Trade liberalization, economic specialization and the environment

Abstract

A great deal has been written, and a great deal of debate has raged, on the effects of international trade and trade liberalization on the environment. Given that it is only recently that the General Agreement on Tariffs and Trade has begun to address the interdependence of the international economy and the international environment in a systematic way, it is likely that the debate will continue for quite some time. It will be argued that the economic case for there being benign environmental consequences associated with trade liberalization is flawed in important ways. This is due to statistical, empirical and conceptual issues which affect the estimation of such effects. Moreover, it will be argued that despite the intensity of the debate the effects of international trade on the environment have in fact only been addressed in an incidental manner. Rather, the debate has concentrated on factors that may coexist with trade, but not on the role of trade itself. This has served to obscure the more fundamental environmental effects of trade liberalization through the homogenization and specialization of ecosystems.