View article

Studies of international trade and sustainability have long been viewed as separate exercises in the mainstream economic literature. The capital approach to sustainability suggests that any country purporting to be on a sustainable development path must maintain non-declining comprehensive wealth (Pearce and Atkinson, 1993; World Bank, 2011). Meanwhile international trade is concerned with the efficient allocation of goods and capital, contributing to sustainability via productivity improvements and increased welfare for a given level of production. Proponents of strong sustainability first criticized this position, arguing that international trade was not a ‘neutral’mechanism to improve global efficiency. Daly (1996) argues the conclusions of neoclassical theory are flawed as capital is now mobile internationally. Faced with the potential of international trade, Hamilton and Clemens (1999) proposed an amendment …