chapter  15
20 Pages

Globalization, North–South industrial location and environmental competition

ByARSÈNE RIEBER AND THI ANH-DAO TRAN

Along with North-South trade negotiations, concerns with the environment are the issues likely to dominate the international arena in decades to come. In the public debate, it is often claimed that polluting industries are likely to relocate from developed to developing countries in order to take advantage of lax regulations. In the newly globalized economy where firms can freely move across country borders, the North may then fail to upgrade environmental standards to the appropriate levels as stricter regulations may drive industries away. Unless policy harmonization and collective management of common resources are implemented, international competition among individual countries undermine any regulatory efforts of governments. The “ecological dumping”1 of the South would then be responsible for the regulatory chill in the global context. From the point of view of Southern economies however, the historical responsibility with regards to environmental degradation incontestably lies with the developed countries (cf. recent conflicts which have arisen with China). Along their development process, they face different resource and environmental constraints which impede their efforts to quickly promote people’s quality of life, while protecting their natural environment. In this context, environmental regulations are often assumed to hinder their industrialization process and economic development. These contradictory appreciations therefore emphasize the need for a global action on environmental challenges.