This overview is divided into two main sections. The first sections reviews the literature on the impact of economic globalisation (involving of liberalisation of international trade and investment) on the state of the environment and sustainable development. While the WTO and Bretton Woods institutions believe that this impact can be expected to be favourable, divergent rational views can be found in the economics literature. A review of the relevant literature reveals that the situation is far from being black-and-white – there are grounds for rational doubt not withstanding the use of Environmental Kuznet’s curves, which on the surface seem to provide grounds for optimism. The second main section dealt with the attitude and policies pursued by GATT-WTO in relation to the environment and sustainable development. These appear to be based on orthodox neoclassical economic theory which is mostly static in nature. In practice, virtually no allowance is made by the WTO for the environment and for sustainable development. The Rio Declaration, Agenda 21 and the Winnipeg Principles have had little or no impact on its policies. A charitable interpretation of its policies would be that it is pursuing weak conditions for sustainable development. Both changing public opinion and evolving academic thought are raising major challenges to WTO’s basic theory and its approaches to environmental protection. Different views expressed at the Seattle Meeting cannot continue to be ignored. New efforts are needed to ensure that WTO plays a more constructive role in the future in coordinating trade, environment and development, and a way forward is suggested.
