Environmental Management: Principles and practice

Trade and environmental management
Trade impacts upon environment for example, it affects:
♦
rates of deforestation;
♦
demand for animal and plant products, and may be a major reason why a species
is endangered;
♦
global carbon dioxide levels;
♦
extraction of mineral resources, production of food and commodity crops;
♦
levels of pollution in developed countries;
♦
pollution controls in developing countries.

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Some forms of trade can be less damaging than others: export of forest products
should be less damaging than logging, and may discourage deforestation if it is
carefully controlled and local people benefit (Buckley, 1993). To combat logging
the Body Shop store chain has tried to encourage environmentally benign forest
product trade by minimizing middleman profits. However, such products may have
limited markets, which restricts what can be achieved. Falling commodity prices on
the world market mean farmers get poor returns on crops, yet, committed to purchasing
inputs, they are forced to expand the area farmed, or intensify production, or practise
shifting cultivation and the extraction of other resources to supplement their farming
activities, leading to environmental degradation. The problem cannot be solved by
going back to a pre-cashcrop economy. Through trade, countries can obtain materials
and continue to expand production. It can also mean that production impacts (pollution
due to manufacture and problems associated with consumption of goods) are felt
over a wider area.
Trade and the environment
In the early 1990s probably over 80 per cent of the world trade was in the hands
of MNCs and TNCs (Anon, 1993:220). In 1974 the Group of 77 (G77)—a
coalition of 100, mainly developing, countries—demanded a New International
Economic Order (NIEO) at the UN General Assembly. The NIEO included plans
for new commodity agreements, alteration of what were seen as unfair patents
laws and general North—South economic reform, especially expanded free trade
as a way of creating employment and wealth. These demands have received
considerable support, and TNCs and MNCs can benefit from better access to
world markets. Some are less keen, and advocate a new protectionism, i.e. a
reduction in the volume of trade, as an alternative to free trade, to cure the market
problems that led to demands for NIEO but have not had much success (Lang
and Hines, 1993).
The main vehicle for reform has been the General Agreement on Tariffs and
Trade (GATT) (Morris, 1990; Shrybman, 1990; Davidson et al., 1992:174). There
are other multilateral trade agreements, e.g. the North American Free Trade Agreement
(NAFTA) (between the USA, Canada and Mexico in late 1993) (Ritchie, 1992); the
Asia Pacific Economic Cooperation (APEC) (founded in 1989 as a loose grouping
of 15 nations); the Common Agricultural Policy (CAP), which seeks to promote
production and effective use of agricultural resources to maintain food supplies and
give EC farmers a fair standard of living. The CAP uses price supports and has had
significant effects on the environment of Europe and other countries which trade
with Europe.
The GATT, which became the World Trade Organization (WTO) in 1994, is a
multilateral agreement covering roughly 90 per cent of the world’s trade, first drafted
in 1947 to establish rules for the conduct of international trade, the hope being to
lower tariff barriers erected in the 1930s that were held to be a hindrance to world
development. There were eight rounds of meetings to discuss GATT prior to

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