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The environment and world trade.

From the earliest days of federal environmental legislation some two decades ago, the American political Scene has been deluged by dire warnings that the effort to curb pollution would carry unbearable costs. Like clockwork, each new proposal for tighter environmental controls has been followed inexorably by a claim that the new proposal, if implemented, would sound a death knell for a particular industry, if not for the American way of life.

Nor have years of experience to the contrary broken this cycle. Time after time, we hear claims:

* that cleaning up our nation's waters will threaten industries and precipitate economic ruin;

* that fighting acid rain and urban air pollution will bankrupt our citizens and cause social disruption of unimaginable proportions;

* that protecting natural resources means throwing hardworking people out of work;

* in sum, that, reducing pollution eliminates profits and eliminates jobs.

These claims - no matter how often they are repeated, no matter how persistently they reappear in our public debate - are wrong. They are wrong no matter how frequently they are used for purposes of political expediency, no matter how many times they are used to distort the real challenges and real issues that lie before us.

Tragically, these misrepresentations were embraced wholeheartedly by former President Bush during his landmark trip to the Earth Summit in Rio - which I refer to as a landmark only because it represents one of the historic lows in the annals of American diplomacy. The Clash of environmental ideals embodied in the debate over Rio had their domestic counterparts during the Presidential campaign. In the end, it was a difference of philosophy that helped elect Bill Clinton President.

Before and during the Rio summit, President Bush told the American people and the world that he would not be party to any agreement that would cost Americans their jobs. The implication was that a coordinated global effort to protect our planet from water pollution, ozone depletion, tropical forest loss, air pollution and other threats would be ruinous to the American economy.

President Bush's message may have been pleasing to the ears of Americans on the political far-right, who instinctively hate - as they have since the days of Woodrow Wilson - all efforts at multilateral cooperation. His message may also have pleased certain leaders in American big business, who instinctively hate the imposition of any government standard, whether it relates to automobile seat-belts, product labelling, or the dumping of toxic waste.

But his message was nonetheless little more than the propagation, once again, of a myth-a very dangerous myth.

The truth is that decades of experience with legally-mandated environmental protection in our nation has made it clear that economic progress does not require environmental degradation, that American prosperity does not require rivers that are biologically dead, or waste sites that spontaneously catch fire, or air that burns the eyes, or soils that cannot support life.

What we have found in this country, through a considerable body of experience over tile past two decades, is that economic progress and prosperity are not, in the long term, at odds with environmental protection. in fact, economic progress and prosperity require environmental protection.

This lesson is true not only for the United States but for the world. Brazil and Costa Rica have found that their forests are worth protecting for practical reasons of long-term development. Poland and Hungary have found that cleaner air makes for good economics. Russia and Thailand have found that clean water will help their countries' future.

Nations around the globe have recognized a fact: that the environment and the economy are linked - not in the way that President Bush asserted, but positively: A thriving economy requires a sound environment.

In defending his lack of leadership in Rio, the President used a profoundly ironic argument. He asserted that the United States should not be criticized for its failure to participate because we are the world loader in environmental protection and already have programs iii place or planned that would meet the goals of the Rio meeting.

The multiple ironies of this assertion are best conveyed in three questions:

First, if the United States was already intending to achieve the goals set forth in the Rio treaties, why didn't we sign each of the Rio agreements rather than abdicating leadership? What did our refusal achieve other than El failure to create environmental protection obligations on the part of other nations?

Second, if the United States is the world leader in environmental protection - and if President Bush was proud of that, as he stated - does that not undermine President Bush's, own contention that environmental protection is a threat to the American economy?

Third, and here lies the great irony, if the United States has attained leadership in the many technologies associated with environmental protection, do we not have a positive economic interest in seeing other nations commit to the use of such technologies? In other words, wouldn't an environmental revolution around the world actually have a sharply accelerating effect on the export of American products and technologies?

The assertion, that the United States has a long record of leadership on environmental issues is absolutely correct. Our Clean Air, Clean Water, and Superfund laws, to name but a few, are landmarks in enlightened legislation. What President Bush failed to recognize is that those laws - and the response of the Amerikan market economy to those laws - have made many of our nation's businesses world leaders in environmental Pollution control technologies.

We are well past the crossroads that President Bush claimed threatened our economy. As the rest of the world catches up with our environmental standards, American businesses can put to valuable use their leadership and experience in this field.

But this opportunity could easily be lost. Our development of pollution control technologies and practices could become another example of a missed market - unless we realize that global environmental protection can mean more American jobs, not fewer; higher profits, not lower.

By failing to recognize the contradiction in his politically expedient assertion that environmental protection is bad for the economy, President Bush acted to scuttle an emerging international consensus to respond constructively to global climate change. The result was that rather than protecting the American economy, the President missed an important opportunity to help the American economy, both businesses and workers.

A report last year on the environmental goods and services industry by the Organization for Economic Cooperation and Development (OECD) underscores the brilliant opportunity now available to American industry. "It is increasingly apparent," the report states, "that goods and services for pollution abatement and environmental protection is also a business opportunity."

That opportunity has in fact become, already, a $200 billion annual market and the projections are for steady growth. The OECD report projects this market to grow at an annual rate of 5.5% through the year 2000 - to a $300 billion annual market worldwide.

Some 800,000 American workers are employed in the production of environmental goods and services. That is 800,000 jobs directly tied to pollution control, environmental protection and environmental cleanup. Last year, the export of environmental products and services accounted for $4 billion of our nation's exports. But this could be only the beginning - if we are smart and quick.

The emerging environmental market within the domestic American economy has proven to be highly conducive to success for smaller companies and innovative firms. But as in most industries, the larger American firms, at least thus far, have dominated in export sales for the simple reason that they have the resources to overcome the increased risks and complexity of the international market. The new programs we put into law law year will help lower those hurdles for all companies, but will be of greatest help to the thousands of smaller American firms that ate developing environmental products, technologies and services.

As the 1990's unfold, the factors driving the demand for environmental goods and services will be spreading throughout the world. The unprecedented extent of participation in the Rio conference demonstrated that environmental protection is on the agenda of citizens around the globe.

The Rio conference embodied what is described in detail in OECD report: "a consistent trend toward the application of more stringent standards in all product segments and most geographic regions." The OECD report described how the global environmental market is being determined by increased "legislative controls related to pollution discharges to air, water, and more recently, land."

Nor do these laws and regulations represent the perverse growth of socialist bureaucracy. As described in an editorial in the Economist - hardly a friend of socialism - these new laws and regulations are "essential to make sure that polluters pay the true cost of their dirty deeds."

That is why last fall, I introduced, with Senators Wirth, Gore, Rockefeller, Lieberman and Bingaman, the Environmental Aid and Trade Act of 1992." Our legislation, much of it now law, was a first step toward a coherent set of policies and programs that will help American business in a rapidly growing global market in environmental goods and services.

The premise of the Environmental Aid and Trade Act of 1992 was that the basic export-promotion tools we need to help American businesses in the global environmental market are already in place, waiting to be focused on this important new objective What our policy requires now is an understanding that environmental protection represents a tremendous opportunity for American businesses, not a burden: a recognition that jobs and the environment are not in conflict, but rather that global environmental protection can mean more jobs for Americans. It is an approach embraced by Governor Clinton during the campaign, and one that President Clinton can make a reality.

Our proposals, as passed by Congress, called for five changes in the federal government: changes that constitute our first concrete steps in responding to the profound advance in global environmental attitudes - an advance that has created what I would call a "new environmental market."

First, within several key federal agencies, our initiative mandates the designation of senior officers as coordinators for guiding the export-related programs of those agencies in support of our environmental goods and services industry. These key agencies are the State Department, the Commerce Department, The Export-import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency. Each of these agencies is equipped in its own way to assist American businesses and workers make the most of export opportunities.

Second, our proposal authorized American Environmental Business Centers in the countries of Eastern Europe and the former Soviet Union, most of which are potential major markets for our environmental products. It also made clear Congress' expectation that similar centers could be established in other countries that are attractive markets. Surprisingly, and almost in contradiction to their more public pronouncements, the Bush Administration had taken tentative steps in this direction, but far more aggressive action was needed to avoid losing this opportunity.

Third, our proposal established a Key Competitor program, to improve our awareness of - and reaction to - efforts by other countries to enter and exploit the new environmental market. This preemptive approach will become increasingly important as other nations seek to build on their own experience with environmental protection.

Fourth, the Environmental Aid and Trade Act called for an environmental trade working group within the already-existing interagency body called the Trade Promotion Coordinating Committee. The TPCC was created within the Executive branch to harness, into a united effort, the federal agencies that have roles in promoting American exports. A specific environmental working group within that structure will ensure that these agencies focus particular attention on the potentially lucrative environmental market, at this critical moment when American businesses still hold a competitive edge.

Finally, our proposal initiated a feasibility study for a program to insure companies that invest abroad against the risk of an unexpected reduction by the host government in environmental standards. A company that has invested abroad to produce products designed to meet a host government's environmental standards could conceivably find itself in a catastrophic position if the host government suddenly reduced or abandoned those environmental standards. This study would analyze whether a foreign government's reduction in environmental standards is an insurable risk like the risk of appropriation of company assets or the risk of deep devaluation of foreign currency - both risks against which OPIC now offers insurance coverage at an appropriate premium.

Why should the United States Government focus special effort on a particular industry - that is, the cluster of goods and services that relate to the environment? The answer is two-fold:

First, global environmental protection is a fundamental United States foreign policy interest. Citizens around the world are increasingly concerned about the deteriorating state of their surroundings; they want to reverse that slide for their own good and their children's; and we should recognize that their aspiration is consistent with and supportive of the American national interest. The American people can find neither security nor prosperity in a steadily deteriorating global environment.

That the Bush Administration failed, infamously, to pursue this interest at the, Earth Summit represents a lost opportunity and a delay. But the American national interest remains, and, I believe, will be pursued through a new and focused policy under President Clinton's Administration.

Second, this special effort, though targeted on the environmental market, would serve the interests of American industries beyond those directly assisted by our bill. By now, it is well understood that no nation can expect to build a solid bass, of economic growth for future generations at the expense of its environment. By strengthening the American environmental industry, this legislative initiative will help our own efforts at environmental protection while building a strong export industry whose success will have a spill-over effect on our entire economy.

The existence and development of this market is not a secret. We must act now, for others are sure to do so. The breadth of opportunities is astounding.

Even nations not hevetofore considered strong on environmental protection are now taking steps to strengthen their pollution standards and enforcement:

* In the former communist world, Poland is rewriting its water and waste management laws. Bulgaria has adopted new environmental protection laws. In Russia, Ukraine and other former Soviet republics, the environment has become a top issue those countries must face.

* In Latin America, slash-and-burn agriculture is now, for the first time, coming under constraint.

Along the Pacific Rim, many of the countries that industrialized so rapidly in the 1960% and 1970's are now starting to deal with environmental problems they had largely ignored heretofore. Indonesia and Thailand have established now environmental agencies. Other countries are taking steps to equip existing environmental agencies with the authority and resources to bring about real improvements.

* In all countries, environmental standards are moving forward, not being rolled back.

These developmentso will create buyers for American environmental products and services. To illustrate, only five percent Of Malaysia's urban population has access to sewers and central treatment plants. In Manila, the largest city in the Philippines, only fifteen percent of its residents are served by a sewer system. As those governments establish the laws and regulations to clean up their waterways and improve living conditions for their citizens, they win be looking to build dozens of water treatment plants and systems. These systems embody technologies with which American businesses have decades of design, construction and operational experience.

Air pollution problems from Krakow to Seoul, and industrial waste problems from Basel to Taipei, are bringing similar demand forces to bear in those market sectors.

In the simplest and starkest terms - in terms of naked American self-interest - these developments represent potential sales for American businesses and jobs for American workers, if we give them to tools to crack those markets. That is precisely what the Environmental Aid and Trade Act aims to do.

As stated in the OECD report, "governments which view the environment industry in strategic terms and provide appropriate supports may be better placed to realize the ecological and economic benefits of a competitive environment sector."

Let us make no mistake: there is urgency in this task for economic as well as environmental reasons. Our competitors in the global market are developing just such strategic plans to make the most of market openings:

* Canada has begun an Environmental Industries Sector Initiative directed precisely at supporting that country's environmental industry in the world market.

* Germany is providing research and development grants to help make its environmental industry a major player in the world market.

* Japan has established a new research and development grants to center to support its environmental businesses, And developed a technology development program to help bring innovative technologies to the world market.

These countries have recognized the environmental changes sweeping the world. America ignores those changes at its own economic peril.

For over two decades, opponents of environmental protection have tried to fend off responsible action by rolling out the threat of job losses. But our domestic experience shows there need be no conflict between environmental protection and the Overall prosperity of the American economy. Unfortunately, in Rio we saw a President assert, on the international scene, the false notion that environmental protection is the enemy of economic prosperity. This was particularly perverse - in that the global environmental market now represents a potential path to increased American prosperity. We simply cannot afford the delay of a mismanaged, underled effort at global environmental protection. The United States and other nations cannot afford further delay for environmental reasons. And American business and workers cannot afford further delay for economic reasons.

America must take the lead - in global environmental protection and in the global environmental market. Under the leadership of President Clinton and Vice-president Gore, international environmental protection pd economic growth will not be pitted against each other in the search for short-term political gain. And with better understanding of the connection between the environment and economic growth, perhaps the myths of earlier years will not be repeated. Then we can move on to solving the real environmental problems we face.
COPYRIGHT 1993 Lewis & Clark Northwestern School of Law
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Trade and the Environment
Author:Biden, Joseph R.
Publication:Environmental Law
Date:Apr 1, 1993
Words:2999
Previous Article:Expanding trade and creating American jobs.
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