Greening through trade: how American trade policy is linked to environmental protection abroad

International trade is an important enabling condition for the geographic separation of production and consumption which has allowed high-income countries in the Global North to increase their economic activity, while ‘offshoring’ a sizable share of the associated environmental risks to lower-income countries of the Global South. In ecological terms, high-income countries can, therefore, ‘have the cake and eat it, too’. That is, they can consume quantities and varieties of products beyond what their respective territories could provide, while maintaining a high level of domestic environmental quality. The clean mobility transition is an exemplary case: as drivers in high-income countries adopt electric vehicles (which reduce transport noise and air pollution), critical components of these cars are extracted and processed in poorer regions with weaker environmental governance resulting in higher local pollution risks there.

As a result, both academics and politicians debate how the problem of unsustainable exchange within the global economy can be mitigated. In the book Greening Through Trade, Sikina Jinnah and Jean-Frédéric Morin explore trade governance design (focusing on the United States’ approach) as a policy option to reduce inequitable distributions of environmental risks throughout the global economy. This book’s contribution appears very timely because of i) the recent proliferation of preferential trade agreements (PTAs) and the diffusion of environmental clauses in these agreements, ii) increasingly politicized debates with regard to the globalization-sustainability nexus in countries on both sides of the Global North-South divide, and iii) the likelihood that policymakers will continue to face strong economic (e.g., due to global supply chains linkages) as well as geopolitical pressure (e.g., due to demand for critical natural resources) towards even deeper trade liberalization.

The book’s main argument suggests that US trade policy design has contributed to global environmental governance in various ways. Drawing on the ‘Trade and Environment Database’ (TREND), the authors first provide a detailed history of US environmental trade-policy-making, starting in the mid-1980s and extending through to the present day. Based on expert interviews, they then demonstrate that environmental provisions have increasingly shaped US trade policy design as policy-makers attempted to level the regulatory playing field and respond to domestic societal demands for increased environmental stewardship by the US government. The authors further note that protectionist interests as well as specific presidential administrations’ preferences also contributed to an expansion of the environmental agenda within US trade policy. Next, the book revisits the US–Peru PTA to illustrate how environmental provisions in trade agreements can strengthen compliance with multilateral environmental agreements (MEAs) within the US trade partner network. Moreover, the analysis in subsequent chapters reveals the effects of environmental clauses in trade agreements may extend beyond MEA compliance. On the one hand, environmental provisions embedded in trade agreements tend to become internalized within US trade partners’ national environmental regulations. On the other hand, environmental clauses can constitute normative benchmarks and trade policy blueprints that are adopted by political actors and trade-policy-setters throughout the global trade governance system.

Yet, besides providing an in-depth analysis of how the United States uses its economic leverage to influence global trade governance, Jinnah and Morin raise an additional notable point: the pursuit of environmental (and other non-trade) objectives through trade policy may have side effects on citizens’ perceived political legitimacy and responsiveness. Specifically, sustainability-related reforms implemented in lower-income economies as part of trade policy packages negotiated with the European Union (EU) or the US may not align with public preferences in these countries. In extremis, this may result in political backlash as exemplified in the book by civil unrest linked to the US–Peru PTA. Accordingly, the authors emphasize democratic public participation as a key recommendation for trade policy-makers, which also from an academic perspective, raises important questions about public preference formation, and the politicization of trade-environment debates among citizens in both high- and lower-income countries. Indeed, these issues could become more salient as many high-income countries are continuing to broaden their ‘extraterritorial’ sustainability policy footprint. For example, the EU and several large economies within the EU have introduced sustainability regulations for global supply chains mandating multinational companies to disclose information on the environmental and social impacts of their business activity.

In sum, Greening through Trade is a well-structured venture into an expanding policy area, which, thanks to its written delivery, remains captivating and accessible for trade policy experts, scholars from diverse disciplines, and practitioners alike. As quantitative macro-level studies remain ambivalent on whether or not environmental provisions in trade agreements induce substantial causal effects on the environmental risks embedded in traded goods, the book offers important evidence concerning such provisions’ pathways to effectiveness, too. Thus, the book is a valuable resource at the intersection of economic globalization and environmental protection, in particular, for readers interested in the micro- and meso-level mechanisms through which innovative trade policy design by consumption-heavy, high-income countries can result in heightened environmental protection throughout the global economy.

Additional information

Funding

This research was supported by the Swiss National Science Foundation (SNSF) within the SNSF grant 100017_175907 22 'Environmental Burden-Shifting Through International Trade: Driving Forces and Policy Implications'.