The relationship between international trade and the environment
International trade is the goods and services exchange amongst nations. In simpler terms, it refers to the importation and exportation of goods and services. Owing to the flow of goods, services, and currencies amongst different nations, the international economy is supported. International trade has played a significant role in promoting the world economies due to the new markets that have been opened. Other than the markets, the international trade has also created new job opportunities due to the demand patterns in different parts of the world and promoted the growth of the production and service industry owing to the relationship between production and consumption. Other than the economic benefits of international trade, there are negative impacts of the trade, especially on the environment. Many environmentalists are concerned about the impact that international trade has on the environment. There is a high consumption of raw materials because of the increased demand for production. The other impact is pollution. The environment has been polluted in a range of ways due to the production procedures, which in the long-term, leads to graver impacts such as climate change. There are also health impacts associated with pollution, which is a cause of concern.
The relationship between international trade and the environment thus has called for the need for regulations to be developed regarding the trading activities and the environment. Global environmental policies have been developed to protect both the trade is undertaken and the environment. Different nations have been directly involved in the formulation and enforcement of the international trade regulations and policies and also in ensuring that they are enforced. Nations, as such, have been forced to change and re-evaluate their legal structure as well as their policies regarding the environment to ensure that they fit within the Paris Agreement commitments. The Paris Agreement *, which is a universal agreement that was made under the United Nations Framework Convention on Climate Change (UNFCCC), holds the responsibility of regulating the temperature globally and ensure that the levels of carbon dioxide produced due to industrial services are minimized. The World Trade Organization (WTO), which is an intergovernmental organization between 123 nations, is among the largest economic agreements established globally. The agreement has been very influential in creating regulations to modify and standardize the global trade of goods, services, and intellectual property (WTO, 2020)*. Other organizations that have been important in the international trade and environment regulation include the Organization for Economic Co-operation and Development (OECD) which is an association between governments and is concerned with the world economy, and it has addressed many issues on trade and environment (OECD, 2019)*
Other international regulations and policies that control the international trade and environmental processes include the General Agreement on Tariffs and Trade (GATT), which encourages manufacturers around the world to produce environmentally friendly products. There are sections of the GATT, such as articles III and XX exempt the manufacturers from these taxes if they follow the suggested rules. Article III states; goods that are not produced in an environmentally friendly manner will be subject to tax in both national and international markets. Article XX provides the exceptions in which the manufacturers can be exempted from these taxes (Quick & Lau, 2003). * World organizations such as the European Union (EU) has been very active with constructing laws to protect the environment and to reduce the amount of pollutants like carbon during the production processes incurred. The EU has also tried to influence many foreign countries that have a connection to its market as well. In compliance with the Paris Agreement, the United Nation’s Environment Programme releases an annual Emissions Gap Report (EGR)*. Every year the report compares where greenhouse gas emissions are directed in comparison to what should be as to avoid the catastrophic impacts of climate change. It also aims to suggest ways to eliminate this gap. In 2019, EGR focused on the better possibilities for energy transition in the transport, power and buildings sector.
Research aims and objectives
This research aims to analyze the correlation of International Trade and the Environment issues
Objectives
To establish the economic impact of the international trade in different nations
To establish the negative effects of international trade globally
To establish the ways of promoting international trade while reducing its negative impacts on the environment.
Research questions:
What is the impact of international trade on world economies?
What is the extent of environmental harm caused by international trade?
What is the role of international trade and international laws and organizations in mitigating the risk of environmental harm due to international trade?
Limitations
This research examines the relationship between international trade and environmental deteriorations over time; as such, it is a social science-related study. The methods to collect data will thus be non-numerical as the research seeks to establish an explanation for the negative impact of international trade on the environment. Meaning is to be interpreted from the non-numerical data presented to explain social factors associated with the international trade and environmental factors in the targeted regions. The prime limitation of this study, thus, is its analytical nature. The research emphasizes analytical research and analysis of existing cases, and numerical data is not applied to the research to show the extent of damage caused to the environment by the international trade. The study is also limited to previously conducted research also because of the current changes caused by the global pandemic, the novel coronavirus which limits other methods that would have been applied, and the impact it has on the international trade at the moment.
Research focus
The focus of this research is the relationship between international trade and environmental deterioration. This research seeks to focus on the positive or negative relations between the international trade and the environment and also the role played by technology in the issue.
Research methodology
The research method that will be primarily employed is the qualitative research method. The method is preferred because data for the study of the relationship between the international trade and the environmental impacts, and the laws that apply, thereof, can be easily collected using different approaches, and it can then be interpreted to establish an understanding of the subject being studied. When conducting such a research, there are restrictions such as those of time, and to ensure measurable outcomes are achieved, the preferred research method is qualitative research because it has less focus on the data metrics and more focus on the subtleties that are in the information. Greater details of the information can, as such, be obtained and greater insights can then be developed following the examination of the data*. The research framework of qualitative research is also fluid in nature which is great for such a study because specific patterns can be developed during data collection, for instance, how international trade affects production in western nations and the impacts on the environments and how the patterns reflect on the case of the African nation. Quality information can be gathered using this method and also opportunities to collect clues that are important for the research rather than sticking to a given confinement, which results in richer data that is gathered.
A case study is the specific qualitative research method that will be applied to conduct the research. This research method has changed over the years and has become a qualitative research method that is highly valuable.* It is typically applied to explain different social sciences concepts and entities. For this research, different legal instruments and information obtained from known global organizations relating to the international trade and environmental protection will be used. Secondary sources such as journals, academic sources, and reports from credible like organizational websites will be used to conduct the research. These sources are to be applied to explain the theoretical concepts of international trade, and its impact on the environment, the laws that apply to them, and other interests relating to them. The research is to be thorough and done systematically and meticulously so that all the relevant information is gathered and categorized into sections that can be easily analyzed. Unique cases of the subject being studied are to be noted and be applied in the interpretation of historical episodes that are similar through causal inference.
The case study method of research is reliable because it acts as an eye-opener to the challenges in the study. The researches done by different scholars give insight to the researcher and information that shows no consistency can be least relied on. The aim is to work on improving the environmental conditions as well as the economic condition; thus, all the information presented surrounding the issue being studied is to be used to contribute positively to the study. The benefit of using a case study approach is that new insights can be developed into the phenomenon which could not have been learned using any other method of research. A pressure is created between social concepts and aspects of morality that aid in the understanding of this subject. The other benefit of this research is that it establishes a contradiction between ideas that have been established and theories owing to the questions raised in the case studies. The challenge associated with this approach is researcher bias. There is a high probability of researcher bias based on the means of data collection and interpretation because, naturally, people are subjective, as Sigmund Freud highlighted*. Where the researcher is interested in a given study, they may end up identifying with it as such, losing their perspective as an outsider, which corrupts the course of the study.
Main arguments
There exists a conflict between free trade and environmental protection, indeed, but there also exists the method to harmonize the conflicts. Different scholars point out that trade and the environment is one of the topics that is continually debated in all the management and economic studies.* this has been an ongoing issue for years because while there are increasing concerns of the impact on the international trade on the environment, there are also concerns of the international trade on the international economy. The typical concerns raised regarding the protection of the environment, trade policies on environmental protection, and the trade impact on the environment. Most of the nations with economies that are developed have expressed interests regarding the degradation of the environment and a connection to the process of globalization, such as industrial pollution. As of the 1980s, the concerns for the environment were great and complex in nature owing to the issues that are brought up like the ozone layer depletion due to climate change.* By 1990s, concepts of sustainable development were established when the liberalization of trade and the aspect of globalization increased.*
Many theories have been established which promote the international trade, like the economic theory.* Such theories have made the debate regarding international trade and the environment complex because some of the proponents of the theory provide that international trade is critical because it promotes economic stability and growth compared to other local trades, and it also fosters the wellbeing of people. Owing to such provisions, it has become difficult for environmental policies and other laws to be implemented to minimize the international trade activities, especially those who contribute to high levels of environmental pollution.* Other different arguments regarding the international trade are in favor of the protection of the environment because some ecologists feel that international trade has contributed to the depletion of environmental resources. With the increasing global demand for different resources and products, the value of the environment continues to depreciate.*. Two perspectives have been presented regarding the international trade and the and the proposed intermediate concept is sustainable development, such that the international trade will result into economic growth; however, there are policies that are to be implemented regarding the environment as well as strict rules which ensure the safety of the environment. Defenders of the international trade continue to support free trade, although with negotiations on the restrictions that have been applied, which are multilateral to ensure that natural resources are not depleted.
WTO was birthed by GATT 1986-1993, where the members of GATT in Morocco signed an Uruguay agreement in 1994, and the establishment was renamed WTO. The core roles of WTO thus include the need to improve the living standards of people in the member countries, to increase goods production and distribution, to foster sustainable development, promote the wellbeing of the world, and to promote complete employment and increase demand. The primary aims of WTO with regard to the international trade thus are economic ones because it seeks to ensure the economic well-being of the world. The organization also seeks to foster sustainable development and environmental protection through the implementation of rules in the trade policy. Such an organization seeks to ensure that there is a balance between the economic benefits of international trade and reduce the negative impacts of the trade on the environment. WTO thus works to administer the rules regarding the trade and the optimum use of resources and also aid other international organizations such as IMF and IBRD to ensure that coherence is achieved in the Universal Economic Policy.
Some research studies raise different viewpoints on the relationship between the environment and the international trade. The studies suggest that it has become normal practice for environmental concerns can be applied as protectionism mechanisms.* The quality of the environment is very significant; however, this is not the only goal. There is a need to promote the environment, which means that striking a balance between environmental laws and international trade is the only approach that is correct. Where the policymakers issue arguments that are protectionists such that they establish trade-related barriers, less growth and less income will be generated and felt. The end result will not necessarily be an improved environment because the policies are competition-based, yet the regions themselves and the practices upheld may not be environmentally friendly. The reality is that, while the environment is at stake, economic benefits also have to be considered. The environmental-based policies established need to be realistic in that they strive to promote environmental wellness rather than unfair competition practices with the label of environmental protection. This is why the subject is complex because how the political economy works is not the same as the en results required for the well-being of the environment. The decision making processes by national governments regarding measures to ensure the safety of the environment should be represented in a manner where all the parties involved are positively affected by the outcomes.
Where the markets fail to allocate resources properly, there are externalities that happen to the environment, which are adverse. Governments and other legal administrations thus are required to regulate such activities, for instance, by placing regulations on emissions. In many cases, environmental degradation due to international trade occurs due to ignorance and the lack of information. There is a lot of search for revenues by different groups to the extent that environmental concerns have been termed as the secondary ones. The failure of implementation of environmental policies by legal bodies and other regulatory measures have also led to the environmental degradation situation whose externality has been termed to be costly. The environmental regulations that could be applied include direct regulation, which involves the use of policies and other mechanisms such that international traders are required to embrace socially desirable actions. It also involves the use of controls such as international agreements, national laws, and other compliance standards with mandates, which are clearly established in the regulations of the environmental policies. Market regulation also applies, and it is an instrument where the prices of products are affected based on the degree of pollution of the production of the goods. The increments used include tax imposition for emissions and schemes that are deposited-reimbursement based.
Direct regulation schemes promote environmental goals achievement with minimal costs incurred. It also fosters technological development, especially in the private sector and increased practical knowledge. There is more flexibility with reference to the technologies applied to the production process, and for the state, the approach is profitable because some of the schemes like taxation that are applied generate income while at the same time promote the quality of the environment. Also, with direct regulations, the need to have a regulatory body that is universal to ensure control and management of environmental and trade processes is done away with because the techniques used for the exploitation of the resources issue a provision for this. The challenges involved, however, include the need for legal changes, and the systems required by institutions for environmental protection and controls are sophisticated. The technique can also be seen as a permit to pollute. Where legal approaches are applied, the economic agents that are part of the environmental issue take part in handling the challenge on their own by applying legal measures. Common legal measures that are used to handle environmental disputes include rules and rights regarding the protection of the environment.
Conclusion
The relationship between international trade and environmental deterioration are both positively and negatively related. The international trades aid to foster economic growth and stability and also ensure that people’s financial needs are catered for due to economic progress globally. The production processes involved in international trade, however, contribute to environmental pollution and a depletion of the resources. An analysis of the economic benefits and environmental threats of the international trade suggest that environmental concerns are of greater value owing to the impact of the international trade assessed over the years. To ensure a balance between international trade an environmental protection, policies and other regulations need to be established and implemented. The polices, however, need to be fair and not ones used as trade protectionism mechanisms as such would not foster environmental protection, and the impact on the global economy would be negative as the flow of goods and money globally would be disrupted.