Environmental Issues in International Business

Environmental issues have been engaging increasing discussion in the international business horizon. As in the case of some other social issues in the fore, the environmental issues raised are mostly which disadvantage the developing countries, ignoring or relegating to the background several serious which hold the developed nations or firms from such nations guilty.

Some countries prohibit the import of goods which cause ecological damage. For example, the US has banned the import of shrimp harvested without turtle excluder devise because of its concern for the endangered sea turtles. Countries like India are affected by it.

Developing countries are affected by the relocation of polluting industries from the developed it the developing ones. Similarly, several products which are banned in the developed nations are marketed in the under developed world.

The dumping of nuclear and hazardous wastes in developing countries and the shifting of polluting industries to the developing countries impose heavy social costs on them. The exploitation of the natural resources of the developing countries to satisfy the global demand also often causes ecological problems.

When the multinationals employ in the developing nations polluting technologies which are not allowed in the developed countries or do not care for the ecology as much as they do in the developed nations, it is essentially a question of ethics.

Another serious problem is that developed nations some times raise environmental issues as a trade barrier or a coercive measure rather than for genuine reasons.

The debate has intensified in recent years on the links between trade and the environment, and the role the WTO should play in promoting environmental friendly trade. A central concern of those who have raised the profile of this issue in the WTO is that there are circumstances where trade and the pursuit of trade liberalization may have harmful environmental effects. There main arguments are forwarded as to how this might occur. First, trade can have adverse consequences on the environment when property rights in environmental resources are ill defined or prices do not reflect scarcity This situation results in production or consumption ‘externalities’ and can lead to the abuse of scarce environmental resources and degradation, which is exacerbated through trade. Some of the pollution can be purely local, such as a very noisy factory. Other pollution can have global repercussions, for example, the excessive emission of greenhouse gases, the destruction of rainforests, and so on. Critics argue that trade liberalization which encourage trade in products creating global pollution is undesirable.