Trade, national competitiveness and the environment‐part i

This is Part One of a two‐part paper on trade, national competitiveness and the environment. Part Two will be published in the next issue of this journal. References for Part One will be published at the end of Part Two. Although there are many concerns which impinge on the trade‐ and‐environment debate, in this essay, we discuss merely two dimensions relevant to the question, viz. the need to apprehend the notion of different assimilative capacities of different countries, and the need to differentiate between product and process regulations. Next, we review empirical evidence for the link between environmental regulation, trade and economic competitiveness in the United States. Empirical studies conducted in the 1970s and 1980s did not establish any clear relationship in this regard. During that period, the policy emphasis of the U.S. government was on the development of comprehensive legislation and administration regulations. Actual regulatory pressure and enforcement increased only towards the end of 1980s, and criminal prosecution of environmental offenses was stepped up in the early 1990s. By the 1990s, an observable trend of relocation of the most environmentally intensive industries to third world countries had become evident. Part Two of this essay will explore in detail the institutional context pertinent to the trade‐environment debate

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