Environment & Trade

1. Introduction

At the very basic level, Environment, trade, and investment are fundamentally linked as the environment provides various basic inputs of economic activity – forests, fisheries, metals, minerals and also the energy used to process those materials. Trade and I investment, are thus affected by environmental concerns, because producers and investors have to comply with environmental regulations and markets have to address the consumer demand for greener goods. Apart from these physical and economic connections, there are certain legal institutions which govern trade, investment and the environment. Institutions like the World Trade Organization (WTO) and also regional & bilateral trade agreements include trade and investment rules. Multilateral environmental agreements (MEAs), regional agreements, and also the national and sub-national regulations encompass the environmental law.

Fundamental goals of WTO are sustainable development and protection and preservation of the environment. These are included in the “Marrakesh Agreement”, which established the WTO, and also complement the WTO’s objective to reduce the trade barriers and eliminate discriminatory treatment in international trade relations. Though, there is no specific agreement which deals with the environment, as per WTO rules members can adopt trade-related measures aimed at protecting the environment, following a number of conditions to avoid the misuse of such measures.

The WTO contributes in protection & preservation of the environment through its objective of trade openness, its rules and enforcement mechanism, work in different WTO bodies, and ongoing efforts under Doha Development Agenda. The Doha Agenda consists of specific negotiations on trade and environment and also some tasks which are assigned to the regular Trade and Environment Committee.

2. International trade

Trade can help to move towards a greener economy. Trade facilitates diffusion of goods, services, technologies...