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Labour and Environmental Standards: The 'Lemons Problem' in International Trade Policy

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Author Info

  • Eugene Beaulieu
  • James Gaisford

Abstract

Environmental and labour standards have become an important international trade issue. This article examines and ranks alternative trade policy responses available to an importing country with concerns over such standards. While a full import embargo may sometimes be preferable to allowing unrestricted access to unlabeled noconforming imports, a partial embargo that allows imports which demonstrably conform to the standard is always a better policy; and labeling solutions, which separate conforming and non-conforming imports, are typically better still. Consequently, full import embargoes based on non-conformity with labour or environmental standards are poor policy choices and should generally remain prohibited by WTO rules. Copyright Blackwell Publishers Ltd 2002.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 25 (2002)
Issue (Month): 1 (01)
Pages: 59-78

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Handle: RePEc:bla:worlde:v:25:y:2002:i:1:p:59-78

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920

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Cited by:
  1. Stephen DeLoach & Jayoti Das, 2008. "Resolving the paradox of social standards and export competitiveness," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(4), pages 467-483.
  2. Christopher Bruce & Andrea Laroiya, 2007. "The Production of Eco-Labels," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(3), pages 275-293, March.
  3. José-Antonio Monteiro, 2010. "Eco-label Adoption in an Interdependent World," IRENE Working Papers 10-01, IRENE Institute of Economic Research.
  4. Dinopoulos, Elias & Livanis, Grigorios T. & West, Carol Taylor, 2005. "How Cool is C.O.O.L.?," Working Papers 15658, University of Florida, International Agricultural Trade and Policy Center.
  5. Kala Krishna, 2005. "Conditional Policies in General Equilibrium," NBER Working Papers 11283, National Bureau of Economic Research, Inc.

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