ABSTRACT
The Uruguay Round, which was concluded at the end of 1993, was the culmination of an eight-year process of trade negotiations which concluded with the establishment of the World Trade Organization (WTO) on 1 January 1995. Traditionally, GATT negotiators had viewed the environment as a strictly non-economic factor that had little to do with trade negotiations. Free trade is believed to be beneficial for the environment, as it will avoid the quagmire of suppressed prices that commodity exports commonly suffer. The second way in which free trade is expected to improve the environment is through international competition, which is alleged to be environmentally beneficial because of the efficient use of resources, higher productivity and increasingly efficient technologies. International trade has the power to create opportunities and support livelihoods. Free trade theory has been abstracted from many complicated factors. Environmental externalities are a type of comparative advantage in international trade.
