Environmental Provisions in Trade Agreements
Abstract
This article investigates the impact of environmental clauses in regional trade agreements on the international trade of CAN and MERCOSUR countries between 2001 and 2019. We use a gravity model estimated with the PPML estimator to analyze the relationship between environmental provisions in trade agreements and total exports. We find that the simple inclusion of environmental provisions does not have a significant effect on trade. However, the presence of a Preferential Trade Agreement (PTA) in the midst of compliance is associated with a negative and significant effect on total exports. This result is accentuated if the trade occurs in a South-North structure. This finding complements previous research and provides a more complete understanding of the impact of environmental clauses on international trade in the countries of the region.Keywords:
environmental clauses, regional trade agreements, international trade, Latin America, developmentReferences
Berger, A., Brandi, C., Morin, J, & Schwab, J. (2020). “The Trade Effects of Environmental Provisions in Preferential Trade Agreements”, in C. Beverelli, J. Kurtz, & D. Raess (Eds.), International Trade, Investment, and the Sustainable Development Goals: World Trade Forum. Cambridge: Cambridge University Press, pp. 111-139. doi:10.1017/9781108881364.006
Berger, A., et al. (2020). "Environmental Provisions in Trade Agreements: A Global Assessment." Journal of International Economics.
Baghdadi, L.; Martínez-Zarzoso, I.; & Zitouna, H. (2013). “Are RTA agreements with environmental provisions reducing emissions?” Journal of International Economics, Vol. 90, no. (2), pp. 378-390. Google Scholar
Barros, L., & Martínez-Zarzoso, I. (2022). “Systematic literature review on trade liberalization and sustainable development”. Sustainable Production and Consumption, Vol. 33, pp. 921-931. https://doi.org/10.1016/j.spc.2022.08.012
Bastiaens, I. & Postnikov, E .(2017). “Greening up: the effects of environmental standards in EU and US trade agreements”. Environmental Politics, Vol. 26, no. (5), pp. 847-869. DOI: 10.1080/09644016.2017.1338213
Bombardini, M., & Li, B. (2020). “Trade, pollution and mortality in China”. Journal of International Economics, Vol 125, 103321. http://dx.doi.org/10.1016/j.jinteco.2020.103321
Brandi, C., Schwab, J., Berger, A., Morin, J. (2020). "Do Environmental Provisions in Trade Agreements Make Trade Greener?" Journal of Environmental Economics and Management, Vol. 129, 104899. https://www.sciencedirect.com/science/article/pii/S0305750X20300255
Carrère, C., & de Melo, J. (2015). "The Dilemma of Rules Coherence: Economic Assessment of Environmental Policy Integration." Journal of Environmental Economics and Management, Vol. 71, pp. 102-120.
CEPAL (2020). La emergencia del cambio climático en América Latina y el Caribe: ¿seguimos esperando la catástrofe o pasamos a la acción? Santiago de Chile. https://www.cepal.org/es/publicaciones/45677-la-emergencia-cambio-climatico-america-latina-caribe-seguimos-esperando-la
CEPAL (2023). Perspectivas del Comercio Internacional de América Latina y el Caribe 2022: el desafío de dinamizar las exportaciones manufactureras. Santiago de Chile https://www.cepal.org/es/publicaciones/pci
Cherniwchan, J. (2017). Trade liberalization and the environment: Evidence from NAFTA and US manufacturing. Journal of International Economics, Vol. 105, pp. 130-149. https://www.sciencedirect.com/science/article/pii/S0022199617300077
Cui, J., Tam, O. K., Wang, B., & Zhang, Y. (2020). The environmental effect of trade liberalization: Evidence from China's manufacturing firms. The World Economy, Vol. 43, no. (12), pp. 3357-3383. https://dukespace.lib.duke.edu/dspace/bitstream/handle/10161/21342/Cui%20et%20al.%20-%20The%20environmental%20effect%20of%20trade%20liberalization%20.pdf?isAllowed=y&sequence=2
Dür, A., Baccini, L., & Elsig, M. (2014). The design of international trade agreements: Introducing a new dataset. The Review of International Organizations, Vol. 9, pp. 353-375. https://link.springer.com/article/10.1007/s11558-013-9179-8
Fairlie, Portocarrero y Paredes, Fairlie, A., Portocarrero, J. M., & Paredes, T. (2021). Impacto de las cláusulas ambientales de los acuerdos comerciales regionales sobre los niveles de contaminación. Revista Kawsaypacha: Sociedad y Medio Ambiente, Vol. 8, pp. 13-35. https://revistas.pucp.edu.pe/index.php/Kawsaypacha/article/view/24292
Grazzi, M. & Sasso, S. (2020). Economía circular e innovación verde, pilares para la recuperación y la resiliencia post COVID-19. Puntos sobre la i: Un blog del BID para conversar sobre innovación en América Latina [Blog]. División de Competitividad, Tecnología e Innovación del BID https://blogs.iadb.org/innovacion/es/economia-circular-innovacion-verde-post-covid-19/
Hovi, J., Sprinz, D., & Underdal, A. (Eds.). (2009). "Implementing the Climate Regime: International Compliance". London: Earthscan.
Kohl, T., Brakman, S., & Garretsen, H. (2016). Do trade agreements stimulate international trade differently? Evidence from 296 trade agreements. The World Economy, Vol. 39, no. 1, pp. 97-131. https://onlinelibrary.wiley.com/doi/abs/10.1111/twec.12272
Laffont, J. J., & Tirole, J. (1994). "Environmental Policy, Compliance, and Innovation." Journal of Economic Literature, 32(2), 804-834. https://ideas.repec.org/a/eee/eecrev/v38y1994i3-4p555-562.html
Lebdioui, A. (2022). El comercio en América Latina en la era del cambio climático: Impacto, oportunidades y opciones de políticas públicas. Canning House Research Forum. https://blogs.lse.ac.uk/latamcaribbean/2022/08/11/comercio-america-latina-pacto-verde/
Liu, H., Lei, H., & Zhou, Y. (2022). How does green trade affect the environment? Evidence from China. Journal of Economic Analysis, Vol. 1, no. 1, pp. 1-19. http://anser.press/index.php/JEA/article/view/7
Martínez-Zarzoso, I. (2017). El impacto ambiental de los tratados comerciales. Eco-Integración de América Latina, pp. 162-176. https://dialnet.unirioja.es/servlet/articulo?codigo=6170340
Morin, J.F., A. Dür and L. Lechner (2018), "Mapping the trade and environment nexus: Insights from a new dataset", Global Environmental Politics, Vol. 18, no. 1. https://www.academia.edu/34111860/Morin_JF_A_D%C3%BCr_L_Lechner_2018_Mapping_the_Trade_and_Environment_Nexus_Insights_from_a_New_Dataset_Global_Environmental_Politics_18_1_122_139
Morin, J. F., Blümer, D., Brandi, C., & Berger, A. (2019). Kick‐starting diffusion: Explaining the varying frequency of preferential trade agreements’ environmental provisions by their initial conditions. The World Economy, Vol. 42, no. 9, pp. 2602-2628. https://onlinelibrary.wiley.com/doi/full/10.1111/twec.12822
OCDE. (2021). OECD Work On Trade And The Environment: A Retrospective, 2008-2020. https://www.oecd.org/env/retrospective-trade-environment-2008-2020.htm
Safdar, S., Khan, A., & Andlib, Z. (2022). Impact of good governance and natural resource rent on economic and environmental sustainability: an empirical analysis for South Asian economies. Environmental Science and Pollution Research, Vol. 29, no. 55, pp.82948-82965. https://link.springer.com/article/10.1007/s11356-022-21401-9
Sánchez-Triana, E., Afzal, J., & Smith, J. (2010). "Institutions, Regulatory Styles, and Environmental Compliance in India." World Development, Vol. 38, no.3, pp. 383-399.
Taylor, M. S. (2005). Unbundling the pollution haven hypothesis. The B.E. Journal of Economic Analysis & Policy, Vol. 3, no. 2, pp. 1–28. https://doi.org/10.2202/1538-0637.1408
UNCTAD (2021). Trade and Environment Review 2021. United Nations Publications. https://unctad.org/system/files/official-document/ditcted2020d3_en.pdf
Velázquez Gomar, J. O. (2014). Environmental policy integration among multilateral environmental agreements: The case of biodiversity. International Environmental Agreements: Politics, Law and Economics, 16, 525-541. https://link.springer.com/article/10.1007/s10784-014-9263-4
WTO (2020). Short Answers To Big Questions: On the WTO and environment. Organización Mundial del Comercio. https://www.wto.org/spanish/tratop_s/envir_s/short_answers_event_s.htm
WTO. (2022). Trade negotiations and discussions in WTO Annual Report 2022. (pp. 46-75). World Trade Organization https://www.wto.org/english/res_e/publications_e/anrep22_e.htm
