Is APEC environmentally friendly?<\/p>\n
By Lyuba Zarsky<\/p>\n
This is the first of two articles on free trade and
\nenvironmental standards under APEC-proposed liberalizations.<\/p>\n
BANGKOK: The Asia Pacific Economic Cooperation forum (APEC)
\nhas emerged as Asia-Pacific's overarching regional institutions.
\nAPEC's eighteen members span East Asia, Australia and the Western
\nHemisphere. Focussed primarily on economic cooperation, the heart
\nof APEC's diplomatic agenda is the creation of a region-wide,
\nliberal trade and investment regime.<\/p>\n
The relationship between trade liberalization, economic growth
\nand the environment in Asia-Pacific has not yet been charted.
\nConceptual frameworks and evidence from other regions suggest
\nthat economic integration generates specific pressures on
\nnational environmental policy-making -- and the environment --
\nwhich create new demands for regional environmental governance.
\nGiven its pivotal institutional role, APEC will be the arena in
\nwhich a trade-environment policy agenda will be debated and
\nformulated over the coming years.<\/p>\n
APEC encompasses one of the most highly integrated economic
\nregions in the world. Nearly 70 percent of total APEC trade is
\nintra-regional, much of it between East Asia and North America
\nand between Southeast Asia and Japan. The sub-region of East
\nAsia, which excludes APEC's North and South American and
\nAustralasian members, is also highly integrated. About 45 percent
\nof total East Asian trade is with other East Asian countries.<\/p>\n
Total trade statistics mask the importance of economic size
\nand do not measure a \"bias factor,\" viz, the tendency for
\ncountries to favor particular trade partners. Another measure of
\ntrade interdependence, the gravity model, adjust for size by
\ndividing the share of two-way trade by the partner's share in
\nworld trade. Under a gravity model, the intensity of regional
\ntrade in East Asia outstrips the intensity of Pacific region
\ntrade by some 25 percent. Indeed, the intensity of East Asian
\ntrade is the highest in the world.<\/p>\n
Economic integration within East Asia, as well as, on a trans-
\nPacific basis, is also evident in rising foreign direct
\ninvestment (FDI). Between 1988 and 1992, the stock of FDI in East
\nAsia grew by nearly 22 percent. Investors from North America and
\nJapan, as well as the new capital exporters of Hong Kong, Taiwan
\nand South Korea have targeted Southeast Asia and China as growth
\npoles.<\/p>\n
Spurred by market opening in China, Russia and potentially
\nNorth Korea, economic integration within Northeast Asia is likely
\nto grow rapidly in the coming decade. Rent by ideological and
\nmilitary divides for 50 years, Northeast Asian trade has been
\nskewed away from the high level of integration that has emerged
\nin other regions where borders are friendly. With the end of the
\nCold War and increasing economic openness, trade and investment
\nflows within the region are predicted to boom. According to one
\nestimate, the value of trade flows within the Northeast Asian
\nregion will more than double by 2000 and triple by 2010.<\/p>\n
Rapid growth, fueled largely by foreign investment and trade
\nopenness, has made East Asia the economic success story of the
\nworld. Economic success, however, has come at the expense of
\nsevere and rising ecological degradation, including the pollution
\nof water and air systems, rapid depletion of resources including
\nforests, wetlands and fisheries, and loss of flora and fauna.
\nEcological degradation will impose large financial costs in Asia-
\nPacific and globally. Moreover, some losses in ecosystem goods
\nand services may be irreversible.<\/p>\n
The ecological costs of environmentally unconstrained, export-
\noriented economic growth are not limited to the rapidly
\nindustrializing developing countries of APEC. In Canada,
\nunsustained management, including inappropriate pricing,
\nundermines forest sustainability. In California, water subsidies
\npromote water-intensive crops in arid areas, with negative
\nimpacts on water salinity, soil micro-organisms, and flora and
\nfauna. In Australia, farming and grazing practices in some states
\ngenerate soil erosion and decline of water tables.<\/p>\n
Is economic integration itself responsible for environmental
\ndegradation? Or should the blame -- and the solution -- be put
\nsquarely and solely with national governments? Studies suggest
\nthat openness to trade and foreign investment has both positive
\nand negative impacts on the environment. Positive impacts are
\nboth dynamic and static. Dynamic gains encompass the transfer of
\nmore efficient, cleaner technologies via foreign direct
\ninvestment; the learning and norm-building that occurs through
\ncross border exchange of goods, services, capital and ideas; and
\nthe transmission of higher environmental standards by \"large
\nmarket\" countries. Static gains include a more efficient
\nallocation of productions in energy and materials use per unit of
\noutput. If the goal of good environmental management is not
\nsimply conservation but sustainable development, then the
\nbenefits of growth inducing trade openness must also include
\nrises in per capita income and consumption.<\/p>\n
On the negative side, trade integration subjects national
\neconomies to rising market demand and the pressures of
\ninternational market prices, which maybe generated in part by
\nrunning down ecological assets in other countries. Processes of
\nmarket competition, in turn, can preempt domestic environmental
\npolicy. Open markets can be transmission belts not for high and
\nrising but for low and immovable environmental standards.
\nMoreover, \"growth\" may be a poor measure of improvements in
\nwelfare.<\/p>\n
Over the longer term, economic integration promotes cross-
\nborder convergence in environmental standards. Market-driven
\nconvergence, which can drive standards \"up\" or \"down\" occurs in
\none of three ways:<\/p>\n
1) through the impacts of large country import requirements;<\/p>\n
2) via the standardized production and marketing practices of
\nMultinational Corporations;<\/p>\n
3) via cost-cutting practices in competitive, non-large-
\ncountry markets. The \"large market\" convergence process in APEC
\nwill be complicated by the fact that there are two large-market
\ncountries, the United States and Japan. With their very different
\nindustrial structures and resource endowments, the U.S. and Japan
\ntend to have different environmental concerns and standards.
\nMoreover, the Asian countries combined with East Asian NICs
\n(South Korea, Taiwan, and Hong Kong) represent a significant
\neconomic force.<\/p>\n
Finally, China is already an important site for foreign
\ninvestment and will emerge as a large market country over the
\nnext decade. Already the largest economy in Northeast Asia, China
\nis growing at the rate of about 12 percent per year. Under both
\nhigh and low growth scenarios, China's GNP is expected to triple
\nthat of second-place Japan by 2010. Without environmental
\nconstraints, increasing integration with China would likely pull
\nenvironment standards down as foreign companies compete for
\nmarket share.<\/p>\n
Convergence can be driven politically as well as through
\nmarkets by large-market countries either through unilateral
\naction, especially threats of trade sanctions, or via bilateral,
\nregional and global trade agreements. The best-known instance of
\nunilateral action was the threat of the United States to restrict
\nimports from Mexico of tuna caught with kill rates which exceeded
\nthose of U.S. standards.<\/p>\n
Whether driven by markets or diplomacy, whether standards rise
\nor fall, convergence in environmental standards is problematic
\nfor sound environmental management. Ecosystems (and social
\npriorities) differ enormously by specific locale -- even within,
\nlet alone across, borders. Standards imported from elsewhere
\nmaybe too low, too high, or simply irrelevant to the sustainable
\nfunctioning of a local ecosystem or harvesting of local
\nresources. Even within countries, like the United States, there
\nis increasing dissatisfaction with rigid, national standards and
\na search for more flexible, locale-specific regulatory
\napproaches.<\/p>\n
To promote ecologically sustainable development, a liberal
\ntrade regime in APEC must be built of three pillars; first, an
\nembrace of the need to design, adopt and enforce common
\nframeworks for the environmental governance of sectors, products
\nand services exposed to trade and investment; and second, a
\ncommitment to the pursuit of diverse and flexible approaches to
\nenvironmental management. Building these two pillars will require
\na cooperative, consensus-building approach which invites input
\nfrom scientists and citizen groups from throughout the region.<\/p>\n
-- The Nation<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/is-apec-environmentally-friendly-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }