Agricultural Trade Liberalisation and Strategic Environmental Policy

Thilo W. Glebe and Uwe Latacz-Lohmann

No 24609, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: We use an extended partial equilibrium trade model to derive optimal environmental policy responses to tariff reduction requirements and assess the impact of such policies on the welfare of trading partners. We find that countries which attribute preferential political weights to farmers' welfare have an incentive to implement environmental policies that deviate from the Pigouvian solution - even if production is not de facto linked to environmental externalities. We clarify the conditions under which trading partners do not gain from unilateral trade liberalisation if trade concessions are accompanied by strategic environmental policy changes. We postulate a role for the WTO in overseeing the process of domestic policy formulation.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 11
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24609

DOI: 10.22004/ag.econ.24609

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