undertook to try to restrict the export
of hazardous materials. However, pollution control activities are not easy because
of difficulties in disseminating information on pesticides and other compounds
and their effects, and because monitoring and enforcing controls in the real world
are often problematic. Measures were taken to improve controls; for example, in
1986 the FAO issued an International Code of Conduct on the Distribution and

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