The Green Corridor: Green Global Trade

The Green Corridor: Green Global Trade

Global Trade That Ignores Nature Harms Our Future

by Timothy Foote, Director Transportation & Network APAC at Asendia and Founder of Susymbio

Since one person in a village started to exclusively supply firewood and another exclusively made bricks for a fireplace, the benefits of trade have been pushing humanity into every corner of the globe. The ability to specialise and gain comparative advantage in skills allow groups of human beings to do much more than they would have been able to as simple individuals. We get to take advantage of the comparatively higher productivity of others.

Where Does Nature Factor In?

The missing party in the regular economics calculation is nature. We assume that the air will be breathable, that the water will be drinkable, that the food to feed the workers will be endless, and that the very land that the workers do their work at will be liveable. Pollution and methods (to make bricks for example) are not generally in the picture – only the output. GDP and other standard measures in economics boil down output and delivers that as a measure for societies to use. These numbers drive governments and drive global investment. Environment, labour practices, health and other factors are generally left out in these equations. This is especially the case when it comes to trade. Empires were not generally established thinking about the well-being of the environment nor the people doing the work. But GDP alone does not have to dictate how society measures its wealth or success. Indeed more and more other measures are being looked at. For example, the UN developed the “Human Development Index” which focuses on life expectancy and schooling in addition to per capita income of individuals. Recently the UK adopted the “Happy Planet Index” which it feels is much more rounded in terms of actual well being of the people with context to social happiness and environmental health.
These national measures do not generally cross over into the realm of international trade though. Trade is still mostly dollar valuations of products and services. Gains past the pure financial and political aspects are generally something that may be looked at only from the corporate responsibility level.

An example of this is what people do at the grocery store. People make judgements on quality and healthiness based on not only the appearance of a fruit, but also from where the fruit comes from. We consumers think about the insecticides, the water quality, the environmental impact.

Protectionism, populism, nationalism is to a large degree attractive to many people today just because of this purely price oriented foundation of trade. The standards within each country for labour, environment and legal standards are still very different around the globe. On the trading side it causes jobs and investment to move to countries that pay the least. Societies that are affected find themselves in a race in order to save their jobs and usually at the expense of their healthy environment.

Greening Our Trade?

In lieu of enlightened environmental scruples on the international trade negotiating level – activists have had to step in to try and create transparency and responsible practices. Take Fair Trade for instance or the Rainforest Coalition. These organisations were setup to take into account the impact of making products and it requires nature friendly practices in order to get certified. One can argue about the parameters, but it means at least it is being considered and measured. Additionally there is an expectation of performance in nature’s favour.

There is little doubt that Fair Trade certified companies have a less damaging impact verses their non-Fair Trade competitors, but they rely on consumers to select their products, and the adding of additional record keeping and responsible practices can add costs. This can make doing the right thing more expensive in the market place and therefore gain less market share.

But hold on! Isn’t a healthy natural environment to everyone’s benefit? Why should it be up to a few individual consumers and a few conscience companies to create this work around? Why aren’t the rules of Fair Trade applied to all companies wanting to sell locally or overseas?

A more game changing move would be for trade blocks to begin demanding standards protecting nature to be written into their trade agreements. Nations don’t accept into their markets cars that are not certified to be safe – there are standards to trade when it comes to protecting consumer health and safety (though for food there can still be large differences). Why not do the same for environmental practices?

The CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) for instance includes member requirements regarding intellectual property. The same could be done for environmental protection. Currently, the environmental requirement for CPTPP members is that “national laws must be enforced.” That doesn’t demand any standard for the environment, though. One country’s pollution can simply be another country’s acceptable level of industrial, agricultural run-off.
Building in environmental practices standards for industries to have, before they are allowed to export is the ideal. Trade should be on equal terms and it shouldn’t favour exploitative practices.

Trade doesn’t have to be a race to the bottom and be used as an excuse for industries to lower their standards. It should ideally work in the other direction. Let’s put our environment and our future into the equation.

About the Author

Timothy Foote
Director, Transportation & Network APAC at Asendia and Founder of Susymbio

Tim has worked in management positions at multiple MNCs for more than 25 years, gaining expansive expertise in logistical operations. Tim continues to craft delivery solutions for many e-commerce clients at Asendia. Once a regional Head of Go Green at DHL eCommerce, Tim now works for customers to decarbonise their logistics by managing Asendia’s 100% carbon-neutral network.

To further promote a net zero future for the logistics industry, Tim created MOVE GREEN. This is a movement committed to greening the logistics industry during this time of transformation. Please join the companies making a pledge to become net zero by going to Susymbio.com for more details.

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