Agricultural Trade Liberalisation and Strategic Environmental Policy

We use an extended partial equilibrium trade model to derive optimal environmental policy responses to tariff reduction requirements and assess the impact of such policies on the welfare of trading partners. We find that countries which attribute preferential political weights to farmers' welfare have an incentive to implement environmental policies that deviate from the Pigouvian solution - even if production is not de facto linked to environmental externalities. We clarify the conditions under which trading partners do not gain from unilateral trade liberalisation if trade concessions are accompanied by strategic environmental policy changes. We postulate a role for the WTO in overseeing the process of domestic policy formulation.

Issue Date:
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
PURL Identifier:
Total Pages:
JEL Codes:
D60; F11; F18; Q17
Series Statement:
Contributed Paper

 Record created 2017-04-01, last modified 2019-08-26

Download fulltext

Rate this document:

Rate this document:
(Not yet reviewed)