7:17 AM Feb 23, 1994

IMPACT OF NORTHERN PRODUCTION, TRADE PATTERNS

by Martin Khor Third World Network Feature

Penang 22 Feb (TWN) -- Trade and the environment has emerged as a key issue in international relations and may well be the focus of a new General Agreement on Tariffs and Trade (GATT) Round now that the Uruguay Round has been concluded. Many environment groups have argued, and we agree, that the pattern of trade has helped accelerate environmental degradation worldwide. It has accelerated the depletion of natural resources as countries in the South extract raw materials and use land resources for export crops (including non-food industrial crops), and the production of industrial goods (especially in the North) that contribute so much to pollution, the Greenhouse Effect, ozone loss and toxic wastes./

We also need to add that the pattern of trade, with its division of labour of raw materials production in the South and manufactures in the North, and the control of trading institutions by Northern-controlled monopolies, have been major factors keeping many countries of the South impoverished./

The key issue in trade and environment could be summarised as follows. How can we recognise the negative impacts of trade on the environment, and take measures to counter or rectify these negative impacts in a fair manner, so that the products of weaker trading countries are not discriminated against, and that the environment is not misused as a protectionist weapon by the strong against the weak? In other words, can we devise a framework for dealing with the negative environmental impacts of trade in a fair and non-discriminatory manner, and in fact in a manner by which the Northern countries carry the main bulk of the burden of adjustment towards more ecological production patterns?/

The rationale is as follows: The North is mainly responsible for global environmental problems (as it accounts for four- fifths of consumption, resource use and pollution), has been the main beneficiary of past and present trade, and has the 'cushion' to absorb adjustments. The South, being mainly impoverished, cannot afford to bear more burdens, especially since it is already enduring debt payments and structural adjustment.

Most discussions of trade and environment tend to focus on the impacts of production and trade of Third World commodities such as tropical wood and minerals. It is true that the extraction of Third World natural resources have had, and is having, devastating impacts on the environment. Measures should be taken to reduce these negative impacts and even to reduce the volume and rate of production and trade. However this must be done in a way that does not have negative social impacts on the people, and especially poor communities, in the South.

For example, the South could produce and export less physical quantities of wood, minerals and agricultural products, but be paid significantly higher prices for these commodities, taking into account the social and ecological values of these products. Supply of the products can thus be rationalised and high enough prices guaranteed. In such a scheme, the South may produce less (and thus cut down on resource depletion) but would not have to suffer economically. Higher commodity prices within an agreement to control and even reduce output is one way towards fairer and more ecological trade./

This, however, is only one part of the answer. Whilst we have to deal with the environmental impact of Third World commodities, it is even more important to look at the production and trade of Northern products, including industrial products, which have equally or more devastating impacts on the environment. If we are to deal with the trade in tropical wood, we should also focus on the trade in timber from temperate and boreal forests.

The environmental impacts of the timber trade should be countered, as we need to conserve forests. But this exercise must look at all timber and forests, not only the tropical varieties. On the other hand, it is also incorrect to take the position that we should not be concerned about trade in timber, as it cannot be denied that logging and timber production and trade is a major contributory factor to forest loss, land degradation and biodiversity erosion. When we examine commodity trade, we should thus look at all trade and not exclusively at Southern commodities. Even more important, we should not confine the exercise to raw materials, but must extend it to the environmental impacts of industrial products.

For instance, whilst we are concerned about timber and mining, we should equally be concerned about the impact of producing, using and trading motor vehicles. As we know, private cars are inefficient as transport vehicles, compared with bicycles or public transport. They use up immense quantities of raw materials and energy resources, take up valuable land space, and are a major polluter contributing to the Greenhouse Effect. We should therefore curb the production, use and trade in motorcars as much or even more than we are concerned about tropical wood and minerals. The same argument also applies to other industrial products, especially those whose production involves toxic substances, high pollution and results in hazardous wastes.

In other words, we need an objective study of the environmental impacts of all products, services and processes, exported by both North and South, and create a framework for taking measures on this whole range of products in a fair and equitable manner.

The fear of many people in the South is that the Northern governments (and perhaps even some NGOs) may take the lead in defining what is environmentally harmful trade, be biased against products exported by the South, and thus arrange for adjustments to world trade in a manner that is to their own advantage, forcing most of the burden on the South once again, as they have done in the resolution of the debt crisis.

Another question in the trade and environment debate is whether trade and trade liberalisation causes environmental harm. Influential parties and agencies have argued that trade liberalisation or 'free trade' is the best route to environmental protection as the increased wealth created by trade enables governments to finance environmental protection measures. This ignores the fact that if trade liberalisation increases production, based on the same patterns of production and consumption that we now have, there will be an acceleration in the depletion and degradation of resources. If it is true that trade promotes environmental protection, then the tremendous increase in world trade of the past one to two centuries would have led to a better environment, but the reverse has happened, leading to the present crisis. We have to recognise that unbridled trade, based on the present technologies and production and distribution structures, has greatly contributed to the environmental problem and that the negative effects of trade have to be dealt with.