Consumption Externalities, Product Quality, and the Role of National Treatment

Paul Missios, Ida Ferrara and Halis Yildiz

No 48, Working Papers from Toronto Metropolitan University, Department of Economics

Abstract: In Article III of the WTO, National Treatment limits domestic policy in an e¤ort to curtail protectionist discrimination against foreign products. We examine National Treatment when goods are vertically di¤erentiated and generate consumption external- ities in two interdependent product markets, comparing quantity and price equilibria under Article III with those prevailing in a world in which Article III does not apply. While one may expect that high externalities would lead to a greater need for discrim- inatory policies, we show this is often not the case and, furthermore, that National Treatment can lead to a cleaner world environment.

Keywords: National Treatment; non-discrimination; environmental damages; consumption externalities; environmental policy; domestic policy; WTO. (search for similar items in EconPapers)
JEL-codes: F12 F18 Q56 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2015-09
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:rye:wpaper:wp048

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