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Contradictions between WTO and sustainable development? The case of environmental dumping

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  • Solveig Lothe

    (Norwegian School of Management, Sandvika, Norway)

Abstract

This paper discusses how the WTO agreement deals with the environmental and competitiveness concerns linked to trade and environmental policies. As the use of traditional export subsidies and other protectionist trade policies are now strongly restricted in the WTO, many countries will try to find other ways to increase competitiveness. One way of doing this is to use lax environmental taxation or regulation as indirect subsidies (i.e. 'environmental dumping'). If this is done, the reduced possibilities of using traditional protectionist trade policies could harm the environment, thus reducing the overall welfare gain from trade liberalization. Environmental countervailing tariffs have been suggested as a way of reducing incentives for environmental dumping. The WTO rules are examined in order to analyse the feasibility of the uses of environmental countervailing tariffs in the current and future framework of WTO, and the incentives and welfare consequences are analysed under different market scenarios. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment

Suggested Citation

  • Solveig Lothe, 2001. "Contradictions between WTO and sustainable development? The case of environmental dumping," Sustainable Development, John Wiley & Sons, Ltd., vol. 9(4), pages 197-203.
    • Handle: RePEc:wly:sustdv:v:9:y:2001:i:4:p:197-203
    DOI: 10.1002/sd.169
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    References listed on IDEAS

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    1. Brander, James A., 1995. "Strategic trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 27, pages 1395-1455, Elsevier.
    2. Collie, David, 1991. "Export subsidies and countervailing tariffs," Journal of International Economics, Elsevier, vol. 31(3-4), pages 309-324, November.
    3. Daniel Esty, 1994. "Greening the GATT: Trade, Environment, and the Future," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 40, January.
    4. Rauscher, Michael, 1994. "On Ecological Dumping," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 822-840, Supplemen.
    5. Conrad Klaus, 1993. "Taxes and Subsidies for Pollution-Intensive Industries as Trade Policy," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 121-135, September.
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