(Draft. Please don’t quote without asking the author.)

Both free trade and sustainable development are seen as imperatives for mainstream policy makers. But are the two concepts compatible?

While resolving the tension between ecology and economy can be seen as its goal, sustainable development is a contested concept. In order to be sustainable development it’s been argued that it must meet “the needs of the present without compromising the ability of future generations to meet their own needs” (Snarr & Snarr 2005:238). Some argue that it’s possible to combine ceaseless growth with environmental and social improvement. Others emphasize the fact that development as it’s now practised is unsustainable.

Global trade has increased significantly since the 1990s. For the neoliberal movement, who has been prominent in policy circles since the 1980s, global free trade is a cornerstone of poverty reduction and environmental protection. For them expansion of trade and investment, standardization of trade rules and minimization of government has been placed on top of the agenda. According to their beliefs, global free trade introduces ecologically and socially sound technologies and leads to effective allocation of resources (Snarr & Snarr 2005:93, 240ff).

Export led development strategies such as specialization of export of cash crops may have positive effects such as increase in agricultural income, GDP and reduction in absolute poverty (UNEP 2005a). However, export oriented industrial agriculture are dependent on fossil fuel inputs; it contributes to climate changing emissions and resource depletion and concentration of wealth and power. Without proper social and environmental policies in place, economic growth are reaped by trading cartels, large scale producers and the government while long term costs such as soil erosion, deforestation and decreased income for local small scale farmers may be devastating (UNEP 2005b). Moreover increased trade means increased transportation, and thus pollution. (Snarr & Snarr 2005:93, 246f).

The Chief of Economics, Trade Branch of UNEP argues that a “[m]ajor shifts in mindset are needed” and that ”World Trade Organization (WTO) pays lip service, at best, to environmental concerns” (Hussein Abaza In Najam et. al. 2007:20).

Hitherto genuine political will and proper regulations both on global and local levels seems to be conspicuous by its absence. Within the global institutional “free trade” framework social and environmental regulations are challenged and sometimes ruled as “unfair trade practices”. Capital interests are strengthened; local governance is weakened (Snarr & Snarr 2005:246). In WTO, where global trade rules are negotiated and litigated “it is mainly developed countries that have the financial resources to bring environmental experts…” (Najam et. al. 2007:17). Meanwhile developed countries may decouple their national growth from environmental hazards by importing cheap products from poor countries (Behrens et. al. 2007) whose “comparative advantage” may be lax social and environmental regulations (Snarr & Snarr 2005:247).

Trade policies must seriously consider aspects of inequality, consumption and production patterns, ecological constraints. The current global trade system is clearly unsustainable. But if global trade should be intensified, as a minimum condition, it must be seen as a mean to achieve sustainability and not an end in itself. Personally I’m not convinced that global trade, even if it would be managed global trade, would lead to sustainable development. Analysts such as Douthwhaite (in Munch & O,Hearn 1999) puts forward a lot of arguments in favour of a plethora of regional small scale economies and development strategies embedded in local contexts and based on e.g. food sovereignty. They also points to the risks of a single, standardizing albeit opaque global trade system, based on a growth imperative, and whose potential collapse may lead to global consequences, food crisis, financial crisis, climate change…

Will the current financial crisis facilitate a change in mindset?

References

Behrens, Arno et al 2007 “The material basis of the global economy” Ecological economics 2007, doi:10.1016/j.ecolecon,2007.02.034.

Munch, Ronald & O’Hearn, Denis (eds.) 1999 Critical Development Theory: Contributions to a New Paradigm Zed Books

Najam, Adil , Halle, Mark & Meléndez-Ortiz, Ricardo (eds.) 2007 Trade and Enviroment. A Resource Book. http://www.iisd.org/pdf/2007/trade_and_env.pdf

UNEP 2005a Integrated Assessment of the Impact of Trade Liberalization

A Country Study on the Viet Nam Rice Sector http://www.unep.ch/etb/publications/intAssessment/Vietnam.pdf

UNEP 2005b UNEP Warns of Trade Liberalisation Failure if Environment Forgotten

http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=452&ArticleID=4953&l=en

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