Impacts of trade and environment on sustainable development

Impacts of Trade and Environment on Sustainable Development


Trade and environment are an of import function for sustainable development. They affect straight and indirectly on sustainable development. Siwar et Al. [ 15 ] province a model for analysing the links between poorness, environment and sustainable development of developing states. They besides analyze that the issues of economic growing, poorness and sustainable development are good known in the development argument during the past twosome of decennaries.

The care of the sustainability of environmental maps constitutes a community involvement, so that it demands duty, openness, and a function for members of the community, which can be channeled by people separately, environmental organisations, such as non-government organisations, traditional community groups, and others, for keeping and increasing environmental supportive and carrying capacity which becomes a pillar of sustainable development. Development which incorporates the environment, including natural resources, is a medium for achieving sustainable development which is a warrant of prosperity and quality of life of present and future coevalss [ 2 ] .

Siwar et Al. [ 13 ] nowadayss the globalisation procedure such as trade liberalisation in the Malayan economic system and Malayan environmental policies, environmental motives toward sustainability from 1947 to 2005 and extensively study assorted issues of Malaysia such as passage of Malayan economic system of pre and station industrial phase ; trade liberalisation policies that enhanced the trade liberalisation, air emanations and Malayan environmental policies of sustainability for 2020.

Economists by and large argue that the internalisation of environmental outwardnesss of economic activity is a necessary measure towards sustainable development. Sustainable development continues to be emphasized that the wellbeing of the present coevals is non met at the disbursal of future coevalss. Economic, societal and environmental facets will be progressively integrated into the development procedure. Environmental considerations are integrated into sectoral policies in order to guarantee sustainable economic and societal development. Besides geting the needed proficient capacity, the authorities implements more efficient and cost-efficient bid and control steps to cut down and minimise pollution every bit good as to better the quality of life [ 27 ] .

Siwar et Al. [ 14 ] analyzes the part of services sector every bit good as pollution deduction of services sector for the production of different industries in the Malayan economic system. They besides reveal the part of services sector in the Malayan economic system and the quantitative appraisal of selected air emanations of services sector in the economic system.

International environmental understandings are aimed at turn toing jobs of planetary proportions. Malaysia has ratified several international understandings including the model convention on clime alteration, the convention on biological diverseness, the Basel convention on the transboundary motion of toxic and risky wastes and their disposal, Convention on International Trade in Endangered Species ( CITES ) , wetlands of international importance ( RAMSAR ) , the convention on desertification and the Montreal protocol for the protection of the ozone bed to phase out CFCs [ 24 ] .

Environmental Torahs and ordinances can be divided into two wide classs. The first represent policies that are domestically initiated and aimed at environmental protection and preservation. These steps by and large affect exports indirectly. The 2nd by and large consist of environment steps that are the results of international understanding, conventions or agreements [ 2 ] .

Siwar et Al. [ 12 ] provinces that trade can impact the environment in two ways: foremost, trade and trade liberalisation promote industrialisation and fabrication of production, taking to increased pollution. Second, industrialisation and fabrication of production lead to increased overexploitations of environmental resources and environmental debasement.

The purpose of this survey is to obtain the development of market entree, trade barriers, trade liberalisation, environmental debasement and pollution, sustainable wood direction and sustainable development.


Data attainment: The survey is conducted in University Kebangsaan Malaysia, Bangi since July, 2008 to November, 2009. The information for analysis is perceived from secondary beginnings in Malaysia. The important uses are market entree, trade liberalisation, understandings on tropical lumber and sustainable development. The corresponding results are demonstrated from the analysis of gathered information.

Market Access, Barriers to Trade and Hindrances:

Market Entree: Market entree is an of import function in the tropical lumber trade to international tropical lumber markets. It can be described as the conditions under which manufacturers are able to offer merchandises for sale. These conditions are the effects of determinations by importers and exporters, and besides a effect of the built-in features of the sector and merchandises. Trade, environment, development, public assistance and societal are the complex issues of market entree of tropical lumber trade. The issues related to market entree, be given to be both complicated and extremely political. The market entree of tropical lumber needs a comprehensive attack to international markets. Market entree is influenced by importing-exporting states and international trade government. The influences are less clearly defined due to legion linkages between woods, the environment and the sustainable development [ 30 ] .

Some surveies examine the downswing in the market entree of international tropical lumber market. The importance of their surveies shows the Organization ‘s work on trade and environment, the issue of permutation by non-wood stuffs, and the importance of life-cycle comparings. The point as a cardinal action country has been identified by the intergovernmental panel on woods [ 21 ] .

Barriers to Trade: All the assorted environmental impacts of trade and economic policies on natural resources are hard to measure, but grounds indicates the presence of both negative and positive impacts. Most of the duties cover to efficaciously really low degrees and non-tariff steps and other hindrances and market failures province the motion toward optimum trading forms. Importer states have in the yesteryear reduced duty barriers to merchandise to conserve on their tropical wood natural stuff. This has improved their local industrial cost fight both against replacement stuffs ( such as boreal and temperate hardwoods and deals and other stuffs ) , and in comparing with tropical manufacturer states. Manufacturer states have introduced export prohibitions, limitations, quotas and revenue enhancements to increase rent gaining control from tropical wood resource, and to make inducements for domestic farther processing. Recently, many manufacturer state policies have gradual deregulating of the trade. Lowering the manufacturer state barriers and hindrances causes necessary structural accommodation steps by the industry of the manufacturer state. Market entree barriers and hindrances may impact the prevailing market for tropical lumber trade.

Export limitations are normally used to promote and advance greater domestic processing by protecting local industry from import competition, enabling the local industry to obtain logs at cheaper monetary values the most underdeveloped states and in some developed states. Since export prohibitions are technically illegal under of GATT, many states ( such as Indonesia and Malaysia ) are now turning to other steps, runing from export revenue enhancements to licenses and licences, in topographic point of direct quantitative controls. In recent old ages, there has been switching towards encouragement of value added lumber merchandises such as sawnwood, and even more late towards forest sustainability issues, where the purpose is to cut down overall force per unit area on the resource [ 9 ] .

Export limitations include entire prohibitions, export quotas, or selective prohibitions based on species ; direct charges such as export revenue enhancements or export levies ; indirect quantitative limitations due to controls on crop degrees ; and administrative controls such as licenses and licences. The export revenue enhancements for processed merchandises, sawnwood, veneer and plyboard are normally negligible or little. Forest-based industries publicity has become more of import with an increasing demand for economic development. From the point of position of effectivity and cost, the export prohibitions have been criticized. They have caused permutation of wood for other factors of production from an economic production map point of position. Some surveies have indicated that the limitations have been effectual in lending to the industrial development end, but at a significant fiscal cost [ 6 ] .

Duty and non-tariff barriers focus on trade in forest-based merchandises. Even though the former have been significantly reduced as the consequence of the Uruguay Round, they still represent a limitation ; peculiarly in the context of duty escalation ( higher duties are applied to value-added merchandises than natural stuff or intermediate merchandises ) . A assortment of non-tariff barriers ( NTBs ) or non-tariff steps ( NTMs ) may be even more of import, and their importance appears to be increasing [ 8 ] .

Lower duty barriers for developing states, in the signifier of GSPs which are discretional, be given to retain high duties for these finished merchandises. It is non clear whether they are adequate to except some developing states from exporting such merchandises to developed states since there may be other factors which may act upon that result [ 7 ] .

Hindrances: Trade hindrances are normally motivated by environmental concerns. They are presently holding some impact on trade degrees and forms of lumber merchandises. In the lumber sector, they are intended at promoting sustainable forest direction. These hindrances include prohibitions and boycotts on the usage of lumber from woods which are non sustainably managed. Many of these prohibitions are linked to the enfranchisement of lumber merchandises, whereby consumers could be assured that the wood in the merchandise they are purchasing comes from a sustainably managed beginning. Finally, the Convention on International Trade in Endangered Species of Wild Fauna and Flora ( CITES ) uses grades of trade limitations to modulate trade in endangered species [ 30 ] .

Trade Liberalization, Timber Trade and Environment: Rytkonen [ 30 ] has stated that trade liberalisation has led to a rapid growing of universe trade and the environmental impacts of this growing. By making market chances for such merchandises, liberalized trade can add value to forest merchandises that are sustainably produced. However, the increased competition can besides make force per unit area to work the resource base more intensively. The international trade regulations have been extensively reviewed in the literature in regard of the rightness of the subjects and how they should be best applied in order to avoid unneeded inauspicious effects.

Murad and Mazumder [ 28 ] province the relationship between trade liberalisation, economic growing, and the environment in Asia- Pacific. They besides reveal that trade liberalisation can hold both positive and negative impacts on the environment grounds from Malaysia and that the economic integrating constrains national environmental policymaking. On the one manus, increased trade can take to enlargement of production, employment, and ingestion, which is associated with a rise in life criterions and a decrease of poorness. Trade liberalisation can advance the efficient allotment of resources worldwide and hence cut down force per unit area caused by over-exploitation of planetary natural resources.

To break up the possible consequence of trade liberalisation on the environment in footings of these three affects the composing, graduated table and technique effects [ 29, 19 ] . They produce more of under free trade that the composing consequence arises from state differences in the merchandises. These differences are the state differences in comparative advantage. The state in the environmentally detrimental goods ( the South ) will increase and non-environmentally detrimental goods ( the North ) will increase production of that goods under free trade. Hence, environmental debasement will increase in the South and lessening in the North. The scale consequence arises from increased income, production, ingestion and hence environmental debasement. Techniques of production are ever harmful to the environment which this negative consequence is the technique consequence. Trade liberalisation on the environment depends on the comparative strength of the composing, graduated table and technique effects.

Agreements on Tropical Timber:

International Trade Agreements: International trade understandings are the indispensable to guarantee proper operation of free trade, while taking into history the protection of the environment. There are a batch of understandings on tropical lumber trade. World Trade Organization ( WTO ) statute law is the chief portion of international trade understandings which is based on the General Agreements on Tariffs and Trade ( GATT ) . The WTO understanding has specific deductions for the preservation and sustainable forest direction: Sanitary and Phyto-sanitary steps ( SPS ) ; Technical Barriers to Trade ( TBT ) ; Trade Related Investment Methods ( TRIM ) ; Trade-Related Intellectual Property Rights ( TRIPS ) [ 30 ] .

International trade regulations under the GATT/WTO understandings have been recognized for the demand of environmental protection. The WTO Committee on Trade and Environment ( CTE ) has reviewed environmental issues related to merchandises and their production and processing methods ( PPMs ) but no important determinations have been made due to decelerate advancement in this country. The WTO Committee on Trade and Environment ( CTE ) has recognized the environmental benefits originating from the remotion of trade limitations and deformations in the forest country [ 38 ] .

Multilateral Environmental Agreements: Multilateral environmental understandings ( MEAs ) are the indispensable to guarantee proper operation of free trade, while taking into history the protection of the environment and lawfully adhering international understandings with a planetary range. There are a batch of environmental understandings on tropical lumber trade. From the point of position of forestry, the Convention on Biological Diversity ( CBD ) is one of the most of import of the MEAs. MEAs have addressed that the Convention on Biological Diversity ( CBD ) , United Nations Framework Convention on Climate Change ( UNFCCC ) , and United Nations Convention to Combat Desertification ( UNCCD ) are he most of import from the forestry point of position. Multilateral environmental understandings have become of a turning concern with WTO and non-governmental organisations ( NGOs ) which taking towards a higher coherency of the two big organic structures of statute law. Multilateral environmental understandings are international understandings between states by and large aimed at increased protection of the universe ‘s natural resources or the publicity of environmental quality. The turning planetary economic system is puting an increasing strain upon planetary ecosystems while seting them at hazard of extinction. As respects, it needs to be recognized that the volume of trade has non shown a turning tendency lumber from natural tropical woods [ 30 ] .

Simula [ 32 ] has stated that CITES naming effectual steps are needed both in exportation and importation states. Trade measures as CITES listings should be limited to accomplish the aim from the trade point of position. On the other manus, CITES trade limitations should be made and implemented efficaciously so that the endurance of a species, which is endangered by commercial trade, is so ensured by the steps taken.

WTO [ 38 ] has stated that most of the environmental effects are indirect in doing alterations in degrees and forms of production and ingestion while acknowledging the possible benefits of trade to the environment. Complementarily can be observed in the WTO and CBD regulations can be identified in the country of forest biodiversity [ 32 ] . The United Nations Framework Convention on Climate Change ( UNFCCC ) addresses the issues related to climatic influences, including the interface with forest ecosystems.

Illegal Logging, Deforestation, and Pollution on Trade and Environment:

Illegal Logging: Brack [ 10 ] provinces that illegal logging takes topographic point when lumber is harvested bought or sold in misdemeanor of national Torahs. He besides presents the extent of illegal logging in some states is so big and jurisprudence enforcement is so hapless. Illegal lumber logging non merely undermines preservation but besides consequences in decreased profitableness of legal trade, loss of foreign gross and currency exchange, ungathered wood related revenue enhancements and depleted forest resources and services.

Buongiorno et Al. [ 11 ] describe the long-run effects of extinguishing illegal logging on the universe wood industries, trade, and stock list. They besides tell that illegal lumber logging and its associated international trade is a major job for environmental, economic, and societal grounds. Illegal timber logging shackles of import environmental services [ 25, 4 ] and it may be a less direct cause of deforestation than land transition for agribusiness raises over development and hapless forest direction. In footings of economic sciences, World Bank [ 35 ] estimations that illegal logging reduces authorities grosss about $ US5 billion by a twelvemonth.

Contreras-Hermosillo [ 17 ] nowadayss six classs of illegal activities in the forestry sector. The six classs of illegal activities are illegal business of forestlands ; illegal logging ; incendiarism ; illegal lumber trade and conveyance and timber smuggling ; transfer pricing and other illegal accounting patterns ; and illegal wood processing. Thomas et Al. [ 33 ] province that illegal logging put at hazard the supports of the hapless and straight endanger ecosystems and biodiversity in protected countries and Parkss across the universe. Poor administration and weak jurisprudence and order are likely to lend to accelerated deforestation and forest debasement.

Deforestation: Deforestation can be defined as the preservation of wood to another land usage or the long term decrease of the tree canopy screen below the minimum10 % threshold [ 18 ] . Deforestation can be caused by several human activities. It can be caused by migration of husbandmans from one country to another ensuing in the film editing of forest due to the sterility of their old land. Deforestation can take to dirty eroding or poverty where dirts tend to be thin and alimentary hapless. Without deforestation, woods can turn and retreat significant sums of C, roll uping it in trees and dirt [ 20 ] .

Allen and Barnes [ 1 ] province deforestation can be as the transmutation of primary closed forest to any other formation, as the loss of any sort of closed wood, or, as the loss of forestland. They describe that there are many causes of deforestation in developing states such as Malaysia. Climate, agribusiness, logging, fuel, combustion and graze, and forest direction are the major causes of deforestation. Agricultural enlargement addition in deforestation due to set down transition but, income, population growth/density, logging prices/returns/production, agricultural outputs and prices/returns, roads/building, and graduated table and institutional factors influence on deforestation [ 5 ] .

Sierra [ 31 ] examined the relationship between lumber trade and tropical deforestation and forest debasement and the deductions for forest preservation policy and planning. Barbier et Al. [ 6 ] besides studied the linkages between the timber trade and tropical deforestation. They showed that the direct impact of wood activities on deforestation appears to be less than 10 % of entire deforestation as compared to agriculture. They explore the comparative virtues of the different policy intercessions in term of deforestation.

Pollution: Pollution has both direct and indirect influences on environment. Industrial pollution affects economic growing in developing states but, industrial patterns produce inauspicious environmental pollution as the effects through the disposal of risky wastes. Income distribution can impact pollution degrees and trade dramas a function in the coevals of most pollution. He has besides showed the economic for income environment is to place the ingestion or family production responsible for some environmental impact and relate to income at the family degree.

Iwami [ 23 ] provinces the globalisation and pollution industries in East Asia on trade and environment. East Asiatic trade affects the production of pollution industries and thereby influences environmental debasements in the part. Pollution industries are utilizing paper and merchandises, industrial chemicals and other chemicals, crude oil refineries, assorted crude oil and coal merchandises.

Grossman and Krueger [ 19 ] examined the relationship between degrees of economic development and assortment of local pollutants. They besides examined sulfur dioxide emanations, fume, lead, Cd, arsenic and quicksilver in H2O. They estimate the relationship between these pollutants and income. They used a decreased signifier three-dimensional equation regressing different steps of environmental pollution on per capita gross domestic merchandise. Cole et Al. [ 16 ] examined sulfur dioxide, C monoxide and N dioxide.


Sustainable Forest Management: Sustainable Forest Management ( SFM ) is the procedure of pull offing forest land to accomplish one or more clearly specified aims of direction without undue decrease of its built-in values and future productiveness or unwanted effects on the economic, societal and environment [ 22 ] and integrates and balances societal, economic, ecological, cultural and religious demands to show and future coevalss [ 34 ] . There are three pillars of SFM include the Fig. 1.

Economic: The capacity of the woods to pull investing and back up economically feasible forest utilizations in the present and the hereafter is unrelieved. The wood is non used beyond its long -term capacity for production of wood and non-wood wood merchandises.

Social: There are a assortment of pillars include societal such as:

a-?The rights of autochthonal peoples and local communities are respected and protected

a-?Forest workers are healthy, safe and their rights are protected ( e.g. , freedom of association, right to dicker, child labour, forced labour, equal wage and non-discrimination )

a-?Local communities, including autochthonal peoples, benefit economically from forest direction ; and

a-?Sites of spiritual, religious, archeological, historic every bit good as of aesthetic and recreational value are preserved

Environmental: Forest usage protects biodiversity ( ecosystems, species, cistrons and ecological procedures ) and the capacity to keep ecosystem procedures and services such as watershed protection, pollenation, protection against mudslides, aesthetic beauty, C storage, etc.

Sustainable Development: At nowadays and in future, sustainability is related to the economic, societal and environmental systems that make up the community provide a healthy, productive and meaningful life for all community occupants ( Fig. 2 ) .

The way to sustainable is a treble procedure. Sustainable development has three facets: economic, societal and environmental, which are linked together and have overlapping within themselves. So, the three parts and their links are to understanding sustainable development, because sustainable development is about more than quality of life and accomplishing balance among the societal, economic and environmental monetary value of a community.

The analytical model, which has been used in construing the impacts on sustainable development, is shown in the Fig. 3.


Trade regulations may act upon on the constituents of sustainable development, such that the effects of liberalisation are felt chiefly through the extent to which it accelerates or decelerates these other procedures. The way and significance of impacts depends on the nature of the policy and regulative models are under-developed and well-developed capacity for policy analysis and execution.

Sustainable forest direction implies the sustainable use of forest resources for the benefit of communities and provinces. The construct non merely aims to keep the value of forest resources, it besides has a immense potency for making employment, income and wealth for the populations and provinces concerned. The sustainable forest direction programme seeks to better the direction of natural tropical woods by increasing the acceptance of sustainable forest direction patterns by forest directors from industries to communities. Good forest direction can both cut down the negative impacts of lumber harvest home on other forest resources and services and increase outputs of coveted merchandises and services from a given country of wood.

The construct of sustainable development has a cardinal nature, and serves as the footing for other new and advanced constructs and rules originating within environmental conventions. Sustainable development is development that lasts for long clip. The Brundtland Commission [ 36 ] right defined sustainable development as, “ run intoing the demands of the present coevals without compromising the ability of the future coevalss to run into their demands ” .

The economic pillar is a suited mix of wood merchandises and non-wood merchandises ( workss, animate beings, etc. ) , that does non decrease the productive capacity of the forest. Social pillars include regard for labour and autochthonal rights, the wellness and safety of forest workers, sharing of economic benefits, and protection of sites of religious or historic value. Environmental pillars can include dirt protection, biodiversity, care of air and H2O quality, and aesthetics. The appropriate balance of these pillars will change among parts and contexts.

Kirkpatrick et Al. [ 26 ] explain that trade steps have direct and indirect impacts on sustainable development. Economic, environmental and societal impacts are the dimensions of sustainable development.

a-?Economic impacts: alterations in per capita incomes, net capital formation, and employment. ;

a-?Environmental impacts: alterations in air, H2O and land quality, in biological copiousness and diverseness ; and in other environmental resource stocks ;

a-?Social impacts: impacts on poorness and other steps of inequality ; effects on degrees of wellness and instruction ; alterations in the civilization and coherence of community life.


The literature about the impact of trade and environment on sustainable development has been reviewed. The links of indexs to policy procedures, though a comparatively new concern for sustainable development, has long been recognized chiefly by bookmans working on societal indexs as a cardinal factor in guaranting effectual usage. Environmental protection is the concern of all people, including those from developing economic systems. Developing economic systems suspect that steps taken by developed economic systems to associate environment with trade might merely be disguised trade barriers. This can be seen from the actions and steps taken by the developing economic systems to protect the environment and to prosecute in sustainable development plans. It is argued here that environmental steps should be confined to environmental protection entirely and non linked with trade countenances. Environmental debasement and sloppiness in developing economic systems are chiefly due to ignorance and to backwardness in environment engineering. Industrialization and economic growing have both positive and negative effects on the environment. Malaysia ‘s economic development has brought big betterments in those environmental jobs that are chiefly related to poorness and to a low degree of economic development. Sustainable development non merely yields benefits for the environment, but besides it signifies poverty relief and giving developing states a opportunity to work their manner out of poorness and bring forth occupations, economic growing, and better quality of life for employees.


Fiscal aid provided by the Research University Grant ( GUP ) UKM-GUP-ASPL-07-06-011, Institute for Environment and Development, University Kebangsaan Malaysia is appreciatively acknowledged.


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