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Trade Liberalization and Pollution Havens

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Author Info
Josh Ederington
Arik Levinson
Jenny Minier

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Abstract

U.S. Presidential Executive Order 13141 commits the United States to a careful assessment and consideration of the environmental impacts of trade agreements.' The most direct mechanism through which trade liberalization would affect environmental quality in the U.S. is through changes in the composition of industries. Freer trade means greater specialization, increasing the concentration of polluting industries in some countries and decreasing it in others. Indeed, in this paper we predict a substantial reduction in U.S. pollution from 1978-94 due entirely to a shift in the composition of U.S. manufacturing toward cleaner industries. We then use annual industry-level data on imports to the U.S. to examine whether this compositional shift can be traced to the significant trade liberalization that occurred over the same time period; we conclude that no such connection exists. First, we find that a shift toward cleaner industries, similar to that observed in U.S. manufacturing, has also occurred among U.S. imports. Second, we find no evidence that pollution-intensive industries have been disproportionately affected by the tariff changes over that time period.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10585.

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Date of creation: Jun 2004
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Handle: RePEc:nbr:nberwo:10585

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Find related papers by JEL classification:
Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting
F18 - International Economics - - Trade - - - Trade and Environment

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Arik Levinson & M. Scott Taylor, 2004. "Unmasking the Pollution Haven Effect," NBER Working Papers 10629, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Kahn, Matthew E., 2003. "The geography of US pollution intensive trade: evidence from 1958 to 1994," Regional Science and Urban Economics, Elsevier, vol. 33(4), pages 383-400, July. [Downloadable!] (restricted)
  4. Josh Ederington & Jenny Minier, 2003. "Is environmental policy a secondary trade barrier? An empirical analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 137-154, February. [Downloadable!] (restricted)
    Other versions:
  5. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March. [Downloadable!] (restricted)
  6. Jeffrey A. Frankel & David Romer, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June. [Downloadable!] (restricted)
  7. Robert C. Feenstra & John Romalis & Peter K. Schott, 2002. "U.S. Imports, Exports, and Tariff Data, 1989-2001," NBER Working Papers 9387, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Hettige, Hemamala & Lucas, Robert E B & Wheeler, David, 1992. "The Toxic Intensity of Industrial Production: Global Patterns, Trends, and Trade Policy," American Economic Review, American Economic Association, vol. 82(2), pages 478-81, May. [Downloadable!] (restricted)
  9. Josh Ederington & Arik Levinson & Jenny Minier, 2005. "Footloose and Pollution-Free," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 92-99, 01. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nicolas Péridy, 2006. "Pollution effects of free trade areas: Simulations from a general equilibrium model," International Economic Journal, Korean International Economic Association, vol. 20(1), pages 37-62, March. [Downloadable!] (restricted)
  2. M. Taylor, 2005. "Unbundling the Pollution Haven Hypothesis," Advances in Economic Analysis & Policy, Berkeley Electronic Press, vol. 4(2), pages 1408-1408. [Downloadable!] (restricted)
  3. Arik Levinson, 2009. "Pollution and International Trade in Services," Working Papers gueconwpa~09-09-04, Georgetown University, Department of Economics. [Downloadable!]
    Other versions:
  4. de Melo, Jaime & Grether, Jean-Marie & Mathys, Nicole Andréa, 2006. "Unravelling the World-Wide Pollution Haven Effect," CEPR Discussion Papers 5815, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Medalla, Erlinda & Lazaro, Dorothea C., 2005. "Does Trade Lead to a Race to the Bottom in Environmental Standards? Another Look at the Issues," Discussion Papers DP 2005-23, Philippine Institute for Development Studies. [Downloadable!]
  6. Dirk T.G. Rübbelke & Vivekananda Mukherjee & Tilak Sanyal, 2008. "Technology Transfer in the Non-traded Sector as a Means to Combat Global Warming," Working Papers 2008.78, Fondazione Eni Enrico Mattei. [Downloadable!]
  7. Levinson, Arik, 2007. "Technology, International Trade, and Pollution from U.S. Manufacturing," Discussion Papers dp-07-40, Resources For the Future. [Downloadable!]
    Other versions:
  8. Sjak Smulders & Lucas Bretschger & Hannes Egli, 2005. "Economic growth and the diffusion of clean technologies : explaining environmental Kuznets," Economics working paper series 05/42, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  9. Mani, Muthukumara & Jha, Shreyasi, 2006. "Trade liberalization and the environment in Vietnam," Policy Research Working Paper Series 3879, The World Bank. [Downloadable!]
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