EXPORT COMPETITION AND THE REMISSION OF DOMESTIC ENVIRONMENTAL TAXES

Steve McCorriston and Ian Sheldon

No 21994, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: In this paper we consider the use of border adjustments to compensate exporters for domestic environmental taxes even when the environmental tax is imposed on an intermediate good. Although GATT/WTO rules allow for border adjustments, there has been little analysis of them. A model of successive oligopoly is used to consider the appropriate border adjustments since many industries where environmental excise taxes are applied can be characterised as imperfectly competitive. We show that the border adjustment currently allowed for in GATT/WTO rules is, under certain circumstances, likely to be too low to maintain the competitiveness of exporters. In some cases, an export tax would be justified.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 19
Date: 2003
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Related works:
Journal Article: Export Competition and the Remission of Domestic Environmental Taxes (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea03:21994

DOI: 10.22004/ag.econ.21994

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