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Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis

Author

Listed:
  • Josh Ederington

    (University of Miami)

  • Jenny Minier

    (University of Miami)

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 modeled as an endogenous variable, its estimated effect on trade flows is significantly higher than previously reported.

Suggested Citation

  • Josh Ederington & Jenny Minier, 2000. "Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis," Econometric Society World Congress 2000 Contributed Papers 1507, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1507
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    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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