A negative environmental effect of free trade in Costa Rica is the regulatory effects it will have on such things as policy. Free trade has the possibility of paralyzing environmental regulations because these regulations are seen as restrictions on free trade and thus are given a negative connotation. One example of this is the issue with intellectual property rights.
Conversely, technology effects could be very positive for Costa Rica. There could be new environmentally friendly technologies that would help with a huge range of problems including waste and waste water management, renewable energies, sustainable agriculture and many more. Costa Rica could benefit greatly from new information technology as well.
Though social issues and environmental issues are inextricably linked, there are some impacts of free trade in Costa Rica that lean more towards social issues. One of these is the income effect. With bigger companies coming in, people with small businesses can’t compete. This leads to unemployment. This is also an environmental issue because those people will have little choice but to begin farming land that could otherwise have remained forested.
Though it could go either way, free trade might create a product effect that would increase the amount of green products in the country. As the Kuznet curve shows, wealthier populations show more interested in caring for their environment. Consumer demand for green products is an example of this phenomenon.
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