Former U.S. Ambassador to the General Agreement on Tariffs & Trade Michael Smith astutely noted that the environment is the trade issue of the 1990s, and that, unless a considered solution is developed to allow constructive interaction between trade and the environment, each of these vital policy spheres may find themselves compromised. Put in “Smithese,” “[t]he question is whether you want to lay down in front of the train or get in the cab and steer it.” Steering is the preferable approach.
As the contributions to this issue demonstrate, the steering process for trade and environment policy indeed has begun. The dialogue is rapidly evolving from its early emphasis on potential conflicts between trade and environmental policies to a more positive attempt to minimize or eliminate frictions between these two policy spheres. Though this evolution is positive from both trade and environmental perspectives, it simply does not go far enough. We need to rethink the course we want to steer. True advancement of both ecological and economic imperatives will occur only when trade and environmental policies are mutuaily reinforcing. “Competitive sustainability” defines a mechanism for realizing sustainable development through the “upward harmonization” of domestic and international environmental standards, using competitive forces to create a level playing field for commerce at consistently higher levels of environmental and social protections that reward the cleanest and most efficient economic actors for their efforts. The goal here is not to overburden economic activities, but to put them to work for the environment. By focusing economic activities, through incentives and disincentives, in directions that yield both economic and environmental benefits, these economic activities can become engines to drive standards of living-broadly defined to include economic, environmental, social, and health stability and security-upwards.