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Trade and Environment: Bargaining Outcomes from Linked Negotiations
Author(s) -
Abrego Lisandro,
Perroni Carlo,
Whalley John,
Wigle Randall M.
Publication year - 2001
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00289
Subject(s) - negotiation , leverage (statistics) , economics , developing country , linkage (software) , international economics , international trade , trade barrier , payment , multilateral trade negotiations , economic growth , finance , political science , biochemistry , chemistry , machine learning , computer science , law , gene
Some recent literature has explored physical and policy linkages between trade and the environment. This paper explores linkage through leverage in bargaining, whereby developed countries can use trade threats to achieve improved developing‐country environmental management, while developing countries can use environmental concessions to achieve trade discipline in developed countries. A global numerical simulation model is used to compute bargaining outcomes from linked trade and environment negotiations. Results indicate joint gains from expanding the trade bargaining set to include the environment. However, compared with bargaining with cash side‐payments, linked negotiations on policy instruments provide significantly inferior outcomes for developing countries.