Abstract
Citizens’ concerns about (international) environmental protection standards are of increasing importance to governments in industrially advanced, high-regulating countries. In almost any proposal for a trade agreement, countries with low environmental regulation standards are required to introduce higher policy standards in exchange for high-regulating countries dismantling their trade barriers and granting access to their domestic markets. Low-regulating countries often act as required and introduce legislation aimed at reducing pollution. This leads to declaratory or de jure policy convergence. But such legislative action is not always associated with de facto or actual policy convergence, since policies are not always enforced. To analyze the strategic aspect of this potential “slippage,” we set up a game-theoretic model with imperfect information. In the model, a high-regulating and a low-regulating country negotiate a bilateral free trade agreement with environmental provisions. We show how potential gains from trade, policy enforcement, and reputation costs, as well as domestic demands for environmental protection affect the occurrence of environmental policy convergence through conditional trade agreements. This study thereby advances our understanding of the relationship between bilateral trade and convergence of environmental policies.
Highlights
Citizens’ concerns about environmental protection standards are of increasing importance to governments in industrially advanced, high-regulating countries
The European Union (EU) has considerably influenced the regulatory policies of its 12 new member states through conditionality, that is the demand to adopt the entire acquis communautaire to become a member of the EU
The political science literature primarily relates trade and environmental policy convergence by resorting to the concept of regulatory competition, which is based on economic theories of systems competition (Tiebout 1956)
Summary
Citizens’ concerns about (international) environmental protection standards are of increasing importance to governments in industrially advanced, high-regulating countries. Free trade agreements have proliferated in recent years (Kono 2007:178) and have considerable influence on national regulatory policies This is because high-regulating countries use ‘‘conditional’’ trade agreements as a means for inducing their prospective low-regulating trade partners to adopt stricter environmental regulation in exchange for granting access to their domestic markets. Almost any trade agreement between a high- and a low-regulating country includes environmental provisions, which the latter is asked to accept as a prerequisite for concluding the agreement This kind of issue-linkage contributes to create a ‘‘level playing field,’’ in which cross-country differences in regulatory policies are reduced. The EU has considerably influenced the regulatory policies of its 12 new member states through conditionality, that is the demand to adopt the entire acquis communautaire to become a member of the EU Both political scientists and economists have devoted great effort to explore the policy implications of trade and FTAs for environmental standards. The idea that there is a difference between declaratory and actual environmental policy
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
