Friday, July 19, 2019

Can We Have Free Trade and Reduce Pollution of the Environment? Essay

Can We Have Free Trade and Protect the Environment?    Endorsing free trade is easy. Ask an Economics professor why free trade is good and you will surely   be shown a graph with three or more intersecting lines that show a higher rate of output for nations that participate in free trade than nations that do not. Opposing free trade, at least on economic grounds, is a bit harder-unless you are an environmentalist.    The economic advantages of free trade were recently brought to light at the meeting of North and South American nations in Quebec City last month to discuss the proposed Free Trade Area of the Americas (FTAA). The proposed agreement would reduce tariff barriers on everything from textiles to foreign direct investment between virtually all nations of the Americas. In essence, FTAA is an expansion of NAFTA-a really, really big expansion.    As with NAFTA, the obvious consequence of the FTAA is greater access to U.S. and foreign markets (which is good for growth), increased incentives for foreign direct investment (which is good for growth), and higher capital availability for developing nations. Unfortunately, growth is not the only story. This is partly why the Quebec summit garnered tens of thousands of protestors outside a meeting hall with only 34 delegates.    Economists are notorious for leaving out environmental costs when evaluating the benefits of free trade. The FTAA appears to be no exception. Unfortunately, the FTAA resembles NAFTA in a number of aspects that could devastate environmental protection laws in developing countries, which are not only important for the environment, but for growth as well.    NAFTA, like ot... ...on policy and investment should be sensitive to the inclusion of competitiveness safeguards for states with existing environmental regulations, and should ensure the promotion of sustainable development measures among all participants. Finally, a dispute settlement mechanism that recognizes the right of participating states to adopt new and more stringent environmental protections that apply to domestic as well as foreign producers should be established.    Economists have long recognized the benefits of free trade and this author is no exception. A substantially revised FTAA agreement that corrects the environmental failures of NAFTA will not only produce an economically superior future for the western hemisphere, but one that includes clean air, clean water, and an overall higher standard of living for the western hemisphere.   

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