International Trade and the Environment

This research study presents the different effects of international trade and globalization on the environment. It also explores the effects of Trade liberalization to the environment, the use of trade Agreements in order to protect the environment, as well as the sustainable development Agenda. The case study was conducted on Sinopec, the largest oil and gas industry in the world, and its impact on the environment. The study also discusses the principles of sustainable development and the use of trade agreements to protect the environment.

Running head: TRADE INVESTMENT AND ECONOMIC POLICY IN ASIA 1
International Trade and the Environment
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Purpose of the study
This research study presents the different effects of international
trade and globalization on the environment. It also explores the effects of
Trade liberalization to the environment, the use of trade Agreements in
order to protect the environment, as well as the sustainable development
Agenda.
International Trade and the environment
International trade is the exchange of services, goods, and capital across territories or
international borders. International trade is a result of globalization and the two terms can be
used interchangeably (Rasmus, 2016). International trade is useful in promoting economic
growth and trade between different countries. The current technological dynamics have made
international trade part and partial of modern economies. Technology has eased the flow of
goods and services across borders with no limits. Therefore, the gains of international trade in
today’s economies are higher than they were in the previous years. However, International
trade also has negative effects on the environment, some of these are promotion of
degradation and pollution. The environment comprises of a number of components. The most
important components are; air, water, flora, fauna, and human beings themselves. Countries
participating in international trade always affect these components of the
environment.Therefore, there is need to create trade agreements so as to protect the
environment from trade liberalization and international trade activities.
Using Sinopec Group, a Chinese gasoline and oil corporation located in china as the
case study (Sinopec, 2010), the effects of international trade and trade liberalization on the
environment are to be assessed. Additionally, the sustainable developments Agenda as well
as the existing trade agreements to protect the environment are also tackled

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Impacts of International trade on the environment.
International trade is a very important aspect or factor in civilisation of countries since
it eases trade, communication, and transportation of goods and services among different
countries. Services and goods are sent where they are needed easily. Given the fact that
international trade is useful, it also has some impacts on the environment components such as
fauna and flora. Some of these negative impacts are pollution, degradation, chronic diseases
such as cancer.
The considered case Study industry is the oil industry. The case study firm is Sinopec
Group, the largest petroleum and gas industry in the world having headquarters in Beijing
China (Sinopec, 2018). Petroleum is one of the main products dealt in while carrying out
international trade. It's nicknamed "black gold" due to its ability to rise revenue for countries
where it’s used as the main export. Crude oil is very useful in the manufacturing of plastics
and medicines; fuel used by cars, planes, and other automobiles. It’s also used in heating
systems and manufacturing of gas thus making life easier.
Trade liberalization involves increased production through setting up more industries
and production centres. These cause contaminations which are very harmful to human life in
the way that they easily affect the green house. Affecting the green house may lead to low
carbon dioxide absorption from the environment and less oxygen generation to the
environment. Also, Soil and water contamination may lead to low food production
(Ehrenfeld, 2018).Given the fact that Petroleum products are essential in the daily today life;
exploring, drilling, refining, and transportation of oil products across boundaries is dangerous
to the environment (Montagnolliet al, 2015). Some of the negative impacts of international
trade through trading oil are; Oil spilling which results from the breakage of pipelines, oil

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wells, trucks, and ships moving oil from one point to the other is hazardous. It is very
dangerous since it is a key factor to water and soil contamination.
Supporting International trade through using crude Oil as the trade product negatively
affects the environment, the products produced by Sinopec are highly inflammable causing
devastating fires and explosions (Tuccella et al, 2017). The nearby fauna and flora are
affected thus making liberalization dangerous to the environment. The same products when
burnt are likely to emit carbon dioxide which easily spread diseases to humans for example
cancer of the lungs through inhaling the fumes. Therefore, there is need for countermeasures
to curb the causes of these emissions.
International trade where Sinopec deals in oil products is very useful. The different
oil products are used in normal day to day life. The disadvantage comes in when there is need
to dispose the waste. Waste is hard to dispose. In Asia and Africa, waste sometimes is
disposed in streams and water passages thus causing high chances of unsafe water (acidic).
This waste is one of the cause of flooding of swamps (Tuccella et al, 2017). Therefore,
governments’ for these countries are looking forward to getting other alternatives to deal with
getting rid of this waste. One of the methods applied is burning. Fumes from automobiles run
by petroleum as well as fumes from burning plastics and refining oil contain carbon
monoxide gas which is very dangerous to the environment. These fumes are the major cause
of global warming and acidic rains in different countries.
Effects of Trade liberalization to the environment
Trade liberalization refers to the reduction or total removal of barriers or restrictions
on trade. It’s a tool for promotion of free exchange of services and goods among countries
(Lind, 2016)). Trade liberation paves way for the elimination of trade barriers across
countries. With liberation, capital flows across nations without any limitations. The adoption

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of trade liberation is one of the factors that has been critical in encouraging multinational
organizations globally. Using Oil industry as the case study, trade liberalization has a large
impact on the environment, some of the impacts are described (Mansfield, 2012). Trade
liberalization increases the exchange of goods and services among countries since tariffs are
reduced. It should be noted that high tariffs causes imports to be expensive which lowers the
demand of products internationally.
Due to increased production, trade Liberalization creates openness to depletion of
resources as well as pollution (HDOH, 2012). It should be noted that, trade liberalization
paves way for multinational organizations to open up branches in different countries which
makes the negatives impacts of industrialization like pollution unavoidable. This openness on
pollution consists of pollution of the air where fumes from refineries in different industries,
burning plastic will emit more carbon dioxide and carbon monoxide (Tuccella et al, 2017).
These gases are very dangerous to fauna and flora, they cause chronic diseases to humans.
The openness to trade will lead to further poor waste disposal rising from increased
production aimed at meeting demand and raising revenue for the companies (U.S. Energy
Information Administration, 2018). Garbage is disposed within water bodies and swamps,
this affects the inhabitants such as the fish due to intoxication nature of the waste.
Liberalization of Sinopec commodities on one hand will raise revenue for the
company, on other hand will degrade the environment through fuelling climatic changes. The
increase in climatic changes will raise due to increased toxicity from factors like solubility
and weathering (Anna, 2018). The petroleum products are characterized with creation of
sheen on the water surface as a very thin layer. This causes an optical phenomenon known as
interphase; it also makes the water not safe for the different living creatures that exist in the
water bodies and swamps. Climatic changes caused by increased production have a
possibility of increasing on the possibilities of global warming.

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Important to note most industrialized economies have a high rate of waste emission.
The increase in the level of waste emission has not spared the environment of most of these
economies destroying the ozone layers leading to increased healthy and environmental
hazards (Rasmus, 2016). Global warming is the main cause of depletion of the green house
due to direct heat, it catalyses the production of acidic rains disastrous to plant and animal life
(Ramanathan & Feng, 2008). The exposure of Benzene from the gasoline and crude oil
products from the case study firm is seriously dangerous to human life since it is referred to
as the main cause of Leukaemia. Therefore, trade liberation has consequences on the
economies of different countries. Hence some of the trade liberation policies have to be
revised for purposes of maintaining sustainability of the economy both in the short and long
run period (Marvin, 2011).
Sustainable development Agenda, and use of trade Agreements to protect the
environment.
Sustainable development looks beyond the current stand and puts into consideration
the near future. The sustainable develop agenda comprehensively looks at how development
can be promoted without compromising the future. A number of initiatives such as
environment protection are considered in the sustainable development agenda. In the 2030
Sustainable development Agenda, trade Liberalization was linked to the issues of
environmental protection (Jens, 2018). The adversaries of trade liberalization argued that the
liberalization of international trade is very harmful to the environment. They proposed that it
will lead to lax of environmental standards by countries involving in the trade. They further
made an argument that trade liberalization would be a key factor to unsustainable natural
resource utilization. The proposers of free trade and trade liberalization argued that the
liberalization of the trade will be good for environment; they added that with free trade there
would be transfer of "environmental friendly technologies" that would prompt production of

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goods having comparative advantages. Therefore, the debate between environmentalists and
free traders led to numerous environmental innovations to multilateral trading system.
According to the E/CN.17/2000/20-Report on the 8th session, Decision 8/6 under the
title "Economic growth, trade and Investment" different decisions and precautions were listed
that are essential when undertaking trade liberalization. These set of principles are aimed at
promoting environmental safety when international trade is carried out. They are described
from principle17 to principle 21 and they are aimed at causing environment and trade policies
reciprocally exclusive.
These policies aimed at creating mutuality between trade and environment and are
explained and used in the Sustainable development Agenda 2030 (Ranja, 2018).
Principle 17 suggests that International organizations for example World Trade
Organization(WTO) and government together with MEAs(Multilateral Environmental
Agreements) should work cooperatively inorder to exploit different ways of enhancing
complementarities between environmental protection and trade liberalization so as
multilateral trading system is more reactive to sustainable growth concerns. Therefore parties
involved are encouraged to identify the different opportunities where trade liberalization
promotes sustainable development for example actions of eliminating trade-distortive and
environment harm (Ranja, 2018).
Principle 19 emphasizes pursuit of effective environmental policies that are both
national and international. This decision rules out environmental measures that are
protectionist in nature. The aspect of environmental protection is critically significant while
looking at sustainable development. When development is pursued minus putting into
consideration the environment in most cases its short lived. The flora and fauna need to be
given keen attention while implementing development strategies.

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Principle 20 emphasizes international organizations and government to consider their
relationship and their agreements with the MEAs and the world Trade organization.
Secondly, it should also consider the importance of environment and trade agreements as they
are mutually supportive.
Principle 21 emphasizes international organizations and developed countries in
relation to their commitments through the multilateral agreements of the environment are to
help countries that are developing to implement the needful agreements so as to protect the
environment during the trade.
These principles were developed to give protection to the environment during trade
liberalization and if put into consideration there is assured protection of the environment from
degradation and pollution by trade firm such as Sinopec Group. The different trade
agreements concerning the environment donot only protect the animals and flora but also the
human who participate in the trade of goods and services since the inhaling of carbon dioxide
gas would affect their health (Ranja, 2018).
Conclusion
International trade which involves exchange of services and goods beyond boundaries
may be dangerous to the environment through the different firms which involve themselves
in the goods production. The case study was conducted on Sinopec the largest oil and gas
industry in the world and having headquarters in Beijing. The different effects of
international trade on the environment include oil spills which may lead to fire outbreaks and
also affecting the environment, affecting the green house during drilling and transportation
thus causing low carbon dioxide absorption, poor disposal of the garbage which is harmful to
the flora and fauna. Trade liberalization is considered to worsen the problem since there
would not be tariffs or strict barriers to regulate the exchange of these goods and services.

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Some of the effects rising from Trade liberalization include increased exploitation of
resources, increased environmental pollution, increased poor waste disposal, and emission of
fumes. Because of the mentioned impacts, world trade organizations together with
Environment organization made agreements concerning the protection of the environment
during trade.

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