US vs EU Environmental Policy. Differences in Character and Effectiveness. Implications for Foreign Trade of Environmental Goods

Abstract

The aim of the paper is to present main similarities and differences between the US and EU environmental policy during the recent years and their impact on foreign trade in ecological products. The elimination of trade barriers also increases the efficiency of the world economic system by enabling countries to specialize in those sectors in which they possess economic advantages, which includes those sectors in which they possess favorable natural environmental conditions. In the latter half of the 1990’s one can observe a rapid and dynamic increase in the environmental protection industry’s share in the world economy. The overall global value of production in the environmental protection industry was estimated at 550 billion USD in the year 2001. In relative terms, this environmental market is not as big as the steel or agriculture markets, but roughly the same size as the pharmaceuticals and information technology markets It is estimated that the OECD countries (with special reference to USA and EU) possess 90% of the environmental protection industry. The environmental policy in the EU and US tried to contribute to the achievement of main goals of global sustainable development strategy by new market oriented economic and financial instruments during the recent years. Results of the empirical foreign trade analysis of environmental products presented in the paper cover 11 countries of the OECD including the USA and 7 EU members. It bases on international comparable database for environmental friendly goods calculated by the author according to the OECD requirements (OECD-EUROSTAT, WTO, 1999). The presentation of some important trends in foreign trade of main exporters and importers of environmental goods in the USA and the EU was the effect of this analysis. These analysis is related also to some regulations of the Committee for Trade and Environment of the WTO with special reference to conclusions of the Fourth and Fifth Ministerial Conferences in Doha and Cancun. The paper will also examine the effects of environmental measures on market access within the multilateral liberalization process and compare these effects for the USA and EU.