World Ecology Prblms
World Ecology Prblms GEOG 1000
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This 8 page Class Notes was uploaded by Dr. Cristopher Deckow on Wednesday September 30, 2015. The Class Notes belongs to GEOG 1000 at Western Michigan University taught by Gregory Veeck in Fall. Since its upload, it has received 19 views. For similar materials see /class/216840/geog-1000-western-michigan-university in Geography at Western Michigan University.
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Date Created: 09/30/15
AA Environmental Implications of the WTO Geography 1000 m Spring 2009 39 Lecture 23 Consider the world s economy GDPgrew from 67 trillion in 1950 to 48 trillion in 2007 Trade has increased more dramatically from 311 billion in 1950 to 144 trillion in 2004 Basic Principles of Trade Agreements NAFTA and WTO use the same basic principles Procedural rules are based on the principles of transparency and reciprocity Other fundamental principles prohibit discrimination 192009 There are no CHAPTER readings but the WTO and its environmental impacts is on the test Please read pages 578579 and Inset box p 581 to become more familiar with the WTO The WTO is based upon the foundation of an earlier agreement GATT iThe general agreement on tariffs and trade Talking about the WTO and its environmental impacts is like the Blind men Mice and the Elephant or whatever that story is Environment and Trade Policy Why environmental issues are becoming more entwined with trade policy Recently environmental concerns has grown rapidly resource depletion species extinction animal rights iReason Economic growth in developing countries with laxer standards 7 Environmental Kuznets curve V l The GeneraAgreement on Trade and Tariff GATT cam existence in 1947 I It sought substantial reduction in tariff and oth 39 trade and to eliminate discriminatory treatment i com l 22 nations were signatory to GATT 1947 WTO GENESIS l Eight rounds of negotiations had taken place during decades of its existence BASIC PRINCIPLES 1 NONDISCRIMINATION MFN status open to all National Treatment all in a market should have access to all markets national and international MARKET ACCESS I Reduction and binding of tariffs General elimination of quantitative rictions on imports and exports is Tariffs Import duties of general application Different from antidumping and countervailing duties Rates vary by product and country MFN tariffrate is the one applied to WTO members Once reduced tariffs are bound WTO GENESIS 39 11199 39 39 ulug y Round Muttilateral Trade Negotiations at Marrakesh on 15quot April 1994 to V Transparent free and rulebased trading system Provide common institutional framework for conduct of trade relations among members Facilitate the implementation administration and operation of Multilateral Trade Agreements Rules and Procedures Governing Dispute Settlement Trade Policy Review Mechanism ggncernmor LDCs and concern on Nontrade issues such as Food ecgl ritylenvironment health etc State sovereignty Empowers countries to enter into treaties Gives governrnents authority to reguiate the acts ofpersons inside their territory and their own citizens Gives countries the right to exploit their own resources as they wish Gives countries the responsibility to ensure that activities inside theirborders do not cause danage to the environrn ent outside their borders in other countries or in international areas Tariff Elimination CanadaUS eliminated January 1998 NAFTA eliminates other tariffs over 15 years 122008 most are to be gone WTO has eliminated some and reduced others WTO Information Technology Agreement a cornputerste1ecorn chips networks etc a 40 countries signed present 92 ortrade r tan39tfs eliminatedJanuary 1 00 7 April 2003 china and Egypt become 58 and 59 members oflTA Transparency I Publish laws and regulations I Accept comments from trade parlners on proposed changes I Make administrative decisionmaking transparent based on recorded evidence and arguments not corruption or nepotism wro was NOT the FIRST TinBrim environmental issues Were actually part of the tr39ade document iBUT most comprehensive l Thisisthepointl I Effect of environmental measures on market access and eliminating trade restrictions and distortions I Examining the provisions of the Agreement as they impact the environment I labelling requirements for environmental purposes WTO Goals Fair andmrket Marta W Aymm Cunmu39bnattx an mppurt amiprntet un Opem unally mam GATT Ruler amp Dixa39pb39nes Equitable Trude Re rm 1mm 6mm uppumm39 esami Tm qu tun ta develnpt39ng mumm Cuntem r LDC and NFIDC Cuntem an Name imm mt ax FuudSemn39ty miman mm m Reciprocity I Make equivalent concessions in trade negotiations I Take equivalent retaliation against other countries trade barriers Tradefor Sustainable Development Objectives I Integrate environmental and natural resource considerations into trade promotion and expansion I so as to maximise the net development gains of trade by minimising associated environmental damage and natural resource use and I mainstream trade in national socio economic development plans Committee on Trade and Environment CTE I The CTE has the mandate to identify the relationship between trade measures an environmental measures in order to promote sustainable development I The CTE looks primarily at the effect of environmental measures on trade rather than the reverse as the WTO itself has no competence in environmental policy Remember our Geog 1000 15 Tragedy of the Commons In a pasture Open to all each herdsman will try to keep as many cattle as possible on the commons which will bring ruin to all In the case of environmental issues environment itself is the common atmosphere oceans ecosystems etc a It is very costly if not impossible to deny access to an environmental asset WTO s View on Misunderstandings The WTO does NOT te11 governmentswhat to do The WTO is NOT for free trade at any cost th t Commercial interests do NOT take priority over development the environment orhealth and safety The WTO does NOT destroy jobs or worsen poverty Small countries are NOT powerless in the WTO The WTO is NOT the tool ofpowerful lobbies Weaker countries are NOT forced to join the WTO The WTO is NOT undemocratic 0040 sz Opposition to the WTO The WTO only serves the interests ofmultinational corporation The WTO is astacked court The WTO trample over labor and human rights The WTO is destroying the environment The us adoption ofthe WTO ms undemocratic The WTO undermines local development and penalizes poor countries The WTO is increasing inequality The WTO undenninesnational sovereignty The tide is turning against free trade andthe WTO IO UIJBUJN Hose o 192009 WTO and the Environment The issue oftrade and environment was not included for initial negotiation in the Uruguay Round but certain environmental concerns were nevertheless addressed in the results ofthe negotiations BUT The Preamble to the WTO Agreement includes direct references to the objective ofsustainable development andto the needto protect and preserve the environment The WTO Committee on Trade and Environment has brought environmental and sustainable development issues into the mainstream ofWTO wo WTO s View on Bene ts The system helps promote peace Disputes are handled constructively Rules make life easier or al Freer trade cuts the costs of living It provides more choice ofproducts and qualities Trade raises incomes Trade stimulates economic growth The basic principles make life more efficient Governments are shielded from lobbying The system encourages good government tooosiotuaacutsa o National vs International Extemality A crucial distinction between national and international externality problems is that while for the former a government exists which can internalize these externalities no supranational government exists with the authority to internalize externalities Because resources are finite and pollution crosses borders The environment has become an irn ortant domestic political concern for all members of the WTO There is a growing realization that environmental problems do not respect national borders 0 A number of ambitious multilateral environmental agreements have been signed by countries that are also member of the WTO Personal values friction between countries with different values resource endowmenm incomes knowledge Environmental Kuznets curve Source Pnlymnu ma kg so2 per Cap 0 5000 MM 15000 20000 25000 s GNP put up Figum J An estimated EKGn SO Environmentalist View 0 In nite value of environment 3Trade penalties to enforce environmental standards are justi ed without regard to the disruption to trade or any costbene t analysis In the end there is money in environmental control 0 BUT currently markem for environmental services are underdeveloped because of disputed or nonexistent property rights or because of the high cost of enforcing those rights At the multilateral level cooperative inter governmental mec ism have only recently begun to be formed in the environmental area and it will take some time before many of them become effective A Lot of Work Needs to be Done 1 Forums for multilateral environmental dialogue not developed 2 The latest scientific evidence giving new urgency to environmental questions DEnvironmental groups are increasingly turning to one of the few policy instruments available to their governments for influencing environmental outcomes both at home and abroad trade restrictions Free Traders View 0 Free traders believe that reducing trade barriers is likely to be environmentally friendly and consistent with sustainable development in the long run 192009 Environmentalists against free trade Objections of environmentalists to free trade 1 Unfair trade promoted environmental degradation 2 Losing higher standards of environmental protection established by developed nations 3 Con icting ethical preferences between developed and developing nations Product standards and Process standards I Distinction must be made between product standards and process standards Product standards externalities in production should generally be speci c to the location of protection I GATT and trade negotiations should Work on how to avoid the use of process standards protectionist devices HecksherOhlin Model I In production As capital is accumulated comparative advantage shifts om labor intensive goods to capitalintensive goods I In consumption As a country39s per capita income and industrial output grow the value its citizens place on different goods chan es The value on environment increases Losing I If free trade oc quotlowerquot enviro higher standards curs with countries having nrnental standards the effect will be to lower their own standards quotrace to the bottomquot I Forum shopping the increased cost base will cause companies to shop around for other countries with less stringent tax systems Unfair trade I If you do something different concerning environment than I do in the same industry or sector this difference is considered to be tantamount to lack of quotlevel playing eldquot and therefore amounts to quotunfair trade I Ecodumping increase While less enwronmentally undercut those domestic costs and prices will imported goods produced under friendly regimes will domestic products at home and abroad Nongreen products Will thus undercut green products An Economic ViewiRemember Herman Daly rnterpret environmental scarcity as afactor ofproduction that in uences the comparative advantage ofacountry The environmentally more less abundant country A will produce and expo d Intensive comma it the relatively more less pollution ity Environmental policy and comparative advantage I If country A implements environmental policy by means of an emission tax and such measure implies the reversal of compamtive advantage the country AWould shi to exporting the relatively less pollutionintensive commodity I The environmental quality of the home country improves While that in the foreign nation deteriomtes Transborder externalities The case of oneway transmission I US is transmitting acid rain to Canada thanks to its COzintensive way of producing electricity If US refuses to tax its electricity producers for the CO they generate should Canada impose tariff on electricity imports from US gt Second best solution Maybe the loss is larger than gain Gain is small because it is not a direct tax Loss of gains from trade Protectionism will always make strange alliances Protectionist measures threaten to be followed by retaliatory and counterretaliatory action ultimately un rmining the rulesbased open global trading system S environmentalists oppose tmde and investment libemlization e Freer trade gt more output and income gt more consumption gt resource depletion and degradation of en r environment e The relocation of environmentally degrading industries to countries with lower environmental standards More on Rational Choice Model all economies were growing equally rapidly the progressive introduction ofnational environmentt and regulations would tend to cause pollutionintensive production processes to relocate gradually from wealthier and more densely popu ated countries to developing and more sparse1y popu1ated countries Concerns about using discriminatory trade measures to address environmental issues I Trade policy measures are not the best instruments for achieving environmental objectives Producer interest groups and some environmental groups are nevertheless nding it mutually imposition of stricter environmental standards on domestic producers Multilateral environmental agreements MEAS The most immediate problem faced by the WTO in its environmental work is its compatibility with existing multilateral environmental agreements EAs a number of which include measures about trade 7 Almost every country that is a member of the WTO is also a signatory of the MEAs gt potential inconsistencies WTO lt3 MEA Whether MEA dispute settlement procedures have precedence over the WT procedures Whether nonparties to MEAs can challenge an MEAbased restriction at the WTO Whether an MBA can be challenged at the WTO Trade and environment US banned imports of Mexican tuna and tried to justify this as a measure that protects dolphins US banned imports of shrimp from India Malaysia Pakistan and Thailand to protect turtles Inboth cases US tried to regulate the activities of foreign shermen outside US territory by denying access to its market Under GATT US agreed to give market access to goods from other WTO members The Celebrated Tuna Case Group on Environmental Measures and International Trade GATT began to examine traderelated aspects of environmental polices because ofthe Tuna Case I Tuna Case US restrictions on imports of tuna on the basis of protecting dolphins I Domestic US regulations affecting the use of dolphinunfriendly nets on US registered shing vessels if implemented alone Would have boosted Mexican competitiveness in tuna shing but the subsequent ban on tuna imports instead reduced it Questions How can Governments and private sector in developing countries address constraints in responding to environmental and health requirements in external markets How can developed countries take account of conditions and needs of developing countries in the development of standards I Thanks for comingandImean itHH
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