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Do environmental provisions in regional trade agreements affect trade in services?

Laurent Didier

Economics Bulletin, 2018, vol. 38, issue 2, 733-750

Abstract: Liberalization of services trade through regional trade agreements (RTAs) represent a significant environmental concern where more and more RTAs include environmental provisions. Do environmental provisions in RTAs improve or undermine trade between member countries? I investigate the unexplored relationship between the number of environmental provisions concluded by trading partners and RTAs on services trade. I focus on three main European trade agreements concerning services: the European Economic Area (1994), the European Union (1995) and the European Free Trade Association (2002). A theory-based and robust gravity model specification including lagged terms is used with sectoral disaggregation for services trade on the 1981-2010 period. The results underline the statistically significant effect of environmental provisions in RTAs covering services on trade with a higher magnitude for deeper environmental provisions. Different trade impacts also appear between these European RTAs across sector-specific services trade and according to the depth of the environmental provisions.

Keywords: environmental provisions; RTAs; trade; services; gravity (search for similar items in EconPapers)
JEL-codes: F1 F5 (search for similar items in EconPapers)
Date: 2018-04-15
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