For the past 50 years, the volume of world trade has grown an average six per cent every year. It is now 14 times the level it was in 1950, due in large part to the elimination of trade barriers such as import tariffs, quotas and other restrictions.
During the same period, biodiversity has declined, pollution has increased and many of the world’s natural resources have been seriously depleted. It is estimated that since 1970, some 30% of the planet’s natural wealth has been lost, due to trends such as increasing greenhouse gas emissions, deforestation, soil erosion and overfishing. At the same time the gap between the poorest fifth of the world population and the richest fifth has widened dramatically.
Thus, the world has created an open global market, but not one that is yet producing sustainable outcomes for the world’s environment, or for many of its poorest communities. As international commerce becomes an increasingly important force shaping our lives, how we trade and invest across borders has profound implications for the health of our planet.
Trade liberalisation has been made possible by a series of world agreements to remove trade barriers. These began after the Second World War with the creation of GATT, the General Agreement on Tariffs and Trade, culminating in 1995 with the establishment of the World Trade Organisation (WTO). Such trade agreements and organisations offer new freedoms to economic prosperity but can also limit the extent to which environmental protection and over-consumption of natural resources can be regulated. For example, trade rules themselves can directly influence environmental policy-making by treating environmental regulations as “barriers to trade”, and removing or weakening them.
While trade is a necessary part of many people’s livelihoods, it can also cause environmental destruction, deplete natural resources and result in the inequitable distribution of wealth and power. The challenge in the future will be to define rules to ensure that trade and trade liberalisation not only broadly benefit people and the planet, but also support sustainable development