Assignment nº 2
How environmental regulations can be used as trade barriers?
Samah Miri
International Business
Professor, Victoriano Travieso
Fall 2016
The expansion of environmental norms and regulations in industrialised
countries may weaken the exchanging chances and trading opportunities that might
occur between developing countries. The fear is, more often coming from the
developing countries, that putting strict product standards in the markets of developed
countries will highly act on as trade barriers for their exports. Furthermore, it’s well
known that environmental restrictions are sometimes used as an indirect way of
protecting industries. This is due to their lack of market power, developing countries can
be extremely vulnerable to changing market conditions, that are usually followed by a
mixture of environmental and protectionist interests.
The debate on trade and environment is focuses often on the interests of free
trade and environmental protection. Many environmental groups have expressed their
concerns about the fact of the liberalisation of trade may lead to unsustainable forms of
development. Also, trade analysts are concerned that the use of trade measures for
environmental purposes will result in trade misunderstanding as well as a hidden form
of protectionism.
However, according the United Nations (1992), the international community has
reached a consensus that trade, development and environmental protection are
compatible objectives. Each activity is dependent on the others and their goals are of
course linked to each other as well:
“Trade is needed for a more efficient allocation of resources, including
environmental resources, and a key instrument for achieving development.”
“Development is needed to reduce poverty and to raise resources needed for
protecting the environment.”
“Environmental protection is needed to preserve and develop natural resources
which are essential for the long-term expansion of trade and sustainable
economic growth.”
This paper will investigate how environmental regulations can affect trade and
manufacturing competitiveness, through three major points. First, it will be about the
environmental regulations as trade barriers, second effects of foreign regulations on
manufacturing trade and competitiveness and finally it will emphasize the governmental
environmental assistance to manufacturing firms.
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Government use numerous means to regulate environmental strategies within their
borders. They can for example, regulate manufacturing processes by requiring permits
perhaps for the release of pollutants. Countries may as well regulate which products
maybe produced and sold and how they may be used and having access to it. As an
example a country might require cars to meet specified emissions quotas. They can
forbid the manufacturing of products that contain banned compounds, or maybe
pressure manufacturers to take back empty beverage containers for refilling and reusing
them.
To be effective, a country’s system of regulations at a certain point must cover imported
products. A nation’s inner control rarely stretch out to the procedure by which imported
items are made. But the directions likely would subject imported items to an
indistinguishable measure from local items in regards to the item, its utilization and its
transfer. Differences in internal regulations can cut off exchange, products made for use
in one country might not meet another country’s standards. When standards can be
harmonized, or made similar, trade can be more open, and trade conflicts rarer.
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