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Economic Growth, Environmental Issues and Trade

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  • Anderson, Kym

Abstract

This paper explores the implications for trade relations of the greening of world politics. It modifies the standard theory of changing comparative advantages in a growing world economy to show the effects on trade of taking into account the fact that the demand for domestic environmental policies increases as economies expand. The demands for environmental policies would not be a problem if they were confined to first-best policies. Trade problems arise, however, when those policies undermine an industry's competitiveness (from which protection is sought), or when a trade policy measure is adopted in an attempt to impose one's own standards on another country's environment, or when trade liberalization is opposed by environmentalists. The paper shows how all three unnecessarily threaten to undermine the global trading system and how, in the cases of coal and food, trade liberalization could well improve rather than worsen the global environment.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 830.

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Date of creation: Sep 1993
Date of revision:
Handle: RePEc:cpr:ceprdp:830

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Related research

Keywords: Comparative Advantage; Environment; Global Trading System; Trade Relations;

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Cited by:
  1. Mehmet, Ozay, 1995. "Employment creation and green development strategy," Ecological Economics, Elsevier, vol. 15(1), pages 11-19, October.
  2. Bommer, Rolf & Schulze, Gunther G., 1999. "Environmental improvement with trade liberalization," European Journal of Political Economy, Elsevier, vol. 15(4), pages 639-661, November.
  3. Kym Anderson, 1997. "Social Policy Dimensions of Economic Integration: Environmental and Labor Standards," NBER Chapters, in: Regionalism versus Multilateral Trade Arrangements, NBER-EASE Volume 6, pages 57-90 National Bureau of Economic Research, Inc.

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