Written by Professor Christina Eckes and Dr. Roda Verheyen
Commissioned by Umweltinstitut München e.V.
25 April 2023
The conclusion of EU Trade and investment agreements has increasingly become politicised. An important set of criticisms relates to the lack of genuine legal mechanisms ensuring the commitments to sustainability and emission reduction.2 The unqualified endorsement of trade liberalisation and investment protection has come under pressure.3 Mainstream economic thinking based on the theories of absolute and comparative cost advantages by Adam Smith and David Ricardo, respectively, has argued for a long time that trade liberalisationalwaysgenerates economic growth and benefitsall trading countries and their populations. Simply put, free trade brings comparative advantage, which trigger specialisation. This increasing specialisation results in economies of scale, which in turn increase consumer welfare.4 However, this mantra has been increasingly challenged in past years. Public opinion is also increasingly critical of this basic assumption. Ever more production, trade, and hence consumption simply not sustainable.
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