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Jute, Polypropylene, and the Environment : a Study in International Trade and Market Failure

James K. Boyce
Department of Economics, University of Massachusetts, Amherst, MA 01003 USA.

Abstract/ Executive Summary:

In recent decades the international market for jute has been hard-hit by competition with polypropylene, a synthetic material produced mainly in the industrialized countries. The production of polypropylene generates considerable pollution; the environmental impacts of jute appear to be modest by comparison. In other words, jute appears to have a comparative environmental advantage. If so, the internalization of environmental impacts in market prices-for example, via pollution taxes or tariffs-would improve jute's competitive position vis-a-vis polypropylene. This case contradicts the common assumption that tradable goods produced in developing countries have higher environmental costs than competing products of the industrialized countries.

Keywords: Jute, Polypropylene, Environment, International trade, Market failure

Location:

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Jute

Objectives:

To examine the competition between jute and polypropylene

Methodology:

Secondary data has been used from BBS and other sources

Source of Information: The Bangladesh Development Studies,Vol. 23, No. 1/2 (March-June 1995), pp. 49-66 Published by: Bangladesh Institute of Development Studies

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

If the case for jute were framed in the broader context of the displacement of natural raw materials by synthetic substitutes, the number of the parties with an interest in addressing the issue would be multiplied. By adopting this strategy, Southern governments would move beyond a defensive posture in trade negotiations in which they are cast as international laggards in safeguarding the natural environment - to a positive stance founded on the comparative environment advantages of their natural raw materials. In this effort, they would have potential allies in the international environmental movement and in particular, among those people in the North who bear the environmental costs of pollution-intensive production.The case of jute and polypropylene illustrates a more general point: the industrialized countries do not have a monopoly on environmental virtue. Indeed it could be argued that the main direction of environmental dumping in the history of international comiperce has been from North to South. As trade negotiations confront environmental issues, there is a danger that these concerns will be hijacked by Northern producer interests.

Knowledge Management: Journal