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In the 1980s, almost all of the anti-dumping cases were initiated by the United States, Canada, the European Union, Australia, and New Zealand. By the 2000s, countries like Argentina, Brazil, South Korea, South Africa, Mexico, and India were filing the majority of the anti-dumping cases before the WTO. As the number of anti-dumping cases has increased, and as countries such as the United States and the European Union feel targeted by the anti-dumping actions of others, the WTO may well propose some additional guidelines to limit the reach of anti-dumping laws.

The environmental protection argument

The potential for global trade to affect the environment has become controversial. A president of the Sierra Club, an environmental lobbying organization, once wrote: “The consequences of globalization for the environment are not good. … Globalization, if we are lucky, will raise average incomes enough to pay for cleaning up some of the mess that we have made. But before we get there, globalization could also destroy enough of the planet’s basic biological and physical systems that prospects for life itself will be radically compromised.”

If free trade meant the destruction of life itself, then even economists would convert to protectionism! While globalization—and economic activity of all kinds—can pose environmental dangers, it seems quite possible that, with the appropriate safeguards in place, the environmental impacts of trade can be minimized. In some cases, trade may even bring environmental benefits.

In general, high-income countries such as the United States, Canada, Japan, and the nations of the European Union have relatively strict environmental standards. In contrast, middle- and low-income countries like Brazil, Nigeria, India, and China have lower environmental standards. The general view of the governments of such countries is that environmental protection is a luxury: as soon as their people have enough to eat, decent healthcare, and longer life expectancies, then they will spend more money on sewage treatment plants, scrubbers to reduce air pollution from factory smokestacks, national parks to protect wildlife, and so on.

This gap in environmental standards between high-income and low-income countries raises two worrisome possibilities in a world of increasing global trade: the “race to the bottom” scenario and the question of how quickly environmental standards will improve in low-income countries.

The Race to the Bottom Scenario

The race to the bottom    scenario of global environmental degradation runs like this. Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits. Faced with such behavior, countries reduce their environmental standards to attract multinational firms, which, after all, provide jobs and economic clout. As a result, global production becomes concentrated in countries where it can pollute the most and environmental laws everywhere “race to the bottom.”

Questions & Answers

problems fcaed by economist
Fatumah Reply
what is the meaning of Dumping
Stephen Reply
Normally the independent variable is plotted on the x-axis. but in economics price which is an independent variable is plotted on y-axis. why ?
what is cost
Deepon Reply
Cost is the amount of capital spent on purchasing an item. Or the amount of expenditure incurred in producing a product or rendering service.
describe the features of micro economics with suitable example
Purusoth Reply
what is economics
According to Mankiw it is the management of scarce resources.
economics it is a science that study human behaviour as a relationship between end and scarce means which alternative uses
so what should a nation do to minimize scarcity?
Andrew Reply
is there any difference between firm and industry under monopoly
Dipsikha Reply
I think firms come together to form industry
There is a well known saying in economics that "there is no such thing as a free lunch". Discuss. Guys any answer
Economic,choice,scarcity,opportunity cost
Seyram Reply
How to we read in hindi
marshellian demand curve?
Mohsin Reply
Economics is the study of how societies, government, businesses, household and individuals allocate their scarce resources
What is economy
mwas Reply
who was the father of micro economics
Rayappa Reply
Adam Smith
adam Smith
adam smith
adam smith
Adam Smith
ppc stands for what?
Deng Reply
Production Possibility Curve.
Product possibility boundaries
Tony Reply
what is the difference between equilibrium and quantity demanded
Usama Reply
equilibrium is the point at which demand and supply are equal while quanitity demanded is d quanitity of commodity that people are willing to buy at a particular price
Thanks Olayinka
what's elasticity
What is a product possibility boundary describing the labour and capital
it is responsiness good and service

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Source:  OpenStax, Microeconomics. OpenStax CNX. Aug 03, 2014 Download for free at http://legacy.cnx.org/content/col11627/1.10
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