Free Trade and Environmental Isolationism

Bruce Babbitt - Secretary of the Interior

Under President Bush, the US has taken up the cause of trade liberalization as the principal way to stimulate the world economy. Indeed, the Bush administration as well as GATT officials have been outspoken proponents of this approach, struggling all the while to persuade the world that trade negotiations are a sacrosanct process, not to be profaned by trifling environmental concerns.

Whereas Bush and his free trade allies are fighting for the fast track, environmental groups want to slow the negotiation process, arguing that trade liberalization without environmental standards will, unless carefully regulated, unleash a new flood of toxic chemicals, lead to still more water and land contamination and eviscerate comparatively tough US environmental regulations.

Environmental leaders say they do not oppose free trade as such. But in their view, the environmental consequences of the new global economy are also global, far beyond the regulatory reach of any one nation. The rise of a new world trading order, they contend, must be paralleled by the making of a new world environmental order.

On this frustrating road to free trade negotiations, American environmentalists have honed two trade linkage techniques that get the administration's attention when all else fails: the legislation of unilateral environmental standards, enforceable against other nations by trade embargoes, and the outright opposition to trade liberalization.

If there is to be a solution to this destructive impasse between the free traders and environmentalists, it must be the creation of new international mechanisms to set and enforce international environmental standards. If nations can be induced or compelled through institutional decision-making to abide by common environmental protection standards, sustainable development can become a reality.

In the aftermath of the Rio summit, it will be especially timely to consider exactly what should be the architecture of an invigorated world environmental order. The common historical analogy is Bretton Woods, the post-World War 11 summit that led to a creation of the World Bank, the IMF and the GATT, the institutions that have guided the development of a global economy.

However, there will not be an environmental Bretton Woods any time soon. Earth Summit was the best, and probably the only, chance in this century for the task to be accomplished from the top down by a convocation of heads of state. More likely, the task of building meaningful international institutions must now proceed incrementally, building brick by brick on the foundations provided by existing international agreements. One such areement is the Law of the Sea Treaty, which has already been ratified by 45 of the 60 nations necessary for it to take effect, with or without the US

Another agreement is the precedent-setting Montreal Protocol, which launched the nations of the earth toward a complete phase-out of chlorofluorocarbons and several similar chemicals by the year 2000. The Montreal Protocol confronted and resolved nearly all the contentious issues that have subsequently risen to torpedo the Earth Summit negotiations. The specific targets for phase-out of the chemicals were agreed upon and then ratcheted downward as scientific evidence confirmed the crisis.

The age-old antagonisms between North and South were settled with an agreement to provide both money and technological assistance to help shoulder the costs of industrial transition in the Third World. The recurring dispute about who controls the money was resolved with a two-tier compromise that provides that the levy and expenditure of funds will require a two-thirds vote of all nations plus a majority of both the North bloc and the South bloc. And, most remarkably, the agreement provides for trade sanctions, including the right to exclude all products manufactured by the use of chlorofluorocarbon chemicals, involving refrigeration, foam products and even semicondustors rinsed in chlorofluorocarbon solutions.

With the Montreal Protocol precedent before them, the Earth Summit negotiators could have produced a similar agreement to control the carbon dioxide emissions that cause global warming. More than any other single event, it was this failure to produce anything more than a vague, non-binding statement of the desirability of stabilizing carbon dioxide emissions that now motivates environmentalists to force action by taking trade hostages: Throughout the US and Europe, rainforest action groups are promoting boycotts of tropical timber products; and Rep. Peter Kostmayer, an environmental leader in Congress, is sponsoring a bill that would aid boycott movements by requiring that all tropical woods be labeled with the name of the wood and the country of origin.

Clearly the Rio summit, however lacking in concrete achievements, has nonetheless opened a new era of world environmental awareness. The day of stand-alone trade and environmental negotiations is about to disappear.