How does international trade affect the environment?The notions of free trade are an idea that the trade can occur within any restrictions. This is used for the taxing purposes of import and export. It allows the goods to flow freely in the regions. In the international free-trade, the European Union is a good example of a free-trade zone (Nordhaus, 2015). However, free trade environment brings with it a set of pros and cons. Consider how, in the case of free trade environment, there are many things that are moving from place, such as from supplier to distributive ends and vice versa.
These are found to have a positive impact on the consumer choice and a much more competitive setting is arrived at, if the suppliers and consumers are selected from the free trade market with the aim of maximizing profits. In such cases, it is found that there is more transportation involved in the process (Nellemann et al., 2014). Hence, here there are rising emissions associated with a larger carbon footprint even if it means that the society (consumers) benefit in the short term. The next is the role of the resources. The country is found to be dependent on the natural resources. This depletion of the natural resources can have a profound impact in the ways in which the countries conduct the businesses. For example, the Brazil’s lumber exports are found to be equated with 5% of the world supply and it is responsible for the deforestation of the Amazon forest. Hence there is increase in the deforestation efforts (Ghai &Vivian, 2014).
Finally, the race to the bottom hypothesis belief is that leaders across the world will want to be competitive and in order to be so, they would want domestic regulations to lower their costs in business externalities monitoring with respect to the environment. Political pressure might be applied (Frankel, 2009). This could make the businesses more competitive in the international scale. However, the race to the bottom would lower environmental standards internally.