Environmentally-insensitive free trade can hurt developing economies: UN

Environmentally-insensitive trade liberalization can lead to economically costly soil degradation, water pollution, loss of biodiversity and destruction of forests, the United Nations Environmental Programme (UNEP) warned today.

The stark warning follows the release of six new reports on the environmental impact of trade liberalization in the rice sector in China, Colombia, Indonesia, Nigeria, Senegal and Vietnam, and three months before a critical World Trade Organization (WTO) meeting in Hong Kong where trade ministers will push for further liberalization under the round of negotiations agreed to in Doha, Qatar.

“It is critical that we get an agreement in Hong Kong and from the Doha Round that frees up agricultural markets for poorer countries, but this should not come at the expense of the natural environment,” said Klaus Toepfer, Executive Director of UNEP, which supported the new studies.

Consequences of environmental degradation, according to the reports, include a decline in earning for local producers, especially small-scale farmers. Consumers can also suffer because traders and trading cartels often do not pass on the price savings of large-scale farming to them.

“Our work on the rice sector, and elsewhere, shows that while on the face of it, trade liberalization brings overall economic benefits, you need to look closely at the ‘winners’ and ‘losers’ and the long-term costs of environmental degradation and loss of natural resources,” said Hussein Abaza, head of UNEP’s Economic and Trade Branch, which led the work.

UNEP says that countries must urgently establish policies that minimize environmental damage at the same time as they design trade policies. Inter-ministerial coordination is an important element of that policymaking, it adds.

Under the auspices of UNEP, the leaders of the rice study reports and government officials from the respective countries are presenting their findings, recommendations and follow-up activities at a meeting today in Geneva.

The country studies are available on the web at:http://www.unep.ch/etb/index.php