There have been increasing pressures by governments and NGOs to restrict international trade in secondary material waste in the conviction that imports of these goods are in reality a disguise for waste dumping by the exporting country. Moreover, cheap imports of secondary material waste tend to crowd out the local recovery system leading to a domestic waste disposal problem. Alternatively, proponents of trade argue that a ban on secondary material waste leads to an inefficient use of resources resulting inevitably in higher economic and environmental costs, both in developed and developing countries. In this paper we set out to investigate if free trade in secondary material waste can support economic development and simultaneously reduce environmental degradation in a developing country and the conditions necessary for the trade to be permitted. In this study we focus on the trade in waste plastics in China. A life cycle model is formulated within an optimization framework and solved by non-linear programming methods. Preliminary results suggest that trade in waste plastics is both economically and environmentally advantageous but under a number of stringent conditions.