| Sustainability and Free Trade: What is the right Path? Mathew Nolan1; 1ARENTFOX SCHIFF LLP, Washington, United States; PAPER: 454/Laws/Plenary (Oral) SCHEDULED: 11:30/Tue. 29 Nov. 2022/Arcadia 3 ABSTRACT: On its face, free trade would appear to foster sustainable development as free trade optimizes the use of limited resources for the greatest gains in overall social welfare. The picture, however, is far more complicated. Free trade can be disruptive to local economies, by disturbing existing industries and employment in sectors that face foreign competition. As countries develop new more efficient industries they challenge existing industries and cause disruption in those markets. In addition, national governments have basic obligations to provide food, jobs, maintain health and a clean environment, and promote local industries which may conflict with free trade principles as they may choose protect threatened industries or reduce trade in products for other reasons like climate change. The discussion of free and fair trade often enters the lexicon, as well as the need to protect local agriculture and industry so a country can feed and employ its people. Some countries abuse trade by subsidizing industries they wish to promote as export platforms and thereby distorting resource allocations. Of course “fair trade” is also sometimes misused as a tool to shield local industry from foreign competition. WTO rules designed to correct predatory pricing like antidumping, countervailing duty, and safeguards regimes may be abused as a backdoor means of permitting protectionist policies to limit trade. In some cases the balance of political forces requires forms of “managed” trade in sensitive sectors. Finally, while regional trade agreements promote trade, the trade is limited to those inside the free trade arrangement. These issues have come to define in part the “antiglobalization” movement and the trend toward “onshoring” production of critical industries. In this session we will explore these issues and ask the question: what is the right balance for countries to promote free trade while ensuring sustainability in the local economy? References: “The Case for Free Trade”, CATO Institute May 2, 2019 “Globalization in transition: The future of trade and value chains”, McKinsey& Company 2019 “Trade and Globalization”, the World Bank “Fair Trade, the Challenges of transforming globalization”, Edited by Laura Raynolds, Douglas L. Murray, and John Wilkinson, Routledge, 2007 |
