As well as consolidating on the previous chapter, this chapter aims to highlight why benefit cost analysis (BCA) procedures need to be taken into consideration in matters relating to trade relations. From this perspective, it seeks to demonstrate the benefits of environmental considerations – as well as highlight the complications relating to assumptions of links between global climate agreements and job losses. This being elaborated on further under chapter ten in extremely complicated matters relating to wage rigidity and flexibility.
TopIntroduction
The ramifications of the recent U.S Presidential election results are, to an extent, not only consequential for the legacies of previously negotiated free trade agreements such as the North American Free Trade Agreement (NAFTA), but also significant in respect of possible shifts in economic relations. Four key agreements which are certain to constitute the focal point of attention and interest in the coming months, are:
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The North American Free Trade Agreement (NAFTA).
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The Trans Pacific Partnership (TPP) – an agreement between the United States and twelve other nations which are predominantly located within the Asia Pacific region.
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The Trans-Atlantic Trade and Investment Partnership (TTIP) – which is currently being negotiated between the United States and the European Union.
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The Paris Global Agreement on Climate Change.
The results of the Presidential elections – particularly the electoral college vote results from states such as West Virginia, Pennsylvania and Ohio, highlighted the impact of NAFTA, as well as the consequential losses of millions of national jobs in coal, steel mining industries – which to a large extent, constituted the source of livelihood for these states and communities. As well as promising to restore jobs to such communities by President-elect Trump, possibilities of re-negotiation or repeal of certain free trade agreements by the incoming US administration are areas which will be watched with keen interest over the next months. Whilst climate legislation and agreements such as the 1970 Clean Air Act and the Paris Global Agreement on Climate Change, also feature in their role and contribution to investment, it is highly unlikely that these acts of legislation - by virtue of their rigidity and lack of sufficient arguments to justify their repeal, will be subject to many alterations.
The 2015 Paris Climate Summit Agreement witnessed a huge and significant step forward in its legal enforcement, on the 3rd September 2016, following its ratification by two leading parties to the Agreement (herein referred to as the Parties) – namely China and the United States of America. The ratification of the global agreement aimed at addressing climate change, took place at the G20 Summit in Hangzhou, following announcements by President Obama and China's President Xi Jinping to ratify the Agreement – in a move which is widely regarded as symbolic – not only from the perspective of such ratification having been undertaken by the world’s two leading economies, but also owing to the fact that China and the United States contribute to 40% of the global carbon dioxide emissions. Once the deal comes into force, countries that have agreed to ratify have to wait for a minimum of three years before they exit.
It is often contended that stringent environmental legislation has proved costly and resulted in job losses to overseas manufacturing companies – however, greater evidence exists to bolster support that labour and production costs have played greater impacts in job losses to overseas manufacturing firms.