International trade is projected to continue to outpace growth in global GDP. While economies will increasingly rely on trade, climate change will affect trade patterns and specialization. On the other hand, the free trade and investment regime do have the environmental consequences. So, there is a two-way interaction between the trade and the environment.
In the first part of this assignment you are expected to review the channels and mechanisms through which the environmental degradation impacts the trade and how free trade impacts on the environment (2 pages) highlighting the connections between Trade, Environment, and the Economy (1 page) and the Conflicts between Trade Policy and Environmental Policy (2 pages).
In the second part you will write one page focusing on two of the following macroeconomic consequences resulting from the mutual interaction of free trade and environmental degradation.
1. Impacts on Comparative Advantage
2. Free trade and the structural change and likely impact on GDP of a country
3. Likely impacts on Employment
4. Likely Impacts on Balance of Trade and Payments
5. Terms of Trade Impacts
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