In 1990, three major U.S. canneries announced that they would only sell tuna that was caught with dolphin safe methods. Labeling their products as dolphin safe became a way to differentiate the product by the process, by appealing to consumers desires to purchase dolphin safe tuna. Then in 1992, 10 countries (including the U.S. and Mexico) adopted the La Jolla agreement, which established an international limit on dolphin mortality rates among tuna fishers. From 1989 to 1993, dolphin deaths declined from nearly 100,000 to 3,600 (Christopher, Mexico's Marine Conservation Efforts. Dispatch, May 1, 1994, pg. 19), an impressive drop made possible through international negotiations.
On the other side of the issue, free-traders like Paul Krugman argue that there is little reason to insist on global environmental standards, as doing so could diminish the gains from trade. Krugman correctly notes that, "international trade is really just a production technique, a way to produce importables indirectly by first producing exportables, then exchanging them". He then goes on to add, that "it does not matter from the point of view of the national gains from trade whether other countries have different relative prices because they have different resources, different technologies or different environmental standards. All that matters is that they be different then we can gain from trading with them." (Krugman). While theoretically correct, Krugman's argument carries the implicit assumption that the U.S. is a rational actor whose sole aim is maximizing national gains from trade. In the real world, this assumption is not plausible. We know from experience that for whatever reasons, many Americans do have an (apparently economically "irrational") interest in preserving the Amazon or protecting endangered species in China. In this era of globalization, the benefits of liberalization must be carefully weighed with the environmental costs, in an effort to produce a socially optimal equilibrium. Krugman is accurate in saying that uniform harmonization of environmental standards is inappropriate, as different countries have different pollution problems and varying valuations of environmental damage. However, something must be done to ensure that trade liberalization is accompanied by appropriate environmental policy.
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