Myth: Environmental regulations should take precedence over trade rules, and these should be harmonized and enforced by international agencies
Reality: If regulations are imposed on poor countries, it will slow their path of development and will prolong poverty.
Environmental groups want to make international environmental rules superior to trade rules, and they want to “link” trade rules with environmental rules. Their goal is to stop trade which they deem to be environmentally harmful. Vested interests (such as businesses) support these measures because they can also be used as trade protectionism. The purpose of trade rules is to eliminate discrimination – either blatant or inherent.
If international regimes are used to impose environmental standards on poor countries, their poverty will be prolonged. Instead of focusing on the desires of environmental groups, poor countries should pursue a strategy to eliminate poverty. This means enabling everyone – not just corrupt politicians and the elite – to create, innovate, and build wealth. Free trade and the removal of onerous regulations which prevent exchange between people are two fundamental steps in this strategy.
If specific environmental goals are deemed important enough to merit international action, then these policies should exist alongside trade agreements, without a need to make one or the other superior. The purpose of trade rules is to facilitate trade between people, and the purpose of environmental rules is to protect the environment. These are mutually supporting policies, because trade leads to wealth creation, which leads to better environmental protection.