Question

How is the international trade linked to the environmental deterioration?

Answer 1

1. Most environmental problems result from polluting production processes, certain kinds of consumption, and the disposal of waste products.
2. Trade, as such, is rarely the root cause of environmental degradation, except for the pollution associated with the transportation of goods.
3. Environmental degradation is driven by market and policy failures. Trade would unambiguously raise welfare if proper environmental policies were in place.
4. International trade may affect sustainable agricultural and rural development and the environment in a number of ways.
5. The major benefits from international trade are:
   1. Trade may encourage production activities to shift from places where the environment is less sustainable to places where it is more sustainable, or vice versa.
   2. Trade influences the process of economic development, creating fresh opportunities for the profitable use of productive resources. For example, international trade in agricultural products is large and an important source of foreign exchange earnings for many countries.
   3. Promotes information exchange, which leads to better cultural understanding of different people.
   4. Trade also promotes democracy.
   5. Trade raises the purchasing power of some nations.
   6. Trade helps in forming a more united world, countries no longer operate in isolation.