This paper examines the effects of international trade and trade policy in a two-country, two-good model with an open-access renewable resource that is internationally shared. We show that both countries may still benefit from trade when they specialize in the production of their comparative advantage good, although the shared resource is reduced by trade. In addition, we demonstrate that the steady state utility of a resource-good importing country may be reduced by trade, even if it specializes in the production of a non-resource good. Import tariffs and export taxes on a resource good may increase or decrease the shared stock level depending on the production patterns in a trading steady state. The trade policy is likely to be Pareto-improving when the shared stock rises, while both countries may be made worse off by the trade policy when the shared stock falls.

Using a two-country, two-good model of international trade, we examine gains from trade and strategic interaction in resource management among countries that share renewable resources such as fishery stocks. Two goods are a resource good, which is the harvest of the shared stock, and some other good that may be thought of as manufactures. The productivity of the resource good depends on harvesting technology and the stock level. This paper focuses on technology standards (e.g., restrictions on fishing gears, vessels, areas, and time) over other methods for resource management because they are most commonly implemented in fisheries. Technology standards are modeled as a restriction on the harvesting technology; that is, under strict technology standards, firms exploit resources as if they are using inferior harvesting technology. We show that an opening up of trade may reduce the shared stock and cause steady-state utility to decrease in a resource-good importing country and increase in a resource-good exporting country. Strikingly, when the shared stock is in jeopardy (a high demand for the harvest), steady-state harvest is maximized after an opening up of trade by what we call multilateral resource management in this paper and both countries gain from trade.

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