THE ENVIRONMENTAL-EFFECTS OF AGRICULTURAL TRADE LIBERALIZATION IN LATIN-AMERICA - AN INTERPRETATION

The trade and environment debate has focused attention on the possible contradiction between promoting free markets while meeting domestic e nvironmental objectives. This paper takes a view from the South. Recen t econometric models predict net effects of expanded agricultural trad e to be positive for the global environment. Yet, further pressure on degraded resources and marginal farmers, and a reinforcement of sector al policies that benefit commercial export crop growers as opposed to food producers may make increased trade more of a bane than a blessing for developing countries. In the context of emerging regional trading blocks in Latin America (NAFTA and Mercosur), removal of trade barrie rs between participating nations has led to dislocation of production whose localized impacts, it is hoped, would be resolved through 'recon version' of agriculture in affected subregions. It may be, however, th at internalization of socio-environmental costs of such dislocation wo uld indicate that production, despite competitive disadvantages, would best have been left where it was. To gain a better empirical understa nding of the links between agricultural trade policy and the environme nt will require prediction of ecosystem stresses anticipated from alte rations in how producers grow crops in specific geophysical settings, rather than reliance on stylized facts. (C) 1997 Elsevier Science B.V.