Handbook on trade and the environment edited by kevin p gallagher

HANDBOOK ON TRADE AND THE ENVIRONMENT Handbook on Trade and the Environment Edited by Kevin P Gallagher Boston University, USA Edward Elgar Cheltenham, UK ã Northampton, MA, USA â Kevin P Gallagher 2008 All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc William Pratt House Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data Handbook on trade and the environment/edited by Kevin P Gallagher p cm (Elgar original reference) Includes bibliographical references and index Commerce—Environmental aspects International trade— Environmental aspects Commercial policy—Environmental aspects Environmental policy—Economic aspects Environmental policy— Political aspects I Gallagher, Kevin, 1968– HF1008.H375 2008 333.7—dc22 2008040341 ISBN 978 84720 454 (cased) Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall Contents List of figures and tables List of contributors List of abbreviations vii ix xviii Introduction: international trade and the environment Kevin P Gallagher PART I 10 11 12 13 TRADE AND ENVIRONMENTAL QUALITY Pre-empting NIS introductions: targeting policy Christopher Costello, Chad Lawley and Carol McAusland International trade and global shipping James J Corbett and James J Winebrake The environmental Kuznets curve James Van Alstine and Eric Neumayer The pollution haven hypothesis Brian R Copeland Trade, natural resources and developing countries Edward B Barbier Foreign direct investment and sustainable industrial development Lyuba Zarsky Globalization and the environment: convergence or divergence? James K Boyce The relation between international trade and water resources management A.Y Hoekstra The environmental costs of Mexico–USA maize trade under NAFTA Timothy A Wise The impact of open trade and investment regimes on environmental outcomes in East Asia’s capitalist developmental states Michael T Rock and David Angel Foreign direct investment and clean technology leapfrogging in China Kelly Sims Gallagher PART II 19 33 49 60 71 83 97 116 126 136 147 TRADE AND ENVIRONMENTAL POLITICS Global mechanisms for greening TNCs: inching towards corporate accountability? Jennifer Clapp Civil society participation in trade policy-making in Latin America: the case of the environmental movement Peter Newell v 159 171 vi 14 15 16 17 18 Contents Trade conflict over genetically modified organisms Thomas Bernauer and Philipp Aerni The politics of trade and environment in the European Union Henrik Selin and Stacy D VanDeveer Environmental politics and global shipping trade: club goods as a solution to common-pool resource problems Elizabeth R DeSombre Fair trade, gender and the environment in Africa Laura T Raynolds and Jennifer A Keahey The global waste trade and environmental justice struggles David Naguib Pellow PART III 19 20 21 22 23 24 25 26 27 194 204 213 225 TRADE AND ENVIRONMENTAL POLICY An introduction to the trade and environment debate Steve Charnovitz The WTO, services and the environment Robert K Stumberg Biodiversity, intellectual property rights regime, and indigenous knowledge system at the WTO: revisiting the unresolved issues Sachin Chaturvedi Investor rights and sustainable development Chris Tollefson and W.A.W Neilson Does environmental policy affect trade? The case of EU chemicals policy Frank Ackerman Environmental regulation, globalization and innovation Nicholas A Ashford Trade and environment policy-making in the Arab region Carol Chouchani Cherfane Trade and environment institutions J Samuel Barkin Redesigning the world’s trading system for environmentally sustainable development Alejandro Nadal Index 183 237 246 267 276 287 296 308 318 327 337 Figures and tables Figures 2I.1 The environmental Kuznets curve 22.1 Ocean shipping (a) as a substitute and (b) as a complement to other freight modes 22.2 Comparison of freight-mode shares (tonne-km) for the USA and Europe 22.3 Summary of estimated ranges in global emissions from maritime shipping 22.4 Global shipping network of routes and ports 22.5 Global indices for seaborne trade, ship energy/fuel demand and installed power 23.1 Environmental degradation and per capita income 27.1 Environmental convergence: four scenarios 27.2 Environmental degradation, income inequality and per capita income 16.1 PSC records of detention ratios 20.1 LNG security near Boston 20.2 States with RPS, June 2007 20.3 Relevance test applied to licensing requirements for coastal development of LNG port 24.1 The efficient frontier for current and future technology contrasting sustaining and disrupting innovation Tables 2I.1 Stolper–Samuelson and sustainable development 22.1 Overview of types of ocean shipping pollution 22.2 Profile of world commercial fleet, number of main engines, and main engine power 22.3 International marine fuel sales by nation, 1990–99 23.1 Estimated turning points for various pollutants and studies 25.1 Low- and middle-income countries and patterns of resource use 15.1 EU membership growth 17.1 Fair trade certified sales in major markets 17.2 Growth of fair trade certified sales by commodity 17.3 Fair trade certified production by region, 2004 17.4 Certified fair trade producer organizations in Africa 20.1 Environmental sectors 21.1 Potential synergies between biotechnology development and value-added bioprospecting vii 34 35 39 40 42 51 98 108 211 247 256 260 300 36 37 38 52 78 195 214 215 216 217 251 271 Contributors Frank Ackerman is an economist who has written extensively about the economics of environmental policy in areas including international trade, climate change and chemicals policy His most recent books, published in 2008, are Poisoned for Pennies: The Economics of Toxics and Precaution (Island Press) and Can We Afford the Future? Economics for a Warming World (Zed Press) He has written numerous academic and popular articles, and has directed policy reports for clients ranging from Greenpeace to the European Parliament At Tufts University’s Global Development and Environment Institute (GDAE) since 1995, he now works jointly with the Stockholm Environment Institute–US Center, also located at Tufts He received a PhD from Harvard University, and has taught economics at Tufts and at the University of Massachusetts Philipp Aerni graduated in Geography and Economics at the University of Zurich in 1996 and received his PhD from the Institute of Agricultural Economics at the Swiss Federal Institute of Technology (ETH) in Zurich in 1999 From January 2000 to April 2002, he continued his research as a postdoctoral research fellow in the Science, Technology and Innovation Program at the Center for International Development at Harvard University, Cambridge, MA, USA Apart from his research at the World Trade Institute, he is currently heading two National Science Foundation Projects (NFP 59) Philipp Aerni is also co-founder and member of the management steering team of the Geneva-based NGO ‘Africa Technology Development Forum’ (ATDF) The main objective of ATDF is to promote science, technology and entrepreneurship in Africa James Van Alstine is a Fellow in Environmental Policy Studies and a PhD candidate in the Department of Geography and Environment at the London School of Economics and Political Science His research focuses on the social and environmental risks of industrial development, the governance of resource extraction in developing countries, and the dynamics of institutional and organizational change His dissertation explores the contestation of corporate environmentalism in the South African petrochemical industry David Angel holds the Laskoff Professorship in Economics, Technology and the Environment at Clark University where he is also Professor of Geography, Provost and Vice President for Academic Affairs His current work focuses on global economic change and the environment, with a particular focus on rapidly industrializing economies in Asia Recent books include: Asia’s Clean Revolution: Industry, Growth and the Environment (with Michael T Rock, 2000, Greenleaf Publishers), Effective Environmental Regulation: Learning from Poland’s Experience (with Halina Brown and Patrick Derr, 2000, Praeger Press) and Industrial Development in the Developing World (with Michael T Rock, 2005, Oxford University Press) Nicholas A Ashford is Professor of Technology and Policy at the Massachusetts Institute of Technology, where he teaches courses in ‘Sustainability, Trade and Environment’ He is the co-author of a new textbook on Environmental Law, Policy, and Economics: Reclaiming the Environmental Agenda (MIT Press, 2008) and a forthcoming textbook/reader on ix 332 Handbook on trade and the environment leaving unsolved the complex questions of food rights, economic development, social responsibility and environmental stewardship All of this ignored the fact that the ‘invisible hand’ metaphor does not work in agriculture Income elasticity for food doesn’t allow for expansion of demand as prices drop On the supply side, aggregate crop output changes little with price because farmers use all their productive capacity all of the time and cannot influence prices Summarizing, the current policy based on the false premise that we need to let markets operate freely is unsustainable and should be replaced by adequate supply management policies (Ray 2004; Ray et al., 2003) Since 1996, world prices for America’s chief farm exports have plunged more than 40 percent, but US crop exports did not increase (Ray, 2004) This led to dramatic losses in farm income and increases in government payments to farmers This spelled trouble for small producers in developing countries as dumping practices destroyed markets, impoverished rural communities throughout the world and benefited vertically integrated agribusinesses This is why the difference between consumer prices and the price that producers receive is out of any reasonable proportion The system that the URAA helped enshrine must be drastically redesigned In the first place, developing countries must have the right to use quantitative restrictions (QRs) as a protection from dumping practices and to de-link their key strategic sectors from the paradigm of the URAA These QRs are compatible with WTO and are recognized by Article XVIII of the original GATT Safeguards should also be made available for developing countries Because global agricultural trade is in disarray, a radically new approach is required We must replace the old system based on the URAA’s naïve illusion concerning free markets with a sound institutional and legal framework that blends sound supply management policy measures with adequate support mechanisms in developing (and developed) countries The world needs adequate crop prices that contribute to a healthy and vigorous worldwide agricultural sector (Ray et al., 2003) A new institutional arrangement, perhaps a new framework convention, needs to tackle the issues of sustainable agriculture, biodiversity, food security and access to genetic resources, not on a piecemeal basis, but in one single undertaking in order to reconcile the objectives of food security and responsible environmental stewardship The new convention should restate the fundamental right of nations to defend themselves from dumping practices and from the market distortions brought about by the concentration of corporate power Countries would be allowed to determine the level of support to their domestic producers and be subjected to trade-distorting disciplines explicitly defined in this agreement Support systems should not be considered as a priori marketdistorting Commodity agreements, intellectual property and investment Over the past century, real prices of primary products experienced a significant declining trend (Ocampo and Parra, 2003) The vulnerability of many countries relying on a few basic products for exports puts undue pressure on people and the environment International commodity agreements (ICAs) can help reverse this trend and increase market transparency in agricultural trade In the past, UNCTAD’s mandate was to use ICAs to arrest the deterioration of terms of trade and to stabilize markets whenever there Redesigning the world’s trading system for sustainable development 333 were large fluctuations Several agreements were set up but this role was destroyed in the 1980s in the aftermath of the debt crisis and was never restored ICAs can reduce market distortions through the supervision of operations where giant corporations control more than 20 percent of the market They can stabilize prices at levels that are fair for consumers and producers and dovetail certification and other resource management schemes with commercial trends Producers that receive a fairer deal through ICAs can be more easily persuaded to improve quality and adopt cleaner process and production methods without exacerbating tensions between trade partners ICAs can also blend trade concerns with technical and financial assistance that improve standards while restoring the notion of special and differential treatment New multilateral agreements should combine sustainable management of resources and the recognition of the legitimate rights of indigenous peoples and other local communities A new generation of international commodity agreements could explore ways and means to increase value-added of raw commodities, providing developing countries assistance to take advantage of new economic opportunities, from processing to packaging Adding value to these commodities will create forward and backward industrial linkages that generate employment opportunities and have healthy multiplier effects in commodity production chains Intellectual property rights and trade Contrary to the views of trade policy analysts, the objectives of ‘free trade’ clash violently with those of ‘intellectual property rights’ The first require competition to attain efficient allocations of resources The second create monopoly rights that may entail loss of welfare Original patent protection treaties required members only to set up a patent system Those legal instruments accepted restrictions in areas such as public health and the environment There was no uniform standard regarding patent life This changed during the Uruguay Round The Agreement on Trade-related Aspects of Intellectual Property (TRIPs) imposed on WTO member countries the obligation to grant patents for a wide variety of items, a 20-year life term for patents and almost eliminated compulsory licensing For countries investing very little in R&D, as most developing countries, TRIPs spelled bad news Economists have embraced the idea that patents are incentives for inventive activity This is inaccurate Intercapitalist competition is the main engine for innovations (Baumol, 2002) and patents serve primarily as instruments in corporate strategies, rewarding rentseeking behavior and raising entry barriers for potential competitors Thus, patents serve primarily the purpose of segmenting markets in order to extend monopoly rents Strengthening IPRs in developing countries will not necessarily increase R&D investment (Kumar, 1996) In addition, industrial policy instruments that could be used to enhance assimilation of technological capabilities have been curtailed by the WTO system This makes technological development very difficult and a strong patent system will not modify this Restoring elements of rationality in the international patent system should be accompanied by restoring the capacity of developing countries to design and implement industrial policies Returning to a more rational IPR system requires de-linking intellectual property rights from trade agreements This is needed in order to redefine a global patent system that is less market-distorting and protects inventors’ rights It should not impose wide 334 Handbook on trade and the environment patentability and long duration for patents, and it should abolish patents on life forms, a major element distorting the patent system that has negative effects on human health and access to genetic resources Investment and trade (TRIMs) Through the agreement on Trade-related Aspects of Investment Measures (TRIMs), developing countries are forced to forego the use of important industrial policy instruments Policies aimed at increasing local content in value-added, or limiting imports to a certain proportion of exports, are not allowed under the current version of TRIMs Thus, instead of protecting developing countries against the effects of market concentration, TRIMs shield powerful multinational corporations against public policies in host countries Some of the policy instruments eliminated by TRIMs are critical in order to obtain technological capabilities and go into higher value-added exports They are essential to building forward and backward inter-industry linkages, and those linkages are the carriers of economy-wide multiplier effects (see UNCTAD, 2003b) Chapter 11 of the North American Free Trade Agreement (NAFTA) is an example of unprecedented rights bestowed on private firms against government decisions perceived as detrimental to investors’ rights Firms can start a binding dispute resolution process in special arbitration courts that can lead to compensations paid with taxpayers’ money Panels not offer the standard transparency guarantees of standard national courts In a twist of priorities, special and differential treatment is accorded to private multinational firms to the detriment of public interest in host countries This needs to be reformed, allowing developing countries more policy space Also, a revision of the TRIMs is required to incorporate the need for greater market transparency through the monitoring of operations of multinational corporations Final comments The international trading system is not leading to greater prosperity and economic justice Empirical evidence shows that rapid trade liberalization coexists with slower GDP growth rates and a very large number of poor people across the world It also coexists with rapid and severe environmental degradation Evidently, something is not working as standard economic models of free trade predict (lower prices and greater welfare) The trading system has concentrated on the elimination of barriers to trade and has ignored the task of building up development capabilities of poor countries In addition, trade agreements are not focused on building a regime for stable prices and fair terms for trade Free trade per se should not be the top priority of the world’s trading system It is just a tool to further integrate the world’s economy into a single entity But in this process, it is urgent to recognize social and environmental responsibility as the central priorities of the international agenda Profit-making should stop being the leitmotif around which the world’s trading system revolves If the world’s most powerful countries not shift the balance towards sustainability, the negative consequences of today’s irresponsibility will return to haunt us The question of survival of our species is involved here Notes I wish to acknowledge support from the John D and Catherine T MacArthur Foundation for my research on alternative development strategies Redesigning the world’s trading system for sustainable development 335 Muradian et al (2001); Muradian and Martinez-Alier (2001) The best references are Fisher (1983), Sonnenschein (1973), Debreu (1974) and Mantel (1973) Financial liberalization was forced upon the world’s economy in order to hedge against the risk of fluctuating exchange rates after 1973 It was also driven by the symptoms of a global recession at the end of the 1970s and a fall in productivity and profit rates in most developed countries References Ackerman (2004), ‘An offer you can’t refuse Free trade, globalization and the search for alternatives’, in F Ackerman and A Nadal (eds),The Flawed Foundations of General Equilibrium Critical Essays on Economic Theory, London and New York: Routledge, pp 149–67 Baumol, William J (2002), The Free-Market Innovation Machine: Analyzing the Growth Miracle of Capitalism, Princeton, NJ: Princeton University Press David, Paul (1975), Technical Choice, Innovation and Economic Growth, Cambridge, UK: Cambridge University Press Debreu, G (1974) ‘Exess demand functions’, Journal of Mathematic Economics, 1, 15–21 Eldredge, N (1998), Life in the Balance: Humanity and the Biodiversity Crisis, Princeton, NJ: Princeton University Press Fisher, Franklin (1983), Disequilibrium Foundations of Equilibrium Economics, Cambridge, UK: Cambridge University Press Global Poverty Monitoring (2004), available at:www.worldbank.org/research/povmonitor/ Habbakuk, H.J (1962), American and British Technology in the 19th Century, Cambridge, UK: Cambridge University Press Houghton, J.T., Y Ding, D.J Griggs, M Noguer, P.J van der Linden, X Dai, K Maskell and C.A Johnson (2001), Climate Change 2001: The Scientific Basis, Intergovernmental Panel on Climate Change, Cambridge, UK: Cambridge University Press Kumar, Nagesh (1996), ‘Intellectual property protection, market orientation and location of overseas R&D activities by multinational enterprises’, World Development, 24(4), 673–88 Landes, D.S (1969), The Unbound Prometheus Technological Change and Industrial Development in Western Europe from 1750 to the Present, Cambridge, UK: Cambridge University Press Mantel, R (1974), ‘On the characterization of aggregate exess demand’, Journal of Economic Theory, 7, 348–53 McCarthy, J.J., O.F Canziani, N.A Leary, D.J Dokken and K.S White (2001), Climate Change 2001: Impacts, Adaptation, and Vulnerability, Intergovernmental Panel on Climate Change, Cambridge, UK: Cambridge University Press Muradian, Roldan and Joan Martinez-Alier, (2001), ‘Trade and the environment: From a ‘southern’ perspective’, Ecological Economics, 36, 281–97 Muradian, R., Martin O’Connor, and J Martinez-Alier (2001), Embodied Pollution in Trade: Estimating the ‘Environmental Load Displacement’ of Industrialised Countries, Milan: Fondazione Eni Enrico Mattei, Available at: http://www.feem.it/web/activ/_activ.html Myers, Norman and Andrew H Knoll (2001), ‘The biotic crisis and the future of evolution’, Proceedings of the National Academy of Sciences, 98(10), 5389–92, May Nadal, Alejandro (1994), ‘The tuna–dolphin association in the Eastern Pacific Ocean tuna fishery: international trade and resource management issues’, in E Mann Borghese, N Ginsburg and J.R Morgan (eds), Ocean Yearbook 11, Chicago: University of Chicago Press, pp 120–43 Nadal, Alejandro (1996), ‘Balance-of-payments provisions in the GATT and NAFTA’, Journal of World Trade, 30(4), 5–24 Ocampo, José Antonio and María Ángela Parra (2003), ‘Los términos de intercambio de los productos básicos en el siglo XX’, Revista de la CEPAL, 79, 7–35 Ray, Daryll E (2004), Agricultural Policy for the Twenty-First Century and the Legacy of the Wallaces, John Pesek Colloquium on Sustainable Agriculture, March, Ames, Iowa: Iowa State University, p 45 Ray, Daryll E., Daniel de la Torre Ugarte, and Kely J Tiller (2003), Rethinking U.S Agricultural Policy: Changing Course to Secure Farmer Livelihoods Worldwide, Agricultural Policy Analysis Center (APAC), The University of Tennessee, 68, also available at: www.agpolicy.org Sonnenschein, H (1973), ‘Do Walras’ identity and continuity characterize the class of community exess demand function?’, Journal of Economic Theory, 6, 345–54 Stern, Nicholas (2002), Dynamic Development: Innovation and Inclusion, Munich Lectures in Economics, Munich, Germany: Ludwig Maximilian University, available at http://econ.worldbank.org/files/ 22048_CES_Munich_Lecture_Nov_19.pdf UNCTAD (2003a), Trade and Development Report 2003, United Nations Conference on Trade and Development, New York and Geneva: United Nations, available at www.unctad.org 336 Handbook on trade and the environment UNCTAD (2003b), Foreign Direct Investment and Performance Requirements: New Evidence from Selected Countries, United Nations Conference on Trade and Development, New York and Geneva: United Nations, available at www.unctad.org UNFPA (2002), State of the World Population 2002: People, Poverty and Possibilities, New York: United Nations Population Fund, available at www.unfepa.org/swp/2002swpmain_spa.htm Wilson, E.O (1993), The Diversity of Life, Cambridge, MA: Harvard University Press Index accountability, transnational corporations 164–7 Acee, H.F 297 Acquaye, Albert K.A 21 Aden, J 92 African Union (AU) 323 Agarwal, Ravi 227, 228 Agenda 21 238, 239 agriculture 120 beef production 192, 293 certification schemes 163 commodity agreements 332–3 fair trade in, see fair trade green revolution 184 jute 102–3 land use and 75–7 maize crop 5, 97, 103–4, 126–33 organic products 102 reforms 331–2 shrimp farming 110 water resources, see water resources wheat production 293–4 see also genetically modified organisms air pollution 150 shipping 34–5, 45 energy use and emissions 35–43 mitigation alternatives 43–5 Aitken, B 85 Alanis-Ortega, Gustavo 177 alcohol 8, 198–9 Algeria, water resources management 117 American Motors Corporation (AMC) 151, 152 Amsden, Alice 85 Andean Pact 171 Anderson, Sarah 12 Anton, Jesus 24, 27 Antweiler, W 65, 66 Apte, Smita 28 Arab region 308 compliance with standards 312–14 emerging issues 315–16 institutional context 310–11 liberalization of environmental goods and services 314–15 policy-making process 311–12 regional background 308–10 Argentina 277 water resources management 118 Ash, Michael 105 Ashford, N.A 301 Association of Southeast Asian Nations (ASEAN) 321, 323 Audley, John 10, 174, 175 Australia 247 water resources management 118 Austria, genetically modified organisms and 199 Auty, Richard M 74 Azerbaijan, foreign direct investment (FDI) and 89 bananas 215 Bangladesh foreign direct investment (FDI) 92 jute production 102–3 baptist/bootlegger coalitions 8–9 Barbier, Edward B 76, 79 Barceinas Paredes, F 131 Barrett, S 54, 109 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal 227, 229, 230, 308 Becker, R 63 Beckerman, Wilfred 107 beef production 192, 293 Bernauer, Thomas 186 Bhopal Principles on Corporate Accountability 166 biodiversity 268–9, 327 maize and 5, 97, 103–4, 129–30, 132–3 biological resources 267–8, 270–72, 273 Birdsall, N 77 Blackman, A 91 Blanco Mendoza, Herminio 179 Boralkar, D.B 228 Boyce, J.K 54, 107, 109 Brander, J.A 68 Brazil, water resources management 118, 119 Brundtland Report (1987) 49 BSE problems 293 Buchanan, Patrick Cabrillo Port 246, 247 Calzolari, Giacomo 26 Cameroon, resource dependence 73 337 338 Index Canada investor protection 282, 284 renewable energy 256 tensions between investors and sustainable development 277–8 water resources management 118 capitalist development state 136, 143–4 capturing international technique effects 139–43 institutional structures 137–8 policy integration and 136–7, 138–9 carbon dioxide emissions 35–43 Cartagena Protocol on Biosafety 190 Cavanagh, John 12 cement industry 139–40 Central America Free Trade Agreement (CAFTA) 180 certification schemes 163–4 Charles, T 303 chemicals, REACH chemicals policy of the EU 287–8, 294 costs 288–9 developing countries and 289–91 US exports and 292–4 Chichilnisky, G 68 Chile, foreign direct investment (FDI) and 89 China competitiveness hypothesis and 61 electronic waste 227 environmental situation 149–51 foreign direct investment (FDI) and 85, 86, 89, 90–91, 147, 149 environment and 151, 154 technology transfer in auto industry 151–4 non-indigenous species (NIS) 27 pollution control 252 resource dependence 79 water resources management 117, 121, 122, 123 Christensen, C 297, 299 Chu, Wan-Chen 85 civil liability, prevention of non-indigenous species (NIS) by 22 civil society 100, 171–2, 180–81 participation mechanisms 175 Free Trade Area of the Americas (FTAA) 178–80 Mercosur 176–8 North American Free Trade Agreement (NAFTA) 175–6 politics of mobilization 172–5 climate change 239, 327 club goods 209–12 coal use 149–50 cocoa 215, 220 codes of conduct 163–4 coffee 215 Cole, M.A 55, 56 Commission for Environmental Protection 12 commodity agreements 332–3 common-pool resources 207 Comoros 291 competition, foreign direct investment (FDI) and 85 competitiveness competitiveness hypothesis evidence 61–4 theory 61 innovation’s key role 297–300 Computer TakeBack Campaign (CTBC) 229 Conroy, Michael 11 consumption-generated pollution 66–7 Convention on Biological Diversity (CBD) 268–9, 273 Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) 237, 321 Convention on the Law of the Sea 209 convergence scenarios 97–104 ecological modernization 99–100 environmental imperialism 102–4 environmental protectionism 100–101 greening the North 101–2 Copeland, B.R 64, 65, 67 cost shifting 109–10 Costello, Christopher J 20, 21, 23, 27, 28 Côte d’Ivoire, foreign direct investment (FDI) and 89, 91 countervailing measures 243 criminal law, prevention of non-indigenous species (NIS) by 22 cross-sectional pollution 67 Dalmazzone, S 20 Daly, Herman 100 D’Antonio, Carla M 20, 21 Dasgupta, S 56, 91 Dean, J.M 61 democracy 100 demonstration effects, foreign direct investment (FDI) and 84 dependence on resources 79 resource curse 73–5 stylized facts of resource use in developing countries 75–9 unequal development and 71–3 deregulation 249–50, 330 DeSombre, Elizabeth Index developing countries capitalist development state 136, 143–4 capturing international technique effects 139–43 institutional structures 137–8 policy integration and 136–7, 138–9 EU REACH chemicals policy and 289–91 resource dependence 79 resource curse 73–5 disinfection 24 Dominican Republic, resource dependence 79 Drake, J.M 28 dumping 100 Dutch disease 5, 73, 74 Dyer, G 131 ecological modernization 99–100 economic growth 49 macroeconomic policy and trade 328–9, 330–31 market systems and 328 resource dependence and unequal development 71–3 state and, see capitalist development state see also environmental Kuznets curve (EKC) Ecuador foreign direct investment (FDI) and 89 resource dependence 73 Ederington, W.J 66 Egypt, water resources management 118, 122, 123 electricity 255–7 electronic waste 225 in Asia 227–8 dumping 226–7 environmental and public health risks 225–6 global movement for extended producer responsibility 228–30 new directions in policy 230–32 worker safety and health concerns 226 employment 303–4 energy use coal 149–50 electricity 255–7 liquified natural gas (LNG) 246, 259 oil 150 renewable energy 150, 255–7 shipping 35–43 environmental cost shifting 109–10 environmental groups 100, 110 electronic waste and 228–30 politics of mobilization 172–5 environmental imperialism 102–4 environmental issues 1, 2–15 trade and environment debate 237–9, 244 see also individual topics 339 environmental justice 105 environmental Kuznets curve (EKC) 6–7, 11, 49–50, 56–7, 107 developing countries and 56 empirical evidence 51–3 international trade and 55 policy and 53–5 theoretical case 50–51 environmental management standards 162–3 environmental protectionism 100–101 Equator Principles 164 Ernst, Christopher 86 Eskeland, G.S 63–4, 91 Ethiopia, fair trade in 219 European Bank for Reconstruction and Development 89 European Union (EU) 8, 12, 194, 201–2, 323–4 early legal developments 196–8 electronic waste and 230–31 foreign direct investment (FDI) and 88 General Agreement on Trade in Services (GATS) and 250–51, 253, 254 genetically modified organisms and 184, 185–7, 199–200 dispute over 183, 188–92, 200 intermodal transport 33–4 policy-making and implementation 194–6 REACH chemicals policy 287–8, 294 costs 288–9 developing countries and 289–91 US exports and 292–4 shipping 33 energy use and emissions 36 trade and environment issues 196, 197–201 expropriation 282 Eyring, V 41 fair trade 213, 221–2 environment and 218–19 gender inequality and 220–21 principles and parameters 214–15 production 215–17 Fernandez, L.O 90 fertilizers, maize and 128–9 Fetter, T Robert 105 financial system 330–31 Finnoff, David 26 Fischer, Carolyn 24 Fisher, Richard 171 fisheries 68 flags of convenience 205–6 Food and Agriculture Organization (FAO) 269 food safety 199 Forbes, Steven 83 Ford Motor Company 152, 153–4 340 Index foreign direct investment (FDI) 2, 93, 99, 147 environment and 148, 151, 154, 160 environmental spillovers 87–93 sustainable development 83 technology transfer in auto industry 151–4 spillovers for industry upgrading 84–6 Forest Stewardship Council 11, 163 France, fair trade in 214 Free Trade Area of the Americas (FTAA) 171, 173, 174–5 participation mechanisms 178–80 Freeman, Chris 297 Friends of the Earth 165 Fullerton, Don 24 Gabon, resource dependence 73 Gallagher, Kevin P 86, 90 game theory, common-pool resources 207 gender inequality, fair trade and 220–21 General Agreement on Tariffs and Trade (GATT) 8, 237, 241, 249 General Agreement on Trade in Services (GATS) 243, 246, 248–9, 260–61 coverage 248 debates 249–50 environmental objectives 249 exceptions 249 negotiations on domestic regulation 257–60 on environmental sectors 250–57 on expanded coverage and trade rules 249 privatization and deregulation 249–50 subnational authority and 250 trade rules 248–9 General Motors (GM) 152, 153 genetic resources 267–8, 270–72, 273 genetically modified organisms 183–4, 199–200, 292–3 explaining differences in regulation 185–7 maize 129 regulatory polarization 184–5 Gentry, Bradford 90 Germany 8, 201 alcoholic beverages 198–9 fair trade in 214 Ghana, fair trade in 220 Global Compact 161–2, 168 Global Exchange 178–9 Global Reporting Initiative 160–61 Global Water Partnership 116 globalization 1, 71, 110–11, 296, 312 convergence scenarios 97–104 ecological modernization 99–100 environmental imperialism 102–4 environmental protectionism 100–101 greening the North 101–2 polarization scenarios 104 environmental cost shifting 109–10 political economy of environmental degradation 105–6 power disparities 106–9 González-Lutenkirchen, Ana Karina 177 governance 100 governments 305 development and, see capitalist development state Graddy, K 54, 109 Greaker, M 61 Greenpeace 166 Grossman, Gene 3, 6, 54, 62, 148 Gylfason, Thorvaldur 75 Haiti, resource dependence 79 Hanna, R 63 Harbaugh, William 109 Harrison, A.E 63–4, 85, 91 Hartman, R.S 92 Hausmann, Ricardo 74 havens, see pollution havens Hayami, Yujiro 73 hazardous waste 255 health and safety issues, electronic waste and 226 heavy fuel oil (HFO) 37 Heckscher–Ohlin model 2, Hemispheric Social Alliance (HSA) 171 Hemmelskamp, Jens 296 Henderson, V 63 Hettige, Hemalala 92, 105 Hirschman, Albert Hochstetler, K 177 Hogenboom, Barbara 174 Hong Kong, capitalist development state 136 Horan, Richard D 24, 27 human capital, foreign direct investment (FDI) and 84 Huq, M 92 Immordino, Giovanni 26 imperialism, environmental 102–4 import bans, prevention of non-indigenous species (NIS) by 21–2 incineration of waste 254 India electronic waste 227–8 foreign direct investment (FDI) 86, 92, 93 foreign direct investment (FDI) and 89 resource dependence 79 water resources management 121, 122 Index indigenous peoples indigenous knowledge system (IKS) 267, 270, 272, 273 Indonesia capitalist development state 136, 137, 138 foreign direct investment (FDI) 92 political economy of environmental degradation 105 resource dependence 73 industrial policy 304–5 inequalities 109, 327 innovation 11 integration of industrial, environmental and trade policies 304–5 key role 297–300 regulation and 301–2 trade strategies, environment and employment 303–4 institutional structures 318, 325 Arab region 310–11 capitalist development state 137–8 environmental institutions 321–3 non-regulatory organizations 324–5 regional integration organizations 323–4 trade institutions 318–21 intellectual property rights (IPR) 243–4, 267, 269–70, 273, 333–4 interest groups, genetically modified organisms and 186–7 intermodal transport 33–4 international agreements 99–100 International Campaign for Responsible Technology (ICRT) 229–30 International Convention for the Prevention of Pollution from Ships 208 International Council for Chemical Associations 163 International Council on Mining and Metals 163 International Finance Corporation 164 international financial system 330–31 International Institute for Sustainable Development (IISD) 285 International Labour Organization (ILO) 215 International Maritime Organization (IMO) 204, 207–8 International Monetary Fund (IMF) 331 International Standards Organization (ISO), environmental management standards 162–3 international trade 1, 8–15 theory of 2–8 trade and environment debate 237–9, 244 see also individual topics 341 International Transport Workers’ Federation (ITF) 206 invasive species, see non-indigenous species (NIS) investment 1, 334 international standards 164 sustainable development and investor rights 276–7 debates 284–5 investor protection architecture and procedures 278–83 tensions 277–8 TRIMS agreement 334 see also foreign direct investment (FDI) Italy, water resources management 117 Jacob, Klaus 296 Jamaica, resource dependence 79 Jänicke, Martin 109, 296 Japan capitalist development state 136, 137 US beef exports 293 water resources management 117 Jenkins, Rhys 11 Jordan resource dependence 79 water resources management 117–18 jute 102–3 Kalt, J.P 62 Kazakhstan, foreign direct investment (FDI) and 89 Keck, Margaret E 172 Keller, W 62, 63 Kenya fair trade in 216, 221 water resources management 117 Keynes, John Maynard 330 Korea capitalist development state 136, 137–8 foreign direct investment (FDI) 92 foreign direct investment (FDI) and 90 Krueger, Alan 3, 6, 54, 62, 148 Kuznets, Simon laissez-faire 300 Lamy, Pascal 238 land use, agriculture and 75–7 Lee, John G 27 Lehner, F 303 Lesotho, resource dependence 79 Leung, Brian 26 Levine, Jonathan M 20, 21 Levinson, A 61, 62, 63 Lewis, W Arthur 73 342 Index Liberia 210 Lichtenberg, Erik 27 linkages, foreign direct investment (FDI) and 85 liquified natural gas (LNG) 246, 259 Lithuania, foreign direct investment (FDI) 86 local authorities 250 Lodge, D.M 28 Low, P 66 Lupi, Frank 24 Luxembourg, genetically modified organisms and 199 Lynch, Lori 27 McAusland, Carol 21, 23, 27, 66 macroeconomic policy and trade 328–9, 330–31 Madagascar 291 maize crop 5, 97, 103–4, 126–33 Malaysia capitalist development state 137, 138, 139 foreign direct investment (FDI) 85 incineration of waste 254 resource dependence 79 management standards 162–3 Mani, M 66 Margolis, Michael 27 market systems 328 Marshall Islands 210 Martin, P 139 Matsuyama, Kimoru 73 Mercado, A 90 Mercosur 323 participation mechanisms 176–8 Merriman, David 23 Mexico agriculture 123 maize crop 5, 97, 103–4, 126–33 foreign direct investment (FDI) and 86, 89, 90, 91 NAFTA and 5, 12, 97, 99 maize trade and 5, 126–33 opposition groups 172–4 resource dependence 73, 79 water resources management 117, 123 Meybeck, M 119 Millennium Ecosystem Report modernization, ecological 99–100 Mol, Arthur P.J 99 monopoly 303 Montreal Protocol on Substances that Deplete the Ozone Layer 321–2, 324 Moran, Theodore H 86 motor vehicles 150 technology transfer in auto industry 151–4 Motorola 140, 141–3 multilateral environmental agreements (MEAs) 13, 14 multinational corporations, see transnational corporations Myint, Hla 73 Nadal, A 131 natural capital 67–8 natural gas 246, 259 natural resources 71 biological resources 267–8, 270–72, 273 common-pool resources 207 renewable resources 68 resource dependence 79 resource curse 73–5 stylized facts of resource use in developing countries 75–9 unequal development and 71–3 water, see water resources Nelson, R.R 297 neoclassical economics 49 Nepal, resource dependence 79 Netherlands, water resources management 119 Neumayer, E 54, 55, 56, 100 New Zealand, non-indigenous species (NIS) in 21 Nigeria foreign direct investment (FDI) and 89 resource dependence 73 non-indigenous species (NIS) 3, 19–20 characteristics 22–7 damage 26–7 growth 25–6 observability 23–4 predictability 25 separability 24 traceability 25 international trade and 19 causal link 20 pre-emptive policies 21–2 research gaps 28–9 targeting 20–21 uncertainty and scope for protectionist policy 27–8 North American Commission for Environmental Cooperation (NACEC) 176 North American Free Trade Agreement (NAFTA) 1, 8, 9–10, 97, 99, 171, 276, 319–20, 322 investor protection 279, 280, 281, 282, 283 Mexico–US maize trade and 5, 126–33 opposition groups 172 participation mechanisms 175–6 Nriagu, J.O 119 Index Obach, Brian 173 OECD Guidelines on Multinational Enterprise 162 oil 150 Olson, Lars J 26 open trade 136 organic products 102 Organisation for Economic Co-operation and Development (OECD), Guidelines on Multinational Enterprise 162 ozone layer depletion 321–2 Paarlberg, Philip L 27 Pacyna, J.M 119 Pakistan, resource dependence 79 Papua New Guinea, resource dependence 73 Pargal, Sheoli 105 participation mechanisms 175 Free Trade Area of the Americas (FTAA) 178–80 Mercosur 176–8 North American Free Trade Agreement (NAFTA) 175–6 patents 243–4, 267 Perkins, R 55 Perot, Ross pesticides, maize and 129 Pethig, R 64 pharmaceuticals industry 267–8, 270–72, 273 phytosanitary measures 242–3 pipeline transport 251 polarization scenarios 104 environmental cost shifting 109–10 political economy of environmental degradation 105–6 power disparities 106–9 political economy of environmental degradation 105–6 political rights 109 pollution control 252 pollution halos 87, 91–3, 99 pollution havens 7, 11, 60–61, 68–9 competitiveness hypothesis evidence 61–4 theory 61 consumption-generated pollution 66–7 evidence 66 natural capital and 67–8 theory 64–5 polypropylene 102–3 population growth, rural areas 76 port state control 209–12 Porter, Michael 11, 61, 296, 300–301 Powell, Colin 292 power disparities 106–9 343 Prebisch, Raúl 72 Prebisch–Singer thesis 72 precautionary principle 330 Princen, Thomas 106 Principles for Responsible Investment (PRI) 164 privatization 249–50 process methods 329–30 process standards, prevention of nonindigenous species (NIS) by 22 procurement policies 257–8 product standards, prevention of nonindigenous species (NIS) by 22 production methods 329–30 protectionism, environmental 100–101 public health, electronic waste and 225–6 pulp and paper industry, technique effects 139–40 quantitative restrictions, prevention of nonindigenous species (NIS) by 21–2 quarantines 21 race to the bottom 100, 148 Raffer, K 72 Rainforest Alliance 93 Randall, A 25 Rauscher, M 65 REACH chemicals policy 287–8, 294 costs 288–9 developing countries and 289–91 US exports and 292–4 regional integration organizations 12, 323–4; see also European Union (EU); North American Free Trade Agreement (NAFTA) regulation 296–7 Arab region 312–14 deregulation 249–50, 330 General Agreement on Trade in Services (GATS) and 257–60 genetically modified organisms 184–7 regulatory chill theory 148 role in benefiting economy and environment 300–303 seas and oceans 207–8 renewable energy 150, 255–7 renewable resources 68 Reppellin-Hill, V 139 residual fuels 37 resources, see natural resources Responsible Care 163, 168 Ricardo, David 2, 120 Rigobon, Roberto 74 Rio Summit 166, 268, 309, 330 344 Index Rosenzweig, M.L 21 Roy, Santanu 26 Ruggiero, Renalto 14 rural areas, population growth in 76 Russia, foreign direct investment (FDI) and 89 Ruud, Audun 93 Sachs, Jeffrey D 73 Salinas, Carlos 99 Salop, S.C 67 sanitary and phytosanitary measures 242–3 Scheffman, D.T 67 Schumpeter, J 303 Schwarzenegger, Arnold 246 Scruggs, Lyle A 109 seas and oceans common-pool resources 207 environmental regulation 207–8 transport, see shipping Selden, T.M 53, 54 Sen, Amartya 106 service sector 243, 246–8 GATS, see General Agreement on Trade in Services (GATS) sewerage 252–4 Shine, Clare 24 shipping 3, 33, 204, 212 club goods 209–12 environmental impacts 34–5, 45 energy use and emissions 35–43 mitigation alternatives 43–5 flags of convenience 205–6 liquified natural gas (LNG) 246 multimodal freight context 33–4 port state control 209–12 technology 204–5 Shogren, Jason F 27 shrimp farming 110 shrinking sectors Siam City Cement Company 140–41 Sikkink, Kathryn 172 Silicon Valley Toxics Coalition (SVTC) 227, 229 Simberloff, D 26 Sims Gallagher, Kelly 90 Singapore, capitalist development state 136, 137, 138 Singer, Hans W 72 smuggling 23–4 Solow, Andrew R 21 Sosa, Julio 210 South Africa fair trade in 216, 217 tensions between investors and sustainable development 277 special and differential treatment 329 Stijns, Jean-Philippe 77 Stolper–Samuelson theorem strategies 303–4 ‘stuck in the mud’ theory 148 subsidies 243, 257–8, 331 Sudhakar, K.S 228 sustainable development 4, 303–4, 327 Arab region 309–10 foreign direct investment (FDI) and 83 investor rights and 276–7 debates 284–5 investor protection architecture and procedures 278–83 tensions 277–8 perspectives for reform 328–30 Sutcliffe, Bob 109 Switzerland fair trade in 214 genetically modified organisms and 191 systemic changes 299 Taiwan, capitalist development state 136, 137, 139 Tanzania fair trade in 217 tensions between investors and sustainable development 277 tariffs, prevention of non-indigenous species (NIS) by 21 taxation 23 prevention of non-indigenous species (NIS) by 21 Taylor, E 131 Taylor, M.S 63, 64, 65, 67, 68 tea 215 technical barriers to trade 242 technology foreign direct investment (FDI) and 87, 89–91 clean technology 89–90 leapfrogging 90–91 technology transfer 151–4 shipping 204–5 technique effects 139–43 see also innovation terms of trade 72 Thailand capitalist development state 137, 138 foreign direct investment (FDI) 92 water resources management 117, 118 Thomas, M.H 25 Torras, M 54, 107 trade, see international trade Index transnational corporations 159–60, 167–8 accountability 164–7 environmental management standards 162–3 Global Reporting Initiative 160–61 industry-specific codes of conduct and certification schemes 163–4 investment by, see foreign direct investment (FDI) OECD Guidelines on Multinational Enterprise 162 UN Global Compact 161–2, 168 transport intermodal 33–4 pipeline 251 sea, see shipping treaties 99–100 Trinidad and Tobago, foreign direct investment (FDI) 85 unequal development, resource dependence and 71–3 United Kingdom, fair trade in 214 United Nations 318 Conference on the Human Environment 196 Conference on Trade and Development (UNCTAD) 325, 332 Convention on the Law of the Sea 209 Environment Programme 218, 322–3 Food and Agriculture Organization (FAO) 269 Global Compact 161–2, 168 United States of America 9, 12 beef production 293 electronic waste and 231–2 environmental justice 105 EU REACH chemicals policy and 292–4 fair trade in 214 General Agreement on Trade in Services (GATS) and 248, 253 genetically modified organisms and 184–5, 185–7, 292–3 dispute over 183, 188–92, 200 incineration of waste 254 intermodal transport 33, 34 investor protection 282, 284 liquified natural gas (LNG) 246 maize crop 103, 104, 126–33 marine life protection 13 NAFTA and 320–21 maize trade and 5, 126–33 opposition groups 172–4 non-indigenous species (NIS) 3, 19, 24, 27, 29 pre-emptive policies 21–2 organic products 102 345 pollution control 252 pollution haven, competitiveness hypothesis 61–3 power disparities 106–7 regulation in 258–9 renewable energy 256, 257 shipping 33 energy use and emissions 36, 38, 40 tensions between investors and sustainable development 277 water resources management 118 wheat production 293–4 Utterback, J.M 297 Uzbekistan, water resources management 117 value network 299 van den Linde, Claas 61, 296 Vanuatu 210 Venezuela foreign direct investment (FDI) and 89, 91 resource dependence 74 Vietnam, resource dependence 79 Vogel, Dan 8, Volkswagen (VW) 151, 153 Wankhade, Kishore 228 Warner, Andrew M 73 waste electronic, see electronic waste hazardous 255 solid 254–5 water 252–4 water pollution 119, 149 water resources 116–17, 123–4, 129 downside of virtual-water import as solution to water scarcity 122 effect of international trade on water resources 117 export of water-intensive commodities 118–19 import of water-intensive commodities 117–18 water pollution 119 effect of water availability on international trade 119–21 global water-use efficiency 121 volume of water saved as result of international trade 121–2 waste water 252–4 Weidner, Helmut 109 West, Sarah E 24 wheat production 293–4 Wheeler, D 66, 92, 105, 139 Wichelns, D 120 Wilson, Norbert L.W 24, 27 346 Index Winter, S.G 297 World Bank 1, 6, 76, 77, 89, 90, 101, 107 International Finance Corporation 164 World Environmental Organization (WEO) 323 World Intellectual Property Organization (WIPO) 267, 269 World Summit on Sustainable Development (2002) 165, 166, 167, 309 World Trade Organization (WTO) 12, 13, 14, 123, 238, 239, 267, 318, 319, 324, 327 Arab region and 309, 310 biodiversity and 269–70 GATS, see General Agreement on Trade in Services (GATS) genetically modified organisms dispute 183, 188–92, 200 intellectual property rights and 243–4, 267, 269–70, 333 investment and 334 protests against 277 provisions addressing the environment 240–44 Technical Barriers to Trade (TBT) agreement 14 Wu, X 91 Wunder, Sven 74 Yang, H 120 Yeats, A 66 Yúnez-Naude, A 131 Zarsky, Lyuba 86, 99 Zedillo, Ernesto 179 .. .HANDBOOK ON TRADE AND THE ENVIRONMENT Handbook on Trade and the Environment Edited by Kevin P Gallagher Boston University, USA Edward Elgar Cheltenham, UK ã Northampton, MA, USA â Kevin P Gallagher. .. the potential to be ‘pollution haloes’ whereby they bring better Handbook on trade and the environment environmental practices to developing nations and can help them ‘leapfrog’ to higher standards... international trade In theory international trade and the environment can be mutually compatible, and perhaps even reinforcing According to independent theories of international trade on the one hand,