What Are the Main Environmental Concerns Over Free Trade and Trade in General - Essay Example

Questions in the assign What are the main environmental concerns over free trade and trade in general? Free trade is a system in which trade between the countries is not affected by the government policies and. The trade of goods and services are done within the countries and there are very little restrictions by the governments. These restrictions are the reason of increase in price of the goods and services. The restrictions and interventions are usually the taxes, tariffs, and quota system by the government or some laws or regulations, which needed to be followed by the other party. There are few examples of free trade agreements, such as North American Free Trade Agreement (NAFTA) and Central America Free Trade Agreement (CAFTA)1. When two governments indulge in free trade agreements, they do not put any intervention or restrictions on trade between them. This allows both countries to freely access the markets and market information. And also the organizations and firms on both sides are enabled to expand their network in the other country, without any lengthy process. Labor can be moved between the countries and like this firms can have access to cheap labor in the other country, which decreases the production cost. Free trade involves many issues and one of them is the environment concern. Our environment is already facing a lot of issues including different kinds of pollution and the affect of pollution on people. Climate change is another issue of environment, which includes the global warming, fossil fuels, sea level rise and also the effects of the automobiles on societies2. The changes in the environment affect the wild life as well as sea life. Many species are now about to extinct, such as polar bear, whales etc. their habitats are destroyed due to the industrialization and rapid growth in population3. Dams are being made all around the world, and this has disturbed the natural flow of water, which was in there for the centuries. As water is used in the production of energy, it is now not the same. Other forms of energy, like petroleum products, are dangerous to not only human life but also for the environment. Genetic pollution is another issue of environment. Due to the raise in population, overgrazing is being started in many parts of the world and meat production is increased, which is another concern for the environment. Soil erosion and land pollution is a danger to our earth. Nuclear technology is a constant threat to mankind, as well as to the environment. Due to the pollution and its various kinds, such as air pollution, noise pollution, light pollution, thermal pollution, ozone layer started depleting. Polluted water is not only a threat to the human life but also for the marine life, animals and plants. DDT, pesticides, toxics use reduction and toxic waste is yet another problem of pollution. Many economists all over the world support free trade, because they believe that nations are better off with free trade than with the restrictions and legislations on the trade4. Trade affects the people of the country and plays a vital role in the increase or decrease of their personal income and purchase power. So, if the government’s policies are trade-friendly, then it affects positively to the people of the country. If there are less barriers and restrictions in the trade, then the exchange and specialization will be according to comparative advantage, and it will also increase income and profits on a bigger scale form larger markets5. Labor and skilled professionals can share their ideas and views with the professionals of the other countries, with fewer restrictions of visas and communication. Investment is done on a larger scale and in a secure environment. However, there are few environmental issues regarding free trade. As it is clear that free trade stimulate economic growth and production, so this can be harmful for the environment6. So, this is the basic reason of conflict between the economists, business community and environmentalists. Business community and economists want government to remove every kind of trade barriers, so that they can easily do business and trade with the other country and this will increase their profits. But on the other hand, environmentalists want government to impose some more restrictions and regulate the legislation in a way, that could be useful for the environment and that can satisfy their concerns over the free trade. The 1999 Program on International Policy Attitudes survey gave results that more than half of the respondents agreed that there must be some international level agreement or treaty over the environmental concerns due to the trade. 77 percent of the participants agreed on it and this is a huge number. This result clearly shows that people around the globe are concerned about the environment and the affect of industrialization and globalization on our environment. Many things, such as acid rain and green house gases are the global issues and everyone in the world, regardless of where ever they live, are affected by this issue, and these issues are not easy to be resolved by individuals, they need government interventions. Though it is stated by many economists that environmental issues should be resolved at domestic level, but global warming is an international issue, because the high temperatures affect everyone in the world. So this issue needs the cooperation of the international community, otherwise, it is not possible to resolve it. Some of the concerns regarding the affects of free trade on the environment can be seen in context to United States jobs. It is stated that the absence of international environmental standards will definitely threaten the U.S jobs, along with the environment. The reason given for this is that lower environmental standards in the other countries of the world will be harmful for the United States and will make it is as a less competitive location7. This will result in inducing United States companies and firms to relocate and like this the people of United States will get fewer jobs and thus unemployment will increase. This will encourage the US companies and firms to open their production plants outside Untied States, where they can find cheap labor as well as less strict environmental laws. So, it is demanded by environmentalists that at least whole world should follow the environmental laws similar to that of the United States. Though, many economists still believe that environmental issues should be considered as the domestic issues and dealt nationally. But when conducted a survey, only 33 percent people agreed that each country should decide how to deal with these environmental problems. And only 37 percent supported the idea of dealing with environmental issues privately because according to them, the cost of implementing the same standards around the globe will not be possible for all the countries because of their costs. So this might be not fair for the other countries. When a survey was conducted regarding the threat to the United States jobs, and people were asked to choose between protecting the environment and to increase the job opportunities, most of the people voted for the environment safety. Almost 52 percent of people chose the protection of environment, 37 percent people chose the jobs and the remaining people voted that both are equally important in their lives, and shall be provided. The people around the world are worried about the exceptional rates of the globally expanded economy or the free trade. Many people think that there is a clear relation between the free trade and environmental issues and quality. And they agree upon that stop any new trade initiative till when the environmental consequences of the free trade are well adjusted and people in the world learn about these details, because this directly affects them. People believe that a policy should be made internationally, which should be followed by all the countries in the world and like this the issue can be handled properly. People living in today’s world are well aware of the environmental issues than the ones living few decades earlier. This is due to the advancements in the technology. It is observed since the last decade, that the assessments and hypothesis have become more accurate. The reason for this is that these hypotheses are based on the comprehensive environmental data sets, baselines and aggregated indicators. So, they give accurate results and it is due to this that now people realize that there is a relation between the environmental issues and the free trade or the trade in general. Ecology is much advanced nowadays and mapping techniques enables the environmentalists to draw maps, which show the exact picture of our environment, and thus people get a clear view of this issue, which is transparent and true. These are known as techniques of environmental impacts assessments guide8. These guides helped a lot in understanding the impact of free trade on our environment. As the technology is getting fast each day and industries are growing on a larger scale, dams are being made to make use of water and to produce electricity from water, are alarming for the people who care for the environment. These are the methodological challenges for the environmentalists and they see this in the context of macroeconomics as well as microeconomics. Macro economies are always dependent on the government trade policies and governments need to make a strict environmental policy to control this. Environmentalists almost always agreed and have a unified stance on the different issues regarding environment. But, there is seen the difference of opinion among environmentalists regarding the North American Free Trade Agreement (NAFTA). The reason for their split on this issue is that one side still believes that free trade is a danger to our environment and will damage it in many ways. On the other hand, other side believes that this will stimulate the national economies of those countries and as a result, will make them rich and ultimately will be generating more money, which could be helpful in the creation of resources and new technology which can help them in research and as a result this will help them in solving the issue of environment. Now the former type is known as anti-NAFTA environmental lobby. Many environmentalists group argued that NAFTA is providing an opportunity for the countries to grow their economies and due to this, United States’ companies and firms will move on to Mexico and like this will get rid of very rigid and strict American laws regarding environment. The groups favoring this point are The Sierra Club, Friends of the Earth, and Public Citizen etc. According to the Larry Williams, who works as a program director in Sierra Club, as the factories will going to move from United States to the Mexico, then "would increase pollution loading levels on the continent and would trigger pressures within the United States to lower environmental standards to improve competitiveness in order to stop the flights."9 Though, this point of view is not thought to be the perfect one, because it contains a lot of flaws in it. This will definitely increase pollution, as the industries will be shifted from United States to the Mexico, and Mexican laws on environment are not as strict as United States, so the pollution will increase in this way. And another thing to be noted here is that many under-developed countries or the developing countries are now concentrating more on the industries and businesses and naturally paying less attention to the environmental issues, as compare to a developed country United States. Like this, we will see an enormous increase in pollution and most of these countries are the same who were in the Communist block few decades back. It is observed that the environmental regulations usually cause insignificant factor on migration decisions by different organizations and firms10. The reason for this is that it comprises less than 4 to 5 percent of the total cost. The other factors play an important role in the migration or the shifting of the factories and these factors are the cheap labor, cheap power supplies etc. as in Mexico, environmental problems are not considered as the major problems, according to Mexicans, they think infrastructure problems as the biggest and want them to be solved by the governments. And of course, not so strong laws and legislation is another factor for the migration and shifting of factories. The environmentalists oppose free trade, because there are very few barriers and restrictions from the governments and businessmen are allowed to run their business with facing less laws and legislation11. According to environmentalists, this will make businessmen relax over the health and safety standards regarding the production processes. There had been many cases observed when the factories, which were migrated from United States to any other country, such as Mexico, were caught by the environmentalists, for not following the health rules in their products, Yellowfin tuna is an example of such cases. Environmentalists usually complain that the politics influence the decisions on the making of domestic law. It might be changed or lenient for one community, as it was stated that some foreigners might use pesticides, which are banned by the government of United States. So, this is said to be a drawback of free trade, where there are no restrictions and less check on the foreigners. It is said that trade restrictions are necessary and should be implemented to ensure the safety and health of the public. Though, any kind of drugs, which are harmful for the human health are banned in United States, but it is not a case in other countries, especially the under-developed or the poor countries. DDT is used in many third world countries, though the environmental activists are trying to ban it all around the world. Though it is not proved yet that whether it contains some substance, which is harmful for the environment. Though it has proved to be very useful for human health, as in the last two decades of DDT use, India observed a cut by 98 percent malaria deaths in the country; it is observed Sri Lanka, Burma, and Bangladesh etc. By the above given example, it is quiet clear that activists sometimes become emotional and they forget the positive side, that may be by indulging in a free trade agreement with the United States, Mexican health standards will gradually move towards the United States’ standards of health and safety. The point which supports the positive aspect is that many multi-national companies follow their own standards of health and safety, regardless of whichever country they are operating. So it is possible that they might start a new trend in the third world countries. Free trade is an ongoing trend in the world and it is very not possible to put a stop on it. The new trend in the free trade, which is started by North American Free Trade Agreement, where both trade and environmental policies are dealt together, is getting popular around the world, and this will provide opportunities for both sides. When two economies work together and work freely, without any restrictions, then there is more chance that new ideas will be generated and work will be done better. Multinationals usually follow their strict code of safety and health, because they are conscious of their reputation all over the world, and this puts a positive affect on the other companies, they try to follow them. But there must be a strict environmental policy, describing laws and regulations regarding environment must be there. References 1. Brakman, Steven; Harry Garretsen, Charles Van Marrewijk, Arjen Van Witteloostuijn (2006). Nations and Firms in the Global Economy : An Introduction to International Economics and Business. Cambridge: Cambridge University Press. 2. Fine, Ben. (2006). The New Development Economics: After Washington Consensus, pp. 46-50. Zed Books. 3. Fuller, Dan; Geide-Stevenson (Fall 2003). "Consensus Among Economists: Revisited". Journal of Economic Review 34 (4): 369–387. 4. Gregory Mankiw. Beyond the Noise on Free Trade. The New York Times. March 16, 2008 5. Job prospects: Pain from free trade spurs second thoughts; Mr. Blinder's shift spotlights warnings of deeper downside, David Wessel and Bob Davis. Wall Street Journal, 28 Mar 2007, p. A1 6. Larry Williams, "Mexican Trade Deal: Fallout or Fantasy?" The Washington Times, December 22, 2004. 7. Pugel, Thomas A. (2003). International economics. Boston: McGraw-Hill. 8. The Nature Audit: Setting Canada's Conservation Agenda for the 21st Century, Report No.1 2003 (Toronto: World Wildlife Fund, 2003) p6. 9. Weintraub S (2004), NAFTA's Impact on North America The First Decade, CSIS Press: Washington, USA 10. Whaples, Robert (2006). "Do Economists Agree on Anything? Yes!". The Economists' Voice 3 (9). Read More