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GEO-3: GLOBAL ENVIRONMENT OUTLOOK  
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Using trade to the benefit of sustainable development

Western trade barriers restrict the ability of developing countries to grow economically and finance sustainable development expenditure. Global trade patterns and increasing globalization can threaten the environment but they can also provide mechanisms and incentives for sustainable development. The open market brings new opportunities for flows of capital, technology and labour to benefit developing countries. The danger of trade liberalization, however, is that environmental policies can be undermined and pollution havens created unless adequate checks and balances are in place.

Some form of sustainable trade is therefore needed. Sustainable trade is defined as an international exchange of goods and services that yields positive social, economic and environmental benefits, and reflects the core criteria of sustainable development. If trade, environment and development are to be brought together successfully, three critical needs must be addressed:

  • the need for transparency;
  • the need for equity and fairness - especially so that countries or stakeholders historically excluded from trade opportunities really benefit; and
  • the need to ensure that social and environmental benefits provide lasting value for developing countries in terms of the capacity for innovation in the future.
Suggestions for Action
Changing trade patterns to benefit the environment
  • Conduct research on issues such as the:
    • impacts of trade liberalization on environmental and human well-being
    • effects of environmentally and socially sustainable trade on communities and environments
  • Build on the valuable lessons of prior experience such as those acquired since 1994 by the North American Commission for Environmental Cooperation which implements the environmental accord to NAFTA
  • Strengthen the sustainable development emphasis of trade policies
  • Prepare guidelines for export credit agencies