Pigs that cross...

In talks about trade, something vital is omitted: the environment.

We’ve got just 12 years to avert disaster: to limit the global temperature rise to 1.5 degrees as agreed at the Paris climate summit, the Intergovernmental Panel on Climate Change (IPCC) recently announced.

We’ve got just 12 years to avert disaster: to limit the global temperature rise to 1.5 degrees as agreed at the Paris climate summit, the Intergovernmental Panel on Climate Change (IPCC) recently announced.

Two things were highlighted that could help slow the rate of global warming: cut down on fossil-fuel usage – fast – and stop eating so much meat.

How both of these relate to international trade was graphically illustrated by British Green Party politician Caroline Lucas back in 2004 when she said: ‘Britain imports 240,000 tonnes of pork and 125,000 tonnes of lamb while exporting 195,000 tonnes of pork and 102,000 tonnes of lamb,’ indicating one of the bewildering follies of the global trading system.

Since then the number of dead animals being shipped around the globe has grown considerably. In 2017 some 32.7 million tonnes of meat was packed off to distant lands. The US, Brazil and EU were the top exporters; China, Japan and the US the biggest importers.

In theory, Britain’s exit from the EU could lead to UK citizens eating more home-grown meat – maybe coupled with a reduction in volume consumed as the price increases. But that’s not the direction favoured by the libertarian leaders of Brexit. Quite the contrary.

They talk of striking bold new trade deals with distant lands – the US is the clear favourite, but the old Commonwealth countries are often mentioned too.

In its communications, the British Department of Trade plays down the aspect of distance as it plays up the benefit of striking trade deals with non-EU countries. In the media, the topic of Trade Secretary Liam Fox’s accumulation of air-miles is a running gag, while ex-foreign minister Boris Johnson recently came back from a trip to Peru bubbling with enthusiasm at the prospect of ramping up trade with the Latin American country (only 10,138 kilometres away).

The US’s new protectionism could, in theory, reduce the need for international freight. But the Sierra Club, a US environmental group, finds Trump’s trade wars the opposite of eco-friendly. For example, tariffs on solar panels and electric cars and bikes from China will make them far more expensive – reducing uptake.

More to the point, Trump is a climate-change denier with a profound dislike of environmental regulations, which he sees as impediments to business.

Losing environmental protections

Laws passed for the social and environmental good are often described as ‘barriers to trade’.

But, as Caroline Lucas puts it: ‘One person’s “hard-won environmental right” is another person’s “trade barrier”. We are going to see a real fight now for whether or not we can defend those hard-won rights against an incredibly strong pressure to deregulate.’

Early in 2018 Prime Minister Theresa May gave her assurance that, on Britain’s exit from the EU, its environmental protections would simply be transferred into British law. Protection would even be improved in some areas with the creation of a new ‘green watchdog’. Then, in September, the hard-Brexit lobby group the Institute of Economic Affairs (IEA) published a warning that if the UK continued to strengthen its regulatory environment, it would lead to ‘wealth destruction’ and ‘push people into poverty’. And if the UK harmonized its regulatory environment with the EU’s after Brexit, the lobbyists insisted, it would make independent trade deals with countries such as the US, China and India impossible.

Government assurances to the contrary were soon shown to be wanting. In November, MPs on the UK parliament’s Environmental Audit Committee saw gaping holes in the government’s 25-year plan for a greener future. While two-thirds of EU legislation could be rolled over into UK law with just a few technical changes this March, around a third of all environmental rules governing air, water, chemicals and waste disposal cannot. The government has not committed to replacing this third, meaning polluters could go unpunished and wildlife will be denied vital protection post-Brexit.

Global divorce

Meanwhile, at a global level, there has long been a deliberate separation of trade and climate issues.

Climate accords (such as the 2016 Paris Agreement) have been silent on the issue of trade. And trade agreements make no mention of climate. The World Trade Organization (WTO) states on its website that it has no ‘specific agreement’ that deals with environmental issues. This is becoming increasingly untenable.

Trade impacts on climate in a range of complex ways, far beyond the growing carbon footprint of transporting goods or managing complex transnational manufacturing and supply chains.

Free-trade deals further entrench an export-oriented, industrial model of agriculture that is itself a significant contributor to climate change. A rise in corporate farms leads to increased pesticide use and more energy required to push agriculture into marginal lands.

Policies to support climate-resilient farming systems, such as allowing grain reserves to protect farmers from market volatility or incentives for long-term investments in adaptation strategies like agro-ecological practices, are often discouraged by the WTO and free-trade deals like the Trans-Pacific Partnership (TPP).

Sometimes there are minor environmental benefits: coffee or cocoa tree crops can, for example, reduce soil erosion. But often the economic gains come at a high environmental cost. Kenya’s booming cut-flower industry (supplying 40 per cent of the EU and 70 per cent of the UK market) is causing an alarming decline in the water level of Lake Naivasha and there are concerns about pesticide use.

And, of course, mining and fossil-fuel extraction – a large part of traded goods – cause serious environmental damage, especially in countries such as Peru or Nigeria where environmental controls are lax. As we have seen corporations and governments can use trade and investment rules to challenge decisions taken to protect the environment. For example, trade rules have been used to challenge India’s popular domestic solar programme.

Meanwhile, between 2010 and 2014, 99 per cent of UK overseas investment in the energy sector went not to renewables but to fossil fuels.

Outsourcing pollution

Some argue that international trade enables developing countries to shift to cleaner technologies. However, free trade has more commonly let richer countries export their pollution as production plants move to nations with cheaper labour and lower environmental standards. You need only look at what has happened to China’s air quality in the past 20 years. Around 22 per cent of global CO2 emissions stem from the production of goods that are, ultimately, consumed in a different country. While the US and many European countries have reduced their domestic emissions over recent decades, some of this reduction has been offset by increasing imports from countries such as China that have a more carbon-intensive energy mix.

Traditional inventories do not include emissions associated with imported goods; the emissions are put on, say, China’s tally rather than that of Britain or the US.

So, even though domestic emissions fell 27 per cent in Britain between 1990 and 2014, if CO2 imports from trade are considered, this drops to only an 11-per-cent reduction. Similarly, a 9-per-cent increase in domestic US emissions since 1990 turns out to be a 17-per-cent increase when trade is included.

Caroline Lucas reckons: ‘There needs to be conversation about where trade policy and the emissions from it fit into the whole climate debate. If we could move to a scenario where we were involving those emissions automatically as part of the climate reporting I think it would raise important questions and put real pressure on areas like trade policy, which at the moment can feel entirely divorced from the climate discussion.’

She adds: ‘What would international trade look like in a framework that was serious about the targets that the IPCC set out? I do think that localizing our economies, if we were to start that debate again, would be very timely.’

It sounds like high time we put people and planet at the heart of trade policy.