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Is environmental policy a secondary trade barrier? An empirical analysis

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  • Josh Ederington
  • Jenny Minier

Abstract

Should international trade agreements be extended to include negotiations over environmental policy? The answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries; our results suggest that they do. Previous studies of this relationship have treated the level of environmental regulation as exogenous, and found a negligible correlation between environmental regulation and trade flows. In contrast, we find that, when the level of environmental regulation is modelled as an endogenous variable, its estimated effect on trade flows is significantly higher than previously reported.

Suggested Citation

  • Josh Ederington & Jenny Minier, 2003. "Is environmental policy a secondary trade barrier? An empirical analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 137-154, February.
  • Handle: RePEc:cje:issued:v:36:y:2003:i:1:p:137-154
    DOI: 10.1111/1540-5982.00007
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    References listed on IDEAS

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    8. Daniel Esty, 1994. "Greening the GATT: Trade, Environment, and the Future," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 40, October.
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment

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