GATTing the Greens: Not Just Greening the GATT

Daniel C. Esty

From Foreign Affairs, November/December 1993

Article preview: first 500 of 2,092 words total.

Summary:  Environmentalists, traditionally hostile to free-trade advocates, argue for "greening" the General Agreement on Tariffs and Trade. But a stronger approach would be to "GATT" the greens and create an honest institutional broker to resolve transnational environmental disputes.

Until recently, trade policymakers and environmental officials worked on separate tracks, rarely perceiving their paths as intersecting. Now that environmental protection has become a central issue on the public agenda, trade and environmental policies seem deeply intertwined and in some cases badly tangled. Environmentalists are calling the General Agreement on Tariffs and Trade (GATT) outdated or worse and are demanding a "greening" of the GATT to reflect environmental concerns. Trade experts have responded with a sharp defense of the international trade regime and have expressed fear that further progress toward free trade will be undermined by protectionism in the guise of environmentalism.

The battle lines between trade and environmental policymakers need not become entrenched. Both camps defend principles that foster long-term security and prosperity, deter irresponsible shifting of costs to other nations or generations, and face a constant threat of erosion from special interests. Much of the discussion to date has focused on possible legal refinements to the GATT to build environmental sensitivity into the international trading system. But creating a new parallel international regime designed to defend the environment as a necessary element of a prosperous global economy and to coordinate policies with the GATT would offer the prospect of a broader peace between the trade and environmental communities. Like GATT, it would provide a bulwark against domestic political pressures that undermine long-term thinking and serve as an honest broker for the economic future, allocating costs, benefits and responsibilities in transnational disputes. In sum, instead of just "greening" the GATT, we should "GATT" the greens.

START WITH A PILLAR

GATT is a central pillar of the post-World War II international order. Its rules, norms and dispute settlement procedures are designed to prevent governments from adopting shortsighted, "beggar-thy-neighbor" policies that limit imports and promote exports to establish a competitive advantage at the expense of other countries. Such policies invite retaliatory actions by others and lead to a downward spiral into global economic chaos, as occurred in the 1930s in the wake of the Smoot-Hawley tariffs. Despite the mutually destructive nature of such policies, governments risk slipping into protectionism because politicians tend to respond to the loud voices of organized special interests who benefit from closed markets rather than to the quiet requirements of the general welfare.

The architects of the Bretton Woods economic order recognized this danger of political failure and, with the lessons of the Great Depression and World War II fresh in their minds, set up the GATT as a government-to-government contract to safeguard an open world market. By enshrining the principles of liberal trade in an international regime, the creators of the GATT elevated the commitment to freer trade to a nearly constitutional level, thereby limiting the power of governments around the world (and legislatures in particular) to give in to the pleadings of domestic special interests seeking to hide from the rigors of the global marketplace.

MORE THAN A PASSING RESEMBLANCE

No comparable system exists to protect environmental values and policies against a similar defect ...

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