Free Trade Agreements

January 3, 2024

Environmental standards in the United Kingdom (UK) when negotiating Free Trade

Agreements (FTAs) with non-EU countries

Introduction
Free Trade Agreements (FTAs) are treaties entered into between two or more countries. They are
targeted at decreasing or eradicating some hindrances to trade and investment. In addition, they
aid in strengthening trade and commercial ties between the subject countries (2022).
We will briefly look at Australia as our case study. According to the Australian Government
Department of Foreign Affairs and Trade, Australia boats of 15 FTAs with 26 countries in
addition to negotiating new bilateral and regional FTAs. Further, according to the Australian
Government Department of Foreign Affairs and Trade, benefits of the FTAs include (2022):
a) Contribution to greater economic activity, creating jobs, and offering chances for large
and small Australian businesses to gain an advantage from more trade and investment.
b) Aiding in dealing with barriers behind the border that ordinarily would hinder the
movement of goods and services. In addition, investment is also encouraged and rules
touching on matters such as intellectual property, e-commerce and government
procurement are made better. This is in addition to them decreasing and eradicating
tariffs.
c) The Australian businessman and consumer is offered better access to a larger array of
competitively priced goods and services, new technologies, and innovative practices.
d) More advantages from foreign investment are facilitated by the FTAs.
e) Regional economic integration is promoted in addition to establishment of shared
approaches to trade and investment between Australia and its trading partners.

f) There is improved trade and investment prospects that aid in improving the economy of
less-developed economies.
g) Bonds between people and businesses are strengthened and supported. These bonds assist
in improving Australia’s overall bilateral relationships with FTA partners.
h) More advantages to Australia and trading partners are continually provided over time.
This includes through in-built agendas that promote ongoing domestic reform and trade
liberalisation.
Looking at the history of FTAs, we come across the Cobden-Chevalier Treaty of 1860 that
echoed Britain’s decision on reduced tariffs from the 1820s via the repeal of the 1846 Corn
Laws. This treaty reduced or eradicated duties imposed on goods traded between Britain and
France. It marked a positive step for liberal economic policies signaling a start to free trade in a
number of European nations up until the early 1890s. The treaty’s name was coined from the
names of its primary negotiators Richard Cobden from Britain and Michel Chevalier from
France. The treaty’s significance in France is that it showed an indistinct move from
protectionism, shaped industrialization, and sharpened political disapproval to Napoleon III, who
was France’s emperor ("Cobden-Chevalier Treaty | Encyclopedia.com", 2022)
This treaty came into play in July 1859, when Britain and France had tensions which were
escalated by France’s involvements in Italy. Lowering tariffs by Britain was seen as a means to
improve their relationship with France; and in October 1859, Britain and France under the
guidance of Cobden and Chevalier, entered into negotiations. The treaty was signed in 23 rd
January 1860, and approved in March providing for the principle of lowered tariffs and
establishing maximum values at 30 percent. The subject tariff continued to be in effect up to
1882 ("Cobden-Chevalier Treaty | Encyclopedia.com", 2022).

Issue
What are the measures in place to ensure the United Kingdom’s (UK) government upholds high
environmental standards when negotiating Free Trade Agreements (FTAs) with non-EU
countries?
Rule
As explained by Friends of the Earth Limited, the environment can be affected by trade both
positively and negatively. Trade, when accompanied by strong governance provisions and
implementation apparatus, is capable of supporting developments in protections in the
environment and sustainable livelihoods. On the negative end, trade may lead to destruction of
the environment due to increased trade flows increasing unsustainable patterns of production and
consumption. Standards in countries may be lowered where there is competition from exporters
who have lower standards ("UK trade and the environment: Our position | Policy and insight",
2022).
The connection between climate change and increased trade liberalization, increased trade,
increased production, and increased energy use has been subject of debate and especially in early
1990 when there were talks pertaining to the North American Free Trade Agreement (NAFTA)
and the Uruguay round of the General Agreement on Tariffs and Trade (GATT). The NAFTA
and GATT came into being when people were becoming more aware of the environment. It was
argued by environmentalists that the coming into effect of the NAFTA would yield in an
environmental catastrophe for Mexico referring to the Maquiladora zone, wherein damaging
effects were experienced on the local environment caused by a concentration of industry that
emanated from trade with the United States (2022).

Trade is also associated with a lot of environmental issues; it enables the international movement
of goods that in the interest of the environment should not be traded. This includes dangerous
wastes and lethal materials that increase the risk to the environment as they are been moved due
to spillage. Additionally, these goods may be disposed off to the countries that do not have
proper disposal mechanism or the capability to determine whether they should accept those
goods to begin with. Different species are also over-exploited to extinction due to trade, for
example, the elephants’ survival is threatened because of the ivory trade, and the decline of air
quality in parts of China linked to export-led growth, and unsustainable harvest rates in tropical
rainforests emanating from trade in timber (2022).
One main fear is that with increased competition from trade liberalizations, environmental
standards are lowered by companies hoping to protect their industry from international
competition or entice foreign companies with the low costs of environmental safeguards as a
similar inducement as low labor cost (2022).
Those who support free trade reference the possible profits from trade, specifically, the growth in
the income emanating from trade. There may be developments in air, and water quality in
developed countries enhanced by trade since the push for a better environment is probable to
increase with income. There is also the advantage of increased transfer of modern and
subsequently cleaner technologies to developing counties since multinational corporations may
find it easier and more effective to use the same technology in all their locations. Moreover, as
per the Porter hypothesis, a constriction of environmental regulations kindles technological
innovation and this positively affects the economy and the environment Pro-free trade
individuals further state that environmental protection or matters should be handled through
taking up effective controls on the environment and not through trade (2022).

Analysis
The Environmental Audit Committee on 30 th September 2021 published its Second Report of
Session 2021–22, The UK’s footprint on global biodiversity (HC 674). The response from the
government was received on 5 th January 2022. In part, it is recommended that (2022):
a) The Government rapidly prioritize the creation of the indicator on foreign environmental
impacts of UK consumption of important commodities, because a greater knowledge of
imported items’ environmental implications is crucial to accomplishing the Government’s
objectives.
b) In the Net Zero Strategy, the government should evaluate all tax changes based on how
effectively they meet environmental goals. The Strategy should also include the
government’s strategy to developing and assessing taxes adjustments.
c) A specific undertaking to Net Zero stress test all future fiscal occurrences should be
contained in the Net Zero Strategy in addition to an undertaking to grow a nature stress
test to be utilized for fiscal occurrences. Prior to the start of COP26, the Net Zero
Strategy should be published.
d) Conduct of sustainability impact assessments for all future trade agreements in addition
to consideration to keep an eye on and deliver environmental net gain in trade deals as
part of the Government’s Nature Strategy. In response to the report, the Government is
mandated to stipulate its plan on increasing participation in the Wildlife Financial
Taskforce, either via proposing a statutory mandate on businesses of a particular size, or
through using other channels.
e) In order to improve sustainability within UK global supply chains:

i. There should be an indistinct and accessible definition of sustainability within the
framework of the Government Buying Standards in order to improve sustainability within
UK global supply chains.
ii. The Government was mandated to reestablish the Greening Government Commitments
for compulsory reporting on sustainable procurement as part of the Government Buying
Standards by the end of 2021.
iii. All attained forest-risk commodities (palm oil and paper included) should be certified as
sustainably produces by the Government Buying Standards.
iv. All large public bodies such as the NHS and prisons should be subject to the Government
Buying Standards. Moreover, these bodies should adhere to annual reporting on
compliance against public procurement policies.
f) Consideration should be made on how a natural capital method may be taken up without
implanting an uneven financial load on farmers or consumers in the National Food
Strategy.
g) Illegalizing use of commodities by UK businesses and the finance industry associated
with deforestation, and at least comprise the finance industry within the limit of the
provisions on forest-risk commodities in the Environment Bill in order to elevate the
sustainable use of forest-risk commodities.
Conclusion
The highlighted report highlights the recommendations and the steps taken to ensure free trade
does not negatively impact the environment. The Government’s responses on the
recommendations offer additional insight on the measures taken to date.

Bibliography
(2022). Retrieved 14 August 2022, from https://www.dfat.gov.au/trade/about-
ftas/Pages/the-benefits-of-free-trade-agreements
Cobden-Chevalier Treaty | Encyclopedia.com. (2022). Retrieved 14 August 2022, from
https://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-
maps/cobden-chevalier-treaty
UK trade and the environment: Our position | Policy and insight. (2022). Retrieved 14
August 2022, from https://policy.friendsoftheearth.uk/policy-positions/uk-trade-and-
environment-our-position
(2022). Retrieved 14 August 2022, from https://www.intechopen.com/chapters/19627
(2022). Retrieved 14 August 2022, from
https://publications.parliament.uk/pa/cm5802/cmselect/cmenvaud/1060/report.html

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