How is Environmental Trade Done Legally?

How is environmental trade done legally? Economic expansion and globalization have drained vast resources from remote East Asia and the Pacific. Among them are goods made of wood, such as paper and lumber. Since 2005, there have been approximately 1.3 billion cubic meters of yearly worldwide trade in wood-based goods, with an import value of about 350 billion US dollars. 

How is Environmental Trade Done Legally?

Logs, plywood, and furniture make up 45 percent or nearly half of the trade’s value, while the remaining portion comprises paper goods, such as pulp, wood chips, and paper. In certain countries, the demand for wood-based products has resulted in considerable forest degradation. Large portions of Southeast Asia’s continental territory, including Indonesia and the Philippines, were heavily logged to commercial depletion. Due to intensive and unsustainable logging practices, forests in Papua New Guinea and the Solomon Islands are quickly being depleted.

Some of the largest producers or consumers of wood-based commodities, like China and Vietnam, are rapidly reforesting using monoculture. Forests covered only 38 percent of Vietnam in 2000, but by 2010, that number had increased to 45 percent. China increased its tree plantation by over 23 million hectares between 2000 and 2010. On the other hand, several countries experienced a loss of up to 5 percent of their forested land during that time, and tree plantations replaced a great deal of the biodiverse forest.

Large amounts of wood-based goods are transported between rural and urban parts of countries. They emanate both from East Asia and the area itself. Large exports of wood and paper goods are evidence of this industry. China is the region’s greatest importer of raw materials derived from wood and its largest export of goods derived from wood, as is the case in other industrial affairs. China exported wood-based goods worth about 33 billion US dollars to various international markets in 2010. In addition to the legitimate international trade in wood-based goods, there is also illegal trade. The majority of unlawful trade is conducted by legitimate corporations using deceptive tactics.

Many Asian nations have enacted laws that, in certain circumstances, go beyond the Basel Convention’s standards and ban or place restrictions on the import of hazardous waste and other types of garbage. However, many of them permit the entry of old materials and out-of-date electrical and electronic equipment or EEE since they require these commodities for their development. For instance, Vietnam and China deploy permits to control the importing and exporting of scraps and used EEE. However, most nations do not have stricter regulations for separating scrap metal, used EEE, plastic, tires, and rubber from the garbage. Because of this, it is quite challenging to distinguish between legal and unlawful waste.

Final Thoughts

Environmental policies and institutional frameworks that are effective at the local, regional, national, and international levels are required. The impact of trade liberalisation on a country’s welfare is determined by whether the country in question has appropriate environmental policies in place (e.g. correctly pricing exhaustible environmental resources). Environmental policies that are strict are compatible with an open trade regime because they create markets for environmental goods that can then be exported to countries that follow suit on environmental standards – the so-called first-mover advantage. This is especially true for sophisticated technologies like renewable energy.

Under the World Trade Organization (WTO) framework, countries have undertaken a number of environmental-related efforts, including negotiating tariff reductions in environmental goods and services, seeking more clarity on the relationship between existing WTO rules and specific trade obligations in multilateral environmental agreements, and seeking disciplines on fisheries subsidies. In this way, the WTO is constructing a multilateral framework for international trade while also discouraging any misguided desire to engage in a “race to the bottom.”

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