Multilateral Environmental Agreements and Trade Obligations: A Theoretical Analysis of the Doha Proposal
The Doha declaration on trade and environment proposed to clarify the relationship between multilateral environmental agreement (MEA) trade obligations and WTO rules by only guaranteeing economic integration upon ratification of certain MEAs. In other words, it pushed to authorize the use of trade measures against non-compliance, denying a non-signatory of its WTO rights to exercise countervailing tariffs. This paper demonstrates that the Doha proposal can be effective when environmental policy and its trade obligations are endogenous. Under plausible circumstances, ratification by a non-signatory to the MEA along with free trade as a reward is the unique equilibrium outcome. Delocation to pollution havens does not occur, as optimal tariffs are positive if standards are not adopted. Tariffs however only work as a credible threat and do not emerge in equilibrium. Results are consistent with broad empirical evidence that opposes the pollution haven hypothesis and suggests capital movements to be non-pollution related.
|Date of creation:||Apr 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Corso Magenta, 63 - 20123 Milan|
Web page: http://www.feem.it/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Javorcik Beata Smarzynska & Wei Shang-Jin, 2003.
"Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 3(2), pages 1-34, December.
- Smarzynska, Beata K., 2001. "Pollution havens and foreign direct investment : dirty secret or popular myth?," Policy Research Working Paper Series 2673, The World Bank.
- Javorcik, Beata & Wei, Shang-Jin, 2001. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," CEPR Discussion Papers 2966, C.E.P.R. Discussion Papers.
- Beata K. Smarzynska & Shang-Jin Wei, 2001. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," NBER Working Papers 8465, National Bureau of Economic Research, Inc.
- Ulph, Alistair & Valentini, Laura, 2001. " Is Environmental Dumping Greater When Plants Are Footloose?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 673-88, December.
- J. Peter Neary, 2003.
"Europe on the road to Doha : towards a new global trade round,"
200317, School of Economics, University College Dublin.
- J. Peter Neary, 2004. "Europe on the Road to Doha: Towards a New Global Trade Round?," CESifo Economic Studies, CESifo, vol. 50(2), pages 319-332.
- Eskeland, Gunnar S. & Harrison, Ann E., 1997.
"Moving to greener pastures : multinationals and the pollution-haven hypothesis,"
Policy Research Working Paper Series
1744, The World Bank.
- Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
- Gunnar A. Eskeland & Ann E. Harrison, 2002. "Moving to Greener Pastures? Multinationals and the Pollution Haven Hypothesis," NBER Working Papers 8888, National Bureau of Economic Research, Inc.
- Jean-Marie Grether & Jaime de Melo, 2003.
"Globalization and Dirty Industries: Do Pollution Havens Matter?,"
NBER Working Papers
9776, National Bureau of Economic Research, Inc.
- de Melo, Jaime & Grether, Jean-Marie, 2003. "Globalization and Dirty Industries: Do Pollution Havens Matter?," CEPR Discussion Papers 3932, C.E.P.R. Discussion Papers.
- Carraro, Carlo & Siniscaico, Domenico, 1994. "Environmental policy reconsidered: The role of technological innovation," European Economic Review, Elsevier, vol. 38(3-4), pages 545-554, April.
- Zigic, Kresimir, 2000. "Strategic trade policy, intellectual property rights protection, and North-South trade," Journal of Development Economics, Elsevier, vol. 61(1), pages 27-60, February.
- Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-59, June.
- J. Peter Neary, 2005.
"International trade and the environment : theoretical and policy linkages,"
200018, School of Economics, University College Dublin.
- J. Neary, 2006. "International Trade and the Environment: Theoretical and Policy Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(1), pages 95-118, 01.
- Markusen James R. & Morey Edward R. & Olewiler Nancy D., 1993.
"Environmental Policy when Market Structure and Plant Locations Are Endogenous,"
Journal of Environmental Economics and Management,
Elsevier, vol. 24(1), pages 69-86, January.
- James R. Markusen & Edward R. Morey & Nancy Olewiler, 1991. "Environmental Policy When Market Structure and Plant Locations are Endo-genous," NBER Working Papers 3671, National Bureau of Economic Research, Inc.
- Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
- Barrett, Scott, 1997. "The strategy of trade sanctions in international environmental agreements," Resource and Energy Economics, Elsevier, vol. 19(4), pages 345-361, November.
When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2005.52. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah)
If references are entirely missing, you can add them using this form.