Book review by Shawn Steil (Environmental Design) -  Book review - "The Environment and International Trade Negotiations - Developing Country Stakes" Edited by Diane Tussie

Ottawa: International Development Research Centre (IDRC)

(263 pages with references)

The Environment and International Trade Negotiations seeks to provide the developing country perspective to the on-going discussion about the relationship between trade and the environment, and to provide a balance to the body of literature on the subject that, as the contributors suggest, has been dominated by "northern-biased" interests. The majority of the contributors are either from, or working in, developing nations. I approached the book with a degree of scepticism, however, because many of the authors have received education in northern universities. Yet the book does remain loyal to its claim, and approaches the trade and environment discussion from a variety of angles that are of particular relevance and concern to developing countries. It questions some of the assumptions made by the developed country approach to trade and environment and provides a comprehensive and persuasive argument for a greater and more effective inclusion of developing countries in the development of mechanisms to address the conflict between trade and environment.

I approached the book with additional scepticism, because edited volumes that tackle a variety of issues and case studies on the theme are often disjointed, and replete with information that falls all over the map of the general theme being produced. I feared that I would have to wade through cases and arguments that held little relevance or interest to what I wanted to know about developing country stakes in international trade negotiations. The first section of the book consists of four case studies from developing countries. These chapters not only provide different geographical cases, but focus on different areas of the international trade and environment as well. Through careful editing, and sharing of their results, the chapters build on one another and provide a good overall picture of developing country concerns and the impacts of trade on the environment.

The second section, on general issues, fills the gaps that might have been left by the case studies, and draws the various strands developed in the first section into the different, but complementary themes of international environmental standards, and trade theory. The final section, International Environmental Governance, looks at the success, failures and options for enhancing the role of developing countries in multi-lateral environmental agreements and institutions, and draws on the arguments presented in the preceding sections.

Overall, the book follows a logical and effective line of development, and is successful in drawing out the variety of approaches and impacts within the framework of developing country perspective. It presents a good blend of the practical and theoretical, with an emphasis on real and existing solutions to the developing country dilemma, and sums up the difference in approaches on the trade and environment along north-south lines.

A consensus between the chapters is built on the need for multilateral cooperation in setting standards and negotiating the mechanisms for dispute resolution. The relatively low position of leverage for developing countries needs to be taken into account, and though trade can have both negative and positive ("upgrading") effects on the environment, the underlying argument is that trade measures (sanctions, and barriers including standards and eco-labelling) alone will, at best, have no effect on improving developing country environmental performance.

The conclusion does an excellent job of tying the arguments of the previous chapters together and in using them to present a comprehensive argument for the effects of trade on the environment of developing countries, and the policy measures and processes needed to build environmental performance. Though the editor acknowledges the difficulty in generalizing on the different cases and approaches presented in the book, she does an admirable job of drawing the arguments into a cohesive whole. But in doing so, the conclusion glosses over some of the more controversial claims made in the book.

For example, at several points, the argument that liberalized trade will be followed by the internalization of environmental externalities is forwarded, but the means of achieving this state of affairs is not fully developed.

The Environment and International Trade Negotiations presents a number of issues that are of significance for developing countries. Among the key arguments for the developing country stakes in trade and environment negotiations are that:

• open trade improves industrial environmental performance, but not necessarily in resource-based sectors,

• there is a need for transparent, multi-lateral agreement on environmental standards, and flexibility in implementing these agreements,

• local or regional policy measures and capacities are needed to counter the dual market system created by liberalized trade and,

• cooperation and capacity-building rather than "mini-lateral" standards and trade sanctions will lead to improved environmental performance in developing countries.

Throughout the book, recommendations for further study are provided where there is a lack of evidence to support developing country claims. In some cases, however, those claims might be subject to vigorous debate. For example, the argument that liberalized trade will lead to improved environmental performance in the industrial sectors can certainly be questioned. The more persuasive argument, one that is reiterated throughout, is that large, export-oriented industries will feel international pressure to reform, while smaller enterprises, or developing nations themselves, with industries focusing on domestic markets, will continue to employ non-sustainable practices.

Other intriguing, though controversial arguments include those found in Chapter 4 in comparing the effects of voluntary, multi-lateral standards and unilateral, or "mini-lateral" impositions of eco-labelling requirements. Da Motta Veiga's argument is summarized in the table below:

Chapter 6 outlines a no less controversial stance that liberalized trade propagates standards through 1) technology transfer, and 2) increased demand for environmental standards. Chapter 7 takes the economists' approach that imperfect information means that trade sanctions are inefficient and ineffective means of dealing with environmental performance.

The final section concludes that agreements that are validated or implemented through regional institutions such as ASEAN and Mercosur, are more effective at improving environmental performance because regionally, as the economic and cultural bonds and identity are stronger, and many environmental issues are regional in scope, competition and subsequently the setting of standards is more even and harmonious within regions. Yet, in the conclusion, the editor argues that ASEAN and Mercosur have shown few signs of achieving any consensus, let alone action, on environmental issues.

In presenting these issues, the book leaves a lot of open ground, and room for questioning. Though it might be argued that it is beyond the scope or focus of the book, developing country issues such as foreign debt, population growth and political capacities were not addressed. In the "questioning" sense, however, it is an excellent instigator of debate, and one would hope, further research and policy development. In closing, Tussie adds her voice to the growing call for an international organization and regime for dealing with disputes along the lines of international trade and environment. She believes that liberalized trade will lead to environmental upgrading in developing countries, with the caveat that, left to the market alone, trade and environment issues will "reflect the interests of a Northern-biased agenda" (p.235). At present, developing countries have little say in setting the standards, and even voluntary measures can have a negative effect on developing country environmental performance by setting the bar too high, and excluding entrance and participation by smaller firms and countries.

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