1 Tokyo, 19-20 June 2007 RTAs and The Environment: Internalizing the Externalities at Regional Level by LAKSMI DHEWANTHI Ministry of Environment, Indonesia.

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Tokyo , 19-20 June 2007

RTAs and The Environment: Internalizing the Externalities at Regional Level

by

LAKSMI DHEWANTHI

Ministry of Environment, Indonesia

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Key pointsKey points

BackgroundBackground What are the main environmental What are the main environmental

issues in the region?issues in the region? Can trade internalize the Can trade internalize the

externalities?externalities? Efforts at Regional levelEfforts at Regional level Closing Remarks Closing Remarks

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BackgroundBackground

Trade has the potential to stimulate economic, Trade has the potential to stimulate economic, social and environment. Yet, to ensure that this social and environment. Yet, to ensure that this trade is environmentally sustainable is a major trade is environmentally sustainable is a major challenge;challenge;

In this regard, it is necessary to ensure that trade In this regard, it is necessary to ensure that trade liberalization does not have a negative impact on liberalization does not have a negative impact on the environment, and that economic growth is the environment, and that economic growth is environmentally sustainable;environmentally sustainable;

Increase negotiation on and discussion of trade Increase negotiation on and discussion of trade and environmental issues and environmental issues increased the increased the challenges confronting developing countries as challenges confronting developing countries as they attempt to formulate coherent trade and they attempt to formulate coherent trade and environment policies. environment policies.

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Over-exploitation of Natural Resources and Environment

in the last 3 decades

Indonesia

trade contribute to better natural resources and environment? orWeak environmental management lowering competitive advantage

in trade?

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What are the main What are the main environmental issues the environmental issues the

region?region?

Rice, pulp and paper, and palm oil are among other key trade commodities, not only for Indonesia, but for most of countries in the ASEAN region

ENVIRONMENTAL IMPACTS

• Increase in Land Conversion (land use shifting)• Decrease chemical fertilizer/pesticides use• Haze pollution• Marine pollution• Lost of biodiversity

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Can trade internalize the Can trade internalize the externalities?externalities?

Current environmental condition is due to Current environmental condition is due to negative externalities of development activities, negative externalities of development activities, incl. trade. incl. trade.

Isolating the impacts of trade from the impacts Isolating the impacts of trade from the impacts of other activities is difficult.of other activities is difficult.

Environmental impact is site and time specific, Environmental impact is site and time specific, yet it also cumulative in natureyet it also cumulative in natureASEAN region: regional environmental ASEAN region: regional environmental

impacts and transboundary environmental impacts and transboundary environmental impacts (haze, marine pollution, etc)impacts (haze, marine pollution, etc)

by internalising environmental factors/ by internalising environmental factors/ impacts into trade policy measurementsimpacts into trade policy measurements

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Efforts at regional Efforts at regional levellevel

No specific references of environmental measurement within RTAs. Yet it has always been aimed at fostering regional peace and stability (incl. environment);

Development of testing and certification of testing and certification and development of regional infrastructure;and development of regional infrastructure;

Regional cooperation on R&D, and Regional cooperation on R&D, and exchange of information on traditional and exchange of information on traditional and environmentally preferable production environmentally preferable production methods suitable for local condition;methods suitable for local condition;

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Efforts…. (2)Efforts…. (2)

Development of regional strategies for Development of regional strategies for improving sustainable trade, including improving sustainable trade, including through strengthening south-south trade through strengthening south-south trade

WG-MEAs, a forum to provide extentisive WG-MEAs, a forum to provide extentisive discuss implementation and development discuss implementation and development of MEAsof MEAsHaze pollution, Biodiversity, Climate

Change, hazardous waste, POPs, etc

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ASEAN WG- MEAASEAN WG- MEA

dialogue among member countries on implementation of MEAs, icl. Conventions: Basel, Rotterdam, Stockholm, Climate Change, etc.;

Raise awareness and build the capacity of all stakeholder, i.e. information exchange and dissemination, transfer of knowledge/ technology, training/workshop, and incentive/financing mechanism.

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BenefitsBenefits Having regional efforts allow country to Having regional efforts allow country to

address, both, regional and transboundary address, both, regional and transboundary environmental impact;environmental impact;

Reducing negative impacts by internalizing Reducing negative impacts by internalizing the externalities into regional policy the externalities into regional policy framework framework accelerating internal/ national environmental policy processes;

Enhancing MEAs implementation, Enhancing MEAs implementation, especially through joint efforts, capacity especially through joint efforts, capacity building, financing mechanism, dll.building, financing mechanism, dll.

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Closing remarks

Trade relating to Environment Issues is only one side of the coin, in order to achieve and to ensure a “win-win-win” situation ensure a “win-win-win” situation it is need to it is need to internalizing environmental impacts into policy internalizing environmental impacts into policy making process at all levels; making process at all levels;

MEAs as a multilateral poicy framework could MEAs as a multilateral poicy framework could be support by regional comittment and efforts. be support by regional comittment and efforts.

Regional efforts on internalizing the Regional efforts on internalizing the externalities would able to address externalities would able to address environmental impacts resulting from trade. environmental impacts resulting from trade. Yet the capacity building and technical Yet the capacity building and technical assistance must result into reasonable costs.assistance must result into reasonable costs.

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Thank youThank you