World trade accelerating environmental damage

By Someshwar Singh, March 2000

As world trade continues its steady upward climb, it is placing unprecedented strains on the health of the Earth’s ecosystems. But today’s emerging global governance structures, such as the World Trade Organisation, for the most part give short shrift to the urgent need to halt global environmental decline, notes a recent report by the Washington-based WorldWatch Institute.

Geneva: The world economy and the natural planetary world&38212;with its life-support systems—are both in precarious states, provoking fears that an era of global instability looms on the horizon, warns the latest annual report by the Washington-based WorldWatch Institute.

In its chapter on Coping with Ecological Globalisation by Hilary French, the report notes that the mismatch between ecological imperatives and prevailing economic practice will need to be bridged if the world is to halt an unravelling of critical ecological systems in the early decades of this century.

The new rules of the global economy, the article notes, are for the most part being set by institutions such as the World Trade Organisation and the International Monetary Fund, where the mindset of traditional economists prevails and where the rules are generally aimed at unshackling global commerce rather than harnessing it for the common good.

But forging an environmentally sustainable society is about more than economics, and far-sighted economics is about more than reducing restrictions on the movement of goods and money, the report notes. Creating a global society fit for the 21st century will thus require not only reform of economic institutions, but also a strengthening of international environmental institutions so that they can act as an ecological counterweight to today’s growing economic powerhouses.

The globalisation of commerce is further internationalising environmental issues, with trade in natural resources such as fish and timber soaring, and with private capital surges giving international investors a growing stake in distant corners of the globe.

While favouring a strong international environmental governance, the report observes that nations are granting significant and growing powers to economic institutions such as the WTO and the IMF, but environmental issues remain mostly an afterthought in these bodies.

As world trade continues its steady upward climb, it is placing unprecedented strains on the health of the planet’s ecosystems. But today’s emerging global governance structures for the most part give short shrift to the urgent need to halt global environmental decline. The report cites the WTO as a case in point.

The WTO came into being in 1994 as an outgrowth of the Uruguay Round of global trade talks under the old General Agreement on Tariffs and Trade (GATT). Although many in the business community, government and academia hailed its creation as an enlightened step toward a new era of global prosperity, critics charged that the new organisation elevated corporate rights to a new plane while devastating local communities and the environment.

The intervening years have done little to cool the passions on either side of the debate, says the report.

The text of the agreement that created the WTO ran to an astounding 26,000 pages (including texts of the agreements and country schedules) and covered a bewildering array of issues, including agriculture, intellectual property rights, investment, and services. The organisation was charged with overseeing the implementation of the new rules of world trade, including settling any disputes among nations related to their terms. Member countries granted the WTO unprecedented powers for an international body, including a binding dispute resolution mechanism and provisions for stiff trade penalties to enforce its rulings.

In a concession to the environmentalists, the preamble to the WTO agreement includes environmental protection and sustainable development among the organisation’s goals, the report notes. The accord also included a commitment to create a Committee on Trade and Environment charged with analysing the relationship between trade liberalisation and environmental protection and with recommending any changes to WTO rules that might be needed to make the two goals mutually supportive. But more than five years later, the committee has produced much talk but no concrete action.

Commenting on the Ministerial conference of the WTO in Seattle last November, the report notes that thousands of NGO activists were also in Seattle, many of them protesting what they see as the WTO’s environmental blindness. Critics particularly decry the secrecy that shrouds WTO activities. Many important documents are unavailable to the public, and most WTO Committees, as well as all dispute resolution proceedings, are conducted in closed sessions dominated by trade rather than environmental experts.

As opposition to the WTO continues to mount, many governments are beginning to acknowledge, rhetorically at least, that reforms are needed to make the world trading system environmentally sound, the report notes. One idea gaining support is to enlist the WTO in an effort to reduce environmentally harmful subsidies. Among the areas where environmentally harmful payouts could be tackled, the report identifies fisheries, agriculture, energy, and forestry subsidies.

Taking on environmentally harmful subsidies would be an important step forward, but it does not let governments off the hook for amending existing WTO rules to buffer environmental laws from trade challenges. Among the priorities for reform are clearly incoporating the precautionary principles into WTO rules, protecting consumers’ right to know about health and environmental impacts of products they purchase by safeguarding labelling programmes, recognising the legitimacy of distinguishing among products based on how they were produced, providing deference to multinational environmental agreements in cases where they conflict with WTO rules, ensuring the right of countries to use trade measures to protect the global commons, and opening the WTO to meaningful public participation.

These changes, says the WorldWatch report, are imperative if the WTO is to gain the public support it needs to stay in business.

International movements of goods, money and people play a major role in today’s unprecedented biological losses. Yet the emerging rules of the global economy pay little heed to the importance of the planet, the report states.

While the international timber trade is not the only culprit in forest loss, the report maintains that it can be an inducement for countries to cut down trees far faster than would be required to meet domestic demand alone. Indonesia and Malaysia, for example, have both pushed plywood exports heavily in recent years, contributing to rapid deforestation in both countries. These two countries now account for nearly 60% of world plywood exports, up from just 4% in 1975.

The value of global trade in forest products has risen steadily ove the last few decades, climbing from $47 billion in 1970 to $139 billion in 1998.

The environmental impact of freeing trade in forest products is another controversial issue looming on the trade horizon, the report cautions. Under a proposed agreement now under consideration, most industrial countries would eliminate tariffs on pulp and paper by 2000, and on wood and other forest products such as furniture by 2002. Developing countries would be given an additional two years to meet these terms.

Studies suggest that the higher prices paid to producers as a result of tariff reductions will boost production significantly in some countries. With so little of today’s timber industry based on sustainable practices, production increases often translate into increased forest destruction.

Mining and energy extraction also imperil the health of forests, as well as mountains, waters, and other sensitive ecosystems, says the report. According to the World Resources Institute, mining, energy development, and associated activities represent the second biggest threat to frontier forests after logging, affecting nearly 40% of threatened forests.

Besides disturbing valuable ecosystems, the report adds, this activity also can be devastating for the indigenous peoples who inhabit them: current exploration targets suggest that an estimated 50% of the gold produced in the next 20 years will come from indigenous peoples’ lands. Toxic by-products of mining poison the rivers that local people drink from, and the mining operations themselves destroy the forests and fields that people rely on for sustenance.

Industrial countries are large consumers of minerals, the report says, accounting for more than 90% of bauxite imports, nearly 100% of nickel imports, over 80% of zinc imports, and roughly 70% of copper, iron, lead, and manganese imports.

But developing countries are home to much of the world’s mineral production, along with the associated environmental damage.

Moreover, the value of world agricultural trade has skyrocketed in recent decades, more than doubling between 1972 and 1997 alone—from $224 billion to $457 billion. Agriculture accounts for 11% of the value of all world exports; 25% of all Latin America’s exports; and 18% of Africa’s.

The developing world is a net importer of basic foodstuff such as grain and meat, but it is a major exporter of many cash crops, such as bananas, coffee, cotton, soybeans, sugar cane and tobacco. As of 1997, developing countries accounted for 97% of cocoa exports, 92% of palm oil, 88% of coffee, and 86% of bananas.

The report notes that although these crops are the mainstay of many national economies, heavy reliance on them can entail substantial social and environmental costs, including the displacement of subsistence farmers from their land and the promotion of chemical-intensive agriculture.

Recent decades have seen particularly rapid growth in so-called non-traditional exports—principally flowers, fruits, and vegetables. These crops tend to command far higher prices than those of traditional agricultural exports, which have been in decline in recent decades. But there are risks associated with these crops as well—one of the most serious of which is exposure to harmful levels of pesticides.

A study of nearly 9,000 workers in Colombia’s flower plantations indicated exposure to 127 different pesticides, some 20% of which are either banned or unregistered in the United Kingdom or the United States, the report observes.

Global fish exports have grown nearly fivefold in value since 1970, reaching $52 billion in 1997—with developed countries accounting for 80% of all imports by value. Developing countries contribute nearly half of all exports. Their share of the total has climbed steadily in recent decades as fleets have turned South in search of fish in response to the overfishing of Northern waters. Thailand, China, Chile, and Indonesia are all now among the world’s top 10 fish exporters.

The report says that with many Third World fisheries now becoming depleted as well, overfishing for export market means depriving small-scale fishers of their bounty. It also drives up the price of domestically available fish to the point where it is beyond the means of local people.

Trade in more exotic forms of wildlife is also a booming business, placing a number of commercially valuable species at growing risk of over-exploitation and even extinction. The wildlife trade is valued at $10-20 billion annually, at least a quarter of which is thought to be illegal. The list includes, on an annual basis: 40,000 monkeys and other primates, 2-5 million live birds, 3 million live farmed turtles, 2-3 million other live reptiles, 10-15 million raw reptile skins, 500-600 million ornamental fish, 1,000-2,000 raw tons of corals, 7-8 million cacti, and 9-10 million orchids.

The world community is just now beginning to awaken, says the WorldWatch report, to a related though far more pervasive threat—the international spread of non-active exotic species, which is known as bio-invasion. The natural barricades provided by mountains, deserts and ocean currents have broken down as trade and travel have skyrocketed.

Once exotics establish a beachhead in a given ecosystem, they often proliferate, suppressing native species. Taken as a whole, invasive species now pose the second largest threat to the diversity of life on Earth, after habitat destruction.

Besides endangering the health of ecosystems, the spread of microbes around the globe also threatens the health of people. Airplanes carry people to the other side of the world in far less time than the incubation period for many ailments, facilitating the unwitting introduction of foreign microbes into vulnerable populations.

More than 30 new infectious diseases have emerged over the past 20 years, including AIDS, Ebola, Hantavirus, and hepatitis C and E. According to the World Health Organisation, environmental changes have contributed in one way or another to the appearance of most if not all of these diseases.

As a solution to the global environmental governance, the report notes that one idea gaining ground is to upgrade the UN Environment Programme into a World Environment Organisation (WEO), on par with the WTO. However, it adds that since it was founded in 1972, UNEP has suffered from meagre resources and a limited mandate. Still, it is important that debates over form not distract from the ultimately far more important questions of function.—Third World Network Features