Chapter 8: Reconciling Trade and Sustainable Development

Aaron Cosbey

Over the past five decades, world trade has quietly grown at rates that dwarf the growth in world income. (See Figure 8–1, p. 137.) For most of that time there was no particular reason for the environmental community to notice the increasingly complex web of international rules governing trade and investment flows. By the 1990s, however, free-trade proponents at the World Trade Organization (WTO) began turning their energies to forms of liberalization that reached far behind the borders of its member states. Domestic regulations such as performance standards, labeling requirements, and rules to prevent imports from introducing new pests and diseases were seen to be much like tariff barriers in acting to unfairly protect domestic industries. It quickly became clear that if trade regulations were allowed to trump environmental regulations, the damage could be enormous. (See Table 8-1, p. 142.)

The recent Doha Declaration took a step in the right direction, however, by extending beyond the trade-environment relationship to affirm that sustainable development—simultaneous progress on environmental, economic, and social issues—is an objective of the trading system. If countries are not trading and making trade rules in order to increase human well-being sustainably, then why else are they doing it? But if the WTO is serious about achieving sustainable development, it will have to address a much wider variety of concerns than it does at present. It will have to work closely with other organizations with similar mandates, such as the World Bank, the United Nations Development Programme, the United Nations Environment Programme, and others to help ensure that countries that liberalize are ready to do so and able to gain thereby.

Special Focus, China & India

Box 8-3: China, the WTO, and the Environment, p. 139

Aaron Cosbey is Associate and Senior Advisor, Trade and Investment, at the International Institute for Sustainable Development in Winnipeg, Manitoba, in Canada.