Trade and the Environment

Effects of Environmental Regulations on Trade Flow in Manufacturing Sectors: Comparison of Static and Dynamic Effects of Environmental Regulations

“…Recently, trade liberalists have insisted that environmental regulations could act as non‐tariff barriers. To support this premise, they point to Article XX of the GATT, which permits nations to prevent the import of specific products (Buterbaugh, ; Li and Beghin, ). The barriers are erected through mandates requiring that imported products carry specific labels or are created using defined production or processing methods.…”

“…US manufacturers had already developed the technologies and know‐how. Thus, the requirement helps the USA protect domestic manufacturers (Buterbaugh, ). In another example, under the Montreal Protocol, 50 member countries banned domestic and foreign goods that produce or use ozone‐depleting substances, such as specific chlorofluorocarbons (CFCs) (Zhang, ).…”

“…Further, environmental regulations have the potential to act as non‐tariff barriers (Buterbaugh, ; Li and Beghin, ). Directly, the barriers are erected through mandates requiring that imported products carry specific labels or are created using defined production or processing methods (Buterbaugh, ; Zhang, ).…”

“…Further, environmental regulations have the potential to act as non‐tariff barriers (Buterbaugh, ; Li and Beghin, ). Directly, the barriers are erected through mandates requiring that imported products carry specific labels or are created using defined production or processing methods (Buterbaugh, ; Zhang, ). Indirectly, environmental regulations protect domestic manufacturing sectors by changing the price system and purchasing behavior of households and businesses (Gulati and Roy, ; Kiuila, ) (H6).…”