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Trade and Environment

Trade and Environment

Theory and Policy in the Context of EU Enlargement and Economic Transition

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by John W. Maxwell and Rafael Reuveny

The debate about how best to manage the interplay between trade, industrialization and the impacts of both on the global environment continues to rage, particularly in the context of the introduction and ratification of the Kyoto Protocol. This book deals with a number of important issues surrounding the debate about trade and the environment, but places particular emphasis on the process of EU enlargement.

Chapter 4: Trade, the Harmonization of Environmental Policy and the Subsidiarity Principle

Charles Perrings

Subjects: economics and finance, environmental economics, environment, environmental economics


Charles Perrings INTRODUCTION Enlargement of the European Union implies increasing heterogeneity amongst member states. This raises important questions about the connections between trade and environmental policy in the enlarged EU and in particular, about the role of harmonization in environmental policy. The question posed is the following: what should be the nature of the linkages between common trade and environmental policies, and to what extent should a common environmental policy imply the harmonization of environmental standards? Although the chapter is concerned with the European Union, and with the differences between current and accession states, these turn out to be essentially the same questions being raised at the global level in connection with an environmental analogue to the World Trade Organization (WTO). The institutional implications are somewhat different, but the principles at issue are the same. Given this, the chapter begins with a discussion of the global debate about the linkages between trade and the environment, and the importance of differences between countries for those linkages. This debate is normally considered in terms of North–South differences, but enlargement faces the European Union with qualitatively similar problems. For example, the current concerns of the South about the role of environmental standards as trade protection devices have echoes in the concerns of accession countries over harmonized environmental standards. Globally, the failure of trade liberalization to yield promised development benefits has hardened attitudes in the South against environmental cooperation. The fact that the South’s share of world exports...

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