Trade in environmental goods: how important are trade costs elasticities?

Lota Tamini and Sorgho Zakaria

Cahiers de recherche CREATE from CREATE

Abstract: Negotiations on the liberalization of environmental goods (EGs) and services within the WTO Doha Round (mandated in November 2001) are facing specific challenges. Conflicting interests and differing perceptions of the benefits of increased trade in EGs were reflected in different approaches proposed for determining EGs. Using import data of 34 OECD member countries and from a sample of 167 countries, from 1995 to 2012, we discuss the trade effect of reducing barriers on EGs. We analyze the lists of EGs proposed by the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Co-operation and Development (OECD) using a Translog gravity model. We found that removing tariff barriers for EGs will have a modest impact because for the biggest importers and exporters, elasticities of trade costs are very low while for most trading relationships they are very high, making it difficult for exporters to maintain their markets. Overall, our results suggest that, because of their substantial effect on international trade, future negotiations on EGs should also address the issues of standards and nontariff barriers (NTBs).

Keywords: Environmental Goods; Translog; Gravity; Trade costs elasticity; Import share (search for similar items in EconPapers)
JEL-codes: F11 F12 F15 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-env, nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:creacr:2016-3

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