Abstract: In international trade, consideration of environmental issues is no more a matter of choice. The linkage is also widely being recognized at the normative level as well. There are several economic studies, which acknowledge the possibility of adverse impact of trade liberalization on environment. This discussion paper looks into some of the broad issues. Section II of the paper attempts to bring out intentions and contents of Cancun Ministerial Draft while Section III puts together trade and environment issues from the point of view of developing countries. Section IV gives an overview of FTAs, particularly in Asia and its linkage with environmental issues, and the necessary conclusions are drawn in the last section.