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[GreenYes] Free Trade & Recycling
    According to the 2/12/01 Waste News ("Bottle-deposit battle shaping up in Germany"), Germany is considering legislation mandating deposits if the market share of reusable bottles falls below specified levels. Of note is the fact that the German Association of Mineral Water Importers is challenging the proposal as a violation of "European Commission rules against distorting competition and argues that it has no environmental justification."

    This follows earlier claims to the WTO that recycled content laws also violate free trade treaties.   Trade officials, for example, have made this statement: "[I]s a bottle made from recycled glass 'like' a bottle made from raw materials for the purposes of trade policy? From one perspective, the two bottles are not the same and may warrent differential treatment in
environmental policies. But from another perspective, the bottle has the
same environmental impact when it is disposed of regardless of its recycled
content, and differential treatment according to recycled content, such as
an extra materials tax, may seem unfair." 

    What this view of trade officials misses, I believe, because it has not previously
set up any linkages with the recycling programs to understand their
rationale, is the ECONOMIC basis for content laws. That is to say, it may very well be true that the environmental impact of a recycled content container in a landfill is the
same as a virgin content container.  But, the issue is far wider.  The
relevant question is how to economically sustain diversion efforts in the
absence of strong, high paying markets.  Once that is seen as an essential
and valid and non-discriminatory element of the equation, the outlines for
legitimate content rules can be better understood consonant with free trade
principles.  Here, content laws are really an economic tool unrelated to discriminatory
roots to protect the environment from undue landfilling.

    While increased international trade can certainly contribute to a net increase in global wealth, the phrase "free trade" as presently employed is increasingly taking on a perverse definition that has nothing to do with economic principles. Rather, the very serious potential latent in free trade treaties to become transmuted into a political cudgel seeking to spur a race to the bottom of environmental protection.

    What "free trade" will mean in the 21st century, in the end, will be a function of tug of war between competing interests, of which the environmental interests that recycling is a part of is just one small part.  If we do not focus far more of our energies and speak with a louder voice on this ticking time bomb in the months ahead, we'll wind up at the mercy of distorted market forces that fail to internalize externalities, without any policy options to correct for those distortions.

Peter Anderson
4513 Vernon Blvd. Suite 15
Madison, WI 53705
(608) 231-1100/Fax (608) 233-0011

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