Exploring Linkages Among Agriculture, Trade, and the Environment: Issues for the Next Century

Many trade and environment issues will confront agriculture over the next several years. This report provides an economic framework to better understand these issues and discusses prior empirical inquiries and findings. Four primary issues are addressed: (1) how will environmental policies affect agricultural trade?; (2) how will agricultural trade liberalization affect environmental quality?; (3) to what extent should there be international harmonization of environmental policies and product standards?; and (4) is there economic justification for using trade measures to protect the environment? This report demonstrates that basic economic paradigms can provide a basis for understanding how trade and the environment interact. The few empirical studies based on these concepts have found many of the linkages between trade and the environment to be weak or the effects small. Trade and environment issues remain important to monitor, however, because economic and environmental relationships and domestic and international policies are continually evolving, and decision-makers need good information to confirm or disprove the numerous hypotheses that have surfaced in international discussions.