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Do environmental provisions in regional trade agreements affect trade in services?

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  • Laurent Didier

    (Université de La Réunion)

Abstract

Liberalization of services trade through regional trade agreements (RTAs) represent a significant environmental concern where more and more RTAs include environmental provisions. Do environmental provisions in RTAs improve or undermine trade between member countries? I investigate the unexplored relationship between the number of environmental provisions concluded by trading partners and RTAs on services trade. I focus on three main European trade agreements concerning services: the European Economic Area (1994), the European Union (1995) and the European Free Trade Association (2002). A theory-based and robust gravity model specification including lagged terms is used with sectoral disaggregation for services trade on the 1981-2010 period. The results underline the statistically significant effect of environmental provisions in RTAs covering services on trade with a higher magnitude for deeper environmental provisions. Different trade impacts also appear between these European RTAs across sector-specific services trade and according to the depth of the environmental provisions.

Suggested Citation

  • Laurent Didier, 2018. "Do environmental provisions in regional trade agreements affect trade in services?," Economics Bulletin, AccessEcon, vol. 38(2), pages 733-750.
    • Handle: RePEc:ebl:ecbull:eb-17-00999
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    More about this item

    Keywords

    environmental provisions; RTAs; trade; services; gravity;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

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