Trade is one of the oldest forms of business in the human world and has taken place worldwide, not only between neighbouring countries but also across the globe. Many pathways have been specially curated to ease the trade of goods and services between many nations and countries. One of the major routes is the Suez Canal, constructed by the British and the French in 1869. However, the question to assess Trade comes to mind as many environmentalists point out the hazards of Trade and the negative effect it might have on the environment. On the other hand, many also claim that Trade is actually more beneficial for the environment than otherwise. In effect, it can be said that Trade has both negative and positive effects on the environment.

Positive Impact of Trade on the Environment

The relationship between the Trade and the environment is a strong one that goes together hand-in-hand. The environmental impact of “trade liberalization” has been divided into many types, including the scale, technique, and composition affect—the liberation of trade results in the expansion of economic activity and growth.

The Scale Effect

The scale effect suggests that it must be recognized that the balance between maintaining economic welfare and keeping pollution levels low is a hard one to maintain.  In simple words, “if the scale effect dominates technology and composition effects and if externalities are not internalized, economic growth will always be harmful to the environment” (Stoessel).

Trade and national incomes are also very closely linked; as trade increases, national incomes also see a rise. This, in

turn leads to improvement in environmental aspects and quality of the surroundings (Grossman & Krueger, 1993; Copeland and Taylor, 2004).

The complex nature of the number of positives and negatives of Trade reminds us that Trade does not entirely lead to causing harm to the environment (Copeland and Taylor, 2004).

Keeping in mind the nuanced nature of the debate, it is very difficult and perhaps unfair to come up with a conclusively decisive answer.

The Environmental Kuznets Curve (EKC) helps explain the phenomenon that “raising incomes per capita are not linearly correlated with environmental deterioration. Rather, pollution increases in its early development stages until it reaches a turning point, and then declines since concern with environmental quality increases and long-term issues start to prevail” (Stoessel, 2001Copeland, 2005Copland and Gulati, 2006).

The Technique Effect

Many academics and researchers agree that 75% of technological advancements have been due to Trade. This model suggests, “New technology is thought to benefit the environment if pollution per output is reduced. Furthermore, if the scale of the economy and the mix of goods produced are held constant, a reduction in the emission intensity results in a decline in pollution. Hence, the technique effect is thought to have a positive impact on the environment.” (Stoessel, 2001Mathys, 2002).

The Composition Effect

This model propagates that “Trade based on comparative advantage results in countries specializing in the production and trade of those goods that the country is relatively efficient at producing. If comparative advantage lies in lax environmental regulations, developing countries will benefit, and environmental damage might result. If instead, factor endowments (e.g., labor or capital) are the source of comparative advantage, the effects on the environment are not straightforward. Therefore, the impact of the composition effect of Trade on the environment is ambiguous.” (Mathys, 2002Stoessel, 2001).

Economic Growth

Trade with other countries can lead to growth on two levels, one for the trading partners, and the second for the indirect stakeholder countries that will be affected in the long term. Moreover, Trade, by pushing forward economic growth, has the capacity to lead to societal progress. This may be because development will be taken place as a result of an economic boom that will contribute to increasing the environmental capacity for efficiency. Further, the economic boom may also lead to advancement in research and development that will directly impact local and international production operatives and may discourage the use of dangerous substances in the field of production.

Environmental policies

Another positive aspect of trade and commerce is that the process can result in the development of the objective of manufacturing and adopting pragmatic environmental policies and legal standings. This is so because the introduction of a country in international Trade exposes its trading sector to the other country’s trading sector and the involved checks and balances included in the exchange of Trade make the countries involved to better their trading policies and to integrate acceptable environmental policies that may contribute to the positive image building of the country in the international community. Hence the changes introduced in the supply chains and the associated trading sector enhances the importance given to the environment and makes Trade beneficial for it. This is essentially what Rose and Rankel (2005) suggest in their “Gains from Trade” Hypothesis that was a built upon the ideals and teachings of Adam Smith and David Ricardo whereby as per Smith, “the gains from trade arise from the advantages of division of labor and specialization—both at the national and international level.” Also, according to Ricardo, trade contributes “to increase the mass of commodities, and therefore, the sum of enjoyments…”.

Many people who are supportive of trade purport that trade boycotts and restrictions are in actuality, not helping to the improvement of the environment. Many international bodies and communities have recognized this argument and have united to improve Trade in an efficient manner. For instance, the formation of World Trade Organization (WTO) in 1995 has tried to bridge the gulf between these two discrepancies. WTO constantly works to propagate green economy and sustainable development; it has also introduced many policies to protect the environment. It is mentioned on the WTO website that “In the WTO, the Committee on Trade and Environment started its work on environmental reviews in 1996 under Item 2 Environmental protection and the trading system of its work program.

In 2001, the importance of environmental reviews in WTO trade negotiations was confirmed in paragraph 6 of the Doha Declaration. This reads We take note of the efforts by Members to conduct national environmental assessments of trade policies on a voluntary basis.

In Paragraph 33 of the Doha Ministerial Declaration Ministers “encourage that expertise and experience be shared with Members wishing to perform environmental reviews at the national level.” The continued work in the committee is based on this.

The importance of reviews was also confirmed in the Johannesburg World Summit on Sustainable Development’s Plan of Implementation of 2002.”

The Doha Declaration is testament to the fact that WTO is determined to ensure that Trade does not cause environmental destruction but rather propels the development of the environment with the help of Trade.


Negative Impact of Trade on the Environment

However, trading with other nations also posits many potential dangers.

Growth may lead to Pollution

One of the major negatives of Trade may be the resulting pollution due to the excessive degrading of resources used as power to make Trade possible. There is also a direct impact on climate change that results from Trade. The process of trading with countries far away from the home country may lead to intense weather changes and the severe changes in the content of the sea. Maritime transport is particularly harmful in some cases. It accounts for about 80% of the total international Trade and the chance of oil spills increased because of this high number.


Reports from International Tanker Owners Pollution Federation Ltd (ITOPF) suggest that

“between 1970 and 2016 approximately 5.73 million tonnes of oil were lost as a result of tanker incidents As single large incidents can be responsible for a huge share of all the oil spilled in a given year, it is advisable to look at trends or decade averages. Over these 43 years, the annual quantity of oil spilled decreased hugely. In the 21st century the quantity of spilled oil was smaller than in several single years in earlier decades. 2012 saw the lowest oil spillage on record so far: 1000 tonnes were spilled. The development can be seen in the following visualization.

Since reports on small (<7 tonnes) oil spills are less reliable only medium-sized and large oil spills are included in these estimates. These are the oil spills presented in the chart before (above).”

Oil spills have been known to cause extremely harmful environmental problems such as damaging the ecosystems and natural habitat found in beaches, ocean and seas that may affect birds, marine mammals, fish, and many more. Long term impacts of the oil spills are flabbergasting and intense. For instance, the short term impact on the sea turtles includes their difficulty in reaching the seashore, but the long term impact may include their eggs failing to develop properly in the oily field or platform and leading to a substantial decrease in the quality and quantity of the species.

Oil spills may also have deadly consequences for a larger marine community. Oil spills are known to repeatedly kill marine life including dolphins, whales, sea otters and many more. The oil property of blocking breathing regions of sea life is a significant factor in leading to the death of these mammals. Oil can completely or partially disrupt can the blowholes of the larger mammals that might hinder their breathing. Other than that, oil coats on animals can also lead to several harmful internal and external diseases such as hypothermia.

An example of the far-reaching impact of the oil spills is the Exxon Valdez oil spill that lead to the death of about more than 2500 sea otters, about 300 harbor seals, and approximately 22 killer whales. That is just the momentary and visible cost of the oil spill. An extensive team of scientists later carried out a longitudinal study of the affected region and found that the effects of the spill could be felt even years after the spill. These consequences included the increased death rate and extremely stunted growth. It is after thirty-five years of the disaster that the team found that the Prince William Sound ecosystem finally smelled of being on the path of recovery and other apparent effects on many animals such as the sea otters seemed to have disappeared as well.

It is also important to note that related carbon emissions are also closely linked with Trade as according to a survey in 2015, the transportation sector combined which is the largest contributor of providing Trade and making it a possibility in the first place, amounts to about 18% of the total carbon emissions.

Those who oppose the concept of globalization point out that Trade is harmful to the environment on a global scale. These people usually believe that “in open economies a race to the bottom in environmental standards will result from governments’ fears that enhanced environmental regulation will hurt their international competitiveness, the result is a race to the bottom in environmental standards.”

Jeffery Frankel and Andrew Rose Study – A Fall to the Top

The Research Associates at NBER, Jeffrey Frankel and Andrew Rose, studied the consequences of the prevalence of Trade in 1995 in a positivist analysis. Their findings included that “the impact of Trade on at least three kinds of air pollution appears to be, if anything, beneficial, not adverse, for a given level of income. Openness, measured as the ratio of Trade to income, appears to reduce air pollution. The level of statistical significance is high for Sulfur Dioxide (SO2), and moderate for Particulate Matter and Nitrogen Oxides (NOx)”.

However, it must be kept in mind that correlation does not equal causation. The apparent linkage of the two, between pollution and Trade, could have arisen from someplace else. There is a high chance that the places or countries that have more implementation of democracy might be more inclined towards Trade and may be more concerned with improving environmental facilities and policies. Moreover, there is also another postulation that higher levels of national income might be liked with Trade and environment in more than one way.

This study tested the causality between the concept of Trade and how the environment is linked with it. It does so by keeping the income level constant and under control while testing the outcome of free Trade on the environment. Later the researchers focus on exogenous factors such as distance, other geographical aspects, scales of growth, investment, education, and population.

These researchers also make use of the “Environmental Kuznets Curve” to measure the three aspects of air pollution. This concept, as explained in their study, suggests that “growth harms the environment at low levels of income, but helps at high levels. At higher levels of income per capita, growth stimulates the public’s demand for improving environmental quality, which in democratic societies is brought about through environmental regulation.” The researchers postulated that “SO2 pollution, for example, peaks at income levels of about $5,770 per capita, and thereafter starts to decline.” This analysis is in-line with many economic teachings that put forward that growth leads to many different types of pollution, such as air and water, especially when the region is going through industrialization. However, this gradually and ultimately leads to a reduction in pollution since with the passage of time, countries involved gain a stronger economic standing and become self-sufficient to clean up the pollution they create. It can be said that where the technology involved in Trade leads to pollution, it also leads to an increase in the income levels that ultimately aids in leading to an increased demand in environmental quality that places a force on the supply side to make positive changes in the environment.

The study of Frankel and Rose conclude that it is after a fall in environmental conditions that a change is observed in the environmental patterns and the environment starts to see an improvement. This entails that in the short run, Trade may deteriorate the environment to an extent, but in the long run, it actually benefits the environment by improving the conditions.

Conclusively, it can be seen that the impact trade has on the environment is multifaceted. There are many positive outcomes and many negative consequences of Trade on the environment. Some positive results include the models of the scale effect, the technique effect and the composition effect; moreover, the economic growth and the improvement in environmental policies. Trade also has some seriously dangerous consequences that include the overbearing cost of pollution. Pollution of different types is caused by many surrounding aspects of Trade. For instance the transport burden leads to the emission of harmful carbon emissions. A major threat is posed to marine life because much of the Trade is carried out using ships and cruises via seas and ocean routes and there are serious cases of oil spills whose consequences may last for decades. Lastly, the study by Jeffrey Frankel and Andrew Rose serves as a bridge between these two opposing beliefs. Their findings postulate that Trade initially will result in environmental harm but, in the long run, can actually improve the environment. 


World Trade Organization,

Nicolas Korves, Inmaculada M. Zarzoso, Anca M. Voicu, (2011) “Is Free Trade Good or Bad For the Environment? New Empirical Evidence,”, September 9th, 2011

Shruti, “The Gains from Trade (An Overview),”

“Is Trade Good or Bad for the Environment?”,, May 28th, 2020

Larry West, (2020) “5 Environmental Consequences of Oil Spills”,, February 4th, 2020




Significance of selected industry for the economy

The Moroccan economy is based on tourism, agriculture, and phosphate. The seafood and fish also play an integral role in the Morocco economy. Gross Domestic Product of Morocco is dependent on mining and industry. After China and the US, Morocco is the third large producer of phosphate. Therefore, it holds a central significance for the economy. Morocco phosphate is an important mineral that has diverse usage. Due to the production of mining n four different sectors, its significance is increased. These four sectors are Boucraa, Youssoufia, Benguerir, and Khouribga. The mining in Khouribga is carried out on the deposits of OuladAbdoun phosphate. These phosphates are found 140 kilometers southeast Casablanca.

This mine has greater potential for extraction and estimated as 17-18 million tons on an annual basis. The extracted phosphate from this mine is exported globally. The ores found here are different quality and substantial support to the chemical industry worldwide. Moreover, this is also supportive of the JorfLasfar chemical industry hugely. A state-owned company OCP is responsible for the ownership and control of Morocco phosphate. It stands for Office Cherifien des phosphate. The extraction potential is key to understand the value of chemicals. OCP operates on five continents (Update, 2019). Since 1920, its creation is set up at the international level. Later, the operations are developed into adjustment, anticipation, and flexibility capacities with the requirement of a competitive industry.

Morocco has OCP as the largest enterprise, so it has employed more than 2% population, so it has contributed significantly to reduce the unemployment level in the economy. The company also provides training to the labor force, so it is a contributing buildup of skilled people in the economy (Encyclopedia Britannica, 2019). Morocco houses about two-third of the phosphate reserves of the whole world, so this is a higher league as compared to Russia, China, and the US. Morocco has four main producers of phosphate, so the reserves account for 50% of the global reserves. The consumption growth of phosphate in Morocco is estimated at as1-2% per annum. These economically exploitable reserves hold central significance in the Morocco economy, so it is taking measures to reduce the prices of phosphate in 2008 (Babali, B. 2019).

An estimated investment of $4milllion, the economy is planning to increase the production of phosphate from 30-55 million tons per annum. The analysis provides that the GDP of the economy is significantly affected by this growth and export. So the country is famous for attracting foreign investment and other countries to increase business relationships and collaboration with the phosphate industry (Update, 2019).

Political and Economic Influence of the Phosphate Industry

Morocco’s export market in Europe has faced successive shocks due to the financial crisis. The stronger position of Morocco’s economy is due to strategic advantage. On the political side, it gas faced political issues with Arab neighbors that created difficulty in maintaining growth. World economic forum reported that Morocco is a competitive economy of North Africa and stable in terms of democracy. After the constitutional changes in 2011, the elected government faced a strong role of parliament among developing countries (Rarick, 2011). The plan of government to capitalize on the strategic location was to focus on the African and American markets. The development strategies of the economy regarding mining and chemical have faced a great set of reforms and policies aiming at growth.

The phosphate industry is facing huge advantage of the growth, and its presence in Morocco’s geographical areas has created wealth, job training, and better supplier connections. Due to the wellbeing of its employees and contribution to improving GDP, political influence is increased. Peace and Security Council of Africa decided that Morocco will not enter in the contracts of exploration and exploration of natural resources of Western Sahara. The decision shows that Morocco faced criticism about not showing up at the meeting of Sahara. Morocco aims to be the large producer of fertilizers and phosphates, and by 2017, this production was increased to 12 million tones.

The big plans of OCP under construction framework and fertilizer production are elapsed at US $2.4 billion investment for a period of five years. In 2016, OCP signed a contract with the Dangote group, which is by the wealthiest person from Africa and Nigeria. These domestic and foreign plans of Sahara with Russia show political goodwill about phosphate partnership, which is relevant to the economy of Morocco. In Sahrawi and Nigerian news sources, the phosphate related collaboration can be a misunderstanding because most of the phosphate and fertilizer is sold to factories and mines. Towards political aspects, Morocco is a leader of Arab states and Mediterranean unions. The stable status of politics in Morocco has international influence. For instance, phosphorus is a chemical fertilizer, and this industry will be engaged in more than 65 new production units and by 2017-2021 (Update, 2019). The stable political status of the economy is seen in all the aspects and industries, so effective measures have been taken for universal education and securing human rights as well as employment opportunities.

Demographic Profile of the Labour Force

The living standard in Morocco is not up to the international level, and a decline is seen since 1990. People living below the poverty line are increasing, so since 1991, 19% are below the poverty line. Another reason for this is uneven development and the emergence of the affluent class. The flexibility of the labor market in morocco is not estimated, but it describes financial productivity and inflation rate. The structural changes in labor 2019 have reported that a shift in labor and productivity is seen from industry to services sector. On account of the phosphate industry, the labor force has specific records, for instance, unemployment is a challenging issue, but due to the phosphate industry, a trained labor force exists in Morocco. The North African average is estimated as 10-12% for unemployed people, while 9% of women laborers are a part of regional unemployment when measured on average (International Monetary Fund, 2019).

In Morocco, no specific unemployment gender gap exists, but data by ILO reveals that a steady rate is observed in the past decade. Youth unemployment is also increasing, while in the past ten years, this ratio is hovering over the regional average. As compared to Arab countries, Moroccan workers are manly working in the agriculture and mining sector (Rarick, 2011).

In the Morocco phosphate industry, the unemployment ratio is at a declined level as compared to other sectors. North African estimates state that 65% of the unemployed force is estimated for a year, while 52% are job seekers. The government is paying job security (social) and medical insurance to employees. If the higher education sector is observed, the unemployment rate is high, and since 2012, this ratio is increased to 6.8% (White, 2015). In the mining and quarrying sector, total employment is 67,664 in 2012, while this sectoral share was 0.6%. The ratio of men employed in this sector was 98%. The estimates show a positive result for the phosphate industry that this sector is engaging more people and increasing the employment level (Update, 2019). In addition, the Gross Domestic Product of Morocco due to mining and quarrying was 3.2%, while per-share GDP in US$ is 64,651. Different channels explain the gender gap and growth rate of employment; for instance, women’s participation in the labor force increases the talent of potential entrepreneurs. The participation rate in the labor force is 25% overall that highlights the case of lags. The Moroccan labor market experiences gender gap. There are gender disparities observed in the participation of the rural and urban areas of the labor force (Ashford, D.E.1961).The employment rates in different sectors, particularly the mining sector, face the rate of unemployment, despite training and formal jobs (Prettitore, P.S. 2015). However, this ratio is minimal, and the labor market is facing mismatch under regulation, yet this impact is acute for women.Moroccan has taken measures to reduce the prices of phosphate in the past. Though it is a large country to produce phosphate rock in the world, yet its labor force is facing different issues. Despite training, involvement, and job opportunities for the labor force in Morocco, specifically in the mining sector, there is a gap in labor force participation.

The manufacturing sector in Morocco is contributing to the GDP of the country (Watch, 2020). Raw material and transportation sectors are linked to the mining sector, and there are enormous opportunities for the labor force to participate, yet some lags exist, and a need to improve this labor force participation is inherent. Though the mining sector is attracting the attention of the private sector and other state operations as well as foreign sources. Processing of phosphate and export needs of fertilizers is a key part that needs the involvement of the labor force. The economic activity of this sector, in relation to labor force participation, is a significant attempt of government because, with the increase in global collaboration and investment, the export will be increased (White, 2015). Morocco’s economy needs an emphasis on the added value of phosphate due to the increased focus on exports. The government is attempting to control basic hurdles and challenges for the labor force to enhance their participation in the mining sector since this will enhance the GDP of the economy (Medsocialdialogue, 2016). The involvement of labor in producing phosphate is inherent for the economy, and this will transform the industry as well as its capabilities.

Evaluation of Economic Growth

The economy of morocco needs high investment as well as private sector growth to reduce unemployment and increase job opportunities for youth. There are some weaknesses in a competitive business environment for small and medium enterprises development. The role of the government to improve private sector involvement is supportive for the acceleration of mining sector growth (Rarick, 2011). These reforms are reinforcing and boosting a rich growth tendency. The public sector involvement, efficiency, and governance are linked to anti-corruption policies and transparency. For the progress, administration, and promotion of government policies, there is an increased need to reduce corruption as well as vulnerabilities in all the mechanisms. The information access law is enacted in 2019 to facilitate all feedback received from the public. The economic forces are now aligned with the communication perspectives, and national strategy implementation is focused that will increase the public trust level (Watch, 2020).

Morocco’s economy has stable politics and enormous natural resources, i.e., phosphate industry potential. This scope can easily attract foreign investment and activate anti-corruption policies. The public sector efficiency for the economy is significant. Civil service and quality of public investment are linked to reforms that can help maintain public wages (Hahn, T. and Auktor, G. 2018). These motivating factors for the labor force can increase the engagement of people and youth. In the Morocco economy, fiscal decentralization in 2018 presented transparent criteria for the public resources in the region. The public enterprises are also working for the financial management level, and it is helpful for the adoption of a strategic approach. The public investment management is linked to increasing the efficiency of public investment because of improved execution and better coordination of public, private partnership welcome labor participation (Rarick, 2011).

The Morocco economy has much potential that can be cultivated by focusing on the transparent involvement of private companies (White, 2015). The standard of life and per capita income in Africa can be increased by the increased involvement of youth in different sectors. Moreover, rural-urban migration in different areas is contributing to economic development. Young Moroccans seek employment opportunities in the economy, and if phosphate production is accelerated by advanced technology, the quality of the labor force can be improved. By improving government involvement, the political & economic spheres can be accelerated that enhance the rapid economic development and growth of certain sectors (Fabbe, K. et al. 2018). Authorities in Morocco are focusing on advanced structural reforms since it will be helpful to accelerate capital. The economy needs to reduce inequalities, remove corruption, and create job opportunities for the business environment. There should be mutually reinforcing reforms like social participation & education practices that will empower vulnerable groups.



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Encyclopedia Britannica, 2019a. History of Morocco. Encyclopedia Britannica. Available at: [Accessed: 26 March 2020]. (把原文中的reference按照这个改过来)

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Medsocialdialogue, 2016. MOROCCO: Economic, Social, Political and Institutional Situation and Its Connection with Social Dialogue. Available at: content/uploads/2018/09/1.1.3_Social_Dialogue_Connection_With_Economic_Social_Political_Institutional_Situation_Morocco_VA.pdf [Accessed 26 March 2020].

Prettitore, P.S. 2015. Family Law Reform, Gender Equality, and Underage Marriage: A view from Morocco and Jordan. The Review of Faith & International Affairs13(3), pp. 32-40.

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