• Environmental impacts

Environmental impacts of trade liberalisation

This paper explores the relations between trade liberalisation and sustainability with a special focus on the Chilean economy. By reviewing relevant literature, the paper assesses how trade liberalisation has affected environment and development in Chile. Furthermore it suggests a number of policies that could be put in place to mitigate any of the negative effects or enhance the positive ones.

The literature review found the following:

• the environmental impacts identified from specific trade liberalisation measures did not turn out to be very significant
• instead, most studies emphasise the fact that existing trends and pressures on the environment and its resources are reinforced through liberalisation
• environmental effects absorb a significant part of the economic benefits of export
• liberalisation has not contributed to industrialisation or more value added production
• environmental aspects have been progressively more integrated into trade agreements.

Policy recommendations include:

• confronting environmental liabilities is already a challenge and will become an ever greater challenge, especially in a scenario of increasing scale of operations and lack of regulation in some areas
• links among sectors have to be better understood
• the integration of social aspects into the Impact Assessment Studies and into strategy discussions on policy recommendations is urgently needed
• there is a need for better understanding the drivers of innovation and value added production and the sustainability impacts of primary resource based production and exports
• the integration of SMEs into sustainable supply chains will be key to ensuring sustainability in different ways
• some of the conclusions and recommendations expressed in the studies have to be analysed in greater detail and their implications seriously evaluated
• applied policy research can play a crucial role in making the link between solidly researched studies and results and the implementation of policy recommendations.

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