Issues in global political economy Essay Example | Topics and Well Written Essays - 2000 words

Issues in global political economy - Essay Example The relationship between the natural environment and free trade focuses on the trade policies impacts on the ecological environment, the impacts on the trade flows and use of trade measures in order to attain environmental policy objectives (Irwin, 2009). Free trade impacts on the environment drew international attention in 1991 when Mexican government challenges United States laws on ban of exports of tuna to the US from Mexico. The United States Marine Mammal Protection Act prohibited the import of tuna and dolphin from countries that used fishing methods that killed the dolphins (Mitchell, 2009). In its case, Mexican government argued that General Agreement on Tariffs and Trade (GATT) allowed free trade between the two countries. Accordingly, the World Trade Organization (WTO) outlined that countries could restrict free trade in instances when the measures are necessary to protect the safety and health of the citizens. In the ruling, GATT panel clearly outlined that the US governm ent had violated GATT agreements since it could not utilise its domestic legislation to control and protect dolphins that were outside its territory (Geradin, 1997). This case opened new controversial issues on the impact of free trade on the environment since Mexico did not press for the implementation of the panel ruling. Thesis statement: International free trade and environmental protection can never be compatible. Free trade increases the global economic activities and leads to higher national incomes. The total global trade volumes have increased significantly due to trade liberlisation and free flow of labour among the trading partners (Irwin, 2009). The growth in free trade has been supported by advancements in transportation networks, increase in outsourcing, industrialisation and emergency of global trade organisations. Proponents of free trade assert that it leads to efficient resource allocation due to the comparative advantage of nations in producing certain commodities . Garber (1993) asserts that free trade increases global economic output due to expanded market for excess output and elimination of market access tariffs and regulations of the domestic economies. Accordingly, free trade encourages competition among various firms thus leading to high quality products and low prices to the consumers. It is acknowledged that free trade will foster technology transfer that contributes to human advancements and better quality of life in the society. Accordingly, free trade enables multinational companies to reduce the costs of production through attracting high qualified skill force at a lower cost and moving their manufacturing plants closer to sources of raw materials (Michalos, 2008). In addition, free trade will contribute to growth in domestic gross product by ensuring higher employment levels and consumer incomes thus ultimately contribute to increase in consumption levels in the economy. However, environmentalists assert that free trade leads to market externalities like pollution and thus stringent domestic environmental regulations are necessary in order to check the standards of goods imported in the economy (Esty, 1994). The WTO established a committee to deal with trade and environment in 1995 in order to deal with issues concerning domestically prohibited goods and eco-labelling. A major concern for the committee is the relationship between multinational environmental agreements