World Trade Rules & Environmental Policies

World Trade Rules & Environmental Policies
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  • 0:06 Environmental Protection
  • 0:37 Environmental Policies
  • 2:12 WTO and Trade Liberalization
  • 3:57 Lesson Summary
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Lesson Transcript
Instructor: Rebecca Gillaspy

Dr. Gillaspy has taught health science at University of Phoenix and Ashford University and has a degree from Palmer College of Chiropractic.

Environmental policies help the environment by managing human activities. Learn how world trade rules and environmental policies relate to each other and the impact they can have on environmental protection in this lesson.

Environmental Protection

Protecting the environment has been a growing concern for decades. With this concern comes a burgeoning awareness that man plays a pivotal role in the sustainability of the natural environment. To fully protect the environment and ensure that natural resources are available for future generations, all countries of the world must do their part to prevent environmental degradation. In this lesson, we will take a look at world trade rules and environmental consequences that can be associated with international trade.

Environmental Policies

Environmental policies are the guidelines put in place to manage human activities for the benefit of the environment. Manufacturing and production of products requires the use of raw materials and energy. The extraction of raw materials and the production of energy create harmful effects on the environment, such as the depletion of natural resources and greenhouse gas emissions. If these processes are not regulated in some way, such as through environmental policies, they could lead to irreparable degradation of the environment.

Therefore, countries create policies to protect the environment. However, developed countries may put different levels of importance on environmental protection than developing countries. This can lead to challenges when it comes to trade between countries. For example, the United States may have strict environmental policies that must be upheld by U.S.-based manufacturing companies. Abiding by these policies can lead to extra steps in the production process or additional equipment costs. These additional steps and costs are added to the price of the product made in the United States.

If that same product is made in a developing country that has lower environmental requirements to meet, then that country will be able to produce the product at a lower cost. Therefore, we see that a country with lower environmental protection policies could have an advantage when it comes to the trade of goods and services. In other words, environmental protection can clash with world trade rules.

World Trade Organization & Trade Liberalization

The World Trade Organization, or WTO, is an international organization that deals with rules of trade between nations. The WTO works to ensure that trade between countries can flow freely. One of the ways to do this is through trade liberalization, which is the reduction of barriers on trade between nations. This can include the removal of a tax or duty on goods produced in a country or the removal of obstacles such as licensing rules or other requirements. This can help trade flow more freely.

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