Abstract

Between 1967 and 1986 the United States and other members of GATT implemented major reductions in tariff rates on manufactured goods. Our primary hypothesis is that beginning with the Kennedy Round, trade restrictions in the U.S. shifted in favor of high pollution industries as their competitive position declined. As a consequence, inefficient domestic producers were nurtured and, thanks to the original GSP from 1975 to 1985, developing country polluters were encouraged to produce dirty industry manufactures for export to the United States. It is likely that both groups benefitted at the expense of more efficient and less heavily polluting competitors in other industrialized countries.

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