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Transboundary environmental problems and new trade rules

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Increased environmental pollution and the globalization of economies have initiated an academic debate on the relationship between international trade and the environment. Addresses the question of whether the present GATT/WTO regime conflicts with effective policies to cope with transboundary environmental problems, including the protection of global commons. Analyses the welfare effects of transboundary pollution tariffs by using a simple partial equilibrium framework. Contrasts the results with an assessment of the existing GATT/WTO regime, in which no distinction between national and transboundary environmental problems has been made. Outlines, in conclusion, some basic elements of a necessary reform of the GATT/WTO regime. These proposals would allow border tax adjustment for certain types of production-related environmental charge without undermining an open and non-discriminatory multilateral trading system.
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Keywords: Environmental Management Strategy; Gatt; International Trade; Pollution

Document Type: Research Article

Publication date: August 1, 1996

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