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Environmental Duties and International Harmonization of Standards
Author(s) -
Ederington Josh
Publication year - 2001
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2001.tb00427.x
Subject(s) - enforcement , harmonization , international trade , commit , environmental standard , international economics , business , competition (biology) , offset (computer science) , convergence (economics) , environmental policy , trade barrier , economics , industrial organization , environmental economics , economic growth , political science , computer science , ecology , physics , database , acoustics , law , biology , programming language
Demands by domestic industries for protection from foreign competition aided by lower standards have led to proposals to set trade barriers conditional on the environmental policies of other countries. This article shows that the threat of such environmental duties can assist in achieving global efficiency when countries cannot commit to a negotiated environmental standard. In addition, this article shows that, in a repeated game framework, the enforcement of a free‐trade agreement may require some convergence in environmental standards across countries when trade is driven by differences in such standards. However, it is also shown that it is more efficient to enforce a trade agreement by setting tariffs to partially offset differences in policy standards than to attempt to harmonize standards within environmental side agreements.