INTRODUCTION TO INTERNATIONAL

TRADE ASSIGNMENT 4

Professor: Simon Robinson

Student ID number: 1109100051

Student Name: Yu-Wen WANG

ENHGLISH DEPARTMENT
 Question 1: What is the main critique (criticism/challenge)

against the WTO with respect to environmental protection?

How does the WTO justify its position on trade disputes that

involve environmental issues?

Some anti-globalization activists claim that growing

international trade harms the environment automatically, and

that WTO is an organization having the effect of stopping an

environmental action. Although these arguments are not entirely

correct, global trade still has some negative environmental

impacts. For example, developing countries rely on these global

trading companies to make money, and they cannot afford to

maintain environmental standards of rich countries. As a result,

while we see the reduction of greenhouse gas emission and

environmental damages in rich countries, they are just

transferring the environmental costs to those poorer countries.

The biggest critique of the WTO is that it ruled American Clean

Air Act was a violation of existing trade agreements. Because

with the implementation of the Act, no more polluting gasoline

than the average of gasoline supplied by domestic refineries will

be imported into the United States. Nevertheless, the WTO

insists that member countries apply the same standards to

imported products as to domestic ones. For these democratic

governments, this is a step backwards from action to protect the

environment, which should actually be encouraged. While being

blamed for blocking environmental improvements, the WTO

argues that since some domestic gasoline producers in the

United States are more polluting than those in Venezuela, this

law only seeks to prohibit the import of gasoline from

Venezuela, not to prevent the production of polluting gasoline.

The WTO also argues that if the US were to change the same

standards for domestic and foreign gasoline, this would be

acceptable to the WTO.

Question 2: In your own words, what are the lessons that were

learnt from the economic crisis of 1997?

Even thought East Asia has created an astonishing economic

success between 1960s and the 1990s by emphasizing their

economic activities on exporting goods, East Asian still faced a

terrible economic crisis in 1997. Regardless the economic

miracle that East Asian Countries have made, they do have some

similar weaknesses that we should avoid. First of all, unlike

western countries, large amount of income depends on the

productivity of individuals, which is a vulnerable way of earning

money because the cost of labour is so high. A better way of

increasing the productivity is using machine to work, so that we

can speed up the working process. Secondly, the banking system

and regulation in East Asia was not strong enough to prevent the

economic crisis; it was even a contributing factor. Because it

was too easy for banks in East Asia to lend their money despite

the high saving rate, especially to some people with politic

affiliations. To avoid excessive lending, banks or other financial

institutions in East Asia should be subject to government

oversight, while setting strict moral hazard and standards for

those who want to borrow money. Last but not least, there was

no law or legal framework in place to safeguard the rights of

creditors. When a company goes bankrupt, there is no process

for it to pay back its creditors, for example by converting the

debt into ownership shares and then continuing to help the

company make money to repay the money it owes. As a result,

when lots of companies went bankrupt, as there was no way to

turn it around., economy declined heavily and caused crisis. In

order to ensure that creditors can get their money back,

bankruptcy law needs to be enacted. Moreover, to survive from

the economy crisis, maintaining capital and monetary control is

indispensable.