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Without vision the people perish
International Trade Regulation,Economics, Water, and the Environment.
April 2000West Coast Environmental Law,
Water Export Controls and Canadian International Trade Obligations
, 17 August 1999.
Introduction
At issue in the
West Coast
legal opinion are competingvalues between capitalism and environmentalism and the power topromote or deny these values as concerns bulk water exports.This essay will attempt to outline the various issues broughtforward by West Coast Environmental Law legal opinion and theimplications of Canadian trade obligations under the NAFTA andthe WTO. In order to do this however, the paper will begin witha brief outline of economic history, tracing the root ofcurrent economic theories that influence trade regulationdecisions and free trade, as well as alternative economicmilestones ignored by the WTO including a Canadian economicperspective. This paper will eventually seek to view WTO tradepolicies within a broader framework that includes environmentalprinciples as demonstrated by our legal and political systems.
Part I : Economic Theory and International Economic Policy
It is only by understanding the limitations of economictheories that they become useful. Economic theories are oftendeclared and viewed as uncertain, and amorphous. Generally they
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are accompanied by the warning that in practice theory shouldbe applied in a contextually limited manner taking intoconsideration other competing models and values.International economic policy is influenced by pragmaticconsiderations and a bit of economic theory. Pragmaticconsiderations which benefit specific groups are probably moreindicative as to the rational for the current global economicclimate than any theory used to justify the trading regime.However, economic theory is used as a building block to justifyinternational trade obligations and should therefore beexamined on its merits, even though an analysis of benefitsmight be more revealing.The first premise that underlies international policy isthe idea that it is desirable to have international trade. Itis difficult to disagree with this proposition. Underlying thisdesire is the motivation for material advantage and benefit.The statement assumes that international trade is beneficial,and so long as it is, the material advantage does provide amotivation for trade. I can only think of two peace-timescenario's where international trade would not be desirable.First, if one party did not actually benefit, either at thetime of each exchange or over the entire duration of the trade,calculating the full social costs and benefits involved. Thiswould create a situation where either neither party benefits,or one party benefits at the expense the other, such as occursunder many colonial relationships. Second, if the nation wasprimarily self-sufficient or religious to the degree thatmaterially advantage was no longer a prime motivation. Neitherof these considerations are relevant to Canada.
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The second premise that underlies international policy isthe idea that interference with trade and the resulting effectsshould be avoided. The proposition is not self-evident. Itassumes that any benefit caused by intervention is outweighedby net negative effects. This may or may not be true, as isparticular to the trade distortion. The effects of interferencecan vary from creating higher prices, to increasing wages, toimproving our environment, to extra costs related to non-proportional retribution.Overall, the effects remain hard to define, are notrestricted to monetary evaluations, and are beyond the abilityof most statisticians to measure or forsee. It is obviouslypossible for intervention to benefit trade, much of the GATTlimits the ability of nations to intervene in a beneficial waywithin their region, under the rational of avoiding traderetribution.Another reason used to avoid interference is that lowercosts of production benefit the consumer. Of course, thisassumes that pricing is the result of supply and demand andthat products are priced relative to their cost, passing thebenefit the consumer, which is mostly artificial posturing.Lower costs do not always benefit the consumer, sometimes theyprovide the incentive for cutting corners on quality. It isproducers who benefit most from a low cost of production,usually at the expense of labour.Less to the point, this statement also assumes that tradeexists
a priori
interference, suggesting that free trade ispart of the natural law of the world. It is basically premisedon the idea that trade can exist without interference.
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