Before countries send their negotiators into trade talks, they first do their best to understand how the different negotiating scenarios will play out in their domestic economies. In which sectors should they be fighting hard for reduced tariffs, and in which should they be striving to maintain protection? Without an idea of where their interests lie, based on an assessment of potential economic impacts, they would be negotiating without having the full picture.

The same logic underlies the idea of environmental assessment of trade liberalization agreements. A country's well-being is not only affected by the economic impacts of trade agreements, but also by how such agreements affect the environmental and social structures, thus the growing interest in an assessment which considers the implications for the environment (see Box 6-2). Perhaps the greatest value of environmental assessments in identifying problems and possibilities is that they bring a wide variety of perspectives to the analysis, including those of non-trade governmental ministries, and non-governmental organizations with expertise in environmental and social issues. The scope, boundaries and focus of such assessments, however, will have to be determined by countries based on their development priorities and other environmental and socio-economic considerations.

Environmental assessments grow out of an established legal institution in many countries, where it is required to conduct environmental reviews of certain types of projects and policies. In some countries the procedures to be followed in such reviews are spelled out in great detail. Usually, they will include extensive participation from the public as part of the process.

A number of options are available for the timing of such assessments. They can be conducted before negotiations take place, to help shape negotiating positions. They can occur continually during negotiations. Or they can occur after the negotiations have finished, to try to identify the effects of a concluded agreement. In fact, all three options are different exercises and serve to complement each other.

Assessments often strive to identify not only potential problems, but also policies that could address those problems. These might be so-called "flanking" measures—complementary policies or measures to mitigate expected impacts, such as increased environmental protection. They might also be safeguards built into the liberalization agreement itself. Or they might be modifications to the proposed scope or depth of liberalization.

The challenges of conducting thorough environmental or sustainability assessments are enormous. Very few, if any, countries have adequate environmental data. And even with such data in hand, analysts then need to model how trade liberalization has impacts on the economy, and how environmental effects flow from those economic changes. If the analysis is expanded from an environmental to a sustainable development focus, we add another layer of complexity. How do we bring in such key variables as income distribution, health, nutrition, education and urban migration? Despite the complexities, sustainability assessments will probably continue to be undertaken and refined, since a blurred vision of the future is better than none at all.

Chapter 6: Suggested readings