The environmental threat to free trade
It is a well-established fact that trade makes the people involved better off, as willing buyers and sellers come together with the goal of improving their well-being. Yet the process of trade — particularly international trade — is increasingly challenged by environmental interests. Green group lobbying and protests consistently hamper efforts to reduce impediments to trade in forums such as the WTO.
The two primary concerns of environmental interests are that: first, as the volume of trade grows, more scarce natural resources are being used. And, second, that with more trade and its associated increases in economic growth and wealth comes increased environmental harm.
One example of environmental interests challenging the expansion of trade involves timber harvested from tropical forests in Indonesia and the Amazon. The main concern is deforestation, which is associated with environmental degradation, including biodiversity loss and waterway siltation.
In response to political pressure exerted by environmental groups such as Greenpeace, developed countries have introduced policies to restrict trade in timber, for example by requiring timber to be ‘certified’ as being produced ‘sustainably’ before it can be offered for sale. Though these certification schemes may be intuitively appealing, deeper analysis reveals that their application may be inherently damaging to society’s well-being.
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