Trade and Environmental Impacts

This assignment delves into the complex relationship between international trade and environmental protection. It examines how trade agreements, such as NAFTA, can influence environmental policies and outcomes. The analysis incorporates various sources like academic papers, WTO reports, and legal documents to explore both positive and negative impacts of trade on the environment. Case studies and specific examples are used to illustrate the theoretical concepts.

International Trade Law

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Background.............................................................................................................................1
2. Relationship between trade and environment.........................................................................4
3. Mechanism of Environmental Protection under International Trade Law..............................7
a. World Trade Organisation (WTO) approach..........................................................................8
a. i. Trends in WTO through Case Law Study.........................................................................10
b. North American Free Trade Agreement (NAFTA) Approach..............................................10
c. European Union Approach....................................................................................................11
d. Multilateral Environmental Agreements (MEA)..................................................................12
4. Impact of trade liberalisation................................................................................................13
CONCLUSION..............................................................................................................................15

INTRODUCTION
The ambit of International trade law is huge and inflating gradually. These laws are very
helpful in regulating trade and commerce across the world. Due to the expansion of business and
trade it has direct impact on environment. As the demand of goods are gradually increasing,
resources are being extracted on regular basis. Which has resulted in adverse effect on the
environment. In order to meet the demand of people resources are extricated from the earth
which has hampered the sustainable development and environment. So to balance its effect there
are certain laws which manages the adverse impact of trade on environment. It becomes
necessary to extract resources to fulfil the needs of human but by keeping principle of
sustainable development. International trade was always a part of globalization but it was
performed by certain laws .
This essay is consist of various legal issues of world trade law and environment law. Also
it explains the relation between trade and environment. WTO has initiated some laws to protect
the mechanism of environment. It includes such measures taken by WTO to administer the
protection of environment. Moreover, it is also comprise of efforts made by European Union and
NAFTA to save environment. The impact of trade liberalization on the environment has also
been discussed in this essay. It is an overview of Impact of international trade on the
environment and how it can be sustainably conducted in order to restrain the harm on
environment. This report is in context of various nations indulged in various agreements to
promote free trade with preservation of environment, human health and welfare. Functioning of
World Trade Organisation (WTO) and European Union (EU) regarding free trade policies and
protection of environment has also been discussed extensively. Conclusively this report discuss
the impact of liberalisation in trade on natural resources and surroundings, also various measures
which has been taken by governing bodies to prevent any harm done to environment.
MAIN BODY
1. Background
International laws came into existence in the late fifteenth century. It was constructed
after the result of 'Peace of Westphalia' in 1648. International trade has been part of nations from
historical period. Trade was practised between various countries. The history of trade is divided
into five parts Ancient, Middle Ages, Early Modern, Later Modern and Post-World War II. The
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study of ancient trade is vast and indefinite. According to the records from Historical Department
trade has been practised from 19th century BCE (Before Common Era) and even before that. The
Egyptians , Chinese, Romans, Indians etc. were involve in the ancient trade of goods. The middle
ages is some what similar to the ancient one but the only difference was, range of trading
increased immensely and laws of trade were also changed by different dynasties. Silk route was
the major path through which trade was executed. In the early modern stage Spice Route changes
from the Persian Gulf to Red Sea and certain other events happened to change the course of
world trade and commerce. Later Modern era gave rises to many treaties and policies of free
trade between the nations. In this era free trade was motivated by the different countries. In Post-
World War II gave rise to certain communities. Over 23 countries agreed to the General
Agreement on Tariffs and Trade in order to rationalize trade between several nations. The
European Free Trade Association was established in 1960 it has been developed to create a trade
bloc on the outer seven European countries who has refused to join European Economic
Community. In this era North American Free Trade Agreement came into existence
International trade is comprise of export and import. Export trade includes sale of goods
to different states whereas Import trade is includes buying goods from different countries. These
means are conclusively known as foreign trade . It is of two types bilateral and multi lateral
trade. When two countries gets into an agreement of exchanging goods and services they are
working under bilateral trade whereas in multi trade where more than one countries are involved.
Apart from import and export, countries purchases product from one place and sell it to other,
this type of trading is known as Entrepôt Trade.
International Trade Laws regulates the trading procedure between countries. The main
purpose is to form those regulations which helps in smooth trade and commerce. These laws are
implemented by World Trade Organisation . WTO is responsible for regulating internation
trade. It was initiated on 1st of January 1995 under Marrakesh Agreement. This agreement was
made in Marrakesh, Morocco and 124 other nations in April 1994. It was the result of General
Agreement on Tariffs and Trade in addition with several agreements such as trade in services,
technical barriers, sanitary and phyto-sanitary measures, etc.1 Moreover, dispute resolution
methods were also included in this agreement.
1 Marceau, G. Z., & Trachtman, J. P. (2014). A map of the world trade organization law of domestic
regulation of goods: the technical barriers to trade agreement, the sanitary and phytosanitary measures
agreement, and the general agreement on tariffs and trade. Journal of World Trade, 48(2), 351-432.
2

Free Trade Area is that arena enclosing a trade bloc. This area is comprise of such
countries who has signed a free trade agreement. In order to reduce barriers in trade and tariffs,
also to elevate trade of goods and services within these countries. Members indulged in free trade
region have a distinct quotas and customs taxes, they do not posses a unique external tariff. Also
policies are different for non-members. Rules of origin is used to stay away from tariff evasion
by the members. A certificate of origin is given to add value to the goods and those who meets
the suitable requirement are treated specially.
The North American Free Trade Agreement (NAFTA) is an agreement attested by
Canada, Mexico and the United States. This agreement forms a trilateral trade bloc in North
America. It was enforced on 1st January 1994, substitute of Canada-United Free Trade
Agreement. Another agreement between these three countries was made known as the North
American Agreement on Environmental Cooperation under which Commission for
Environmental Cooperation was established whose main objective was to ease cooperation and
public involvement in promoting safety, conservation and intensification of the North American
environment which is beneficial for sustainable development in the criteria of growing economy,
trade and service between these three countries.2
European Union is a cluster of 28 members of state. It has an internal system of trading
and marketing. Their main objective is to fortify the free movement of people, goods,capital and
services within the member countries. They have their own free trading area, legislative and
administrative organisations. EU can emphasis environment standards on its members for
performing trade according to it. This process is known as harmonization of environmental
standards. Some of the countries are made to form strict policies on environment to meet
environmental standards. It creates a conflict between countries because if one of them is
tightening their policies then it might weakens the policies of other countries.
2. Relationship between trade and environment
Trade is related to selling and buying of goods and services. It is done for generating
money as well it involves exchange or transfer of products or services this take place for money.
Manufacturer manufacture goods after then move towards the wholesaler, then to retailer and last
or final step is consumer. Trading is important because it help in satisfying human needs and
wants. Motive of doing trade is not only for generating revenue but also for providing services to
2 Villareal, M., & Fergusson, I. F. (2017). The North American Free Trade Agreement (NAFTA).
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consumers. Trade is started with the birth of human beings and it will continue till the existence
of human being. The same help in many ways such as in raising living standard of consumer
because with the assistance of trading they get variety of goods and services. Along with this
trade also help in development of economy by increasing import and export, living standard of
people and many others reasons are also there. Apart from this trade is divided into two types:
Internal or home or domestic trade, external or foreign or internal trade.
Internal trade also called as home trade and these take place within the geographical and
political boundaries of nation. Such trade is done at local level, regional level or national level
for instance trade between London and Leeds is known as home or internal trade. Moreover
internal trade also have its two sub parts like: wholesaler they are such people who purchase
goods in large quantity from manufacturer or producers then after they sell in small lots to
retailers so they can resale to the consumers. In simple term it can be said that wholesaler is a
link between producer and retailer as well both retailer and manufacturer are dependent on
wholesaler. Second sub part is Retail trade they are those who purchase goods from wholesaler
in small lots. Then retail sell in small quantity to consumers for meeting their day to day activity
or for some personal use also. Retailer is the last linker in chain of distribution they establish link
between wholesaler and consumer. There are small and large two types of retailer where, small
scale retailers include general stores, pedlars, hawkers and many more.
Second part of trade is external trade these are foreign trade it is related to buying and
selling between two countries as well can also tell as trading outside the geographical boundaries
of nation. Along with this, it is divided in three groups such as: export trade, import and entrepôt
trade. In export trade goods and services are sell from home country to another. Whereas, in
import home nation purchase commodities from another. Entrepôt trade is that when products are
imported in one country and the same was re-exported after doing some process as well in
general word it can be said that it is re-export process of imported goods.
Environment is the surroundings and several other things which affects organism during
their lifetime. It is sum of total water, land and air as well these all are interlinked with human
being, property and other living organism. Now a days production of goods and services are
harming environment because of the living organisation are not getting health and safety living
surroundings. Healthy surrounding is important for every living beings that can be humans or
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animals both. For safety of this it is necessary for each and every company to take proper steps
which will not destroy environment.
Relationship between trade and environment- trade and environment both are interrelated
to each other as well modification in any gives impact on both. Production affect environment
and surroundings thus it gives some negative impact also like air pollution, noise pollution as
well water pollution. Main reason behind this is production of goods which is done in factories
through this smoke generate creates air pollutant, wastage after producing throw in river or
ponds which is water pollutant, machinery sound is noise for surroundings. It is not major issue
that trade is damaging environment but also some activities are doing it. Along with this trade
giving some beneficial impact on environment with the help of sharing goods and services
worldwide which results in generating more as well profit maximisation for company. Increasing
trade activity is supporting for economic growth is related to export and import , social welfare
and development.. Along with this they are contributing to the greater capacity for managing
environment more effectively because it is not possible that every nation is producing every type
of goods thus trading assist in managing whole world properly. Environmental policies and
institutional framework is required at every level local, national, regional and international level.
Thus effect of trade and trade liberalisation on nations welfare is dependent on that
environmental resources of particular nation is correctly paid or not. Every thing have its
negative and positive both impact in geographical area of country and even outside also. Same as
trade is also giving its both type of impacts. Companies who are trading have to keep in mind all
the rules and regulation related to the same and also to the environment that it will not harm.
Because healthy surrounding is needed for living beings with the assistance of trading people all
over the world consuming variety of goods and services which is raising their living standards.
World trade organisation- fundamental goals of organisation are sustainable development
, preservation and protection of environment. Marrakesh Agreement is that which was
established by WTO and they complement the objectives of same organisation for removing
barriers which occur while trading as well remove discriminatory treatment in relation to
international trading. Thus, there is no particular agreement which is dealing with the
environment, under World Trade Organisation rules members can follow trade-related measures
with motive to protect the environment supply numerous of conditions to avoid the misuse of
these kind of measures for protectionist ends are consummated. Along with this same
5

organisation is contributing to protect and preserve the environment with its objectives of trade
openness, by its enforcement mechanism and rules. WTO is playing important role in saving
environment by negative impact of trading and help in sustainable development with the
assistance of trade. Since in 1995 at the time of entry of World Trade Organisation into force,
WTO dispute Settlement Body is dealing with several disputes which is related to environmental
related measures. These type of measures accomplish variety of policy objectives such as
conservation of sea turtles which is capturing in commercial fishing for saving human health
from risk which is posed by air pollution. WTO jurisprudence has affirmed that WTO regulation
do not take priority all over the environmental concerns. Apart from this in 2001, member of
WTO ban importation of asbestos so they can protect population of nations.3 TNC decisions of
15 December 1993 as read for identifying relationship between environment and trade measures
for promoting sustainable development in world. It gives proper recommendation that is their
any modification is required in provision of the multilateral trading system is needed, compatible
with the open, equitable and non-discriminatory nature of the system, as regards. Along with this
WTO is providing safeguards to environment which is important for all the living beings.
3. Mechanism of Environmental Protection under International Trade Law
As the needs of humans are increasing extraction of resources are also growing
immensely. In order to maintain economic growth nations has to develop such policies that
would help them in globalisation. Sustainable development is using of resources but to a limited
extent for preserving future. Sources are being extracted frequently and that has affected the
environment in a negative manner. To avoid such adverse effect of trade on environment various
organisation, and unions came forward to initiate preservation of habitats and nature. WTO,
European Union and various nations has played an important role and has created laws to
improve the health of humans and environment. The mechanism that these organisation follows
are based on treaties, conventions and various agreements. Agreements are used most frequently
to form regulations protecting environment, it is of three types, unilateral, bilateral and
multilateral. In a unilateral agreement, offensive TREMs is applied that is a nation enforces
terms regardless of others unlike bilateral, which is made to promote trade and investment
3 European Communities — Asbestos
<https://www.wto.org/english/tratop_e/envir_e/edis09_e.htm>
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between nations. A multilateral agreement is made between more than two countries to perform
trade and business. Apart from this certain laws has been implemented by WTO to safeguard
endangered species from threats caused due to commencing trade.
As per the free trade regulations, gives the basis of GATT and for the World Trade
Organisation (WTO), it has been said that countries are not entitled to restrain imports only in
few cases such as when there is a question of the safety and health of their citizens.4
Protection of environment is an essential issue. For the conservation of it certain policies
has been made and is implied internationally. These polices are consist of two major factors,
environment and policies. Environment is considered as physical confinement and policies are
the course of action to preserve it. Similar policies has been initiated by several trade conducting
organisation. It becomes conspicuous for the nation to regulate certain measures in preserving
climate and human life. Environmental standards are made to formulate the process of trade so
that it would not end up in destruction of habitats. Every nation has their own stats of
contingencies and when they imply it with others it becomes a discriminatory act. The main
reason behind it is that they contradict universal standards. environmental or natural laws is a
collective term that forms a network of treaties, statutes, regulations, common and customary
laws that addresses the impact of human activity on the nature. There is a need to regulate
international environmental laws due to the challenges facing through the individuals,
communities, private companies and government through out the world. Most of the
government, companies and civil society organizations are recognise the environmental issues
and promoting the laws to prevent the nature from outside activities. There are some main
international treaties which are concerning about the environment, such as 1972 UN Convention
on the Human Environment; 1992 United Nations Conference on Environment and Development
(UNCED), which produced the Rio Declaration; 1997 Kyoto Protocol, entered into force on
February 16, 2005;2002 World Earth Summit The laws for the environment are Preventing
Trans-boundary Environmental Crime : It covers the illegal activities against the environment
including wastes, Wildlife and illegal timber. Human Rights and the Environment – The UN and
UNEP High Commissioner identities the human rights and promote the good practices related to
the use of human rights and environmental issues. These laws has a great impact on regulating
4 Jonathan M. Harris, 'Environmental and Natural Resource Economics: A Contemporary
Approach'[2002] (1) Trade and the Environment
<http://ase.tufts.edu/gdae/education_materials/modules/Trade_and_the_Environment.pdf>
7

conservation of environment and sustainable growth. There are certain organisation like WTO,
EU and many other methods which has created a parameter up to which trade can be practised
without disturbing natural habitat and environment.
a. World Trade Organisation (WTO) approach
The issue related to conservation of environment has been a challenge for WTO. Main
motive is to ensure sustainable development. There are certain trade related environmental
measures (TREM) which regulates the capacity of a country to perform trade at certain extent.
For instance, a dispute was arose in 1990 regarding the trade of Tuna or Dolphin, where the
United States enforced a unilateral substandard environmental measure contrary to export done
by Mexico. WTO succeeded GATT in 1995 by merging European communities and 75 GATT
members. Their purpose was to liberalize trade within the merged members and to prevent
discrimination between them.5
According to the Article XX 12, enables a particular exemption which authorises a
member to perform unilateral trade but for a certain time, restrictions are made only if such
practice results in whimsical discrimination between countries where a similar trade has been
performed. Moreover protectionist measures are applicable until it becomes essential to
safeguard human, animal, vegetation and health, under Article XX (b). As per Article XX (g) a
party may enforce such measures in order to conserve exhaustible resources by restricting
domestic production .
Taking the case of Tuna/Dolphin6, imports of Mexican tuna was banned by the United
States. It was done to make them to realize about killing of Dolphins the practice of Tuna
fishing. U.S. opposed such commercial practice by enacting the ban under Marine Mammal
Protection Act (MMPA). Several countries were affected by such ban including Mexico. It was
lifted in October 1990 but Mexico was exempted from such embargo. Ban was implied to reduce
5 Jonathan M. Harris, 'Environmental and Natural Resource Economics: A Contemporary
Approach'[2002] (11-12) Trade and the Environment
<http://ase.tufts.edu/gdae/education_materials/modules/Trade_and_the_Environment.pdf>
6 Hrytzak, Dara, ‘The Impact of Trade related Environmental Measures on International Trade’
Saskatchewan Economics Journal (21-23)
<http://artsandscience.usask.ca/economics/resources/pdf/02v4The%20Impact%20of
%20Trade.pdf>
8

the killing of Dolphins by commercial practice of fishing. The net which was used in fishing,
traps Tunas, but eventually end up in killing Dolphins. Ban was imposed until some measures
were taken to deduct the killing of Dolphins. The legislation which was imposed on import by
Mexico was a unilateral substandard TREM. If Mexico wants to trade in US then they have to
conduct such programmes which will ensure safety of marine mammals and the average rate of
commercial mammal harvesting should be similar of US standards. Which restricts the killing,
not more than 1.25 times that of US.
An appeal was made in GATT/WTO by Mexico in 1991 for resolving dispute regarding
trade of tuna in the US. It was claimed by Mexico that America has violated rights of trade.
Grounds laid were according to the Article XI and XIII, ban against quantitative restrictions and
discriminatory measures connected to specific geographical regions respectively. Also the eco-
labelling done by America was discriminatory under Article I and IX. It was decided that the US
has stats of scrutinised from their fishermen that is, standard made by them was not on universal
base. So Mexico has all right to sell their goods in US.
a. i. Trends in WTO through Case Law Study
TREMs are considered as significant condition for creating conflict between members of
GATT/WTO. Enormous steps has been taken by WTO to preserve natural resources and
environment. To execute such measures it has made certain barrier to limit the purpose of trade.
The trading community has taken major and minor decisions to regulate several policies
regarding environmental standards. For maintaining national environmental standards, TREMs
are useful and considered as essential tool for governing bodies. Offensive TREMs have been a
part of strategy to meet external standards with the standards of their own. Tuna trading dispute
between US and Mexico is a landmark case of the implication of offensive TREMs. WTO found
it as a discriminatory act done by the US and gave judgement in the favour of Mexico. Reason
which was concluded in this case was that the US has not meet universal standard. There stats on
Dolphin killings was based on their fishermen.
Similar trend has been followed by GATT/WTO in 1994 case of Tuna's shipment.
Embargo by the US was challenged by EU. US induces other members to change their
environmental policies which would hamper trade and can originate disputes among the
members. WTO's panel gave their decision on the basis of Article XX that a country can form
policies beyond their limits but they cannot force other members to change their environmental
9

policies. In 1998 a Shrimp-Turtle dispute7, US applied a ban on the import of shrimps because
during fishing nets were ensnaring turtles and they have been considered as endangered species
under section 609 of Endangered Species Act. It was decided by WTO that import was justifiable
as ban was made on the process of trade not on products.
b. North American Free Trade Agreement (NAFTA) Approach
The physical changes in environment has been of greater concern by the government and
environment preserving organisation. Globalisation and trade has its impact on several regions,
local bodies and ecosystem, moreover it has an adverse impression on human health and life.
NAFTA agreement was made between three countries, United States, Mexico and Canada. Free
trade has created a huge concern about its effect on ecosystem. According to some it would
result adversely and can give birth to certain environmental issues in tariff free industrial region
along the Mexican and US border. In order to overcome this situation two agreements were
formed, one was on environmental cooperation, North American on Environmental Cooperation
and the other one was on labour co-operation(NAALC).8
The particular concern to social and environmental region of trade and commerce was
exceptional in trading agreements. NAFTA has resulted in various positive and negative impact
on cultural and environment of various regions. Illegal immigration due to opening of agriculture
sector has created conflict of views among people. Also NAFTA has both negative and positive
impact in the region of industrial pollution. Strategies has been made by Mexico to improvise
their industrial sector but it has also increased industrial waste and till now no such measures has
been taken by them to overcome this issue,
c. European Union Approach
European Union has been a significant part of conveying trade and regulating
environment related measures cause due to it. They can formulate measures to preserve
environment and to prevent environmental degradation due to trade and commerce.
7 Trebilcock, Edward Elgar,' Understanding Trade Law: Trade Policy and the Environment'
[2011](164-165) Overview of GATT/WTO case law
<http://192.168.1.18/projectfiles/internal_cust_document/Understanding_Trade_Law_141527
070457_1527927766.pdf>
8 Jonathan M. Harris, 'Environmental and Natural Resource Economics: A Contemporary
Approach'[2002] (12-13) Trade and the Environment
<http://ase.tufts.edu/gdae/education_materials/modules/Trade_and_the_Environment.pdf>
10

Environmental standards formed by EU binding upon its member, it is essential to follow the set
of rules which has be enforced by it in order to perform trade among its members. It is
considered as harmonization of environmental standards. But it has created a supranational entity
which controls the policy of making environmental standards.9
The conduct of issuing environmental standards has created dispute among its members.
Sometimes regional trade policies has created conflict between states, as for some these policies
strengthen their standards and for others it weakens their standards. So it would be difficult and
causes loss in their overall economy. The policies made by commission are limited into the
boundaries of EU. Trade is commenced in between 28 states and these regulations are applicable
on them. But on observing various aspects it can be seen that some of these nations are not as
developed as others. The impact of strict policies for preserving environment has been a
drawback for such countries. What if the only source of maintaining economy is through those
methods which has been banned in EU or an embargo issued by recognised nation restricting
them to trade that specific product.
Steps taken to harmonize environmental standards has also resulted in dispute between
the standards which has been created by WTO. Instead of harmonizing up it has rather fall down.
But it is necessary to keep in kind that these policies are only applicable on such states which
comes under EU. Civil societies has also played an important rule in influencing policies of EU
and every nation has their own society. It has been an advantage but due to different cultural
beliefs and region it has some drawbacks too.
d. Multilateral Environmental Agreements (MEA)
There are some issues that requires attention and international solutions. To vanquish
such problems certain treaties were formed to deal with problems originated due to trade.
Phylloxera agreement of 187810 was the first treaty to overcome problems related to trade and
environment. Various conventions were made in order to preserve environment and to ensure
safety of human beings. Use of phosphorus was banned for manufacturing of match sticks as it
9 Jonathan M. Harris, 'Environmental and Natural Resource Economics: A Contemporary
Approach'[2002] (13-14) Trade and the Environment
<http://ase.tufts.edu/gdae/education_materials/modules/Trade_and_the_Environment.pdf>
10Jonathan M. Harris, 'Environmental and Natural Resource Economics: A Contemporary
Approach'[2002] (14) Trade and the Environment
<http://ase.tufts.edu/gdae/education_materials/modules/Trade_and_the_Environment.pdf>
11

was responsible for contingent diseases among those who were working in its manufacturing
especially match workers.
Similarly, various conventions and international treaties were also made to preserve
environment. Specific agreements were also constructed to prevent excessive use of natural
resources. The main motive of such treaties, conventions and agreements was to implicate
methods of sustainable development. Certain conventions like illegal production of fur seals,
protecting birds who migrates, polar bears, whales and endangered organisms, were made.
MEAs are such international agreements which is binding upon more than two countries.
It is a legal obligation over countries to perform such steps mentioned in the agreement to
preserve and save environment, human health and welfare. These agreements are generally
constructed and regulated by United Nations which includes measures related to preservation of
atmosphere(Montreal Protocol on Substances that Deplete the Ozone Layer,1987), management
of residuals (Basel Convention on Hazardous Wastes,1989), taking precautions to conserve
marine species ( Convention on Straddling and Highly Migratory Fish Stocks, 1995), etc.
These agreements are based on mutual consent of different countries unlike regulations
made by WTO. Every country recognised by UN are bound to obey the guidelines issued by
WTO regarding environmental standard and policies. Moreover, MEAs cover only such matter
which has been agreed by the nations while under WTO measures are taken to protect
environment and it becomes mandatory for its member to abide by such decided measures.
4. Impact of trade liberalisation
Trade has always been a significant par of globalisation. Nations are involved in making
various treaties and agreements regarding trade and polices of saving environment from those
damages cause by such performance. In order to synchronise trade with human requirements it
becomes evident to liberalise the practice of trade. Trade liberalisation is elimination of such
barriers that restricts practice of trade or makes it difficult for nations to interact in the context of
trade. Its main purpose is to promote free trade, allowing countries to trade goods by removing
barriers. This would be an asset for countries to trade on a lower cost but on the other hand it
affects local markets.11
11 Kleemann, L., & Abdulai, A. (2013). The impact of trade and economic growth on the
environment: Revisiting the cross‐country evidence. Journal of International
Development, 25(2), 180-205.
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Past three decades many nations has entered into unilateral or multilateral agreements to
promote substantial growth of trade and commerce. For ensuring free trade, barriers were
removed which has resulted in importing of goods at lower costs. These agreements are based
upon various treaties and conventions. Although certain countries do not follow these regulations
or agreements. It has generated imbalance in trade which is affecting overall growth of trading
lobby. The impact of trade liberalization on balancing trade is a major concern between nations.
Trade liberalisation has affected how nations are performing trade and also on its imports.
According to some critics these affects are positive and enhances the growth of trade among
nations. But their views on liberalisation affecting exports are kind of mix nature. Certainly it
depends upon how nations deals with TREMs of others. Sometimes it has been helpful in
expansion of trade limits and most of the time it has a negative impact on other.
WTO has taken various steps in promoting free trade and removing barriers affecting it.
WTO acts as dispute resolving panel for the purpose of resolving conflicts between nations.
Moreover, it is responsible for making major rules and regulations such as prohibiting
discrimination of supplying goods. Power to settle matters between nations are mainly used by
WTO, if a country is violating environmental standards then other can appeal for restricting the
trade of such inside free trade union lobby. WTO approaches to a maximum extent but it is
limited up to such nations which is recognised by it. Moreover, it can not take sou-motu cases
that is primarily nations have to apply for solving a dispute among them. Lets take an example,
suppose US is extracting crude oil form Gulf countries then dispute arising from their act cannot
be heard in international court or WTO tribunal because Gulf Countries are not recognised by
UN. Its impact is limited and certain.
NAFTA has been successful but not on a border range. Also it has created dispute
between the US and Mexico. The ambit of NAFTA is limited up to three countries Mexico, US
and Canada. Due to liberalisation it has increased access to then market of Mexico and also
gradually increased imports from Mexico. But it has also resulted in illegal migration of people
and other sort of social conflicts. Moreover, NAFTA has been used as discriminatory agreement
between these nations. Its approach is limited and not that effective on universal basis.12
12 Baylis, K., Garduño-Rivera, R., & Piras, G. (2012). The distributional effects of NAFTA
in Mexico: Evidence from a panel of municipalities. Regional Science and Urban
Economics, 42(1-2), 286-302.
13

Regulations and policies made by European Commission is limited over such nations
which is recognised under EU. Many effective measures has been taken by EU to regulate trade
and conserving environment. But these measures are applicable for those states which is formed
under EU. Similar, to NAFTA it has not that wide range of jurisdiction. EU performs its function
to fortify trade policies and promotes sustainable development through trade agreements and
development policies. It is mandatory for EU and those who are in trade with them, to follow
measures of sustainable development. Also it is essential to promote and encourage trade that
pursuing awareness regarding climate change.
Each organisation, unions and agreements has their own significances. They have made
commendable moves to preserve resources and balance trade. Their procedures and laws are
different but they share same motive of sustainable development. WTO has been successful in
maintaining peaceful trade relation among the recognised nations.
CONCLUSION
Trade and environment works hand in hand. During the course of trade several harms are
caused to the nature. Trade is commence by the means of air water and land, these medium
constitute to form environment. Trade has beneficial as well as adverse impact on the
environment. It leads to transfer of goods at greater extent which supports the economic growth,
development and social welfare. But nothing is free in this world so these benefits come with
some negative impact, by affecting environment. It has been a huge concern for the nations in
building such measures which prevent hammering of environment due to trade. It is exist of
treaties, conventions and agreements. Protection of human health and environment lies on the
priority of countries. Trade, is no doubt essential for globalisation but some cost has to paid by
practitioners. So to save our environment various organisation came forward to protect it. World
Trade Organisation has played a significant part in constructing measures related to the
protection of wild life, marine mammals and other habitats. WTO acts as appellate tribunal and
assists in resolving dispute between the nations. It becomes challenging to balance trade with
sustainable development, still WTO succeed in maintaining harmony between the nations. Not
only WTO but different countries has came forward to ensure conservation of environment by
constructing agreements according to which they have to perform their duties. This report is aq
critical analysis of relation between trade and environment, mechanism of environmental
protection under international law, discussing various approaches of unions, agreements and
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organisations. It can be concluded that resources are being used to meet the needs of human but
according to the principle of sustainable development. Also nations are taking various measures
in order to ensure a better, safe and clean environment not only for humans but also for other
species habiting in our surroundings. This is a complete analysis of impact of trade on
environment and measures taken by various nations to preserve it.
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