Trade and the environment: Economic development versus sustainable development

Journal of Interamerican Studies and World Affairs, Fall 1994 by Rosenberg, Robin L

IT should come as no surprise that the environmentalist community in the Americas, whose expectations were raised by the bold, global "Agenda 21" of the 1992 Earth Summit, the informal title accorded the United Nations Conference on Environment and Development (UNCED), would be concerned that the forces of free market capitalism and the urgency for economic development have proven to be more powerful than the regional movement towards sustainable development. By virtue of the region's large share of the planet's environmental resources, the global environmental agenda, which includes, inter aila, such complex and daunting problems as biodiversity, global warming, and ozone depletion, should logically place the Western Hemisphere in the center of policy action. On the eve of the December 1994 Summit of the Americas in Miami, however, the general principles outlined in the "Agenda 21" and related initiatives, have not been translated into concrete or coherent intergovernmental policy actions. As much as environmentalists would like to see the politics of the biosphere as the strategic arena of North-South relations, nation-states and peoples in the developing world continue to clamor most for such tangible policy objectives as market access, investment, access to technology, and financing. In short, growing poverty and inequities in the South, and fiscal austerity and rising protectionism in the North, have made the transformation from an economic development agenda to a sustainable development agenda an almost glacial process.

Those who have witnessed the poverty and resultant political instability throughout the Americas are far from surprised that the sustainable development bandwagon has thus far been characterized by inaction and more than a little hot air. Environmental consciousness and the burgeoning environmental community made up of nongovernmental organizations (NGOs) may have reached historic heights in Latin America and the Caribbean, but, when faced with the choice between economic growth and sustainable use of land and natural resources, more often than not, Hemispheric leaders opt for immediate satisfaction of economic demands (French, 1993). Although the Hemisphere is dotted with model projects and innovative approaches to sustainable development, the Americas still have a long way to go before policymakers ever begin to fill the rhetorical bubble blown up by those who, faced with the trade-off between short-term economic goals and the long-term objectives of sustainable development, will almost always sacrifice the environment.

For practically all of the 33 democratically-elected leaders invited by President Clinton to Miami in December, the strategic arena of North-South relations in the Western Hemisphere is trade and economic integration. As long as sustainable development is not a low-cost proposition, and also as long as the developed countries in the Hemisphere are not willing to confront the staggering price tag, diplomatic resources and private and public monies will be directed toward maximizing the benefits to be derived from trade liberalization, a process which began in the late 1980s and has, at both the national and subregional level, only accelerated in the 1990s (Ferrate, 1993). Although the liberalizing process in Latin American and Caribbean economies is historically a momentous development, environmentalists harbor the legitimate fear that, underneath this "new moment" in Hemispheric economic relations, lurk the all too familiar politics of economic growth which have contributed to destruction of the biosphere. During the 1980s, when the structural adjustment and liberalization processes took off, the countries of Latin America and the Caribbean incurred great costs in terms of democratic stability, less equitable distribution of income, and a weakening of the state's ability to meet basic human needs. Today, regional leaders seek some reciprocity in the form of a broader, more dynamic Hemispheric market -- with the ultimate prize being free access to the North American market. This course of action is perceived as the quickest, surest path toward the political sustainability needed to consolidate economic reforms and address the material demands of impoverished majorities. The basic assumption here is that poverty is the greatest enemy of the environment because it forces both people and governments into opting for short-term economic goals at the expense of those more conducive to sustainable development. The vicious circle of poverty and environmental degradation can be broken only by the kind of economic growth that the developed countries themselves experienced on the road to prosperity.

SEARCHING FOR THE CONCEPTUAL MIDDLEGROUND

FOR the realists, the goal of sustainable development remains a foreign policy norm. Wary of what The Economist calls the "greening of protectionism," concern for the environment seems to get in the way of free trade regimes and the free flow of capital (The Economist, 1994). Economists and free traders make allowances for measures that ensure the safety of final products on the one hand, but still support trade regimes that are blind to the process by which the product is made on the other, thus making the process of "dirty production" into an issue of national sovereignty in which the cost is absorbed by the environment instead of by the producer. Thus these partisans (1) cite conclusive evidence that refutes the existence of pollution havens; (2) boast of the developing world's greater capacity to absorb pollution and polluting economic activity; (3) hold out the promise that the prosperity generated from trade and free markets will provide the resources needed for environmental protection; (4) argue that trade liberalization will allow environmental technology to be more readily transferred; (5) assert compatibility with the principles of national sovereignty embodied in the Charter of the United Nations (UN) by defending the right of individual countries to set their own environmental standards without the threat of trade and other sanctions; and (6) advance the basic principle of trade theory (e.g., that free trade maximizes efficiency in the use of the world's resources, including natural resources and the environment). Lately, recognizing that poor people and political instability make for equally poor and unstable trading partners, the free marketeers have even used the paternalistic, but nonetheless powerful, argument that economic improvements for the losers in the economic growth game should not be held hostage to environmental goals Anderson and Leal, 1992; Low, 1992; Lash, 1994).