China is the biggest developing country which also has the largest population in the world. By analyzing the change of China's environmental policy after its entry into WTO, the opportunities and challenges of third world countries for the environment and trade development through the application of the WTO can be understood as well.
With the entry into the WTO, China has to follow these WTO-rules: reduction of WTO incompatible subsidies especially in the energy, textile and agricultural sector and opening of the domestic markets. As a consequence, there could be negative effects on employment such as in the agricultural sector. However, entering the WTO China also receives the right to use the trade conflict settlement mechanisms of the organization including environment related cases as other developing countries did before. Implementing the WTO-rules could also bring about economic and environmental benefits for China.
One central question about China's WTO entry is what are the possible environment benefits? Due to the WTO Committee on Trade and Environment, the greatest environmental benefits of trade liberalization, for example the removing of trade and restrictions and distortions are in energy, fisheries, forestry, non-ferrous metals, textile, clothes and leather.
In China, agriculture, energy and textile are the most important economic sectors. According to population statistics, 75% of the Chinese population lives in rural areas. Farms are encouraged to increase production, sediment damage, increased nutrient loadings in waterways, etc. Conversely, when farm incomes are taxed by artificially lowering food prices to subsidize consumers, farmers need to produce more food (leading to environmental problems), but they aren't paid as much because the government is subsidizing the consumers, not the farmers. (Oberheitmann, 2001, p.42) When farmers have to produce more, they are not able to take as much time to care for their plants and animals because they are producing so much. Instead, they use harmful chemicals on their plants, inject all of their animals with antibiotics (which can cause the farmers and consumers to become immune to antibiotics), and the food quality suffers. When farmers are taxed for producing more products, they don't have the money they need to farm organically. Thus, the reform of the agricultural sector is a difficult task. Subsidies have to be reduced only where GATT-incompatibilities exist or where they are appropriate, in order to have positive implications for economic welfare.
Energy consumption in China has increased significantly since the last 20 years. Within the developing countries, the countries of the Asia Pacific region consume approximately 60% of total world energy demand among all developing countries, accounting for the bulk of demand increase in recent years. According to IEA data, with 3.1 billon tons of CO2-emissions from fuel combustion in 1997, after the USA, China is the second largest emitter in the world. (Oberheitmann, 2001, p.43) The Chinese government subsidizes energy costs for the Chinese citizens. These are the examples for subsidies of energy:
With the entry into the WTO, China has to follow these WTO-rules: reduction of WTO incompatible subsidies especially in the energy, textile and agricultural sector and opening of the domestic markets. As a consequence, there could be negative effects on employment such as in the agricultural sector. However, entering the WTO China also receives the right to use the trade conflict settlement mechanisms of the organization including environment related cases as other developing countries did before. Implementing the WTO-rules could also bring about economic and environmental benefits for China.
One central question about China's WTO entry is what are the possible environment benefits? Due to the WTO Committee on Trade and Environment, the greatest environmental benefits of trade liberalization, for example the removing of trade and restrictions and distortions are in energy, fisheries, forestry, non-ferrous metals, textile, clothes and leather.
In China, agriculture, energy and textile are the most important economic sectors. According to population statistics, 75% of the Chinese population lives in rural areas. Farms are encouraged to increase production, sediment damage, increased nutrient loadings in waterways, etc. Conversely, when farm incomes are taxed by artificially lowering food prices to subsidize consumers, farmers need to produce more food (leading to environmental problems), but they aren't paid as much because the government is subsidizing the consumers, not the farmers. (Oberheitmann, 2001, p.42) When farmers have to produce more, they are not able to take as much time to care for their plants and animals because they are producing so much. Instead, they use harmful chemicals on their plants, inject all of their animals with antibiotics (which can cause the farmers and consumers to become immune to antibiotics), and the food quality suffers. When farmers are taxed for producing more products, they don't have the money they need to farm organically. Thus, the reform of the agricultural sector is a difficult task. Subsidies have to be reduced only where GATT-incompatibilities exist or where they are appropriate, in order to have positive implications for economic welfare.
Energy consumption in China has increased significantly since the last 20 years. Within the developing countries, the countries of the Asia Pacific region consume approximately 60% of total world energy demand among all developing countries, accounting for the bulk of demand increase in recent years. According to IEA data, with 3.1 billon tons of CO2-emissions from fuel combustion in 1997, after the USA, China is the second largest emitter in the world. (Oberheitmann, 2001, p.43) The Chinese government subsidizes energy costs for the Chinese citizens. These are the examples for subsidies of energy:
The Chinese government should remove the subsidies and create an "energy tax" as a "distinctive incentive" for citizens to use energy. It is better for the environment to use less energy. This may help in the development of "clean" energies because there is no incentive to use coal, gasoline, and CO2 emitting energies. Fortunately, China is taking measures to reduce emissions of sulphur dioxide, suspended particulate matter, nitrous oxide, carbon monoxide, carbon dioxide, light hydrocarbons, organic and inorganic aerosols, as well as toxins produced in certain combustion methods, i.e. Greenhouse gases. They should continue with this work.
In 1997, the exports of articles of apparel and clothing made 17.4% of total Chinese exports. (Oberheitmann, 2001, p.46). It must be noted that these are final products, not the raw materials to make clothing. China has become the biggest exporter of clothing and the second biggest exporter of textiles in the world. Because China has such a huge impact on the clothing and textile global market, it is hard for other countries to compete. To limit the effect of Chinese textiles in the marketplace, there have been restraining measures including high tariffs, import licensing requirements, import prohibitions, and direct subsidies on some production inputs. To improve the quality of clothing and the quality of production for the clothing, there needs to be less waste dumping and other environmental restrictions placed on the clothing and textile makers.
Is pollution inevitable for developing and industrial countries? "This constellation is a dilemma for China and other developing countries as they can not fulfill the standards with existing technology, but at the same time are losing export revenues that would enable them to invest in environmentally friendly technologies and management". (Oberheitmann, 2001, p.33)
Countries like the US and the UK also polluted the environment through their own industrialization years ago. There are significant parallels between industrialized and developed countries while they were in their industrialization stages and China now. They didn't have the awareness of the pollution or the technologies to stop the pollution. Now that we have better technologies to be more environmentally friendly, why are these developing countries like China still struggling? The main question is how we change it.
References:
Websites:
http://www.riel.whu.edu.cn/article.asp?id=25056
http://news.qq.com/a/20090307/001708.htm xinhua
http://www.sc.gov.cn/zt_sczt/wto/hyyx/200701/t20070119_172530.shtml
Academic publications:
WTO机制下的中国对外贸易与环境保护 印卫东 徐荟华
WTO with Sustained Development Strategy of China 彭璧玉
PERSPECTIVES OF SCIENTIFIC AND TECHNOLOGICAL ACHIEVEMENT 2002 (2)
Environmental impacts of China's WTO-accession Haakon Vennemoa, Kristin Aunanb, Jianwu Hec, Tao Hud, Shantong Lic and Kristin Rypd3alb
In 1997, the exports of articles of apparel and clothing made 17.4% of total Chinese exports. (Oberheitmann, 2001, p.46). It must be noted that these are final products, not the raw materials to make clothing. China has become the biggest exporter of clothing and the second biggest exporter of textiles in the world. Because China has such a huge impact on the clothing and textile global market, it is hard for other countries to compete. To limit the effect of Chinese textiles in the marketplace, there have been restraining measures including high tariffs, import licensing requirements, import prohibitions, and direct subsidies on some production inputs. To improve the quality of clothing and the quality of production for the clothing, there needs to be less waste dumping and other environmental restrictions placed on the clothing and textile makers.
Is pollution inevitable for developing and industrial countries? "This constellation is a dilemma for China and other developing countries as they can not fulfill the standards with existing technology, but at the same time are losing export revenues that would enable them to invest in environmentally friendly technologies and management". (Oberheitmann, 2001, p.33)
Countries like the US and the UK also polluted the environment through their own industrialization years ago. There are significant parallels between industrialized and developed countries while they were in their industrialization stages and China now. They didn't have the awareness of the pollution or the technologies to stop the pollution. Now that we have better technologies to be more environmentally friendly, why are these developing countries like China still struggling? The main question is how we change it.
References:
Websites:
http://www.riel.whu.edu.cn/article.asp?id=25056
http://news.qq.com/a/20090307/001708.htm xinhua
http://www.sc.gov.cn/zt_sczt/wto/hyyx/200701/t20070119_172530.shtml
Academic publications:
WTO机制下的中国对外贸易与环境保护 印卫东 徐荟华
WTO with Sustained Development Strategy of China 彭璧玉
PERSPECTIVES OF SCIENTIFIC AND TECHNOLOGICAL ACHIEVEMENT 2002 (2)
Environmental impacts of China's WTO-accession Haakon Vennemoa, Kristin Aunanb, Jianwu Hec, Tao Hud, Shantong Lic and Kristin Rypd3alb
